You've done everything right. You saved diligently for decades, worked with a financial planner and built a retirement nest egg that should, by any measure, fund the life you've been dreaming about.

So a few months in, why do so many new retirees find themselves feeling vaguely … restless?

There's a concept in psychology called the hedonic treadmill, and it may be the most important retirement planning topic no one is talking about. The idea is deceptively simple: Human beings have a powerful tendency to return to a stable baseline of happiness regardless of what happens to them, positive or negative. We adapt. Quickly.

That new-car smell fades. The lake house becomes just "the house." The golf game you couldn't wait to play every day starts feeling like obligation by the third month. The dopamine hit is real, but it's short-lived. And then the treadmill catches back up.

The treadmill is already running in your retirement plan

Here's where it gets personal. In my years as a financial planner, I've worked with many clients to build what we call an "intentional financial life" — defining what an ideal retirement looks like, then building the plan to get there. We reach the milestone, we celebrate. Then, almost without fail, the goal posts move.

It's not ingratitude. It's biology. The hedonic treadmill doesn't care how hard you worked or how carefully you saved. It just keeps running. And the retirement transition is one of the moments in life where this phenomenon hits hardest, because so much of your identity, your schedule, your relationships, your sense of purpose, changes all at once.

The research backs this up. Studies consistently show that retirees who anticipate a dramatic, lasting boost in happiness from leaving work are often disappointed. The first year frequently brings a genuine honeymoon phase.

But by year two or three, life satisfaction tends to drift back toward pre-retirement levels, unless something more intentional is put in its place.

Moving the goal posts isn't always a bad thing

I want to be careful here, because ambition in retirement isn't the enemy. Plenty of retirees channel the hedonic treadmill productively; they launch a second act, mentor the next generation, or build something new precisely because sitting still didn't suit them. The treadmill, in that case, becomes fuel.

The problem comes when the goal posts keep moving without intentionality behind them. Or, to put it another way, when "enough" never arrives because it's always defined by something just out of reach — a bigger portfolio number, a better house in a warmer state, one more year of work "just to be safe." That's not ambition. That's the treadmill running you.

I've seen the other side of this, too, and it's worth holding up as a model. Occasionally, a client will look at what they've built, look at their life and make a deliberate choice to step off. Not because they've given up, but because they've genuinely recalibrated what they're chasing and realized that "more" isn't the answer.

Their happiness doesn't come from the outside. It comes from an internal sense of enough. Those are the clients I learn the most from.

What the research says actually works

The good news is that the hedonic treadmill can be managed — not defeated, but worked with. Behavioral economists and positive psychologists have identified a handful of things that produce durable life satisfaction rather than a quick spike and fade.

Experiences over things. Spending on experiences, travel, time with grandchildren or learning something new produces longer-lasting happiness than material purchases. Possessions adapt into the background of your life. Memories don't.

Purpose and structure. Retirees who maintain a sense of meaning, through volunteering, part-time work, creative pursuits or community involvement, consistently report higher life satisfaction than those who treat retirement as a permanent vacation. Structure matters more than most people expect.

Social connection. Loneliness in retirement is a documented health risk. The relationships you invest in, with friends, family and community, are among the most reliable predictors of well-being in later life. No portfolio allocation compares.

Savoring and gratitude. Actively noticing and appreciating what's already good — rather than focusing on what's next, is one of the most well-documented ways to raise a personal happiness baseline. It sounds simple because it is. It's also genuinely hard to do consistently.

What this means for your retirement plan

Here's the honest truth: Most retirement plans are built around a number. Hit the number, stop working, be happy. That's the implicit promise. But if the hedonic treadmill has taught us anything, it's that the number alone won't get you there.

The financial piece matters enormously. Security is foundational, and I'm not minimizing it. But the clients I've seen thrive in retirement didn't just plan for what they'd stop doing. They planned for what they'd start. They defined what a good day looked like at 68, and then built a life — not just a portfolio — that could support it.

The treadmill keeps running. That's not a tragedy — it's just how we're wired. The question is whether you're running toward something that genuinely matters to you, or just running.

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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 people step out of their working years and into retirement, they could still have a long journey ahead — perhaps longer than they ever imagined.

Consider how much longer healthy individuals are living today compared with a century ago. For many people, retirement is far more than a brief chapter. It can stretch for decades, which means your planning needs to account for all those years if you want a fulfilling retirement rather than one weighed down by financial stress.

One key to navigating this successfully is having a healthy perspective on accepting longevity. Rather than viewing a long retirement as an obstacle to overcome, think of it as your greatest lever, a powerful tool you can use to your advantage.

Don't eliminate all risk

One way to leverage longevity is by understanding how your investments can complement a longer time period. Many people are tempted to strip nearly all risk from their portfolios as retirement approaches because they worry they won't have time to recover from a market downturn.

While it's true that significant volatility early in retirement can do serious damage to a portfolio (especially when you're simultaneously withdrawing money to cover living expenses while the market is falling), that doesn't mean a conservative approach is your only option.

Protecting every dollar isn't always as efficient as it seems. A portion of your portfolio still needs to be positioned for growth, and that requires accepting some level of risk.

It might feel uncomfortable in this stage of life, but the risks you take should be driven by your needs, not your fears. If you hold on too tightly and suffocate your dollars from growing, they might run out before your retirement does.

This is exactly where longevity becomes your ally. A retirement that lasts 20 or 30 years gives your invested assets real time to recover from market setbacks and continue growing.

That doesn't mean going all in on equities. You absolutely want to shield a portion of your money from market volatility. But keeping your entire portfolio in CDs or similar instruments that can't keep pace with inflation isn't safety — it's a slow erosion of purchasing power.

A balanced investment plan helps give your money a fighting chance over the two or three decades ahead.

An important subject often left unmentioned

When planning for a retirement that could last 20 years or more, one topic deserves a prominent place in the conversation: The potential need for long-term care.

Unfortunately, too many people push this topic aside — which is understandable, but not wise. The prospect of needing a nursing home or round-the-clock in-home care isn't a pleasant topic on which to dwell.

However, these costs can have an incredibly detrimental impact on your retirement savings if you don't plan for them.

The fear of the cost is the other reason people disengage. When they see the numbers involved, planning can feel futile, so avoidance becomes the path of least resistance.

That fear isn't misplaced: Long-term care is genuinely expensive. According to CareScout's yearly Cost of Care survey, the median annual cost of a semiprivate room in a nursing home is $114,975. In-home care can run close to $80,000 annually.

These costs are precisely why planning needs to begin early. Putting it off means that when the need arises, you could find yourself scrambling to address a situation for which you never prepared, and by then, your options might be far more limited.

Those with significant wealth have more flexibility here — not because they're less likely to need care, but because they can afford to pay for it out of pocket. For them, the plan is straightforward: Write a check when needed. Most people don't have that option.

To start, it's worth taking the time to review your options for covering long-term care costs. These might include a dedicated long-term care insurance plan, a life insurance policy with a long-term care rider or setting aside a portion of your savings specifically for that purpose.

This is where the right financial adviser makes a genuine difference, one who is an empowering steward rather than a cautionary money manager. The goal is to build a plan that will help navigate the uncertainties ahead by capitalizing on longevity.

A long retirement can feel like a risk — but it doesn't have to. With the right mindset and planning, longevity becomes an opportunity, not a burden.

Ronnie Blair contributed to this article.

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

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

For decades, the 60/40 portfolio — allocating 60% to equities and 40% to fixed income — stood as the gold standard of wealth management.

Its appeal was rooted in a simple and elegant idea: When stocks decline, bonds typically rise, creating a natural hedge that allows investors to "buy and hold" their way to long-term growth.

However, for accredited investors — those with at least $1 million in investable assets — the financial landscape of 2026 has exposed the limitations of this static approach.

In a world shaped by rapid technological disruption, geopolitical shifts and persistently higher interest rates, the traditional 60/40 portfolio is no longer a reliable safety net.

In many cases, it has become a source of unintended risk.

To preserve and grow capital in this environment, the conversation must evolve from static risk management to tactical risk management.

The failure of the static model

Static risk management is, by design, reactive. It depends heavily on historical correlations, assuming that past relationships between asset classes will continue into the future. Its primary mechanism is periodic rebalancing — adjusting holdings to maintain a fixed allocation like 60/40.

Recent inflationary cycles have highlighted a critical flaw in this approach. During periods of rising inflation, the traditional inverse relationship between stocks and bonds can break down. Instead of offsetting each other, both asset classes may decline simultaneously.

For investors with substantial portfolios, this creates a meaningful risk. A simultaneous 15% drop across both equities and fixed income can significantly erode purchasing power — and recovering from that kind of drawdown can take years.

Defining tactical risk management

Tactical risk management takes a proactive, regime-based approach. Rather than adhering to a static allocation, it dynamically adjusts portfolio exposures based on current economic conditions, market trends and volatility signals.

For accredited investors, this approach offers three key advantages:

1. Volatility budgeting

Instead of targeting a specific asset mix, tactical strategies aim for a defined level of portfolio volatility.

When market turbulence increases, cap exposure to higher-risk assets is reduced, with capital shifting into "dry powder," such as cash or short-term Treasuries.

This helps mitigate sequence of returns risk, which can be especially damaging near retirement or liquidity events.

2. Regime-based allocation

Today's market is characterized by rolling recessions and rapid sector rotations. A static 60/40 allocation may leave investors overexposed to declining sectors or underexposed to emerging opportunities.

Tactical management uses macroeconomic indicators to tilt portfolios toward areas of relative strength — such as energy, commodities, private credit or infrastructure — while reducing exposure to weakening trends.

3. Asymmetric preservation

Tactical strategies often incorporate elements of convexity — seeking to capture a meaningful portion of market upside while limiting downside exposure.

For high-net-worth investors, the objective isn't simply to outperform a benchmark, but to ensure that major market corrections result in more controlled portfolio drawdowns.

The behavioral edge

One of the most overlooked advantages of tactical risk management is its psychological benefit. A static "buy, hold and hope" strategy may feel comfortable during bull markets, but it becomes increasingly difficult to maintain during prolonged downturns.

Many investors abandon their strategy at precisely the wrong moment — near market bottoms.

Tactical management introduces a structured, rules-based framework for decision-making. With predefined signals guiding when to reduce risk, investors can rely on data rather than emotion.

This transforms risk from something unpredictable into something actively managed.

Summary: Preserving the next million

Building wealth is not just about identifying the next high-growth opportunity — it's equally about avoiding significant losses. For accredited investors, access to more sophisticated strategies is often the defining advantage.

The 60/40 portfolio was well suited to a different era — one defined by low inflation and steady growth. Today's environment demands a more adaptive approach. Tactical risk management offers a way to stay aligned with current market realities, helping investors move from a passive position to one of active control.

In a volatile world, it's no longer enough to ride along. Investors need to take the wheel.

Dan Dunkin contributed to this article.

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

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

The aphorism "If you fail to plan, you're planning to fail" is commonly attributed to Benjamin Franklin.

Even if the words are his, he wouldn't have been thinking about income taxes when he wrote them. Those were introduced in 1862 to temporarily fund the Civil War. The 16^th Amendment made them permanent in 1913.

Today's income taxes are quite complex compared to the type of taxation people would have known in the days of the Founding Fathers. And you'll need to take an active, strategic approach to managing them if you want to optimize your financial position.

In general, for income of $150,000 or under, there are specific concerns and ways to approach the planning. For those with $500,000 and more in income, there are different concerns and approaches.

There is no doubt that proper tax planning helps at any level, but in the "messy middle," between $150,000 and $500,000, there is more complexity than necessary.

The challenges of active tax management

One of the biggest challenges in active tax management is synthesizing all the information to uncover what can reduce your tax burden as much as possible in the future, and not just in the current year.

You might be unaware of various deductions, state-specific rules and thresholds that can kick you into a higher bracket, eliminate or phase out a deduction, or cause other unforeseen expenses now or later.

It is a balancing act that is based on and informed by income sources, assets, ways assets are owned, taxation attributes of types of assets, financial goals, expectations about the future of taxes and sometimes even legacy intentions.

For many, the complexity requires a professional to dig into the details, ask the right questions and help devise the best strategy or mixture of strategies. An expert can provide objective analysis that identifies missed deductions and potential opportunities, ensures regulatory compliance, mitigates risks and increases net after-tax long-term wealth.

Whether you do your own tax planning or hire a tax professional, the important point is being intentional — making tax planning a priority in your financial plan (at the very least giving it equal importance to investment, income, legacy and protection planning) and making choices to ensure you are protecting as much of your savings and assets as possible for the long term for the best possible taxation.

Learning the tax implications of your income range

The starting point in active tax management is figuring out your likely income range and optimal tax strategies for now and for retirement. Tax rates can change in the future, but the important approach now is to identify an income range where you think you could settle tax liability at reasonable rates, avoid paying unnecessary taxes and set up a future where you have some flexibility to manage brackets later.

Let's focus on the tricky messy middle — those with between $150,000 and $500,000 in income. For the 2026 tax year, that range of income spans three tax brackets (22%, 24%, 32%) for married couples filing jointly and three for single/married filing single (24%, 32%, 35%).

That range points out the importance of active tax management not only because of the various tax rates, but also because there are numerous deduction phase-outs and additional tax triggers.

Here are just some of those (based on the 2026 tax year).

Net investment income tax (NIIT). This is an additional 3.8% federal tax on certain types of investment income. It applies to individuals with modified adjusted gross income (MAGI) exceeding $200,000 (for single filer/head of household) and $250,000 (married filing jointly/surviving spouse).

Once you cross into these ranges, every dollar of investment income becomes less efficient, making proactive tax planning significantly more valuable. The NIIT applies to income such as interest and dividends, capital gains (stocks, real estate, funds), rental and passive income and certain annuity income.

Long-term capital gains rates. Another negative impact of the NIIT: It effectively raises long-term capital gains rates to 18.8% (15% + 3.8%) or 23.8% (20% + 3.8%), depending on your filing status and income level.

Qualified business income (QBI) deduction. The QBI deduction is a tax break allowing eligible self-employed individuals and pass-through business owners (partnerships, LLCs, S corps) to deduct up to 20% of their qualified business income from their personal taxes.

In 2026, the phase-out range (for some in specified trades or businesses) is $403,500 to $553,500 for married joint filers, $201,775 to $276,775 for single filers.

Child tax credit. The phase-out starts at $200,000 for single/head-of-household filers and $400,000 for married couples filing jointly. The credit amount is reduced by $50 for every $1,000 of income above these thresholds.

Deduction for those who are 65-plus. A new $6,000 deduction for individuals aged 65-plus phases out between a MAGI of $75,000 to $175,000 for singles and $150,000 to $250,000 for married joint filers. The deduction reduces by six cents for every dollar over the limits.

State and local tax deduction (SALT). With MAGI just over $505,000, you begin to lose the increased SALT deduction, but for now, for many with income under $500,000, a higher deduction may mean itemizing for the first time in a while.

Charitable contributions. Donations are only deductible to the extent they exceed 0.5% of your adjusted gross income (AGI). For example, with an AGI of $300,000, only donations over $1,500 are deductible as an itemized deduction, and then only if you itemize. There is now a small "above the line" deduction for those not itemizing. (A note for those in the top tax bracket: A limitation on itemized deductions comes into play for you.)

Increased Medicare premium surcharges. The income-related monthly adjustment amount (IRMAA) is a surcharge added to Medicare Part B and Part D. It is based on your MAGI from two years prior. Single filers with income ranges from $109,000 to $500,000+ pay progressively higher surcharges, as do those filing married jointly from $218,000 to $750,000+.

For example, a married couple filing jointly with a MAGI of $280,000 would pay approximately double for Medicare premiums relative to those who make $215,000.

This is an especially tricky one to navigate and is not felt until two calendar years later, based on how Medicare premiums are determined. You go over a threshold by just a dollar, and it could cost you hundreds, if not thousands.

The widow's tax penalty. This is a surge in federal income tax liability and Medicare premiums that occurs when a surviving spouse shifts from married filing jointly to single status, typically one year after their spouse passes away.

For higher-income individuals, the penalty can be severe because they often have income sources (pensions, IRAs, investments) that do not decrease when a spouse dies.

Most often, the surviving spouse spends about the same money and needs the same amount of funds to accomplish that, which means the same amount of income while the brackets have been cut in half. The IRMAA charges are higher at lower income levels, too, for the surviving spouse.

Take control and reap the rewards

Active tax management is no longer beneficial for just the ultra-wealthy; it is a necessity for anyone and beneficial for those navigating the increasingly complex $150,000 to $500,000 income range.

This bracket is filled with hidden triggers, phase-outs and surtaxes that can quietly erode wealth if left unaddressed. The difference between reactive and proactive planning can mean thousands of dollars kept or lost each year and over a lifetime.

Understand what you have, what you can do now and what you can do later, so you can either defer income or settle tax liability when it makes sense. That approach allows you to optimize your current and future tax situation.

By understanding how the various ingredients and thresholds interact — and by making intentional, forward-looking decisions around income, investments and timing — you can take greater control of your financial outcomes and your net after-tax dollars.

Remember, you do not get to spend pre-tax dollars — it is only the after-tax dollars you get to spend. As the great Yogi Berra once said, "If you don't know where you are going, you'll end up someplace else."

Dan Dunkin contributed to this article.

Appearances on Kiplinger.com were obtained through a paid public relations program. The author received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

The information contained herein is for educational purposes only. It is not intended to provide, and should not be relied on for, any tax, legal or investment advice. You are advised to seek the advice of a qualified professional prior to making any decision based on any specific information contained herein. The specific tax consequences of any investment or strategy will depend on your specific tax situation.

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

More Americans are growing concerned about their ability to afford retirement.

A recent survey from Northwestern Mutual found that 48% of Americans believe they'll outlive their savings.

Many also believe they'll need at least $1.46 million in savings to retire comfortably in 2026, a $200,000 increase from 2025.

It can be easy to hyper-focus on having a certain amount saved before retirement, but without a strategy to turn those savings into reliable income, even the most substantial nest egg may not last.

Whenever surveys like these come out, people shut down after hearing they'll need to have a million dollars in retirement savings. What's often missing from the conversation is how that number is actually calculated.

Many pre-retirees start by estimating how much monthly income they would need to live comfortably. Others use the income replacement ratio (IRR) method, which is calculated by estimating the pre-retiree's average gross salary during their final three years of employment and assuming they'll need about 60% to 80% of that amount each year.

Pre-retirees can also use the 4% withdrawal rule, which suggests they may be able to withdrawal about 4% of their retirement portfolio in the first year of retirement, adjusting that amount for inflation each year thereafter.

Some may choose to take a more detailed approach by building a retirement budget that includes both essential expenses and discretionary spending.

It's important to note that these methods are great starting points, yet they may not take into account market downturns, long-term care needs, reduced Social Security benefits, higher taxes or taking care of adult children.

While it can give you a ballpark range to aim for, setting a target savings number doesn't account for unexpected life events, such as a medical emergency, job loss or a sudden drop in the value of investments.

Oftentimes, these estimates are based on assumptions that do not reflect real-life conditions.

The transition from earning income to living off of savings brings uncertainty regardless of how much money is sitting in retirement accounts. Instead of receiving a consistent paycheck, retirees must rely on their savings to generate income.

This introduces a new set of challenges to navigate, such as withdrawal strategies, healthcare expenses and tax management. Rather than building savings, the focus shifts to sustaining them.

When it comes to creating a withdrawal strategy that works for you, start by developing an expense and budget plan.

• Make a list of your expected annual or monthly expenses, including mortgage or rent payments, property taxes, insurance premiums, utilities, healthcare expenses as well as credit card and loan payments
• Calculate your guaranteed income from sources such as Social Security or pensions.
• Subtract that amount from your annual expenses to determine how much money you'll need from retirement savings or investments to fill that gap.

Once you know how much income your portfolio needs to generate, you can utilize investment strategies. Depending on your goals, risk tolerance and timeline, this may include a combination of income annuities, bonds, certificates of deposit (CDs), dividend-paying stocks, alternative investments, reverse mortgages or other investment vehicles.

After establishing an asset allocation strategy, you can implement a withdrawal approach that aligns with your spending needs.

A strategy that could work for you

For some, the bucket withdrawal strategy might be the best approach. This method puts your savings into short-term, intermediate and long-term spending buckets.

Others may follow the guardrails strategy, which allows retirees to increase withdrawals when portfolio values are rising and reduce them when the market is down.

The "go-go, slow-go, no-go" spending framework may also be worth considering. This method acknowledges that spending patterns often change throughout retirement, with higher spending in the earlier, more active years, followed by slower spending in the later years as one ages.

An important part of retirement planning is preparing for the unknown. Whether it's accounting for inflation, market downturns or longer life expectancies, a comprehensive retirement plan is built to withstand various outcomes.

Even with a solid retirement plan, mistakes can still happen. What's important is being flexible.

Refusing to modify withdrawal rates or adjust investment strategy as life changes can have long-term consequences that can be difficult to recover from.

Market fluctuations can also have a significant impact on retirement income, particularly in the first few years of retirement. When markets decline, many retirees panic and sell off their investments, which can lock in losses that can be difficult to recover from, especially if a withdrawal strategy is already in place.

And, as history has shown, those who leave the market when it's down often miss out on the rebound.

Building a sustainable income strategy starts with understanding monthly expenses.

Once a budget is in place, retirement income can be generated through a combination of Social Security benefits and investments, structured to provide day-to-day sustainability and future growth.

Chris Cohan is a registered representative of and conducts securities transactions through CoreCap Investments, LLC. Chris Cohan is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. RJP Estate Planning is a separate entity and not affiliated with CoreCap Investments or CoreCap Advisors.

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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 experts recommend setting your asset allocation and sticking to it until your life circumstances change.

You should typically split your investments among equities and fixed-income investments and perhaps a pinch of commodities.

For example, you might decide on 49% in stocks, 49% in fixed income and 2% in commodities. If stocks have a big run-up and become, say, 60% of your portfolio, you should consider rebalancing to get back to your original allocation.

What's the best asset allocation for you is highly individual and depends on many factors, including age. Most people become more conservative as they enter retirement and cut back on stocks and increase fixed-income assets, which include bonds and bank certificates of deposit (CDs).

But they aren't the only choices. As the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed and lifetime income annuities, I am a nationally recognized annuity expert and know all about those choices.

Fixed-rate deferred annuities — especially multi-year guarantee annuities, or MYGAs — provide safe, steady interest but without most of the drawbacks of bonds or bond funds. They also usually pay higher rates than CDs and are tax-advantaged.

These annuities can thus substitute for some of the bonds or CDs in your fixed-income allocation. But you need to be aware of liquidity and taxation matters before committing.

MYGAs avoid bond-market volatility

Issued by insurance companies in exchange for a single premium deposit, MYGAs share some similarities with bonds and even more with CDs. Like CDs, they earn a guaranteed rate of interest for a set period, usually two to 10 years.

But there are some key differences between bonds and fixed annuities, which have more guarantees and lower risk.

First, you can lose money in bonds. Both CDs and MYGAs guarantee interest and principal. But the market value of a bond fluctuates with changes in interest rates. If rates go up and you sell a bond prior to maturity, it will be worth less than its original cost. With an individual bond, you can avoid this problem by holding it to maturity.

Bond-fund investors don't have that option. If rates spike up after you buy a bond fund, the value will decline. Especially with a long-term bond fund, it may take many years to recover your full principal, if ever.

Second, owners of individual bonds (except Treasuries and U.S. agency bonds) also face default risk. A company or municipality may run into financial problems and fail to make timely interest or principal payments. A default means you could lose part or all of your investment.

In contrast, an annuity is guaranteed by the issuing insurance company. There is no federal deposit insurance, so buyers need to choose carefully. Insurers with strong financial ratings are considered very safe. Rating agencies like AM Best provide a letter grade to insurers.

With fixed annuities, the insurance company bears the underlying investment risk, shielding annuity owners from both bond market volatility and default risk.

Most corporate, municipal and government bonds pay out interest every six months. Normally, there's no ability to reinvest interest so that it can grow and compound at a high rate.

Bond funds let you reinvest your dividends automatically, but the price per share varies as interest rates change. You may have a gain or loss on reinvested dividends when you cash in the fund shares.

More advantages

MYGAs let you compound interest earnings. Reinvested interest gets the same rate as the base annuity, so the yield is guaranteed. Depending on the annuity, owners who need income can usually choose to receive interest earnings monthly, quarterly or annually.

Interest from corporate bonds and Treasuries is taxable in the year it's received. Annuities in nonqualified accounts (not in an IRA, a 401(k) or a similar plan) are tax-deferred.

All interest earnings left inside the annuity grow and compound tax-deferred until withdrawn, a significant tax-planning benefit. You can wait until retirement, when your tax bracket is likely to be lower, to start receiving payments. Without taxes taking a cut, your money compounds faster.

Many corporate and municipal bonds are callable. When rates are high, it may look like you nailed down a great deal. However, a few years later, when rates are lower, the issuer may call the bond back, and you'll have to reinvest the proceeds at a lower rate.

Fixed-rate annuities, like CDs, can't be called. The interest rate is set for the duration of the guarantee period.

Annuities also offer the ability to create a guaranteed lifetime income stream via annuitization. It's the only financial product that offers this option.

Liquidity and taxes

MYGAs have less unpenalized liquidity than bonds and bond funds. You can always cash them in, but you'll pay a penalty for early surrender. Second, interest earnings withdrawn from nonqualified annuities before age 59½, with a few exceptions, are subject to a 10% IRS penalty, plus ordinary income tax.

By the way, MYGAs can work very well as a fixed-income allocation in IRAs, providing "ballast" that counteracts the swings of the stock market while earning a high guaranteed rate of interest.

Because they have less liquidity than bonds, you probably wouldn't want to put all of your fixed-income investments in MYGAs. Among other things, it might limit your ability to rebalance.

But there is some liquidity. Many fixed-rate annuities let you withdraw up to 10% a year penalty-free. They're thus usually more liquid than CDs, which have stiff penalties for any early withdrawals.

Furthermore, you can stagger multiple MYGAs with different terms so that you'll have new ones coming up for renewal every year or two.

Not for everyone but maybe for you

MYGAs aren't right for everyone, but many people can benefit from their unique features. They provide steady, reliable interest that you can usually receive monthly, quarterly, semiannually or annually if you need the income. Or you can let interest accumulate in the annuity and grow tax-deferred.

MYGAs can also work very well in both IRAs and Roth IRAs.

There's nothing wrong with bonds and CDs. But take a look at MYGAs. One or more may be a good fit for you.

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

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• Too Scared to Dive Into a Fixed-Rate Annuity? Interest Rates Make It Worth Dipping Your Toe In
• Are Annuities Safe?
• What are Annuities? The Different Types and How They Work
• Income and Life Expectancy Not Adding Up? An Annuity Could Solve the Equation

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

Employees at companies that offer equity compensation have the opportunity to grow significant wealth, but it also comes with considerable risk.

Having too much of your net worth tied up in a single company makes you vulnerable to volatility and both short- and long-term losses, depending on the firm's success.

I've seen many employees with concentrated stock positions at tech companies and in other industries who feel conflicted about selling their shares. They may have an emotional attachment to the company or even feel disloyal selling off their shares.

Not to mention that selling all your shares at once can leave you with a large tax bill.

With a thoughtful approach, investors may be able to address the risks associated with a concentrated stock position over time, seek tax efficiency, and remain invested in their company and industry while managing potential downside exposure.

Stock concentration isn't always bad, but it needs a plan

Having a concentrated stock position isn't inherently bad. For many clients, that stock concentration is exactly how they built their wealth in the first place. The goal is simply to make sure your exposure is intentional and appropriate for your situation.

There's no set rule of thumb for how much of your portfolio your company stock should make up. I generally prefer people to keep their single stock concentration to less than 40% of their portfolio, but many advisers take an even more conservative approach, recommending closer to 10% or 20%. The younger you are, the higher percentage of your portfolio it can make up.

It also depends on your other assets. If you have substantial liquid assets, that 40% may be appropriate. But if you have real estate and other illiquid assets, a lower percentage is likely better.

Here are five strategies to manage your concentrated stock position:

1. Understand what you're working with

Stock compensation comes in several forms, including incentive stock options (ISOs), non-qualified stock options (NQSOs) and restricted stock units (RSUs). Each type comes with a different tax treatment, which affects your strategy.

Before you plan your next steps, you need a clear understanding of what you own, when it vests and how you'll be taxed on it.

2. If your company is still private, build your tax-loss bucket now

If your company is heading toward an IPO, you could have several years to start preparing for the large tax bill. Start creating a tax loss bucket in advance.

You can start harvesting your tax losses by selling losing positions in your investment account, capturing those losses, and reinvesting in a comparable security.

You'll slowly build up a reserve of losses you can use to offset the gains you'll earn when you eventually sell your IPO shares.

High earners with sufficient investable assets can also explore specialized investment strategies, such as direct indexing vehicles, to give you more control and help you create tax losses to offset your future gains.

3. You don't have to unwind everything at once

Many employees take one of two extremes when their company IPOs: They either sell everything right away, or they don't sell anything at all. Neither is necessarily the right option.

First, you'll typically be subject to some sort of lockup period, usually 180 days, during which you won't be allowed to sell any of your shares. But you can still use this time to prepare.

Once the lockup period ends, consider a staged selling strategy rather than selling everything all at once. You can spread your sales across multiple tax years to lower your tax bill, reduce the impact of net investment income taxes and, ideally, avoid bumping yourself into the next tax bracket.

By staging your selling over several years, you can significantly lower your tax burden and remove some of the emotional pressure that comes with trying to perfectly time your sale.

4. Consider an exchange fund for long-held stock positions

If you have a highly appreciated stock position worth at least $500,000 to $1 million, an exchange fund can help you diversify it without a large tax consequence. You exchange your concentrated stock position for a private diversified portfolio of securities contributed by other investors.

This strategy isn't appropriate for everyone, as it requires a large investment and a seven-year holding period before you can exit the fund with your holdings — an earlier exit puts you at risk of financial penalties and taxes.

However, if you're a candidate for this strategy, it can be a powerful tool to save a significant amount in taxes.

5. You can diversify without abandoning your industry

A common sentiment among employees with highly concentrated stock positions, especially in the tech industry, is a desire to remain heavily invested in the sector.

Depending on your risk tolerance, you don't have to abandon your tech holdings, but instead spread them out across more companies. You can preserve the potential upside without a single bad earnings report causing a major hit to your net worth.

The bottom line: There's no one-size-fits-all plan, but early planning is key

Stock concentration is common among employees at post-IPO firms or companies that offer equity compensation packages.

There's no one right strategy to address this situation, as it depends on your age, liquidity, risk tolerance and other key factors.

If your company is still pre-IPO, time is on your side, as you have plenty of time to plan your strategy. And if you work for a public company, you have options to exit your concentrated position with less of a tax impact.

Concentrated stock can create life-changing wealth; it's just important to have the right strategy in place to manage it.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. #2026-12426

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• Why Company Stock May Be Riskier Than Employees Realize
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• How to Unlock the Value of Your Employee Stock Options (and Help Avoid Taking a Financial Hit)
• What to Know Before Exercising Your Pre-IPO Stock Options

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.

Is your wealth manager invested in your goals or the next commission? It's an essential question every investor should ask.

Finding the right fit amid the crowded landscape of options can feel overwhelming, especially when choosing the right partner to grow your wealth. Thankfully, some of our readers have already done the heavy lifting for you.

For the Kiplinger Readers' Choice Awards, over 4,000 readers ranked the best wealth managers based on overall satisfaction, quality of advice, retirement planning services and more categories in an online survey conducted this past winter on Kiplinger.com.

Among the standouts this year, UBS Wealth Management was the overall winner for wealth managers. Here are the reasons why our readers chose UBS as the best wealth manager.

1. A personalized approach to financial planning

Some wealth managers like to employ a one-size-fits-all strategy, tailoring solutions around higher commissions than taking your needs into account.

However, UBS takes a much more personalized approach to getting to know you. It aims to learn what wealth really means to you by asking you these five questions:

1. What do you want to accomplish in life?
2. What do you want your legacy to be?
3. How do you plan to achieve your life's vision?
4. Who are the people that matter most to you?
5. What are your main concerns?

This begins the UBS Wealth Way conversation. Once you answer these questions, UBS works with you to establish direct goals that align with your answers. Doing this gives you confidence that you have a trusted partner who not only takes the time to listen to you but who also tailors solutions that match your goals and values.

2. Expert service and advice at every life stage

Some wealth managers help you set goals, and that's where their work stops unless you contact them. UBS, on the other hand, is there to take a proactive approach in helping you reach your goals, even as your life changes. The main theme among readers' comments was how exceptional the service was, and the advice they received was excellent.

Their team of wealth experts can help you craft a full suite of goals and adjust them as your life changes. Whether you're a new investor, catching up on retirement savings or receiving a wealth transfer, their team can help you make sense of your finances and plan strategies to help you reach your goals, even after they change.

In turn, you gain a trusted partner who can scale strategies as you build your wealth.

3. Research and digital tools that empower your decisions

UBS invested in digital tools to make managing your wealth convenient. Once you become a client, you can access the online portal 24/7 to monitor your accounts.

This is essential if you're a hands-on investor who wants to review your portfolio regularly, access liquidity or pull up important tax documents. Use the UBS Advice Compass for portfolio assessments and actionable recommendations.

One way UBS excels is in its research offerings. To demonstrate, the UBS Evidence Lab is a sell-side team of research experts that collects data across more than 50 countries and 5,000 companies. In turn, their experts convert this data into actionable insights, providing you with the information you need to make informed investment decisions confidently.

While UBS took the top spot in overall satisfaction, these firms also earned high marks from our readers for their exceptional services and commitment to client success:

• Morgan Stanley Wealth Management
• Raymond James
• Fidelity Wealth Management
• Vanguard Personal Advisory Services
• Bank of America/Merrill Wealth Management Services
• Fisher Investments

Ultimately, not all wealth managers are the same. When it comes to planning for your future and maximizing wealth, lean on the experts our readers recommend the most. UBS offers the tools, resources and personalized guidance that help you feel confident about the road you're on and the direction you're heading.

Eager to see how our readers ranked your wealth manager? Visit our Kiplinger Readers' Choice best wealth managers to see the full ranking and what our readers liked about each one.

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• Kiplinger Readers' Choice Awards 2026: Wealth Managers
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• 2026 Kiplinger Readers' Choice Awards

For many people, estate planning starts with a will, a durable power of attorney and a healthcare proxy.

These documents are important. They help determine who receives your property, who can make decisions for you and how your wishes are carried out if you are no longer able to speak for yourself.

But in some situations, they may not be enough.

A trust can be an important part of an estate plan, but it is also one of the most commonly misunderstood estate planning tools. As an estate planning attorney with several years of experience, I have heard a number of assumptions.

Some people assume a trust is only for the very wealthy. Others think a trust is only about taxes. Some believe that if they have a will, they have already avoided probate.

None of those assumptions is necessarily true. My job is not only to ensure an efficient and orderly transition of assets for my clients, but also to ensure that they understand why I am recommending certain documents, including a trust, as part of their estate plan.

What is a trust?

At its most basic level, a trust is a legal arrangement. Think of it as a contract between the person creating the trust and the person responsible for administering it.

The person creating the trust may be called the grantor, settlor or donor. The person responsible for managing the trust is the trustee. The people who benefit from the trust are the beneficiaries.

The trust says, in effect:

• Here are the assets
• Here are the people I want to benefit
• Here is how I want the assets managed and distributed
• And here is the person I am trusting to carry out those instructions

That trustee has a fiduciary obligation to administer the trust according to its terms and in the best interest of the beneficiaries.

Trusts are not just about avoiding probate

One of the most common reasons people consider a trust is to avoid probate. That is a valid reason, but it is not the only one.

Probate is the court-supervised process for administering assets that are part of someone's probate estate.

In Massachusetts, for example, the probate process requires forms to be filed with the court, reviewed and approved. A personal representative must be appointed.

There is also a one-year creditor period during which creditors can file claims against the estate. If assets are distributed too early and a valid creditor claim later appears, the personal representative can be responsible for that claim.

Probate can add time, expense and administrative burden at a point when families are already dealing with a loss. A trust can help avoid that process for assets that are properly transferred into the trust.

For example, if a house is owned by the trust, the trustee can administer or distribute the property according to the terms of the trust, rather than requiring the family to go through probate for that asset.

But a trust is not the only way to avoid probate. Beneficiary designations can also do a significant amount of work. A checking account, savings account, retirement account or other financial account may be able to pass directly to a named beneficiary outside of probate and accomplish much of what is needed in some circumstances.

A will does not avoid probate

Another common misconception is that having a will means your family avoids probate.

A will is important, but it does not keep you out of probate. In many cases, the will is the document that gets filed with the probate court to begin the probate process.

What a will does is provide direction. It tells the court and the personal representative how you want your probate assets distributed. It can reduce uncertainty and clarify your wishes. But the will still has to be accepted by the court, and the personal representative still has to be appointed.

A trust works differently. A revocable trust, often called a living trust or inter vivos trust, is created during your lifetime. It can hold assets while you are alive and provide instructions for how those assets should be administered after your death.

A common estate plan may include a health care proxy, durable power of attorney, pour-over will and revocable trust. The pour-over will acts as a backup, directing any assets that end up in the probate estate into the trust. The trust itself typically contains the detailed instructions for administration and distribution.

When does a trust make sense?

A house is often one of the major reasons people create a trust, because transferring the house into the trust can allow it to be administered without probate. A trust may also make sense if you want to leave assets to a minor child, niece, nephew or grandchild. Most people would not want an eight-year-old to receive a large sum outright. They also may not want the child's parent or guardian to have unrestricted control over the money.

In that situation, the trust can provide that funds be used for the child's education, health, support or other needs. It allows the person creating the trust to provide for the beneficiary while putting guardrails around how the money is managed.

Trusts can also help when a beneficiary is not great with money, has creditor issues or struggles with dependency issues. The goal is to protect the assets and provide structure. A trust can also be amended during your lifetime, if it is revocable, to reflect changing circumstances.

What about blended families?

Trusts can be especially helpful for blended families.

A person in a second marriage may want to provide for a surviving spouse while also ensuring that children from a prior relationship ultimately receive an inheritance. If everything is left outright to the surviving spouse, the surviving spouse may later change their estate plan, remarry, spend the assets or leave the remaining property to different beneficiaries.

A trust can create more clarity and help avoid conflict. It can allow assets to be used for the surviving spouse during the spouse's lifetime, while preserving what remains for children or other beneficiaries after the spouse's death.

Are trusts only for people with more than $2 million?

No. Tax planning is one of the more common reasons to use a trust, but it is not the only reason.

In Massachusetts, the state estate tax threshold is $2 million. For married couples whose combined assets exceed that amount, trusts may be used to shelter assets and defer or reduce estate tax exposure. Assets can include cash, a home, retirement accounts, bank accounts, brokerage accounts and business interests.

But many people who are below the estate tax threshold may still benefit from a trust for non-tax reasons, including probate avoidance, privacy, real estate planning, minor beneficiaries, family complexity or beneficiary protection.

What does a trust cost?

The cost varies by region, law firm and complexity. Some firms charge a flat fee. Others charge hourly. A straightforward trust may cost a few thousand dollars, while more complex planning can cost more. While that upfront cost can feel significant, for many families, it is often less than the expense and delay of probate later.

The key is to start with your goals. What do you own? Who do you want to benefit? Are those beneficiaries ready to receive assets outright? Are there family dynamics that could create conflict? Are there tax, probate or creditor issues to consider?

A good estate plan should not be more complicated than it needs to be. But it should be thoughtful enough to accomplish what you actually want. A trust can provide that structure when a will or beneficiary designation alone does not go far enough.

Related Content

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• Is Your Estate at Risk? The 5 Trusts You Need to Understand
• Three Legal Documents Your Child Should Sign When They Turn 18
• Where There's a Will, There's a Way Your Assets Will Be Distributed as You Wish
• I'm an Estate Planning Attorney: These Are the Two Legal Documents Everyone Should Have

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.

Something is happening in advisory practices across the country. The clients who once fit neatly into a financial planning model have changed, and the gap between what they expect and what most firms deliver is getting harder to ignore.

This trend is showing up in client conversations and retention numbers. It's also recurring in conversations I'm having with advisers who sense the model that got them here may not be enough to carry them forward.

While this shift might be concerning to some, I see it as a real opportunity — at least for advisers who are willing to see it that way.

The client has changed

The wealth management industry is in the middle of what may be the most significant client reset in decades. Clients today are approaching wealth differently than they did even a few years ago, and their expectations of the advisory relationship are evolving just as quickly.

Clients are no longer solely focused on portfolio performance. Instead, they want advice that reflects their values, goals, time horizon and definition of success. Generic strategies and one-size-fits-all portfolios are becoming increasingly out of step with what today's clients expect from a financial relationship.

Many clients are also looking for what I call Return on Time Invested, or ROTI. They want advice that buys back hours and funds experiences, not just accumulation. They're less interested in being managed and more interested in being understood.

This shift creates a meaningful challenge for advisers whose practices were built around a model designed for a different type of client. It's also a great opportunity for a reset of the adviser-client relationship itself.

Firms that don't adapt risk losing those relationships as client expectations continue to rise.

Client expectations have outpaced what most firms deliver

For most of the industry's history, the advisory model has been transactional: Win clients, manage portfolios and compete on performance and service. That model no longer matches what clients expect.

Today's clients don't experience their financial lives in silos. They don't separate their investment portfolio from their insurance coverage, estate plan or tax situation. They want someone who can see the whole picture and advise accordingly. They're looking for a better client experience.

The most successful firms are consistently delivering that experience, starting when a client first says yes and lasting throughout the duration of the relationship. They're offering proactive communication rather than reactive. They're providing tax-aware portfolio construction rather than performance-first allocation.

These firms deliver advice that is tailored to the individual, even across a large and growing client base.

Until recently, that kind of capability required infrastructure that only the largest firms could afford. While that's no longer true, it does require the right partners and a willingness to build something more intentional than most advisory practices have been in the past.

From transactions to relationships

The advisers who will thrive over the next decade aren't necessarily the ones with the most clients or highest assets under management (AUM). They're the ones who have built a systematically personalized client experience and the infrastructure to deliver it consistently.

The defining opportunity for independent advisers right now is the shift from transactions to teamwork — and it's one that plays directly to the strengths that independent firms already possess.

Independent advisers aren't steered toward proprietary products. The advice they give is genuinely theirs, and the relationships they build belong to them. As consolidation continues to reshape the industry, that clarity of purpose becomes a differentiator clients notice and value.

The question is how to build the experience that clients are looking for without losing what makes the independent model work. At AE Wealth Management, here's how we're helping advisers understand and make the shift:

• Whole-picture planning is the new standard. Clients expect their adviser to understand the full picture, not just their investment portfolio. Tools that integrate market-correlated and non-market-correlated investments, life insurance and annuities into a single planning view give advisers the ability to deliver comprehensive advice without doing all the heavy lifting themselves.
• Personalization is within reach. Direct indexing, tax-aware portfolio construction and preference-based customization used to require resources most independent firms couldn't access. The right platform partner can change that, putting sophisticated personalization tools in the hands of advisers who want to compete on depth of service rather than just breadth of offering.
• Systematization must be personal. The firms that are growing consistently have one thing in common: A repeatable, disciplined approach to the client experience. However, that doesn't mean it's generic. These firms are building processes that deliver a high-quality, personalized experience to every client, not just the top tier.
• Succession and continuity are part of the experience. Clients who trust an adviser want to know the relationship is protected over time. Advisers who think proactively about succession and preemptively design internal equity tracks and leadership development programs send a signal about the kind of firm they're building.

Consolidation is changing the competitive landscape

As I previously wrote in the article You Don't Have to Sell Out to Grow: A Case for Staying Independent as an RIA on Your Terms, private equity is reshaping the RIA competitive landscape at a speed that was hard to predict even a few years ago. Consolidation is creating real pressure on independent firms, but it's also clarifying something.

Clients are beginning to understand the difference between an adviser who is independent and one who operates inside a structure built for someone else's exit timeline. As that distinction becomes more visible, independent advisers who can clearly articulate their value and back it up with a consistently excellent client experience are gaining an edge that is difficult to replicate.

The advisers who will benefit most from the current opportunities are the ones who stop treating independence as a default and start treating it as a strategy.

Start with the client in front of you

These changes in wealth management can feel abstract until you zoom in on a single client relationship.

• What does that client expect from you today that they didn't five years ago?
• What does their next chapter look like?
• Does your practice have the tools and infrastructure to support it?

The advisers who are asking those questions and acting on the answers are the ones building something that lasts.

The client has changed. The model is shifting. The opportunity is real. The only question is what you will do with it.

This content is for informational use only and not intended as financial advice or advice designed to meet the needs of any particular situation.

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• To Win HNW Clients, Consider an Unbundled Advisory Model That Delivers Objective Oversight

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

"Do I have enough to retire?"

It's the question nearly every pre-retiree asks — and it's often answered with: "Do you have $1 million?"

Sometimes it is $1.3 million, and occasionally, it is even higher.

But if you have a pension, these benchmarks likely don't apply to you. In fact, retirees with pensions are in a stronger position than they realize and may not need anywhere near $1 million to retire comfortably.

Or, if they do, then they may need to find ways to spend more in retirement.

Here's why.

The $1 million rule leaves out a key piece

Most retirement guidelines are built for people without pensions. They assume your savings must generate income to replace your paycheck, which is where figures like $1 million or more can come from. These types of retirement plans are designed to produce enough annual income to support your retirement lifestyle.

A pension already does that, so when you apply the same savings target to someone with a pension, you're essentially double counting. (I wrote a book for those with pensions that you can request here.)

What is your pension really worth?

To understand how much you actually need to retire if you have a pension, you have to reframe your thinking — not in terms of account balances, but in terms of income.

Let's say you have a $70,000 annual pension. If you took $1 million and tried to replicate that same guaranteed income stream through an immediate income annuity, you may end up in a similar place: Roughly $70,000 per year for life.

A pension can be thought of as an equivalent to having a $1 million investment portfolio dedicated to producing income.

If your pension includes a cost-of-living adjustment (COLA), it may be even more valuable.

How does Social Security affect the math?

Now, let's layer in Social Security with a simple example:

• Pension: $70,000 per year
• Social Security: $36,000 per year

You're already over $100,000 in annual income before touching your investments. That's a level of income many retirees aim for with $1 million or more in savings alone.

So, the question becomes less about "Do I have enough saved?" And more about "How much do I actually need from my portfolio?"

Why retirees without pensions need more

This contrast highlights just how powerful a pension is. Without one, retirees must rely heavily on their investments, often withdrawing 4% or more annually.

That introduces real risks, especially early in retirement: Sequence of returns risk is the danger that poor market performance early in retirement, combined with ongoing withdrawals, will prematurely deplete a portfolio and jeopardize long-term financial security. I call it a double loss.

A pension helps protect you from those risks by covering a significant portion of your essential expenses with guaranteed income.

This is a main reason why studies consistently show retirees with pensions report higher confidence and even greater happiness in retirement.

So, do you actually need $1 million?

Not necessarily. If your pension and Social Security already cover most (or all) of your lifestyle needs, your investment portfolio becomes a supplement, not a necessity.

That could mean:

• You can retire with less saved than you thought
• You may be able to retire earlier
• You could have more flexibility in how you use your money

On the flip side, if you do have $1 million or more and a pension, you may be in an even stronger position than you realize.

What happens if you have both?

Let's revisit that earlier example:

• $70,000 pension
• $36,000 Social Security
• $1 million portfolio

You're already looking at more than $100,000 of guaranteed income. If your portfolio generates an additional $40,000 to $70,000 annually, you could be looking at $140,000 to $170,000 per year in retirement income.

For some people, this could be the same or more than their working income. That raises a different question entirely: "What are you going to do with all that money?"

The real shift: From accumulation to purpose

For many "Midwestern millionaires," who are hardworking, disciplined savers who didn't earn massive incomes but built their wealth steadily (I wrote a book on this that you can request here), retirement requires a mindset shift.

You've spent decades saving, and now you must decide how to use your hard-earned dollars. This mostly comes down to three choices:

• Spend it (travel, experiences, lifestyle)
• Gift it (help children or family now)
• Give it (charitable impact)

Most people haven't put a lot of thought into this, as they have been heavily focused on accumulation.

Also, remember to plan for taxes, as they are one of the biggest concerns for people in this crowd.

Don't ignore taxes and strategy

One important caveat: Having more income, especially from pensions, often means higher taxes in retirement than expected, and strategies like Roth conversions, tax diversification and income timing can help you:

• Maintain control over your tax bracket
• Reduce required minimum distributions (RMDs)
• Increase after-tax income over time

Without a plan, even strong financial positions can become inefficient.

The bottom line

If you have a pension, the traditional $1 million retirement target may not apply to you.

You may already have more than enough. The real opportunity isn't just retiring comfortably, but recognizing the strength of your position and using it intentionally.

Once your income is covered in retirement, it becomes less about hitting a number and starts being about what that number can allow you to do.

Related Content

• 5 Financial Planning Secrets of Millionaires
• If You're the Millionaire Next Door, You May Be a Terrible Spender
• Do You Have at Least $1 Million in Tax-Deferred Investments?
• The Secret to Reducing Lifetime Taxes for Retirees in the 2% Club, From a Financial Planner
• Many Retirees With a Pension and $1 Million-Plus Do These 7 Things (and Regret It Later)

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

The investing road to retirement can be invigorating.

You make regular contributions to an IRA or a 401(k), buy individual stocks or find other investments for your money, and you watch your portfolio's value grow.

There might be times when growth halts or you lose money. But you hold steady with your aggressive approach, a rebound happens and the dollar figure trends upward once again.

As you near retirement, however, you begin to wonder: Will I eventually run out of money?

That's a legitimate concern. Unfortunately, it's more likely to become reality if you continue the aggressive investing decisions that helped you accumulate that hefty dollar amount for your retirement. And that's all thanks to sequence of returns risk.

What is sequence of returns risk?

Put simply, sequence of returns risk is the fact that, in retirement, the overall return on your investment is less important than the order in which those returns happen.

If the market soars during your first years of retirement, you likely can withstand market losses later. But if your investment losses happen in the first five to 10 years of retirement and you are making withdrawals to live on at the same time, your portfolio balance can evaporate quickly.

When the market eventually rebounds, you could have little or nothing left in your portfolio that would allow you to capitalize on that recovery.

In other words, you are a victim of the order in which returns on investments happen.

Two retirees with the same portfolio balance, the same withdrawal rate and the same average return over a 20-year span could have very different results.

The retiree who has a strong market performance in the early years likely could weather a poor performance later. The retiree who had a poor performance early might never recover.

Where will money come from in retirement?

One way to mitigate sequence of returns risk is to ease up on your investing when you're about five years from retirement and begin planning how you can turn at least a portion of your savings into retirement income. That way, in a market downturn, you aren't forced to sell some of your investments at a loss.

The first thing to do is determine your income needs.

Someone who earned $6,000 a month during their final working days might want to continue to have that amount available in retirement. Others might decide they can get by on a little less than their final salary — say 80% or 90%.

Then you need to determine where the money will come from.

Social Security is a main source of retirement income, but it typically equals about 40% of someone's final salary. Unless you have a pension, you will need to make good use of your savings to make up the difference between that amount and your income goal.

That's where wise investing comes into play.

Previously, I mentioned that when nearing retirement, you should ease up on aggressive investments so that you don't see a volatile market swallow everything you worked so hard to save. But you can't ease up entirely. Going too conservative also has its drawbacks.

Take CDs, for example. Long ago, they could generate ample income. In the mid-1980s, you could have lived off the interest on CDs because rates rose into double figures. In those days, $500,000 deposited into a one-year CD might have generated 11% in interest, giving you $55,000 a year.

That opportunity is long gone. These days, CDs barely keep up with inflation — if that. Putting a portion of your money into CDs is fine, especially since your principal is protected, but don't count on them to produce a large amount of income for you.

The diversified income strategy

Another option is a fixed index annuity with lifetime payouts. With a fixed index annuity, you pay a premium to an insurance company, and in return, you receive a regular, guaranteed income.

Other potential income sources in retirement include dividend-paying stocks, U.S. Treasury securities, bonds and real estate investment trusts.

Ideally, you should have a diversified income strategy that balances guaranteed income sources with investment income. But don't create a strategy and think you're done. Revisit your plan about once a year to see how things are working and whether you need to make adjustments.

If you're unsure about the best investing strategy for your retirement needs, a financial professional can discuss your goals with you and help you review the options.

Ultimately, the goal is for your savings to continue to work for you, no matter how long your retirement lasts.

Ronnie Blair contributed to this article.

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

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

For decades, wealth management conversations largely centered on the question, "How much is enough?"

Today, many high-net-worth women are asking a different question: "What is this wealth ultimately for?"

That shift is helping redefine modern financial planning. Women are viewing wealth not simply as a measure of financial accumulation, but as a tool to support wellbeing, family, values and impact.

As head of Wealth Strategies & Solutions at RBC Wealth Management, I've come to call this evolving mindset "inner wealth," which describes the integration of financial success with personal fulfillment and emotional alignment.

Our recent Women and Wealth survey found that 81% of high-net-worth women prioritize values tied to "body, spirit and soul," while 80% emphasize ethics, trust and social responsibility. In other words, wealth today is increasingly being defined beyond the balance sheet.

I don't feel that this is a rejection of financial performance. Rather, it reflects a more holistic understanding of success that integrates financial security with quality of life, meaningful relationships, philanthropy and intentional living.

A new definition of wealth

Historically, wealth management often focused on returns, tax efficiency and asset growth. Those fundamentals still matter deeply. But today's clients, particularly women, want financial plans that also reflect who they are and what matters most to them.

In RBC Wealth Management's research, 58% of women identified "contribution, impact and legacy" among their most important personal values. Many also said they define financial freedom less by luxury and more by flexibility, peace of mind and the ability to spend time with loved ones.

One respondent described financial freedom as "having control over your money so it serves your life goals, not the other way around." That perspective is reshaping financial decisions across investing, estate planning and lifestyle spending.

As more women step into the role of the sole manager of their wealth, whether they are divorced, widowed or never partnered, we are seeing them shift the way they think about their wealth. They think more about the purpose and outcome of their wealth. They want to understand and have meaning in what they invest in. They want to know why they are holding the investments they own and go beyond the numbers.

Values-based planning is moving into the mainstream

Perhaps the clearest evidence of this shift is that clients are aligning money with values in tangible ways.

For some, that means incorporating philanthropy into long-term planning earlier in life. RBC's survey found that 52% of Millennial women say charitable giving is an important priority, which is nearly double the rate of Gen X women.

Many are embracing "giving while living," choosing to support causes and family members during their lifetime rather than waiting to transfer wealth later.

For others, it means pursuing investments that align with personal convictions around sustainability, governance or social impact. Investors are increasingly seeking portfolios that reflect both financial objectives and broader principles.

In daily life, intentional spending is becoming more common. Rather than spending simply for status, many wealthy women are directing resources toward experiences, wellness, family connection and personal growth.

RBC's research showed particularly strong spending interest in adventure travel, luxury travel and hobbies tied to enrichment and wellbeing.

But values-based planning does not necessarily mean sacrificing returns. That misconception has faded considerably in recent years as investors recognize that disciplined diversification, strong risk management and long-term strategic planning can coexist with purpose-driven goals.

How to align your financial plan with your priorities

For readers looking to incorporate more purpose into their own financial lives, the process often starts with reflection before action.

Ask yourself questions like:

• "What does financial freedom actually look like for me?"
• "What experiences or relationships matter most?"
• "How do I use my wealth for better outcomes for my family?"

From there, you can work with an adviser to build strategies that integrate both performance and purpose. That may include creating a philanthropic giving strategy, updating estate and legacy plans, or reviewing investment allocations through a values lens.

It could mean prioritizing wellness and lifestyle goals in retirement planning and structuring family conversations around financial values that are linked to wealth transfer along with financial education, among other important planning elements based on your life.

As women continue reshaping the financial landscape, the concept of "inner wealth" offers an important reminder: True wealth is not only measured by what we accumulate, but by how well our resources align with our values, relationships and sense of purpose. That may become the most valuable return of all.

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• Retirees: Want to Keep Your Money? Make a Tax Plan

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

My paralegal let me know I had a call waiting from a woman who teaches broadcast journalism. She wanted to discuss serious issues facing university students who find themselves caught in a trap because of the employment contract they signed when they were hired as a broadcast journalist.

I took the call, from "Rachel," who first wanted assurance that our conversation would be confidential. After I assured her it would be, she told me that she was calling about employees on the news teams of local TV stations owned by giant corporations "being forced to continue working when they want to quit.

"Viewers have no idea of this abuse, and depending on where you live and which local television stations you watch, often the nice young people — typically in their first job in TV news right after graduation — realize it isn't for them and don't want to be there, but they are, practically speaking, forced to continue working or suffer thousands of dollars in penalties.

"One of my former students is going through a serious depression as we speak, mugged financially by management at a television station she wants to leave. "Mr. Beaver, your column is popular in university mass communication departments, and you can do so many young people a great service by writing about this abuse."

So, how can this happen in today's America? Two things: Supply-and-demand and a corporate management philosophy among some broadcasters that views their employees as disposable.

It's not all glamor

If you live in almost any U.S. city with a population of less than 500,000 and watch local television, no doubt you've seen a revolving door of new "talent" delivering the news.

Every few months, new faces appear — some are absolute standouts — only to vanish, sometimes within months, for greener pastures. Often, viewers see people who just do not belong on the air. So, why have they been hired?

"There is a very good reason," Rachel explained. "There is an absolute glut of students majoring in broadcast journalism. When we ask our students why they chose this field, the most common answer comes down to their perception of television news as 'glamorous.'

"In reality, a broadcast newsroom is often one of the most toxic places in journalism, and sadly, it isn't until the graduates land jobs that the truth hits some of them.

"There is, in addition, a perception that these people we see on our local news are extremely well paid. So many students see young people like themselves on the news wearing what appears to be expensive clothing and do not realize this is fantasy."

TV reporters qualifying for food subsidies

How much would you figure is reasonable pay for a new graduate in a local television news department in cities with population of less than 500,000?

"First-job reporters in small markets are paid from $12 to $16 an hour, and many across the country (receive SNAP benefits). The low pay and exploitation in television news would shock viewers if they knew," Rachel said.

"This is a shrinking industry," she added, "with massive consolidation, layoffs and contractual traps. Sixty-five percent to 75% of broadcast graduates never enter TV news, and among the 25% to 35% who do, about 50% to 60% leave within two to three years.

"Only about 10% to 15% of broadcast journalism majors stay in TV news long term."

Reimbursement is required

Rachel sent me several employment contracts that her students have signed with a number of broadcasters. Most of them had this type of a clause:

If you quit before the expiration of your contract, we have the right to recover from you up to one half of your last six months compensation to reimburse us for publicizing you as a team member, training, clothing allowance and much more.

It isn't rocket science. From what I have seen, the repayment amounts are not tied to actual costs or a justifiable estimate of damages, and the intent appears to be to punish the employee for quitting, plain and simple.

Many of these provisions are unconscionable.

States have differing laws in the area

In California, it is illegal to require repayment of wages, and virtually none of this is legal, but that is not the case in several other states where employer rights dominate.

The effect of this language is clear: It restricts employee mobility and violates public policy in some jurisdictions.

As far back as 1911, in Bailey v. Alabama, the Supreme Court struck down a law that criminalized quitting after receiving an advance, holding that, "You cannot force someone to work or punish them for quitting in a way that effectively forces them to stay."

The court said this created a system of involuntary servitude, which, as we all know, was outlawed with slavery in 1865 when the 13th Amendment to the U.S. Constitution was ratified.

My recommendation

When offered a job and handed an employment contract, any broadcast journalism graduate — or anyone — needs to schedule a consultation with a labor and employment attorney who represents employees.

Don't just sign the contract!

Often, employers will include language in employment contracts that they know is not enforceable, hoping that, out of an applicant's desperation to get a job, they will sign anything.

For several years, I was an "action reporter" in local television and enjoyed the experience, but I know too many people who grew tired of being nomads, going from city to city every two to three years, station to station, discovering it wasn't what they'd ever expected. They opted for a more normal life with family, kids, a promise of tomorrow and a real home.

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.

Editor's note: This is part two of a two-part series about estate planning. Part one is These Are the 3 Pillars You Need Before You Build Your Estate Plan.

In the first article in this two-part series on estate planning, I shared the three foundational financial pillars you need to have in place before creating your estate plan. This article also comes in threes — the three-step process for executing an effective estate plan.

When most people think about estate planning, they picture it as signing a will or trust and checking the box as complete. The documents are drafted, notarized and filed away, and it feels like the job is done.

In reality, estate planning is not a single event. It's a three-step process: design, structure and funding. While the first two steps get the most attention, the third is often overlooked. That's the problem, because without funding, even the most carefully drafted trust might not accomplish what it's supposed to.

Understanding how these three steps work together can mean the difference between an estate plan that functions as intended and one that only exists on paper.

Step 1: Estate design: Deciding what to do with your assets

The first step in estate planning is design. This is the vision-setting stage at which you determine what you want to happen with your assets and how you want them managed.

These conversations should focus on questions such as:

• Who should receive your assets?
• When should they receive them?
• Should distributions happen all at once or over time?
• Do you want to provide protection for beneficiaries?
• Do you want control of how money is used after you're gone?

This stage is less about legal language and more about understanding goals. It also requires a broader look at your financial life. Your investments, retirement accounts, tax considerations and long-term care planning all influence what type of estate plan makes sense.

For example, if you're someone who wants to control how assets are distributed over time, you might need a trust.

On the other hand, if you're comfortable with direct transfers, you might want to rely more heavily on beneficiary designations. These decisions shouldn't be made in a vacuum. They depend on how assets are structured and the outcomes you're trying to achieve.

Step 2: Estate structure: Putting legal documents in place

Once the estate design is in place, the next step involves how to properly structure your estate. This is typically when an attorney is called in to create the legal documents that support your goals and wishes.

These documents could include a will, a revocable living trust, powers of attorney and healthcare directives. This step puts your wishes into a definitive written plan, translating your goals into legal instructions that can be executed later.

This is also when many people must decide between a will and a trust. Though frequently used together, there are distinct differences between the two.

A will directs how assets should be distributed after death, but it must go through probate, which is the legal process that oversees the division and distribution of assets among beneficiaries.

A trust is a separate legal entity that can own assets during or after your lifetime, often avoiding probate and allowing more control of how assets are managed.

Because trusts offer additional flexibility and control, many people choose to go that route when creating their estate plans. But this is also where a common misconception begins: Signing trust documents doesn't automatically place assets into the trust.

That leads to the most critical and often overlooked step.

Step 3: Estate funding: Putting the plan into action

Funding your estate is the process of transferring assets into your trust or aligning beneficiary designations so your estate functions as intended.

Without funding, a trust can exist legally but have no authority over any assets. If that's the case, the estate plan may default to probate or distribute assets in ways that don't reflect your wishes.

Unfortunately, this happens more often than people realize. Someone might go through the effort of creating a trust, only to leave their home, bank accounts and investments titled in their individual name. When that happens, the trust doesn't control those assets. It essentially becomes a document sitting on a shelf.

Don't let missteps ruin your estate plan. Work with a financial professional who can protect and preserve your assets and help you leave a legacy for the next generation.

Funding requires action. Depending on the type of asset, this could involve changing ownership or updating beneficiaries. Assets commonly found within a trust include real estate, after-tax brokerage accounts and bank accounts. For example, if you want your home governed by your trust, the deed must be updated so the trust becomes the owner instead of you.

Other assets, such as an individual retirement account (IRA), cannot be owned by a trust. These accounts must remain in an individual's name while they're living. However, they can name a trust as a beneficiary in certain situations, allowing assets to flow into the trust upon death.

A complete estate plan requires coordination

Estate planning is most effective when all three steps — design, structure and funding are completed one after the other. The design clarifies your goals. The structure puts legal documents in place and funding is what makes the entire plan work.

Without it, your wishes might not be carried out the way you intended.

If you've already created a will or trust, it might be a good idea to review it alongside a professional to determine whether your assets are properly aligned with your wishes. A trust that owns the right assets can help ensure your plan is executed without heartache and financial hardship.

At Blue Ridge Wealth Planners, we believe everyone deserves to have their wishes respected and legacy preserved. A thoughtful and well-coordinated estate plan will help you better protect your assets, not only for yourself, but for your loved ones and the causes closest to your heart.

Blue Ridge Wealth Planners is an independent financial services firm and uses a variety of different investment strategies. This is for informational purposes only and is not intended to serve as the basis for any financial decisions, nor should it be construed as legal or tax advice.

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

If you're like most people, you work hard not only to cover everyday necessities, but also to prepare for a day when you don't have to work anymore.

Sadly, comprehensive retirement planning is a challenge for many workers. More than 56 million Americans don't have access to an employer-sponsored retirement plan like a 401(k),according to a 2024 Pew Charitable Trusts survey.

The good news is that a lack of an employer plan doesn't mean you can't retire successfully—you just need to take a different approach.

Why doesn't your employer offer retirement plans?

Many employers assume that offering a 401(k) is prohibitively expensive. The reality is much more encouraging. Retirement plans designed for startups are often charged on a per-participant basis, making them scalable and affordable.

Smaller businesses also may not realize they have access to SEP IRAs and SIMPLE IRAs. These plans come with lower administrative costs and fewer management burdens. They also allow business owners to make contributions toward their own retirement.

Even if you don't have employees, you have options. A Solo 401(k) allows you to invest in your retirement, potentially saving more than you could with an IRA alone.

Which self-funded plans are available?

Regardless of why a plan isn't offered, the more important question is how individuals can take control of their own retirement savings. The first place my mind goes is to individual retirement accounts, or IRAs.

Unlike a 401(k), which is always tied to your employer and offers a limited menu of investment options, an IRA can be opened and managed on your own, while providing considerably more investment options.

The tradeoff is that contributions are capped, limiting how much you can save each year.

Another excellent choice for self-funding is a taxable brokerage account. These accounts allow you to invest in mutual funds, stocks, bonds and other securities without the contribution limits of an IRA. You'll pay taxes on dividends and capital gains, but the flexibility and uncapped contributions can make a brokerage account a valuable complement to tax-advantaged retirement savings.

Beyond choosing the right accounts, consistency matters just as much. While working with clients, I've found it helpful to set up automatic contributions to their IRAs and brokerage accounts. This replicates the "pay yourself first" approach of a 401(k)—you are less likely to miss what you don't see.

Are there any non-retirement plan options?

Beyond traditional retirement accounts, other financial vehicles can bolster your retirement readiness. Health savings accounts (HSAs) are worth considering if you have a high-deductible health plan. HSAs offer three tax advantages:

• Contributions are tax-deductible
• Growth is tax-free
• Withdrawals for qualified expenses are tax-free

While you're young, these benefits can help offset healthcare costs, allowing you to shift funds toward retirement savings. After age 65, you can withdraw HSA funds for any purpose—although you'll pay taxes on nonmedical withdrawals. I like to think of it as a stealth retirement account.

Annuities can be another source of retirement income. This financial tool is a long-term contract with an insurance company—you pay money now in exchange for guaranteed, tax-deferred income later.

Annuities provide steady cash flow for a set period or for life. However, they are complex financial instruments with varying fee structures and features, so they require careful evaluation to ensure they align with your specific needs.

How can working with an adviser help?

Even with all these options, deciding how to combine them can be challenging, which is where partnering with a financial adviser can help. An adviser can help you navigate the full range of options and provide guidance to pick the strategies that work best for your situation.

Consulting with an adviser is especially important 10 years before your desired retirement. This decade-long window allows you to make meaningful adjustments to your savings strategy and investment allocation based on where you stand versus where you need to be.

If you're 50 or older, you can also take advantage of catch-up contributions that allow higher annual limits for both IRAs and 401(k)s.

What should you do first?

The absence of an employer-sponsored retirement plan is a challenge, not a dead end. Multiple paths can lead to a secure retirement.

For example, you could start by building an emergency fund to cover six months of expenses, then fund an IRA up to the annual limit and finally direct additional savings to a taxable brokerage account or HSA.

Whatever direction you take, the important thing is to explore your options as soon as possible to allow your money more time to grow. With the right mix of planning, discipline and guidance, preparing for retirement without a 401(k) isn't just possible, it can be powerful.

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• I'm 54 with a $320,000 IRA and will soon be self-employed, earning $120,000 per year. How much should I save for retirement?

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

If there's one question that keeps pre-retirees up at night, it's this: Will my money last?

For decades, the financial industry has leaned heavily on rules of thumb, such as the 4% rule, to answer that question. But real life rarely follows a straight line.

Markets fluctuate, inflation rises and falls, and unexpected expenses — especially healthcare — have a way of showing up at the worst possible times.

A more reliable approach to retirement income planning doesn't depend on guesswork. Instead, it starts with structure.

I like to think of retirement income in three distinct layers: Need, want and grow. When built correctly, this framework creates stability, flexibility and long-term resilience, regardless of market conditions.

It may not be flashy. In fact, it's intentionally a bit boring. But that's the point: A boring portfolio supports an exciting retirement.

Here's how it works.

Step 1: Guarantee your 'need'

The foundation of any successful retirement plan is ensuring that your basic living expenses are covered — no matter what happens in the markets.

Your "need" income is the amount required to maintain your core lifestyle. Think housing, utilities, groceries, insurance and other essential expenses. These are non-negotiable. They must be paid whether the market is booming or in a downturn.

The key here is certainty.

To guarantee this level of income, retirees should rely on sources that are dependable and, ideally, last for life. These typically include:

• Social Security
• Pension income (if available)
• Interest from high-quality, long-duration government bonds (such as 30-year Treasuries)
• Annuities with lifetime income riders

Each of these sources shares a common characteristic: They provide income that isn't directly tied to stock market performance.

A practical strategy is to carve out a portion of your retirement savings specifically to fund this layer. Once your need is covered by guaranteed or highly predictable income streams, you've eliminated the biggest risk in retirement: The inability to meet your basic expenses.

This step alone can dramatically reduce financial stress. When retirees know their essentials are covered, they can approach the rest of their portfolio with greater confidence and clarity.

Step 2: Protect your 'want'

Once your foundational needs are secured, the next layer focuses on enhancing your lifestyle.

Your "want" income is what allows you to enjoy retirement — not just survive it. This includes:

• Travel and vacations
• Dining out
• Hobbies and entertainment
• Gifting to family
• Experiences that make retirement meaningful

While these expenses are more flexible than your needs, they're still important. After all, retirement should be about enjoying the life you've worked hard to build.

The goal in this step is protection with moderate flexibility.

Unlike step one, this layer doesn't need to be fully guaranteed — but it should still be relatively stable and low risk. Appropriate tools often include:

• Government bond portfolios
• Fixed index annuities
• Other conservative income-oriented investments

These options typically offer a balance between safety and modest growth potential, helping preserve principal while generating income.

Again, the strategy is to allocate a portion of your retirement savings to fund this layer after step one is complete.

By doing so, you create a buffer between your lifestyle spending and the volatility of the stock market. Even during market downturns, your ability to enjoy retirement isn't immediately compromised.

Step 3: 'Grow' the rest

With your needs guaranteed and your wants protected, the remaining portion of your portfolio can be positioned for growth.

This is where you invest for:

• Inflation protection
• Future healthcare expenses
• Legacy goals
• Emergencies and unexpected costs

This portion of your portfolio is typically invested in a diversified mix of market-based assets, such as:

• Stocks
• Exchange-traded funds
• Mutual funds
• Other growth-oriented investments

The exact allocation should align with your personal risk tolerance, time horizon and financial goals.

Because your essential and lifestyle income needs are already addressed in steps one and two, this growth portion can be invested more strategically — without the pressure of needing to generate immediate income during unfavorable market conditions.

This is a critical advantage.

In traditional retirement strategies, retirees often draw income directly from market-based portfolios. When markets decline early in retirement — a phenomenon known as sequence of returns risk — this can significantly damage long-term outcomes.

By separating income needs from growth assets, you give your portfolio time to recover and compound over the long term.

How the pieces fit together

In practice, most retirees will allocate:

• 50% to 60% of their portfolio to steps one and two combined
• Up to 70% at most in more conservative income and protection strategies
• The remaining portion to growth investments

This balance creates a structured yet flexible approach to retirement income.

It's also fundamentally different from relying solely on the 4% rule.

The 4% rule assumes a consistent withdrawal rate from a market-based portfolio, regardless of market conditions. While that rule can work in favorable environments, it offers limited protection during prolonged downturns or periods of high inflation.

In contrast, the need-want-grow framework is designed to work in both good markets and bad markets.

In strong markets, your growth portfolio can flourish, supporting future needs and legacy goals.

In weak markets, your essential income remains intact, and your lifestyle is largely protected.

This reduces the emotional and financial strain that often leads retirees to make poor decisions — such as selling investments at the wrong time.

Why 'boring' works

It's easy to be drawn to complex strategies or high-return opportunities, especially after decades of saving and investing.

But retirement is about maximizing reliability and peace of mind, not maximizing returns.

A structured, layered approach may feel conservative, even boring, but that's exactly what makes it effective.

When your income plan is predictable:

• You worry less about market volatility
• You avoid emotional decision-making
• You gain the freedom to actually enjoy retirement

And that's ultimately the goal.

While an exciting portfolio might look good on paper, it's a boring, dependable one that supports an exciting life.

Final thoughts

Creating a rock-solid income in retirement doesn't require complicated formulas or blind faith in market performance; it requires clarity.

By breaking your retirement income into three distinct steps — guaranteeing your needs, protecting your wants and growing the rest — you can build a plan that is resilient, adaptable and aligned with how real life actually unfolds.

And perhaps most importantly, you can replace uncertainty with confidence. Because in retirement, the best plan isn't the one that promises the highest return; it's the one that lets you sleep at night — and wake up excited for the day ahead.

Centennial Advisors, LLC is an Investment Adviser registered with the U.S. Securities and Exchange Commission ("SEC"). Registration as an investment adviser does not imply a certain level of skill or training.

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.

Most financial plans are created with good intentions. When they're made correctly, they account for the client's goals, spending habits and savings patterns. But financial problems rarely come from a bad financial plan. They're usually the result of a plan not being implemented consistently.

Making financial changes isn't easy. Behavioral changes take time, and daily life can be distracting. Clients usually understand the recommendations being made, especially when they have a good relationship with their adviser.

But actually following the guidance requires the client to look inward and confront financial habits that may no longer work — and that can be uncomfortable.

The tasks that commonly get delayed aren't the hardest, but rather the ones that feel the least urgent. Updating beneficiaries, funding trusts or investing for retirement can easily be pushed to the side thanks to a false sense of security.

People think the future is guaranteed and waiting to act doesn't have consequences — until the unexpected happens.

Tomorrow isn't guaranteed

Earlier this year, I worked with a couple to create both a retirement and estate plan. The legal documents were drafted and a strategy was in place. The husband and wife just needed to continue funding the trust. They understood this, but it never felt urgent, particularly for the husband. He was 68 and simply thought he had more time. But he didn't.

One morning he was brushing his teeth when he suffered an aneurysm that killed him. As the trust wasn't fully funded, the estate went through probate. The wife was left with unexpected legal costs, delays and stress while mourning the sudden death of her husband.

This is a situation no one wants to go through, but believing the future is guaranteed can increase its chances of happening. Helping clients stay engaged after their financial plan is created is the most effective way to maintain momentum.

Start small

People often struggle to follow through because seeing everything that may be required to achieve their goals all at once can be overwhelming. Every recommendation, task or new strategy becomes intimidating, which feels uncomfortable. When these feelings go unaddressed, action is delayed entirely.

Rather than focusing on everything at once, pick one objective to tackle, and start with small, manageable steps. Crossing smaller action items off the list will create a sense of progress, making long-term goals feel more achievable.

Financial planning is most effective when it's viewed as an ongoing process instead of a one-time event. And progress rarely comes from one major decision. Most often, achieving long-term goals requires you to consistently follow through on the smaller ones.

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

The standard 401(k) playbook leaves high-income professionals and business owners with a planning gap that's larger than most realize. Cash balance plans, when used correctly, can help close it.

For most American workers, a 401(k) and an IRA cover the retirement bases. For successful professionals and business owners earning far above the median household income, those same vehicles may provide less retirement savings capacity and current-year tax efficiency than other qualified plan structures.

The shortfall isn't a flaw in the traditional plans but rather a planning gap — a missed opportunity to select a plan that better fits their unique circumstances.

One potential tool for addressing that gap is the cash balance plan, which remains surprisingly underused, even among households that would benefit most.

How cash balance plans work

A cash balance plan is an IRS-qualified defined benefit pension plan, but it's designed to feel and function more like a defined contribution account. Each participant has a hypothetical "account" that grows in two ways each year:

• A pay credit (a percentage of compensation or a flat dollar amount set in the plan document)
• An interest credit (a guaranteed rate, often tied to the 30-year Treasury)

The employer makes annual, actuarially determined contributions to fund those credits, and those contributions are tax-deductible for the business.

The reason the structure is attractive is the contribution ceiling. A standard 401(k) plus profit-sharing combination caps total annual employer-plus-employee contributions in the low-to-mid five figures. A cash balance plan stacked on top of that 401(k) may allow age-weighted contributions ranging from roughly $100,000 to north of $400,000 each year for older owners and key employees depending on age, compensation, plan design and actuarial assumptions.

The older the participant, the more compressed the funding window, so the IRS permits larger annual contributions to reach a defined retirement benefit. As a result of the higher limits, the tax deferral impact may exceed that of traditional plans for certain high-income households.

Is there an income threshold where these strategies start to make sense?

There's no statutory minimum, but a practical one. We generally start exploring cash balance plans when a household has consistent, predictable taxable income above roughly $400,000, has already maxed a 401(k) and profit-sharing plan, and has cash flow that can support a meaningful pension contribution for at least three to five years.

Below that level, the design and administrative costs eat into the benefit, defeating the purpose. Above that starting level, particularly above $750,000, the potential tax savings may become substantial, and the plan's tax savings may outweigh the plan's design and administrative costs for some high-income business owners.

Why these strategies tend to be underused

If cash balance plans are this effective, why don't more eligible business owners use them? In our experience, the answer is rarely about the math but rather about who's at the table.

Many advisers and firms are organized around investment management, not plan design. A cash balance plan requires coordination among an adviser, a third-party administrator, an actuary, the business's CPA and often an ERISA attorney.

That coordination is real work and falls outside the day-to-day workflow of advisers who don't specialize in business-owner planning. The path of least resistance is to recommend a SEP-IRA or a slightly larger 401(k) match and call the conversation finished.

There's also a generational gap. Defined-benefit plans developed a reputation in the 1980s and 1990s for being inflexible, expensive to maintain and risky for the sponsor.

Modern cash-balance plans have addressed many of those issues because interest credits can be structured to match plan assets and because plans can be amended or terminated when circumstances change, but the legacy perception lingers.

Overlooked advantages and common misconceptions

The first misconception we hear is that a cash balance plan "locks up" money permanently. It doesn't. Once a participant terminates participation in the plan, balances may generally be eligible to be rolled over to an IRA, just like a 401(k), subject to plan terms and applicable distribution rules.

The plan itself can also be amended, frozen or terminated if the business's situation changes, provided the IRS rules on plan permanence are followed.

The second is that these plans are "only for huge companies." In fact, the sweet spot is the opposite. A solo physician, a four-partner law firm, a small dental practice or a consulting firm with a handful of professionals can often capture more relative benefit than a large enterprise because contributions can often be weighted toward owners while still satisfying applicable nondiscrimination requirements.

The third misconception is that cash balance plans are speculative. They are not standalone investment products. They are funded pension obligations, although plan assets are invested and subject to investment risk.

The investment portfolio is typically managed to a conservative target return that matches the interest credit, which may help reduce funding volatility for the sponsor.

Professionals consistently underestimate the benefit on the tax side. A $200,000 cash-balance contribution for an owner in a combined 45% federal and state bracket isn't a $200,000 retirement deposit.

It's potentially about $90,000 in current-year tax savings plus a $200,000 retirement deposit, depending on the taxpayer's specific circumstances.

Over a five- to 10-year funding window, the cumulative effect can materially affect retirement accumulation and long-term financial planning outcomes.

Who benefits most

The strongest candidates share three characteristics:

• High, stable income
• A closely held business or professional practice
• Owners who are typically older than the rank-and-file employees

We see this structure deployed most often in medicine and dentistry, law, engineering and architecture, accounting and consulting, independent investment management and family-held operating businesses with strong free cash flow.

Solo practitioners and 1099 professionals can also use this structure. For instance, a one-participant cash balance plan is administratively simpler and often has a dramatic impact.

At the other end, partnerships and professional corporations with multiple owners can design tiered benefit formulas that direct the bulk of contributions to the partners while still meeting coverage and nondiscrimination requirements.

How to know if it makes sense for your situation

A good first conversation answers four questions:

• What is your taxable income today, and how stable is it over a three- to five-year horizon?
• Are you already fully funding a 401(k) and a profit-sharing plan?
• What does your workforce look like? Specifically, how many non-owner employees are there? What are their ages and their compensation levels?
• What is your investment return assumption, and is it compatible with the conservative funding portfolio a cash balance plan typically requires?

Those answers, paired with a feasibility study from a qualified actuary, can often determine relatively quickly whether a cash balance plan can move the needle for your household and business. They will also tell you if it doesn't make sense, which is just as valuable, since not every high earner is a fit.

The bottom line

Cash balance plans aren't a loophole, a gimmick or a one-size-fits-all answer. They are an established, IRS-qualified planning tool that may be underused or less frequently discussed in the standard retirement planning conversation.

For the right business owner facing persistent high tax bills, they may help accelerate retirement funding and reduce current-year tax liability. They may also bring clarity to the rest of their financial plan, including estate, business succession and charitable giving.

If your income has increased beyond your retirement plan, consider consulting an adviser who specializes in implementing wealth management strategies to help mitigate the tax exposure that comes with that growth.

Cash balance plans are long-term retirement vehicles that involve investment risk, ongoing administrative and actuarial costs, and required annual funding obligations. Actual tax benefits and retirement outcomes depend on factors including investment performance, business cash flow, employee demographics, actuarial assumptions, and future tax law changes. These plans are not appropriate for every business owner or high-income professional.

Investment Advisory Services are offered through Mariner Platform Solutions (MPS), an SEC-registered investment adviser. Imperio Wealth Advisors and MPS are not affiliated entities.

Related Content

• Cash Balance Pension Plans: the Smart Way to Turbocharge Your Retirement
• Could a Cash Balance Plan Be Your Key to a Wealthy Retirement?
• Got a Cash Balance Pension? Understand Your Options
• Why Your Business Shouldn’t Be Your Only Retirement Plan
• Pension vs 401(k) Plans: Which is Better?

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, older Americans could count on their monthly Social Security check arriving in the mail. But in 2025, the Social Security Administration (SSA) was ordered to move to electronic payments.

The SSA plans to complete the full transition to electronic payments for all beneficiaries this year. Payments will be delivered electronically, either through direct deposit to a bank or credit union account, or through a Treasury-approved prepaid debit card. Checks will be sent in the mail only as a last resort, and for that you'll need a government waiver.

The SSA says the goal is to improve speed, security and reliability, and the change is part of a broader, government-wide move to electronic payments.

But for those who still rely on mailed checks, the shift away from paper raises practical questions. Vulnerable older adults will now have to consider banking access, fraud prevention, family involvement, digital literacy and their comfort level with an electronic payment system.

Why this matters now

For many retirees, Social Security is their only source of income. It is the income that pays the rent, mortgage, utilities, groceries and prescriptions. Even a short delay or disruption can create real hardship.

That is why this issue deserves more attention than it has received. The end of paper checks is not simply a "technology upgrade." It is a consumer protection issue.

The people most likely to be affected include:

• Older beneficiaries who do not use online accounts
• Individuals in rural areas
• People without traditional bank accounts
• Those with cognitive decline
• Widows or widowers who relied on a spouse to manage finances
• Beneficiaries who are wary of scams or uncomfortable sharing banking information

In other words, the beneficiaries who still receive paper checks may be among those least prepared to navigate a fast-moving digital payment system without help.

What replaces the paper check?

Beneficiaries have two electronic payment options.

The first is direct deposit into a checking or savings account. Beneficiaries can sign up:

• Through their personal "my Social Security" account at ssa.gov
• On the Treasury's Go Direct website
• By calling the Treasury's Electronic Payment Solution Center (1-800-333-1795) or the SSA's national phone number (1-800-772-1213)
• At their financial institution

The second option is to use the Direct Express® Debit Mastercard®, a Treasury-sponsored prepaid debit card for people who do not have a bank account. With Direct Express, the federal benefit payment is deposited onto the card account on the payment date.

The card can be used to make purchases, pay bills or get cash, and it doesn't require a bank account.

That second option is especially important because requiring every older beneficiary to "just use direct deposit" is not always possible.

Some people are unbanked because they've had negative banking experiences or live where transportation to a bank branch is limited.

Others may be unable to maintain a bank account because of fees, overdrafts or confusion managing the account.

The identity-proofing issue

While paper checks are being phased out, the SSA has tightened identity-proofing requirements around certain benefit and payment changes:

Individuals who cannot use their personal "my Social Security" account may need to visit a local Social Security office to prove their identity for certain actions, including changing direct deposit information.

People receiving payment by paper check must visit an SSA office before changing their mailing address.

SSA is using additional fraud-prevention measures to verify bank account information connected to direct deposit changes.

Direct deposit fraud can be devastating. If a scammer diverts a retiree's Social Security payment into another account, the beneficiary may not discover the problem until the money does not arrive. By then, rent may be due and automatic payments may fail. Recovering the funds can take time.

But stronger identity rules also create friction for legitimate beneficiaries.

• A frail 89-year-old widow who no longer drives may find it difficult to visit a field office
• A beneficiary without internet access may not be able to complete online identity proofing
• A family caregiver may know exactly what needs to be done but may not have legal authority to act

That is the heart of the paper check problem: The government is trying to reduce fraud and modernize payments, but some of the people most in need of protection may also face the greatest barriers to compliance.

Watching for scams during the transition

Major government changes create openings for scammers.

Families should be alert for calls, texts, emails or letters claiming that a beneficiary's Social Security payments will stop unless they immediately provide a Social Security number, bank account number, debit card number, PIN or password.

Direct Express warns that it will never contact cardholders by phone, email or text to ask for a card number, password, PIN or security code.

The safest approach is simple: Do not respond to unsolicited messages. Instead, contact SSA, the Treasury's Go Direct program, your financial institution or Direct Express directly, using known, official contact information.

Older adults should also be warned about "helpers" who offer to set up direct deposit but ask to use their own bank account. Social Security benefits should be deposited into an account that properly belongs to the beneficiary or to an authorized representative payee.

What families can do to help

The most important first step is to identify whether an older parent, relative or client still receives a paper check. Many family members assume payments are already electronic because most beneficiaries converted years ago. That assumption may be wrong.

Next, confirm where the payment should go. If the beneficiary has a safe, low-cost checking or savings account, direct deposit may be the simplest option. If not, review the Direct Express card as an alternative.

Families should also help beneficiaries create or secure their personal "my Social Security" account, where appropriate.

This should be done carefully. The beneficiary should not share passwords casually, and family members should avoid taking over an account unless they have proper legal authority or the beneficiary is capable and has clearly asked for help.

For individuals with cognitive impairment, serious illness or declining ability to manage money, families may need to explore SSA's representative payee process.

A power of attorney may be useful for many financial matters, but SSA generally does not recognize a power of attorney for managing Social Security benefits in the same way a bank might.

When a beneficiary cannot manage benefits, SSA's representative payee rules become important.

Finally, the beneficiary should build a payment calendar showing their expected Social Security deposit date, what bills are tied to that payment, and whom to call if money does not arrive.

Electronic payments reduce mail delays and stolen checks, but they do not eliminate every possible problem.

The bigger lesson

The end of mailed Social Security checks is not just about how money moves. It is about whether older Americans can safely access the benefits they earned.

For many beneficiaries, electronic payment is faster, safer and more convenient. But for the small group still dependent on paper checks, this transition requires planning, communication and trusted support.

Families, advisers and caregivers should not wait until a payment is missed. The time to review payment arrangements, banking access, identity-proofing options and scam protections is before there is a crisis.

Social Security has always been more than a monthly benefit. For millions of retirees, it is the foundation of their financial security. Making sure that benefit arrives safely, reliably and in the right hands is now an essential part of retirement planning.

Related Content

• How to Spot a Social Security Scam (and What to Do About It)
• 11 Places Where You Should Never Give Your Social Security Number
• 15 Social Security Tasks You Can Do Online
• Social Security Family Maximum Benefits: Are You Eligible and How Much Can You Receive?
• Filed for Social Security Too Soon? 2 Ways to Get a Do-Over

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 the early 1980s, the 30-year Treasury yield topped 15%. Bond traders who had the foresight to lock in those coupons made the trade of a lifetime.

While everyone else chased the dot-com boom a decade later, those traders didn't need the market to cooperate. Their bonds just kept paying.

So, when the stock market went essentially nowhere from 2000 to 2013 (a flat market), many retirees who were in the market, focused on growth, struggled to maintain their lifestyle, while those who bought those bonds were able to sail through.

They didn't win because they predicted the future, but because they recognized a good rate when they saw one and acted on it.

That same logic applies to annuities today. But it didn't always.

Why I couldn't stand them (around 2015)

When I entered the financial planning industry over a decade ago, the 10-year Treasury was hovering around 2%. That's one of the benchmarks that heavily influences what insurance companies can offer in lifetime income payouts. And at 2%, the payouts were, frankly, uninspiring.

For example, I remember seeing payout rates around 4% to 5%. With inflation risk and the time needed to feel like you'd get your money back at a reasonable rate, it didn't make sense to me.

It was difficult to rationalize putting a client's money into a product that generated negligible income when other strategies could do more with less restriction (see my article 10 Ways to Generate Income in Retirement).

The math, in my opinion, didn't work. So I avoided suggesting lifetime income for years.

What changed

Today, the 10-year Treasury sits around 4.5%, which is more than double where it was a decade ago. That shift isn't cosmetic ... It's structural. The underlying rates that support lifetime income payouts have fundamentally changed what annuities can offer.

Higher rates mean higher payout factors. A product that once generated a modest income stream from a given deposit now generates a meaningfully better one. For pre-retirees concerned about outliving their money, that changes the entire conversation.

Today, I'm seeing payouts around 7% (some more, and some less). Rates are obviously subject to change, but that seems like a good deal.

This isn't about being bullish on annuities. It's about recognizing that the tool has become more effective in today's rate environment, much like those bond traders recognized a historically favorable rate and acted accordingly.

A product that finally grew up

Beyond rates, the annuity itself has evolved. The early versions of lifetime income products were clunky. High fees, restrictive surrender schedules, limited flexibility and opaque terms made them difficult to recommend.

That's no longer the case. Modern innovations like guaranteed lifetime withdrawal benefit (GLWB) riders, lower internal costs, index-linked crediting strategies and more have made today's annuities a fundamentally different product category than what existed even 10 years ago.

The industry matured, and the products improved with it.

Not all annuities are the same

One of the biggest misconceptions is that all annuities work the same way. They don't.

Here's a quick breakdown of some that are available today:

Variable annuities seem to be the poster child of what people believe an annuity is. They have higher fees, limited options and so on. Yes, they have "more upside potential," but they also have downside risk.

The fees can put a drag on the performance every year. This is where many of the horror stories are found, in my experience.

Fixed annuities offer a guaranteed interest rate for a set period, kind of like a CD. When it matures, you get your money back plus interest. This is probably the simplest annuity.

Fixed-indexed annuities offer upside potential with downside protection. Some are designed more for cash growth as a bond fund alternative, while others offer better lifetime payouts. It just depends on what you want.

Immediate annuities (SPIAs) convert a lump sum into income payments that start right away, often used for pensionlike income.

Each serves a different purpose. And none of them is universally right or wrong.

It's just a tool

Let me ask you a question: How do you feel about hammers? Probably indifferent. You like them when you need one, and you only hate them when you use one wrong, like when you miss the nail and hit your thumb.

Annuities are no different. The people who hate them usually had a bad experience with the wrong type, at the wrong time, for the wrong reason.

The people who love them sometimes overlook the tradeoffs. Both sides would benefit from a more neutral starting point.

That's exactly why I wrote The DIY Annuity Guide. I wanted to help people move past the love-it-or-hate-it reflex and figure out whether the tool actually fits their situation.

The rate environment has changed. The products have changed. Give yourself permission to check your assumptions and explore whether an annuity belongs in your plan or not.

Either answer is a good one, as long as it's informed.

Related Content

• What are Annuities? The Different Types and How They Work
• Is an Annuity Your Missing Retirement Piece?
• Five Annuity Mistakes to Avoid
• The Bear Market Protocol: 3 Strategies to Consider in a Down Market
• Retirees' Anti-Bucket List: 10 Experiences You Don't Want

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 anxiety does not always end at retirement. For many people, it gets louder. Without a paycheck coming in, every withdrawal can feel permanent.

What separates calmer retirees from constantly worried ones is often less about how much they have and more about how they manage decisions, expectations and trade-offs.

Feelings of security are strongly linked to planning behaviors and habits, not just portfolio size.

Below are seven money habits that can help retirees feel more in control of spending.

1. They separate money into time buckets

Instead of treating their portfolio as one big pile of money, confident retirees often organize assets by when the money will be used.

Near term (one to three years). Cash and cash alternatives such as high-yield savings, money market funds and short-term CDs

Middle term (roughly years four to 10). More conservative investments such as high-quality short- or intermediate-term bonds and balanced strategies

Long term (10-plus years). Growth-oriented investments such as diversified stock exposure meant to ride through market cycles

The practical advantage is simple. If markets fall, the "spending money" for the next few years is not forced to participate in that decline.

The behavioral advantage is often bigger: It can reduce the urge to sell long-term investments at the wrong time.

One way to pressure-test this habit is to ask a basic question: "If the market dropped 20% this year, how much of my next 24 months of spending is already set aside?"

When that answer is clear, the rest of the portfolio can be managed with a longer view.

2. They follow a consistent withdrawal strategy

Stressed retirees often make withdrawals reactively: "We will take what we need and hope it works out." Confident retirees tend to choose a repeatable framework.

A common starting point is the 4% rule, which suggests withdrawing about 4% of a portfolio in the first year of retirement and then adjusting the dollar amount for inflation each year. For example, a $1 million portfolio would generate about $40,000 in year one.

The exact method matters less than the presence of a method. A withdrawal policy (whether a fixed percentage, a guardrails strategy or an approach informed by required minimum distributions) reduces second-guessing because the decision rules are clear before emotions get involved.

It also creates better conversations. When spending decisions are tied to an agreed-upon policy, choices feel less like guesses and more like trade-offs you intentionally accept.

3. They spend deliberately on what matters

Confident retirees usually do not "cut everything." They identify what makes retirement feel meaningful, then spend intentionally in those areas.

Common examples include:

• Travel that supports relationships
• Hobbies that are deeply valued
• Health and wellness spending that preserves independence

At the same time, they regularly remove spending that no longer fits their life. Subscription creep, unused memberships and maintaining a home that is too large can quietly erode confidence.

A practical habit is a simple annual "spending values" review: Keep the top three categories that genuinely improve life and challenge at least one recurring expense that has become automatic.

4. They plan for healthcare costs realistically

Healthcare uncertainty is one of the most common retirement stressors. Fidelity estimates that a 65-year-old retiring in 2025 may need roughly $172,500 for healthcare costs in retirement, not including long-term care.

Confident retirees tend to:

• Understand the basics of Medicare (Parts A, B and D)
• Compare supplemental coverage options (Medigap vs Medicare Advantage)
• Budget for premiums and out-of-pocket costs

They also address long-term care risk proactively. The "plan" might be insurance, a hybrid policy or earmarking assets, but it is rarely "we will deal with it later."

Removing uncertainty is often the biggest driver of reduced anxiety.

Even if the numbers are imperfect, a written estimate plus a funding approach is usually more calming than avoiding the topic.

5. They maintain financial flexibility

Rigid plans break when life changes. Confident retirees usually build flexibility into both income and spending.

That flexibility can look like:

• Maintaining the ability to earn some income (consulting, part-time work, seasonal work)
• Separating spending into "needs" and "wants," so discretionary categories can be adjusted in a down market
• Keeping a liquidity backstop, such as an unused home equity line of credit, to avoid selling investments during a market decline

Even if these options are never used, simply having options can reduce stress.

Flexibility can also include timing. When markets are down, delaying a large discretionary purchase, adjusting travel plans or shifting gifting schedules can protect the plan without feeling like deprivation.

6. They separate identity from net worth

A surprisingly powerful habit is psychological. Retirees who struggle often treat account balances like a scoreboard. When markets drop, it feels personal.

Confident retirees usually define what "enough" looks like in practical terms: An income plan that supports their lifestyle with an acceptable margin of safety. Once that goal is clear, day-to-day market noise carries less emotional weight.

This does not mean ignoring risk. It means remembering that money is a tool to fund life, not a measure of worth.

A helpful reframe is to focus on income durability rather than portfolio highs. The question becomes: "Is our plan still on track to fund the life we want?" Not: "Did we beat the market this quarter?"

7. They review and adjust regularly, but they do not obsess

Confident retirees tend to be consistent, not compulsive.

A reasonable rhythm might include:

• Periodic check-ins (quarterly or semi-annually)
• Rebalancing when allocations drift meaningfully from targets
• Updating the plan after major life changes (health events, relocation, widowhood, major gifts)

In contrast, constant monitoring can create anxiety and can tempt people into emotional decisions. A set review schedule and a simple dashboard of the metrics that matter (withdrawal rate, spending vs plan, asset allocation, cash reserves) is often more helpful than watching daily market moves.

If checking accounts daily is a habit, consider putting guardrails around it. For many retirees, the goal is not less awareness. It is less reactivity.

Building these habits

If retirement spending feels stressful, confidence often comes from structure:

• Organize savings into time buckets
• Choose a repeatable withdrawal policy
• Align spending with what matters and cut what does not
• Plan realistically for healthcare
• Build flexibility so you are not locked into one path

Working with a financial adviser can help connect the technical plan (cash flow, taxes, investment risk) with the behavior that makes the plan sustainable.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Related Content

• 5 Retirement Lifestyle Upgrades That Cost Less Than You Think
• 7 Assets to Leave Out of Your Roth IRA, From a Financial Planner
• These 7 Investment Behaviors Hurt Retirees the Most, But It's Not Too Late to Change Your Ways
• The Smart Way to Retire: 13 Habits to Steal From the Wealthy
• 7 Signs You’re Secretly Getting Rich (and Don’t Even Know 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.

What is the best way to save money for children?

I get this question quite a bit from new and existing clients alike. It usually gets brought up by parents, but sometimes it comes from aunts, uncles, grandparents and other guardians.

The answer, as it is to so many financial questions, is: It depends on the financial goals and wishes of the saver.

While it can be hard to determine what a newborn will be interested in at age 18, opening pathways with a nest egg is a good start. Some of the most common account types to save for children:

• 529 plans
• Roth IRAs
• Uniform Gifts to Minors Act (UGMA) accounts
• Coverdell Education Savings Accounts (ESAs)

Each have a different set of benefits, depending on your priorities.

529 plans

529s are tax-advantaged savings vehicles for guardians to save for higher education. Depending on where you live, your state might offer a specific tax benefit for savings efforts.

Some states offer a tax benefit for both in-state 529 plans and plans from other states so you'll need to confirm what regulations apply to you.

Similarly, some states also recapture the benefit if the money is used for noneducation purposes. As you're considering what choice to make, one important piece of the puzzle is confirming your state tax benefits with 529 plans.

With rising higher education costs, 529 plans are becoming more impactful. The passage of the Secure Act 2.0 expanded options for those funds by allowing the rollover of funds to a Roth IRA and a change in beneficiary.

Roth IRA rollover

After an account has been open for 15 years, money within a 529 can be repurposed as Roth contributions, as long as the funds are at least five years old.

For example, if you have $10,000 in a 529 and contributed another $5,000 during year 15, that deposit must remain in the 529 account for five years before it can be moved to a Roth IRA. The initial $10,000 can be transferred during year 15.

While a minor can't sign Roth IRA account paperwork, adults can open a custodial or guardian Roth on their behalf.

I also often hear clients say, "I want to open a Roth IRA for my child." If the minor has a W-2 for wages earned, you can.

I once worked with a grandmother who opened one for a granddaughter who had a minimum wage summer job as a pool lifeguard. Once a year, the two would come in to contribute the amount in the granddaughter's W-2 to a Roth, typically a few thousand dollars.

While the granddaughter spent the money she earned on other things, her grandmother would gift her an equal amount in her Roth contribution. At 18, the grandchild was able to re-register the account in her own name.

Nonqualified distributions

While a 529 account is ideally used for education expenses, nonqualified distributions might also be an option for noneducational uses for 529 funds.

Even if used for other purposes, principal contributions can be withdrawn without tax or penalty, although earnings are charged a 10% penalty to the IRS.

If the account is started for a newborn and the nonqualified withdrawal is completed on or by their 18th birthday, the owner can still enjoy 18 years of state tax benefits and tax-deferred growth.

I sometimes get savers who put their personal experiences first when making decisions for their children's savings. I've heard many times, "I did not have a 529 to pay for higher education, and I made it work."

Other times, the saver might be concerned that a 529 could influence a child's decision to pursue higher education.

In those cases, Uniform Transfers to Minors (UTMA) and Uniform Gifts to Minors Act (UGMA) custodial accounts might be better alternatives.

UTMA and UGMA accounts

As an alternative, these types of accounts let you save for a child without the expectation that the funds will be used for education.

Instead, deposits are an irrevocable gift to the child, and the adult custodian manages investments until the child reaches the age of maturity.

Coverdell Education Savings Account (ESA)

One of the final ways to save for a child's education is with a Coverdell ESA. During my 15-plus years in the industry, I've seen few of these.

In my opinion, 529 accounts are often preferable, given their flexibility. ESAs have low contribution limits, and the assets must be used by age 30.

High-income earners are also ineligible for these accounts and others can only contribute to the account until the child's 18th birthday.

So many choices — what should you do?

I have children and reviewed the same options for my family. For our circumstances, I found the best options to be an UTMA and 529.

The benefits of the 529 shine the most in my opinion, and I have automatic monthly contributions to a 529 for each of my children. As they become comfortable making their own financial decisions, I'm onboard with Roth contributions for unused 529 assets or even cashing out the accounts to give the cash to my children.

I can even transfer an unused 529 for one child to another, without tax or penalty while replacing the funds with personal savings.

For the UTMA account, I deposit any gifts of cash my children receive for holidays or birthdays. To encourage good financial values, I let them decide how much to save.

For those trying to pick the best option for their family, whichever path you choose, you're working toward a goal. We don't know what the future holds, but rest assured you helped your loved one in some way with your savings efforts.

Related Content

• A Financial Planner's Guide to Unlocking the Power of a 529 Plan
• I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS Paperwork
• How Much Do I Need to Retire? A Financial Professional Breaks Down Your Options
• To Insure or Not to Insure: Is Life Insurance Necessary?
• How to Optimize Your RMDs in Retirement

Oil and gas investing has always been tied to geology, engineering and price cycles. But today, investors also need to understand something else: Geopolitics.

A well in Texas, Oklahoma or North Dakota may be drilled on American soil, but its value is still shaped by decisions made in Riyadh, Moscow, Tehran, Beijing, Brussels and Washington. The oil market is global.

• A barrel taken off the water in the Middle East can change the economics of a barrel produced in the Permian Basin
• A sanction written in Washington can redirect tankers halfway around the world
• A refinery bottleneck, shipping disruption or political conflict can move prices before a single rig changes direction

That is why global-minded investors should not look at U.S. oil and gas only as a commodity play. They should look at it as a strategic asset class influenced by policy, security, infrastructure and capital discipline.

OPEC+ still matters, but its power is changing

For decades, OPEC, and later OPEC+, have played a major role in balancing global oil supply. When the group cuts production, the market often tightens. When it adds barrels, prices can soften.

But the influence of OPEC+ is not what it used to be. U.S. shale changed the world by adding flexible, private-sector supply outside the traditional producer cartel. At the same time, internal politics inside OPEC+ have become more complicated.

The group has to balance national budgets, market share, spare capacity, geopolitical alliances and long-term demand concerns.

Recent OPEC+ decisions show that the group is still trying to manage supply carefully. In May 2026, several OPEC+ countries announced another output target increase for June, continuing a gradual effort to add barrels while navigating a disrupted market.

For investors, the takeaway is simple: OPEC+ is still important, but it is not the only force that matters. U.S. producers, sanctions policy, shipping routes, global inventories and demand from Asia now all share the stage.

Geopolitical risk is a valuation factor

When investors value an oil and gas asset, they often focus on reserves, decline curves, operating costs, acreage quality and expected commodity prices. Those are all critical.

But geopolitical risk can change every one of those assumptions.

• If global supply is interrupted, U.S. barrels become more valuable
• If sanctions remove supply from Russia, Iran or Venezuela, the market may need more reliable production from North America
• If shipping routes become unsafe or expensive, buyers may prefer barrels from politically stable regions
• If global inventories fall, the value of near-term production can rise

The U.S. Energy Information Administration's June 2026 Short-Term Energy Outlook forecast that global oil inventories would fall by an average of 6.3 million barrels per day in the second quarter of 2026, with Brent crude averaging around $105 per barrel in June and July under EIA's assumptions.

However, as of June 18, oil prices had moved lower following U.S.-Iran ceasefire and Strait of Hormuz reopening developments, with Brent settling at $79.85 per barrel and WTI at $76.60 per barrel.

That matters because oil and gas valuations are not based solely on today's spot price. They also depend on expected future cash flows, the forward curve for Brent and WTI, risk-adjusted discount rates, operating costs, geopolitical risk and confidence that production can be developed, transported and sold into the market.

In plain English, uncertainty can either hurt or help valuations. It hurts when it raises costs, delays projects or scares capital away.

It helps when secure U.S. production becomes more valuable compared with barrels trapped behind sanctions, war risk or transportation chokepoints.

Sanctions are reshaping supply flows

Sanctions have become one of the most powerful tools in global energy policy. They do not always remove barrels from the market completely, but they can change who buys them, how they are transported, what discount they trade at and which companies are willing to touch them.

Russia, Iran and Venezuela are the clearest examples. Each country has significant hydrocarbon resources, but sanctions and political risk affect how those resources move into the global market.

The U.S. Treasury's Office of Foreign Assets Control continues to issue energy-related guidance and licenses tied to sanctioned countries, including Iran and Venezuela.

For investors, sanctions create both risk and opportunity.

The risk is compliance. No serious investor wants exposure to assets, counterparties or transport routes that create legal or reputational problems.

The opportunity is scarcity. When sanctioned barrels become harder to finance, insure or move, compliant U.S. production can command a stronger strategic position.

That does not mean every U.S. oil and gas investment automatically becomes attractive. It means investors should pay closer attention to where production is located, who operates it, how it is financed and how it connects to pipelines, refineries, export terminals and buyers.

Supply chain shocks now hit the oil patch directly

Energy investors sometimes think of supply chain risk as something that affects technology or manufacturing. That is a mistake.

Oil and gas production depends on steel, pipe, sand, rigs, pumps, compressors, chemicals, labor, trucking, pressure-pumping crews and specialized equipment. If those inputs become scarce or expensive, drilling costs rise. If costs rise faster than oil prices, margins shrink.

The Dallas Fed Energy Survey reported that oil and gas activity in its region increased in the first quarter of 2026, with the business activity index rising from negative territory to 21.0. But executives also continued to operate in an environment of elevated uncertainty.

That is the real world of energy investing. Higher oil prices do not automatically translate into higher returns. A strong operator still has to control costs, execute drilling plans, manage service contracts and avoid overpaying for acreage.

This is where discipline matters. In my view, investors should favor operators and projects that use conservative price assumptions, have clear cost controls and do not rely on perfect conditions to work.

Friend-shoring is coming to energy

The term "friend-shoring" is usually used to describe manufacturing, semiconductors or critical minerals. It means moving supply chains toward countries that are politically aligned, commercially reliable and less likely to weaponize trade.

Energy is becoming part of that same conversation.

Countries do not just want cheap energy anymore. They want secure energy. They want supply from partners they trust. They want LNG, crude oil, refined products, uranium, minerals and equipment from places that will still be available during a crisis.

That trend can support the long-term strategic value of U.S. oil and gas. The United States has private mineral ownership, deep capital markets, advanced drilling technology, established infrastructure and a legal system investors understand.

Those advantages matter more in a world where security of supply is no longer taken for granted.

The International Energy Agency recently noted that global natural gas investment is expected to rise in 2026, while upstream oil investment is projected to decline for a third straight year. That combination is important. The world still needs energy, but capital is becoming more selective about where it goes.

What this means for portfolio strategy

For large portfolio managers, policy analysts and global investors, oil and gas exposure should not be treated as a simple bet on the next price move.

A better framework is to ask five questions:

• Is the asset located in a politically stable region?
• Does the operator have a cost structure that works at conservative oil and gas prices?
• Does the project have access to infrastructure, including pipelines, processing, water handling, storage and export capacity?
• Are the cash-flow assumptions based on realistic decline curves and operating costs?
• Does the investment improve portfolio resilience, or does it simply add more volatility?

Direct oil and gas investments can play a role in a diversified portfolio, but they are not for everyone. They are illiquid, operationally complex and exposed to commodity risk.

Investors should review tax considerations, risk disclosures, sponsor experience and suitability with their own advisers before committing capital.

That said, the strategic case for U.S. oil and gas is not going away. The world may debate the pace of the energy transition, but it continues to consume large volumes of oil and natural gas.

Demand may change over time, but security of supply is moving higher on the priority list.

Tomorrow's wells are being shaped today

The wells that get drilled tomorrow are being shaped by today's conflicts, sanctions, shipping lanes, interest rates, service costs and policy decisions.

That is why energy investing requires a wider lens. The investor who watches only the oil price is missing the bigger picture.

The investor who studies geopolitics, capital discipline, supply chains and U.S. production quality has a better chance of understanding where value may be created.

In my opinion, the future of oil and gas investing will not be won by chasing headlines. It will be won by owning quality assets, partnering with experienced operators and respecting both the opportunity and the risk.

Geology still matters. Engineering still matters. Cash flow still matters.

But in today's world, geopolitics matters, too.

Related Content

• 5 Mistakes to Avoid in Oil and Gas Investing (Plus, 6 Ways to Stay Focused)
• High Earners Who Choose Direct Energy Investing Can Reap Tax Advantages and Other Wins: Here's How
• Energy Investing Is a Long Haul: How You Can Prepare the Road Ahead for Your Heirs
• 3 Niche Oil and Gas Investments for Next-Gen Wealth Builders
• Tax Advantages of Oil and Gas Investments: What You Need to Know

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.

Today's couples often build deeply intertwined lives long before, after or without marriage. They share homes, combine expenses, raise children, support aging parents and make long-term financial decisions together.

What often lags behind is the planning structure to support that life. Day-to-day systems can work smoothly for years, obscuring the fact that many legal and financial defaults still hinge on marital status, formal ownership and written authority.

LGBTQ+ couples have long navigated this gap firsthand, offering a clear example of why intentional financial planning matters.

Who has legal and financial authority?

One of the most overlooked planning gaps is authority during incapacity. Without explicit documentation, an unmarried partner may have no legal right to receive medical information, make treatment decisions or manage finances — even if they share a life in every practical sense.

LGBTQ+ financial planning frameworks underscore the importance of healthcare proxies, powers of attorney and account access as foundational elements of a sound plan.

For modern couples, these documents help ensure the most trusted person can act when decisions need to be made quickly, rather than defaulting to state law or next-of-kin rules that may not reflect reality.

Do beneficiaries match intent?

Beneficiary designations often override wills and estate documents, yet they are easy to overlook during major life changes. Career moves, new relationships, children or second marriages can leave outdated beneficiaries quietly in place for years.

LGBTQ+ planning conversations consistently highlight this risk because beneficiary alignment is one of the simplest ways to avoid unintended outcomes.

Regular reviews of retirement accounts, insurance policies and payable-on-death accounts can help ensure assets pass as intended — without confusion, delay or conflict during emotionally charged moments.

How is property actually owned?

Modern couples often co-own homes or contribute differently to shared property. One partner may provide the down payment, while the other covers monthly expenses or renovations.

Without clarity, it can quickly become unclear whether those contributions should be treated as gifts, reimbursements or equity.

A more disciplined planning approach aligns property titling with written agreements, such as cohabitation or marital agreements, so ownership and exit terms are clear.

LGBTQ+ households often adopt this discipline early, recognizing that intent alone does not determine legal outcomes when property must be divided or sold.

Are insurance and liquidity aligned with risk?

Life, disability and liability insurance are often purchased reactively — or not revisited as circumstances change. Yet, for modern couples, particularly those with children, businesses or income asymmetry, insurance plays a critical role in protecting both partners.

Insurance supports continuity, not just loss replacement. Adequate coverage can reduce the risk of forced asset sales, protect surviving partners and create breathing room during periods of loss or transition. Maintaining liquid reserves serves the same purpose.

Does the estate plan reflect the family?

Estate planning gaps are amplified for modern couples because default intestacy laws — which govern asset distribution when someone dies without a will — rarely account for blended families, unmarried partners or chosen-family structures.

These laws typically prioritize legal spouses and biological relatives, not the people most involved in daily life. Delaying planning can result in outcomes that conflict sharply with a couple's values and expectations.

LGBTQ+ planning checklists place particular emphasis on coordinating wills, trusts and guardianship provisions so that children, partners and extended family members are treated intentionally.

For modern couples, estate planning is not just about wealth transfer but also about clarity, dignity and control.

Turning intent into protection

What LGBTQ+ households demonstrate especially clearly is that good intentions are not a substitute for structure. A disciplined planning approach creates a repeatable way to align how couples live with how financial and legal systems recognize them — and turns abstract conversations into concrete decisions.

For modern couples, this process is not about anticipating failure. It is about reducing uncertainty when life changes — through illness, career shifts, separation or death — and ensuring decisions reflect shared values rather than outdated defaults.

Planning for the life you're already living

Modern couples are redefining partnership, commitment and family. LGBTQ+ households, having navigated these realities without built-in protections for years, offer a useful lesson: Planning works best when it is intentional, documented and regularly revisited.

A simple, disciplined framework can close the gap between how couples live and how outcomes are determined — protecting both partners and the life they have built together.

Related Content

• Three Financial Planning Tips for the LGBTQ+ Community From an LGBTQ+ Financial Adviser
• Protect Your Family's Future: Avoid These 12 Common Estate Planning Mistakes
• I'm a Wealth Planner: These 3 Steps Can See You and Your Heirs Through a Wealth Transfer
• An Estate Planning Attorney's Guide to the Importance of POAs
• Is Spring Fever Compelling You to Refresh Your Portfolio? 3 Ways You Could Be Acting Impulsively

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.

Imagine spending 40 years meticulously building a legacy, only to have it dismantled in 40 days because of a single, outdated signature.

For many high-net-worth individuals (HNWIs), their estate plans are often their "set-it-and-forget-it" documents, and only a few realize that this is a remarkably costly oversight.

It's true that the initial signing of a will or trust feels like the end game, but a legacy plan actually functions like a high-performance engine that requires consistent tuning so it remains operational.

Ultimately, the plan's legal power is only as effective as your most recent and updated signature.

When we look at American wealth management, the gap between life changes and legal updates is jarring. A 2024 survey sponsored by Bank of America found that only 27% of legal and financial clients update their plans every one to four years.

What's even more concerning is that 39% of the demographic do so only every five to nine years.

This delay creates a dangerous administrative lag between your current status and your legal instructions.

As we get older, family dynamics shift rapidly, but the documents governing life transitions often remain frozen. If your plans aren't current after a major milestone, you are proactively leaving behind a ton of legal disputes and increased tax burdens to your loved ones.

That could even lead to the very real possibility that your hard-earned wealth could end up in the hands of the wrong people.

Protecting your youngest heirs from 'accidental' probate

The birth of a child or grandchild is a moment of profound joy, but it also fundamentally changes the math of your estate. A common mistake many make is assuming that "natural heirs" are automatically covered under general language.

However, unless your plan is specifically updated to reflect a new beneficiary, that child may not have the legal protections they deserve.

This is especially critical for naming guardians. If your plan is not current, the decision about who raises your child may be left to a judge, and that is every parent's nightmare.

An updated estate plan should also lay out how and when a child receives an inheritance. For younger beneficiaries, that may mean naming a trustee to manage assets until they reach the legal age of majority. Normally, that age is 18, though it can vary by state.

For adult children, a structured distribution plan can offer added protection from lawsuits or other financial risks.

The necessity of a post-divorce estate audit

Divorce can change an entire estate plan in a lot of surprising ways, and they aren't always immediately obvious.

Technically, the court decree divides marital property. The problem is, it does not always automatically update every individual account or legal instrument.

That means any non-probate assets, including insurance policies and certain bank accounts, often pass outside the probate process and go directly to the beneficiary named on the account or policy.

In that case, you would need a comprehensive review as soon as possible. If beneficiary forms remain unchanged, an ex-spouse could maintain a valid legal claim to some of your most significant assets, regardless of what your current will states.

In many jurisdictions, a single forgotten designation can legally override your intended distribution.

The risks extend to your primary decision-making documents as well. For instance, an outdated power of attorney or healthcare directive can still give an ex-spouse the legal authority over your finances or medical care when you become incapacitated.

Outdated guardianship provisions can create the same kind of risk.

In a nutshell, if every designation still reflects your life before the divorce, they can trigger legal conflict and cause emotional and mental distress to your children at the very moment they need stability the most.

Why remarriage needs a plan overhaul

Remarriage certainly introduces a distinct set of complexities that can trigger "accidental disinheritance."

Without immediate and precise revisions, a new spouse might be left with no legal claim to your estate, and that often results in sudden financial hardship.

Conversely, when your entire estate is left to a current spouse, it can inadvertently disinherit children from a prior marriage.

Let's say that the spouse passes away later without their own updated plan, or is not on good terms with your kids — those assets may never reach your children as you originally planned.

In these blended family scenarios, assets are frequently distributed unevenly or unfairly, and that happens in real life.

So, an immediate review allows you to establish trust structures, such as a QTIP trust, that provide for a surviving spouse during their lifetime while ensuring the remaining principal eventually goes to your biological children.

Also, this secures that the new branch of your family tree is nurtured without starving the original roots.

The urgency of alignment

The moment a child is born, a marriage dissolves or a family blends, your existing estate plan becomes a historical document instead of a functional legal shield. Failing to act immediately creates a dangerous window where your legacy is governed by outdated (or malicious) intentions.

Life is unpredictable, so if a crisis occurs before your designations are updated, the law will not take your current intentions into account. It will follow the signature on file, even if that signature belongs to a life you no longer recognize.

The urgency here is not merely administrative. You want to ensure an ex-spouse does not inherit a retirement account by default, or a newborn is not left without a court-vetted guardian, or a new partner is not sidelined by rigid probate laws.

These life transitions move with incredible speed, and your legal framework must move faster to ensure your wealth serves your current family and circumstances.

Utilizing modern tools ensures that these vital updates are both signed and immediately accessible.

In estate planning, the only thing more costly than a mistake is a delay.

I would urge you not to wait for the "perfect time" to reconcile your documents with your life. By then, it may already be too late.

Related Content

• What Really Happens in the First 30 Days After Someone Dies (and Where Families Get Stuck)
• The 4 Estate Planning Documents Every High-Net-Worth Family Needs (Not Just a Will)
• An Attorney's Guide to Your Evolving Estate Plan: Set-It-and-Forget-It Won't Work
• Wills Gone Wild: How to Avoid Estate Planning Disasters
• Choosing Your Trustee: These Are the Common Options

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.

"Fiduciary" may be one of the most overused words in the world of financial advisor marketing.

Consumers hear it everywhere: Advisor websites, television ads, matching services, professional designations and trade association campaigns. The message sounds reassuring: "Trust me. I am a fiduciary."

But consumers should slow down. The word "fiduciary" does not always mean what you think it means.

A legal fiduciary relationship for investment advisers is governed by federal or state law. The SEC says an investment adviser's fiduciary duty under the Investment Advisers Act of 1940 includes both a duty of care and a duty of loyalty.

But many advisors and marketing platforms use the word more loosely, blending legal obligations, professional ethics and marketing language into one trust-building slogan.

That creates confusion.

Three different kinds of 'fiduciary'

Consumers should understand that the word can be used in at least three different ways.

A moral fiduciary is someone who tries to do the right thing because of personal character.

An ethical fiduciary is someone who agrees to follow a professional code, oath or set of standards.

For example, the National Association of Personal Financial Advisors (NAPFA) has a Code of Ethics that requires its fee-only financial advisor members to act with honesty, objectivity, competence, confidentiality and fiduciary responsibility by always placing the client's interests first.

Certified Financial Planners also must act as ethical fiduciaries when providing financial advice under the CFP Board's standards.

A legal fiduciary is someone subject to fiduciary obligations under federal or state law, typically because they are acting as an investment adviser or investment adviser representative.

Those three fiduciary obligations are not the same thing.

Credentials do not automatically create a legal fiduciary relationship

A financial advisor may have completed fiduciary training, signed an oath or earned a professional designation. That may be valuable. But it does not necessarily mean the advisor is acting as a legal fiduciary at all times, for all advice, for all clients.

For example, the Accredited Investment Fiduciary® designation reflects fiduciary-related training, an exam and an ethics requirement.

That education provided by the Center for Fiduciary Studies may be useful, but consumers should not assume a professional designation alone creates a legal fiduciary relationship.

The same caution applies to other professional credentials. Passing an exam, joining a professional association or signing an ethics statement may indicate training or commitment. It does not automatically answer the consumer's most important question: What legal fiduciary standard applies to this advisor's advice to me?

The better question: How are you paid?

Consumers should not stop at, "Are you a fiduciary?"

Ask instead: "Are you legally required to act as a fiduciary at all times, for all advice, for all clients?"

Then ask: "How are you compensated?"

That second question may be even more revealing. Fee-only financial planners are paid directly by clients and do not receive sales commissions or compensation tied to the sale of financial products.

NAPFA defines fee-only advice as compensation paid solely by the client, with no commissions, referral fees or other compensation contingent on product sales.

That is a much clearer consumer test than vague fiduciary marketing.

Don't be sold by a marketing buzzword

The financial services industry has discovered that fiduciary is a powerful marketing word. But a consumer should treat that word the way they would treat a car salesperson saying, "Trust me, I'm giving you a great deal."

Maybe true. Maybe not. Verify it.

Before hiring an advisor, ask for written answers to these questions:

• Are you fee-only as defined by NAPFA?
• Do you sell financial products?
• Do you receive sales commissions, referral fees or revenue sharing?
• Are you legally required to act as a legal fiduciary to me at all times?
• Will you put that legal fiduciary commitment in writing?
• Do you provide comprehensive financial planning, or only investment management?

The word fiduciary still matters. But it is not enough.

Consumers need more than a marketing slogan. They need clear answers, transparent compensation and objective financial advice.

Related Content

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• Three Ways Fiduciary Financial Planners Put You First
• Objective Financial Advice vs a Product Pitch: How to Ensure You Hire the Right Financial Expert Rather Than a Salesperson
• If You're Looking for Financial Advice, Start With This Question (It Isn't About Fees)
• I'm a Financial Adviser: This Is Why I Became an Advocate for Fee-Only Financial Advice

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 TV and movies, retirement magically falls into place. After years of loyal work for one company, an employee signs off for a carefree retirement of traveling, golfing and spending time with grandchildren. The end.

It's debatable whether this was ever an accurate depiction, but one thing is certain: Retirement has clearly shifted over the past few decades. People are working longer and hold several jobs over the course of a lifetime.

According to the Bureau of Labor Statistics, late Baby Boomers (those born between 1957 and 1964) will hold an average of 12.9 jobs from age 18 to 58. Younger Americans are expected to have even greater job mobility.

These changes can pose hidden costs in the form of increased tax liabilities.

However, the good news is, even though work and retirement may have grown more complex, Americans have a lot of options at their disposal.

Here are five strategies that will help you keep more of what you've earned over your lifetime.

1. Start planning early

It's never too early to start planning for retirement. But ideally, you should start having extensive discussions with your adviser roughly 10 years before you expect to stop working.

The more time you give yourself, the more carefully you can consider cash flows and ways to optimize your tax liabilities throughout retirement.

2. You can't 'set and forget' a 401(k)

For most people, the biggest ticking time bomb in their retirement is their pretax 401(k)s. Many people assume they'll be in a lower tax bracket when they retire. But because a growing number of retirees are taking part-time work, consulting, starting businesses or growing their other investments, they often find themselves in their highest-earning years right when they hit the required minimum distribution (RMD) age, which is 73 (rising to 75 for those born in 1960 and later).

Though you can avoid taking RMDs if you're still employed by the company where you have your 401(k), this only postpones the inevitable. Also, since people tend to move jobs throughout their lives, there's a good chance that you may also have IRA rollovers that will require RMDs.

3. Consider a Roth conversion

Financial advisers often urge young people to invest in a Roth IRA, as this strategy leverages their longer time horizon to achieve tax-free growth. But the Roth IRA strategy is also effective for older people who may have graduated into higher income through their RMD years.

Your financial adviser can use a tool to measure all income sources — RMD and non-retirement withdrawals, Social Security income, qualified distributions and Roth conversions — over a projected 25-year retirement to determine how to deliver the greatest tax efficiency. This can help save retirees tens of thousands in lifetime taxes.

4. Avoid inheritance complications

The ticking time bomb element of a pretax 401(k) not only affects retirees, but can also pose problems for their heirs. Once portfolios are passed on, children must take minimum distributions and then deplete the full account by the end of year 10.

This can create further complications for heirs who are often at their peak earning years, forcing them to withdraw at a higher tax bracket. When you convert into a Roth IRA, heirs also inherit tax-free.

5. Maximize different phases of retirement

Retirees should consider converting to a Roth IRA in the early years of their retirement, before RMDs are in effect, as this can allow you to leverage a lower tax bracket.

For example, some people decide to take early retirement (at 60 to 62) before they are eligible for Social Security. They may have some savings on the side coupled with a part-time job that they use primarily for health insurance.

You can leverage this early period to complete the Roth conversion while your income is still low.

Your Hollywood ending

If you're invested in a 401(k) plan, congratulations. Only 59% of U.S. adults are invested in some form of retirement account. But investing into a 401(k) without planning for retirement could mean you're setting yourself and any heirs up for a potentially hefty tax bill.

By starting the planning process well before your 65^th birthday and then taking advantage of the different phases of retirement, you can keep more of what you've earned, enjoy a long and fulfilling old age, and even leave a legacy to your loved ones. That's the real happily ever after.

Related Content

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• We've All Heard the Buzz About Roth Conversions, But Not Everyone Will Like the Reality
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• Where a Trump Account Might Fit in Your Financial Strategy for Your Newborn (Agree With Him or Not, Your Child Stands to Benefit)
• Important Planning Considerations: Insurance & Long-Term Care

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

By the time many real estate investors buy their last property, they are no longer chasing opportunity. They are chasing a tax deferral.

That may sound harsh. But after years as a financial professional working with investors selling appreciated real estate, I have noticed something important: Many people do not actually want another property. They simply do not want the tax bill.

So they buy something anyway.

A few years ago, a man walked into my office who had done extraordinarily well in real estate. Over several decades, he had built a portfolio of roughly 160 single-family rental properties. He had appreciation. He had cash flow. He had equity most investors only dream about.

He was also exhausted.

As we sat down, I expected the usual conversation: Cap rates, depreciation, financing, 1031 exchange timelines. Instead, after a few minutes, he leaned back and said something I have never forgotten.

"I don't think I want another property," he said. "I think I just want relief."

Then we moved on to the conversation he actually needed to have.

The question most investors never ask

When investors approach a 1031 exchange, the conversation almost always begins with taxes.

• How much do I owe?
• How long do I have?
• What qualifies as replacement property?

These are important questions. The 1031 exchange remains one of the most powerful tax-deferral tools available to real estate investors.

But there is a bigger question that rarely gets asked: What role do I want real estate to play in the rest of my life?

For many investors, the answer to that question has changed, often without them fully realizing it.

The problem is that the 1031 process does not pause long enough for them to notice.

The 45-day clock changes behavior

Once a property closes, the investor has just 45 days to identify a replacement property. That clock creates a particular kind of pressure worth understanding.

Under pressure, people optimize for the immediate problem in front of them. In a 1031 exchange, the immediate problem is almost always taxes.

For many investors, the potential capital gains tax bill is large enough to change behavior. So instead of asking bigger questions about lifestyle, concentration risk or long-term goals, the focus narrows to one thing: How do I avoid paying taxes right now?

That is how a person who quietly wants fewer responsibilities ends up buying another property.

The replacement property often looks reasonable on paper. It may be newer, larger or located in a stronger market. It may promise fewer headaches than the property being sold.

But six months later, many investors realize something important: They solved a tax problem and created a lifestyle problem.

The last property is often different from the first

Most successful real estate investors built wealth through concentration, patience and hard work.

They bought properties when others would not. They dealt with tenants, vacancies, repairs, financing issues and economic cycles. They accepted the burdens of ownership and benefited from appreciation over time.

But eventually something changes.

The investor who once enjoyed operating properties begins valuing simplicity more than expansion. The appeal of another roof replacement fades. Retirement becomes less theoretical and more real. Children often do not want to inherit management responsibilities.

And quietly, many investors begin asking themselves a question they never expected: Why am I still adding to a portfolio I would rather be exiting?

That is a completely different objective than the one that built the portfolio in the first place.

Yet many investors continue buying replacement property as though nothing has changed.

When relief becomes the goal

There is nothing wrong with wanting relief.

• It is not laziness
• It is not failure
• It is not a lack of ambition

It is simply the recognition that the goals driving wealth accumulation are not always the same goals that serve wealth preservation.

That distinction matters because a 1031 exchange is not just a tax decision. It is often a life decision.

Investors who recognize this early usually have more options.

Structures like Delaware statutory trusts (DSTs) and 721 exchange strategies were created for investors who want continued real estate exposure without remaining active landlords.

They are not appropriate for everyone, but they reflect a broader trend: Many investors eventually transition from operating properties to allocating capital.

That is a fundamentally different conversation than cap rates and closing timelines.

Freedom has value, too

One of the most overlooked ideas in financial planning is that simplicity, flexibility and time all have value.

Not every decision should be evaluated exclusively through the lens of tax minimization.

The investor who aggressively defers every dollar of capital gains sometimes ends up trapped in a portfolio that no longer fits their life.

Meanwhile, the investor who accepts some tax in exchange for flexibility and peace of mind may end up in a much better place emotionally and financially.

There is no universally correct answer.

But investors should at least be honest about the trade-offs.

The man with 160 rental properties eventually found a path that gave him what he was actually looking for. It was not another lease agreement. It was a different relationship with his capital entirely.

The better question

A 1031 exchange can be an excellent strategy. It has helped countless investors preserve and compound wealth over time.

But investors should be careful not to let the tax tail wag the investment dog.

Before the next exchange begins, it is worth sitting quietly with a question that has nothing to do with cap rates or closing timelines: What do I actually want from here?

For many investors, especially those who have spent decades building real estate portfolios, the honest answer to that question may surprise them.

It surprised the man with 160 properties.

But once he finally said it out loud, he already knew the answer.

Related Content

• A 1031 Exchange May Look Great for You on Paper, But It's Not Just About Taxes
• Counting on Real Estate to Fund Your Retirement? Avoid These 3 Costly Mistakes
• How to Turn Your 401(k) Into A Real Estate Empire — Without Killing Your Retirement
• Don't Defer Retirement if You're a Landlord, Defer Taxes Instead
• DST Exit Strategies: An Expert Guide to What Happens When the Trust Sells

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 most of my life, I've worked as an innovator in the financial services space, with a particular focus on life insurance and annuity products.

For 40 years, that was my job and specialty. One of my "first of a kind" product inventions — the Accumulator — offered downside protection on the income that a variable annuity could provide and eventually created a $1 trillion industry.

In my current role as an investment adviser focused on retirement planning, my innovations address the current needs of retirees regarding greater longevity, concern about Social Security, high inflation, taxes and increasing medical and long-term care costs. As this survey of retirees by Schroders details, those are the top concerns of many people in retirement.

The concerns about costs of long-term care are about to increase even further, with a new federal Medicaid rule that, beginning in 2028, will cap allowable home equity at $1 million. This will most directly affect middle-class homeowners in high-cost markets.

Under current rules, states set the amount of equity that a homeowner could maintain and still qualify for Medicaid LTC coverage. It ranged from about $750,000 to $1.13 million — and it was adjusted every year for inflation. In 2028, the allowable equity will be $1 million for everyone (except farm families), and it will not be indexed for inflation.

Of course, there are other related costs that Medicaid will not cover, like assisted living or services like a home aide, unless the retiree satisfies a means test.

Change in retirement planning is necessary

As it happens, I've been working on a new design for retirement planning that addresses long-term care costs. It does require, among other things, a breakdown of the silos between investments, annuities and housing wealth.

This design change doesn't focus on wealthy or lower-income retirees, but rather, the broad group of so-called mass affluent. The most popular planning approach for this group of retirees is to invest in different investment portfolios and withdraw 4% to 5% per year, increasing by inflation.

Intuitively, most retirees know that they can do a lot better not only in the level of income, but also in the reduction of risk and taxes, and in greater liquid savings.

On the other hand, most don't fully appreciate the potential costs of long-term care. Not surprisingly, those who live longer are more likely to need long-term support and services like nursing home care.

One interesting statistic is that 50% of retirees age 85 and over will need long-term-care services, which are in the $80,000-to-$150,000-per-year range, with a historical increase rate of 3% to 5% per year.

Our analysis suggests these costs may represent nearly 25% of the average $2 million in net worth split between a rollover IRA and value of a home. Without planning for those costs in advance, the sale of the home, with the related closing costs and taxes, may be required.

Here are the retirement planning design changes we developed.

Consider all major asset classes, including housing wealth and lifetime annuities

In figuring out a solution to these retirement challenges, whether or not Medicaid is an option, it made sense to look at all of a client's net worth. That struck a chord when housing wealth was reported as 50% of our sample retired client's wealth.

Importantly, the innovations needed to be doable with no regulatory change or product refinement — and simply in the retirement planning space. It had to be accomplished through our planning algorithm and executed by an adviser through partnering with different product providers.

The first step was how to include housing wealth in the planning. The second was the integration of the most logical but underutilized retirement product — lifetime annuities.

The key for me was to consider them together rather than separately. Why together?

That togetherness answers the following key objections that often are raised about each product individually (also, see my article Transform Your Retirement Plan With This Powerful Combo):

Housing wealth. If using a reverse mortgage such as a home equity conversion mortgage (HECM) to unlock this wealth, the objections are the costs — and the risks if you borrow too much. (See my article How Your Home Can Fill Gaps in Your Retirement Plan.)

Lifetime annuities. A qualifying longevity annuity contract (QLAC) can help define a better retirement by deferring taxable IRA distributions and delivering guaranteed lifetime income at an age you select. (See A QLAC Does So Much More Than Simply Defer Taxes.)

Despite a lifetime payout for a 67-year-old man of, say, $50,000 per year on a $100,000 premium, retirees often object to the lack of liquidity.

In our development phase, we said, "HECM, meet QLAC." Individually, both HECM and QLAC can be helpful in their own ways.

Together, we call it HomeEquity2Income, and the combination can help you stay in your home as you build liquidity for possible long-term care costs, as well as boost income.

It also means you don't have to spend down the savings in your rollover IRA to qualify for Medicaid.

Here's how we put them together:

1. Set up a line of credit through HECM and purchase QLAC from rollover IRA savings:

2. Analyze standard configurations under HECM and QLAC and why they may not work for your retirement plan. The charts below demonstrate results from both a HECM and a QLAC on a stand-alone basis, as often presented to retirees.

In our view, while both are reasonable designs, they are not used most effectively for retirement purposes.

3. Use a new algorithm for a combination of a HECM and a QLAC (HomeEquity2Income, or H2I) to meet twin retiree objectives of increasing income and increasing liquid savings. At the same time, establish a building block for your retirement plan.

Testing H2I for legacy and historical rates

While income and liquid savings are two important elements of H2I, retirees may also consider the effect of H2I on the legacy they're providing to their spouse and other family members.

Also, the broad message for planning is not to try to predict the exact amount of savings or legacy for each homeowner, but to demonstrate the possible impact of the market performance on your own plan.

The illustrations above were based on industry standard fixed rates but, as covered in my article Treat Home Equity Like Other Investments in Your Retirement Plan: Look at Its Track Record, we believe it important to be able to Illustrate benefits based on historical performance.

By using historical rates, we are looking at the interplay of various product elements with real-world performance.

Looking at the expanded example of this combination, here's what we learned about each component:

• HECM's liquid savings grow dramatically when you stop drawing down from a line of credit and use a part of QLAC income to pay down the loan balance
• QLAC may be purchased in a laddered format to create increasing income before age 85. In limited situations, QLAC income may be accelerated before its original income start age
• And in combination, HECM and QLAC offer significant tax advantages, particularly in early retirement years

Use H2I as building block in a retirement plan with other savings

With H2I in place, the question becomes how we might further combine it with other retirement savings. Let's look at adding to H2I our sample retiree's rollover IRA savings ($800,000 after QLAC premium), personal savings ($1 million) and Social Security payments ($36,000 starting at 67).

While portfolio allocation is often a very personal decision, here's what our starting plan reflects:

• Allocation of $800,000 in IRA between stocks (growth) and bonds in a balanced portfolio
• Allocation of $1 million in personal savings among stocks (high dividends), bonds, and SPIA (single-premium immediate annuity)

What is the starting income this plan will support? Using H2I as a building block and the Go2Income planning algorithm, the starting income is $133,000. The plan assumes that income will grow at 2% per year.

With the $36,000 of Social Security benefits, the total starting income is $169,000. The retiree can, of course, refine the plan to increase income and lower the substantial amounts of legacy and liquid savings.

Long-term care scenario testing

The next step in the process was to test various H2I scenarios as they related to covering long-term care. That's particularly timely with greater longevity and increased responsibility of retirees, leading to coverage of more long-term care costs.

• The economic return for H2I in the 3.5% to 4.5% range is attractive, recognizing the major asset is the housing wealth, assuming a growth rate of around 4%. In one sense, the higher crediting rate on a QLAC is offsetting the higher HECM interest rate.
• In the scenarios above, we are able to generate additional income and cover $100,000 in LTC costs over five years from age 85 to 89. We would need to do some stress-testing for larger or different patterns of LTC expense. Of course, we should consider the resources from other retirement savings.
• The income tax effects are quite positive with all HECM drawdowns tax-free, QLAC income deferred until received and LTC costs being tax deductible. (See my article The 9% Solution: An Expert Guide to Retirement Tax Breaks That Could Cut Your Tax Rate Nearly in Half.)

H2I for this sample investor can cover a reasonable amount of LTC costs while delivering higher income. The final planning steps include further testing to confirm results. Including a measure of income taxes, market risk and IRR (internal rate of return) before and after tax, we look at three qualities of the plan in our evaluation:

• Inflation protection
• After-tax income
• Stock market risk

For retirees, it means they no longer need to keep an eye on new caps for home equity or spend down all their other assets to qualify for Medicaid's LTC benefits.

Even for those who never considered Medicaid as an option, H2I provides an easier way to create wealth from retirement savings while aging in place.

Unlike product innovation in the past, these design changes don't require regulatory change, product pricing or design changes, or special servicing. Just stack these building blocks and assemble them as the plan instructs. Visit Go2Income, where you can start building your own plan.

Related Content

• The 75% Safety Net: How All-Asset Retirement Planning Helps Reduce Your Investment Risks
• It's Time to Redefine Retirement for Retirees With $500,000 to $5 Million
• Unlock Housing Wealth and Tax Benefits by Adding Lifetime Annuities to Your Retirement Plan
• Does Your Retirement Plan Ignore Half of Your Net Worth?
• The 9% Solution: An Expert Guide to Retirement Tax Breaks That Could Cut Your Tax Rate Nearly in Half

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.

On a recent episode of his HBO Max show, Last Week Tonight, John Oliver leveled a brutal attack on JG Wentworth and other financial companies that promise "fast cash" for structured settlement injury victims.

His commentary has racked up 1.8 million YouTube views, so it clearly struck a nerve. Watch for yourself (Caution: Strong, but, in my opinion, appropriate language):

A fellow attorney and friend who's spent her career representing accident victims called me this week and asked if I'd seen Oliver's comments and wanted to know whether I thought he was too harsh.

After 30 seconds of talking about it, we realized we both had the same reaction: Oliver wasn't too tough on these financial predators. He wasn't tough enough!

Since 1982, federal law has recognized structured settlements as a voluntary option for accident victims who take a settlement in an annuity with payments exempt from federal and state income tax.

The system worked well until the late 1990s, which is when "fast cash" predators started fleecing accident victims of their financial security.

In response to this, Congress and most states, passed laws that mandated better disclosure, present-value calculation of future payment rights and judicial oversight with a "best interest" standard for the victim. Backers called these laws structured settlement protection acts, or SSPAs.

The takeaways

My attorney friend and I agreed that Oliver's commentary had two important takeaways:

One, attorneys and anyone who works with accident victims must warn clients about the dangers of these predatory "cash now" companies. And if the client has a brain injury, the court should be encouraged to appoint a guardian ad litem — basically, a part-time overseer who'll protect the client's interests.

As a longtime supporter of structured settlements, I can tell you that, without the presence of that "guardian," the sale of structured settlement payments or cashing in the entire annuity is seldom a good idea. Because of the losses that would be incurred — as the structured settlement is "sold" at a discount — rarely is it in the accident victim's best interest.

And two, any public official who thinks the federal 2002 "model protection act" solved this structured settlement problem is delusional. It required only court approval before the sale of the annuity, but did not require courts to evaluate the fairness of the transaction itself, only that the sale complied with individual state SSPAs.

For decades, I have represented accident survivors, often encouraging them to take annuities instead of a single lump sum. I can't recall a single instance when a client who wanted to sell future payment rights would have been better off to do so, with one exception: One of my clients became a paraplegic, and he spent the money helping his family out of poverty.

In the few others who ignored my advice, thousands of dollars went to buying cars for girlfriends, making loans to friends and family that were never repaid and, in one case, buying a bowling alley that was in bankruptcy. So much money, just squandered.

After watching Oliver's show and speaking with my fellow trial attorney, I wanted a perspective from inside the structured settlement industry. So I called Peter Arnold, a certified structured settlement consultant in Maryland who has organized successful grassroots lobbying efforts for the structured settlement industry.

"The most telling aspect of today's structured settlement protection laws," he said, "is that they were supported by the same predatory companies who were abusing injury victims. That should've been a huge red flag that the law was toothless, but Congress and even many in the insurance industry ignored it. Congress just wanted a fig leaf to let them pretend they did something."

My recommendations

So what should you do if you or someone you know is considering selling structured settlement payment rights to one of these predators? Here are a few suggestions:

Check with an attorney. If an attorney negotiated the settlement, see whether they will evaluate the proposed contract, including how much the company will pay for the rights it receives to the annuity payments. If it's a sham deal, the attorney should be able to spot it quickly.

Don't let the "cash now" company railroad the agreement through a judge. Federal law encourages court approval of these transactions, but some judges see themselves as rubber stamps.

At a minimum, make sure the judge has full knowledge of all medical issues, including anything that might affect the injury victim's judgment. Be clear about this even if the company buying payments says to downplay it.

Get multiple bids and make sure these bids come from separate buyers. JG Wentworth does business under multiple names, and according to Arnold, they may not tell you this even when they know you already have a bid from a sister company.

"It's an underhanded way to make you think you're getting a second bid when you're not," Arnold said.

If you're still negotiating your injury settlement, get your structured settlement broker's corporate policy on sharing your data. Most brokers who work with accident victims to design future payments are fine people. But every group has a few sleazebags.

For years, there have been indications that some brokers discreetly sell client information to companies like JG Wentworth. This could include the size of your settlement and your payment schedule.

If you find out this has happened, you may have a legal claim for violation of your right to confidentiality.

I'll say again that, in my entire career as a legal advocate for accident victims, I have almost never seen someone with a structured settlement who would be better off by doing a "cash now" deal.

I wrote this story years ago that is right on point, and each time I read it, I feel so angry, so disappointed.

If you or someone you know feels like there is no other way than to sell their payment rights on a structured settlement, then, at the least, don't fall for someone pushing you into a quick sale — and make sure to get independent advice.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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

Every May, Small Business Month shines a spotlight on entrepreneurship. Just as the coverage slows down in June, so does visibility of small business ownership after launch.

The leap of faith, the ribbon cutting, the early momentum — these are all important moments. But they are only the beginning.

If a business' launch is the pilot, the real test is whether the business gets picked up for a second season. For most entrepreneurs, the real story is a tale of stabilization in the face of pressure — when and how they grow — and, ultimately, preparation for transition.

The data underscores just how complex that journey has become. Citizens' Q2 2026 Business Pulse survey showed that as global tensions increased, so did small business confidence.

Thirty-six percent of owners reported being extremely or very confident in the economy heading into the second quarter, up from 30% in Q1. The survey was fielded after the onset of war with Iran, making that rise in confidence reflective of a broader pattern: Small businesses are learning to operate and even plan for growth in uncertain conditions.

Resilience is the defining thread of today's small business. Small business ownership is not a moment; it is a lifecycle that changes with the seasons and is reborn with each generation.

At every stage, owners are making a different set of financial and personal decisions to position for what comes next.

What's possible

Every business begins with a bet on what's possible. Nearly half of small business owners (48%) expect revenue growth over the next three months, up from 43% the prior quarter, signaling an improvement in near-term expectations despite a volatile backdrop.

Business owners were largely confident that they could grow revenue and invest in their business; momentum at the outset is still driven by a belief in opportunity. That confidence trends upward quarter over quarter even in an uncertain environment.

But optimism at launch is only part of the equation. From day one, owners are navigating pricing decisions, cost pressures and access to working capital. Launch may be the moment that gets celebrated, but durability is what defines success.

That shift from starting to sustaining is where the real test begins. Broader economic conditions are felt most acutely during this stabilization stage.

Inflation remains the top concern for small business owners, cited by 43% of respondents, even after easing from 54% the prior quarter, while tariffs and global trade risks continue to layer additional uncertainty into decision-making.

Small business owners are managing pressure from both sides, as rising input costs compress margins while those same pressures reduce customers' ability to spend.

The result is a constant balancing act that defines what it takes to keep a business on solid footing.

For many businesses, stability is the foundation for the next stage. But growth today looks different than it did in the past.

Rather than scaling headcount or accelerating spending, many owners are taking a more measured approach, prioritizing efficiency and flexibility.

That shows up in steady hiring plans, stable investment levels and a focus on maintaining access to capital rather than expanding it aggressively.

In this environment, growth doesn't always mean getting bigger; it's about working smarter.

Succession planning

For all the focus on growth and resilience throughout a business' lifecycle, one stage of ownership remains underemphasized: Planning for the end.

Much of today's small business decision-making is anchored in the near term (working capital, immediate staffing needs, quarterly look-ahead). Owners are focused on a compressed planning horizon, which is still necessary, but comes at a cost.

When volatility dominates the day-to-day, long-term succession planning tends to slip. That makes sense in the moment. There is always another decision to make, another expense to manage, another short-term target to hit.

Over time, though, pushing that conversation off only raises the stakes. Succession is one of the most important decisions an owner will make, even if it rarely feels urgent.

Owners who plan for succession early tend to run differently. They develop employees and leaders who can step up and take on responsibility within the organization.

They put systems in place that do not depend on a single decision-maker. They think about how the business connects to their personal finances and what an eventual exit might look like.

Those choices shape how the business runs well before any transition is on the horizon. The lifecycle does not just lead to succession. It depends on preparing for it from the start.

The bottom line

As business confidence rises, small business owners are showing they can absorb shocks through unsteady times. There is a steady confidence in where their businesses are headed and what comes next.

Small businesses do not just open, they launch. That moment may get the spotlight, but success is not defined by the lift-off. It is shaped by everything that follows.

Owners must stabilize when conditions change, make disciplined decisions about growth and plan for the long term even when the near term demands their attention.

The strongest businesses are not built around a single moment. They are built over time, through the choices owners make across the full lifecycle — from launch to stability to growth and, ultimately, to what comes next.

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

If you have retirement savings in an IRA or 401(k), Uncle Sam is your partner on that money because every dollar you pull out of it is taxed.

Consider this common scenario: One spouse in a retired household passes away and the surviving spouse becomes a single taxpayer, which affects their overall tax liability, even though their income goes down.

Let's say the couple's total income was $200,000 a year. While they were married, this meant they had an effective tax bracket of about 15%.

When the husband passes away, the wife's income goes down to $180,000 because she loses the smaller of their two Social Security checks. But going forward, she will file as a single taxpayer, so she is now in the 20% tax bracket.

Additionally, if her RMDs and her income grow each year, her tax rate could keep climbing. And that doesn't even factor in future tax increases. (It's unlikely taxes will stay as low as they are now, considering our nation's debt of $39 trillion.)

Proactive tax planning could have helped protect her from the impact of higher taxes after losing her partner.

For retirees in higher tax brackets looking to help their spouse (or adult children) avoid this kind of tax trap in the future, partial Roth conversions now can help.

1. Protecting the surviving spouse

If you're a married couple, you're in a joint taxpayer bracket. And once both spouses reach age 65, you become eligible for specific additional tax benefits.

For example, with a taxable income of $148,300, you fall within the 12% tax bracket for married couples filing jointly after the deductions.

The $148,300 figure includes a $32,200 standard deduction based on your filing status. You would also receive the $3,300 additional standard deduction for both being over age 65 – this consists of $1,650 for each spouse, as determined by the One Big Beautiful Bill for taxpayers over 65. On top of this, there is an additional $12,000 bonus deduction for those over age 65 (up to a certain income limit).

However, when one spouse dies, the surviving spouse (usually the wife) jumps up to the 24% tax bracket.

If your income is higher, it's an even larger jump in taxes for the surviving spouse.

For example, if your taxable income as a married couple is $250,000 a year, you can see on the chart below that you're in the 24% tax bracket because you're "married filing jointly."

However, if the husband dies first, the surviving spouse is now a "single filer" with taxable income of $250,000. You can see she has now jumped up into the 32% tax bracket.

A Roth IRA may help protect the surviving spouse from higher taxes as a single taxpayer because you already paid the taxes while you were both alive as joint taxpayers.

2. Protecting non-spouses

When you die and leave your IRA to your children, they only have 10 years to empty your IRA completely.

Let's assume the IRA you leave to your children will earn 4% annual returns over the 10-year period after you leave it to them. This means that your children will have to take out approximately 14% of the IRA balance every year.

This would allow them to take out the 4% annual earnings along with 10% of the principal, so the entire IRA is drained over that 10-year period without a potential big tax hit in year 10.

However, this 14% annual IRA withdrawal could put your heirs in a higher tax bracket.

While a Roth conversion would mean paying income tax now, that could be a bargain compared to the potentially higher income tax brackets your heirs might have to deal with after you're gone — and any state income taxes they may also have to pay.

Additionally, if your children live in a state that has a state income tax (such as New York, which has a 10.9% top state tax bracket), they may be subject to federal income taxes and up to an additional 10.9% in state income taxes as well.

We use software called Holistiplan that helps identify the maximum amount to withdraw year by year to take advantage of today's tax brackets, and will work alongside an accountant or a tax professional.

When appropriate, we recommend our Strategic Roth Integration (SRI) plan to clients so that they can take advantage of today's income tax rates and never pay taxes on their Roth IRA again.

If you'd like to learn more, check out my new book, IRA Owners: Help Defuse Your Ticking Time-Bomb, co-authored with Steven Kao.

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.

Editor's note: This is part one of a two-part series about estate planning. Part two will explore the three-step process for designing your estate plan.

When most people think about estate planning, they think about a will. It's often framed as a final step, a document that ensures your wishes are carried out and your assets are distributed properly.

While that's important, it misses a much bigger point: A will governs only what's left.

The real question is, will there be anything left to govern?

That's where many people get it wrong. They focus on planning for their death without fully planning for their life. The financial decisions you make while you're living — how you invest, how you manage taxes and how you prepare for major risks — are what ultimately determine the size and strength of your estate.

In other words, estate planning shouldn't start with documents. It should start with building a financial life worth protecting.

The difference between estate planning and life planning

At its core, estate planning is about transferring assets after death. Life planning is about making sure those assets last throughout your lifetime.

The distinction matters more than most people realize.

If your financial plan doesn't account for income needs, market risk, taxes and unexpected expenses, your estate plan might never have the chance to work as intended. A will can't fix a portfolio that runs out of money, and a trust can't undo years of unnecessary taxes or cover the cost of long-term care.

What happens during your lifetime directly impacts what you leave behind. That's why a strong estate plan is built on a solid financial foundation, one that prioritizes sustainability, efficiency and protection.

The three pillars that support every estate plan

Before drafting legal documents, it's critical to address three foundational financial areas: your investment strategy, your tax strategy and your long-term care plans. Together, these pillars determine whether your estate will be preserved and protected.

1. Investment strategy: Sustaining income without running out

Your investment strategy isn't just about growth; it's about sustainability.

Growing your assets matters, but as you approach retirement, the focus shifts. Your portfolio now has to do two things at once: Continue to grow and provide reliable income.

That balance is where things can become tricky.

If you take on too much market risk while also withdrawing more income than your portfolio can support, you create a scenario in which your assets can be depleted faster than expected. Market downturns combined with withdrawals can accelerate losses, increasing the risk of running out of money.

If that happens, your estate plan could suddenly be in jeopardy.

A well-designed investment strategy accounts for both growth and income, ensuring that your assets can support your lifestyle over time, not just in ideal market conditions.

2. Tax strategy: Keeping more of what you earn

Taxes are one of the most overlooked threats to retirement and long-term wealth.

Over the course of your lifetime, inefficient tax planning can erode a substantial portion of your assets. That's money that could support your lifestyle or be passed on to future generations, which is why tax planning shouldn't be reactive. It should be proactive and forward-thinking.

Strategies such as Roth conversions and tax diversification can help reduce your lifetime tax burden while also creating more flexibility in retirement. They can also improve the tax efficiency of what you leave to your heirs.

The key message is: It's not about how much you accumulate over your lifetime; it's about how much you get to keep. What you keep plays a major role in what you ultimately pass on.

3. Long-term care: The risk that can undo everything

Long-term care is one of the largest financial landmines people face in retirement and, unfortunately, one of the least planned.

Whether it's in-home care, assisted living or a nursing home, the cost can be substantial. Without a plan, those expenses often come directly from your assets, quickly reducing the value of your estate.

There are generally two approaches: Self-insuring by relying on your own assets or transferring some of that risk through insurance-based solutions, such as life insurance policies with long-term care benefits. Either way, the key is having a plan.

Without one, even a well-built portfolio and solid tax strategy can be undone late in life. Long-term care costs have the potential to drain assets when you least expect it and when you're least likely to recover from the impact.

Build the life first, and the legacy will follow

These three pillars don't just support your financial life; they determine the outcome of your estate plan. They answer some of the most important questions: Will your assets last? How much will be left? Will it be transferred efficiently?

Legal documents don't create wealth; they organize it. If the underlying financial plan isn't strong, even the most carefully drafted estate documents won't achieve their intended purpose. In many cases, a lack of planning during your lifetime can lead to the very worst-case scenarios people try to avoid in the first place.

Estate planning is often framed as preparing for the inevitable, but it's about something much bigger. It's about making thoughtful and intentional decisions throughout your life so that your money supports you the way it should, so that when the time comes, there's something meaningful to pass on.

A will can distribute your assets, a trust can control them, but neither can replace a well-planned financial life. If you want to leave a lasting legacy, start by building a plan around your life. The rest will follow.

Conversations around your finances and estate should never occur separately. At Blue Ridge Wealth Planners, we take the complexity out of financial planning, helping clients create a plan for everything, from investments, income, taxes, healthcare and your legacy.

In the next article of this series, I'll explain the three-step process (Design, Structure, Funding), highlighting the critical but often-missed "Funding" step to make a trust legally effective.

Blue Ridge Wealth Planners is an investment adviser registered with the Securities and Exchange Commission. SEC registration is not an endorsement by the SEC nor does it imply a certain level of skill or training.

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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've worked with enough successful business owners to know that almost every one has the same gap in their plans.

Take a scenario I see all the time: Dave built a widget company from nothing into a $30 million business. He's sharp, disciplined and completely focused on growth.

But when I ask him what his plan looks like after the company's sale, he stares at me like I've asked him to solve a riddle in an unknown language.

Dave isn't unusual. Most successful entrepreneurs pour every ounce of energy into building a business and almost none into planning for what happens when it turns into liquid wealth.

It's not carelessness. Building the company is the priority. If it doesn't succeed, there's nothing for which to plan.

The problem is that by the time the exit is real and there's a signed contract and a closing date, the biggest wealth-building opportunities have already passed. The cost of that timing gap can run well into the millions.

Three things business owners aren't considering

The same three blind spots come up again and again:

• The first is business structure. How the company and the owner's personal stake are organized for tax purposes. Whether you're a C corp, S corp, LLC or LLP affects not just annual income taxes but the tax treatment of any future sale. Get this wrong at formation, and you could be locked in for decades.
• The second is succession planning. For a business to command a strong valuation, it needs to be transferable. This means there is management in place, client relationships are institutional rather than personal, and operations can run without the founder. Buyers pay a premium for businesses they can take over immediately.
• The third is exit and estate planning. This one costs families the most money. A successful sale creates a massive tax event. Without years of advance planning, your options to reduce that burden shrink dramatically.

Why the math gets worse as the business grows

Valuation multiples expand as revenues grow. A company with $200,000 in EBITDA might sell for five times, or $1 million. Scale to $3 million in EBITDA and a 10-times multiple puts the value at $30 million. At $35 million in EBITDA, a 20-times multiple can push it to $700 million.

Industry and revenue quality directly impact these numbers, but the pattern holds: The bigger the exit, the bigger the tax event.

The federal estate tax rate above the exemption is 40%. The current lifetime exemption is $15 million per person ($30 million per couple), which is the most generous in U.S. history.

But Congress can change that number. A sale that pushes your estate above the exemption can trigger an enormous tax bill for your heirs if you haven't planned ahead.

What early planning looks like

If a business owner shows up with a signed purchase agreement and asks what can be done to reduce the tax hit, the honest answer is: Not much. The valuation is set. The structure is locked. The die has been cast, as we say.

The difference between the business owner who plans five years out and the one who plans five months out can easily be eight figures.

Let's revisit Dave's scenario. Five years before his planned exit, we started working on a strategy. Dave created an irrevocable trust for the benefit of his wife and children and transferred 50% of his company, valued at $15 million at the time, into that trust.

When the company sold for $60 million, the trust's half was worth $30 million, and that $30 million was outside Dave's taxable estate.

He paid long-term capital gains of 20% on the sale rather than ordinary income rates of 37%, and by moving assets out of his estate at a much lower valuation years earlier, he avoided what could have been $12 million in estate taxes on the growth alone. All told, early planning saved Dave's family north of $20 million.

Two types of trusts come up most often in these conversations:

• A spousal lifetime access trust (SLAT) is an irrevocable trust that names the spouse as beneficiary during their lifetime, then passes to children and grandchildren. It works well when the business owner might still need access to income or assets from the trust.
• An intentionally defective grantor trust (IDGT) skips the spousal access and goes directly to children and grandchildren.

Both of these options share the same critical advantage: The assets are valued when they go into the trust. For a growing business, that means transferring at a relatively low valuation years before the exit and letting all that appreciation happen outside the taxable estate.

Charitable strategies can strengthen the plan further. Donating appreciated stock to a donor-advised fund — or, for private company shares, to an organization that accepts them — delivers meaningful tax benefits over donating cash. These tools work best when built into the strategy early.

Four things to do now

If you own a business and think you might sell it someday (even if "someday" feels like a decade away) here's where to start.

1. Find the right wealth manager. Look for someone who works specifically with business owners and can help you build a long-term plan that connects your business goals to your personal financial picture. This isn't a one-meeting exercise, it's an ongoing relationship.

2. Assemble your full team and get them on the same page. Alongside your wealth adviser, you also need an attorney and an accountant, all working from the same playbook. These professionals shouldn't be operating in silos. The value comes from coordination. To ensure this, I encourage you to ask your team four questions:

• What is the plan?
• How are we going to get there?
• Who else needs to be involved?
• What are we not thinking about? This is the one most people forget.

3. Start three to five years before any potential sale. This is the window when the most powerful strategies, including trust planning, ownership restructuring, estate tax reduction, are still available to you. If you wait until a deal is on the table, most of those doors close.

4. Execute aggressively. An unexecuted plan is worthless. Once the strategy is in place, move on it. Every year of delay is a year that asset values grow inside your taxable estate instead of outside it.

The future will arrive faster than you think. Time is your single greatest ally in wealth planning but only if you use it.

The entrepreneurs who start early, build the right team and execute with urgency are the ones who keep the wealth they spent a career creating.

The ones who wait? They pay for it.

Related Content

• 4 Retirement Risks Business Owners Often Overlook
• When Starting a Business, the End Is a Very Good Place to Start
• The Entrepreneur's Exit: How to Sell (or Pass on) Your Business Without Losing the Family
• Planning to Leave Your Business? How to Find the Right Buyer
• To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around You
• The Most Important Number for a Business Owner Considering a Sale

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

For retirees and those closing in on retirement, understanding how to manage required minimum distributions (RMDs) is essential.

These government-mandated withdrawals must be taken from tax-deferred retirement accounts, such as traditional IRAs and 401(k)s, starting at age 73. Yet, as a longtime financial adviser, I've learned that many investors nearing that age aren't familiar with how RMDs work or prepared to deal with the extra taxes they can trigger.

Even those who know something about RMDs aren't always aware of recent rule changes or useful strategies that might help reduce their RMD tax burden. That means they could easily make costly missteps that impact their retirement savings.

What are RMDs?

The IRS doesn't allow retirement savers to keep money stashed in their tax-deferred accounts indefinitely. Once you turn 73, you must begin withdrawing a minimum amount annually (based on an IRS formula) and pay ordinary income taxes on that amount.

These mandated withdrawals are called required minimum distributions. And failing to take the appropriate distribution at the correct time can result in a hefty penalty.

The RMD rules apply to all tax-advantaged plans except Roth IRAs because those account owners have already paid taxes on their contributions.

Common mistakes with RMDs

1. Taking RMDs without advance tax planning

RMDs start at age 73 for most people born between 1951 and 1959. And those born in 1960 or later will start at age 75. But I recommend planning for these complicated withdrawals long before you're required to take them.

When you hear retirees complain about paying much more in taxes than they expected in any given year, it's often because they weren't ready for how RMDs would affect their taxable income.

For example, your RMD could push your income past the IRS threshold that determines whether your Social Security benefit will become taxable and at what percentage it could be taxed.

Your withdrawal could also trigger the income-related monthly adjustment amount (IRMAA), a surcharge on your Medicare premiums. Planning ahead could help you avoid these and other RMD-related tax traps.

2. Waiting until the last minute to take your first RMD

RMDs generally must be completed by December 31 of the current calendar year. In the year you turn 73, however, you'll have the option to delay taking your RMD until April 1 of the following year. (For example, if you're turning 73 in 2027, you'll have until April 1, 2028, to take your first RMD.)

But there can be consequences for postponing. If you decide to make two withdrawals in one year, your taxable income will likely be higher for that year, which could mean facing a steeper tax bill. Before you decide to double up, you may want to run the numbers to be sure it makes sense.

In fact, waiting until the last minute in any year could cause problems if you suddenly get busy, can't afford or simply forget to take your RMD.

If you haven't withdrawn the full RMD amount by the deadline, you could face a 25% penalty on the amount you haven't withdrawn. (That drops to 10% if the RMD is corrected within two years.)

If you decide to wait until the RMD deadline, you also may have to sell investments in a down market. Spreading out your withdrawals could help reduce market risk.

3. Forgetting inherited IRA rules

Planning to leave what's left in your accounts to your beneficiaries? They, too, will have to take distributions based on IRS rules. And they, too, could face a penalty if they don't correctly calculate and take their required withdrawals at the proper time.

The rules for when account beneficiaries must take RMDs vary based on the inheritor's relationship to the original account holder. A spouse who inherits a retirement account usually has more flexibility, for instance, when it comes to determining how soon RMDs will begin and how they'll be calculated.

But most non-spouse beneficiaries are required to empty their inherited account and pay taxes on this income within 10 years of the original account holder's death. Which means adult children often end up having to take RMDs from an inherited account during their highest-earning years.

If you expect to leave money in a 401(k) or similar account to your loved ones, it's important that they have a chance to do their own tax planning. Your financial adviser should be able to suggest strategies to help them maximize your generous gift.

4. Missing out on qualified charitable distribution opportunities

It may be difficult to predict exactly how much your RMDs will be from year to year — or how much they might impact your taxes. But just knowing they're coming will give you an opportunity to prepare.

If charitable giving is part of your financial plan, a qualified charitable distribution (QCD) can help you further your philanthropic goals and reduce the tax hit from your RMDs.

QCDs allow individuals age 70½ and older to make tax-free donations directly from an IRA to a qualified charity, potentially satisfying all or part of the annual RMD amount due from their eligible accounts.

A QCD doesn't offer a tax deduction, but the amount of your QCD won't be included in your taxable income. And you can make a QCD from several different types of tax-deferred retirement accounts — although there are rules regarding using a SIMPLE or SEP IRA, and you can't make a charitable contribution from a workplace retirement plan, such as a 401(k).

5. Ignoring Roth conversion strategies before RMD age

Converting a traditional IRA to a Roth IRA can help you avoid RMDs altogether — or at least lower the amount you'll have to withdraw each year.

Unlike traditional IRAs, Roth IRAs don't require that you take RMDs during your lifetime. This means you can keep your money invested for as long as you want, allowing it to grow tax-free. And if you pass on a Roth IRA to your heirs, they can take their RMDs tax-free.

Of course, you'll have to pay taxes on the amount you convert, so timing — and planning well in advance of your RMD age — is important. Minimizing your income sources in the year you plan to do the conversion can help keep your tax liability as low as possible.

Many retirees find the "sweet spot" for completing a conversion is after they've stopped working but before they begin receiving Social Security benefits or pension payments.

Your adviser can help you determine if and when a Roth conversion makes sense for your needs.

Don't put off RMD planning

If you expect to withdraw the IRS's required amount — or more — each year to cover your living expenses in retirement, RMDs may not be a concern for you. But if RMDs will impact your income, tax and estate planning, you may want to seek guidance.

The rules are complex, and making a mistake can be expensive.

The IRS website offers basic information regarding the overall RMD regulations. But if you want more specific advice and ongoing support, consider talking to a financial adviser ASAP.

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

• How to Calculate RMDs (Required Minimum Distributions) for IRAs
• New RMD Rules: Starting Age, Penalties, Roth 401(k)s, and More
• You're Stuck Taking RMDs: Now What?
• Inherited an IRA? Key Distribution Rules to Know
• 8 Factors to Consider When Considering a Roth Conversion

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.

Meet Mike, a 67-year-old who has owned the same set of small Texas rental properties for 31 years. He's ready to step back.

The tenant calls, the late-night plumbing emergencies, the property taxes that climb every year? He's done. So he sells one of his appreciated properties (the highest-maintenance one!), and starts the 1031 exchange clock.

Forty-five days to identify a replacement property. One hundred eighty days to close.

In the past three years, that has sometimes been a challenging window. Replacement properties have been thin on the ground. Sellers and buyers couldn't agree on the price. Lenders have been cautious. Mike, three years ago, might have spent his 45 days in a panic and pulled out, paying the tax he was trying to defer.

Today, Mike has a different problem. Not too few options — too many.

Last week, Mountain Dell Consulting reported that the Delaware statutory trust market is now sitting on the largest inventory of investable equity it has ever had. About $3.9 billion of available equity across roughly 100 DST offerings, according to Mountain Dell associate Seth Anderson, who shared the figures with Bisnow on May 29.

The previous high-water mark was $3.2 billion, recorded in May 2023. And that's just what's open for new capital. Through May 2026, sponsors had already raised an additional $3.75 billion, up nearly 24% from the same period in 2025 ... with Mountain Dell projecting $10 billion to $11 billion in total DST sales by year-end.

That is a meaningful shift. And if you're sitting on a property sale, considering a 1031 exchange, or wondering whether passive real estate makes sense in your retirement plan, you must understand what just happened.

What is a Delaware statutory trust (DST)?

If you're new to the conversation, a DST is a legal structure that holds title to commercial real estate on behalf of multiple investors. You buy a fractional interest. A professional sponsor (typically a real estate firm) handles the work: Acquisition, financing, property management and eventual sale.

The IRS confirmed in Revenue Ruling 2004-86 that a DST interest qualifies as "like-kind" replacement property under Section 1031. So an investor selling a rental house, an apartment building, an office park or raw land can roll the proceeds into a DST and defer the capital gains tax — the same as if they had bought another property directly.

The minimum investment for most DSTs is about $100,000. Some go lower, some significantly higher.

For a 1031 exchanger facing the 45-day clock, a DST is often a safety net. Increasingly, though, it's the main event.

Why DST inventory hit a record high in 2026

Two forces are pushing equity into the DST space.

The first is the supply side. Major institutional names like Ares, Hines and Blue Owl currently lead the DST market by volume, while recent entrants, including Apollo, Nuveen, Fortress and Invesco, have launched their own DST funds in the past two years.

Fortress launched its DST fund in March, targeting housing for older people, student housing and multifamily.

Nuveen rolled out a DST last year that converts property sellers into investors in its $2.1 billion nontraded real estate investment trust (REIT).

Through May 2026, Ares alone accounted for nearly 22% of all DST equity raised — more than twice the next-largest sponsor.

The second is the demand side. Replacement property inventory in the broader market is tight; financing terms have stayed expensive. The bid-ask gap between sellers and buyers has been wide enough to kill plenty of deals.

First American Exchange Company, a national qualified intermediary, reported that its DST transaction volume rose 55% from 2025 to 2026. President Julie Baird told Bisnow the 1031 market is "fundamentally different than it was even five years ago."

Investors are choosing the certainty of a fully structured, professionally managed property over the uncertainty of chasing a direct deal in a difficult market.

What the record DST market means for 1031 exchange investors

Three things change when there is $3.9 billion in inventory, rather than $2 billion, waiting for capital.

First, you have selection power. You can be picky. You can compare a multifamily DST in Phoenix against a net-lease retail DST in Charlotte, against an industrial DST outside Atlanta.

Five years ago, 1031 exchangers were grateful for any DST they could close on inside the 45-day window.

Today, you can build a small portfolio across asset classes and geographies inside a single exchange.

Second, sponsor quality matters more than ever. When inventory was tight, you took what was available. With this much equity competing for investor attention, sponsors have to put their best deals forward to differentiate.

That said, not every offering on the market is a good one. The 1031 timeline pressures investors into decisions, and sponsors know it. Some offerings still arrive with thin reserves, optimistic distribution projections or debt that will be in trouble at the next refinance. It's critical to differentiate.

Third, and this is the one Mike cares about, DSTs are increasingly being used as a starting point for a longer wealth strategy, not just a one-time tax move. Some DST sponsors are affiliated with REITs and offer a future exit through a 721 UPREIT, in which DST holders contribute their interests into a REIT's operating partnership in exchange for partnership units. Tax-deferred.

That is a separate and complex topic — one I wrote about in my article Can You 1031 Exchange into a REIT? — in which the exit options are wider than they used to be.

DST investment risks every 1031 exchanger should know

A record inventory is good news for buyers … but it's not a free pass.

A handful of DST sponsors have had financial trouble in recent years. Properties carrying debt placed in 2020 or 2021 (when borrowing was cheaper) are facing refinancing realities that the original projections never modeled.

Some vintage 2019 and 2020 DSTs have struggled to deliver the distributions investors were originally shown.

Baird at First American said it plainly to Bisnow: "There have been some DST sponsors that have had some financial challenges, and so it really is incumbent upon those interested in those types of investments to understand the mechanics of the transaction and who's backing it."

That is the right framing.

5 questions to ask before investing in a DST

If you're evaluating a DST inside a 1031 exchange, or evaluating whether to consider one at all, here are five questions I would put on the table before signing anything.

1. Who is the sponsor, and how have they performed on prior DSTs over the past 10 years? Not their pitch deck. Their record.

2. What is the debt structure on the underlying property, and when does the loan mature? If the loan matures during a tough rate environment, the projected returns may not survive the refinance.

3. What does the lease tail look like? If a major tenant's lease expires in three years and the DST's expected hold is seven years, somebody is going to have to re-lease the space.

4. What is the income yield investors should reasonably expect, net of all fees? Not the gross number on the cover page. The net.

5. What happens if the property doesn't perform? Reserves, contingencies, sponsor obligations. Read those sections of the offering documents twice.

These are not "gotcha" questions — these are the basics. A sponsor who answers them clearly is a sponsor worth considering.

A sponsor who deflects is telling you something.

How to evaluate today's DST market in a 1031 exchange

Anderson at Mountain Dell told Bisnow he expects the DST market to remain in a "heightened level of sensitivity for the next three or four years." For investors, that sensitivity is an opportunity dressed in caution.

Mike, our 67-year-old hypothetical seller, will close his 1031 exchange this summer with three DST positions across two states. He will trade his late-night plumbing calls for monthly distributions. He will keep his deferred tax intact.

And because of the basis step-up at death, he will be in a stronger position to pass real estate equity to his children than he was with the rental properties he had 10 years ago.

That outcome is available to more investors than ever before in the history of the DST market.

The bigger questions are whether it fits your specific situation and which of the 100-plus current offerings are worth your money.

That is the conversation worth having before inventory tightens up again. (Which, historically, it always eventually does.)

Related Content

• Counting on Real Estate to Fund Your Retirement? Avoid These 3 Costly Mistakes
• Do Self-Storage REITs Deserve Space in Your Portfolio? It's a Yes From This Investment Adviser
• How Well Do You Know Delaware Statutory Trusts? Test Your Knowledge
• I'm a Real Estate Investing Pro: This Is 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 article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The estate planning field has developed an impressive sophistication when it comes to carrying out a person's final wishes.

Virtually without fail, estate planning documents work as intended, accounts transfer, and instructions are followed to the letter.

When it comes to the orderly dispersal of a person's estate, lawyers and estate planners almost always have the process well in hand. But what they might not fully understand is the reasoning behind the directives.

When a loved one passes, his or her directives might be followed to the letter. But it's not uncommon for family members to be confused about the thinking behind those directives. Why was an asset allocated in a certain way? What priorities shaped those choices?

While the written directions might be clear, the thinking behind those directions could be murky, even hurtful.

So much more to account for today

For decades, estate planning has focused, appropriately, on the orderly transfer of assets, even as the process has grown more complex. Today's plans must account not only for bank accounts and property, but also for online financial tools, subscription services, digital files and, increasingly, cryptocurrency holdings.

In response, a range of tools has emerged to handle those new logistics, such as Apple Digital Legacy and Google Inactive Account Manager allow designated individuals to access accounts after a period of inactivity or death.

Digital vaults and estate organization platforms help centralize passwords, documents and key information.

These are important advances that help loved ones find and manage assets that have been left behind.

While those tools work as intended, they fail to make clear what the deceased person might have been thinking when he or she prepared the final will. I've seen families receive everything they need to administer an estate, but struggle to make sense of it.

The legal framework might be intact, but the human context is missing. Without that context, even well-designed plans can create confusion, tension or second-guessing among those left behind.

This is what I think of as the "context gap" in estate planning.

Why were certain choices made?

A will can distribute assets, but it rarely conveys the reasoning behind those decisions. A trust can outline conditions, but not the personal considerations that shaped them. Even the most detailed plan can't fully capture a person's intentions, relationships or values.

As a result, families are often left to interpret those decisions on their own. Sometimes that interpretation is straightforward. Other times, it isn't.

Siblings might wonder why certain choices were made. Executors could feel uncertain about how much discretion they should exercise. Adult children might struggle to reconcile what they see in documents with what they believed about a parent's wishes.

These are not failures of planning. They are limitations of the tools we've traditionally used.

Even so, estate planning is beginning to evolve into two parallel tracks. The first is the familiar transfer of assets, the management of taxes and the legal structures that ensure everything is handled properly.

The second is communication of intent. This includes messages people might want to leave behind — explanations of key decisions, expressions of gratitude, guidance for future choices or simply words that help loved ones understand not just what was done, but why.

Preserving the meaning behind estate planning

Up to now, people have tried to address this informally. Some have written letters to be opened after death. Others recorded videos or left notes with attorneys or family members.

But these have often been inadequate. They have been difficult to update, and they have not always delivered their messages at the right time — or even at all.

New tools are attempting to address this need more systematically. Platforms focused on what is sometimes called "digital inheritance" aim to complement traditional estate planning by preserving not just assets, but the meaning behind it.

Systems such as OneFinalMessage.com allow individuals to store messages alongside important documents and update them as circumstances change.

Features make it possible to ensure such messages reach the intended recipients when they're needed and not be overlooked or lost. These new products are aimed at recognizing that a complete estate plan may require more than legal precision.

For individuals, this raises a simple but important question: If something were to happen tomorrow, would the people who matter most understand not just what you left them, but why?

For financial advisers and estate planning professionals, all this suggests an opportunity to broaden the conversation. It encourages planners to ask clients how they want to be understood, and whether their plans reflect that.

Related Content

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• How to Tackle Digital Estate Planning in Four Easy Steps
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• 10 Things You Should Know About Estate Planning
• 5 Estate Planning Things You Need to Do Now, From a Financial Planner

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 planning tends to get treated as a math problem: Should we retire with $2 million or $3 million? Can we spend $7,000 a month or $9,000 a month? Should we claim Social Security at 62 or 67?

Those questions matter. After years of helping people work through retirement plans, though, I've noticed that the couples who struggle most aren't always the ones who got the math wrong. They're the ones who never had the harder conversations.

They assumed they were on the same page about the big money decisions. Then, with retirement suddenly in view, they discovered they had completely different pictures in their heads.

One partner was imagining travel and adventure. The other was counting on staying close to family. One had already mentally quit their job. The other assumed they'd both work part-time for years. None of it surfaced until it was almost too late to plan around.

A few meaningful conversations, well before you hand in your notice, can change that. Not just for your relationship, but for the quality of your financial plan. When you and your partner understand each other's priorities, the plan you build can reflect what both of you want, not just what one of you assumed.

1. What does retirement look like for you?

Start here, before you analyze a single number.

Ask each other: What does a great day look like once we're not working? What do we want most in the first ten years of retirement? What do we want to make sure we don't miss?

In my experience, couples are often closer on this than they expect. I've sat with partners who came into the conversation thinking they wanted completely different retirements. One wanted adventure and outdoor travel. The other wanted family time and one meaningful trip each year.

When they finally talked it through, the overlap was bigger than either had assumed. They agreed on more travel early, especially with family while everyone was still healthy, then a slower rhythm later.

That shared picture became the foundation for everything else.

If you haven't had this conversation yet, have it before you do any serious retirement modeling. The numbers should serve the vision, not the other way around.

2. How do you and your partner think about money?

Money values don't always surface until markets drop or a major financial decision lands on the table. In retirement, that's too late to be caught off guard.

A lot of those values trace back further than most couples realize. Someone who grew up in a household where money was tight, where a job loss or medical bill created real hardship, often carries a deeply cautious relationship with spending and risk. Their instinct is to protect what they have.

Someone who grew up in a more financially stable environment, or where conversations around money were fruitful, may feel far more comfortable letting a portfolio ride through volatility.

I've seen couples who had managed their finances together for decades suddenly disagree sharply when markets fell 20%. One wanted to pull back and preserve what was left. The other wanted to stay the course and let the portfolio recover.

The disagreement wasn't really about the market. It was about two very different relationships with financial security, shaped long before they ever met each other.

Ask each other:

• How much of a cash cushion would help you sleep at night?
• How flexible are you willing to be with spending if things get tight?
• How much financial risk are you willing to accept in exchange for a potentially higher income in retirement?
• If one of us wanted to make a large unplanned purchase, how would you want to handle that conversation?

A partner who is naturally conservative with money and one who is comfortable with more equity exposure can absolutely build a plan together. They just need to have talked about it first.

This is also a conversation where working with a financial professional can help. Sometimes it takes an outside expert to help two people with different money values land on a plan they both feel comfortable with.

3. When do you really want to retire?

This is often where fear and anxiety show up. One partner worries they're retiring too soon. The other wonders if they'll ever get to stop working. The conversation feels loaded, so couples tend to avoid it.

The better approach is to be direct: When do you picture leaving full-time work? Does part-time feel right as a transition? What makes you nervous about the timing, and what makes you excited?

I worked with a couple, both in their early sixties, who had never really compared notes on retirement timing. He assumed they'd both work until 65. She had quietly been hoping to stop at 62. Neither had said it out loud. When they finally did, they realized they were close enough to build a real plan around.

They modeled retiring at 63 and 61, with the husband doing some part-time consulting for one year as a transition. Their Boldin plan showed a very strong chance of success (often referred to in the financial planning industry as a Monte Carlo score).

They ran a second version with no part-time income at all. That scenario still came back above 80%. To them, a one-in-five chance of ever needing to make a modest planning adjustment, like trimming discretionary spending during a rough stretch in the market, felt entirely manageable. What had originally felt like a daunting conversation became a confident plan in a single afternoon.

That's the value of running the numbers. When couples can see what different timing scenarios look like, the fear tends to give way to something more useful: A real decision they can act on.

4. Where do you want to live?

Where you live in retirement touches almost everything: Lifestyle, cost of living, proximity to family, state income taxes and emotional ties to a community you may have spent decades building.

Ask each other:

• Do you want to stay where you are?
• Would downsizing make sense?
• Is there somewhere else you've always wanted to live, or a second home worth exploring?
• If moving closer to family becomes a priority, when would that realistically happen?

This conversation can carry more emotional weight than couples expect. The family home means something. So does the idea of being nearby when grandchildren start arriving.

I've seen couples who were completely settled on staying put change their thinking the moment a grandchild entered the picture. Suddenly, the question wasn't whether to move, but when. That shift has real financial implications worth planning around before the emotions of the moment make the decision for you.

Moving to a different state, for instance, can have a significant impact on how retirement income is taxed. Some states exempt Social Security, pension income or IRA withdrawals entirely. Others tax all of it. A move that feels modest on paper can look very different once you account for those differences.

If there's a potential move in the back of either partner's mind, whether that means downsizing, relocating or buying a second home, surface it now. Treating it as a real option in your planning, even a tentative one, gives you a much clearer picture of what retirement could look like.

5. How do you protect each other later in life?

I saved this one for last, because it's usually the conversation couples save for last, if they have it at all.

Nobody wants to sit across from their spouse and talk about who's likely to outlive whom. The financial decisions you make now, around longevity and Social Security, will determine how well the surviving spouse is protected when that happens.

Start with longevity assumptions. There are several life expectancy tools that factor in family history, health habits and current age. Use them as a starting point, then consider building in a scenario where one partner's longevity is shorter than expected.

Not because you're planning for the worst, but because you want to understand the financial impact on whoever might be left with a longer retirement ahead.

Next, look carefully at Social Security timing. Most couples default to claiming at full retirement age without running the numbers on what delaying might do. Waiting to claim until 70 can significantly increase the monthly benefit and provides a stronger guaranteed income stream for whoever lives longer. When one spouse passes, the surviving spouse keeps the higher of the two benefits. That decision is one of the more powerful tools available for protecting each other.

Long-term care is the other piece most couples avoid. Roughly 70% of people turning 65 today will need some form of long-term care during their lifetime, whether that's in-home assistance, assisted living or memory care.

The costs can be significant, and they tend to arrive at exactly the moment a portfolio can least afford a large, unplanned withdrawal. Some couples self-fund by setting aside a dedicated reserve. Others explore long-term care insurance or hybrid life insurance policies with a long-term care benefit.

What matters most is having the conversation before a health event forces it.

Start the conversation, then build the plan

These can be some heavy conversations, so don't feel the need to tackle them all in one sitting. Starting with these five, though, gives you a strong foundation and a shared sense of direction.

When you know where each of you stands, the retirement plan you build reflects both of you, not just a set of numbers one partner entered into a planning software or spreadsheet.

For couples, retirement planning should not be a solo endeavor. The plan that holds up isn't the one with the biggest portfolio. It's the one both partners built together.

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More and more retirees are "retiring" from retirement.

Data from the National Institute for Occupational Safety and Health shows the number of retirement-age Americans in the workforce is growing.

And in a survey by Asset Preservation Wealth & Tax, 51% of respondents who'd reached retirement age said they plan to work indefinitely.

The reasons for retirees planning to work into their later years vary. Some simply have to from a financial perspective, while others want to live an active, purposeful life.

However, working during retirement brings challenges and trade-offs, especially when it comes to Social Security benefits, taxes and healthcare. The decisions you make about when to start claiming Social Security and whether you plan to keep working can have lasting consequences.

The pitfalls of claiming Social Security too early

A common phrase we hear is, "I'll just take my Social Security benefits at age 62." While it's true this is the first age you can start claiming benefits, doing so can backfire, particularly if you keep working.

If you claim and continue working before reaching your full retirement age, which is between 66 and 67 depending on your birth year, a portion of your benefits may be temporarily withheld owing to Social Security earnings limits.

For 2026, you can earn up to $24,480 before benefits will be withheld. In the year you reach full retirement age, the earnings limit increases to $65,160. After you reach your full retirement age, there are no earnings limits.

Upon reaching full retirement age, your benefit amount will be recalculated to give you credit for any benefits reduced and withheld.

Additionally, once you've started collecting Social Security, stopping and starting benefits is complicated and can permanently reduce your lifetime payments. It's not a switch you can easily flip on and off.

Bridging the healthcare gap: Age 62-65

Another major issue for people who claim Social Security benefits early is healthcare. Medicare eligibility doesn't begin until age 65, so if you leave your employer's health plan and retire at 62, you'll need to find coverage on the open market, which can get expensive.

Working part-time may provide access to employer healthcare, but that could put you at risk of exceeding the Social Security income limits. You could turn to private insurance, but the premiums can easily use up a large portion, or even all, of your Social Security check.

The three-year gap between age 62 and 65 is one of the most overlooked in retirement planning. I recommend sitting down with a financial adviser to go through all of your options before claiming early and potentially setting yourself up for financial failure, watching sky-high out-of-pocket premiums drain your savings faster than expected.

Income, taxes and the cost of working in retirement

Even after reaching full retirement age, when the Social Security earnings limit no longer applies, income from work can still impact your finances. That's because it depends on your total income.

If you're single and your combined income, the sum of your adjusted gross income (AGI), non-taxable interest and half of your Social Security, exceeds $25,000, or $32,000 for married couples, up to 85% of your Social Security benefits may be taxable.

In other words, the more you earn from working, the more you may have to give back in taxes. It's not necessarily a reason to stop working, but it does highlight the importance of strategically coordinating your income sources.

Knowing when to claim

Many people think waiting to claim Social Security until age 70 is always the best option, since benefits grow by about 8% each year after full retirement age until age 70. While that may maximize the amount you receive every month, it's not right for everyone.

For some retirees, the time value of money may matter more. For example, some may start taking benefits at 67 or 68 and use that income strategically by reinvesting it, reducing portfolio withdrawals or using it to strengthen their overall retirement cash flow.

There's also a break-even point, where the total amount collected by claiming early can surpass what you'd get by delaying. For married couples, it often makes sense to strategically stagger claims, with one spouse claiming earlier and the other delaying for a higher survivor benefit.

At the end of the day, there's no one-size-fits-all when it comes to claiming Social Security. It all comes down to finding the right balance of longevity, income needs and your overall financial plan.

Social Security should supplement, not replace, your income

Social Security was never designed to be the sole source of retirement income. It was meant to supplement, not replace, your paycheck.

You will likely need around 70% of your pre-retirement income to maintain your current lifestyle, and Social Security was only meant to cover about 40% of that.

That isn't to say Social Security doesn't matter. After all, those benefits come from decades of contributing payroll contributions. It's money you've earned. While the benefit may not be life-changing, it can still help cover major expenses, such as housing, travel or healthcare.

The importance of having a plan for claiming Social Security

Working in retirement can be incredibly rewarding, personally and financially. But it also requires strategic planning, especially if you plan to claim Social Security early.

Deciding when and how to claim Social Security is one of the most important financial choices retirees make because reversing your initial decision can be complicated and costly.

Before you claim, make sure you understand how your job, income and healthcare could affect your benefits. Working with a financial professional who can help you strategize Social Security with your overall financial plan can make a big difference. The right timing and strategy can help you keep more of what you've earned and lead to a more confident retirement.

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

As children reach adulthood, many parents assume they'll still be able to step in when needed. In reality, that dynamic often changes quickly. Once a child turns 18, parents can lose both visibility and influence in ways they may not expect.

That's why I suggest having two difficult conversations that can make a meaningful difference: The first helping your children build financial literacy, and the second ensuring you can support them effectively in a medical emergency.

Neither is especially comfortable, but both are far easier to have now than after something goes wrong.

Conversation one: Talk openly about money

Parents are often reluctant to be transparent about money with their children. Some think they're shielding their kids from stress; others are just trying to practice good manners. But in practice, silence creates confusion.

When parents don't explain what's happening financially, children tend to fill in the gaps on their own. And those assumptions are often negative.

In my work with clients in their 20s and 30s, I see the long-term effects of this all the time. Some develop a persistent fear that they'll never be financially secure, even when they're doing well. Others assume a certain lifestyle is easily attainable, only to find themselves living far beyond their means.

Much of this comes down to a lack of context. Income and lifestyle are not always aligned in obvious ways. Some high earners live modestly, while others stretch their budgets to maintain a certain standard of living. Without visibility into the numbers behind those choices, children can develop a distorted understanding of what things actually cost.

That's why it's important to start talking about money earlier, and more specifically, than many families are comfortable with. If you start with simple conversations in the early teenage years, and let the discussions become more detailed as the child grows up, they should have a working understanding of how money functions in day-to-day life by the time they prepare to leave for college or turn 18.

That may include not just opening a bank account, but also:

• How to use debit or credit cards responsibly and build strong credit
• How to budget for fixed and variable expenses
• How student loans, interest and repayment work
• The importance of saving early and how compounding works
• The difference between gross and net pay (including taxes and benefits)

This doesn't mean sharing every detail, but it does mean giving your children a clearer picture of how financial decisions are made. That can include discussions around income ranges and career paths, the cost of housing and day-to-day expenses, savings and investment priorities and trade-offs, and financial setbacks.

Be candid about the full picture, and your children will begin to develop a more intuitive understanding of how money works.

You might also consider bringing a third party into the conversation. If you work with a financial adviser, your child could sit in on a meeting. Hearing these discussions from an objective professional can make the information feel less charged and more credible than when it comes directly from a parent.

Over time, this kind of exposure can reduce anxiety and build confidence. Instead of reacting to money problems with fear or avoidance, your children can begin to see it as something they can understand and manage.

Conversation two: Prepare for a medical crisis

Once your child turns 18, you may assume you'll still be able to step in if something goes wrong. Legally, that's no longer the case.

Under federal privacy laws, doctors and hospitals generally cannot share medical information with you without your child's written consent. That means parents can find themselves in the ER unable to get updates, speak with physicians or understand what's happening in real time.

Consider an unfortunately common scenario: A student experiences a severe mental health episode away from home. Without prior authorization, parents may not be able to speak with providers, review treatment plans or even confirm what care is being given. But with the right documents in place, they can stay informed and provide support when it matters most.

This is why the conversation needs to happen early. You might even make it part of the college send-off, alongside setting up a bank account.

The most important step here is signing a Health Insurance Portability and Accountability Act (HIPAA) authorization form, which authorizes medical providers to share information with you. While HIPAA is a federal law, the specific forms and requirements can vary by state, so it's also important to confirm local requirements.

But remember that this is a conversation. Your adult child may have their own concerns about privacy or independence. Framing this as a way to support them, not control them, can make the discussion more productive.

Don't wait until something goes wrong

These are not conversations you want to delay until something goes wrong. Financial habits are far easier to build early than to correct later, and in a medical crisis, preparation may determine whether you can step in at all.

Discussing both proactively can give your children a stronger foundation for navigating adulthood. These conversations may feel uncomfortable in the moment. But they are far less difficult than the confusion and stress that can arise when these issues are left unaddressed.

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

Many people don't begin planning for retirement until later in life. Saving earlier can feel financially difficult or secondary to more immediate priorities.

But delaying retirement investing comes at a significant cost: time.

Even modest investments made early can grow substantially through compound returns. The longer money remains invested, the greater the opportunity for growth and long-term financial security in retirement.

Household wealth in the United States is highly concentrated. The top 10% of households hold most household wealth, while the bottom half own only a small share.

One major driver of this divide is access to assets early in life and the long-term power of compounding investments. These differences often begin in childhood.

Children who grow up with savings or investment accounts are more likely to learn the basics of managing and investing money. They might hear conversations about markets at the dinner table or learn early how compound growth works. Over time, those experiences can shape confidence, financial habits and long-term participation in investing.

Many children, however, don't have those advantages. They enter adulthood without access to financial assets or foundational financial education.

As a result, many begin working without understanding the value of a 401(k), long-term investing or how small, consistent contributions can grow over decades. The result is a head start for some and a delayed starting line for others.

That is why proposals for child investment accounts are generating renewed conversation around early wealth-building and financial capability.

The Trump Accounts or 530A accounts create $1,000 pre-seeded investment accounts for children at birth. The broader principle behind them is straightforward: The earlier investing begins, the more powerful its long-term impact can be.

Educational tools should accompany these accounts. Free educational programs such as the SIFMA Foundation's Family InvestQuest™ and Summer Stock Market Game™ can help families build financial knowledge alongside saving and investing habits.

The power of time in investing

One of the simplest truths in finance is also one of the most important: Time is an investor's greatest advantage. The reason is compound growth — investment returns generating additional returns over time.

Consider a simple example. If $1,000 were invested at birth and earned an average annual return of 7%, that single deposit could grow to roughly $3,400 by age 18 without adding another dollar.

If family members contributed an additional $50 per month, the account could grow to about $25,000 by age 18.

If those contributions continued into adulthood, the balance could grow to more than $500,000 by age 59½.

The lesson is clear: Starting early often matters more than investing large amounts later.

But access to that early starting point is not equal for all families.

The growing conversation around early asset-building

Policymakers and financial educators have increasingly explored ways to expand access to investment accounts earlier in life.

Proposals for child investment accounts are built around a simple concept: Create an investment account at birth, provide an initial deposit and allow families, friends or employers to contribute over time.

Similar programs have been tested in several states and cities. Research highlighted by the Milken Institute suggests these child savings accounts or child development accounts are associated with improved financial security, stronger educational outcomes and higher long-term earnings potential.

Children with savings accounts are more likely to attend college, develop stronger savings habits and build greater financial confidence as young adults.

Even relatively small balances can grow meaningfully over nearly two decades. But the benefits might extend beyond the dollars themselves.

When children grow up knowing they have an investment account, they could begin to see themselves as participants in the financial system and future long-term investors.

Access and education must go hand in hand

Expanding access to investment opportunities is only part of the equation. Financial education is equally important.

Through programs such as the SIFMA Foundation's Summer Stock Market Game™ and Family InvestQuest™, families can learn the fundamentals of investing — including diversification, market volatility and long-term planning — in an engaging and accessible way.

Participants manage simulated portfolios using real market data while learning concepts such as asset allocation, risk management and long-term investing.

Research on SIFMA Foundation's financial education programs has found that participants demonstrate improved financial knowledge, greater confidence in investing and stronger engagement with economic concepts.

Such experiences can help demystify investing and prepare young people to make informed financial decisions and avoid when they begin managing real assets.

Financial education can also help young people understand the long-term impact of compounding and the value of beginning retirement investing early.

A step toward a more inclusive financial future

No single policy will close the wealth gap or solve decades of structural inequality. Financial security depends on many factors, including education, income stability, savings habits and access to financial tools.

But initiatives that encourage early asset-building and financial education represent a meaningful step forward. They expand participation in investing, introduce financial concepts earlier and allow time — one of the most powerful forces in wealth creation — to work in the next generation's favor.

For families, the lesson is simple: The earlier conversations about saving and investing begin, the greater their long-term impact can be.

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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 advisers spend a lot of time talking about risk, whether that's market risk, inflation, longevity, tax, sequence of returns, concentration, long-term care … The list seems endless.

But clients don't necessarily experience retirement risk as a category on a planning report. They experience it as a knot in the stomach:

• What if I run out of money?
• What if I become a burden to my children?
• What if I retire and lose my identity?
• What if my spouse dies first?
• What if the market falls right after I stop working?
• What if I need care and there is no good place for me to go?

For financial advisers, these fears can be frustrating if they appear to contradict the numbers. The plan may be strong. The portfolio may be diversified. The Monte Carlo analysis may look solid. The client may have more than enough. And yet the fear is real.

That is where the adviser's work becomes more human. The best advisers don't simply tell clients not to worry. They help clients understand which worries are emotional noise and which ones are pointing to real planning gaps.

That is the difference between fear that paralyzes and fear that prepares.

Start by normalizing the fear

Billy Spencer, a wealth manager at Crestwood Advisors in Boston, says fear can be viewed as a feedback mechanism. "The question is not whether a client feels fear. The question is whether the fear is controllable and actionable," says Spencer.

That framing can be powerful.

Clients approaching retirement are often stepping into unfamiliar territory. For 30 or 40 years, the work rhythm was clear: Earn, save, invest, repeat.

Retirement changes the assignment. Now clients must spend from assets, make healthcare decisions, think about housing, prepare for aging and build a life that may no longer revolve around professional achievement.

For high-performing executives and business owners, that can be especially unsettling.

Jeff Blomgren, managing partner and co-founder at Mountain Legacy Family Wealth Partners in Colorado, works with many executives who have accumulated substantial wealth. In his experience, the issue is not always whether they can afford to retire. It's what retirement will ask of them emotionally.

• What will I do with my time?
• How will I stay challenged?
• How will my relationships change?
• How do I remain useful?

Those are not soft questions. They are central retirement questions. Advisers who ignore them may miss the real source of client anxiety.

Separate emotional fear from planning risk

A client's fear of running out of money may mean several different things. It may mean the client truly has not saved enough, or the withdrawal rate is too high. It may mean the portfolio is poorly positioned, or the client has not planned for long-term care.

Or it may mean the client grew up in a household where money was scarce and cannot emotionally trust abundance, even when the plan is sound. The adviser's job is to help tell the difference.

Bob Dietz, a wealth strategist at Bernstein Private Wealth Management, works with high-net-worth and ultra-high-net-worth clients on issues such as tax planning, portfolio stress-testing, wealth transfer and retirement income. "Healthy fear often points to a planning gap. If the fear causes the client to focus, engage and take action, it can be constructive," he says.

That may mean stress-testing the plan under poor capital market assumptions, and modeling life expectancy, taxes, inflation and spending. It may mean looking at the impact of Roth conversions, charitable strategies, required minimum distributions or concentrated wealth created through a business sale.

For wealthy clients, the fear may not be, "Will I be poor?" It may be, "What am I missing?"

Use the plan as a compass, not a verdict

Monte Carlo analysis to stress-test a portfolio can be useful, but should not be presented as a magic bullet. Clients may not fully understand probabilities, and even an 85% or 90% success rate can leave them wondering about the other 10% or 15%.

Spencer describes planning as a compass. It helps clients make adjustments as life unfolds. That is a healthier message than presenting a plan as something carved in stone.

Retirement may last 25 or 30 years. Markets, tax laws and clients' health, family needs and goals will all change.

A good adviser can help clients expect that change instead of fear it. That may include regular reviews, updated projections and plain-English conversations about trade-offs.

Can the client spend more? Give more? Retire sooner? Work part time? Buy the second home? Help a child with a house down payment? Pay for grandchildren's college? Move into a life care community?

The point is not to eliminate uncertainty. It is to make uncertainty more manageable.

Build liquidity clients can believe in

One of the simplest ways to reduce retirement fear is to give clients a clear answer to this question: Where does my spending money come from if markets fall?

Jason Dall'Acqua, CFP®, founder of Crest Wealth Advisors in Maryland, uses planning tools, stress tests and reserve strategies to help clients understand how they can fund several years of spending without being forced to sell long-term assets in a downturn.

Blomgren describes a bucket strategy that may set aside three to five years of essential expenses in safer assets while allowing the rest of the portfolio to remain invested for longer-term growth.

That kind of structure can help clients stay disciplined. It also gives advisers language they can use during volatility: We planned for this. This is why the reserve exists. This is why the portfolio is not built around one market environment.

That does not remove fear. But it can keep fear from turning into panic.

Address the fear of spending

Many retirees need help not only with saving and investing, but with spending.

This can be especially true for clients who built wealth through discipline, frugality and restraint. The habits that helped them accumulate assets may make it difficult to enjoy those assets.

Dall'Acqua says helping clients feel comfortable spending, gifting or giving to charity can be one of the most rewarding parts of the job. But it often requires more than showing a projection. It requires conversations about values:

• What is the money for?
• What experiences matter while the client is healthy?
• What would be more meaningful — leaving a larger estate later or helping children and grandchildren now?
• What charitable causes reflect the family's values?

A healthy fear of running out of money may lead to better withdrawal planning. But an unhealthy fear may cause clients to lead a less-than-fulfilling retirement. Advisers can help clients find the middle ground.

Bring family and legacy fears into the open

Many retirement fears are really family fears:

• Will my children handle inherited wealth responsibly?
• Will one child feel treated unfairly?
• Should I help my grandchildren now?
• How do I talk about money without creating entitlement?
• Who will make decisions if I cannot?
• Will my spouse be prepared if I die first?

These concerns can lead to better planning if advisers know how to guide the conversation.

Blomgren encourages clients to think about supporting family during life, not only through inheritance. That might include education funding, help with housing, charitable giving through a donor-advised fund, or family conversations where younger generations have a voice, even if they don't have a vote.

"Advisers don't need to become a family therapist, but we can create the structure for better conversations," says Blomgren.

Don't ignore health, housing and cognitive decline

Some of the hardest retirement fears involve health.

Clients may have watched parents struggle with care decisions. They may fear dementia or becoming a burden to adult children. They may assume they can age in place, even if their home, location or family situation makes that difficult.

Spencer says these conversations often work best in smaller pieces:

• Who would you want involved if your health changed?
• Are your health care proxy and power of attorney documents current?
• What would quality care look like?
• What housing options would you consider?
• What would aging in place require?

For some clients, the answer may involve self-insuring. For others, insurance, home equity, a second-home sale or a continuing care community may be part of the plan.

The details matter less than the willingness to have the conversation before a crisis.

The adviser's soft skills are now planning skills

The future of financial advice is not just better software, better tax analysis or better portfolios. It is also better listening.

Clients need advisers who can validate concerns without amplifying panic. They need advisers who can say, "That is a reasonable fear. Let's see what it means in your plan."

That takes behavioral knowledge, empathy and patience. It takes the ability to translate complex planning into decisions clients can live with.

Fear will always be part of retirement. The question is whether advisers can help clients use it well.

Healthy fear should lead to action: A stronger plan, a clearer estate strategy, a better cash reserve, a more honest family conversation, a smarter tax strategy, a more realistic housing decision or a more intentional life.

Clients do not need to be fearless. They need to be prepared.

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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.

Growth can become a numbers game fast. More campaigns, more touches, more spend. But one adviser we work with sees it differently: Your firm can grow when you're known by your community rather than just your clients.

That's the tension many firms face. You want to scale, but you don't want to lose the human side of the business in the process. The answer for this firm was simple and disciplined. Community service was made part of the team and the job.

The result is worth your attention. It became a big part of the firm's culture, client experience and growth.

One simple rule

The adviser and their leadership set a clear expectation: Every employee would spend four hours each quarter volunteering.

That kind of rule can sound small on paper. In practice, it does something bigger. It tells your team more about what matters on the annual calendar.

We've had a similar volunteer structure at our company for more than a decade, and employees often say these days are among their favorite of the year.

For the adviser, the reasoning for the rule was also rooted in a real client need. Many retired clients, once they leave long careers, lose more than a paycheck. They can lose routine, identity and community. The firm wanted to help bridge that gap by creating opportunities for connection through local service.

That decision gave the team a stronger sense of purpose. It also gave clients a clearer picture of what the company stood for.

Here's the key turning point: This firm didn't treat community work as branding language. It was treated as behavior.

Building bridges

As a financial adviser, you're in a trust business. People don't always choose your firm only because of the process or product. They also choose you because they believe you understand their lives and will show up when it counts. Community involvement reinforces that in a very public, very human way.

At this firm, volunteer events created three kinds of value at once:

• Stronger team connection. Employees served and interacted with colleagues across departments
• Deeper client ties. Clients enjoyed shared experiences with the team outside the office
• Clearer market identity. The firm became known for doing what it said it valued

That last point matters. Plenty of firms talk about care, service and purpose. Fewer build systems that make those values visible every quarter. It's a lot like fitness. Good intentions don't change much. Consistency changes things.

Each year, clients of this firm help choose a "charity of the year," giving them an ongoing voice in the firm's outreach and creating real buy-in from the start.

Employees also volunteer during normal work hours, which removes friction and signals that the commitment is real.

The team then works with local nonprofits to create meaningful events. Before each event, the nonprofit contact comes to the office and presents to the team. They give employees context about the mission, the local chapter and how the organization serves the community.

Why does that step matter? Because people engage more deeply when they know the "why" behind the work. They aren't just filling boxes or walking a route. They understand the people and purpose behind the effort.

That's when service begins to move from task to mission.

Metrics with meaning

If you're serious about making community engagement part of your business, you need to measure what matters.

Currently, this firm tracks volunteer hours to confirm participation. That's a good start. But the team understands something important: Hours are the input, not the outcome.

The firm houses program data in a custom-built dashboard. The dashboard gives the team one place to track volunteer hours, promote upcoming service opportunities and reinforce core values.

It also includes practical resources such as team spotlights, a quarterly newsletter, marketing themes and training documents.

That kind of central hub does two useful things.

First, it keeps the service visible. If your values live only in a presentation deck, they fade. If they live in the same place, your team checks for events, updates and resources as part of their daily work.

Second, it creates accountability. When outreach has a home inside your systems, it becomes easier to plan, measure and improve.

For advisers and their firms, this is the larger lesson: Culture scales better when you give it structure. If you want your team to act on a value, put it somewhere they can see, use and track.

Five steps to build a community outreach program

If you want to create something similar in your own firm, start here:

1. Define your values. If your team can't explain why your firm serves, the program will feel shallow. Start with a clear set of core values and make sure your outreach reflects them.

2. Invite client input. Ask clients which causes matter to them. This makes the program more personal and helps your outreach reflect the community you already serve.

3. Set a realistic commitment. Four hours each quarter worked for this firm because it was specific and manageable. Choose a standard your team can meet without turning it into a burden.

4. Partner locally. Look for organizations in your area that align with your firm's values and your clients' interests. Over the years, our company has partnered with dozens of local groups of many sizes, and we're always finding new ways to connect and create impact.

5. Track your impact. Start with hours if that's the easiest place to begin. But don't stop there. Over time, measure participation, client engagement, team sentiment and referral activity.

Showing up is the strategy

Advisory firms often seek growth through new tools, campaigns and channels. Those can help. But this one example is a reminder that growth also comes from being known, trusted and present in the places that matter to your clients and your team.

When your firm shows up consistently, people notice. They remember. They talk. That's not a shortcut. It's a principle you can build on.

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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 young investor today wakes up to a TikTok video on private credit, asks a generative AI tool to draft a retirement plan over breakfast, scrolls through podcasts comparing crypto custodians on the commute and fields a robo-adviser's portfolio recommendation before lunch.

Information about money has never been cheaper to produce, easier to access or harder to evaluate. However, despite the ubiquity of investment information, human advisers remain the single most trusted source of guidance for young investors today.

The role of traditional investment advice in an age of digital communication is a central tension in the new Next-Gen Investors report from CFA Institute, which draws from a survey of more than 2,400 mass-affluent and high-net-worth investors in six major wealth markets around the world.

Instead of reading this as nostalgia for a fading model, consider how trust works in a saturated information environment. When advice is everywhere, the question is no longer who has the answer, but who can be trusted to guide choices among many possible answers.

Younger clients are looking for a curator and collaborator, and the advisers who recognize that will own the next generation of relationships.

How advisers can stay relevant

What makes young investors different is how they verify trust. Older investors tended to define trustworthiness primarily through the relationship itself, with years of personal history, in-person meetings, and continuity across family generations. Gen Z and Millennial investors still want that personability, but they expect it alongside measurable, professional indicators.

Our research shows young investors place greater weight on professional credentials, transparency around conflicts of interest, data security and verifiable performance against benchmarks.

These markers are particularly valuable in a world ripe with mass-produced AI advice. Professional credentials, for example, are one of the few public proofs that a person, not a machine, has demonstrated domain knowledge and expertise.

This measurable trust is what advisers can lean into to stay relevant. In our survey, approximately one third of Gen Z and Millennials already use generative AI to learn about investing. Generative tools will keep getting better at producing fluent-sounding advice, but fluency is not judgment.

Cut through the hype

Seasoned advisers bring years of seeing market cycles, regulatory changes, behavioral patterns and the outcomes of decisions that looked obvious at the time. That experience is exactly what cuts through hype. An AI tool may produce responses that sound confident, but it cannot replace competence.

For advisers, this reframes the scope of their work. Professionals are no longer the primary gatekeeper for investing. Clients now have access to an abundance of information. Instead, the job is to serve as a curator, validator and translator of an overwhelming digital landscape.

In some ways, that is a more demanding role, yet a more durable one. It means being fluent in the latest products your clients are reading about, including the ones you would not personally recommend, so you can have an informed conversation rather than a defensive one, and being ready to interpret a viral video or an output a client copied out of a chatbot.

Younger clients are not going to stop consuming content, but they want an expert whose true value lies in human judgment.

Communicating that value is now part of the job. Younger clients will not assume seasoned judgment is in the room but will look for evidence of it.

Treat credentials, professional experience and past performance as strategic assets that are clearly communicated to current and future clients.

Document conflict-of-interest policies in plain language and make them client-readable.

Show the work behind a recommendation, including supporting evidence, not just the conclusion.

At the same time, AI can be a useful tool to communicate the value proposition of adviser judgement. Used well, it removes the friction that prevents advisers from being successful curators and collaborators.

AI can help with drafting first-pass communications, summarizing trends, preparing for meetings and scaling personalized check-ins.

Nearly 70% of Gen Z and Millennial investors in our study who use a paid financial professional interact with their adviser at least monthly. That cadence is difficult to sustain without technology, but underlying those interactions is the adviser's expertise and judgment orchestrating those communications.

Voice of reason

But the deeper reason younger clients want a human adviser is that the world has become a noisy place, and navigating the signals and products can be overwhelming and lead to rash decision-making.

Over half of Gen Z and Millennial investors in our research have already made at least one investment driven purely by fear of missing out (FOMO), most often in cryptocurrency.

As markets continue to show volatility, and as new investment opportunities emerge, the adviser's role is to be the person on the other end of the line when the next market dip arrives, the next can't-miss asset surfaces, or the noise of information gets too loud.

The point is not to chase every trend or reflexively dismiss new products or opportunities, but to be a voice of reason and stability. A credentialed, experienced professional who can keep clients aligned to their long-term goals and strategies; steadfastness becomes even more valuable in a noisy environment.

The advisers and firms who successfully adapt to the next generation will not approach AI as a threat, nor as a replacement for the adviser-client relationship.

They will be the ones who use technology to amplify their reach, and focus on their human qualities of judgment, accountability, ethical stewardship and demonstrated experience, which no algorithm can fully capture.

Genevieve Hayman, PhD, and Ryan Munson are co-authors of the CFA Institute Research and Policy Center report Next-Gen Investors: A Guide for Wealth Managers and Financial Advisers.

Genevieve Hayman is a senior manager of macrosystems and foresight at CFA Institute. Her research focuses on pensions and retirement security, complex systems, cognitive science and the long-term forces shaping global finance. In her role, she develops structured, long-horizon scenario frameworks that examine how technological, economic and regulatory shifts may reshape financial markets, institutional behavior and professional norms. She also contributes to early-warning frameworks and cross-pillar integration across CFA Institute's research agenda.

Ryan Munson is a research manager at CFA Institute. His research focuses on pensions and the future of finance, exploring how extra-financial factors impact the investment industry and investment professionals. Ryan serves on the advisory board for the Mercer CFA Institute Global Pension Index. He is the author of several CFA Institute publications, including the Future State of the Investment Industry, the Future of Work in Investment Management series and the CFA Institute Investor Trust series.

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• The Future of Financial Advice Is Human: Gen Z Trusts Advisers, But AI Skills Matter
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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.

Research shows that most high-net-worth (HNW) clients are already charitable. They donate to causes they care about, support organizations in their communities and often want philanthropy to play a meaningful role in their legacy.

Yet many lack a cohesive giving strategy that ties charitable giving to clearly defined objectives and integrates within their broader financial and estate plans. Bridging the gap between intention and strategy is where advisers can provide real, differentiated value.

Recent data highlights how much HNW clients really value these discussions. According to the 2026 TPI Study of The Philanthropic Conversation, 88% of HNW clients consider it important to discuss philanthropy with their advisers, and 80% believe advisers have a professional or ethical responsibility to raise the subject.

Advisers have largely caught up to that expectation: 96% now view it as their obligation, a significant increase from 62% in 2018. The alignment is there, but the next step is ensuring these discussions move from one-off, year-end conversations into a consistent bullet point on the planning agenda.

1. Understand what motivates clients to give

Before diving into giving vehicles and technical solutions, the first step in helping clients build a strategic giving plan is understanding why they are motivated to give in the first place.

Advisers often assume clients' philanthropy is driven primarily by tax considerations, but the data suggests clients are most motivated by purpose and impact rather than deductions.

The TPI study found a notable disconnect between adviser perceptions and client priorities. Advisers identified "being an inspiration to others" as the top motivation for charitable giving, while clients ranked "making an impact" highest.

Furthermore, 40% of advisers cited taxes as a key motivator, compared to only 21% of clients.

For advisers, philanthropy offers a unique opportunity to connect with clients on a deeper level beyond portfolio performance and investment returns.

Asking targeted questions around charitable goals often reveals what clients care about most, and uncovers personal aspirations, legacy goals and family dynamics that may not come up during traditional financial planning meetings.

When clients feel understood on that level, the adviser relationship becomes more meaningful and durable.

2. Match giving vehicles to goals

Once a client's motivations and priorities are clear, the next step is helping them select the charitable giving vehicles and strategies that best support their goals.

According to the TPI study, 34% of clients are interested in integrating charitable objectives into their broader wealth management plans, reflecting a growing desire for philanthropy to be intentional rather than reactive.

Different charitable vehicles serve different purposes, and the right approach depends on the client's goals, assets and desired level of involvement.

• Donor-advised funds (DAFs) suit clients who want flexibility, simplicity and an immediate tax deduction without the administrative obligations of a foundation.
• Private foundations make sense for clients seeking more control, a vehicle for multigenerational family engagement, and the ability to make grants, run programs or invest mission-aligned capital.
• Planned giving programs, including charitable trusts and bequests, work well for clients integrating philanthropy with estate and legacy planning.

It often makes sense for donors to use a combination of giving vehicles. Private foundations and DAFs are especially synergistic, providing more ways to give and maximizing financial outcomes.

Overall, moving from ad hoc donations to a more programmatic approach through structured vehicles makes it easier to incorporate philanthropy into a financial plan and enables steadier streams of funding for nonprofits.

3. Measure progress and impact

As philanthropy becomes more intentional, many donors want greater clarity on the impact of their charitable giving, but measuring that can be difficult.

According to the 2026 Foundation Source Donor Survey, 27% of donors identify impact measurement as a top challenge, while 33% say it is an area of strong interest.

Advisers can play an important role by helping clients define what success looks like from the outset. For some, success may mean donating a certain dollar amount annually or supporting a specific number of organizations.

For others, it may involve measurable outcomes tied to a specific cause, such as scholarships funded, families served or conservation goals achieved.

Strong relationships between donors and grantees can make a meaningful difference, too. Donors who engage regularly with the organizations they support often have a clearer view of how their grants are being deployed and the impact they have.

Encourage clients to maintain an ongoing dialogue with grantees — an open line of communication can foster a more collaborative environment and lead to more insight into results.

Just as importantly, charitable planning discussions should not happen only once a year. Embedding philanthropy into regular planning meetings allows advisers and clients to revisit goals throughout the year and better track progress.

Donors are becoming more deliberate about how they give and want it to feel purposeful, not piecemeal. Advisers have the opportunity to help clients structure their giving strategically to reflect personal values, involve the next generation, and sustain across market cycles and policy changes.

When you help a client turn charitable intentions into a structured giving strategy, you're not only serving their charitable mission, but also building the kind of relationship that lasts for generations.

The 2026 TPI Study of the Philanthropic Conversation was conducted between December 2025 to January 2026 among 300 professional advisors who advise high-net-worth (HNW) clients (those with $5 million or more in investable assets) and 103 HNW clients who participate in philanthropy. The study was co-sponsored by Foundation Source and DAFgiving360, with support from The Boston Foundation.

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• Every Dollar Counts: How to Evaluate a Nonprofit

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 another school year winds down, many families are focused on graduation parties, summer camps and the logistics of the next academic year.

But summer can also be an ideal time to step back and reassess how you're funding your family's education, before fall tuition bills, enrollment decisions and financial aid deadlines arrive.

For many households, that means taking a fresh look at 529 plans — accounts that have quietly become far more flexible and valuable than many parents realize.

For years, 529 plans were viewed primarily as college savings vehicles. Parents or grandparents contributed over time, invested the funds and planned for the balance to cover future tuition expenses.

That function is still at the core of many 529 strategies, but recent legislative changes have significantly expanded how these accounts can be used.

The One Big Beautiful Bill Act (OBBBA), signed into law in 2025, expanded how families can use 529 assets. Beginning in 2026, another important change took effect: The annual federal limit for qualified K-12 expenses increased from $10,000 to $20,000 per beneficiary.

That is a meaningful shift for families with children in private school, students who need tutoring or academic support or households thinking more broadly about how education planning fits into their long-term financial plan.

529 plans are no longer just about college tuition

One of the biggest misconceptions surrounding 529 plans is that they can only be used for college tuition.

Under the expanded rules, 529 funds can now be used for a broader range of K-12 education expenses, including tuition, curriculum materials, books, instructional supplies, tutoring, standardized testing fees, dual-enrollment costs and certain educational therapies for students with disabilities.

That flexibility can be especially relevant during the summer. This is often when families are reviewing report cards, evaluating tutoring needs and planning enrichment programs.

However, families should understand that not every education-related expense will qualify, and state tax treatment can vary. Before taking distributions, investors should review their state's rules and may benefit from consulting a tax adviser. But the broader message is clear: 529 plans have evolved into more versatile education funding tools.

Why families should rethink 'overfunding' concerns

Historically, many families were cautious about contributing too aggressively to 529 plans because they feared ending up with excess balances if a child received scholarships, attended a less expensive school or chose not to attend college altogether.

Those concerns have not disappeared, but they have become less restrictive in recent years.

One reason is the expanded list of qualified education expenses. Another is the ability to roll unused 529 assets into a Roth IRA for the beneficiary if certain requirements are met. Current rules allow up to $35,000 to be rolled into a Roth IRA over time, provided the 529 account has generally been open for at least 15 years and other contribution rules were satisfied.

The planning implications are significant. In some cases, a 529 plan can now support a child not only through school, but potentially into early adulthood and saving for retirement as well.

That shift is changing the tone of conversations many advisers are having with families. In the past, clients often aimed to fund only a portion of expected education costs because they worried about excess balances. Today, for families with the cash flow and balance sheets to support it, we are discussing whether it makes sense to fund more aggressively.

Unused dollars may support another family member, help with qualified education expenses earlier than college or, in some cases, begin building a Roth IRA foundation for the child.

In that sense, the 529 has evolved from a narrowly focused college account into more of a long-term family planning tool.

Start earlier than you think — and review your state plan

If there is one consistent takeaway for young families, it is to start early.

The value of a 529 plan comes largely from tax-advantaged growth over time. The longer the money is invested, the more valuable that potential growth can become. Starting early may also matter for families who eventually want to preserve the option of a Roth IRA rollover, since the account-age requirement is generally 15 years.

Families should also periodically review which state plan they are using. Many investors default to their home state's 529 plan, and that often makes sense if the state offers an income tax deduction or credit.

However, many families do not realize they are not always limited to their own state's plan.

Some states, including Pennsylvania, for example, allow residents to receive a tax deduction even when investing through another state's 529 plan. Other states, including Georgia, require residents to use the in-state plan to receive the tax benefit.

That distinction matters because 529 plans can vary significantly in fees, investment options and usability. Certain plans, such as Utah's my529 program, are viewed favorably by advisers because of their low costs and broad investment selection.

For some families, it may even make sense to split contributions between multiple state plans — using one to maximize state tax benefits while directing additional savings to another plan with stronger investment features.

Do not ignore FAFSA or scholarship applications

Summer is also a good time to revisit financial aid planning. The federal FAFSA deadline for the 2025-2026 academic year is June 30, 2026, and families should pay close attention to school and state deadlines, which may come earlier.

Even families who assume they will not qualify for need-based aid should not automatically skip the FAFSA. Some merit scholarships, institutional aid programs or other opportunities may require it.

Scholarships also create additional 529 planning opportunities. If a student receives a scholarship, families may generally withdraw up to the scholarship amount from a 529 without paying the usual 10% penalty on earnings, although income tax may still apply to the earnings portion.

As summer begins, families may want to take time to review whether their current 529 strategy still reflects how these accounts can now be used. Between expanded K-12 flexibility, Roth IRA rollover opportunities and evolving state-plan considerations, many households may have more planning options than they realize.

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

It's not unusual to feel a flood of relief as soon as tax season subsides, especially if you're a business owner.

After weeks spent pulling documents, reviewing expenses, answering CPA questions and finding cash for a final payment, you'll probably feel like closing the folder immediately and not thinking about taxes for another year.

But that pause can be expensive.

Q2 is one of the few points in the year when the return is recent enough to teach you something, and the calendar still gives you time to align. The IRS expects taxes to be paid as income is earned, not just when a return is filed.

For many business owners, that means staying current through withholding or estimated payments.

For individuals, sole proprietors, partners and S corporation shareholders, it's when you generally need to make estimated payments if you expect to owe at least $1,000 at filing.

What often gets called tax planning is, in practice, more like tax reporting in advance. Now is the time to make sure you don't fall into that trap.

Model the tax impact before major decisions

Most large tax outcomes begin when a business owner hires, buys, sells, restructures, takes on a partner or changes how income flows through the company.

A decision can look profitable in the operating model and still create a tax position that weakens the economics.

For instance, a new senior hire may bring growth, but the full cost includes payroll taxes and mandated government benefits, which will definitely bring changes to cash flow.

Similarly, a major equipment purchase may qualify for depreciation benefits, so timing and income level matter.

Q2 gives owners time to run those numbers before the decision is locked. As a CPA, I'd recommend leveraging that time because fixing tax problems later can be slow and costly.

For context, during fiscal 2025, the IRS processed about 1.6 million business amended returns and took an average of more than 13 months to process them.

It's always best to involve a tax adviser before making any move. Ask your CPA to show the after-tax effect of the decision, or the estimated cash needed to support it, or anything that would affect the result, such as deadlines.

The goal is not to nitpick every small purchase or watch every action round the clock. It is to identify which decisions can materially change taxable income, deductions, credits, entity treatment or estimated payments before you commit.

Use last year's bill as a diagnostic for this year

A higher tax bill can feel like you're finally growing your business. And in some cases, it is. When revenue rises, the owner's income often rises with it, and so do taxes.

But that bigger payment is not always just a sign of success. It can point to a structure that no longer fits, or planning that may have started too late.

Q2 is the right time to review what drove those numbers while the return is still fresh.

• Look at the categories that changed most from the prior year
• Review whether revenue growth reduced deductions or moved income into a higher tax bracket
• Confirm whether personal and business expenses were clearly separated

Small-business tax surprises often stem from one or more of these.

The purpose of this review is to spot the opportunities you missed so you can course correct quickly and get ahead of any patterns that are likely to repeat this year.

• If revenue grew, is it likely to grow again, and what bracket will that put you in?
• If a deduction was missed, what needs to change in the books before December?
• Does your entity structure still serve you?

These are the questions you should be asking now.

For high-earning business owners, key opportunities may involve retirement plan design, cost segregation for real estate, R&D credits, Qualified Small Business Stock (QSBS) treatment, entity optimization or charitable giving with appreciated assets.

At Gelt, we can never emphasize enough that these strategies require proactive planning rather than a return-preparation mindset.

In a nutshell, check whether the bill increased because the business performed better, or because the tax plan failed to keep up with the business. Those are two very different problems.

Decide whether your CPA relationship has kept pace

Early-stage business owners often just need a CPA to file for them with accuracy and keep them compliant. But as income grows, that level of support may no longer be enough.

Compliance looks backward at what has already happened. Strategy looks forward at the decisions that can still be changed. If the only conversations with your CPA are happening in March or April, the relationship may be limited to just reporting the year instead of shaping it.

Sadly, that gap is common. In fact, reports say 90% of business clients are interested in advisory or consulting services from their accountant, but more than half say they are not fully using their adviser's full range of services.

This is another reason why Q2 is a practical time to assess the relationship, because both sides have more room to think. Ask whether your CPA specializes in clients with your income type, entity structure, industry and long-term goals.

Think about whether they meet with you quarterly, explain your effective tax rate, flag deadlines in advance and help model major financial events before they happen.

Ensure their scope of work is clear, so you know what is included and what is not.

Make Q2 the start of next tax season

The tax return you filed in April should become the first milestone for the rest of the year. If the bill was higher than expected, Q2 is the time to understand what happened and what the rest of your year might look like.

Look at the income that changed, the deductions that were missed, the estimated payments that fell short, and the business decisions that created tax consequences no one modeled in advance. That review gives you a wider view for the next eight months.

From there, update your income projection, adjust estimated payments before the next deadline, review whether your entity structure still fits your revenue and bring your CPA into decisions such as hiring, equipment purchases, real estate transactions, partner changes or compensation planning before they are finalized.

Waiting until Q4 leaves less room to act. Q2 gives business owners the time to correct what caused last year's bill and make tax planning part of the decisions that shape this year's growth.

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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 recently listed my home for sale. Like most people, I spent the weeks leading up to the first showing making it look its best.

I repainted walls, handled the landscaping and finally addressed the small repairs and deferred maintenance I had lived with, and ignored, for years.

Ironically, the house looked better for the strangers walking through it than it did for the family that had called it home.

It struck me how often financial advisers do the same thing with their own firms.

We spend our careers helping clients optimize balance sheets, manage complex risks and think strategically about wealth.

Yet, when it comes to our own businesses, often among the largest personal assets on our balance sheets, many of us delay meaningful investment until a triggering event forces the conversation.

Whether it is retirement, burnout, succession planning or an unexpected shift in the market, many advisory firm owners start improving the business only when a potential buyer or partner comes knocking.

By then, they are not building. They are reacting. They are trying to capture value that should have been compounding for years.

The $100 million to $1 billion reckoning

The wealth management industry is entering a critical period, especially for firms with $100 million to $1 billion in assets under management (AUM). In this range, many firms encounter a ceiling of complexity.

The reliance on the founder's calendar, combined with the manual workarounds that helped a firm reach $250 million, often becomes the very thing that prevents it from reaching $1 billion.

A similar trend is playing out in the legal industry. For years, smaller law firms felt they could not compete with the resources of Big Law.

More recently, however, many have leaned into technology-enabled operating models, strategic partnerships and outsourced infrastructure to level the playing field.

The lesson for wealth management is clear: Scale is no longer just about headcount. It is about whether the firm's technology, workflows and operating infrastructure can act as a force multiplier.

The small-firm edge: Agility as a competitive advantage

There is a powerful advantage hidden in the $100 million to $1 billion space: The ability to pivot quickly.

Large, multi-billion-dollar firms often move slowly because of bureaucracy, legacy systems and multiple layers of approval. Smaller, nimbler firms can often pilot new technology, refine client experiences and adjust operating models in weeks, while larger competitors may take far longer to reach consensus.

By leaning into institutional-grade tools now, smaller firms do not merely catch up to larger competitors. They can out-innovate them by being more responsive, more focused and more willing to evolve.

The valuation gap between a founder-centric lifestyle practice and a scalable enterprise is widening. Strategic buyers and private capital are not simply looking for a list of client names. They are looking for a repeatable, durable business development process. They want a firm that can thrive even if the founder is not personally driving every interaction.

Advisers routinely counsel clients against concentration risk, yet many remain personally over-concentrated in a single fragile asset: A firm that cannot function without their constant, direct involvement.

Institutionalizing excellence

At Aspire, we believe high-level financial management should not be reserved only for the ultra-wealthy. Our mission is to help clients professionalize their financial lives by bringing them the best practices, sophisticated reporting and rigorous oversight often associated with institutional family offices.

To provide that caliber of service, we must first apply those same institutional standards to our own firms.

Michael Kitces and other industry observers have written extensively about the risks of founder dependency as advisory firms scale. The core idea is simple: A firm cannot scale sustainably if its growth, client experience and operating discipline depend entirely on the founder's personal heroics.

Based on the workflows that drive enterprise value, there are three areas where firms can build immediate equity by moving from a lifestyle mindset to an institutional one.

Standardize workflows. Client meetings may follow a general cadence, but there is wide variation across firms in the time required to prepare for meetings and complete follow-up afterward.

Acquirers want to see CRM-driven workflows where agendas, notes, tasks and next steps are documented and repeatable.

If the client experience is a process rather than a set of to-dos stored in the founder's head, risk goes down and valuation goes up.

Centralize planning. Advisers often get bogged down in the mechanics of financial planning: Tweaking projections, generating reports and managing the operational details behind each plan.

Transitioning to a dedicated core team of part-time or full-time specialists helps ensure that the firm's planning engine runs consistently across all clients. It demonstrates that the firm has a methodology, not just a lead adviser's intuition.

Integrate technology. Manual processes are a silent killer of firm value. If teams are still reconciling data between the CRM, custodian, client portal and financial planning platforms, they are increasing the margin for error.

Strategic buyers look for clean, automated data flows. This is not just a technology upgrade. It is a risk mitigation strategy.

Scale, partnership and controlling our destiny

Unlike a home sale, a firm does not always have to be an all-or-nothing transaction.

There is a common misconception that advisory firm owners have only two choices: Remain completely independent until they no longer work or sell the firm and walk away. The most strategic options often exist in the middle.

By investing in infrastructure now, firm owners can create the possibility of partial liquidity. That may allow them to take some capital off the table and diversify their personal net worth while still maintaining meaningful ownership, leadership and client relationships.

Clients today are looking for more than portfolio returns. They are looking for continuity. They want to know whether the firm serving them today will also be there for their children and grandchildren.

The best time to improve the curb appeal of our firms is long before the open house. If we invest in the foundation today, we are not just preparing for an eventual sale. We are building a much better business to own.

My interest in this topic stems from a desire to partner with like-minded firms that share this vision. I believe firms in the $100 million to $1 billion space are often better off operating together than apart.

Together, we can scale faster, share the burden of operational complexity, and capture value that is often unavailable to a solo practice.

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

It's no secret that many RIAs are looking to modernize their technology stacks and create a more personalized, digital experience for clients.

Based on my experience, the most successful RIAs that are achieving top-decile organic growth and strong client outcomes tend to share one strategy in common: They are segmenting their business.

Segmentation is the process of dividing an adviser's client base into distinct groups based on needs, behaviors, profitability, growth potential, complexity and other characteristics.

With the right structure, advisers can match different clients with the service models, pricing, custodial setups and technology solutions that best suit them.

The result is a streamlined practice structure where larger client relationships still receive the depth of service they need, while smaller accounts can be serviced effectively without draining adviser capacity.

However, when I mention "client segmentation" to RIAs looking to scale, the initial reaction is often skeptical. Many associate it with added overhead, operational risk and more complex workflows.

Without the right preparation, partners and technology, client segmentation can indeed slow advisers down and cause the very friction it is designed to remove.

The good news is that RIAs can take clear, proactive steps before committing to segmentation to ensure it aligns with their broader strategy and timing. With the right partner, advisers can:

Determine if segmentation is right for the practice

Based on their current assets under management (AUM), as well as their appetite for risk, ability to weather potential temporary disruption and goals for growth, advisers can figure out whether their practices are at the right point in their development to implement client segmentation.

This strategy tends to work well for firms that have accumulated more than $250 million in AUM and are outgrowing their initial niche specialization. There will also be some degree of short-term disruption for any firm that adopts this strategy, since segmentation can sometimes involve parting ways with clients who no longer fit the practice.

Run profitability analysis

Using visualization tools, advisers can model the financial impact of client segmentation on their existing books, as well as calculate the cost-to-serve ratio across all segments.

These tools can also calculate what minimum fees would be necessary, following the implementation of client segmentation, to ensure their practices can remain independent and profitable.

Design tier structures

Advisers can work with partners to figure out how many segments need to be created based on their current books and then which service levels and other factors should be assigned to each segment. They can also plan for how to balance meaningful upside with any potential disruption.

Build operational infrastructure

To ensure their technology can support client segmentation, RIAs can prepare their billing solutions for tiered pricing, utilize analytics tools to make lower-tier segments more profitable and configure their CRM systems to track different segments.

Roll out sequentially and manage client communication

When solutions enabling client segmentation have been onboarded, RIAs can roll out the new service models beginning with the top strategic accounts and then continue down the line to lower-margin and at-risk clients.

Advisers and their partners should also deliver personalized messages about any changes — from fee increases to new adviser assignments — to individual clients in a timely manner.

Track progress

To monitor if client segmentation is helping meet desired goals, RIA firms can establish baseline metrics for what success should look like at 90 days, six months and 12 months after implementation.

Outstanding service works best with guardrails. When RIAs attempt to serve all clients the same way, they often end up serving no one exceptionally.

A one-size-fits-all approach doesn't make sense if you're working with a $500,000 Millennial couple and a $20 million executive nearing retirement who have different strategies, financial planning needs and specializations.

Client segmentation gives RIAs the freedom to define investment strategy, adviser involvement, planning depth, pricing and more for every client — and excel at serving them accordingly.

Over time, this strategy can deliver positive outcomes, high-quality engagement and a competitive advantage.

With the right team and technology in place to mitigate friction, RIAs can unlock the full value of client segmentation and serve the next generation of clients while delivering sustainable growth for years to come.

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