Mark Twain said, "Never put off till tomorrow what may be done day after tomorrow just as well." Coming from a long line of procrastinators, that sentiment rings true. It was also my approach to retirement. I put off the decision again and again.

Until now.

After spending much of my career writing about retirement, I finally decided it was time to start living it. I assumed I was prepared. I had spent years researching the topic, interviewing experts and helping others think through one of life's biggest transitions.

Then I turned in my retirement notice.

What I expected to feel was relief. What I felt seemed more like loss. The experience hit me much harder than I anticipated. In fact, I went through a brief period of sadness that caught me completely off guard.

Retirement looked very different in practice than it did in theory. For the first time, I realized that preparing financially and preparing emotionally for retirement are not the same.

When your identity changes

You can say labels don't matter, but the truth is they do. For most of my adult life, I've been an employee, a writer, a colleague and a contributor. Soon, my title will change to retiree.

Am I old enough? Yes. Have I saved enough? I think so. Am I ready to become the smiling older man walking on a sandy beach? I know too much about retirement marketing to be on the cover of that brochure.

What surprised me most was how much of my identity was connected to my work.

My office sits on the corner of a busy hallway. I only have to turn toward the door to see who is walking by. Throughout the day, colleagues stop in to share stories, kick around ideas, celebrate successes or talk through challenges. There have been plenty of laughs, more than a few crises averted and countless conversations I'll miss.

Retirement means stepping away from more than a job. It means stepping away from a community and a daily rhythm that has been part of my life for decades. Recognizing the stages of change can help make sense of the transition.

In his Bridges Transition Model, researcher William Bridges describes three transitions people go through during major life changes:

• It starts with an ending
• Then comes the neutral zone, the period between an old identity and a new one
• Finally, there is a new beginning, ideally bringing with it renewed energy and optimism for the next chapter

Replacing more than a paycheck

I'll miss getting a paycheck.

I've received one every other Friday for decades. Like an old friend, that ritual is comforting and easy to take for granted.

What surprised me is that a paycheck isn't just income. It's reassurance. Every other Friday, money quietly appears in my account and confirms that everything is working the way it's supposed to.

Retirement asks you to replace not only the income but some of that confidence as well. That's one reason many retirees build strategies around reliable sources of income.

Depending on individual circumstances, annuity products can help create a stream of guaranteed^* income that works alongside other retirement assets and withdrawals. A financial professional can help you develop a customized strategy.

Learning Medicare's lessons

I'll be on Medicare.

After years of relying on employer-sponsored health insurance, I found researching Medicare to be a maze of parts, enrollment periods, deadlines and rules. A qualified insurance agent helped me navigate the process and reminded me that Medicare is anything but free.

Fidelity estimates the average 65-year-old couple will spend roughly $12,850 on healthcare during their first year of retirement. And that doesn't include long-term care expenses.

The lesson is simple: Build room in your retirement budget for healthcare costs.

Building a new community

According to the Holmes-Rahe Life Stress Inventory, retirement ranks ninth — tied with marital reconciliation — among the 43 most stressful life events measured by the scale.

In my case, retirement is accompanied by a move, which is also on the list. While I'll be closer to extended family, I'll also be leaving behind a network of workplace relationships and social connections.

I'll be looking for some new friends, and the best remedy is to get busy. Volunteering and community involvement are how many retirees build new relationships. Ken Dychtwald, founder and CEO of Age Wave, recently suggested society could benefit from an Elder Corps — something like the Peace Corps for retirees.

My own plans include joining Toastmasters, participating in a book club, spending time at a health club, reconnecting with my college alumni association and enjoying my son-in-law's boat.

I should probably let him know about that last one.

The point is to actively seek connection and avoid isolation and loneliness.

I'll get Monday mornings off

For years, the iconic ticking stopwatch from 60 Minutes triggered my Sunday scaries, shifting my mindset from weekend relaxation to work responsibilities. While I look forward to no longer caring whether it's Sunday or Monday, maintaining a schedule can provide structure and purpose.

My father, who spent nearly 30 years in retirement, opened an antique shop after a successful engineering career. He didn't sell much, but he had a place to go every day and a community of regulars and friends.

Turning a passion into a purpose can provide a reason to get up each morning while you're still finding your footing.

Appreciating the gift

Advances in medicine, healthcare and technology are steadily increasing life expectancy. Longer lives are not simply adding years to the end of life — they are reshaping how people think about retirement and the opportunities it presents.

What I've come to realize is that retirement isn't a single event, it's a transition.

I've spent years focused on the financial side of leaving the workforce. What surprised me was how much emotional preparation was required as well.

From the moment people start saying congratulations to the realization that you're now on your own path, retirement becomes a new life story.

Retirement marks an important new chapter of my life. The trick is to turn fear into curiosity and anxiety into possibility.

Like most meaningful transitions, it isn't something you fully understand until you start experiencing it.

* Guarantees are backed by the claims-paying ability of the issuing insurance company.

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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 lot of financial advice treats every stage of life the same, with a checklist repeated with bigger numbers.

This guide walks through what tends to matter most in your 30s, 40s, 50s and 60s.

We'll cover which decisions carry the most weight and what deserves attention at each stage of life.

Financial priorities in your 30s

Higher income in your 30s rarely creates as much breathing room as people expect.

The extra money usually disappears into rent upgrades, childcare, weddings and student loans.

Here's what to do:

• Track what's coming in and what's going out.
• Build an emergency fund. Three to six months of essential expenses can change how a layoff, medical bill or major repair hits a person financially.
• Start retirement savings early, even if the amount feels small. Get the full 401(k) match if you have one. Without a workplace plan, consider an IRA.
• If someone depends on your income, ensure you have term life and disability insurance.
• Prioritize high-interest debt first. After that, the best payoff system is usually the one you'll stick with.

The systems you automate here tend to follow you for decades.

Jeffrey Zhou, CEO and founder of Fig Loans, works with borrowers building credit and rebuilding financial consistency over time.

"The biggest financial improvements usually come from consistency, not intensity," Zhou says. "People tend to underestimate how much automatic savings, recurring payments, and predictable routines compound over a few years."

Financial priorities in your 40s

This is the decade in which people often look financially successful while feeling stretched all the time.

Conrad Wang, managing director of EnableU, works with businesses and households navigating long-term financial and operational planning.

"The people who struggle most financially in their 40s usually aren't reckless spenders," Wang says. "They're carrying too many fixed obligations at the same time. Bigger mortgages, kids' expenses, aging parents and higher insurance costs. The pressure comes from how many things become non-negotiable at once."

David Kolodny, co-founder of Wilbur Labs, oversees the financial strategy behind building and scaling multiple companies simultaneously.

"Financial complexity increases significantly in your 30s and 40s." Kolodny says. "You're managing an increasing set of personal obligations and business decisions at the same time, and the margin for error on both sides shrinks.

"The people who navigate it well usually have one thing in common: They stopped treating financial planning as something to revisit annually and started treating it as an ongoing operating system."

A few priorities start carrying more weight here:

• Retirement contributions need to increase. Aim for roughly three times your salary saved by age 40 and about six times by age 50, although real life rarely follows those benchmarks perfectly.
• Avoid stagnation. A contribution rate that stays frozen for ten years becomes difficult to recover from later.
• A 529 plan can provide tax advantages and flexibility if education funding is part of the plan. The IRS keeps a straightforward overview of qualified tuition programs and eligible expenses.
• Investment allocations deserve more attention now. A portfolio built entirely around aggressive growth at 31 might not fit the same way at 47. Rebalancing matters because markets distort risk exposure over time.
• Estate planning usually gets delayed too long here because people associate wills and powers of attorney with retirement. In reality, this is often when they become necessary.

Make sure documents reflect current life circumstances instead of the version of your life that existed 12 years ago.

Financial priorities in your 50s

Retirement starts feeling close in your 50s. That changes the weight of financial decisions very quickly.

This is usually peak earning territory, which makes the decade important.

A few strong years can materially improve retirement flexibility.

A few careless ones can create pressure later that's difficult to recover from.

Phil Santaro, co-founder of Wilbur Labs, oversees the financial strategy behind building and scaling multiple companies simultaneously.

"The 40s are when financial complexity compounds faster than income does," Santoro says. "You're managing personal obligations and business decisions at the same time, and the margin for error on both sides shrinks.

"The people who navigate it well usually have one thing in common: they stopped treating financial planning as something to revisit annually and started treating it as an ongoing operating system."

In your 50s, protection starts mattering more. Pay more attention to volatility, taxes, withdrawal sequencing and how much market risk your future retirement income can realistically absorb.

A health savings account (HSA) paired with a high-deductible health plan can create meaningful tax advantages for future medical costs. Long-term care deserves attention, too; 70% of people turning 65 today will need some form of long-term care during their lives.

Mortgage decisions become more nuanced during this decade, as well.

Some people prioritize entering retirement debt-free because the psychological relief matters to them. Others prefer keeping more liquidity available and investing excess cash elsewhere. There is no universal answer.

Before retirement gets too close, it also helps to stress-test spending.

Try living for a few months on the income level you expect later, and save the difference.

Financial priorities in your 60s

One bad stretch of market withdrawals early in retirement can weaken a portfolio faster than most people expect because the account is no longer just compounding in the background.

A few decisions start carrying outsize weight:

• Delaying Social Security beyond full retirement age increases monthly payments by roughly 8% annually up to age 70, but the right timing depends on health, cash flow and household needs.
• Withdrawal order affects how much income gets exposed to taxes over time, especially once required minimum distributions (RMDs) begin.
• Medicare enrollment mistakes, coverage gaps and income-related premium surcharges can become expensive quickly.

The large family house that once made sense can start feeling expensive, empty or exhausting to maintain.

Sometimes downsizing is about unlocking equity and simplifying daily life.

Estate plans deserve another serious review here, as well. Your paperwork should reflect your current reality, not the version of your life from 15 years ago.

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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 planning used to be singularly focused on accumulation, but a paradigm shift has now pushed the focus more on intentionality. Money is a tool that can be used to build a life you can enjoy, which means planning for your ideal future.

That's not to say money isn't important. Make no mistake about it, money can make life easier. Constantly fretting about getting basic needs met is exhausting. But true wealth is about more than money and goes far beyond basic needs. It's less about getting "stuff" and more about a life well lived. Money is a tool in the pursuit of that life.

Prioritize time over things

Acquiring stuff can sometimes feel good and can certainly result in a temporary dopamine hit. But research from the University of Texas at Austin indicates that spending on experiences, such as travel, dining or cultural events, yields greater immediate and lasting happiness compared to material purchases, regardless of cost.

Some families are opting for experiences over possessions, less time commuting and more time connecting. That shift can often lead to greater happiness and lower expenses.

Money is limited, but so is time

Essentially, the question becomes, what brings people joy? The research suggests it's experiences, not stuff, that can prompt lasting happiness. Consequently, time becomes a more valuable commodity than money, in that time well spent leads to contentment.

It's a nuanced argument. Research by Killingsworth, Kahneman, and Mellers suggested that for a large percentage of people, happiness increases as income does. While that might be a byproduct of basic needs being met, the research also suggested that, instead of money increasing happiness, it might decrease unhappiness instead.

But chasing money in an effort to find happiness and disregarding the very real joy that can stem from time spent with loved ones is a mistake many people make. Instead, people should strive for balance, using money as a tool to grant them more time for the things they enjoy.

Redefine success as freedom

Whether it's working fewer hours, taking a sabbatical or saying yes to a passion project, the new dream is control over how you spend your days, not how much you can earn. True success simply isn't measured by the amount of money in your bank account. It's measured by how easily you can pursue your passions and make a difference in your community.

While it's true that money can help you achieve a lifestyle that allows you to live with purpose, far too many people have trouble making the shift from acquisition of assets to living the life made possible by those assets. A financial plan that sets the path toward a life of freedom can't be all about numbers; it also must take into consideration each individual's definition of "freedom."

For some, that might look like traveling the globe in luxury. Others might want to stay close to home, supporting their community through intentional philanthropy. Whatever freedom looks like to you, there's a path toward it.

Well-earned freedom doesn't happen accidentally. But it can happen with some careful planning.

It starts with clarity

Reimagining your ideal life begins with asking what really brings joy. If you can see a vision of your ideal life, you can set the goals necessary to obtain it.

Ask yourself this question: "What does a perfect day look like?" Take time to imagine it without putting restrictions on the vision. Focus on the perfect day without any consideration of money sitting in your bank account. Focus on what factors of your imagined perfect day bring you the most joy.

Once you have your vision, ask yourself the next question: "How do I get there?" It's not a question you have to answer alone. Share your vision for an ideal life with your financial adviser. Together, you can create a plan that sets you on the path toward your vision.

Financial plans that align with your answers will always feel more rewarding and more sustainable. Knowing what the goal is, and how to get there, can be incredibly motivating.

Leading with joy

In my practice as a financial adviser, I start conversations with clients by asking them an important question: "What did you do today that brought you joy?" It's a way to quickly learn about what's important in a person's life and, in turn, what our focus should be for them.

Joy should be at the forefront of any discussion about money and the future. Planning for a purposeful future that brings joy is a way to start setting the foundation to reach that ideal future eventually, and live the life you've dreamt of.

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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 AI is helping financial advisers save time and become more efficient, investors should be asking a simple question: Who benefits from that efficiency?

What if your financial adviser suddenly started taking on twice as many clients? A year ago, that question would have sounded hypothetical. Today, it's entirely plausible.

Artificial intelligence is rapidly changing the economics of the financial advice business. The biggest brokerage firms and financial institutions on Wall Street are openly celebrating how AI will help them cut costs, increase adviser productivity and onboard more clients without adding staff.

According to Bloomberg, JPMorgan CEO Jamie Dimon said the bank's roughly $2 billion annual investment in AI is already producing billions in benefits and cost savings.

Business Insider reported that Dimon pointed to AI-driven savings from reduced headcount, productivity gains and operational efficiencies, while describing the benefits as only "the tip of the iceberg."

What's missing

Conspicuously absent from this reporting was any meaningful discussion about how AI would improve the client experience. That's where the conversation stops being about technology and starts being about ethics.

That became clear to me during a recent podcast conversation with Jeff George, CFA and founder of TAO Financial, an independent fee-only fiduciary adviser who is a member of my Wealthramp network. Like many advisers, Jeff has begun integrating AI into his practice.

Jeff explained he's using AI to help organize research, prepare for client meetings and capture notes during conversations (without sharing personal information).

The note-taking capability, in particular, has changed how he works with clients. Instead of dividing his attention between listening and documenting, he can focus entirely on the conversation and review a detailed record afterward.

That's a meaningful improvement in the client experience because the efficiency allows him more face time with clients.

What Jeff does not do is allow AI to participate in the part of the process clients are paying him for.

"I don't allow AI to influence anything that requires independent judgment," he told me. More telling was what came next: "I believe that clients are hiring me for my advice and that they want my brain. And if I'm using AI to build financial plans, then what are they really paying for?"

Jeff's guardrails are surprisingly straightforward:

• He won't allow AI to recommend portfolio changes, determine withdrawal strategies or make planning recommendations that require professional judgment
• He won't upload client information into public AI tools
• He won't accept AI-generated conclusions without verifying the underlying sources himself
• He won't present AI-generated output to a client as if it were his own analysis

Those guardrails aren't just a reflection of Jeff's approach to AI. They highlight a much bigger issue for investors.

Too much information can overwhelm

Most people who reach out to me to find fiduciary advisers aren't suffering from a lack of information. If anything, they're overwhelmed by it. They've read articles, listened to podcasts, watched YouTube videos and increasingly experimented with AI themselves.

What they still don't know is whether they can afford to retire, whether they're taking too much risk, whether helping an adult child will jeopardize their own future or whether they're making a costly mistake they can't see.

Those are judgment problems that require decisions to be made with full context.

Two investors can have identical portfolios, identical incomes and identical account balances and still need completely different advice because they're solving different life problems. One might be caring for an aging parent.

Another could be supporting grandchildren. One might be terrified of running out of money. Another could need permission to spend more freely. The facts might be the same. The advice should not be.

This is where I think the AI conversation sometimes goes off track.

People often ask whether AI will replace financial advisers. Increasingly, I hear a different version of the question: If consumers have access to the same AI tools, why hire an adviser at all?

It's a fair question.

Consumers can absolutely use AI to become better-informed investors. They can ask smarter questions, learn unfamiliar concepts, compare strategies, explore retirement scenarios and organize information far more efficiently than ever before. Used thoughtfully, AI can be a powerful financial education tool.

But information and advice aren't the same thing.

Jeff described that tension perfectly. Used appropriately, AI can handle the blocking and tackling of running an advisory practice — organizing information, managing workflows, documenting conversations and performing preliminary research.

That frees advisers to spend more time doing work that actually requires experience, context and judgment.

But he also acknowledged the slippery slope. At some point, every adviser will face a choice between using AI to serve clients better and using AI to serve more clients. Those aren't necessarily the same thing.

That's why I believe consumers need to ask a different set of questions. Instead of asking whether an adviser uses AI, find out how you benefit from it. Ask:

• What safeguards are in place to ensure AI supports rather than replaces personalized advice?
• Is confidential information is ever entered into public AI systems?
• What decisions are never delegated to technology?
• How will the adviser's use of AI improve your experience as a client?

This should become part of your adviser vetting process, because their answers will reveal where most of the benefits of AI are flowing — to you or to their firm.

Financial advice has always been an industry where consumers had to look beyond marketing claims to understand what they were really buying. AI doesn't change that reality. If anything, it makes the distinction between outstanding fiduciary advisers and sales-driven advisers easier to see.

The advisers who stand out in the next decade won't necessarily be the ones using the most sophisticated technology. They'll be the ones who can clearly explain how they're using it, why they're using it and where they draw the line.

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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 does a cutting-edge artificial intelligence data center have in common with a natural gas pipeline built decades ago?

More than most investors realize.

The race to build AI may be dominated by headlines about chips, software and trillion-dollar technology companies, but the infrastructure supporting that growth could create opportunities in a much less glamorous corner of the market.

About three years ago, I wrote my first article for Kiplinger. It focused on pipeline companies, which many investors expected would become obsolete from the global transition toward renewable energy.

I argued that the market was underestimating the durability of energy demand, particularly for natural gas, and the importance of the infrastructure required to transport and process it.

That thesis has not only held up — it may have become even more compelling.

Opportunities in the pipeline

AI is driving an enormous increase in electricity demand as data centers are built across the country. While renewable energy will undoubtedly play a critical role in meeting future needs, natural gas remains one of the most reliable and readily available sources of around-the-clock power.

As a result, many utilities have significantly increased their expectations for future natural gas power generation.

This creates an interesting opportunity for pipeline operators. Many of the companies that own the existing network of natural gas pipelines possess assets that would be incredibly difficult, expensive and time-consuming to replicate.

The AI revolution may be driven by cutting-edge technology, but it still depends on physical infrastructure built over decades.

Investors who experienced the painful collapse of the MLP sector during the last energy downturn may also be surprised to learn how much the industry has changed.

The old model of aggressively issuing debt and equity to finance growth has largely been replaced by a more disciplined approach focused on stronger balance sheets, internally funded growth, free cash flow generation and returning capital to shareholders.

This evolution is particularly important because it changes the way investors should think about the sector. Many people still associate energy investing with a simple bet on oil and natural gas prices.

However, many midstream businesses generate cash flow based on the volume of energy moving through their systems, often under long-term contracts, rather than the daily swings of commodity prices.

Investing in the age of AI

This idea is consistent with a broader framework I recently discussed in a Stansberry Asset Management webinar on investing in the age of AI: The best opportunities may not only come from the companies creating new technologies, but also from businesses with durable assets, low risk of obsolescence and an essential role in supporting the future economy.

For investors willing to roll up their sleeves, individual pipeline companies may present attractive opportunities. However, selecting the right exposure requires evaluating factors such as asset quality, growth opportunities, balance sheet strength and valuation.

Many investors may therefore prefer a diversified fund or to work with a professional investment manager such as Stansberry Asset Management (where I am the deputy chief investment officer) that can determine how best to incorporate this opportunity into a broader financial plan.

When I first wrote about pipeline companies for Kiplinger, the question was whether the world would still need them decades into the future. Today, that answer appears clearer than ever.

The AI investment nobody is talking about may not be the technology itself, but the infrastructure required to power it.

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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 I think of summertime, I think back to 17-year-old me — driving my car, windows down, not enough sunscreen on, listening to music. Summer always meant less noise, fewer worries about school and not being held hostage by alarms.

These memories have always evoked especially carefree feelings. Until now.

Today's (slightly older than 17) me is struck by the fear that for Gen Z (those born roughly between the late 1990s and early 2010s), summers aren't as insulated from the noise, especially from the echo chamber of social media. And that is causing distress.

Gen Z is inundated with content about the best clothes, the worst places to go to school, the "right" look. They are also exposed to endless financial content, almost daily, and I believe it is causing anxiety.

These young people are under extraordinary pressure to look like they have it all figured out — and it's preventing them from asking for help.

This article looks to quiet a bit of that noise and shine a light on some fundamental financial building blocks.

I'll also discuss where Gen Zers can find trusted, competent advisers to complement their knowledge and provide an appropriate level of support, and how they can create a life for themselves based on financial stability and security.

But first, a few recent examples of "noise."

Side hustles build wealth, but jobs are boring

One common narrative on social media involves downplaying the benefits that come from a traditional, 9-to-5 job. It romanticizes a version of entrepreneurship, which more closely resembles a side hustle that someone should be doing for joy and extra cash rather than to build wealth.

Entrepreneurial spirit and drive are important and can be great, but placing too much emphasis on these themes can make Gen Zers feel bad about not monetizing hobbies. Instead, I think it's more important to think about how to create wealth from your career.

Take workplace benefits, for example. These are a largely invisible form of compensation. A company matching a 401(k) contribution, access to health and disability insurance, or the ability to save into a health savings account or flexible spending account can be incredibly valuable when life takes an ugly turn.

Simply having a predictable cash flow itself is a huge benefit for someone looking to build wealth. It means you can automate savings, anticipate how much you can invest and plan for the future.

Girl/boy math and 'no-spend' months

Some catchphrases are funny — for example, using the term "girl/boy math" to justify unnecessary spending (if you return a shirt that costs $50, you made $50).

"No-spend months," on the other hand, create a restrictive mindset more akin to dieting.

Both can lead to unhealthy financial behavior because they turn budgeting into a game or punishment.

In reality, budgeting is an exercise where you look at your cash inflow and determine how much you can spend on necessary costs, such as rent or a car payment, and discretionary costs, such as dining out, taking that vacation or bulking up savings.

By creating short- and long-term goals, you can create a meaningful, attainable budget that is sustainable for your overall financial health.

Be your own financial adviser — it's easy

No. It's not. While I appreciate the spirit of independence, it's risky to think you shouldn't ask a professional for help because you should be able to do it on your own using "facts" available on the internet.

There's a big difference between being able to access financial information and being able to understand it. Having the ability to sift through what is fact or fiction and apply it to your situation can be incredibly complex — and that's where professional help is useful.

Gen Zers seem to select financial advisers with a decent amount of skepticism and due diligence — and this is a good thing.

But those who hire professionals know the good ones can help educate and coach them to make their own financial decisions, accept new ideas and keep them on track to achieve their financial goals.

Setting the right foundations

This is just a sample of the noise that Gen Z constantly hears. There are plenty more examples and some can be pretty insidious, promising dreams of getting rich quick.

If we can do one thing for our Gen Z friends and family, it's to give them a foundation that helps them feel great about their own choices now and in future. Then maybe they can get back to what young people should be doing this summer — having some fun.

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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.

Picture a family sitting around the table for Thanksgiving dinner. They chat, laugh and enjoy the thoughtfully prepared meal. As they finish, the conversation shifts to what each family member is thankful for. They talk about gratitude in the context of family values and decide which charities to support during the holiday season.

Conversations like this can engage children in charitable giving early on. And while every family's discussion will be different, taking this kind of intentional approach is an essential first step in building and maintaining a lasting charitable legacy.

This is a hot topic for many families. After a decade of buildup, most agree that the Great Wealth Transfer is underway. According to Cerulli Associates, $124 trillion will be transferred by 2048. Most of that will come from baby boomers, and an estimated $18 trillion is expected to go to charitable causes.

Those who want to use the Great Wealth Transfer to build a meaningful legacy will need to focus on two distinct priorities. The first is effectively navigating tax provisions and making the right decisions around asset transfers — an elemental part of financial planning that requires constant vigilance.

The second is building an efficient succession plan that empowers heirs and future generations to carry the legacy forward.

Passing on assets, values and processes

Younger generations stand to inherit more than money. The biggest hope might be that they inherit some of the values and priorities that helped shape how their elders gave. But they often inherit the family process for charitable giving.

For families with a private foundation, this could mean board meetings, administrative responsibilities and managing considerable overheads. These systems may have worked for older generations, but they can feel confusing and burdensome to successors.

To make matters more complicated, many families will experience multiple inheritances as money passes from one generation to another. Married couples may leave money to their spouse as well as their children, for example. In fact, research suggests that $54 trillion will be passed on to widowed spouses as part of the Great Wealth Transfer.

Older spouses must therefore discuss their priorities and plans for how money will pass down. They can then begin talks with the next generation — and advisers — about how to make the process of charitable giving as effective and impactful as possible.

Using a flexible giving vehicle

When considering different approaches to transferring wealth, look for those that offer flexibility. Some families want to empower future generations while retaining some control, for example. A donor-advised fund (DAF) can be a useful tool for this kind of cross-generational giving.

A DAF offers a powerful framework for streamlining and managing elements of inheritance and sustained charitable giving. Specifically, a DAF's structure allows families to combine two common tactics in charitable succession planning: Bestowing to others and endowing to charity.

Bestowing to others enables future generations to assume account privileges and begin making strategic philanthropic decisions. With a Vanguard Charitable DAF, for example, up to two individuals (often a spouse or a child) can be named successor advisors.

The account can then be split into multiple new accounts, allowing families to segment funds and responsibilities how they see fit.

Endowing directly to charity, on the other hand, allows older generations to retain decisions about giving, even after they pass or no longer control the account. You can do this by recommending recurring grants from the DAF. These schedule repeating grants to one or more charities based on a percentage of remaining account assets.

Another benefit of a DAF is that it can accept assets from a private foundation. This simplifies administration, which can relieve many of the burdens inheritors may resist. It also establishes a clear structure for balancing giving priorities by bestowing to others and endowing to charity.

How to navigate family dynamics

With the right plan and giving tools in place, successions and inheritances become an opportunity to pass down one's priorities and lessons alongside wealth. But what happens when families don't agree on values and struggle to create a meaningful path forward?

There is no one-size-fits-all solution, as every family has its own dynamics to navigate. However, there are some best practices to keep in mind.

Clearly communicate expectations. There should be few surprises when an inheritance occurs. Through conversations and estate planning, make sure expectations, roles and wishes for future generations are well established and understood.

Incorporate responsibilities in stages. Just as a child's introduction to finances is traditionally an allowance, then a checking account, then perhaps a credit card, charitable giving and grantmaking can be taught in incremental steps. This can include opening a smaller DAF or another charitable vehicle to help younger generations better understand the process.

Create opportunities for conversation. Charitable giving is a significant and rewarding part of life for many individuals and families. Making time for conversations around philanthropic priorities and how they may evolve over time is critical.

No two families are alike. Those Thanksgiving and dinner table talks will vary. But creating a plan with the right tools and communicating that plan with younger generations — is a powerful way to create and maintain an impactful charitable legacy.

Related Content

• Great Wealth Transfer: How Families Can Get on the Same Page
• Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who Knows
• High Earners Want to Give Money and Communities Need It: Impact-First Investing Can Bridge the Gap
• Giving Gamechanger: Why Now's the Time to Use a Donor-Advised Fund
• Donating Complex Assets Doesn't Have to Be Complicated

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 something happened to you tomorrow, would your family know exactly what to do … or would they be left guessing?

Without a plan, your estate might go through probate, a process that can take months (or longer), incur legal costs and make your personal financial matters part of the public record.

According to Caring.com's 2025 Wills and Estate Planning Survey, less than 50% of respondents said they had estate planning documents drawn up to ensure their wishes were known. Only 24% said they had a will (a significant decrease compared with past years).

As a longtime financial adviser, I have to admit I wasn't surprised when I saw those survey results. Through the years, I've learned that even the most diligent and caring families underestimate the importance of legacy planning as part of their overall financial plan.

Some just don't want to think about it, or they haven't gotten around to it. Many simply can't imagine that they have enough assets to justify the time, effort and cost that goes into documenting their preferences.

But having a legacy plan is one of the most thoughtful things you can do for your loved ones. If you can make these consequential decisions now — and get it all down in writing — your family and friends can help avoid the anxiety of having to guess, fight for or fight over what you might have wanted.

What are some legacy planning basics?

A legacy plan can range from a few basic documents meant to help ensure that your medical, financial, and other wishes are clear to a more detailed plan that can help shield your estate and your beneficiaries from taxes and the probate process.

(Note: The following information is provided for educational purposes only and is not intended as legal advice.)

Because estate planning documents must be drafted based on your individual circumstances and state laws, you should consult a qualified attorney to create or complete the components of your estate plan.

Some common components include:

A basic will

A will is a legal document that outlines who you want to inherit your assets after your death. Because it can be relatively easy and inexpensive to create, it's the foundation of most estate plans.

A will allows you to:

• Name your beneficiaries
• Appoint an executor who will be responsible for carrying out your wishes
• Choose the guardians who will care for your children
• Leave charitable gifts to the causes you care about

Contrary to what many people believe, a will usually won't exempt your estate from going through probate, a court-supervised process that includes ensuring that your debts are paid and that your assets are properly distributed.

But a will provides guidance and more control. If you die intestate (without a will), the court will follow state laws to decide how to distribute your estate.

A living will

You can use a living will to inform your family and doctors about the medical treatment you want to receive if you're no longer able to communicate or make decisions.

It's a legal document that must meet state requirements, and it won't take effect until doctors determine you can no longer convey your wishes about things such as pain management, resuscitation or end-of-life care.

A healthcare power of attorney (POA)

A healthcare POA, also known as a durable POA for healthcare or medical POA, differs a bit from a living will in that it appoints a proxy or agent to make healthcare decisions for you if you become incapacitated.

With this document, a chosen representative whom you trust can communicate with healthcare providers and access medical records to make informed decisions.

A financial POA

A durable POA allows you to name the person (or persons) you want to make financial and legal decisions on your behalf. This means that person can manage your affairs without having a guardian or conservator appointed by the court.

The document can be tailored to grant specific powers or provide broader powers based on your preferences. Unlike a regular POA, a durable POA remains in effect if you become incapacitated and can no longer make your own decisions.

Other must-dos to help avoid probate

Along with these documents, legacy planning moves can also help your heirs avoid the stress and expense of the probate process:

• Name your beneficiaries. Never assume your money and other assets will make it to the people and places you have in mind. Make sure your beneficiaries are noted (and regularly updated) on all your accounts, property deeds, insurance policies, etc.
• Set up payable-on-death (POD) designations. Taking the time to fill out a POD designation form with your bank can keep your loved ones from having to wait months or longer to access the money in your accounts. Instead of going through probate, the funds in your checking, savings and other accounts can be automatically transferred to the named beneficiary when you die.
• Preparing transfer-on-death (TOD) designations. A TOD designation is another legacy-planning tool that typically allows assets to pass directly to beneficiaries without having to go through the probate process. The main difference is that a TOD account typically applies to investment accounts or individual holdings rather than bank accounts, and there are usually more steps involved in accessing the account(s).

With a TOD (vs just including an inheritor's name on a property deed or an account), the asset's basis will be automatically adjusted, or "stepped up," to its fair market value on the date of the transferer's death, which can help mitigate capital gains tax.

Let's talk about trusts

You might have heard that a trust is a must when it comes to legacy planning. Setting up a trust can make sense for many people.

Besides potentially offering significant estate tax benefits, a trust can provide other protections. The assets in your trust won't be part of any probate proceedings, which means your beneficiaries should be able to receive them faster.

trusts don't become part of the public record, so it's a good way to help protect your family's privacy.

There are two broad categories of trusts, and each has its pros and cons:

A revocable trust allows you, as the grantor, to make changes to your trust or revoke it if you should choose to do so at some point. You can remove beneficiaries, add new ones or modify how assets within the trust are managed.

However, because you'll retain control of the assets in a revocable trust while you're alive, those assets will still be considered part of your estate for tax purposes.

Unlike an irrevocable trust, a revocable trust isn't a sure thing when it comes to shielding your assets from creditors.

With an irrevocable trust, you, as the grantor, give up the right to amend or revoke the trust without your beneficiaries' consent, which means giving up some control.

But it also means that any asset transferred to the trust during your lifetime will be removed from your estate for estate tax purposes if the trust is properly drawn up and administered. Those assets will also be protected from your creditors and your beneficiaries' creditors.

Do you really need a trust?

Not everyone needs a trust, but many families benefit more than they realize, especially as their financial lives become more complex.

If you need help figuring out which strategies and documents might be the right fit for you and your family, I recommend reaching out to your financial adviser and/or an estate attorney.

If retirement planning is about creating income for your life, legacy planning is about creating clarity for the people you leave behind.

If you're worried about costs, you might find that getting help and putting the proper documentation in place can help save you money in the long run.

The sooner you get started, the better.

Kim Franke-Folstad contributed to this article.

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

Related Content

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• I'm a Wealth Planner: These Are the 3 Pillars You Need Before You Build Your Estate Plan
• What to Do When Someone Dies: A Checklist
• A Financial Pro Breaks Retirement Planning Into 5 Manageable Pieces
• 4 Ways Washington Could Put Your Retirement at Risk (and How to Prepare)

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, recent market swings have been emotionally draining. These volatile moments in the market can create uncertainty and may influence how people feel about their financial future in retirement. As markets go down, financial stress can often go up.

In the 2026 Annual Retirement Study* from the Allianz Center for the Future of Retirement®, two in three Americans (67%) said they worry more about running out of money than death.

That concern has climbed steadily over the past five years, up 10 percentage points since 2022. This worry is driven by rising costs, healthcare concerns and market volatility.

Market drops trigger anxiety

Many Americans are tuned in to how the market is performing each day. The majority of Americans (57%)* said they feel anxious about their future financial well-being when their retirement accounts suffer losses due to a market drop. Half say they immediately check their retirement accounts after a dip.

Watching the balance fall in your retirement accounts can feel like watching years of hard work disappear. But it's important to keep in mind that over the long term, the market has historically provided positive returns.

Reacting to short-term volatility can leave a lasting, and likely negative, impact on retirement security.

Still, more than one in three Americans (34%)* say they typically withdraw money from investments to avoid further losses when the market experiences a significant decline.

While cutting your losses may feel proactive, selling during a downturn locks in those losses and may derail a long-term financial strategy. For those who still have decades before retiring, time is on their side for recovery.

This makes it concerning that 46% of Millennials* said they pull money out of the market during a downturn. If young investors continue to accumulate assets in a down market, the volatility can even work to their advantage by buying when prices are lower.

If young investors stay in the market, then history has shown the market could rebound before they intend to touch those accounts.

For those approaching retirement or who have recently retired, a down market can have a big impact on outcomes. They don't have the time to ride out a market downturn.

The years just before and after retirement are referred to as a "fragile decade," because withdrawals taken during market downturns can reduce the longevity of a portfolio, which can cause anxiety around market volatility during this period.

Losses early in retirement can be harder to recover from because you are withdrawing money at the same time the portfolio is trying to rebound. In this case, short-term declines can have a material effect on retirement income.

The role of risk management in a retirement strategy

Many may have these reactions to market volatility because it exposes their lack of planning for retirement. Nearly half of Americans (48%)* said they do not have a written financial plan.

Without a road map, Americans don't know how to navigate through a detour or bumps in the road.

While we cannot predict when market volatility will happen, history shows that it has occurred over time. A strong retirement plan incorporates strategies to manage the risk posed by market volatility.

Avoiding the market altogether isn't advised to address the risk — market participation can be critical to manage other risks such as inflation.

Incorporating risk management within a retirement strategy can help align risk appetite with desired retirement outcomes. If risk is not accounted for, then it could signal the need to consult a financial professional.

A financial professional can create a written financial plan that can help create structure and confidence around risk and controllable factors.

A written financial plan provides a guide when volatility strikes. It will identify your retirement income sources and assign roles to the different assets in your portfolio.

It can document how a scenario was anticipated and what strategies are in place to address it. Without that guide, it can be easy to react emotionally rather than stay the course.

Building a reliable strategy for uncertain markets

Market volatility isn't new, and it isn't going away. What changes is how prepared people feel when it arrives. A retirement strategy isn't about avoiding uncertainty. It's about planning for it.

It is important to incorporate a level of protection from market volatility into your strategy while accumulating assets and when drawing down on those assets for retirement income.

Some financial products, like defined outcome exchange-traded funds (ETFs), have a buffer that can help limit losses in a down market.

As you move from accumulation into retirement, you may plan to shift how your assets are spread across asset classes to diversify and allocate more toward financially conservative approaches.

It also helps to ensure your essential expenses are covered. One strategy designed to address market risk is to have reliable, stable, secure sources of income to cover essential expenses such as housing, food, utilities and healthcare.

That way, you will not have to withdraw from your more variable assets when the values are down just to pay bills.

Social Security is an important source of reliable, increasing income for many Americans, but it is not enough to be the sole source of retirement income for many. So there is often a gap between essential expenses and Social Security benefits.

Other sources of guaranteed income like annuities can help fill in that gap and provide safe guaranteed income** that cannot be outlived*** and, in some cases, can increase, complementing Social Security.

Knowing that you have strategies in place can help make it easier to go through periods of market volatility. By addressing risks head on and incorporating risk-management strategies alongside growth, Americans can feel more prepared to weather market turbulence without losing sight of the long term.

Volatility may test your nerves. But a well-built strategy helps ensure it doesn't derail your financial future.

* Allianz Center for the Future of Retirement® conducted the 2026 Annual Retirement Study in January 2026 with a nationally representative sample of 1,000 respondents age 25+ with an annual household income of $50k+/$75K (single/married) OR investable assets of $150k+. The Allianz Center for the Future of Retirement® produces insights and research as a part of Allianz Life Insurance Company of North America.

^** Guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurance company.

^*** Assumes all terms of the contract are followed.

Annuities can help meet long-term retirement goals by offering tax-deferred growth potential, a death benefit during the accumulation phase, and a guaranteed stream of income at retirement.

Investment strategies, such as diversification and strategic asset allocation, do not ensure a profit or protect against loss.

Defined outcome ETFs are subject to investment risk, including loss of all principal invested.

Related Content

• These 5 Steps Can Help You Keep Your Head When Market Volatility Causes Others to Lose Theirs
• When Markets Are Jumpy: A Financial Planner Explains How to Stay Grounded
• A Simple Trick for Better Investing: Stop Timing the Market
• Is Your Retirement Plan Based on Social Security Fact or Fiction?
• Are You Putting Yourself Last? The Cost Could Be Your Retirement Security

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

If you're getting financial advice from someone who is paid based on the products you buy, you're not getting objective financial advice. You're being sold.

That may sound harsh, but it's the reality of how much of the financial services industry still operates.

One of the least understood drivers of this problem is something called revenue sharing. And if you don't know how it works, there's a good chance it's influencing your portfolio.

The incentive you're not supposed to notice

Revenue sharing is simple:

• Investment management companies charge fees on the products you own
• They send a portion of those management fees back to the financial advisory firms that recommend their product
• The more client money in those financial products, the more money flows back to the financial advisors

In the aggregate, these payments can total hundreds of millions of dollars over time.

Let's call it what it is: A financial incentive for a financial advisor to steer you toward certain investments.

This isn't advice — it's financial product distribution

Think about the grocery store "shelf space" analogy.

The brands at eye level didn't earn that spot by being better. They paid for it.

Now apply that to your portfolio:

• Some funds are easier for your financial advisor to recommend
• Some product providers happen to get preferred placement
• Some options may not even be shown to you

That's not objective advice. That's product distribution dressed up as financial planning.

The cost to you: Hidden fees and compounding costs

Revenue sharing doesn't come out of thin air. It comes out of your investment returns and is layered on top of (or sometimes baked into) your:

• Advisory fees
• Fund expenses
• Platform costs

So you end up paying what many insiders call "the fee on the fee on the fee."

Even small differences in cost compound into massive differences in long-term wealth.

Why most investors never see it

Revenue sharing is technically disclosed.

But in practice?

• It's buried in the fine print of your client agreements or mutual fund prospectuses
• It's rarely quantified
• It's almost never explained clearly (or even brought up)

So investors continue to believe they're receiving objective advice when they're often sitting in a system designed to reward the financial advisor for product placement.

Here's the truth most investors miss

The problem isn't just bad actors. It's the system.

Even well-intentioned financial advisors operate within compensation structures that:

• Reward certain financial product recommendations
• Encourage "approved lists" of products
• Make some investments more profitable than others — for the advisor

You can't fix that with better questions alone. You fix it by changing the type of advisor you work with.

The clean break: Fee-only financial advice

If you want to eliminate these conflicts, there is a straightforward solution: Work with a fee-only financial advisor. Better yet, work with one affiliated with the National Association of Personal Financial Advisors (NAPFA).

NAPFA advisors operate under a strict standard:

• Client payments only
• No sales commissions
• No hidden revenue sharing agreements
• No third-party compensation tied to recommendations

Read that again. NAPFA financial advisors do not get paid more based on what you buy. That's a completely different business model.

Why this matters even more than credentials

Many investors focus on designations, titles and branding.

But here's the uncomfortable truth:

• A profession designation or credential does not eliminate conflicts of interest
• A polished sales presentation does not eliminate financial incentives
• A big financial firm does not eliminate biased advice

Compensation structure does. And if your advisor is part of a system that profits from product placement, you need to assume that influence exists — whether it's visible or not.

A simple process of elimination

If you want better financial advice, start here:

• Avoid financial advisors who have some (or all) of their compensation tied to product sales: That includes financial advisors working at product-driven financial institutions such as large banks, investment securities brokerage firms and insurance companies.
• Ask financial advisors one key question: "Do you receive any compensation from the investments you recommend?"
• Eliminate all financial advisors from your search who earn a living based on conflicted financial advisor compensation models: If the financial compensation model includes sales commissions, sales incentives or revenue sharing, move on to other firms.
• Focus on fee-only advisors: Use "find an advisor" directories at fee-only trade associations, such as NAPFA, to find the fee-only financial advisors in your area.

This process is not complicated. But it does require discipline.

The bottom line

You have two choices when it comes to financial advice:

• Work with someone who is paid to sell products
• Or work with someone who is paid to give advice

Revenue sharing is just one example of how the lines get blurred. But if you want to cut through the noise, remember this: The easiest way to avoid biased financial advice is to avoid the product distribution system that creates it.

For many investors, that means one thing:

Stop taking financial advice from a product salesperson and start working with a fee-only financial advisor who is paid only by you.

Related Content

• Overpaying for Financial Advice? A Financial Planner's Guide to Fees
• Why Flat Fees for Financial Advice Work When They're Tied to Value Rather Than Portfolio Growth
• 'Fee-Only' and 'Fiduciary' Are Not the Same: A Financial Pro Sets the Record Straight
• I'm a Financial Adviser: This Is Why I Became an Advocate for Fee-Only Financial Advice
• The Truth About 'Top Producers': What You Should Know Before You Choose a Financial Professional

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.

Roth conversions have recently become one of the most popular retirement tax planning strategies. Financial headlines often promote them as a way to create tax-free income, reduce future required minimum distributions (RMDs) and leave a more tax-efficient legacy to heirs.

For many retirees, those benefits are real.

But Roth conversions aren't a one-size-fits-all solution. In fact, as a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that converting retirement assets at the wrong time can result in paying more taxes than necessary and reduce your long-term wealth.

The key question isn't whether Roth conversions are good or bad; it's whether paying taxes today will save you on taxes in the future (I wrote a bestselling book all about taxes — you can request a free copy here).

Below are six situations where retirees may want to think twice before converting.

1. You don't have a pension

One of the biggest factors in determining whether a Roth conversion makes sense is your expected future tax bracket. For retirees without a pension, their future taxable income is often lower than it was during their working years, as many rely primarily on Social Security and modest withdrawals from retirement accounts.

As a result, they could remain in relatively low tax brackets throughout retirement.

Today's tax code also includes a generous standard deduction (up to $32,200 for 2026). For some retirees, that deduction might shelter most or even all of their taxable income.

If you expect to stay in a lower tax bracket for life, voluntarily accelerating taxes through a Roth conversion might not provide as much benefit.

By contrast, retirees with substantial pensions often face a different reality. Pension income can create a permanent tax floor that follows them throughout retirement, making Roth conversions far more attractive in certain cases.

2. You have less than $500,000 in tax-deferred accounts

Your account size matters. When evaluating Roth conversions, it's important to consider future RMDs. Starting at age 73 (or 75 for many younger retirees), the IRS requires withdrawals from traditional IRAs and other tax-deferred retirement accounts.

However, smaller account balances produce smaller RMDs.

For example, a retiree with $500,000 in a traditional IRA might have an initial RMD of roughly $20,000. Combined with the standard deduction and other available tax benefits, that withdrawal could have little impact on their overall tax situation.

If your retirement savings aren't large enough to create a meaningful future tax burden, converting assets today could mean paying taxes earlier than necessary without generating significant long-term savings.

3. Your tax rate today is higher than it will be in retirement

At its core, a Roth conversion is a tax-rate arbitrage decision. You're choosing to pay taxes now because you believe you'll pay the same or even a higher rate later. This strategy falls apart if the opposite is true.

Consider someone in their peak earning years who is currently in the 32% federal tax bracket. If they have no pension and moderate retirement savings, they may eventually find themselves in the 12%, 22% or even lower brackets after they retire.

In that scenario, converting assets while working could mean prepaying taxes at a significantly higher rate than what would have been owed later.

Before converting, retirees should estimate their likely retirement income rather than assuming their future tax rate will automatically be higher.

4. You're planning to retire early

One reason not to do Roth conversions today is that you could have a better opportunity later. Early retirement often creates what planners call a "tax window": A period after earned income stops but before Social Security, pensions and RMDs begin.

For example, someone retiring at age 58 might have several years when taxable income drops dramatically. During those years, they can often perform Roth conversions in much lower tax brackets than they could while working.

This window can be particularly valuable because it could allow retirees to:

• Convert assets before Social Security becomes taxable
• Avoid increasing Medicare premiums tied to higher income
• Fill lower tax brackets more efficiently
• Reduce future RMDs

Rather than converting aggressively during high-income working years, some retirees may benefit from waiting until these lower-income years arrive.

5. Your children might be in lower tax brackets than you

Many Roth conversion discussions focus on leaving tax-free assets to heirs. This can be an advantageous legacy planning strategy, but it isn't always the right answer.

Today's inherited IRA rules generally require most non-spouse beneficiaries to empty inherited retirement accounts within 10 years. Because of this rule, many parents assume they should convert everything to Roth accounts, but there are considerations to think about.

The better question is: What tax bracket will your children be in when they inherit the money?

If your children have higher incomes than you, significant retirement savings of their own or expect to remain employed during those 10 years, Roth conversions may make more sense because each of these could result in your children paying more taxes down the road than you would have paid.

But if they're likely to be in lower tax brackets than you, allowing them to inherit traditional IRA assets could result in a lower tax bill being paid across generations.

Legacy planning shouldn't focus only on your tax rate, but should also account for the tax situation of the people who will ultimately receive the assets.

6. You're single today but expect to marry

Tax brackets are not static. A single retiree who expects to get married in the near future could gain access to larger tax brackets and a higher standard deduction through married-filing-jointly status.

In some situations, waiting until after marriage to perform Roth conversions can create additional flexibility and allow larger conversions at lower effective tax rates.

This isn't a common planning strategy, but it's one that can be overlooked when evaluating conversion opportunities.

Bonus consideration: You're moving to a lower-tax state

State taxes can significantly influence the math behind a Roth conversion. Someone working in a high-tax state, such as California, may pay an additional 7% to 10% or more in state income taxes on converted dollars.

If that same person plans to retire in Florida, Tennessee or another state with no income tax, waiting would likely generate sizable tax savings.

In some cases, the difference between converting before and after a move can amount to tens of thousands of dollars.

The bottom line

Roth conversions can be an incredibly effective tool, especially for retirees with pensions, large tax-deferred balances and concerns about future taxes. But the goal isn't to convert simply because Roth accounts sound attractive. The goal is to minimize your lifetime taxes.

Related Content

• If You're Converting to a Roth IRA, Don't Do It Like This
• 5 Reasons Roth Conversions and Pensions Work Well Together
• This Changes Your Social Security Decision (Especially if You're in the 2% Club)
• 7 Times to Dip Into Your Roth IRA if You Have a Pension (and When to Leave It Alone)
• 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You

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

"I feel like we'll never actually retire."

"We make good money. But what retirement? It keeps moving further away."

"I don't want to abandon my kids. But I also don't want to work until I'm 67 to make sure they're OK."

These aren't quotes from struggling households. They're what I hear regularly from Gen X professionals, dual-income earners in their late 40s and early 50s with real portfolios and real incomes.

They're high earners with strong intentions — and a quiet but growing line item that almost none of them budgeted for: The Bank of Mom and Dad.

Picture this household: Both spouses are 49 with a combined income of $400,000 and an investment portfolio of $1.5 million. They want to retire at 60 to live on $175,000 a year in retirement, but feel as if they've finally earned the life they've been building.

Yet, $50,000 a year is quietly flowing out of that household to support two adult children, $25,000 each.

• One is 22, in her final year of college and living on campus but relying on her parents for tuition, a car, insurance and everyday expenses.
• The other is 27, recently engaged, living at home, needing help with a wedding and, eventually, a home down payment.

Neither child is a failure. Both parents are generous. But without a plan, that $50,000 is on its way to $70,000. In the 11 years before this couple wants to retire, that unstructured support will cost them far more than money.

People in these circumstances feel behind because they are. It's not because they failed, but because no one helped them plan for this.

The situation is fixable, but only if it changes before the window closes.

The Gen X retirement squeeze is real and getting worse

Research by the Alliance Retirement Income Institute found that Gen X is the least financially prepared generation for retirement by nearly every measure. While Baby Boomers dominate the headlines, Generation X faces an even greater retirement crisis.

In 2025, the eldest Gen Xers entered their 60s, with multiple studies highlighting their lack of retirement preparedness, compounded by their status as a sandwich generation simultaneously caring for aging parents and supporting young adult children.

Meanwhile, roughly one in three adults ages 18 to 34 in the U.S. live with a parent, according to 2025 Census data, up slightly from the year before. A growing share aren't just living at home; they're financially dependent, sometimes deeply so.

For the theoretical household described above, the $50,000 in annual support isn't the only problem. It's what that number becomes. If support continues growing with life events, the wedding, the down payment, extended college costs, ongoing lifestyle needs, that figure reaches $70,000 per year with no defined exit point.

Over the 11 years before their target retirement at 60, unchecked support will have redirected hundreds of thousands of dollars that could have been compounding in retirement accounts, brokerage investments, and tax-advantaged savings.

That's not a small gap. That's a retirement.

One question before we run the numbers

I want to start where I start with every client, with a question I've asked clients for years: "Are you content with the financial and emotional investments you have placed into your adult children thus far?"

If the answer is yes, that doesn't mean you continue indefinitely. It gives you permission to transition from guilt to intention, moving from reactive support to aligned support.

If the answer is no, that doesn't mean you've failed. It means you have clarity.

This question is the foundation of my work on boomerang parenting and what it costs Gen X families, and I've explored it in depth in my Bank of Mom and Dad planning guide.

What I've found across thousands of conversations is that most parents aren't irresponsible. They're unresolved. They haven't yet asked the question that turns support from a reflex into a plan.

What the numbers show

To fund $175,000 annually in retirement, using a 4% withdrawal rate as a planning baseline, this couple need about $4.375 million at age 60. They have $1.5 million today. That leaves a gap of roughly $2.875 million to build in 11 years, achievable with disciplined savings and compounding, but only if their dollars are pointed in the right direction.

Currently, $50,000 per year is flowing to adult children. If the 22-year-old transitions to financial independence after graduation but the 27-year-old's needs continue to grow through wedding costs, a down payment, ongoing lifestyle support after marriage, that figure reaches $70,000 or more per year with no defined end.

Ameriprise Financial found that working parents contribute 2.3 times more to their adult children than to their own retirement accounts each month. For this household, that ratio is quietly becoming true.

Just as the structure of an adviser's fee can quietly compound against retirement outcomes over time, so can unstructured household outflows. The Bank of Mom and Dad is one of the largest untracked line items in a Gen X financial plan.

The compounding cost of that drift is measurable. Here's the planning illustration:

That $510,000 to $625,000 difference is not a rounding error. It's the gap between retiring at 60 and working until 63 or 64. It is the gap between retiring with confidence and retiring with the same anxiety that followed this household through its peak earning years.

"We don't want to abandon them. We just don't know how to stop."

That's a conversation worth having before the numbers get worse.

The catch-up window: Use it or lose it

What makes the next decade specifically critical for this Gen X household is that the tax code is actively rewarding people in their situation, if they act.

For 2026, participants in most 401(k), 403(b), governmental 457 plans and the federal government's Thrift Savings Plan who are 50 and older can generally contribute up to $32,500 each year. That's a $24,500 base contribution plus an $8,000 catch-up for those 50 and older.

The SECURE 2.0 Act introduced super catch-up contributions for those ages 60 to 63. For 2026, the super catch-up limit is $11,250, higher than the standard $8,000 catch-up available to those 50 and older, and designed to help those closest to retirement maximize their savings in the final stretch.

For a dual-income household, this is significant. If both spouses contribute maximally in their 50s and into their early 60s, the combined annual contribution capacity in employer-sponsored plans alone exceeds $65,000 per year, before IRA contributions and brokerage investments.

One note for high earners: Starting in 2026, if you earned more than $150,000 in FICA wages in the prior year, catch-up contributions in employer-sponsored plans must be made on a Roth after-tax, basis.

For a $400,000 dual-income household, this almost certainly applies. This isn't a penalty. Roth contributions build tax-free retirement wealth, but it requires coordination with your plan and your adviser.

Every dollar redirected from unstructured adult-child support into catch-up contributions is a dollar that compounds tax-advantaged for 10 or more years and avoids taxation in retirement. For high earners in peak earning years, this is one of the most direct financial moves available.

The five-step plan for Gen X parents running the bank

Step 1: Get aligned with your spouse or partner first.

Before any conversation with your adult children, get aligned emotionally and financially with each other. Conflicting messages, one parent holding firm while the other quietly supplements, destroy planning integrity and create resentment in both directions.

This alignment conversation covers three questions:

• How much can we afford annually without compromising our retirement security?
• What are we willing to support?
• What's the exit strategy?

Unity is not about being harsh. It's about being honest with each other before you can be honest with your children.

Step 2: Audit the real numbers.

Many parents are genuinely surprised when they total what they're spending on adult children annually. Housing, food, cellphone plans, car insurance, credit card transfers, tuition extensions, medical costs and emergency payments that recur like clockwork all add up to a real line item. For this example household, $50,000 is only the beginning of an honest audit.

Compare that number with current retirement contribution rates, brokerage account contributions, debt-reduction acceleration and lifestyle goals that have been postponed. Seeing trade-offs clearly, in actual dollars, removes guilt and restores agency.

Step 3: Distinguish between support types and set a timeline.

Not all support is equal. A 22-year-old in her final year of college has a clear exit point. A 27-year-old recently engaged and still living at home, needing wedding funds and a down payment, represents a much longer and more open-ended financial commitment if left unstructured.

Ask explicitly: Is this support a bridge or a baseline?

• Time-limited essentials cover final semester costs, a specific medical event or a relocation deposit. These have natural endpoints. Fund them clearly and close the chapter.
• Intra-life transfers are intentional gifts toward wealth-building milestones such as a home down payment or an emergency fund. These can be profoundly impactful and might carry more meaning than a post-death inheritance. They should be deliberate, budgeted and non-recurring.
• Lifestyle subsidies include ongoing rent, car payments, credit card transfers and recurring lifestyle support. These are the most consequential category because they rarely have a defined exit and tend to grow, not shrink, over time.

For the 27-year-old in this household, a one-time, clearly bounded contribution toward a wedding or down payment with a specific ceiling is fundamentally different from continuing open-ended household support into the couple's first years of marriage. Define it now, before the number drifts.

Step 4: Redirect with intention.

If this household redirects $20,000 annually of unstructured support into retirement and after-tax accounts, starting in year three when the 22-year-old finishes college and becomes self-supporting, the compounding difference in the following eight years is substantial.

If both spouses max out 401(k) contributions including catch-up provisions starting at age 50, the annual retirement contribution capacity climbs well above $60,000 per year, enough to put the $4.375 million retirement target within reach.

An after-tax brokerage account deserves focused attention. Unlike retirement accounts, brokerage accounts provide liquidity before age 59½, flexible withdrawal options and the ability to fund retirement expenses from ages 60 to 72 before required minimum distributions begin. For a household targeting retirement at 60, this account isn't optional; it's essential.

Step 5: Have a compassionate, adult conversation.

The financial plan is only as effective as the conversation that introduces it.

With the 22-year-old, the conversation is relatively direct: There is a clear graduation date, and with graduation comes a transition to financial independence. You're there for genuine emergencies, a health crisis or an unexpected job loss, not ongoing lifestyle support. This is not rejection; it's the clearest expression of belief in her capability.

With the 27-year-old, the conversation requires more care. He's newly engaged, wants to build a life, and has been living inside the support structure of his parents' home. Be clear about what you can offer — perhaps a defined contribution toward a wedding or down payment with a specific amount and a specific end date — and equally clear that ongoing housing and lifestyle support has a sunset.

Frame it as preparation, not withdrawal. The boundaries you set today protect both your retirement and his long-term resilience.

Support without structure breeds resentment. Structure without compassion breeds distance. The goal is neither.

What intra-life transfers can do that inheritances can't

The most meaningful financial gifts you can give your adult children might be the ones you give while they're in their 20s and 30s, when a down payment helps them build equity for 30 years, or when early retirement account seeding gives compound growth decades to run.

In my experience, both parents and their adult children often say the same thing when this comes up: They would rather the money have meaning now, when it can change the trajectory of a young family's life, than arrive later as part of an estate settlement.

The key is intentionality. An intra-life transfer that is bounded, purposeful and budgeted into your financial plan is fundamentally different from ongoing support that grows without definition or consent.

For the 27-year-old preparing to buy a home, a structured gift of $20,000 to $25,000 toward a down payment, planned, finite and clearly communicated, might do more lifetime good than a far larger sum left in an estate. It also carries more meaning to both the giver and the receiver when it's given with intention rather than obligation.

Aligned generosity and aligned retirement savings are not in conflict. Your financial decisions should reflect how you actually want to live, not just how you feel in the moment.

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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.

Long-term care can become one of the biggest expenses in retirement. Yet, traditional long-term care insurance doesn't fit everyone's budget or needs.

Rising premiums and stricter underwriting have pushed many people to seek more flexible ways to protect their savings and future care choices.

We'll cover what you need to know about long-term care insurance alternatives with modern strategies for wealth protection.

What long-term care policies cover

Long-term care insurance (LTCI) helps pay for the kind of support many people need as they age. Think of assistance with daily activities such as bathing, dressing, eating, walking and buying groceries.

Policies typically reimburse a daily or monthly amount for such services as in-home aides, adult day care, memory care and skilled nursing. The goal Is to preserve assets and give families options when health needs change.

Bryan Henry, president of PeterMD, recommends looking beyond conventional insurance and finding alternatives for long-term care.

"Traditional LTCI has become harder to buy and harder to keep," Henry says. "Premiums run high, which can be unpredictable. Policy language is dense. Benefits can be limited or exclude certain situations.

"Many insurers have left the market over the past decade, and those remaining often require strict medical underwriting. That's why more people are now looking for flexible alternatives."

Here are some strategies to consider.

Long-term care insurance

Hybrid insurance products

Hybrid insurance policies combine life insurance or annuities with long-term care benefits. If you need care, the policy accelerates benefits to cover it. If you don't, your heirs receive a death benefit, or you can access the cash value.

These policies typically come with guaranteed premiums or at least more predictable funding than stand-alone LTCI.

On the tax front, many hybrid benefits are treated as tax-free when used for qualified long-term care under federal rules. See IRS guidance related to qualified LTC benefits and Form 1099-LTC.

Some policyholders use a tax-free 1035 exchange from an existing life insurance policy or annuity to fund a new hybrid contract. Check FINRA's overview of 1035 exchanges.

Annuities with long-term care riders

Annuities can be customized with riders that boost income, or they can provide extra benefits if you become chronically ill. You're essentially building a baseline retirement paycheck with an added layer that helps cover care if needed.

Some riders multiply your monthly benefit for a set period if you need assistance with the activities of daily living. Others waive certain fees during a qualifying care event.

These designs vary widely by carrier, so, you need to understand the contract language, such as how benefits trigger and what counts as covered care.

Health savings accounts (HSAs)

If you're covered by a high-deductible health plan, an HSA can be surprisingly powerful for future care.

HSAs come with a rare triple-tax advantage:

• Contributions might be deductible or pretax
• Funds can be invested and grow tax-free
• Withdrawals for qualified medical expenses are tax-free

Long-term care services and a portion of LTC insurance premiums might qualify as deductible under IRS rules. See IRS Publication 969 and Publication 502.

As contribution limits change each year, check the current numbers before you automate deposits.

Alternative investment strategies

Self-funding and portfolio diversification

Some households prefer to self-fund care. That doesn't mean ignoring the risk; it means creating a dedicated long-term care reserve in your financial plan and investing it thoughtfully.

You might segment a portion of your portfolio as a long-term care reserve sized to your goals and family health history. Match some of that reserve to inflation-protected assets or short-duration bonds to reduce sequence risk.

A TIPS ladder or a balanced mix of stocks and bonds can help keep pace with rising care costs. Keep cash for the first six to 12 months of potential care, then invest the rest for growth and resilience.

You can also add stopgaps (such as a smaller hybrid policy) to cap worst-case scenarios while still relying on investments to cover the bulk of expenses.

Real estate investment

Real estate can serve two purposes: An income source now and a fallback for care later. Here are some potential investments:

• Rental properties can generate predictable cash flow
• Real estate investment trusts (REITs) offer a simpler way to access the sector without being a landlord
• A reverse mortgage can turn home equity into tax-free loan proceeds to pay for in-home help or facility care, but you need to understand interest accrual and repayment rules before signing

Jeffrey Zhou, CEO and founder of Fig Loans, notes that alternative investment strategies work best when real estate and self-funding are integrated into a broader retirement plan. He emphasizes that both portfolio-based funding and property assets can complement each other in managing long-term care costs.

"A well-structured approach that combines diversified self-funding strategies with real estate can provide steady cash flow in retirement," Zhou explains. "This helps offset rising care costs while preserving the underlying assets as part of long-term wealth."

This perspective highlights how a balanced mix of liquid investments and property income can improve financial resilience. It ensures retirees are not overly dependent on any single source of funding for healthcare and long-term care needs.

Government programs and community resources

Medicare and Medicaid

This is where confusion often creeps in. When it comes to government programs, there's a line drawn between the two:

• Medicare covers medical care, not custodial long-term care. It might pay for limited, short-term skilled nursing or rehab after a qualifying hospital stay. However, it's not going to help with activities of daily living that most people eventually need.
• Medicaid does cover long-term care, but only for people who meet strict income and asset rules, which often means spending down savings first. There's also a five-year look-back period on asset transfers in most states, plus complex spousal protections to navigate.

Proper planning helps you qualify for benefits when needed while protecting your life savings and your home. The key is understanding these programs' rules well before you need care.

Local and community resources

Don't overlook your local support network:

• Area agencies on aging can connect you with home-delivered meals, transportation, caregiver respite and benefits counseling. Eldercare Locator is a perfect example of this alternative access for older people.
• Nonprofits and faith-based groups often offer volunteer services. They provide older people with long-term care.
• Large organizations, such as AARP Caregiving, maintain extensive caregiver guides and checklists you can use right away.

There are more choices than there used to be

Traditional long-term care insurance isn't your only option. With rising longevity and rising costs, planning ahead makes sense, and you have more choices than you used to.

That's why you should consider hybrid life policies, annuities with care riders, HSAs, a thoughtful investment reserve and even targeted real estate. They can work together to protect both your care choices and legacy.

The sooner you prepare for future care costs, the more financial stability you're likely to have later.

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• How to Negotiate to Lower Your Medical Bills: These Strategies Can Help Reduce Your Costs

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 our children were little, we taught them how to cross the street, brush their teeth and say "please" and "thank you." Many people started the kids doing chores and earning an allowance. We understood that those conversations were part of raising responsible adults.

Then they turned 18.

Somewhere along the way, many parents assumed that talking about money should stop because their children were now adults. Nothing could be further from the truth.

In fact, adulthood is when the most important financial conversations begin.

The American Dream has changed

Today's young adults are navigating a financial landscape unlike any previous generation. Student loan debt, soaring housing costs, rising insurance premiums, inflation, volatile markets and an uncertain job market have changed the traditional path to financial independence.

Many are delaying marriage, homeownership and having children — not because they lack ambition, but because the economics are dramatically different.

What does this all mean? Almost 80% of baby boomers own homes vs only 26% of Generation Zers being able to or choosing that path of homeownership.

And baby boomers are trying to ease their kids' pain (and perhaps creating more pain for themselves) — about 50% of these parents are helping to offset money pressures for their adult children.

Things aren't rosy for any generation

Meanwhile, older parents are facing their own financial realities. Many are working longer than expected, caring for aging parents while helping adult children and worrying whether their retirement savings will last 30 years or more.

In fact, among Americans 65 and older, about one in five is still in the labor force. And many more have odd jobs or are gig workers.

That creates a generation caught in the middle — and a lot of silence.

Silence is not golden

Silence is expensive.

I elevated the topic of teaching kids about money in the 1980s. I have taught families the lessons of finance for decades, and one truth remains constant: Families who talk openly about finances make better decisions together. Those who avoid the subject often create misunderstandings, unrealistic expectations and emotional landmines.

The goal isn't to lecture your adult children. It's to have a conversation between equals.

Start with your own story

Many parents hide financial struggles because they want to protect their children. Others hide financial success because they don't want to create entitlement. Others carry the baggage from when they grew up that the biggest secrets in the household related to money issues.

None of these approaches helps. Adult children benefit from understanding how their parents made financial decisions, overcame setbacks and learned from mistakes.

Tell your offspring about the first house you couldn't afford. The investment that didn't work. The credit card debt you finally paid off. The promotion that changed everything. How you had to take your Social Security early to make ends meet later in life.

Money stories teach lessons that spreadsheets never can.

Be honest about your retirement

One of the biggest misconceptions adult children have is assuming Mom and Dad will always be financially available. They may quietly assume you'll help with a home down payment, pay for grandchildren's education or leave a substantial inheritance.

Those assumptions can create disappointment —or, worse, poor financial decisions — based on deceit.

A healthier conversation sounds like this: "We've worked hard to secure our retirement because we don't ever want to become a financial burden to you."

That's one of the greatest gifts parents can give.

If you plan to help your children financially, explain what that help looks like. Is it a loan? A gift? A one-time opportunity?

What are the expectations? Clarity prevents conflict.

Discuss inheritance before it's necessary

No family enjoys talking about death. But avoiding estate conversations doesn't protect anyone.

Adult children should know:

• Where important documents are located
• Who has financial and healthcare powers of attorney
• Whether there is a will or trust
• Who the executors are
• The family's overall wishes — not necessarily for every dollar, but the overall plan

Surprises after a death rarely strengthen families. Money issues and unclear expectations can tear a family apart. Do you really want that to be your legacy?

Set boundaries without guilt

Many parents continue financially rescuing adult children well into their 30s and 40s. Sometimes that help is appropriate. Sometimes it delays independence.

Before doling out the next pot of money, ask yourself: "Am I solving a temporary problem or creating a permanent dependency?"

Financial assistance should come with conversations, not conditions. Explain why you're helping, how often you're willing to help and what success looks like. Healthy boundaries strengthen relationships.

Respect your kids' financial choices

Your adult children grew up in a different economy. They may prioritize experiences over possessions, rent instead of buy or work remotely instead of climbing a traditional corporate ladder. That doesn't mean they are being financially irresponsible.

Instead of criticizing, ask questions:

• "What made you choose that?"
• "How does that fit into your long-term goals?"

Curiosity builds trust. Judgment shuts conversations down.

The best financial conversations happen long before anyone needs money. Don't wait until there's a medical emergency, job loss, divorce or estate settlement.

Instead, create a family tradition. Have a semiannual "money dinner," where you:

• Review major life changes
• Discuss family goals
• Celebrate financial wins
• Update important documents

Make money as normal to discuss as your vacation plans.

The greatest inheritance

Many parents focus on leaving wealth. I believe our greatest inheritance is wisdom. Money can be spent. But values compound.

If your children inherit confidence, sound judgment, healthy financial habits and the ability to have honest conversations about money, you've already given them something priceless.

The question isn't whether your family should talk about money.

It's whether you'll begin the conversation before life forces you to. Because the families who talk together today are often the families who stay together tomorrow.

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

As the saying goes, "You're only as happy as your least-happy child." Any parent or grandparent knows how true that feels.

We may spend a lifetime building financial security, saving for retirement, buying insurance and drafting detailed estate plans. Some families even create spreadsheets spelling out who gets the wedding ring, the family home, the brokerage account, the antique table or the emerald earrings.

All of that planning matters.

But deep down, we do not simply want our children to inherit our assets. We want them to be happy, capable and grounded. That desire is not just emotional — it is deeply human. We are wired not merely to pass on our DNA, but to protect, nurture and help our children thrive.

That is why the greatest legacy we leave may not be financial wealth. It may be what I call "wisdom wealth" — the judgment, values, self-knowledge and purpose that help the next generation use money well and live well.

Financial wealth is what you own. Wisdom wealth is what you have learned.

Financial wealth includes your home, portfolio, retirement accounts, business interests, insurance proceeds and personal property.

Wisdom wealth includes your values, judgment, resilience, faith, gratitude, mistakes, life lessons, decision-making habits and your understanding of what money is actually for.

One can be transferred with documents. The other must be transmitted through lived experience, conversations, examples and intention.

And that is where many families fall short.

The most ignored inheritance

The coming decades will bring one of the largest transfers of wealth in history. Much of that discussion focuses on dollars: Who will inherit, how much they will receive and how taxes can be minimized.

These are important planning questions, but they are not the whole story.

Many families are prepared to transfer assets, but not wisdom.

• Parents may leave behind a well-funded trust, but no explanation of the values that shaped it
• They may leave a brokerage account but never explain how they handled fear during market declines
• They may leave real estate, but never talk about the sacrifice, discipline and patience that made ownership possible

The result is that children may inherit the money without inheriting the mindset that created it. That gap can turn a generous inheritance into confusion, conflict or missed opportunity.

Here are five ways to transfer wisdom wealth while you are still living.

1. Turn family time into wisdom time

In the age of TikTok, Instagram and constant distraction, wisdom is rarely transferred through formal "sit-down talks." It is transferred in ordinary moments, a long walk, a family dinner, a car ride, a vacation, a holiday gathering or a conversation after everyone else has left the room.

One of the most practical things parents and grandparents can do is create recurring time with their adult children and grandchildren. This may mean a combination of weekly dinner, Sunday breakfast, a monthly family gathering or an annual vacation.

Occasions such as birthdays, anniversaries, graduations and promotions are valuable opportunities to get together and celebrate. The tradition matters more than the venue.

Longer trips can be especially powerful. When families travel together, they are removed from daily distractions. Conversations become deeper. Grandchildren see how grandparents make decisions, handle inconvenience, express gratitude, treat strangers and spend money. These experiences often teach more than any planned speech.

If you have the resources, helping pay for these gatherings can bring joy to the entire family and support the transfer of wisdom wealth.

2. Share the stories behind the money

Many children know what their parents own, but not what their parents endured. They may see the house, the portfolio, the business or the retirement account, but not the years of discipline, risk, sacrifice, delayed gratification, mistakes and recovery that created them.

Parents should share the stories behind the wealth. Talk about the first job, the bad investment, the business risk that failed or almost failed, the home you stretched to buy, and the market decline that tested your nerves. Share memories about the period when money was tight, the career decision that changed your life, the opportunity you missed, the mistake you would not repeat.

These stories are not self-promotion. They help the next generation understand that wealth is not magic. It is usually built through compounding, patience, work, judgment, resilience and sometimes luck.

Do not share only victories. Share failures, heartbreaks and the difficulty of accepting what you could not control. In many families, children inherit a sanitized and polished version of their parents' lives. But wisdom often comes from the real and unpolished chapters — the moments of fear, regret, humility and growth.

A child who understands how you stood back up after a mistake is far better prepared to stand back up after their own.

3. Create a family investment conversation

One practical way to transfer wisdom wealth is to involve children in real financial decisions early, long before they inherit significant assets.

Parents can help children fund investment accounts and discuss the difference between saving and investing. They can explain why diversification matters, review basic asset allocation and talk about how emotions affect decisions during market declines.

These investments can open the door to important life and money lessons. Why did the portfolio rise or fall? Why avoid panic selling? How do taxes and risk affect long-term returns? How do you balance enjoying life today with preparing for tomorrow? How much to save and how much to give?

The purpose is not to make children investment experts. It is to deepen relationships, enhance financial literacy and help them build a calm, informed relationship with money before they are responsible for larger sums.

4. Help them build real-life capability

Financial help can be generous, but it is most powerful when it builds capability.

Helping an adult child buy a first home can be more than a gift. It can become a lesson in budgeting, mortgage payments, property taxes, insurance, maintenance, neighborhood selection and the discipline of ownership.

Helping with education can include conversations about career choice, debt, income potential and purpose. Helping with a business idea can include discussion of risk, cash flow, customers, failure and persistence.

The key is to pair financial support with financial education and a deeper relationship. Instead of simply writing a check, explain the thinking behind the help. What is the purpose? What responsibility comes with it?

The goal is not dependency. The goal is capability, the confidence to make good decisions long after your help is no longer needed.

5. Explain how and why your beliefs and values have evolved

Most of us do not see the world at 60 the same way we saw it at 30. Our views about success, money, marriage, parenting, faith, health, ambition, status, generosity and happiness often change through experience, but many parents never explain that evolution to their children.

Tell them what you once believed and what life taught you.

• Maybe you once thought success meant income, but later realized it also required health and relationships
• Maybe you once chased status, but now value peace
• Maybe you once feared risk, but learned that some risks are necessary
• Or perhaps your faith, gratitude or sense of purpose has shifted or deepened through hardship

These conversations give children something more valuable than advice. They give them perspective.

Wisdom wealth is not the claim that parents have all the answers. It is the humility to say: "Here is what I learned. Here is where I was wrong. Here is what mattered more than I expected. Here is what I hope you discover earlier than I did."

The best legacy is more than money

A good estate plan can transfer assets efficiently. A good family legacy can transfer values, judgment and purpose. Both matter.

But if we leave our children money without wisdom, we may leave them resources without direction.

Financial wealth can change a child's balance sheet. Wisdom wealth can help guide them toward a joyful, meaningful life supported by financial security.

Your children may inherit your financial wealth. The deeper question is whether they will also inherit your wisdom wealth.

To learn more about legacy, personal transformation and other related topics, you can order my new book (out today!), The Wisdom and Wealth Solution.

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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 picked up Strangers: A Memoir of Marriage by Belle Burden expecting a juicy divorce memoir. What I got was a thoughtful, sometimes uncomfortable look at how a marriage can unravel so gradually that, by the end, the person you've shared your life with feels almost unrecognizable.

Burden's memoir has all the ingredients of a page-turner: Wealth, privilege, beautiful homes, family dynamics, betrayal and a divorce that becomes increasingly contentious.

More than once, I found myself staying up later than I should have, telling myself I'd read just one more chapter.

As a financial adviser, however, I found myself reacting to different parts of the story than most readers probably would.

At one point, I wanted to reach through the pages and yell, "No! Do not take your money out of your separate property trust and put it into a jointly owned home!"

That's what made the book so compelling to me. Beneath the story of a marriage ending was another story unfolding quietly in the background: The financial decisions being made along the way.

The danger of disengaging with your finances

Burden's story reminded me how easy it is for intelligent, capable people to become passive participants in their financial lives. Not because they lack the ability to understand money, but because life is busy.

Careers demand attention. Children need to be raised. Marriages operate on trust. One spouse naturally takes the lead in certain areas, and before long, financial decisions become something that simply happens in the background — often brushed aside with a comment like, "This is all too complicated for you to understand, anyway."

Most of the time, that arrangement works just fine … until circumstances change.

The reality is that many of the financial pitfalls people encounter aren't obvious. Few people wake up worrying about how property is titled, whether inherited assets have been properly protected, whether a prenuptial agreement still reflects their current situation, or whether beneficiary designations are consistent with their wishes.

Yet these are precisely the kinds of issues that can have life-changing consequences.

What makes Strangers particularly powerful is that Burden doesn't portray herself as a victim of circumstance. Near the end of the book, she reflects on a series of decisions involving her prenuptial agreement, property ownership and her level of involvement in the family's financial affairs.

Reading those reflections, I found myself thinking less about the divorce itself and more about the dozens of moments along the way when a different conversation, a second opinion or a deeper understanding of the financial implications might have altered the outcome.

That's a lesson I see play out frequently in my profession.

Many people assume the greatest financial risks they face involve the stock market. They worry about whether they should buy a particular fund, invest in international stocks or wait for a market correction.

In reality, some of the most consequential financial decisions have little to do with investing. They happen when we sign legal documents we don't fully understand, make changes to ownership structures, neglect to update estate plans or assume someone else is paying attention to details that affect our future.

The value of expert financial advice

This is one of the reasons I believe comprehensive financial planning is so valuable. A good financial adviser doesn't simply manage investments. They help clients identify risks they may not even realize exist.

Sometimes the most important question in a planning meeting isn't, "What should I do?" but rather, "What haven't I thought about?"

And yes, you can use AI chatbots to answer questions, but you need to know what to ask them.

An experienced adviser, however, can prompt the questions that haven't yet occurred to you:

• What happens if circumstances change?
• Does this legal agreement still reflect our intentions?
• Have we unintentionally exposed assets we meant to protect?
• Is the financial structure of our lives still aligned with the reality of our lives?

Those aren't questions most people ask regularly. They're certainly not questions people ask when they're in love. Yet they're often the questions that matter most.

The power of staying engaged

That's ultimately the financial lesson I took away from Strangers. Burden's story is deeply personal, and every marriage is different. But her reflections serve as a reminder that financial security isn't created by avoiding difficult conversations. It's created by having them early, revisiting them often and staying engaged in the decisions that shape your future.

By the end of the book, I wasn't thinking about the divorce anymore.

I was thinking about all the people sitting across from me every year who assume nothing will change.

Most of the time, they're right.

The problem is not planning for the possibility that they're wrong.

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• Estate Planning for Women: Married, Single or Divorced

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 interesting — and truly dramatic — highways in Southern California lies due north of Los Angeles. Known as The Grapevine, it is a steep, winding, five-mile section of Interstate 5 that goes through the Tehachapi Mountains, rising more than 4,000 feet via the Tejon Pass.

While not apparent at first glance, there are several small communities along the route.

In one of them, two neighbors were locked in a struggle over the refusal of one to recognize that an "implied easement" had been established nearly 30 years ago. Similar legal issues go back — way back — to Ancient Rome and the English common law brought to America in which the basic principles of using a neighbor's property without a written deed were established.

A paradise … until he moved in

In the small mountain community, longtime readers "Jill" and her husband, "Ricky," live in a mobile home on Lot A, which they bought from "Sally" more than 20 years ago. Sally had owned that land and the adjacent parcel, Lot B, for many years. Initially, she rented out a mobile home on Lot B, but she recently sold the lot to "Matthew."

A driveway is located between Lots A and B, with a portion of it on Lot B. For more than 30 years, Sally and all her tenants, including Jill and Ricky, either walked or drove across that Lot B portion to reach the nearest road.

Aside from a forested, 45-degree downward slope that is impossible to safely walk down or drive over, there is no other practical way to reach the nearest road. In other words, without access to that portion of the driveway on Lot B, Lot A would be landlocked.

"This wonderful place was a little paradise for everyone in the area until six months ago, when Matthew became our next-door neighbor," Jill said. "Overnight, our lives became a living nightmare with his behavior."

'You are using my property without permission'

Matthew became the neighbor from hell. He'd pound on their door and send them nasty texts, demanding to be paid $16,000 for their use of his driveway.

In addition to other assorted threats that I read in his texts, he threatened to lock a gate between the two lots, which would prevent the couple from leaving their property.

I had several telephone conversations with him, and the expression "as stubborn as a mule" fit Matthew, though I would say he was as stubborn as an entire barn of mules.

Given the facts and history of usage of that driveway, in my legal opinion, he didn't have a chance of collecting 1 cent from them.

Of course, the legal question boils down to this: Could he charge them anything for walking or driving over that small section of driveway that is, indeed, located on his property?

I referred my readers to Bakersfield, California, real estate attorney Fawn Dessy, who answered that question with two words: "Absolutely not!"

Creation of an implied easement

"This common situation in rural areas gives rise to what we call an implied easement," Dessy said.

She cited a classic definition that law students never forget: An implied easement is found when a property owner was previously using one part of their land to benefit another part and then divides and sells the parcels. Its use legally continues. It is usually not written in a deed but is recognized since it is based on prior use of the land.

Dessy listed the specific legal requirements to establish an implied easement:

• Common ownership. Both the parcels must have originally been owned by a single person or entity.
• Severance. The parcels must have been separated through, typically, a sale.
• Apparent and continuous use. Before the parcels were split, the use was visible, obvious and ongoing.
• Reasonable necessity. The easement must be reasonably necessary for the occupants on the parcel that is benefited by its use, such as getting to and from a highway.

Dessy's letter to Matthew

Dessy sent a polite, yet no-nonsense, letter to Matthew, citing controlling cases and urging him to take no actions that would in any way harm my readers.

Over the next few days, Matthew and I had reasonably pleasant telephone conversations in which I tried to reason with someone whose mind was made up, regardless of the facts. Then a question occurred to me: Had he been aware of that easement before buying Lot B? Did the information appear in the listing and sale agreements?

If it wasn't obvious to him or in the sales documentation — or he simply did not know of it — he would likely have a claim against the real estate agent who handled the transaction.

While it would require an appraiser to determine how much he overpaid, if any amount at all, for a lot subject to the implied easement, if he really wanted to pursue the matter, that would be his best bet.

So, I called him and asked, "Was the easement mentioned in the real estate sales agreements?"

At first, he did not directly reply, and then he said, "Beaver, I got Attorney Dessy's letter. Tell them they can continue using the driveway, as before. I'm done fighting. And, no, the easement was not disclosed in the actual sales documents. But the seller told me about it."

So he'd known about it all along. He'd been after a cash grab, punctuated by threats, bullying and name-calling.

I gave the good news to my readers that he was dropping his claim. The couple emailed me, "Mr. Beaver, Paradise has returned to our little corner of the world."

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.

Retirement readiness is rarely a feeling. It's a numbers game. Yet many Americans approaching retirement age struggle with a nagging sense of uncertainty, even when their financial house is in order.

According to NerdWallet research, only 23% of Americans evaluated their progress toward retirement savings goals in the past year, leaving the vast majority in the dark about where they stand.

The disconnect between financial reality and emotional confidence is more common than you might think. Vanguard's 2025 Retirement Outlook found that more than four in 10 Americans are on track to maintain their lifestyle in retirement yet many of these same individuals express doubt about their preparedness.

I'm a financial planner with nearly two decades of experience, and if you've been questioning whether you can afford to leave the workforce, these seven concrete indicators suggest you might be more ready than you realize.

1. Your retirement savings meet or exceed age-based benchmarks

Financial planners use age-based milestones to gauge retirement readiness. Fidelity recommends saving 10 times your annual income by age 67, with incremental goals along the way: One times your salary by 30, three times by 40, six times by 50 and eight times by 60.

If you've met or exceeded these benchmarks, you're likely in strong shape. These guidelines account for a retirement lifestyle that maintains your pre-retirement standard of living, assuming you'll need 70% to 80% of your preretirement income annually.

2. You have multiple income streams in place

Financial experts consistently point to diversified income as a hallmark of retirement readiness. Relying solely on Social Security or a single pension creates vulnerability to policy changes or plan failures.

Strong candidates for retirement typically have three or more income sources: Social Security benefits, retirement account distributions (401(k)s, IRAs, Roth IRAs) and potentially pension income, rental property revenue or part-time work.

This diversification provides both financial security and flexibility to adjust withdrawal strategies based on market conditions and tax planning opportunities.

3. Your debt is eliminated or manageable

Carrying significant debt into retirement dramatically increases the income you'll need to maintain your lifestyle. Most financial advisers recommend entering retirement either debt-free or with only low-interest, manageable debt remaining.

If you've paid off your mortgage (or will within the first few years of retirement) and carry no high-interest credit card balances, you've cleared one of the most significant obstacles to retirement security.

The exception: Strategic debt like a low-rate mortgage that allows you to keep more funds invested might make sense depending on your tax situation and investment returns.

4. You've stress-tested your retirement budget

Wishful thinking has no place in retirement planning. If you've created a detailed retirement budget that accounts for essential expenses (housing, healthcare, food, insurance) and discretionary spending (travel, hobbies, entertainment) and your projected income covers these costs with a buffer, you're demonstrating the kind of preparation that indicates true readiness.

Financial planners suggest running multiple scenarios: One for your expected lifestyle, one for a reduced spending scenario if markets underperform and one for increased healthcare costs or other contingencies.

If your retirement income comfortably covers your baseline expenses across multiple scenarios, you're likely ready.

5. Your healthcare strategy is funded and understood

Healthcare represents one of the largest and most unpredictable retirement expenses. If you're under 65, the gap between retirement and Medicare eligibility requires a solid plan, whether that's COBRA coverage, marketplace insurance or a spouse's employer plan.

Research shows that financially prepared retirees have not only identified their healthcare coverage strategy but have also funded it. This includes understanding Medicare parts A, B, D and potential Medigap or Medicare Advantage coverage, plus maintaining an emergency fund specifically for out-of-pocket medical expenses.

If you've modeled healthcare costs into your retirement budget and have a clear coverage plan, this uncertainty is behind you.

6. Your portfolio is positioned for distribution, not just accumulation

The shift from saving to spending requires a different investment approach. If you've worked with an adviser to restructure your portfolio for retirement (creating a more conservative allocation, establishing a withdrawal strategy and potentially creating a bucket approach with short-term cash reserves), you've done the strategic work that separates hopeful retirees from prepared ones.

This includes understanding the tax implications of your withdrawal strategy. Smart retirees consider which accounts to tap first (taxable, tax-deferred or tax-free) to minimize lifetime tax liability and avoid pushing themselves into higher brackets or triggering additional Medicare premiums.

7. You can articulate your Social Security strategy

Social Security claiming decisions have lifetime implications, yet many people approach this choice casually. If you've analyzed your break-even points, considered spousal benefits and survivor benefits, and made a deliberate decision about when to claim (whether at age 62, full retirement age, or age 70), you're exhibiting the kind of strategic thinking that characterizes successful retirees.

Delaying Social Security until age 70 increases benefits by roughly 8% per year after full retirement age, a guaranteed return that's difficult to replicate elsewhere. Understanding this trade-off and how it fits your overall income plan is a sign of readiness.

The confidence gap

If you've checked most or all these boxes but still feel uncertain, you're not alone. The psychological transition to retirement often lags the financial reality. Consider working with a financial adviser to run a comprehensive retirement analysis, which can provide objective validation of your preparedness.

Remember that retirement readiness isn't about achieving perfection. It's about having sufficient resources to maintain your desired lifestyle with acceptable risk.

Vanguard's research shows that younger generations are on track to be better prepared for retirement than current retirees, thanks to improved access to workplace retirement plans and stronger plan design.

The question isn't whether you feel ready. It's whether your numbers say you're ready. If the financial indicators are in place, your hesitation might be the natural anxiety that comes with a major life transition, not a reflection of insufficient preparation.

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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 common questions I hear from clients approaching retirement is also one of the most emotionally loaded: "Should I pay off my mortgage before I stop working?"

The honest answer is: Sometimes.

That's not a cop-out. It's the only answer that respects both sides of this decision.

Paying off a mortgage is not just a math problem. It's a cash-flow problem, a tax problem, an investment problem — and, for a lot of people, a peace-of-mind problem.

The mistake is assuming there's one universal rule. There isn't. The right answer for a homeowner carrying a 2.875% mortgage, a solid brokerage account and a reliable pension looks very different from the one facing someone with a 6.5% loan heading into heavy IRA withdrawals.

Two recent changes make the math worth revisiting.

• Freddie Mac's weekly survey puts the average 30-year fixed rate at 6.51% as of late May 2026.
• The SALT deduction cap increased to $40,000 under the One Big Beautiful Bill Act, with phaseouts starting above $500,000 in modified adjusted gross income.

Both shift the calculus for retirees in ways that weren't in play two years ago.

Start with where you are in your mortgage

By the time most clients ask this question, they're in the last quarter or third of their loans. That matters more than people realize.

Early in a mortgage, your payment is mostly interest. Later, it flips — you're paying far more principal than interest. The amount of interest you'd avoid by paying off early is probably smaller than you expect.

Here's a concrete example. Take a married couple with an original $350,000 mortgage at 6.5% and $111,000 still owed at year 26. Their annual payment runs about $26,547, but only $6,767 of that is interest. The total interest remaining in the next four years is roughly $19,670.

Compare that with the cost of paying off the loan by pulling from retirement accounts. Assuming a 24% federal bracket and 5% state tax, they'd need to withdraw approximately $140,845 to net the $111,000 after taxes, generating about $7,042 in state taxes and $33,802 in federal taxes.

That's more than $40,000 in taxes to eliminate $19,670 in interest. The numbers don't hold up.

The SALT change and why your state tax burden matters

For years, the $10,000 SALT cap made itemizing difficult for most homeowners. The new $40,000 limit changes that, particularly in higher-tax states such as Connecticut, New York or California.

At our firm, a large share of clients come from Connecticut, and this is the kind of question in which having accountants on staff pays off. The answer depends on whether you're itemizing, which depends on your full tax picture.

If you can now itemize under the new cap, your mortgage interest carries more federal tax value. That doesn't automatically mean you should keep the mortgage. It means you should compare your mortgage rate with your investment returns on an after-tax basis, not gross.

Don't drain your liquidity to feel debt-free

This is where a spreadsheet can mislead you.

Say you owe $300,000 and have $350,000 in taxable savings. Paying off the loan might feel like the right move. But if it leaves you with $50,000 outside your retirement accounts, you've traded one risk for another.

Retirees need accessible cash for home repairs, health costs, long-term care planning, tax bills, and market downturns. If paying off the mortgage means pulling more aggressively from IRAs later, you could end up with higher taxable income, steeper Medicare premiums and more of your Social Security subject to tax.

A paid-off house is comforting. But you can't spend your kitchen.

A practical framework for making the call

If your mortgage rate is below 4%, you're taking the standard deduction, and your portfolio is diversified, keeping the mortgage often makes more financial sense.

If your rate is above 6%, you get little or no tax benefit from the interest deduction, and if you have enough liquid assets remaining after payoff, paying it down becomes more compelling.

If you're somewhere in between, run four numbers before deciding:

• The after-tax cost of your mortgage (not the stated rate)
• Realistic after-tax portfolio return expectations
• Remaining liquidity after payoff
• The tax bill from withdrawing retirement funds to make the payoff

The best retirement decisions come from coordinating taxes, income and investments together. A mortgage decision is no different.

The real answer isn't "always pay it off" or "always stay invested." It's: Pay it off when the numbers work, your cash reserves stay healthy, and the peace-of-mind benefit is genuinely worth what you might be giving up.

Sometimes it is. And sometimes the spreadsheet makes that clear before your gut does.

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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.

Company stock can become one of the largest sources of wealth you'll ever accumulate.

Research from the National Center for Employee Ownership found that employees participating in stock ownership programs accumulated more than double the retirement savings of the average American, underscoring just how powerful equity compensation can be in building long-term wealth and financial independence.

But equity compensation can also quietly become a financial landmine if you don't fully understand how it works.

Without proper planning, you could face massive surprise tax bills, costly alternative minimum tax (AMT) liabilities, underpayment penalties or even pay taxes on wealth that later disappears in a market decline.

You can also become dangerously overconcentrated in your employer's stock, leaving both your paycheck and your investment portfolio exposed to the same company risk.

By the time many employees realize they have a problem, the damage is often already done.

Why equity compensation feels so confusing

You might receive restricted stock units (RSUs), stock options, employee stock purchase plans (ESPPs) or some combination of all three, and many high earners naturally assume they're taxed and managed the same way.

They're not. That confusion can become incredibly expensive.

• RSUs are company shares granted to you over time that become taxable as ordinary income once they vest. When an RSU vests, it means the stock officially becomes yours, and you can keep or sell it.
• Stock options give you the chance to buy company shares later at a price that's locked in today. If the company's stock price goes up, you can buy the shares at the lower locked-in price and potentially profit from the difference. Exercising your options means choosing to buy the shares using that special price.
• ESPPs allow you to buy company stock at a discount, often through payroll deductions.

Each type of equity compensation follows different tax rules, different vesting schedules and different planning opportunities. In some cases, taxes are triggered when shares vest. In others, taxes are triggered when you exercise options or sell stock.

You might not fully realize when those taxable events occur until you're staring at a shocking tax bill.

Once you layer in bonuses, deferred compensation, investment income and potentially multiple state tax filings, it's understandable that confusion can happen.

The tax bill that no one saw coming

One of the biggest mistakes employees make is assuming their company already withheld enough taxes.

In reality, many companies only withhold federal taxes on RSUs and stock option profits at a flat 22% rate, even if your actual tax bracket is 24%, 32%, 35% or 37%. That doesn't include state taxes, city taxes, Medicare taxes, or Social Security taxes.

That gap can quietly snowball into a massive surprise tax bill when April arrives.

Imagine receiving a large vesting event, celebrating what feels like a major financial win, only to later discover you owe the IRS hundreds of thousands of dollars you never planned for.

I recently worked with a senior executive whose RSUs vested during the same year she received a large bonus and significant deferred-compensation payouts. She assumed the taxes had already been handled automatically by her employer. They had not.

When we ran projections before year-end, we discovered she faced a six-figure tax shortfall. Had she waited until tax filing season to discover the problem, she could also have faced underpayment penalties.

The double taxation trap

Another surprisingly common mistake happens after employees sell their company shares.

Many employees don't realize they paid ordinary income taxes on RSUs when the shares vested because that income was already included on their W-2. Later, when the stock is sold, brokerage tax forms can sometimes make it appear that the full value of the sale is taxable all over again.

If your tax return isn't handled properly, you can accidentally pay taxes twice on the same money.

For high earners with large stock grants, this mistake can cost tens or hundreds of thousands of dollars.

When wealth becomes overconcentrated

Taxes aren't the only danger.

One of the biggest risks with company stock is emotional attachment. After years of working at a company, it's natural to feel loyal to the shares that helped build your wealth and career. But that emotional connection is dangerous.

Morgan spent decades building what she believed was a secure financial future through company stock and stock options. Over the years, her holdings grew to nearly $5 million. The shares represented years of hard work, promotions, long nights and professional success.

Like many longtime employees, she genuinely believed the company's best years were still ahead. Then everything started to unravel.

A major product recall triggered lawsuits. Earnings weakened. Headlines became increasingly negative. Employees watched the stock fall day after day while leadership struggled to calm investors.

Shareholders ultimately received only about 6 cents on the dollar in a corporate buyout. Her nearly $5 million position collapsed to roughly $300,000.

In a matter of months, both her career and the wealth she had spent decades building disappeared almost simultaneously.

Turning equity into long-term wealth

RSUs, stock options and ESPPs can either become one of the greatest wealth-building opportunities of your career or one of your biggest financial mistakes.

The employees who handle equity compensation most successfully are usually not the ones obsessing about the next stock surge or trying to perfectly time the market. They're the ones who proactively manage taxes, diversify before risk becomes dangerous and treat company stock as the major financial asset it truly is.

The damage is often already done by the time you realize you have an equity-compensation problem.

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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.

High-income retirees are often surprised by a Medicare expense that can lurk behind the scenes, automatically deducted from their Social Security benefits each month.

It's a surcharge added to Part B and D premiums known as the income-related monthly adjustment amount (IRMAA).

These surcharges are tiered, meaning sometimes a single additional dollar of taxable income could trigger thousands in extra costs. Because it's based on income from two years ago, many retirees don't see it coming until it's too late.

The amounts aren't small. For 2026 the annual surcharges for Parts B and D range from slightly more than $1,100 for the lowest tier to nearly $7,000 for the highest tier. Those are per person, and on top of the base premiums.

Here's how the 2026 IRMAA brackets break down:

The good news is that it's reassessed each year, so you can take steps now to manage this hidden "tax" and optimize your Medicare costs.

Here are five situations in which you could pay more than you should in Medicare surcharges and strategies that could help.

1. After a major life event

Many Medicare enrollees are unaware that IRMAA can be reassessed under certain circumstances if an appeal is submitted.

The Social Security Administration (SSA) outlines specific eligible life-changing events, with the most common being retirement (or a work reduction such as moving from full-time to part-time), marriage, divorce and death of a spouse. A full list is available on Form SSA-44.

Strategy: You should consider appealing if it's likely to move you into a lower IRMAA bracket. This won't be the case for every life event.

For example, if you got married and your joint income would have pushed both partners in a higher IRMAA bracket, appealing won't be beneficial.

If you decide to appeal, you have 60 days from receiving your initial determination notice to do it, with instructions included in that notice. To start, you'll need to contact the SSA and will likely file Form SSA-44 and provide supporting documentation.

Depending on timing, you might need to appeal two years in a row. As an example, someone retiring in 2026 might need to appeal twice: Once for their 2027 assessment (which would otherwise be based on their 2025 working income); and once for their 2028 assessment (which would otherwise be based on their 2026 working income).

2. When your taxable income is near an IRMAA threshold

Distributions from retirement accounts such as traditional IRAs and 401ks typically increase taxable income. If you're near a threshold, an unnecessary distribution could push you into the next tier. The only thing worse than triggering IRMAA is triggering it by just a few dollars.

Strategy: If your income has historically been toward the top or bottom of an IRMAA bracket, try to stay (or get) in the lower tier. Be thoughtful about taking retirement distributions from pre-tax accounts that could pop you into the next tier.

If you have a health savings account (HSA), you can use distributions to cover qualified medical expenses without increasing your taxable income, including paying the premiums, deductibles and copays for Medicare Parts A, B, C and D (but not Medigap premiums).

If you have Roth accounts, you might be able to take tax-free distributions to keep you under the next IRMAA threshold.

3. When you start taking required minimum distributions (RMDs)

RMDs are withdrawals that must be taken from certain retirement accounts starting at age 73. For those with substantial traditional (pre-tax) retirement assets, this can translate to a meaningful increase in taxable income when they start taking RMDs, which can result in a surprise IRMAA bill two years later.

Strategy: If an RMD is pushing you into a higher IRMAA bracket, and especially if you're toward the bottom of that income bracket, a qualified charitable distribution (QCD) might be useful.

A QCD is a direct transfer from an IRA to a qualified charity. It can help satisfy your RMD without increasing your taxable income (up to $111,000 for 2026), all while giving to your charity of choice.

4. When you're doing Roth conversions

A Roth conversion involves moving funds from a traditional IRA to a Roth IRA. Because so many retirees have the bulk of their retirement savings in pre-tax assets, there can be many advantages to completing Roth conversions: The potential for tax-free distributions, no RMDs, and a tax-free asset for your heirs.

The cost is paying taxes now on the converted amount.

The tax impact means it's a good idea to work with a financial adviser and tax professional to execute the conversion, but even then, many well-intentioned professionals forget to mention (or consider) the impact on IRMAA.

Strategy: When considering Roth conversions, you'll want to keep in mind the immediate and future impact to IRMAA. Increasing your taxable income might trigger IRMAA two years after the conversion, but the resulting Roth assets can help save on IRMAA in future years, both by reducing future RMDs and providing a source for tax-free withdrawals.

The key is to understand the short-term and long-term impacts. It might also make sense to spread a conversion across multiple years.

5. When you choose your filing status at tax time (if you're married)

Filers who are married have a choice at tax time to file jointly or separately. But because IRMAA is a surcharge (generally deducted directly from Social Security payments) rather than a true tax (paid and reported to the IRS), it's often not considered as part of the calculation in determining which filing status is more advantageous.

This is problematic because the IRMAA determination for married individuals filing separately is particularly steep (some would say punitive), likely because the government doesn't want couples to file separately solely to avoid triggering IRMAA for both spouses.

Couples — even those working with experienced tax professionals — might save a few hundred dollars on their taxes by filing separately, only to trigger thousands of dollars in annual IRMAA surcharges that could have been avoided.

Strategy: Whether you're doing your own taxes or working with a professional, make sure potential IRMAA surcharges are part of the calculation of whether to file jointly or separately.

Final thoughts

By coordinating distributions, conversions and filing decisions with Medicare thresholds, retirees can avoid thousands of dollars in unnecessary surcharges.

The earlier you incorporate IRMAA into your planning, the more opportunities you'll have to keep your healthcare costs in check.

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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 prospective client told me he had it all done. He had a will in place, did his own stock picking and his wife did the taxes. What more did he need?

I went through my checklist. He had a lot of cash sitting in the bank and CDs — not ideal for high earners, since the interest is taxable. His will had no family trust, causing potential probate issues, and his adult children had no estate plan either. He was giving cash to charity, another tax faux pas. And on we went.

On the surface, financial planning can seem simple, if you are unaware of the possibilities. That is where a professional can help. And thanks to improvements in technology, today I am more excited about the opportunities to help high-income earners than ever in my 25-plus years in the industry.

Here are three examples, depending on individual circumstances, where technology may help in financial planning for high earners.

Tax-aware fixed income

High earners were traditionally advised to invest in tax-free municipal bonds in taxable accounts. Municipal bond interest is generally exempt from federal income taxes, and so high-income investors in a high tax bracket can use municipal bonds to avoid having the interest eaten up by taxes.

However, municipal bonds don't always pay the most interest on an after-tax basis. Some non-municipal bonds, such as corporate bonds and federal agency bonds, can pay more interest even after taxes.

Investment managers today can jump between different types of bonds depending on which yield pays the most after-tax interest for the client. Different bonds move at different speeds or valuations.

Munis might rally and become expensive relative to other bonds, and depending on the client's tax bracket, the manager might take gains from the munis and reposition into taxable bonds. Of course, you must pay attention to credit risk too, as different bonds have different risks.

The key is: Don't think municipal bonds always make sense. That might not be the case, and other bonds may offer different after-tax characteristics worth considering.

Robust tax-loss harvesting

If you are staring at a taxable gain on your Schedule D Tax Form, you probably need a more robust tax-loss harvesting strategy. Tax-loss harvesting — selling stock or bond losses to offset gains elsewhere in a portfolio — has been around for a long time.

However, technology has improved trading capabilities immensely. Today, tax-loss harvesting can be implemented more frequently using these tools.

There are other non-traditional tax-loss harvesting strategies appropriate for certain high-net-worth clients that can also be considered. If your tax-loss harvesting is stuck in the old way of doing it once a year around the end of the year, I encourage you to explore the new platforms that are available.

Advanced scenario planning

Moving to a state with a lower income tax? It can seem like a good idea, but it's best to check with a professional beforehand. Tax software can help show the difference in taxes between the two states, and sometimes the savings is less than expected.

I have client who wanted to see the impact of making additional Roth 401k contributions. The scenario planner showed the tax impact assuming different rates of return and different tax rates in the future. This helped put some context into the client's decision.

The software most planners use today is highly intelligent. Most of these scenarios can be done rather quickly and can lend confidence to decision-making.

My advice to high-income investors is this: If you haven't explored wealth management capabilities recently, much has changed in what a planner can do for you. The technology improvements have significantly improved the advice we can provide, and may be worth exploring.

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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 planning for retirement, the conversation usually centers around accumulating wealth.

Many people spend the majority of their careers focused on building enough savings to hopefully leave the workforce.

However, as retirement approaches, the mindset needs to shift.

In the five to 10 years before retirement, the goal should shift from growing assets to determining how those assets will generate income and support long-term goals.

Oftentimes, this transition is overlooked, and mistakes made during these years can have a significant impact on a person's ability to retire comfortably and maintain their lifestyle.

One of the biggest mistakes people make during this stage is assuming they still have plenty of time to figure everything out. The final five to 10 years before retirement are when important decisions about income needs, investment risk, Social Security and withdrawal strategies come into focus.

Another common mistake is assuming that a large retirement savings account is the only prerequisite to retirement. While reaching a certain savings goal is a great accomplishment and can provide confidence, it's not an accurate measurement of preparedness.

Many pre-retirees focus on how much they've saved without thinking about how that money will support their lifestyle in retirement. Without a detailed cash flow analysis that accounts for inflation and future expenses, even those with large retirement accounts may find themselves unprepared.

Wealth protection is important

Preparing for life after retirement involves more than maintaining the same investment strategy that worked during the earning years. While growth is important, protecting against significant market losses becomes the main priority.

A major market downturn can have a much greater impact on someone who plans to retire within the next 10 years than on someone who is still decades away from leaving the workforce. Therefore, pre-retirees should evaluate whether a portfolio's risk level still aligns with their personal timeline and income needs.

Understanding where retirement income will come from is equally important. Instead of assuming withdrawals can be made as needed, pre-retirees need to have a clear understanding of how their savings, investments and any other income sources will support their lifestyle.

Failing to account for these factors can leave some retirees with a false sense of security. For example, some pre-retirees think withdrawing 4% from their retirement accounts each year will provide a stable income stream.

While that may be the case in some circumstances, this strategy doesn't account for every market environment. A significant market decline in retirement, in addition to inflation and ongoing withdrawals, can put additional strain on a portfolio, impacting long-term stability.

As a result, stress-testing how savings will generate income in a variety of scenarios can be just as important as the amount of savings.

While every plan is different, there are three specific areas people who are five to 10 years from retirement should begin reviewing.

1. How much income will you need?

The first step is having a realistic understanding of how much income will be needed throughout retirement. Housing, healthcare, travel, hobbies and daily living expenses should all be factored into a retirement budget with regard to inflation.

Pre-retirees in this phase should also evaluate whether their investment strategy still aligns with their retirement timeline, risk tolerance and income needs.

The investment strategy that was used during your working years may not be appropriate as retirement nears. Once the need for income becomes more immediate, such as in retirement, protecting against major losses while managing volatility becomes the main priority.

2. Where will your income come from?

The next step is identifying where retirement income will come from, particularly for tax efficiency. Having different types of retirement assets, such as traditional IRAs, Roth IRAs and non-qualified investments, can offer more flexibility when managing taxes throughout retirement.

3. Do you have a retirement plan in place?

Finally, pre-retirees should have a comprehensive retirement plan in place before exiting the workforce. This plan should serve as a road map, accounting for income needs, spending expectations, taxes, investment risk and long-term goals.

Retirement is often viewed as a financial milestone, but the final preparations that should be made in the final decade of your career aren't talked about nearly as much.

While reaching a target number of retirement savings is important, understanding how those savings will generate income and withstand market volatility while supporting long-term goals is the key to a sustainable retirement.

By taking the time to address these questions in the decade leading up to retirement, pre-retirees can transition into retirement with more confidence and a better understanding of what lies ahead.

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• I'm an Investment Adviser: This Is the Retirement Phase Nobody Talks About

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.

Money usually goes off track slowly, with a few ignored expenses here and some delayed decisions there.

But one financial reset each month can help you build a stronger financial position over the course of a year. I'm a financial professional with 10-plus years of experience, and this guide shows you how — and you don't have to start the process in January.

Month 1: Set financial goals and rebuild your budget

Start with measurable goals for the year.

Then rebuild your budget. It will work better when it accounts for real life instead of ideal behavior, so pull up the last three months' worth of bank and credit card statements.

This is usually where the surprises show up — such as deliveries, annual subscription renewals and more small purchases than you think — and it will show you where you can cut back.

Don't forget to plan for irregular expenses, such as insurance premiums, holidays, travel, car maintenance and school fees.

Month 2: Review your cash buffer

Look honestly at your emergency fund.

Three to six months of essential expenses is the common benchmark, but that range changes depending on how stable your income is.

If you start this process in January, then February is early enough to fix problems before tax season turns into a scramble.

Gather everything in one place first: W-2s, 1099s, mortgage interest statements, HSA records, donation receipts and investment documents.

Check your withholding.

A large refund feels good until you realize you essentially gave the government an interest-free loan for 12 months. A surprise tax bill feels worse. Adjusting withholding now is easier than fixing it next April.

And if a refund is coming, decide where it goes before it disappears into random spending.

Month 3: Attack expensive debt

This is the month to map everything out properly: Balances, rates, minimum payments, promotional periods and variable-rate exposure.

Stack small changes together:

• Negotiate lower rates
• Use balance transfers carefully
• Redirect subscription savings

The important part is reducing principal consistently. Minimum payments alone keep people stuck for years.

Month 4: Make money conversations normal

Pick one area and learn about it properly, whether it's investing basics, credit scores, insurance, taxes or compound interest. Then bring the household into it.

Conrad Wang, managing director of EnableU, works with families navigating long-term care and support planning, where financial conversations are often delayed until stress forces them to happen.

"The households that usually cope better financially are the ones having practical conversations early (around) what support exists, what recurring costs look like, and what happens if circumstances change," he notes.

Month 5: Clean up spending habits

Start with recurring charges, such as streaming services.

You did this in the first month, but you've probably stacked up a few subscriptions by now. This step helps with that.

The small operational habits matter, too, like meal planning a couple of nights each week. Saving an extra $100 or $200 a month changes things over a year.

If you cut $80 from a recurring expense, move that exact $80 automatically into savings or investments before it gets absorbed elsewhere.

Month 6: Financial check-in

This is where you stop and assess whether the past five months have helped you to move in the right direction.

Sometimes the answer is uncomfortable. But it's better to adjust now than pretend everything is fine at the end of the 12-month process.

If you started in January, then this is when bonuses, freelance income, investment gains and insurance changes can start affecting finances in ways people miss. Taxes can get messy at the midyear point if income changes and withholding does not adjust with it.

While you are reviewing accounts, check your Social Security earnings record, too. Errors are uncommon, but fixing them decades later is much harder.

Month 7: Review investments and rebalance risk

People often discover their allocation no longer matches their actual risk tolerance. This is where rebalancing comes in.

Gregor Emmian, deputy chief digital growth officer of trading app Rise, says people often mistake market movement for strategy: "One of the easiest ways investors drift into unnecessary risk is by letting a strong market convince them they had a plan all along. We see people become massively overweight in a single asset class without noticing because the gains feel good."

Look at your portfolio as a whole. If one category has become disproportionately large, trim it and redistribute intentionally.

Month 8: Review insurance before you need it

Most people set policies once and never revisit them, even after major life changes.

Review everything:

• Health insurance
• Auto and home coverage
• Disability insurance
• Life insurance beneficiaries
• Retirement account beneficiaries

Disability coverage gets ignored far too often. For many households, future earning power is the largest asset they actually have.

And update beneficiaries carefully. Those designations often override what is written in a will.

Month 9: Increase income

Now that you've done the previous eight steps, it's a good time to revisit your compensation.

If a raise is not possible, negotiate for something else useful: Training, flexibility, title progression or a documented path toward promotion.

Outside traditional employment, additional income streams can help accelerate financial goals faster than minor budgeting tweaks. Even temporary income boosts can reduce the time it takes to pay off debt.

Month 10: Handle estate planning before it becomes urgent

Avoiding estate planning creates problems for the people left to handle everything later.

At a minimum, most adults should have:

• A will
• Durable power of attorney
• Healthcare proxy
• Updated beneficiaries

If children are involved, guardian designations matter, too.

Month 11: Make giving intentional

November is usually when people start thinking about charitable giving, but it works better when it is planned instead of reactive.

For people who itemize deductions, donating appreciated securities creates better tax outcomes than donating cash directly.

The important part is whether your spending matches your values and deciding what money can support beyond consumption.

Month 12: Celebrate your wins

Take a net worth snapshot and celebrate your wins. Maybe you paid off a credit card balance that had followed you for years. Maybe you finally built a cash buffer.

Financial improvement can feel repetitive. Slightly boring, even. Then one day you look back and realize there's less pressure than there used to be.

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• A Financial Expert's Three Steps to Becoming Debt-Free (Even in This Economy)
• Tired of Tracking Every Dollar You Spend? You Need an Anti-Budget
• The First 5 Years After a Salary Jump: How to Handle a Pay Raise Without Buying a Life You Can't Afford

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.

Mike came into the consultation with his mind nearly made up.

At 67, he was past full retirement age and, between him and his wife, he had the larger earnings history. He could file for Social Security now and receive about $3,500 a month. Waiting until 70 felt, to him, like leaving money on the table.

"I paid into this system for decades," he said. "Why should we spend down our portfolio while I wait for a larger check?"

Amy, his 54-year-old wife, was quiet.

That happens often in Social Security consultations. Some couples arrive as a team. Others arrive as two people making what looks like a joint financial decision, while one spouse carries most of the confidence and the other quietly carries most of the worry.

So I asked Amy a simple question: "What concerns you most if Mike dies first?"

She paused. "I don't want to tell him what to do," she said. "But if I'm the one left here for another 25 years, I don't know what my income is supposed to look like."

That sentence changed the consultation.

The Social Security decision was no longer just about Mike's check. It was about Amy's future income floor.

The mistake: Claiming as if you are single

One of the most common Social Security questions I hear is: "How long do I have to live to make delaying benefits worth it?"

It is a logical question. It is also often the wrong one.

For a single retiree, a break-even calculation may be a useful starting point. But for married couples, especially couples like Mike and Amy with an age gap, Social Security should not be modeled only over the life of the person filing. It should be modeled over the life of the household.

That distinction can change everything.

Social Security gives retirees a claiming window. You can generally begin retirement benefits as early as 62, claim at full retirement age or delay as late as age 70. Delayed retirement credits can increase a retirement benefit for each month benefits are delayed beyond full retirement age, and the increase stops at age 70.

Many retirees know that delaying can increase their own monthly benefit. What they often miss is that the higher benefit may also affect the surviving spouse.

When one spouse dies, the survivor generally does not continue receiving both full Social Security checks. If the survivor's own retirement benefit is smaller than the survivor benefit available on the deceased spouse's record, Social Security generally pays the higher amount, either directly or by paying the survivor's own benefit plus a survivor amount to bring the payment up to the larger benefit.

That means the higher earner's claiming decision can become the surviving spouse's income floor.

This is where age gaps matter.

If spouses are close in age, the survivor period may be shorter. But when one spouse is 10, 12 or 15 years younger, as Amy nearly is, the survivor period can last decades. A claiming decision that seems minor at 67 can become a major income decision for a widow or widower in their 70s, 80s and 90s.

That is why I tell couples: "Do not ask only, 'When do I break even?' Ask, 'What happens to my spouse if I die first?'"

A simple example

Let's use round numbers.

Assume Mike's benefit if he files now is about $3,500 a month. If he delays until 70, delayed retirement credits could raise that benefit to roughly $4,340 a month before future cost-of-living adjustments. The exact increase depends on birth year and the number of months delayed, but the planning concept is the same: Waiting can produce a meaningfully larger check.

In this illustration, the difference is about $840 a month, or roughly $10,000 a year.

If this were only about Mike's own life, he might focus on how long he must live to recover the checks he skipped by waiting. But in an age-gap marriage like his, that is incomplete.

If Amy later qualifies for an unreduced survivor benefit and survives Mike by 20 years, that extra $10,000 a year could represent roughly $200,000 of additional survivor income before cost-of-living adjustments and taxes. If she survives him by 30 years, the difference could be roughly $300,000.

Mike and Amy's actual numbers will depend on their birth dates, benefit amounts, claiming ages, health, work history and survivor eligibility. Once survivor benefits are available, Mike's claiming age can help determine the size of Amy's protected income stream for the rest of her life.

Spousal benefits and survivor benefits are not the same

A major source of confusion is the difference between spousal benefits and survivor benefits.

A spousal benefit while both spouses are alive can be worth up to 50% of the worker's primary insurance amount, depending on the spouse's age and eligibility. Delayed retirement credits earned by the worker do not increase that spousal benefit above the 50% calculation.

Survivor benefits are different. A surviving spouse who qualifies may receive up to 100% of the deceased spouse's benefit, depending on the survivor's age and other factors. In addition, delayed retirement credits earned by the deceased worker can increase the survivor's benefit.

That is why the higher earner's claiming decision can be so powerful.

Delaying may not dramatically improve the younger spouse's benefit while both spouses are alive. But it may materially improve the amount available to the survivor after the higher earner dies.

This is the distinction many couples miss. They ask, "What will my spouse receive while I am alive?" But the more important question may be, "What income will my spouse have if I die first?"

The marriage dynamic matters

Social Security claiming conversations are rarely just about numbers. They often reveal how a couple makes decisions.

Some spouses communicate openly. They ask questions together, challenge assumptions respectfully and think of retirement as a shared household problem. Others unintentionally approach the decision as if they are still financially single. One spouse focuses on "my benefit," "my life expectancy" and "my money," while the other spouse quietly wonders what the plan means after the first death.

That dynamic matters because the quieter spouse is often the one carrying the survivor risk.

In Mike and Amy's case, Mike was not trying to ignore Amy. He simply saw the decision through the lens of checks he would receive or give up. Amy saw it through the lens of a possible future where she was widowed, older and dependent on one remaining Social Security check.

He had not been selfish. He had been solving the wrong problem.

Three questions every age-gap couple should ask

The right Social Security claiming strategy is not based on a rule of thumb. It is based on household modeling. For age-gap couples, three questions are especially important.

1. Who is this decision really protecting?

At Social Security Claiming Experts, we help clients understand their unique longevity forecasts. But no one can predict longevity perfectly. Age, health, family history and gender all matter.

In consultations, I listen not only to the numbers but also to the marriage dynamic. The higher earner may be focused on recouping what he or she paid into the system. The younger spouse may be thinking about an entirely different question: "Will I be financially secure if I am alone?"

Neither concern is irrational. But they are not the same concern.

If the higher earner is older and the lower-earning spouse is younger, the claiming decision may affect the younger spouse long after the higher earner is gone. That does not automatically mean the higher earner should wait until 70, but it does mean the survivor impact must be modeled.

Social Security is not just a monthly check. For many households, it is longevity protection. The longer the surviving spouse may live, the more valuable that protection can become.

2. Which Social Security check will survive?

Look at both spouses' benefit estimates.

If both spouses have similar earnings histories and similar benefit amounts, the survivor issue may be less dramatic. But if one spouse's benefit is much larger, the higher earner's claiming age deserves special attention.

The key question is not just, "How much will we receive as a couple?" The better question is, "What remains when one check goes away?"

Many affluent couples underestimate this because they view Social Security as supplemental income. But after the first death, the surviving spouse may face lower household income, higher effective tax pressure, reduced pension income or greater dependence on portfolio withdrawals.

In that moment, the larger Social Security check can become far more important.

3. What is the cost of waiting, financially and emotionally?

Delaying Social Security is not free. A household may need to use taxable savings, draw from retirement accounts, rely on pension income, continue working or adjust spending to bridge the gap.

For high net worth households, this is often where planning creates the most value. The question is not simply whether delaying produces a larger Social Security check. The question is whether the household has an efficient way to bridge the years before claiming.

Sometimes using portfolio assets earlier in retirement feels uncomfortable. That discomfort is real. The older spouse may see the account balance falling and feel like the plan is losing ground. The younger spouse may see the same withdrawals as the price of building a larger protected income floor for later.

Both perspectives deserve to be heard.

Other times, waiting may not make sense. If delaying would force damaging withdrawals, create cash-flow stress or increase risk in the rest of the plan, claiming earlier may be appropriate.

When delaying may be worth it

Delaying the higher earner's Social Security benefit often becomes more attractive when several factors line up:

• The higher earner has a much larger benefit
• The spouse is younger
• The younger spouse's own benefit is modest
• The couple has reasonable longevity expectations
• The household has enough savings, income or flexibility to bridge the delay

But this is not an argument that everyone should wait until 70.

An earlier claim may make sense when there are serious health concerns, when both spouses have similar benefit amounts, when there is no meaningful survivor issue, or when the household needs the income immediately.

The point is not "always delay." The point is "do not claim as if you are single when you are married."

The moment the conversation changed

When Mike first looked at the decision, he saw three years of checks he would not receive if he waited. That is a natural way to see it.

But when we modeled the household to Amy's potential survivor years, the decision changed. Mike was no longer comparing checks he might receive at 67, 68 and 69. He was comparing Amy's possible income at 75, 85 and 95.

By the end of the conversation, he said it differently: Waiting was not simply giving up checks. It was potentially buying Amy a larger, inflation-adjusted income floor.

That is a much more useful frame.

Your Social Security claiming strategy should not be built only around the person filing first. It should be built around the person most likely to live longest.

In many age-gap marriages, that means the older, higher-earning spouse's Social Security decision is not really about the older spouse at all.

It is about the spouse who may still need that check 20 or 30 years later.

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• Why You Need to Start Your Social Security Claim 4 Months Early: 7 Steps to Prevent a Delay at the Worst Possible Moment
• Don't Let Low Tax Rates Lull You Into the Torpedo Zone: If You Have $1M to $3M in Tax-Deferred Savings, You Could Be Looking at Brutal Tax Bills in the Future

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.

Jim and Pam are a hypothetical couple I use with clients to illustrate what the numbers in a retirement plan can look like. They're both 62, have $2.5 million in pretax retirement accounts and $54,000 a year in combined Social Security benefits when they retire. On paper, they've done everything right.

But when Jim dies at 75, Pam's financial picture changes in ways they never planned for.

Her Social Security does not disappear entirely. The higher of the two checks continues, but one check is gone and her fixed income drops significantly overnight.

Her effective tax rate climbs from approximately 10% to between 15% and 23%, and may reach 28% by the time she is 85. Her total annual tax bill rises by approximately 145%, from roughly $11,000 to roughly $27,000. Within just a few years that increase may exceed 300%, with estimated total taxes of around $46,000 a year driven primarily by required minimum distributions (RMDs).

On top of that, a Medicare IRMAA surcharge begins approximately two years after RMDs start, ranging from an estimated $4,600 to $6,300 a year, deducted directly from her Social Security before she ever sees it.

And her RMDs, around $167,000 a year when they begin and potentially $250,000 a year as the account grows, now land entirely on a single tax return.

Same savings. Dramatically different tax bill — for the rest of her life.

This is the widow's penalty. It is not a fluke or an edge case. It is a predictable consequence of how our tax system treats a surviving spouse, and most retirement plans don't take it into account.

Four financial hits that arrive at once

When one spouse passes away, the survivor faces four simultaneous changes. Each is significant on its own. Together, they reshape the entire retirement picture.

1. Tax brackets compress immediately.

The 22% tax bracket for a married couple filing jointly in 2026 begins at $100,800. For a single filer, that same bracket kicks in at $50,400. The standard deduction also drops, from $32,200 for a married couple to $16,100 for a single filer. The first full tax year after a spouse dies is often the most financially disorienting year a surviving spouse will face.

2. Medicare IRMAA surcharges can jump.

Medicare's income-related premium adjustments are tied to income thresholds that are far lower for single filers than for married couples. A couple may be comfortably below an IRMAA tier, but when one spouse dies, the survivor can suddenly be well above it, paying thousands more a year in Medicare premiums on exactly the same income.

3. One Social Security check stops.

The survivor keeps the larger of the two benefits but loses the other entirely. For many couples, that's a drop of $25,000 to $40,000 in annual income. It doesn't get replaced.

4. RMDs don't stop.

At age 73 or 75, RMDs continue, regardless of what else has changed. The account balance is the same. But those forced withdrawals now land entirely on a single tax return, at single-filer rates, whether the money is needed or not. For a $2.5 million pretax account, that's not a rounding error.

Why don't retirement plans cover this?

Three things work against couples here. First, most retirement planning conversations focus on accumulation — saving more, investing well, managing risk. Tax planning for the surviving spouse is rarely on the agenda.

Second, advisers and clients alike tend to plan for the couple as a unit. The shift to single-filer status feels abstract until it's real, and by then the options have narrowed.

Third, these are uncomfortable conversations. It's easier to defer them. But in tax planning, time is the asset. The window for meaningful action is only open while both spouses are alive, healthy and still in a favorable bracket.

Four things to do while the window is still open

The widow's penalty is predictable. That means it's plannable. Here's where I focus with clients who want to get ahead of it.

1. Roth conversions during the married filing jointly window.

Every dollar converted from a traditional IRA to a Roth while both spouses are alive is a dollar the survivor can access tax-free, without pushing into higher brackets, triggering IRMAA surcharges or increasing Social Security taxation.

The married filing jointly bracket is one of the most valuable tax planning advantages available to couples. Most never use it for this purpose. I'd argue it's the most effective move available for reducing the survivor's future tax burden.

2. Term life insurance sized to replace the lost Social Security check.

This one surprises people. Term insurance isn't just a wealth-transfer tool. It can be a direct replacement for the Social Security income that disappears when a spouse dies. Size it to cover the income gap, put it in place before retirement while premiums are still reasonable, and the survivor has a real financial buffer during the most financially vulnerable period of widowhood.

3. Coordinate Social Security claiming with the survivor in mind.

Delaying the higher earner's benefit increases the survivor's check for life. For couples where one spouse earned significantly more, that delay can materially increase the survivor's annual income for life. The claiming decision that maximizes lifetime income for two people is often different from the one that maximizes the survivor's income alone. That gap deserves explicit attention.

4. Keep the portfolio working.

As a married couple, it can be easy to feel like the investments do not need to work as hard. Two incomes, shared expenses, a plan built around both of you. But that can change at any moment.

While both spouses are still living, keep the portfolio growing. A surviving spouse at 75 may have 20 or more years ahead and may suddenly need to draw significantly more from the portfolio than the couple ever did together.

A portfolio that becomes too conservative too early loses the growth needed to outpace inflation and fund a long retirement. Investment strategy should be built around who is still here and how long they may need it to last, not the couple's age at the time of the first death.

The penalty is predictable. So is the solution

The math behind the widow's penalty isn't complicated. What makes it damaging is that it catches couples off guard, at the worst possible time, with no runway left to act.

Jim and Pam's numbers aren't abstract. They're close to what I see across my client base, with different names. The tax bill Pam faces isn't the result of bad luck or bad investments. It's the result of a plan that was built for two and never updated for one.

The right time to fix that is now, while both spouses are here, the brackets are still favorable and the options are still on the table.

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• How One Widow Nearly Missed Out on $213,000 in Social Security
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• I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement Income

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.

Summer vacations are something many families look forward to every year, but the summer of 2026 could hit your wallet hard.

Higher gas prices are just one of the issues leading to more expensive plane tickets and road trips.

This year, if travel plans require a flight and lodging, you can expect to spend almost $4,000 before even arriving at your destination, according to a report from NerdWallet. And more than a third of the travelers who put their vacations on credit cards last year are still paying them off.

With costs even higher this year, how can you plan a summer vacation without throwing off your financial goals?

1. Build a budget

First and foremost, you should fully understand the cost of your vacation ahead of time. Before you choose a destination, understand how much you can afford for the trip as a whole.

Once you have your spending limit, start pricing out each individual expense, such as airfare, hotel, gas, food or entertainment. Many travelers don't plan out their spending limits before they leave, which can lead to debt that you carry long after your trip.

Allocate your budget to what is most important to you and your family. Are you a family that values a really nice hotel or something more budget-friendly? Are you focused on experiences such as excursions or dining out?

Creating a budget isn't about restriction or telling yourself to pull back on the fun. It is about creating a spending plan that focuses on what you value the most and what will help create the most lasting memories.

2. Manage spending

While creating a budget is a great way to take a bird's-eye view of what this trip will cost you, what will your individual spending plans be for the days you are there?

My recommendation is that you carry only the amount of money you have given yourself to spend each day. This way, you know when the cash is gone, you have reached your limit.

Of course, there might be some instances where you'll have no choice but to use a credit card, depending on where you are and what you're doing.

But don't be tempted to put expenses on a credit card that you may not be able to pay off. Try to use credit cards only for emergencies. They can be a secure way to spend money, especially overseas, but it's easy to overspend using them.

Look for easy ways to lower your spending:

• Take advantage of continental breakfasts and try to avoid the hotel restaurant. It's often a lot more expensive than the restaurant down the street.
• Instead of dining out for every other meal, consider spending extra money on one or two memorable dinners and look for more affordable options the rest of the time.
• If your vacation includes trips to an amusement park such as Disney World, consider packing snacks and water bottles to bring with you. This will help reduce impulse purchases throughout the day.

Just like you did with your overall budget, decide what is most important to your family. Pick the few attractions or souvenirs you absolutely need to spend money on. You may not be able to afford every single one, but having a priority list will help you decide what is best.

3. Plan for next year

One of the biggest mistakes you can make is putting your entire vacation on one credit card and telling yourself you'll figure out how to pay it off later. Look into the benefits of having a dedicated vacation fund and making monthly deposits into it throughout the year.

Breaking down a $3,000 vacation into 12 separate deposits of $250 seems much more realistic and manageable than paying for it all at once. A financial planner could help you set up a high-yield savings account that is specifically used for travel expenses.

4. Don't forget about the ultimate vacation: Retirement

Planning for your summer vacation is fun, but don't let that excitement take away from your plans for the ultimate vacation: Retirement. Prioritizing saving for your future will help you enjoy your golden years without worrying about running out of money.

I often recommend that you save 10% to 15% of your income if you plan to keep your current standard of living in retirement. A good goal is to have more than 10 times your annual salary saved by the time you retire.

But that number varies from person to person, depending on your unique situation. Sit down with a financial professional to determine how much money you need for retirement.

While summer vacations are more expensive than they were just five or six years ago, that doesn't mean you have to skip them. With strategic planning, it is possible to enjoy a great vacation without setting yourself up for a failing 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.

Carlos owns two parcels on the south side of McAllen, Texas.

The first parcel is located in a Qualified Opportunity Zone, one of the original tracts the federal government designated in 2018. That designation expires on December 31, 2026. Less than six months from now, the line on the map vanishes.

The second parcel, three miles north, is located in a Census tract that didn't make the cut in 2018. But under the new eligibility rules signed into law last summer, that second tract just became eligible for OZ 2.0, and Carlos' governor has until late September 2026 to nominate it, or not nominate it, or pick a different tract entirely.

Carlos can't develop both parcels. He has one window of construction capital, and he needs to put it where the next decade of tax-advantaged capital will flow.

He needs to read the tea leaves. So do you.

Key dates for the 2026 governor OZ 2.0 nomination window

The Opportunity Zone program was made permanent by the One Big Beautiful Bill Act (OBBBA) on July 4, 2025. That's the good news. The complicated news is that every Opportunity Zone designation in America is refreshed every 10 years, and the first refresh is happening right now.

Here's the timeline you need to memorize.

The 90-day designation window opened on July 1, 2026, and runs through September 28, 2026. During that window, every state governor is submitting their nominations to the U.S. Treasury Department. The IRS published Revenue Procedure 2026-14 in April, spelling out exactly how the process works.

Treasury will certify the nominations late in 2026. The new Opportunity Zones take effect on January 1, 2027, and run for 10 years through 2036.

Once that map is set, it's set. Nobody is going to add your tract in March 2027 just because you missed the deadline.

So the question isn't whether your governor is making this decision. The question is whether you know which way they're leaning.

OZ 2.0 vs OZ 1.0: Eligibility changes every investor should know

Before you can guess the map, you have to understand the rules your governor has to follow.

The first big change: The income threshold dropped. Under OZ 1.0, a tract was qualified if its median family income was at or below 80% of the state or metropolitan median. Under OZ 2.0, that threshold drops to 70%. The bar is higher, the field is smaller.

The second big change: The contiguous tract provision is gone. In 2018, governors could include a tract that didn't meet the income test as long as it sat next to a qualifying tract. That loophole stitched together some of the most lucrative zones in the country. It's closed now.

The third big change: There's a new anti-gentrification trigger. A tract is disqualified if its median family income exceeds 125% of the state or metropolitan median. If your neighborhood has already been gentrified between 2018 and 2024, congratulations, but you're probably not getting another OZ designation.

The fourth major change is the rural carve-out, which is significant enough to deserve its own section below.
Net result: Under OZ 2.0, the eligible pool of tracts is about 25% smaller than it was under OZ 1.0. Your governor is making harder choices with fewer chips.

Qualified Rural Opportunity Funds: How the basis step-up works

The biggest structural shift in OZ 2.0 favors rural America. Tracts that qualify as "rural areas" under the new statute unlock a supercharged set of benefits. Investors in a Qualified Rural Opportunity Fund (QROF) get a 30% basis step-up after five years, triple what urban OZ investors receive.

And the "substantial improvement" threshold drops from 100% to 50%, meaning rural developers can renovate properties with half the capital outlay they'd need elsewhere.

That 50% rural threshold went into effect the day the law was signed, July 4, 2025. It's already in play.

For governors with significant rural economies, this is a strong incentive to lean rural in their nominations.

For investors, it offers a fundamentally better economic profile than urban OZ 2.0: A higher step-up, a lower improvement bar and the same 10-year tax-free appreciation.

Lessons from the 2018 OZ designations: What to expect in 2026

We aren't completely flying blind. The 2018 round gave us a behavioral road map.

The average OZ designated in 2018 had a 31% poverty rate, well above the 20% statutory threshold. The average tract had income at 59% of the median area, significantly below the 80% cap they could have used. Governors weren't pushing the edges. They were picking distressed tracts with project pipelines.

The contiguous tract provision, the loophole that's now closed, got used in only about 2.6% of designations. Most governors didn't lean on it.

But here's the pattern that should grab your attention: By 2022, 75% of all OZ investment had gone to urban areas, even though 45% of zones were rural. And 75% of the total investment had been allocated to real estate, mostly residential. About one-third of OZ tracts received zero outside investment over the entire program.

So governors had two failure modes in 2018: They picked tracts where capital never showed up, and they overindexed on urban projects at the expense of rural communities that Congress intended to help.

This time, with rural super-incentives baked into the statute and a smaller eligible pool, expect a meaningful pivot. Governors who got criticized last round for "rich neighborhood" picks will be more cautious. Governors with significant rural economies will lean rural.

How Texas, Washington and other states are running their OZ 2.0 nominations

Different states are running different processes.

In Texas, the governor's Economic Development & Tourism Office asked local economic development organizations and county judges to submit eligible tracts by June 26, 2026. The state is now finalizing its list and intends to send picks to Treasury by August 3. The state is selecting on three criteria: Clear federal eligibility, demonstrable local support, including incentive packages and project viability within 24 to 48 months.

That third criterion is your biggest signal. Texas is picking tracts where private capital is genuinely about to deploy. If your county has a master plan, a TIF zone and a developer with a financed project pipeline, you're in the running. If your county hasn't submitted anything? You're not.

Washington state is publishing its draft application and scoring criteria publicly. New Mexico has spelled out exactly when its final tracts will be locked in. West Virginia plans to submit by late September. Some states are running stakeholder processes you can participate in right now.

In 2018, California revised one-fifth of its nominations after public feedback. Pennsylvania accepted recommendations covering 61% of eligible tracts. The states that ran transparent processes ended up with more deployable maps.

If you want a tract designated, the time to be in the room is this summer, while the governor is still finalizing, not October, after the map is locked.

How investors can influence OZ 2.0 tract selection: A four-step action plan

Carlos has about three weeks until Texas locks its list and sends it to Treasury on August 3. Here's the playbook, and it applies whether your state's window is still open or, like Texas, is down to the final days.

Identify which Census tracts within your project area are eligible under the new rules. Both Novogradac and the Economic Innovation Group publish free interactive mapping tools that overlay the 2020-2024 American Community Survey data that Treasury is using.

Find out whether your local economic development organization has already submitted your preferred tract. If yes, great. If not, you have an urgent phone call to make this week, not next month.

Document your project pipeline. Treasury isn't going to read your business plan, but your governor's office is. The states with the cleanest project documentation are getting the most credibility on their nominations.

Watch what doesn't get nominated (this is the part most investors miss). Tracts that are eligible but ignored become public information once states publish their submissions. Some of those tracts may become opportunities in the next 10-year cycle if conditions shift.

Planning for the December 31, 2026, OZ 1.0 deadline and the OZ 2.0 transition

The end of OZ 1.0 isn't an exit from this strategy. It's a transition.

Investors who deferred capital gains into OZ 1.0 funds have a hard recognition date on December 31, 2026, with the tax bill coming due in April 2027. That's a separate planning problem worth its own conversation with your investment adviser.

But the runway ahead is longer than the runway behind. OZ 2.0 isn't a sunset. It's a permanent program with a rolling deferral, enhanced rural benefits and tightened eligibility, focusing capital where it can do the most good.

The investors who win the next decade aren't going to be the ones who watch the map. They're going to be the ones who help draw it.

Carlos has three weeks. So do you.

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• DST Inventory Just Hit a Record $3.9 Billion: What 1031 Exchange Investors Should Do Next
• How to Use 1031 Exchanges to Scale Up Your Real Estate Empire
• DST Exit Strategies: An Expert Guide to What Happens When the Trust Sells
• This High-Performance Investment Vehicle Can Move Your Wealth Up a Gear

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 is a line I hear from women constantly, and it usually sounds harmless at first.

"Oh, he handles all that."

The investments, taxes, retirement accounts, loans, insurance policies, passwords…

"He handles it."

And honestly? I understand how it happens.

Life gets busy. Careers take off. Kids need rides. Aging parents need help. One person in the relationship naturally gravitates toward financial management, and the other slowly steps away from the details.

It feels efficient. Logical, even. Until life changes.

Lately, this conversation has exploded again because of Belle Burden's bestselling memoir, Strangers. The book struck a nerve with women everywhere because underneath the divorce story is something much bigger: What happens when a smart, accomplished woman slowly disconnects from her own financial life.

Let's be clear: This is not about blaming women.

Some of the smartest, most successful women I know fall into this dynamic. Lawyers, executives, entrepreneurs, physicians. Women with graduate degrees and thriving careers.

This is not an intelligence issue. It is a participation issue.

As a financial adviser and Certified Divorce Financial Analyst (CDFA), I have watched too many women discover, during divorce, widowhood or financial crisis, that they do not fully understand what they own, what they owe or even how their accounts are structured.

That realization is terrifying.

The good news is that you can take the reins at any moment. You do not need to become a tax attorney overnight. You do not need to memorize investment jargon or start day-trading stocks.

You simply need to start participating.

Here are five financial truths every married woman should know.

1. Know your numbers

Every account. Every debt. Every insurance policy. Every password.

I cannot tell you how many times I have sat across from someone who did not know how much was in the retirement accounts, whose name was on the brokerage account or where the life insurance policies were located.

Most of the time, people assume everything is fine.

And often, it is. Until it is not.

Set aside one evening this month and create a complete financial inventory:

• Bank accounts
• Retirement accounts
• Credit cards
• Mortgage balances
• Insurance policies
• Estate documents
• Beneficiary designations
• Advisers' contact information

Store it somewhere secure.

This is not about distrust. It is about awareness.

Knowing your finances does not make you cynical. It makes you an adult participant in your own life.

2. Keep your own financial identity

This one especially affects women who step away from the workforce to raise children or care for family members.

Over time, many women slowly lose their independent financial footprint. Their credit history weakens. Their income history disappears. Accounts shift into joint ownership.

Then suddenly, after divorce or widowhood, they try to apply for a mortgage or credit card on their own and are treated like they have no financial history at all.

It is one of the most demoralizing things I see.

And have felt.

It happened to me. I had no credit after my divorce. Miraculously, I managed to get an Express credit card from the women's clothing store. So, I bought one shirt. And then I paid it off. Then I bought two shirts and paid them off. And so on. It took a minute, but I built my credit back.

Keep at least one credit card in your own name. Use it responsibly. Monitor your credit score regularly.

And understand this: Unpaid caregiving labor absolutely has value. Raising children and supporting a household are enormous contributions.

Unfortunately, the financial system does not always recognize this invisible labor, so you need to protect your own paper trail.

3. Understand what you own and how you own it

This is where people's eyes usually glaze over, but this issue can cost families hundreds of thousands of dollars.

How an asset is titled matters enormously.

Inherited money, trust assets and family property can lose their protected status if they are commingled improperly or retitled jointly.

For example, depositing inherited funds into a joint account or adding a spouse's name to inherited property can unintentionally transform separate property into marital property, depending on state law

Many women are shocked to learn this after the fact.

Before adding anyone's name to major assets, speak with a financial adviser, CPA or family law attorney. Five minutes of planning upfront can save years of legal and emotional pain later.

4. Have money conversations early

Nobody wants to discuss finances before marriage. It feels awkward and unromantic. But avoiding money conversations does not eliminate financial problems. It simply delays them.

Financial secrecy is one of the biggest sources of stress I see in relationships. Couples need to discuss:

• Debt
• Spending habits
• Credit scores
• Financial goals
• Investment philosophies
• Expectations around work and caregiving

Prenuptial agreements are not always about expecting divorce. Sometimes they are simply about transparency and clarity.

And if you are already married, it is not too late. Have regular "money dates." Talk openly about finances before problems arise. (I have a takeaway on my site to help start the conversations.)

5. Build your financial team before you need one

Too many women only seek financial help in a crisis. By then, emotions are high, options may be limited, and costly mistakes may already have happened.

Every woman should have access to:

• A financial adviser
• A CPA or tax professional
• An estate planning attorney

During divorce or major life transitions, a CDFA can be invaluable in helping analyze long-term financial implications.

Most importantly, understand this: Financial independence is not about preparing for divorce.

It is about confidence.

It is about knowing that no matter what life throws at you — career changes, caregiving, widowhood, reinvention or unexpected loss — you can sit at the table and fully understand the conversation.

That changes everything.

Because the women I worry about most are not necessarily the women without money. They are the women who are not paying attention to the money they already have.

And that is a problem we can fix.

Related Content

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• When Divorcing, What Financial Specialists Do You Really Need?
• I'm a Financial Planner: This Is How Smart Women Can Plan for Financial Freedom Despite Life's Curveballs
• A Financial Adviser's Guide to Divorce Negotiations: Civil — or Not
• A Financial Adviser's Guide to Divorce Finalization: Tying Up the Loose Ends

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

Most business owners know they need capital to grow. Far fewer know how many doors are actually open to them — or that their bank's rejection letter is often the beginning of the conversation, not the end.

Through many years of setting up business financing deals in a wide variety of sectors including commercial, manufacturing, healthcare, hospitality and real estate, I have seen some of the most capable entrepreneurs forgo countless opportunities that could have made them millions due to a simple lack of awareness about where to find money and how to secure it.

Why your bank said no (and why that's not the whole story)

Traditional banks are extremely risk-averse entities. These entities are run according to strict regulation requirements and have to see at least three years of solid performance, a large amount of collateral and no problems in either the business or its owner's credit.

If your business is new, operates in an unstable market or is undergoing some transformation — for instance, an ownership change, sudden growth or loss-making period — then the bank algorithm will red-flag your application even before your file gets reviewed by a person.

This does not mean that your business is not creditworthy, just that it operates outside of the risk tolerance box of that particular bank. The world of commercial lending is much larger than a few big banks.

A map of the commercial lending landscape

Understanding your options starts with understanding who lends what — and why. Here's a practical breakdown:

SBA loans (7(a) and 504 programs). These remain the gold standard for businesses that can qualify. SBA 7(a) loans go up to $5 million and can be used for nearly any business purpose.

The 504 program is purpose-built for major fixed-asset purchases — equipment and commercial real estate — and often features below-market interest rates. The trade-off is time: SBA loans involve significant documentation and can take 60 to 90 days to close. If you have the runway, they're worth pursuing.

Non-bank commercial lenders. This category includes credit funds, debt funds and private commercial lenders who operate outside the traditional banking system.

They move faster — often closing in two to four weeks — and are generally more flexible on deal structure, collateral types and borrower profile.

Rates are higher than bank rates, but for many borrowers, the speed and certainty of execution more than justify the premium.

Revenue-based and asset-based financing. For businesses with strong receivables or recurring revenue but thin equity, asset-based lending (ABL) and revenue-based financing offer a compelling alternative.

Instead of underwriting your credit profile, the lender underwrites your assets — your invoices, inventory, equipment or contracts.

A distribution company with $3 million in outstanding invoices may qualify for a $2 million revolving line of credit even if its balance sheet looks modest.

Factoring and invoice financing are subsets of this category and work especially well for B2B businesses with long payment cycles.

Industry matters more than you think

The often-overlooked variable in business lending is industrial specialization. Often, lenders have niches in which they can operate to their advantage since they have ample experience and already know what to expect.

For example, one who has lent money to 50 car washes knows all about them from the economic point of view better than a generic lender.

Industries with active, specialized lending markets include:

• Healthcare and medical practices (including dental, veterinary and behavioral health)
• Franchises (many lenders maintain franchise brand registries that fast-track approvals)
• Commercial real estate and mixed-use development
• Trucking, logistics and fleet operations
• Hospitality, hotels and food service
• Manufacturing and industrial equipment
• Professional services (law firms, accounting firms staffing agencies)

You can visit US Professional Funding's website and US Medical Funding's website for more information on these industries. (I am the vice president of Business Development at both US Professional Funding and US Medical Funding.)

When you're seeking capital, your industry isn't just a detail on the application — it's a primary filter for which lenders are most likely to say yes.

The five things lenders actually look at

Commercial underwriting is more nuanced than personal credit, but it follows a consistent logic. Most lenders evaluate five core factors, sometimes called the Five C's of Credit:

Cash flow. Can the business service the debt from operating income? Lenders typically look for a debt service coverage ratio (DSCR) of at least 1.25x — meaning the business generates $1.25 in net operating income for every $1 of annual debt payments. Know your number before you apply.

Collateral. What assets secure the loan? Real estate, equipment, inventory and receivables all carry value on a lender's balance sheet. Even if you're cash-flow positive, lenders want a secondary repayment source.

Capital. How much equity does the owner have in the business? Lenders want to see skin in the game. A highly leveraged business with minimal owner equity is a harder credit story.

Conditions. What are you using the funds for, and does the use make business sense? Expansion into a new market is a different risk than covering operating losses.

Character. Your credit history, your track record and the people running the business. Personal credit scores above 680 are generally the floor for most commercial lenders; 700-plus significantly broadens your options.

How to prepare before you apply

The single biggest mistake business owners make is approaching lenders unprepared. A strong loan package doesn't just improve your odds — it dramatically shortens your timeline and often secures better pricing.

Here's what to assemble before you start:

• Two to three years of business tax returns (and personal tax returns for any owner with 20%-plus ownership)
• Year-to-date profit and loss statement and balance sheet, prepared by a CPA
• Three to six months of business bank statements
• A one- to two-page executive summary of your business and the purpose of the loan
• A debt schedule listing all existing loans and obligations
• Documentation of collateral (appraisals, equipment lists, accounts receivable aging)

If your financials show a challenging year, don't wait for the lender to ask about it. Write a clear, factual explanation — an addendum or letter from your accountant — that addresses what happened and why the business is positioned for stronger performance going forward. Lenders respect transparency. They don't like surprises.

The bottom line

Access to capital is one of the most powerful levers a business owner has — for growth, for acquisition, for weathering downturns and for building enterprise value. The commercial lending market is deeper and more flexible than most owners realize.

Your next step: Pull your last two years of tax returns and your most recent financial statements. Calculate your DSCR. Get clear on what you're asking for and why. Then have a conversation with a lender or broker who specializes in businesses like yours — not just the bank where you have your checking account.

The capital is there. The question is whether you've positioned yourself to access it.

The information provided in this article is for educational purposes only and does not constitute financial advice. Loan availability, terms and eligibility vary by lender, borrower and transaction. Consult with a qualified financial or lending professional regarding your specific situation.

Related Content

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• For Business Owners, Estate and Exit Planning Join Forces
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• 5 Actions to Set Up Your Business With Your Exit in Mind, From a Wealth Adviser
• The Four Worst Mistakes to Make When Selling Your Business

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 in three Americans feel less confident in their retirement plan than a year ago, and nearly half of pre-retirees say they expect to retire later than planned.

That's according to a survey from CNO Financial Group.

Factors ranging from inflation to healthcare costs are part of the reason, but longevity, market volatility and the possibility of outliving savings is making it increasingly difficult for many Americans to feel they're prepared enough for retirement.

For those approaching retirement, feeling secure enough to stop working can be difficult to define, especially during periods of economic uncertainty. Even workers who have spent decades saving consistently might still not feel fully prepared for retirement.

This uncertainty is largely tied to longer life expectancies. Many people fear their retirement savings won't be enough to stretch across several decades, especially when factoring in inflation, increasing healthcare costs or long-term care.

As a result, some pre-retirees continue to increase their savings goal, even when they've surpassed their original figures.

Sometimes it makes sense to delay retirement

There are situations in which delaying retirement makes sense. Instead of claiming Social Security benefits as soon as you become eligible at 62, waiting to claim can increase your check by around 8% per year up until age 70.

In addition to earning consistent income, working longer than expected also gives your 401(k) or IRAs additional time to grow before required minimum distributions (RMDs) begin.

However, there's a difference between postponing retirement strategically and delaying because of uncertainty.

Waiting too long to retire can bring its own set of risks. As a wealth management specialist, I once worked with an older couple who were both healthy. Over time, they began experiencing physical setbacks that limited their ability to participate in many of the activities they'd planned to in retirement.

By the time they finally felt comfortable enough to retire, their vision for how that time would be spent had dramatically changed.

Emotional changes and retirement

Retirement also comes with emotional changes that aren't discussed as much. After decades of working around a structured schedule, having complete control of your time can be a difficult adjustment.

For many of us, work provides routine, stability, social interaction and a sense of purpose that can be hard to replace as a retiree. As a result, some retirees choose to re-enter the workforce.

I once worked with a retired physician who took a position at a Lowe's home improvement store simply to stay active, interact with people and maintain a sense of purpose.

Although financial security is important, retirement will always involve some level of uncertainty. Deciding when the right time to stop working is more than just reaching a specific savings number.

Quality of life, physical and mental health and emotional preparedness must all be considered.

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.

Selling a business is often framed as a transaction: A valuation, a deal structure, a number on a page. But, in reality, it can be one of the most significant transitions an entrepreneur will ever face.

While valuation, deal structure and tax outcomes are key considerations, they are just part of the equation. The emotional, familial and lifestyle implications can be just as consequential.

All of these factors should be taken into account during the upcoming wave of anticipated exits. According to the Exit Planning Institute, roughly 75% of business owners plan to sell within the next decade, representing an estimated $14 trillion expected to change hands.

Yet only 20% to 30% of businesses that go to market actually sell.

Addressing this gap requires a more integrated approach, which changes the expectations placed on advisers. In many cases, the adviser role extends beyond transaction support into guiding clients through a sequence of financial and personal decisions that unfold over time.

By acting as a coach, advisers can help business owners by providing continuity and direction throughout a process that is both technically complex and personally consequential.

An adviser's role starts quite early in the process, commencing with how "readiness" is defined.

Start with readiness

Wanting to sell and being ready for a sale are two very different things, and preparation extends well beyond the business itself. True readiness often involves aligning financial strategy with personal priorities, long-term goals and life after the transaction.

Often, it comes down to two questions:

• Is the business ready for a sale?
• Does the owner understand why he or she is selling?

From a business perspective, readiness should be relatively straightforward: Clean financials, operational scalability and a credible growth story.

However, from an owner's perspective, it can be much more complex. It involves understanding what the sale is intended to accomplish and what comes next.

Advisers often frame this as balancing "economic alpha" with "life alpha." Maximizing valuation certainly matters, but there also should be clarity about the next phase.

Without that clarity, even a well-executed exit can feel incomplete or unsatisfying, potentially straining relationships. Owners who have spent decades building something often find themselves asking a difficult question once it's gone: What now?

Assemble the right team

Most entrepreneurs only sell a business once, which makes assembling the appropriate team of professionals one of the most important decisions in the process.

A typical deal involves a wealth adviser, an M&A attorney, an investment banker and an accountant. Each plays a discreet role, from structuring the deal, to managing negotiations and mitigating tax impact.

However, isolated expertise isn't enough. The team should operate in alignment. When communication breaks down or priorities diverge, friction quickly builds.

Accordingly, effective teams tend to function as a unit — anticipating challenges, coordinating decisions and keeping momentum intact when the process becomes complex.

Plan for the proceeds

A liquidity event can often create sudden wealth, which, depending on how it's handled, can potentially lead to fulfillment or a void. Effective plans start with clear requirements and goals. Proceeds are typically allocated across three areas:

• Lifestyle needs
• Philanthropy
• Wealth transfer

It's key that advisers account for how clients want to live post-sale, whether that involves more travel, hobbies or other meaningful experiences. Without that level of intentional planning, many business owners struggle with a loss of structure once the demands of running the business disappear.

Philanthropic strategies, such as donor advised funds (DAFs), should reflect genuine convictions and the family's broader values, rather than being driven solely by tax considerations.

Wealth transfer is often more nuanced. The most complex decisions often involve children, including when and how to introduce wealth in a way that supports independence, rather than undermines it.

These discussions with the next generation can shape family dynamics for years. Done thoughtfully, it may help reinforce independence. Done improperly, it can create lasting tension.

Prepare for the emotional roller coaster

At some point, the tone inevitably shifts. Once a letter of intent (LOI) is signed, control begins to change hands. Due diligence introduces scrutiny. Negotiations can become more adversarial.

It's often difficult for entrepreneurs to go from building a business to suddenly defending it in terms of valuation and financials.

Separating personal identity from the business takes time, which is why exit planning may work best as a multiyear process. And it's important to note that the emotional complexities don't typically end when the deal closes — they simply evolve.

Post-sale, owners face new questions around purpose, time and relationships. As wealth increases, its marginal value tends to decline. In its place, concerns arise around health, connections and how the client's time will be spent — areas commonly overlooked during the deal.

Execute pre-sale planning strategies

Preparation before the sale can meaningfully impact the outcome. Strategies such as gifting shares into trust structures ahead of a liquidity event may reduce tax exposure by leveraging discounted valuations.

Family limited partnerships can also facilitate wealth transfer, while allowing owners to retain some control.

But these approaches come with trade-offs. Without clear communication, they can create confusion or tension around access and fairness.

Concentration risk should also be considered, since many owners have most of their net worth tied up in the business.

Interim solutions, like term life insurance, may provide protection leading up to the transaction.

Avoid the common post-sale mistakes

When the deal closes, many owners initially increase spending, especially on physical assets like vacation homes, cars or other hobbies. But this phase typically doesn't lasts.

Within a few years, priorities tend to shift. Instead of acquiring more physical assets, many sellers focus on experiences, relationships and how they spend their time.

Without a clear plan, that transition can feel disjointed. A disciplined approach to investing and spending may help support long-term sustainability.

Family dynamics can also become strained if wealth is introduced too quickly or without context. Preparation, once again, is beneficial.

The deal is done, and the real work begins

A business exit tends to compress a wide range of decisions into a relatively short period of time. Once that process is in motion, the focus naturally shifts toward execution, and there is less room to revisit the broader questions that emerge alongside the transaction.

For advisers, that makes the timing of engagement important. The work that often has a meaningful impact often takes place earlier, when clients can approach decisions around tax strategy, capital allocation, family dynamics and personal priorities with more perspective and fewer constraints.

Bringing those elements together requires coordination across disciplines and a willingness to operate beyond the immediate demands of the deal.

In that context, an adviser can play the role of a coach, helping business owners through the peaks and valleys of the dealmaking process and the unfamiliar terrain that comes with it, from both a financial and personal perspective.

We do not endorse, approve or make any representations as to the accuracy, completeness or appropriateness of any part of any content linked to from this article.

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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 IPO activity picks up, client calls tend to follow. A high-profile company goes public, the financial press lights up, and suddenly, clients who have never considered investing in an IPO are asking whether they should get in.

These conversations can be genuinely useful, but they can also go sideways quickly if advisers aren't prepared to manage expectations alongside the enthusiasm.

Having a clear framework for these conversations helps. Here's how I think about it.

1. Start with the fundamentals

Before getting into access or mechanics, it helps to anchor clients in why companies go public in the first place. While an IPO creates an investment opportunity for outside investors, it's primarily a capital-raising strategy.

The company needs funding to grow, pay down debt or give early investors and employees a path to liquidity. Going public is how they get it.

In exchange, the company accepts significant new obligations: Regular SEC reporting, public scrutiny from analysts and shareholders, plus ongoing regulatory oversight. These responsibilities shape how the offering is priced and who gets access first.

2. Walk clients through the process

Many investors have a vague sense of what an IPO is, but not a clear picture of how one comes together. Walking them through the basic mechanics sets up the risk conversation more naturally.

The company selects investment banks (underwriters) to manage the offering and determine pricing, share volume and allocation. Then, the company files a registration statement with the SEC, which includes a prospectus with financials, the business model and a detailed risk factors section.

Institutional investors get a first look during the "roadshow," where company leadership presents details about the IPO to build demand.

The offering price is finalized the night before trading begins and shares hit the market.

Educating investors on the process is important because your clients may assume IPO investing is as simple as clicking "buy" on their brokerage app. But most offerings aren't straightforward, and explaining why to your clients helps set the right expectations.

3. Clarify the three access points

When a client asks, "How do I get in on an IPO?" the honest answer is that it depends on when you want in and what you have access to. (I typically hate "it depends" answers, but it truly applies in this situation.)

There are three entry points, each with a meaningfully different profile:

Pre-IPO secondary markets. Before a company goes public, some shares may be available through secondary platforms, purchased from early employees or existing investors seeking liquidity.

This path is generally limited to accredited investors, involves limited disclosure and comes with transfer restrictions and higher operational complexity. Pricing can vary significantly from the IPO price, and fraud risk is elevated.

If a client is interested in this option, the channel matters enormously. Only established, regulated platforms with clear documentation of ownership and custodial arrangements should be considered.

IPO allocation. Participation in the actual offering, at the offer price, typically flows through broker-dealers that are part of the underwriting group. Institutional investors receive priority, and retail access can be limited.

In high-profile deals, demand often far exceeds available shares. Clients should understand that submitting interest isn't a commitment, and allocation isn't guaranteed.

Anyone promising guaranteed access to a hot IPO is waving a bright red flag.

Post-IPO trading. Once shares list on a public exchange, any investor can buy them through a standard brokerage account. This is the most accessible option and the one with the least operational complexity. It's also where most individual investors will land.

The trade-off is that newly public companies often see elevated volatility in the early weeks of trading as the market finds its footing.

We saw this in action with the SpaceX IPO earlier this year. The company's stock (SPCX) increased by more than 50% in the four days following its debut, then dropped back down around initial pricing in the subsequent two weeks.

4. Reframe the 'first-day pop' conversation

IPOs attract a lot of attention around first-day performance. A company opens 30% above its offer price, and it looks like a missed opportunity. If it drops 20% on day one, suddenly the whole asset class gets a side-eye.

Neither reaction is especially useful for long-term investors.

First-day price movements reflect a combination of limited float, pent-up retail demand and short-term sentiment, none of which are a reliable signal of where the company will be in three to five years.

Early enthusiasm has a way of fading once the lockup period expires and insiders can sell. Clients who buy in based on first-day momentum often find themselves holding a position they don't fully understand at a price that was set by very different market forces.

This is a good moment to bring the conversation back to fundamentals. Some good questions to ask:

• Does the client understand the company's business model?
• Have they looked at the prospectus, particularly the risk factors section?
• Does the offering fit within their time horizon, risk tolerance and overall portfolio composition?
• What percentage of their holdings would this represent, and are they comfortable with that level of concentration?

5. Tie it back to the plan

One of the most effective ways to manage IPO conversations is to redirect them toward your client's financial plan. An investment that generates a lot of headlines isn't automatically a good fit.

An IPO that most investors can't access at the offer price, carries meaningful volatility risk and represents a company with an unproven public track record deserves the same disciplined evaluation as anything else in the portfolio.

Access and hype are not the same thing as opportunity. Helping clients see the difference, and then evaluating each situation through the lens of their individual goals and risk profile, is exactly the kind of value a good adviser provides.

Related Content

• Are You Ready to Go Upmarket? What Advisers Need to Know
• How Advisers Can Establish Relationships With HNW Prospects
• Serving the HNW Market: How Financial Advisers Can Break Through and Deliver Lasting Value
• Global Uncertainty Has Investors Running Scared: This Is How Advisers Can Reassure Them
• Are You the Doer or the Visionary of Your Advisory Practice? Here's How You Can Make the Leap to Chief Vision Officer

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.

Leaving a financial legacy is an important factor in financial planning for many retirees, particularly those with high net worth.

Whether the goal is to give loved ones a financial boost, strengthen their retirement or contribute to grandchildren's education, proper planning can allow retirees to make an impact long after they pass away.

Taxes can be a significant factor in determining how much is left. If you aren't tax-efficient in your strategy, you might be paying a large portion of your legacy to the government rather than your loved ones.

Federal estate taxes begin at any amount of inheritance above $15 million for individuals, $30 million for married couples.

Beyond that, income and capital gains taxes on inherited assets can come back to bite.

As high-net-worth individuals plan their estates, it's important to do so early and keep tax efficiency in mind. Here are three things to consider.

Pick the right trust

Trusts are one of the most powerful ways to protect and control your money from the grave and ensure it is passed on to the correct beneficiaries. One of the key advantages of a trust is avoiding probate, to which a traditional will is subject.

There are more than 30 types of trusts to consider, but they're broken into two categories: Revocable and irrevocable.

A revocable living trust is usually where we start the estate-planning process — this type of trust can be amended by the original grantors/trustees during their lifetime, allowing flexibility and control of the assets.

An irrevocable trust doesn't offer the same flexibility; under most circumstances, it can't be changed unless all beneficiaries agree to make modifications, which can be a complicated process.

However, the benefit of an irrevocable trust is that it's typically excluded from the additional estate tax applied to estates above the $15 million threshold.

Establishing clear goals while legacy planning can help distinguish whether revocable, irrevocable or both types of trusts should be a part of your plan.

Determining if your estate is above the threshold and subject to additional taxation is a good place to start. If it's over, an irrevocable trust might be the best option to avoid further taxation.

However, because of the lack of flexibility, it's important to choose someone you have faith in to be in charge of the trust, such as a loved one or your personal lawyer or financial adviser.

One type of irrevocable trust to consider is a charitable remainder trust. This option allows you to designate a portion of the trust to be donated to charities of your choice when the beneficiaries die. The income is distributed to the beneficiaries tax-free, and the remainder can be donated to charity when they pass away.

Consider step-up-in-basis

Understanding your capital gains situation can help determine if and when you should utilize tax-loss harvesting strategies to effectively limit your taxation, both in the present and future.

Step-up-basis means that when someone inherits an investment, such as property or stocks in a brokerage account, the asset's cost basis is reset to its value on the date of the original owner's death.

As a result, when the beneficiary sells it, they only have to pay capital gains tax on the appreciation that occurred after inheritance, rather than the total gain accumulated over the decedent's lifetime. Depending on income levels, capital gains can be as high as 20%.

For example, Apple stock was worth about 30 cents in 1990, and it's currently worth around $300. If you were to buy this stock 36 years ago and sell it today, you would owe up to 20% capital gains tax on your total earnings. If you leave it as an inheritance, the value resets at the current $300, and your beneficiaries can sell it with significantly less tax.

Good planning is knowing which stocks to sell and harvest now, and which stocks to save for the next generation.

Indexed universal life insurance might help

Many people only think of life insurance as an option to protect their family's finances when they're younger, in the event of an unexpected death.

However, life insurance can also be an effective way to pass on tax-free money or income when they pass away.

The widow's penalty is often overlooked but can be detrimental for the surviving spouse. For example, if one spouse has a pension, the surviving spouse might lose some or all of that income.

In addition, Social Security benefits are reduced, as the surviving spouse only gets to keep the larger of the two benefits.

Not only do we need to plan for a reduction in income, but also an increase in taxation as the widow moves from the joint to single tax bracket; this double whammy can be difficult to manage.

An indexed universal life insurance (IUL) policy can help supplement the surviving spouse's income. It's typically funded over a period of time through monthly premiums, which can total up to thousands of dollars per year.

A portion of the premium covers the cost of insurance, including a death benefit, which can be more than $1 million, depending on the policy. The remaining portion contributes to the policy's cash value accumulation.

The cash value can be invested in the market, typically using an index fund, contributing to the policy's growth over time. When the owner passes away, beneficiaries will receive the death benefit, completely tax-free.

However, the cash value could be subject to capital gains tax.

This option might not be suitable for everyone, as it sometimes requires extensive health screenings, which are harder to pass as we age. But it can be one of the better tools to utilize if you plan and have the capital to do so.

Summary of high-net-worth estate planning

To recap, here are the key tools and strategies to consider for high-net-worth individuals creating an estate plan:

• Pick the right trust. Evaluate the different types of trusts, including revocable, irrevocable and charitable remainder trusts to maintain control and limit taxation
• Tax planning. Knowing when to utilize tax-loss harvesting strategies and when to save those stocks for the next generation. Be intentional about the assets you leave behind.
• Indexed universal life insurance. An IUL can help protect your family after your death and provide tax-free income, which can help offset the widow's penalty
• Other strategies may include gifting or selling a family business to the next generation, which can be spread across several years to help reduce taxation now and in the future.

There's a lot to keep in mind, but it's important to get it right. I recommend speaking with a financial adviser to evaluate your unique situation and build a plan that works for you. You and your family deserve to protect and experience your full legacy.

Related Content

• Inherited Money or Property? What You Need to Know Before Filing Your Taxes
• The 4 Estate Planning Documents Every High-Net-Worth Family Needs (Not Just a Will)
• For High-Net-Worth Retirees, Tax Planning and Estate Planning Are the Main Events
• Widow's Penalty: Three Ways to Protect Your Finances
• Gender Pay Gap Is a Triple Whammy for Women: How to Beat It

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

In today's increasingly politicized financial environment, a growing number of high-net-worth American taxpayers are exploring ways to move abroad — and take their money with them.

While it's tempting to attribute this solely to economic fears or investment optimization strategies, the reality is more complex. Americans who want to reposition their wealth internationally must navigate a labyrinth of regulatory hurdles, tax implications and strategic choices.

Why are U.S. investors going global?

Traditionally, U.S. investors have been heavily U.S.-centric. It's not hard to see why. The American stock market is the most liquid and has historically outperformed most others over long periods.

In contrast, global citizens (those with ties to multiple countries) may naturally own assets across borders.

Increasingly, wealthy Americans are starting to think more like global citizens, seeking not just financial diversification but also geographic, lifestyle, political and various other kinds of diversification.

The ease of international travel, not to mention the proliferation of second passports and the ability to purchase residency visas, are all nudging affluent investors to look outward.

It's not unusual anymore to see U.S.-based clients requesting exposure to assets and currencies beyond the U.S. dollar, even through direct ownership of foreign stocks and offshore custodial accounts.

What are the challenges?

Of course, wanting to move money abroad and actually doing it are two very different things. The Foreign Account Tax Compliance Act (FATCA) has made it very difficult for Americans to open accounts overseas.

Most foreign banks and brokers are simply unwilling to take on U.S. clients, much less U.S. residents, owing to the compliance burden and reputational risks.

That said, it's not impossible. For example, a U.S. resident may be able to open an investment account through a licensed financial adviser in Singapore who is regulated locally (for example, by the Monetary Authority of Singapore), if the advisory firm's employees and Singapore office are registered with the SEC.

There are two broad ways to invest abroad:

1. Custody your assets in a foreign jurisdiction under a non-U.S. legal framework

2. Directly buy foreign-denominated securities, even while staying in the U.S.

The first requires opening a foreign custodial account (no small feat), while the second can be done through select U.S. platforms, such as Interactive Brokers, which offer robust FX conversion and foreign market access.

Most major U.S. brokers — think Schwab, Fidelity, Vanguard — may not support international currency trading or direct foreign stock ownership outside American Depositary Receipts (ADRs). They allow access via U.S.-traded ETFs or mutual funds that hold foreign stocks.

Even when they do, the cost can be prohibitive. Some brokers may charge upwards of $50+ per trade and hundreds more in clearing fees to settle international trades through third-party custodians.

In contrast, a platform like Interactive Brokers allows a client to convert USD into euros or pounds at near spot rates, execute trades on foreign exchanges, and custody assets in those currencies, all at low cost.

This infrastructure gap is one reason sophisticated investors are working with global advisers who understand these nuances and can access compliant, efficient platforms.

Private placement life insurance

Another useful strategy for ultra-high-net-worth families is offshore private placement life insurance (PPLI). Compared with U.S.-based policies, offshore PPLI structures often provide access to a broader universe of investment options, including alternative investments and institutional-quality strategies that may not be available in domestic policies.

Offshore policies also tend to have lower administrative and insurance-related costs, while U.S. policies are generally subject to more restrictive investment rules and higher fee structures.

For globally mobile families, offshore PPLI can provide both investment flexibility and tax-efficient wealth planning when properly structured and compliant with U.S. tax reporting requirements.

Tax and other considerations

Americans abroad also face a unique tax minefield. The IRS classifies most foreign mutual funds and ETFs are classified as passive foreign investment companies (PFICs) — a category subject to punitive tax treatment.

U.S. taxpayers living abroad must avoid these products and instead invest in individual stocks or U.S.-compliant vehicles, or risk expensive tax consequences.

To complicate matters further, U.S. estate plans, health insurance and tax brackets often don't travel well. Medicare doesn't follow you overseas. Most foreign estate laws are dramatically different.

And while Europe might seem appealing, many of its countries have significantly higher effective tax rates than the U.S., plus global taxation on investment income.

Practical advice — and warnings

If you're still keen on moving wealth abroad, consider these guidelines:

• Start with your currency. If you're planning to retire in Europe, build a portfolio denominated in euros, kronas, francs, krones, even sterling. If you're moving to Singapore, consider Singapore dollar-denominated assets. Don't wait until you move — start dollar-cost averaging now.
• Work with the right adviser. Local knowledge matters. If you're American, work with someone who understands both U.S. tax law and local financial systems, or you may find yourself untangling a financial mess later. American CPAs and financial advisers living abroad will understand what you're trying to achieve.
• Avoid the local "flavor of the month." Just because you live in Spain doesn't mean the local adviser's favorite fund is right for you. If it's a PFIC, it could cost you dearly in taxes.
• Reconsider property ownership. The dream of owning a villa in Italy is romantic but rarely practical. From break-ins to opaque ownership laws and maintenance costs, owning overseas property may be more trouble than it's worth. Try renting first.
• Prepare before you leave. Your financial plan should be portable. That means health insurance, estate documents and a U.S. tax strategy that doesn't react to your new life abroad but anticipates it.

The bottom line

Moving money (and life) abroad is not a casual undertaking — it requires strategic planning, legal awareness and the right partnerships. For ultra-high-net-worth individuals, setting up a foreign family office may make sense.

But for most Americans, the most realistic path is working with robust platforms and globally fluent advisers who are licensed in your destination.

And if you're still wondering whether it's worth it? Try renting an apartment overseas for a year. You'll quickly learn that the glamour of foreign residency often gives way to the grit of bureaucracy, and that a good plan is worth more than a good view.

Related Content

• 5 Countries Wealthy People Are Moving to — and What They're Looking For
• Why More U.S. Business Owners See a Second Passport as a Path to the Next Level
• I'm an Estate Planner: Moving Family Assets to a Safe Haven Abroad Could Be a Huge Headache for Your Heirs
• Setting Up a Business Abroad? 6 Mistakes to Avoid, From a Singapore-Based Financial Planner
• Despite Our Grumbles, America Still Delivers on the Dream: Perspective From a Financial Pro Who's Seen Stuff

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

Few would argue with the idea that hiring a financial professional to assist with your financial plan and an attorney to draw up your estate plan is a wise move.

Each professional brings specific expertise to those undertakings, knowing the best practices for achieving your goals.

But even then, pitfalls await the unwary.

All that precise planning could collapse if no efforts are made to integrate the estate plan with the financial plan, ensuring that the two work as one.

Unfortunately, in many instances, the financial professional who works on the financial plan and the attorney who puts together the estate plan don't communicate.

That's when the trouble begins — trouble that might not be noticed until you're gone and your beneficiaries are left to untangle, if they can, the untidy state of affairs left behind.

Thinking ahead and making sure those responsible for preparing the two plans are talking goes a long way toward avoiding potential problems down the line.

Failing to properly fund a trust

When the financial plan and estate plan aren't integrated, things can go awry in a number of ways.

Here's one example involving a revocable trust, the purpose of which is to establish a controlled distribution of your assets to your heirs. Essentially, the trust helps ensure the right heir receives the right asset at the right time.

This comes in handy when you worry that someone might mismanage — or squander — what you bequeathed if they receive it in one large lump sum.

In that case, through the trust, you could arrange for them to receive their bequest in 25% increments, spread out over a certain number of years (or however you think best to handle the situation).

But if the trust's distribution plan isn't funded properly, all your plans could become meaningless. When a revocable trust is properly funded, the assets are typically transferred through beneficiary designations on investment accounts.

Clearly, you don't want something to fall through the cracks. That's why having your financial professional involved in the process, working in tandem with an attorney, can help make sure that all the assets are accounted for — a critical factor for having the trust work as intended.

Financial power of attorney

It's also important to designate a financial power of attorney to ensure that someone can handle your financial matters if you're still alive but have become incapacitated. This way, your financial and business affairs can still be managed.

Integration also plays a role here. Sometimes the power of attorney is not broad enough, and the designated agent doesn't have the full authority to make the decisions they need to.

Usually, it's best for the powers of attorney to be written broadly, but with safeguards in place to prevent the designated person from taking advantage of the client.

For example, an incapacitation trigger can be put in place so the agent isn't vested with authority until the client is incapacitated, with proof of incapacitation.

It's also important to choose a trustworthy person who'll see that the game plan is executed properly.

Two sets of professional eyes

A financial professional and an attorney both provide important services, but they can be even more effective when they work together. Each brings professional knowledge and experience to the collaboration.

One might spot an opportunity that the other would miss, or one could notice a problem that the other might have missed. It's two sets of professional eyes and two sets of expertise looking out for you.

You, in turn, will benefit by having a financial plan and an estate plan that are integrated, helping to ensure that taxes are minimized, all assets are accounted for, and your wishes are carried out when you are gone.

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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• A Financial Planner's Guide to 4 Tools That Help Advisers Take Estate Planning to the Next Level
• The Clock Is Ticking: Take Advantage of These Retirement Tax Benefits While They Last

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 more than a year, we've been sharing the profiles of millionaires who've generously and honestly recounted how they made their first $1 million.

Our My First $1 Million series is at 61 profiles and counting (with many more to come) — from a novelist in New England and a 37-year-old banking executive (yes, 37), to the owner of a waste-hauling business and a retired middle school teacher.

Many of these millionaires have told strikingly similar stories about how they built their savings, and we noticed some trends among them, some of which we highlighted in the article 5 Key Insights We Learned From 50 First-Time Millionaires.

They've had some retirement regrets, too, which we wrote about in 5 Things 50 Millionaires Wish They'd Known Before They Retired.

This time, though, we want to turn the spotlight on you. Have you been paying attention? Do you know what it takes to become a millionaire yourself (if you're not already one!)?

Take this quiz to find out. Don't worry if you miss an answer: You can follow the links below the quiz to brush up on your knowledge.

Please note that this quiz has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or financial advice.

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• The Rule of Compounding: Why Time Is an Investor's Best Friend
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• These 5 Steps Can Help You Keep Your Head When Market Volatility Causes Others to Lose Theirs

Total market bond funds offer competitive yields, but do they belong in your portfolio?

Often complex and misunderstood, these funds encompass more than basic bond investments; they vary in structure, management approaches and risk characteristics.

Active management in the bond market presents unique challenges, as managers must carefully navigate duration and credit exposures to outperform benchmarks, often by adjusting duration or targeting higher-yield corporate bonds.

If you're thinking of working with an adviser to include total market bond funds in your portfolio, here's what you should know.

What are total market bond funds composed of?

Total market bond funds were traditionally used to reduce equity risk and enhance diversification and are composed of various public and private bonds.

For example, the Bloomberg U.S. Aggregate Bond Index (the Agg), which tracks more than 10,000 securities with a total value of roughly $50 trillion+, is made up of three primary components: U.S. Treasuries, corporate bonds and mortgage-backed securities.

Overarchingly, with total market bond index funds, the more debt an entity issues, the greater its weight in the index. Hence why U.S. Treasuries are such a large component of the index.

Besides the Agg, what are other common total bond market funds?

Many funds track an Agg-like index. Some are actively managing "total bond" or "core/core-plus" funds. They mostly use investment-grade U.S. bonds, including Treasuries, agencies and investment-grade corporate bonds, as well as agency mortgage-backed securities.

Active "total bond/core /core-plus" funds offer more flexibility. They include more corporate, securitized and mortgage assets. Some funds add high-yield and international bonds.

How should investors assess their risk appetite?

To accurately gauge risk tolerance with total market bond funds, investors must identify interest rate, credit and duration risks. While diversification is often viewed positively, it may not always yield stability in bond portfolios.

Previous beliefs about bond reliability must be reevaluated. For example, while interest rates are higher than they were before 2022, can bonds earn enough income to offset inflation moving forward?

When interest rates rise, the value of existing bonds declines. Funds linked to the Agg generally have significant duration, which increases their sensitivity to rate fluctuations. A prolonged period can lead to significant losses during rising interest rates.

Between 2021 and 2022, investors encountered substantial losses in perceived "safe" bond funds as rates surged. Confusing duration with maturity and misjudging rate sensitivity contributed to negative surprises. Not all advisers may be up to the task.

How should investors benchmark a total market bond fund's performance?

Benchmarking is crucial for managing total bond market funds and is highly personalized.

To see if a bond fund works for your specific financial goals, you or your adviser should compare it to the Agg over time.

Many investors compare their portfolios to the S&P 500, even in a 60/40 or 40/60 mix. Old rules, like "age in bonds," are archaic and come from a time of high rates that no longer exist.

To try to beat the Agg, active managers might buy more investment-grade corporates rather than Treasuries, then add high-yield or unrated bonds and invest in securitized credit, such as mortgage-backed securities.

This approach may increase yields but can also heighten vulnerability to economic contraction and credit disruptions, potentially leading to pronounced losses during severe credit downturns.

Your personal risk appetite will determine whether total market bond funds is a good strategy.

Remember, total bond market funds are simply a tool

Ultimately, investors should prioritize achieving personal financial objectives and treat total bond market funds as portfolio instruments rather than inherently "safe" investments.

Remember that two total bond funds with similar names may have very different risk levels.

To strategically add them to an otherwise healthy portfolio, carefully assess duration, credit composition, sector allocation, fees and performance relative to the Agg before moving forward.

Working with a knowledgeable adviser can mean the difference between injecting a healthy dose of risk, aiming for a smart long-term gain or demolishing the portfolio you've worked hard to build.

Related Content

• What Are Bonds and How Do They Work?
• 10 Things You Should Know About Bonds
• What All Investors Should Know About The Life Cycle of a Bond
• Three Common Mutual Fund Misconceptions Debunked
• Is the Traditional 60/40 Portfolio Truly Dead? Or Just Hibernating?

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

Last summer's tax law changes introduced new floors on charitable deductions for high earners. In response, donor-advised fund (DAF) contributions surged.

According to the Wall Street Journal (paywall), new accounts rose 123% at National Philanthropic Trust and nearly doubled at Vanguard Charitable in the final months of 2025, as donors moved appreciated assets into tax-advantaged vehicles at historic valuations.

Today, more than $326 billion sits in DAFs — capital explicitly set aside for public good but not yet deployed.

The DAF policy debate has centered almost entirely on payout rates. Unlike private foundations, which must distribute at least 5% annually, DAFs have no federal minimum. But that framing misses the point.

The more urgent question is not when is this capital granted, but instead, how is it working in the meantime?

Right now, most DAF capital is working similarly to any other pool of wealth. Most of these assets remain in cash, money market funds or conventional portfolios, generating market returns while the intended impact is deferred.

This seemingly neutral choice represents a massive missed opportunity.

Impact-first investing: A straightforward solution

A growing set of solutions to our most persistent social challenges, such as affordable housing, childcare, community-based lending, regenerative agriculture and workforce development, operate with real, durable business models. They generate revenue, preserve capital and, in some cases, produce modest returns.

Yet traditional investors routinely overlook them because they fall outside conventional risk-return parameters. At the same time, they do not fit neatly into grantmaking. As a result, they remain chronically undercapitalized.

This is precisely the gap that impact-first investing is designed to fill.

The premise is straightforward: Prioritize measurable social or environmental outcomes while structuring capital to recycle. Each dollar can be deployed, returned and redeployed, compounding its impact over time.

Consider early childcare. Providers are small businesses with strong community demand, yet they consistently lack access to affordable, flexible capital.

An organization like the Low Income Investment Fund can address this gap by providing capital, technical assistance and policy support. The capital it lends is repaid and recycled to support additional providers, extending the reach of each original investment.

Returns are modest, but capital preservation is strong, and the social outcomes — expanded access, increased capacity, improved quality — are both tangible and measurable.

Another organization, Care Access Real Estate (CARE), tackles the largest cost barrier providers face: Real estate. CARE acquires, renovates and leases properties to quality licensed childcare providers at affordable rates, allowing them to scale their businesses.

It also offers a purchase option that creates a pathway to property ownership and wealth-building.

Now consider the scale of what is possible. If just 10% of DAF assets were allocated to impact-first investments, that would unlock more than $32 billion in catalytic capital.

Deployed thoughtfully, that capital could accelerate business models that generate income, build wealth, expand access to essential services, and strengthen community and climate resilience, all while preserving and recycling philanthropic resources.

Expanding the charitable toolkit

We see a consistent pattern among ultra-high-net-worth individuals and families. Interest in impact-first investing is high. In a 2019 survey of 270 DAF donors, roughly three-quarters expressed a desire to deploy capital this way.

The barriers are practical, not ideological: Sourcing credible opportunities, conducting diligence, constructing diversified portfolios and measuring outcomes with rigor. With the right infrastructure and expertise, these are solvable problems.

The result would be a more effective use of philanthropic capital. Grants would continue to flow. At the same time, impact would compound as investments are repaid and redeployed into new solutions. This is not about replacing one tool with another. It's about expanding the toolkit.

Charitable capital has already received its public subsidy. It should be working as hard as possible for the public good.

Not someday. Now.

Related Content

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• Five Ways to Approach Impact Investing
• SRI vs. ESG vs. Impact Investing: What's the Difference?
• An Impact Investing Guide for Private Foundations
• How to Put Your IRA to Work for Change and to Help the Next Generation, Courtesy of an Investment 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.

"Barry," a reader in Reno, Nevada, was "losing hair over this," he said on a phone call describing the mess he and his former fiancée are in.

"Five years ago, planning to be married, 'Christy' and I bought a home with acreage in the country. But I admit I was a jerk and kept putting off marriage until she grew tired of my excuses, so we broke up. Both of our names are on the deeds, but only my name is on the loan, and she will not agree on a sales price.

"I paid for an appraisal and was given an asking price far higher than Christy got from a lending institution. I then spoke with a lawyer who said that the courts will not generally get involved in situations like this involving unmarried couples. Why, Mr. Beaver, to both questions?"

Barry needed to understand why marriage solves these problems.

Ownership and the loan are completely separate

Without a written agreement on how property will be dealt with in the event of a breakup, if only one partner signs the mortgage, that partner alone is legally responsible for the entire loan. This is true even if both verbally agree to split payments and do so. It's also true even if both names are on the deed.

Meanwhile, the partner not on the loan has full ownership rights, with no obligation to make payments, because their name is on the deed. "True love" often creates the worst possible mismatch of rights and responsibilities.

Do not look to the courts for help

Unlike married couples who have divorce courts to divide property, in most jurisdictions, unmarried couples do not. I can't begin to count the number of times I've heard, "It feels like I am drowning," when the person on the loan realizes they:

• Cannot force their ex to refinance
• Cannot force them to sell
• Cannot force them to move out

Their only option is to retain counsel and file a partition action, at substantial legal expense.

The ultimate in getting even?

No one wants to feel used or misled, so anyone who commits to marriage and then keeps pushing back the date may have a certain karma coming.

When both names are on the title, both parties must agree to sell the property. That gives one partner the opportunity to block the sale just by being unreasonable.

Christy can remain in the house and even stop making half of the mortgage payment. Unless Barry makes the full payment, his credit would be at risk, while no damage is done to hers.

That said, if both were to stop making payments, this would result in a foreclosure. The property would be taken over by the lending institution, which might negotiate a rental agreement with the occupant — Christy — or simply evict her.

Going a step further, unmarried couples, in my experience, never give a second thought to what happens if one of them dies. Here's what can result:

• Without a will or trust, the surviving partner may inherit nothing
• The deceased partner's family may inherit their share of the house
• The survivor may suddenly co-own the home with the deceased partner's family
• The lender may demand a refinance the survivor will not qualify for and lose the house

Asking price can be a huge struggle

Agreeing on an asking price can create another struggle, as Barry is learning.

I asked real estate appraiser Atom Levi, of A.L. Appraisal Co. in Sacramento, California, who has both MAI and SRA professional appraisal designations, to explain the difference in asking prices.

"They serve different purposes," he told me. "A lender's appraisal is conservative, intended to protect its collateral and answers one question: 'Is this property safe security for our loan?'

"Lenders often use automated valuation models (AVMs) or desktop appraisals when possible. These rely on public data, which can miss nuances such as upgrades, views or micro market trends.

"However, a private appraisal (the one Barry obtained) is designed to tell us: 'What is the property actually worth in the current market?' Independent appraisers work for the homeowner, not the lender, conducting a deeper analysis with a physical inspection, verifying square footage, evaluating comparable sales and considering neighborhood trends more deeply."

How not to become a 'Barry'

Buying a home together before marriage may seem romantic, but it is not. It is a business partnership, and without legal protections, the consequences can be financially and emotionally devastating.

Any couple considering this dance around land mines needs either:

• A written cohabitation/property agreement, or
• A registered domestic partnership, depending on where you live

I advised Barry to retain a real estate attorney, or he may never awaken from the nightmare he created for himself by being a self-admitted jerk.

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.

You know the story. A boy keeps shouting that there's a wolf, nobody comes, and the one time a wolf actually shows up, he's on his own.

For the past several years, financial commentators have been pointing at market valuations and warning that stocks are expensive. And for the past several years, the market has largely ignored them and kept climbing.

Past performance may not indicate future returns, but it does skew our expectations. This is especially true right now, because the past 15 years have been incredible, favoring those who took on more risk than they may have realized.

After a while, you stop listening to the warnings. That's the dangerous part of the fable. The boy was wrong several times. But in the end, there was a wolf.

The data tells a story worth hearing

The Shiller P/E ratio (CAPE) divides the S&P 500's price by its average inflation-adjusted earnings over the prior 10 years. As of mid-2026, it sits at roughly 41, which is a level exceeded only by the dot-com peak.

Each dot in the chart above represents the S&P 500 on the first trading day of a given year, plotted against the real total return investors earned over the following decade. The pattern is clear: Every time valuations have reached these levels — 1929, 1966, 2000 — the subsequent decade delivered flat or negative real returns.

Not every time was a crash. But every time was a long, frustrating stretch of going nowhere.

I wrote about this pattern in my article Four Historical Patterns in the Markets for Investors to Know. Historically, the market has gone flat for 10 or more years roughly every 20 years or so. We're now 16 years from the last one.

Innovation is real: Bubbles are, too

To be clear, this isn't a call to sell everything and hide in cash. New technologies, such as the railroad, the automobile and the internet, created genuine, lasting economic value. AI will likely do the same.

The problem isn't the innovation. The problem is what happens when everyone wants in at the same time.

Railroads were revolutionary. The railroad bubble of the 1840s still wiped out investors. The internet changed the world. The Nasdaq still fell about 78% from 2000 to 2002. Good technology and bad timing can coexist.

The flip side is just as important

This chart tells the mirror story. At the end of every flat-market cycle — 1921, 1932, 1982, 2009 — valuations were depressed, and the subsequent decade rewarded patient investors handsomely.

This is one of the reasons I wrote my book, How to Retire on Time. I fear that too many people believe they can retire and use the same systems they have used for the past 15 years.

It's easy to retire when the markets only go up. It's a completely different story when the markets go flat.

If you consider that retirement may be 20 to 30 years, there's a good chance a part of your retirement could be during a flat-market cycle.

What that means in practice

It's not about trying to time each crash with active trading. It's not about riding the market up and down with your fingers crossed. It's about understanding price, recognizing when the market is offering a good deal and when it isn't and having a strategy that responds accordingly.

Patience is the foundation.

Beyond that, it means looking at tools that many investors overlook. Guaranteed income from an annuity can help stabilize your plan and portfolio, even if your stock portfolio doesn't perform (see the DIY Annuity Guide).

Bond funds may be making a comeback as an uncorrelated market to help stabilize your portfolio.

Real estate (not a stock of real estate companies, but something tied to actual real estate) can provide income and diversification that equities simply can't replicate.

It is important to take a step back as you approach retirement, or any new phase of life, and consider updating your plan. Perhaps it's time to diversify not just by asset class, but by markets and by strategies.

Here's the challenge: Many of these alternative strategies aren't readily available to retail investors through a standard brokerage account. That's one reason it may be worth sitting down with a fiduciary financial planner who can provide access to a broader set of tools, even if it's just a one-time engagement to build a plan you can execute yourself.

The wolf may or may not be at the door. But the shepherd who has a plan doesn't need to panic either 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.

Receiving an inheritance is emotional. Even when it comes from a place of love and generosity, it often arrives during one of the hardest seasons of life.

Once the initial emotions settle, many people suddenly find themselves responsible for decisions they've never had to make before.

I've seen inheritors make thoughtful, life-changing decisions, and I've also seen smart people unintentionally create avoidable issues simply because they moved too quickly or didn't have a plan.

That's especially important to keep in mind as an unprecedented amount of wealth changes hands in the coming years. It is estimated that $105 trillion is expected to flow to heirs through 2048.

The good news is you don't need to become a financial expert overnight.

Before you start spending, investing, gifting or paying off debt, there are a few things to consider.

1. Don't rush to make big decisions

A common mistake people make after inheriting money is responding to pressure to "do something." An inheritance can create emotional urgency. Suddenly, family members have opinions. Friends may offer advice, and even social media might start providing investment-related content.

It can feel like you're missing out on opportunities or like you're falling behind if you don't act quickly.

In reality, slowing down is often the smartest move. In fact, you may not have a choice. Settling an estate is a big task, and if assets are not held in a trust, they will likely go through probate, which can take months and sometimes even years.

Take this time to create a plan. Think through some of your short-term and long-term financial goals, whether that's paying down debt, saving for retirement or even taking a vacation.

If the money is sitting in cash, in a bank account or a brokerage account, I suggest temporarily putting it into a high-yield savings account or a money market fund while you process your options. Remember, you don't need an instant solution.

2. Understand what you actually inherited

Give yourself time to begin gathering important documents and account statements for the assets you inherited. Not all inherited assets should be looked at the same way.

For example, an inherited IRA comes with distribution rules and potential tax consequences, while a taxable brokerage account may receive a step-up in cost basis, which can significantly reduce capital gains taxes. Real estate may come with maintenance costs, property taxes, and/or tenants and rental agreements.

Before making withdrawals or liquidating investments, it's important to understand the type of account, how it's titled and what rules apply. A single uninformed decision can create a large surprise tax bill.

3. Avoid treating the inheritance like "found" money

Psychologically, inherited money often feels different from earned money. People tend to spend inheritance funds more freely because they don't associate the money with years of work or sacrifice.

This behavioral bias is called "mental accounting," where people treat money differently depending on where it came from, even though it should be treated the same.

In fact, a study from ThinkAdvisor (paywall) shows that 42% of inheritors spend their inheritance within a year. That kind of behavior can quietly derail long-term goals.

This doesn't mean you shouldn't enjoy any of the inheritance. In many cases, using a portion for meaningful experiences or family memories can be fulfilling, but treating the entire inheritance like found money can lead to lifestyle creep that is difficult to sustain in the long run.

4. Lean on a trusted advisory team

Even knowledgeable inheritors may sometimes feel overwhelmed when dealing with money left to them, because the decisions can be complex. Questions around how certain assets pass, distribution rules around certain types of accounts, property transfers and tax strategies can quickly become more nuanced than people expect.

This is where having a strong advisory team can help make a meaningful difference. That team may include a financial adviser, CPA, estate planning attorney and even an insurance broker or agent.

Having experienced professionals by your side can help you avoid preventable mistakes and identify opportunities you may not know exist.

A good advisory team should help you slow down and think clearly. You don't have to navigate every financial, legal and emotional decision alone.

5. Create a legacy, one step at a time

This journey is personal and often overwhelming. The financial steps you take now can help bring peace and stability for the years to come, and create a legacy that honors your loved one.

You don't need to figure it all out in one day, but having a plan and the right team beside you can make all the difference.

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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, private equity has generally been confined to pension funds, university endowments and the ultra-wealthy, but that's beginning to change. Without much publicity, private equity is starting to find its way into 401(k) plans — not as a fund you can easily select, but embedded inside target-date funds and other diversified portfolios that millions of workers already use.

For retirement savers, this raises an important question: If private equity is showing up in your 401(k), how does it affect you, and what should you be paying attention to?

You may already own it (without realizing it)

Most workers won't see "private equity" listed anywhere on their 401(k) menu. Instead, exposure is being added behind the scenes, typically within target-date funds, the all-in-one portfolios that automatically adjust risk as you approach retirement.

If your plan uses a custom target-date fund or a more complex investment structure, there's a chance a small portion of your account is already allocated to private markets. That's not necessarily a problem, but it does mean your retirement portfolio may be changing in ways that aren't immediately obvious.

Why it's being added

The argument for including private equity is straightforward: Potentially higher long-term returns and better diversification.

Private companies don't trade on public markets, so their performance doesn't always move in lockstep with stocks. In theory, that can help smooth out returns over time, especially for younger investors with decades before retirement.

Large institutional investors have relied on private markets for years. Now, some plan sponsors are trying to replicate that approach inside 401(k)s. But there's a key difference: Institutions have long-time horizons, large pools of capital, and teams dedicated to managing complexity, while individual retirement savers typically do not.

The trade-offs most people miss

The biggest risk isn't that private equity is inherently bad. It's that it introduces trade-offs many investors don't fully see, including:

Less transparency. Unlike publicly traded stocks, private investments aren't priced daily by the market. Their value is estimated periodically, which can make performance appear smoother than it really is. That can be misleading. A portfolio that looks stable on paper may simply be slower to reflect underlying changes.

Higher fees (sometimes much higher). Private equity has traditionally come with significantly higher costs than index funds or standard mutual funds. Even when bundled into a 401(k) structure, those fees don't disappear — they're just less visible. Over time, higher fees can meaningfully reduce your retirement balance, especially if the performance doesn't justify the added cost.

Limited liquidity — beneath the surface. You can still move money in and out of your 401(k) as usual. But behind the scenes, private investments are less liquid, meaning they can't be quickly bought or sold. To manage this, funds limit how much private equity they hold. Still, in periods of market stress, liquidity constraints can create complications that don't exist with traditional investments.

Complexity layered into "simple" funds. Target-date funds are often marketed as set-it-and-forget-it solutions. Adding private equity makes them more complex — sometimes significantly so. That doesn't mean they're inappropriate. But it does mean the simple option may not be as simple as it appears.

Who stands to benefit — and who should be careful

Private equity exposure may make more sense for certain investors than others.

If you're early in your career, consistently contributing to your 401(k) and unlikely to need access to your funds for decades, a small allocation to private markets may not materially change your risk — and could potentially enhance long-term returns.

But if you're closer to retirement, the calculus shifts. At that stage, transparency, liquidity and cost control tend to matter more than incremental return potential. Even modest increases in fees or unexpected constraints can have a larger impact when your time horizon is shorter.

What to look for in your plan

You don't need to become an expert in private equity. But you should understand how your 401(k) is evolving. Here are a few suggestions:

• Check what's inside your target-date fund. Look beyond the name. Review the fund's fact sheet or prospectus to see whether it includes "private markets," "alternatives," or similar language.
• Pay attention to total fees, not just the headline number. If your plan has introduced more complex investments, ask whether overall costs have increased and how those costs compare to simpler alternatives.
• Understand how performance is reported. If returns seem unusually smooth compared to the broader market, that may reflect how private assets are valued and not necessarily lower risk.
• Consider your time horizon. If you're within five to 10 years of retirement, you may want to think carefully about how much complexity and illiquidity you're comfortable with, even indirectly.
• Ask questions. Plan sponsors and HR departments may not proactively highlight these changes, but they should be able to explain them.

A shift worth watching and not ignoring

Private equity in 401(k)s is still in its early stages. Adoption remains limited, and many employers are proceeding cautiously. But the trend is worth paying attention to.

For years, the biggest risks in retirement plans were obvious: Not saving enough, taking on too much risk, or paying excessive fees. Those risks haven't gone away, but they are now being joined by a more subtle one — complexity creeping into portfolios that were designed to be simple.

For most investors, the right response isn't to overreact or opt out entirely. It's to stay informed. The biggest impact on your retirement savings often doesn't come from a single investment decision; it comes from understanding how all the moving pieces fit together, especially when they start to change behind the scenes.

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• Average 401(k) Match: Do You Work for a Generous Company?

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 people hear that I went from earning more than $200,000 a year as a professional athlete to making $12 an hour as a financial planning intern, they usually focus on the pay cut.

I understand why. It's a dramatic contrast.

But I've never seen that part of my story as a fall from success or a cautionary tale about what happens when an athlete's career ends. To me, the more important story is what happened in between.

I was competing at the highest level — including in four Olympic Games — and making six figures as a professional athlete with a Nike contract. From the outside, it looked like I had made it.

But internally, I was still trying to understand my money.

Organizing and understanding my finances

I knew there were responsible things people were supposed to do with money, but I didn't know what they were. I didn't know how to organize my finances or fully understand what was coming in, what was going out, what I was invested in or how my financial decisions would affect me after sports.

It's uncomfortable to admit when you look successful from the outside, but earning money and understanding money are two different skills.

Early in my career, I looked for help, but most of the advice I received started with investing instead of financial literacy. Investing matters, but it should come after you understand your expenses, cash flow, goals, taxes and long-term income reality.

At that point, I didn't need someone to simply take over. I needed someone to help me become financially literate.

Figuring out what was going on

When my adviser told me, "We lost a lot of money today. Don't panic," I realized the problem wasn't just the loss. It was that I didn't know what the loss meant.

I didn't know what I was invested in or how the market worked. I didn't know whether the loss was normal, serious or connected to the plan I supposedly had. I was trusting someone else to make sure my money was growing, but I didn't have enough knowledge to participate in the conversation myself.

That experience taught me something I still believe: You cannot fully outsource your understanding.

Learning the hard way

There were other lessons along the way. I bought too much house, more than once. The first time, I was listening to advice from friends and family. The second time, an adviser encouraged me to buy a second home.

How was I going to pay for two homes for 30 years? How long would my athletic income last? No athlete has a 30-year playing career. I was doing well, but how long would that window stay open?

That lesson doesn't only apply to athletes. Many people make major decisions based on what they can afford now, without asking if the choice still works when income, health, career or priorities change.

Can future me live with this decision?

That's why the first question should not always be, "Can I afford this today?" but rather, "Can future me live with this decision?"

When I began transitioning out of professional sports, I was 30 and trying to choose a career path for the first time. I had a finance degree, an MBA and a real estate license, but I still didn't fully understand what kind of work fit the life I wanted to build.

Taking the internship was part of that adjustment.

From the outside, it may have looked like a step backward. But I had savings, which gave me options. I could pay my bills while earning less in the short term so I could invest in myself for the long term.

That's the part people often miss. The internship was a deliberate move, not desperation. It gave me structure, responsibility and a chance to become a beginner again. I was earning much less, but what I was learning felt invaluable.

It was an investment in becoming the kind of professional I wished I had found when I was younger.

Not an easy transition

That doesn't mean the transition was easy. Starting over professionally was humbling. The internship was part of the process of earning my CFP® certification, which was key to entering the financial planning profession.

I also needed to take the CFP® certification exam. I failed the exam twice before passing on the third try, which reminded me that being smart wasn't enough. I had to prepare differently, stay persistent and keep going.

Sports helped me with that. Athletics taught me how to come back after disappointment and keep going when something is hard.

When I began working with clients, financial planning stopped feeling like a backup plan almost immediately. Many of the people coming to me had basic questions, but those questions mattered. They wanted to understand their money and feel more confident. They wanted someone to explain things without judgment.

The kind of adviser I am

Those early experiences shaped the kind of adviser I wanted to become. I didn't want people to feel talked down to, confused by jargon or left out of conversations about their own money. I wanted to help clients understand their whole financial picture, not just their investments.

That became the foundation for my firm, Worth Winning. I expected to follow a traditional one-on-one planning model, but I saw many people needed education, accountability and a safe place to ask questions. That led me into classes, speaking, corporate financial wellness programs and retreats.

If there's one thing my career transition taught me, it's that financial confidence comes from staying engaged.

Making decisions with more confidence

You don't need to become an expert in every investment strategy, tax rule or planning tool. But you do need to understand enough to know when something doesn't make sense, when a decision feels rushed or when the advice you're getting doesn't match the life you're trying to build.

That starts with paying attention to your own numbers and being willing to stay in the conversation. Know what you earn, what you spend, what you owe, what you own and what trade-offs you're making. Those details may not feel exciting, but they are what give you the ability to make decisions with more confidence.

The $12-an-hour internship may be the surprising part of the story, but it's not the most important part. For me, the shift from athlete to financial planner was never really about starting over. It was about learning to take ownership of my financial life and then building a career helping other people do the same.

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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.

We're living longer, and that's wonderful news — until you sit down with a calculator. A 25- or 30-year retirement isn't unusual anymore. This means your health and money must last far longer than they did for your parents.

One thing that affects both is preventive health spending. It sounds simple: Get the screenings, take the vaccines, keep up your checkups, stick to healthy habits.

However, the financial consequences are bigger than most people realize.

Here's how to incorporate preventive health spending into your retirement planning.

Understanding preventive health spending

Preventive health spending covers everything you do now to avoid costlier problems later:

• Routine screenings
• Vaccinations
• Annual wellness visits
• Healthy lifestyle changes

None of this is glamorous. But it pays off down the line.

The financial case is strong: Chronic conditions drive 90% of the nation's $4.5 trillion in annual health spending, according to the CDC. Many are preventable or manageable when caught early.

Community-level prevention programs show meaningful returns. Investing $10 per person per year in proven community-based programs could save the country more than $16 billion annually within five years, a return of $5.60 for every dollar invested.

Clinical screenings make a difference at the individual level, too. Colorectal cancer screening starting at age 45 reduces both incidence and mortality, with strong evidence supporting its benefits.

Vaccinations for adults against seasonal flu, shingles, pneumonia and other related diseases reduce hospitalizations and complications, especially as we age.

From a financial planning perspective, preventive health spending can be viewed as a form of risk management. It helps reduce future costs while protecting both your health and your money in the long term. It should be part of your retirement planning for healthcare costs.

The economics of longevity and retirement

Longevity changes the math.

Retirements that once spanned 10 to 15 years can now stretch two or three decades. While life expectancy dipped during the pandemic, long-term planning horizons are trending longer for many households.

Gallup reports the average retirement age is near 62 to 64, with workers expecting to retire around 66. That gap hints at a reality check ahead.

Healthcare inflation complicates things further. Medical costs tend to rise faster than general inflation over time. Fidelity estimates a typical 65-year-old couple might need $172,500 in after-tax savings set aside just for healthcare in retirement. That number doesn't include long-term care.

Planning for a 20- or 30-year retirement requires a different mindset than previous generations. Your financial plan must account for both increased longevity and rising healthcare costs.

Smart, preventive health investments today compound into substantial wealth preservation over decades.

Impact of preventive health spending on lifetime wealth

Preventive care helps you avoid the most expensive kind of healthcare: emergency, late-stage, hospital-based care.

When blood pressure is controlled, you're less likely to face a stroke or heart attack. When you catch colon polyps early, you dodge the cost and trauma of advanced cancer care.

Each avoided crisis keeps assets in your account rather than paying medical bills.

Bryan Henry, president of PeterMD, recommends treating preventive care as part of a long-term financial strategy, not just a medical routine. This is especially essential when planning for retirement healthcare expenses.

"Our data shows that individuals who invest in preventive care experience 40% fewer catastrophic health events after age 65, Henry explains. "This translates into significant savings and preserved wealth over time. The most successful retirees treat health spending as an investment … not an expense."

Ultimately, the preventive path doesn't just lower bills. It stabilizes cash flow … which matters a lot when you're drawing down a portfolio.

How to incorporate preventive health into retirement planning

If you're building or updating a retirement plan, treat preventive health like any other core line item. Give it a budget, a schedule, a purpose. Here's what you can do:

Map your age-based screenings. Use your annual physical to set a personalized screening calendar. Get your blood pressure, lipids, colorectal and breast cancer, bone density and skin checks.

Medicare covers a wide range of preventive services with no copay when you see a participating provider.

Use the insurance for which you already pay. Many employer policies and marketplace plans cover recommended preventive services without cost-sharing. Put those dollars to work.

Fund an HSA if you're eligible. Health savings accounts (HSAs) offer a triple tax advantage: pretax contributions, tax-deferred growth, tax-free withdrawals for qualified expenses.

If you can, invest HSA dollars and pay routine costs out of pocket now, saving your HSA for retirement healthcare.

Lean into employer wellness programs. Employees who maximize their wellness benefits and HSA contributions build a powerful financial buffer for retirement. These programs offer tax advantages while funding preventive care.

It's about creating a sustainable strategy that protects both health and wealth simultaneously.

Build a small "health opportunity" fund. Think of a fitness budget and nutrition support. Consider such things as a community center membership or sessions with a dietitian. Modest spending can have big, long-term returns.

Embracing preventive health spending for lifetime wealth

Prevention isn't just about adding years to life; it's about adding quality to those years while protecting your finances. The more you can avoid catastrophic events, the more control of your savings you keep.

If you haven't already, look at your financial plan and ask a few practical questions:

• Do you have a preventive care schedule on your calendar?
• Are you using insurance-covered services for which you're already paying?
• Is your HSA strategy set up to help future you (not just present you)?
• What wellness benefits are you leaving on the table at work?

Small, steady choices today can buy you more options tomorrow.

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• 6 Steps to Quickly Build Your Emergency Fund

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.

Let's think back to March 2020. Where were you, what were you doing, and what financial choices did you make?

Markets were hitting circuit breakers almost every other day for two weeks, and investment strategists, like me, were calling clients to ensure they weren't making irrational decisions while accounts were down substantially. It was a blur.

Yet, only about 60 days later, markets had recovered and were advancing. This monumental period served as a stark reminder that market volatility is an inherent and recurring feature of investing, not a one-time event.

In fact, market volatility has already defined the first half of 2026, stemming from global conflicts, persistent inflation and the Federal Reserve's shifting stance.

Given these challenging conditions, the question for every investor remains: How can we define and maintain a "healthy" portfolio designed to weather these turbulent times?

What makes a portfolio healthy?

First, a healthy portfolio is one built to deliver the returns necessary for your financial plan, while balancing liquidity with total return and combining income and market growth to keep your goals within reach.

Most importantly, a healthy portfolio is one that is fundamentally built around a long-term plan that short-term volatility cannot easily derail.

When coaching clients through market swings, I remind them that long-term portfolios are designed around their financial plans, and short-term dips of 5% to 10% don't change the likelihood of a plan's success.

Over the long run, market returns drive positive financial outcomes; it's critical not to react to short-term swings or social media noise.

We all need portfolio hygiene

This leads to the key to navigating volatile markets: Consistent, non-emotional maintenance. Or what I call "portfolio hygiene."

This is the essential practice of regularly checking in on your portfolio to ensure it continues to reflect the current reality of your financial life.

While it's tempting to obsess over current events during market turmoil, I recommend scheduling this check-up quarterly, regardless of the news.

For your own well-being and investment success, it is important not to overdo it; excessive monitoring during a downturn can become psychologically taxing and lead to impulsive decisions that actually could harm your portfolio.

In fact, one of the most common mistakes I see clients make during periods of volatility is trying to adjust their portfolio based on short-term, market-moving events that are, for better or worse, essentially coin-flip choices.

Take the conflict in Iran, for example: Oil is a hot topic. Some argue that oil has topped, and you should sell, while others contend that continued geopolitical risk could keep prices elevated, making energy assets a buy for the long haul.

Investors who act based on outcomes beyond their control can make knee-jerk decisions, especially in a fast-moving environment.

When is it time to apply some tweaks?

With this in mind, you may be thinking, "Surely I can't always sit tight." So, what are the key indicators that it is time to tweak a portfolio?

Simply put, if your life has changed, it is often time for your financial plans, and, therefore, your portfolio, to change as well. This includes major life-altering events like a marriage, the death of a family member or a new child joining your family. This is where portfolio management truly marries personal finance.

In addition to typical maintenance or life events, change may also be warranted for people with diversified portfolios who are comfortable being aggressive when others are afraid.

In times of market-dislocating risk, these investors can strategically reallocate their financial plan, bearing in mind the market's tendency to "stair-step up and elevator down."

These are the people who have been through volatility before, possess "calluses" when it comes to risk and know that a market dip can be a moment to capitalize.

No matter what, before making any change, especially when feeling pressure from market movements, every investor should ask themselves three simple questions:

• What is the desired outcome?
• Is there a follow-up or another decision to be made after making this change?
• Am I OK with the change not working?

These questions can be a start, but I sometimes advise my clients that the first thing to do when it comes to changing their portfolios during a volatile period is to not do anything. If you have an idea for an adjustment, stop, write it down and revisit it the next day.

Take the time to think about it and consult a trusted adviser or professional. Because if you remember one thing right now, it should be the importance of understanding your own behavioral and psychological biases, as they can cloud your judgment and worldview.

Separating those biases from portfolio decisions, along with having an asset allocation built to be nimble in times of opportunity, is a recipe for success in a turbulent market.

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

Most affluent retirees don't have an investment problem. They have a structure problem. That distinction matters.

As a financial adviser with more than three decades of experience in investment strategies, tax-efficient retirement income planning and legacy wealth building, I've seen many portfolios that look strong on paper but leak wealth in retirement.

The account balances may be high, the allocation may look reasonable and the investment performance may be acceptable. But if the structure is wrong, money can quietly drain away through taxes, forced distributions, Medicare surcharges, Social Security taxation, poor withdrawal sequencing, survivor-tax penalties and inefficient legacy planning.

That is the retirement tax trap. And it usually does not show up as one dramatic mistake. It shows up slowly. These are some ways that the trap can appear:

• A larger tax bill than expected
• A required minimum distribution (RMD) that pushes income higher
• A Roth conversion window that closed too soon
• A surviving spouse suddenly paying more tax on similar income
• Children inheriting a large IRA that is far less efficient than the parents had assumed

None of this feels urgent while the accounts are still growing. The most dangerous retirement tax problems are often created when people feel financially safest.

Accumulating vs income engineering

Most successful retirees spent decades doing exactly what they were told to do — save, defer taxes, max out retirement accounts, reinvest, avoid debt and build the portfolio. That advice helped them accumulate wealth. But accumulation is not the same as retirement income engineering.

A retirement portfolio tells you what you own. A retirement income structure tells you how much control you actually have. Those are not the same things.

If most of your wealth is inside IRAs, 401(k)s, 403(b)s, deferred compensation or other tax-deferred accounts, you do not own that money with complete freedom. You own it with a future tax claim attached.

That does not make those accounts bad. It just means that they are incomplete without a distribution strategy.

IRA expert Ed Slott has warned for years that tax-deferred retirement accounts can become a tax time bomb when people confuse tax deferral with tax elimination. His core point is simple: Tax-deferred money is not tax-free money.

Emotionally, many retirees still treat a $2 million IRA like $2 million of spendable wealth. It's not. Part of that account belongs to future taxes. The only questions are how much, when and under whose tax rates.

That is where structure matters.

If you have never modeled how your IRA withdrawals, Social Security, pension income,

investment income, Medicare thresholds, Roth conversions and future RMDs interact over time, you may not have a retirement tax plan — you may only have a portfolio. That's a dangerous distinction.

The IRS does not tax your retirement based on how hard you worked, how responsibly you saved or how badly you want the money to last. It taxes the structure.

And a weak structure creates leaks. Some leaks are obvious; others stay hidden until the planning window has already narrowed.

Preventing leaks: How to strengthen your plan structure

Wade Pfau, a professor at the American College of Financial Services, has written extensively about retirement income planning as a different discipline from traditional accumulation investing.

He argues that retirement is not just about maximizing returns. It's about building an income structure that can support spending, manage risk, preserve flexibility and survive uncertainty. That is the point that many retirees are never shown clearly enough. A pile of assets is not a plan.

A plan requires coordination:

• The investment account has to work with the tax return
• The tax return has to work with Social Security
• Social Security has to work with Medicare thresholds
• IRA withdrawals have to work with Roth conversions
• Roth conversions have to work with future RMDs
• Income planning has to work for both spouses, not just while both are alive
• Legacy planning has to account for what children actually inherit after taxes

If those pieces are not coordinated, the plan may still look fine. Until the leaks begin.

The solution is a retirement tax map. It should show:

• Where income will come from
• Which accounts will be used first
• When Roth conversions may make sense
• How future RMDs may grow
• How Social Security taxation fits in
• Whether Medicare thresholds are being managed
• What happens to the surviving spouse
• How heirs may inherit assets after taxes

That kind of planning does not guarantee perfection. But it gives the family something most retirees desperately want: Control over timing, taxes, income, survivor outcomes and how much of the family's wealth is preserved.

As you create a retirement tax map that gives you the strong structure you need, bear in mind the following:

There is an optimal mathematical balance to keep in your tax-deferred account that allows you to get your future RMDs tax-free. Creating a systematic Roth conversion timeline will help solve this.

Creating a portion of your retirement income that's not market-dependent is one of the strongest mathematical financial structures you can build.

Stress-test your retirement structure

The worst retirement mistakes are rarely obvious when they are being made.

They look responsible. They look normal. They look like what everyone else is doing until years later, when the tax bills, forced distributions, survivor issues and legacy problems finally reveal what the account statements never showed.

By then, the issue is not just money. It's regret. The feeling that the family worked for decades, saved responsibly and still overlooked a problem that could have been mitigated with better structure.

If your retirement structure has never been stress-tested for taxes, widowhood, forced distributions, Medicare thresholds, long-term income sequencing and after-tax legacy outcomes together, you may be seeing your portfolio but not your future exposure.

That is the real retirement tax trap. Not taxation itself, but waiting too long to see where the leaks are.

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.

In 1776, the American colonists did something remarkable, not for the reasons most people think. They did not rebel impulsively.

They spent 169 years living under a functional system that governed, organized and provisioned their lives in exchange for something they had not fully understood: The systematic extraction of their labor, resources and future.

The exact moment of realization, when it finally occurred, was encapsulated by Thomas Jefferson in a single sentence: "Whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government."

Most people reach retirement without ever making this declaration.

The system I'm describing isn't a government. It's the work-identity system, the structure that guided your life for 30 or 40 years.

It defined your worth by your title, scheduled your time by someone else's calendar, limited your relational energy to what was practically useful and paid you in currency: Money, status and a sense of purpose borrowed from the institution. It felt sufficient until the day it stopped.

This isn't intended as a critique of work, which can be meaningful, productive and deeply fulfilling. However, the structure most people operate within was originally built on mercantilist principles, the same principles that guided Britain's relationship with its American colonies.

An imposed structure

The organization was not primarily focused on your growth. It was focused on your productivity. As Thomas Paine noted about the Crown's relationship with America: "England consults the good of this country no farther than it answers her own purpose."

Replace "England" with "the organization." The sentence still holds.

If you doubt this, consider the grievances. The work system took your best hours, not your leftover hours, but the prime hours of your prime years. It imposed its structure on your family without their consent.

It measured your worth by metrics it designed for its own purposes. It severed your access to deeper relationships, curiosity, community and unhurried time with the people you love, because these produced no measurable return. It called the benefits it provided gifts, though they were simply the minimum required to keep you productive.

Bearable costs

None of this was malicious. Most of it was invisible. That's how extractive systems sustain themselves: Not through cruelty, but through familiarity.

The colonists didn't suffer under the Crown because they lacked intelligence. They suffered because they were accustomed to it, and because, for a long time, the costs were bearable.

Jefferson understood this: "Mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed."

This is why many people enter retirement psychologically unprepared. The system wasn't destroyed; it was merely put on hold. They carry the colonial master into freedom: The need for external validation, equating worth with productivity and discomfort with time that isn't owned by anyone. They've crossed the border but never declared independence.

The Declaration of Independence wasn't the hard part. What followed was harder. Jefferson wrote that the goal was to "institute a new Government, laying its foundation on such principles and organizing its powers in such form as shall seem to them most likely to secure their Safety and Happiness."

This is precisely what the Encore Years require:

• Not a vacation from the old system but the intentional design of a new one
• A system built around identity grounded in character rather than title
• Purpose derived from contribution and curiosity rather than productivity metrics
• Connections valued for depth rather than utility
• A structure you chose rather than one that chose you

Most retirement planning addresses the financial dimension of this transition with considerable sophistication. It also addresses the structural dimension:

• Who am I without the title?
• Where does my sense of worth come from now?
• What do I build my days around, with considerably less?

The result is what financial advisers recognize but rarely name: Clients who have achieved financial independence while remaining psychologically colonized by the system they left.

Money, it turns out, is a subset of wealth. The colonists understood this. Their grievances were not only about taxation but also about identity, autonomy and the right to govern themselves.

Jefferson was careful to note that independence is not declared for "light and transient causes." The threshold was a long train of abuses, a pattern rather than an incident. The pattern in retirement is usually visible in hindsight:

• The growing suspicion that the currency you were paid in was not the one you needed
• The relationships that faded because they required time you allocated elsewhere
• The questions about meaning you delayed until there was more room to consider them

There is now more room. The question is whether you will use it to create the life you want or to rebuild the one you left behind.

The paradox of retirement freedom is this: The system you're leaving gave you structure, but at the expense of autonomy.

The system you now need to build requires you to create your own structure to regain that autonomy.

Independence isn't the absence of government; it's the presence of better government, designed by you, accountable to your core values and organized around the principles you truly believe in.

The colonists knew the difference. They didn't dissolve one government and leave a vacuum. Instead, they built something new.

That is the declaration retirement requires.

To learn more, 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.

Over the past few months, Microsoft has made headlines by offering a select group of employees the chance to take an early-retirement package.

This is the first time Microsoft has made an offer like this, and as the employees who have elected to take the package begin to make their exit, it's become clear that this offer has a lot to teach all of us about retirement planning and readiness.

The offer

Microsoft rolled out what it is calling a Voluntary Retirement Program (VRP), a one-time offer for certain employees to retire early with a specific set of benefits. Employees who have elected to take it will receive a certain number of months of severance based on their years of service, continued vesting of company equity and continued health insurance for a defined period.

The Microsoft execs I've talked with say they have been strategizing things like cross-country moves, future healthcare costs and wondering how to mobilize company stock to help achieve their goals.

With layoffs on the rise and AI-fueled job fears dominating the headlines, these types of concerns are increasingly common for modern executives. It turns out that Microsoft's VRP is forcing questions for their employees that can serve as a retirement readiness checklist for all of us as we plan for the unexpected.

Here are five things to keep in mind.

1. Retirement readiness has a number

Microsoft gave its employees a number and left it to them to assess if it was worth making the jump to retirement. They have had to choose whether the offer helps them achieve, or even accelerate, their retirement goals.

For modern executives, there is always a number that can gauge how ready you are to make a change. That number could be described as your "financial freedom number," and it essentially tells us if your current savings and investments can support an early retirement.

It's very common for executives, even those with a million dollars or more of company stock, to question whether they are truly on track. This is a scary transition and an understandable fear, but a few targeted conversations and some careful math can readily help address things like:

• Can your investments support your goals?
• Do you need additional income after you retire?
• When do you need to sell company stock?
• How long will your money last? What should you pass on to others?

I've written before about Coast FI planning as a kind of secret weapon for high earners precisely because it turns a really overwhelming question into a thoughtful framework. A planning philosophy like this means that you can always know how ready you are to face the unexpected.

2. The healthcare bridge

Look closely at Microsoft's package, and you'll notice it includes up to five years of continued medical, dental and vision coverage. It's hard to overstate how often healthcare costs keep people anchored to jobs.

If you retire before 65, you are not yet eligible for Medicare. You have to bridge the gap, and if you're in your late 50s, that bridge can be pretty expensive. People go to great lengths and mental gymnastics to solve this problem.

I've talked to execs over the years who consider retiring and getting the proverbial "part-time job at Starbucks for health insurance" or even moving to another country to lower their healthcare costs.

Microsoft addressed that problem for its retirees by handing them a multiyear runway. The rest of us have to build our own runway, through the ACA marketplace, a working spouse's plan, COBRA or dedicated savings earmarked for premiums.

Weighing the various options for healthcare can be overwhelming, but there are a few valuable tools for people considering early retirement.

Create an annual cash flow projection. Mapping out your income and expenses shows you the impact of changing healthcare expenses.

Understand ACA subsidies. For early retirees, even those with large portfolios, it's possible to control your income levels in key years to qualify for additional ACA subsidies to assist with insurance costs.

Include your new costs in your long-term plan. Health insurance costs are almost always discouraging, but if you have weighed your options carefully and included the cost in a long-term financial plan that works for your family's goals, you are prepared to make moves more confidently.

As we make our plans for entering a new phase, we all have to do the math on what options will work for our finances, but the bigger challenge is likely to be accepting that cost so that you can move into early retirement with a sense of actual freedom.

3. Every decision is a tax decision

Put yourself in the shoes of a Microsoft employee taking the VRP:

• You have half a year of taxable W-2 income already
• You're being paid an additional eight to 39 weeks of severance pay as cash
• You will continue to have stock vest (and taxed) over the coming months
• You may have to sell stock to kick off your retirement, incurring capital gains taxes

It's tempting to think this scenario is entirely unique, but in many ways, it's a common story when someone finally makes the jump from corporate work to early retirement.

For employees leaving midyear, the time is now to make your first tax projection. Understanding your likely tax bill is going to inform how much cash you need to set aside for the IRS and what other moves you need to make this year vs future tax years.

This may end up being a higher-than-average income year for Microsoft employees taking the offer, creating opportunities for charitable-giving strategies, tax-loss harvesting and quality long-term planning.

For other would-be retirees, the opportunity may cut the other way. As you leave your job, you may find you have an especially low-income year, which can open a window for planning moves like Roth conversions and capital gain harvesting.

At Reach Strategic Wealth, we call these different phases of someone's life Strategic Planning Windows, which we visualize like this:

Whether it's time as an employee, early retirement or taking a consulting role for the first time after you exit, each one of these windows brings unique opportunities, and each one is open only so long.

Correctly identifying which planning window you're in and what moves are open to you in that window are vital in making the most of your money.

When it comes to early retirement strategies like selling company stock, performing Roth conversions, giving to charity or beginning to live off of portfolio income, taking advantage of your Strategic Planning Window requires thoughtful planning and must include multiple years of tax projections to help you understand the impact of any potential moves.

4. You can't eat stock for breakfast

Microsoft is letting the employees who take the VRP continue to receive stock vests for six to 12 months after their exit date.

Like many executives, senior Microsoft employees likely already have a concentration in their company's stock. This means that as they make their transition, they will be faced with decisions around when to sell stock to fund their retirement.

It's not that you need to sell company stock all at once — it's that you need to clearly articulate your goals to understand your cash flow needs so you can make moves tax-efficiently.

I laid out a framework I use for exactly this decision in the article Tied Up in Knots Over a Concentrated Stock Position? This Strategy Will Help You Unravel.

It's quite common to see people retire with a robust balance sheet made up of company stock that can't support regular spending on its own.

In other words, it's great to have stock, it might even make you rich on paper, but you can't eat it for breakfast.

There are many different strategies available to sell and diversify concentrated stock positions — exchange funds, direct indexing, long/short investing and charitable donations, to name a few.

The problem isn't a lack of tools — it's that, as we noted earlier, every decision is a tax decision, and when it comes to selling company stock, it's very easy to get "analysis paralysis" while considering the options.

To overcome this, we start with learning your family's very specific goals so we understand your income needs and then move on to the technical strategies that may let you pursue them tax-efficiently.

In my experience, getting those steps out of order is a recipe for staying stuck.

5. The hardest part probably isn't financial

Microsoft gave eligible employees a window of about a month to decide. That deadline is doing something not-so-subtle: It's forcing a choice that people often postpone indefinitely.

It's very common for a family to be financially ready to make a move well before they are mentally ready for it. The desire and confidence to leave don't necessarily come directly with a given account balance.

You've likely heard before about the spouse who wants their partner to leave the corporate world, but it keeps getting put off. It's the cycle of sticking around for one more bonus or stock vest. Or the executive just can't imagine what post-corporate life will be like.

These things can often become the real golden handcuffs, not just the equity that vests if you stay, but the identity and routine that make you stay put.

The tool that breaks this way of thinking is almost embarrassingly simple: A year-by-year cash flow plan. When you can see the income, the taxes, the healthcare and the portfolio drawdown laid out side by side, the abstract fear of "Can I really do this?" gets replaced by a concrete answer, whether it's "yes" or "no."

A deadline like Microsoft's is uncomfortable precisely because it demands that clarity. The good news is you can create the same clarity for yourself, proactively, so you are ready to make the jump on your terms.

Making a plan before your employer forces it

The idea of a well-planned, one-time retirement date is alluring but elusive, almost to the point of being mythical. Many times, it seems that layoffs, caregiving responsibilities or health needs force our hand when it comes to retirement decisions.

In other cases, retirement from the corporate world is just a bridge to consulting or re-entering the workforce down the line.

Microsoft decided that changes to the org chart were needed for its company plans. Whether that wave reaches your industry next, the offer it put together is an opportunity for the rest of us to learn. It prompts us to map out these key points and to check in on our own plans as we prepare for a new phase of life.

The families who navigate these steps well are rarely the ones who guessed right about the stock market. They're the ones who take the time to articulate their goals, understand what strategic planning window they are in and execute the necessary moves tax-efficiently.

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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 retirees, the biggest financial threat isn't market volatility, inflation or taxes. It's the staggering cost of long-term care.

According to recent national estimates, a private room in a nursing home can easily exceed $100,000 per year in many parts of the country, and those costs continue to rise.

A prolonged illness, dementia diagnosis or extended nursing home stay can rapidly drain a lifetime of savings — even for families who believed they planned well.

That's why more retirees are exploring a legal strategy known as a Medicaid Asset Protection Trust (MAPT).

When structured properly and implemented early enough, this type of trust might protect assets from being consumed by long-term care expenses, which helps preserve financial security for a surviving spouse and future generations.

Understanding the problem

Many Americans mistakenly assume Medicare will cover long-term nursing home care. However, Medicare coverage is generally limited and temporary. After short-term rehabilitation benefits expire, families often find themselves responsible for the full cost of care.

At that point, Medicaid becomes the primary government program that assists in covering long-term custodial care.

However, qualifying for Medicaid requires applicants to meet strict income and asset limitations.

Without proper planning, this eligibility requirement often means spending down savings, investment accounts and other assets before benefits begin.

For married couples, the consequences can be particularly painful. One spouse might require nursing home care while the healthier spouse remains at home trying to maintain financial stability.

Families are regularly shocked to learn how quickly years of retirement savings can disappear.

What is a Medicaid Asset Protection Trust?

A MAPT is an irrevocable trust designed to remove certain assets from an individual's countable estate for Medicaid eligibility purposes.

Typically, assets such as a home, investment accounts or other nonretirement assets are transferred into the trust. Because the trust is irrevocable, the person creating it no longer directly owns those assets.

That loss of direct ownership is precisely what can help create protection.

After a specified period — generally five years under current Medicaid "look-back" rules — assets inside the trust might no longer count toward Medicaid eligibility calculations.

In simple terms, if you start planning early enough, the assets placed into the trust could be preserved rather than being spent on nursing home bills.

Timing matters

One of the most important aspects of Medicaid trust planning is timing.

Medicaid currently applies a five-year look-back period, which means that transfers into a MAPT made within five years of applying for Medicaid might trigger penalties or delays in eligibility.

Because of the length of the look-back period, using a MAPT to improve Medicaid eligibility works best when families plan for a health crisis well in advance.

Unfortunately, many people wait too long. They assume long-term care is a distant possibility — until a stroke, fall or cognitive diagnosis suddenly changes everything.

Planning earlier provides more flexibility and significantly more protection opportunities.

How it could help a surviving spouse

One of the lesser-known advantages of Medicaid planning involves protecting the financial stability of the healthy spouse at home.

When one spouse enters a nursing facility, the other spouse — often called the "community spouse" — might still need income and assets to maintain their lifestyle, pay property taxes, cover insurance costs and continue living independently.

Without planning, a severe long-term care event can create financial hardship for the community spouse.

A properly designed MAPT might help preserve family assets for the surviving spouse while still positioning the ill spouse to potentially qualify for Medicaid assistance later.

For example, a home transferred into properly structured trusts might help shield the property from nursing home spend-down requirements and in some cases, from Medicaid estate recovery after death.

That can be critically important for surviving spouses who could otherwise face pressure to liquidate investments or sell the family home.

Estate recovery concerns

Another issue many families don't discover until too late is Medicaid estate recovery.

After a Medicaid recipient dies, states are often required to seek reimbursement for benefits paid during life. In many cases, this recovery effort can involve the family home or other remaining assets.

Proper trust planning might help reduce or avoid some of those recovery risks, depending on state law and how the trust was structured.

For families hoping to preserve assets for children or grandchildren, this can be a major consideration.

MAPT is legal planning — not hiding assets

Some people hear the phrase "asset protection" and assume it involves hiding money or exploiting loopholes.

That is not what Medicaid trust planning is.

These trusts are established under existing federal and state laws and are commonly used as part of legitimate elder-law and estate-planning strategies. The key is making sure the trust is drafted correctly by an experienced elder-law attorney and coordinated with an overall retirement and tax-planning strategy.

Families should also understand that irrevocable trusts involve tradeoffs. Once assets are transferred, the creator generally gives up direct access and control of those assets, which is why careful planning is essential.

The bottom line

Long-term care costs have become one of the greatest financial risks for retirees today. A nursing home stay can quickly erode decades of disciplined saving and investing.

For families who want to plan, a Medicaid Asset Protection Trust might offer a way to help preserve assets, protect a surviving spouse and create greater peace of mind.

But timing matters — the earlier families begin the conversation, the more options they have. Waiting until a health emergency occurs can dramatically limit planning opportunities and leave families facing avoidable financial stress during an already difficult time.

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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.