The Medicare Part D landscape is constantly evolving, brought on by major legislative updates like the permanent elimination of the "donut hole" and cap changes to out-of-pocket prescription spending. However, lower overall spending caps don't mean every plan offers equal value.

Private insurers set their own premiums, deductibles and pharmacy contracts, meaning two plans in the exact same zip code can carry dramatically different bottom-line costs for identical prescriptions.

Take this quick, 10-question quiz to test your knowledge about Part D and ensure you are well-prepared to select the coverage that is best for your health and budget this year.

And don't worry if you miss an answer, you can follow the links below the quiz to brush up on your knowledge.

More on Medicare Part D, from the Kiplinger retirement team:

• 10 Things You Should Know About Medicare Part D Plans
• 8 Changes Coming to Medicare in 2027
• Your 2027 Medicare Open Enrollment Guide: Essential Dates and Notices
• Medicare 2027 Projections: Here's How Much Your Monthly Premiums Are Estimated to Rise

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

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

Retirement planning deserves the same approach.

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

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

Here are five areas worth keeping score on.

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

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

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

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

Consider:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For example, a retiree might consider whether to:

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

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

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

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

A comprehensive risk assessment should consider several factors, including:

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

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

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

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

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

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

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

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

Keep evaluating your scorecard throughout retirement

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

It might have substantial assets but insufficient guaranteed income.

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

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

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

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

Dan Dunkin contributed to this article.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2. Stress-test your retirement plan now

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

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

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

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

3. Stay connected

In addition to financial preparation, keeping your professional skills and network up to date can give you more options if you find yourself looking for work. This includes maintaining required licenses or designations as well as staying connected with people in your industry.

Keeping up with changes in your field later in life can make it easier to pursue another position if you lose your job, rather than feeling forced into retirement.

For many of us, the age at which we hope to stop working is the first step in retirement planning. But that timeline is subject to change at any time.

Preparing for the possibility of a sudden job loss, building flexibility into your retirement plan and stress-testing it under different scenarios will help you understand how to move forward without minimizing benefits or sacrificing years' worth of savings.

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• An Expert Guide to Calculating How Much Money You Really Need in Retirement
• I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) Contributions

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

You just got a $1 million inheritance in the Great Wealth Transfer and don't know what to do? You're not alone. Millions of people are poised to receive a piece of the more than $124 trillion in generational wealth expected to be transferred over the next decades.

While an inheritance of that size can be life-changing, it can also cause undue strife. With a windfall come taxes, estate administration fees and investment decisions.

"Most people, when they receive an inheritance, want to spend it," said Tim McGrath, a managing partner at Riverpoint Wealth Management. "If they don't make the right decisions, it could hurt them over the long haul rather than help them."

Let's say you buy a big house that you can't afford or make risky investments — you could end up in debt or homeless because of the inheritance.

The good news is there are easy ways to protect your newfound wealth. From where to initially park your cash to how to grow it, here's how.

First, figure out what the inheritance means to you

Receiving $1 million can be a big deal. It could mean you're debt-free, your kids' education is paid for, or your retirement is in the bag, or it mightmean something completely different. Either way, McGrath says the first thing you should do is determine what it means for your goals and finances.

"For most people, $1 million is life-changing," says McGrath.

While you consider how to use your newfound wealth, don't keep the money under a mattress. Put it in a high-yield savings account or, if you already have one, an investment account.

"In today's environment, you can still find money markets or high-yield savings accounts paying 3% to 4%, so parking it there to make a little interest while you determine how to proceed is a simple way to get started," says Kassi Hyde, a financial adviser with Apollon Wealth Management. "If you know you don't need or want to touch the money and want it to grow for future needs, then definitely go ahead and invest. Just make sure to consider your time horizon when determining how risky you want to be."

If you don't have a financial adviser, now is the time to find one. Our How to Find a Financial Adviser guide will help you select one that matches your personality and budget.

Pay down high-interest debt

Even if you know how you want to use the inheritance, financial advisers say to pay off any high-interest debt first. That could include credit cards, personal loans and retail cards that charge you double-digit interest. The idea is to get yourself into a cash-flow positive position first, says McGrath.

Put the money to work while you wait to use it

Maybe you plan to buy a new house in a couple of years, pay for your kids' college in the future or save it for retirement. Whatever the goal, it's important to put your inheritance to work while you wait. That's where an investment plan comes into play. The type of inheritance dictates how you can invest it.

Develop a tax strategy

You need to be mindful of the tax portion of your inheritance, but how much is taxed depends on the asset. The lifetime federal estate tax exemption — $15 million for individuals and $30 million for couples in 2026 — pretty much guarantees most recipients won't owe federal estate taxes on their inheritance.

Depending on where the person who left you an inheritance lived, you might face state estate taxes. State tax exemptions are typically lower than the federal exemption. For example, Massachusetts exempts up to $2 million.

If the asset generates capital gains after it's passed on, you'll owe taxes. "If you inherit an investment worth $500 and the value grows to $600 and you sell it, you have $100 in gains you will have to pay taxes on," said Hyde. The caveat to that capital gains rule is the "step-up in basis," which resets an asset's original value to its market value on the date of the original owner's death.

You'll also owe taxes (as ordinary income, potentially bumping you up to a higher tax bracket) if you inherited a traditional IRA or 401(k) and you aren't a spouse.

You might wish to consult a professional tax expert if your inheritance is complex or you don't understand your options.

Stick to the plan

A $1 million inheritance offers rare financial freedom, but only if you manage it wisely. By tackling debt first, planning for taxes and putting the rest to work, you can turn a one-time inheritance into generational wealth. Once you create a plan for that money, stick to it, and don't be afraid to ask an expert for guidance along the way.

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Everyone's heard a horror story.

The adult children who no longer speak to each other after a blow-up over who would get Mom's engagement ring when she died. The constant arguments between siblings over the family vacation house they jointly inherited. The simmering resentment between adult kids after a parent's will revealed an uneven split of assets among them — tension that eventually boiled over, causing the siblings to sever their relationship and cut off their children, once-close cousins, from seeing each other as well.

These are heartbreaking scenarios that many parents worry about and try to avoid in their estate planning. And many adult children share their concern: One-third of adult kids expect an inheritance to create conflict with their siblings, according to a national survey commissioned by Kiplinger and conducted by the research firm Morning Consult.

Studies, unfortunately, show their concern is justified. Research from Cornell University indicates that among the 27% of Americans who are estranged from a family member, disputes over an inheritance are a leading trigger and frequently involve siblings.

Similarly, an Ameriprise study found that when adult siblings report money conflicts, nearly 70% of those arguments involve their parents, and inheritance was the top cause of those disputes.

Inheritance conflicts are rarely only or even primarily about money, experts say. "Sibling disputes over estates and wills almost always surface in the context of older, unresolved grievances, typically about parental favoritism and unequal treatment, so money becomes a scorecard for perceived favoritism or slights over a lifetime," says Karl Pillemer, a professor of human development at Cornell University and author of Fault Lines: Fractured Families and How to Mend Them.

Adding fuel to the fire: The transfer of a parent’s assets occurs at a time of grief, when emotions are already running high. And in many families, there has been no prior conversation about how Mom and Dad intend to pass on their wealth, so adult children are forced to draw their own conclusions — and they often fill in the blanks with negative implications, experts say.

"Grief mixed with urgency and ambiguity is a tough combination," says Elisa Shevlin Rizzo, head of family advisory at J.P. Morgan Private Bank.

The amounts at stake rarely matter. "Disputes can happen when the only assets involved are Mom’s china and jewelry, and they can happen when there’s millions of dollars at stake," says Monique Lavender Greenberg, managing partner of the law firm Lavender Greenberg in Miami and a board director of the National Association of Estate Planners & Councils.

"No one wants their legacy to be that their kids end up hating each other. We want our families to continue to love each other, but that takes thought and planning."

Want to ensure your wealth passes as you intend and your children are still speaking to each other after you’re gone? Experts suggest these steps.

Figure out what's truly fair.

The default for most parents is to split the assets they’re leaving to the kids equally. But many adult children don’t feel that’s a fair division.

In the Kiplinger-Morning Consult survey, for instance, 71% of parents said they intend to leave the same amount to each of their kids, but just 50% of adult children preferred that approach. That 21-point gap was filled by siblings who believe Mom and Dad should base inheritance decisions on each child’s financial situation and need, or on factors such as how much financial help parents have given each child in the past and how much the kids assisted their mother and father during their lifetimes.

"Equal means the same for everyone, while fair means each person gets what they deserve or need," says Pillemer. "Sometimes those two norms pull in opposite directions inside families."

Both perspectives are valid. "An even split is completely understandable if you’re a parent who wants to avoid inserting a new conflict into the sibling dynamic and to communicate that you love all your children equally," says Matthew Willner, a therapist who specializes in family conflict and estrangement, including adult sibling conflicts and inheritance disputes.

"But if one child has been struggling financially for years, an even split can feel emotionally like their needs don’t matter or aren’t recognized. And if you’re, say, a daughter who has been a caregiver for Mom or Dad for several years and there’s an even split, it can read to you as if everything you did counted for nothing."

On the other hand, an unequal division, especially if it’s unexplained, can be even more hurtful and trigger long-lasting rivalries and tensions between siblings.

"If I’m the child who received less and I already feel like my mom and dad loved my brother more, that’s going to be a real hard nut to swallow, even if they helped me more financially when they were alive," says Rizzo. "Even if I’m a hedge-fund manager and my brother works at a nonprofit making $40,000 a year, getting less is hard emotionally — even if I know intellectually it makes sense."

There is typically no right or wrong decision on splitting assets, experts say, and parents are entitled to pass down their wealth however they see fit. What’s imperative, though, is that you’re thoughtful about your process and choices, and then, crucially, that you inform your children of your decision and explain your reasoning.

It’s the element of surprise that can do the greatest damage, experts say.

"The very thing that would prevent sibling conflicts or at least lower their temperature — having an honest conversation about how parents have decided to pass on wealth and why — is the step many families skip because it can be uncomfortable and bring up old wounds no one wants to deal with," says Willner.

He suggests talking to all of the children together, if possible, as that lessens the possibility of one sibling accusing another of manipulating or pressuring their parents, especially if you’ve decided on an uneven split. It also gives the kids a chance to voice their emotions and concerns; feeling heard can make it easier to accept the parents’ decision.

"If the children know what’s going to happen and why, they typically suck it up and honor your wishes," says Greenberg. "And if the kids are going to be mad, they’ll be mad at Mom and Dad, not each other."

You can also pursue ways to reward an adult child who has helped out a lot, provide more to one who needs extra financial help, or balance the scales on past financial gifts to another that avoid a hurtful uneven division of assets in your will. You might, for example, make a caregiver child the beneficiary of a small life insurance policy or give more money during your lifetime to the child working at the nonprofit than to the one who is a hedge-fund manager.

The important thing is that none of your plans live in the dark. Says Sharon Olson, managing principal of Olson Wealth Group, "We spend enormous amounts of time preparing the money for the children. We need to spend just as much time preparing the children for the money."

Read more: Why Leaving an Equal Inheritance to Your Children Could Backfire

Take particular care with tricky assets.

Ironically, the part of your estate that’s least likely to trigger a blow-up among your kids may be your most valuable holdings, in dollar terms: Cash savings and liquid investments, such as stocks, bonds and funds. Far more fraught are assets that can’t be easily or neatly divided, such as a parent’s home, a vacation property or a family business.

Take the family lake house, for example — an asset with both monetary and sentimental value, perhaps tied to happy memories of summers together by the water. Maybe the siblings want to keep it in the family and share it, but one cannot afford the upkeep. Or maybe one sibling prefers to sell, but the other siblings don’t have the cash to buy them out.

"Parents often leave property to their children and say, ‘They’ll figure it out when I’m gone,’" says Rizzo. "That’s one of the most damaging attitudes out there. If you want to set your kids up for future conflict, let them figure it out when you’re gone."

A family business can be especially problematic, particularly if one or more siblings had jobs at the company and others didn’t. "The daughter who worked there for 25 years may say, ‘I helped Dad build this business and I deserve it.’ Her brother may say, ‘I understand that, but he was my father too, and I also deserve a share.’ Both can be right," says Olson.

To head off trouble, she suggests parents identify potentially thorny assets and establish valuation and buyout provisions as part of estate planning. If multiple children will own a vacation home, determine how expenses, property use and eventual sale will work. "Don’t leave the children a complicated asset and unanswered questions," Olson says.

To the extent that you can, solve potential problems in advance. You might, for example, put the house in Nantucket in a trust with enough financial assets to cover the expenses, if the estate can afford it, Rizzo suggests.

Or, if an estate lacks cash, buying life insurance might be helpful. That way the child who wants the beach house gets it, or the family business passes to the kid who works there, and the other child is the beneficiary of the insurance policy and receives an asset of comparable value, says Carly Doshi, head of family advisory planning and trust services at Flagstar Bank and chair of the New York branch of the Society of Trust and Estate Practitioners.

Be careful to communicate your intentions, including for any accounts you own jointly with one of your children, to all of your offspring, experts say.

For example, you may have a joint checking account with right of survivorship with a son or daughter who helps you with bill-paying, and that will pass directly to them upon your death. If that’s what you want — say, to compensate that child for their help — let all of the kids know the plan. Or, if not, let them know you intend for that money to be split among them after you’re gone, document your wishes in writing in a letter of instruction, and consider retitling the account.

"One of the greatest gifts a parent can leave their children is clarity," says Doshi. "A thoughtful estate plan is really about removing as many reasons for conflict as possible."

Read more: What Happens to Your Savings Account When You Die?

Sweat the small stuff.

For one family, it was the red plate with hearts on it that said "You’re special," which Mom used to serve birthday cake for each child growing up. For another, it was a 25-cent Christmas ornament.

In yet another case, it was a piece of art, promised by the father to one kid and by the mother to another. Then there was the daughter-in-law found racing through the parents’ home after the funeral, switching masking-tape labels attached to various cherished items indicating which sibling was supposed to get what.

Estate and wealth-management experts are filled with stories of personal possessions, sometimes valuable but often not, that triggered big fights among siblings after a parent’s death, sometimes resulting in a permanent rift.

"Objects are often more contentious than money — not just because it’s hard to divide a holiday ornament or a plate, but because those kinds of items hold more memories and meaning for people," says Sara Croymans, an educator with the University of Minnesota Extension who helps facilitate its Who Gets Grandma’s Yellow Pie Plate? program, which teaches research-based practical strategies for passing on personal possessions.

Croymans suggests parents take a poll of their adult children to find out what items they’re interested in and why. Don’t just assume, for instance, that a son should get the tools and a daughter her mom’s jewelry, she says. Parents should also share their views and plans for dividing possessions and the stories behind items that are particularly meaningful to them. That, in turn, might affect the kids’ preferences.

If more than one child wants the same item or items, try to land on a system together that feels fair for deciding who gets them, perhaps coming up with similar items that can be considered in tandem. Croymans recalls three sisters who had shared a baptismal gown, and each one wanted it for her own kids. The siblings averted an argument by identifying a confirmation gown and their mother’s wedding dress as things of similar emotional value, and each sister ended up with a garment that was meaningful to her.

"Research has found that if people buy into the process and believe it’s fair, they’ll support the outcome, even if they didn’t get the specific thing they wanted," says Croymans.

Experts recommend documenting your plan for personal possessions, naming names and specific objects, in a letter of instruction you keep with other estate-plan documents. Although the document is not legally binding, experts say it carries the weight of moral authority, and most siblings honor their parents’ plans.

Read more: The Great Junk Transfer: Why Heirs Want Meaning, Not More Stuff

Avoid the oldest-child syndrome.

Sometimes tensions build and boil over among siblings not over the inheritance itself but rather who is appointed to oversee the disposition of those assets. To avoid fights, parents often default to appointing their oldest child as executor or trustee or naming some or all of the children as co-managers — well-intentioned moves that experts say often backfire.

"The person who is most suited for the role is the best choice, and that should be the person who is organized, financially capable, communicative and, crucially, trusted by the other beneficiaries," says Doshi.

Whoever you pick, to minimize resentment or hurt feelings, be sure to communicate your decision to all of your children as well as your reasons — say, if the appointee has legal or financial skills or is recognized within the family as the peacemaker.

As for the team approach to executorship, experts are not fans. "Requiring all of your children to reach constant consensus, especially when everyone is grieving, can slow things down or even create conflict where there wasn’t any," says Doshi.

And if the kids don’t always get along? "If the siblings have never made decisions well together, requiring a consensus after a parent dies is planning for deadlock," Rizzo says.

The critical question parents don’t ask enough, Olson says, particularly when it comes to trusts: What will giving this child authority do to the sibling relationship? "Sometimes the most loving thing a parent can do is not put one child in the position of policing another," she says.

Alternatives to naming one or more of your children as executor or trustee include appointing another family member or close friend who is capable and willing to take on the responsibility, or hiring a professional fiduciary through, say, a bank or other financial institution. Or you can turn to an estate-planning attorney who offers these services (find one via the directory of The American College of Trust and Estate Counsel).

Read more: 6 Steps to Choosing an Executor

Get help before things blow up.

If you anticipate conflict between your children over their inheritance, or recognize it’s a possibility, you can also turn to professionals to mediate potentially thorny issues or just help get all the kids on the same page. Siblings can also seek outside help after a parent’s death, if issues around their bequests start to get contentious.

"Having a neutral third party in the room guiding the conversation can help mitigate some long-standing family feelings and tensions, and people tend to be more respectful and reasonable," says Joseph Kellogg, head of wealth planning for WE Family Offices in Miami.

Experts suggest parents consider building a procedure for mediation of disputes into estate-planning documents. (An estate-planning attorney or family wealth manager may be able to fill this role, or you can find a professional mediator in your locale using a tool such as Mediate.com’s practitioner directory.)

"That way everyone knows there’s a way out of disputes that attempts to be fair and objective," says Kellogg. "And it can motivate kids to go the extra mile in trying to work it out themselves, knowing that if they don’t, someone else will step in and do it for them."

Research from Karl Pillemer at Cornell, including interviews with about 300 people who had experienced family rifts, backs up the importance of seeking independent mediation if siblings are locked in a fight over their parents’ estate.

"When I asked family members who had a rift over inheritance what would have helped, they often said some version of, ‘I’d like a time machine, so we could go back and get outside help.’"

The good news, says Pillemer: Rifts over wills, inheritance and money are somewhat more likely to be repaired than ones that stem from systemic family problems, such as harsh parenting or extremely difficult childhoods — unless siblings reach a tipping point in which one says to the other, "I never want to see or speak to you again."

"When that occurs, it develops its own dynamic and is surprisingly hard to repair," says Pillemer. "Almost every estranged family I talked to wished they hadn’t drawn that line in the sand.

So do almost anything you can not to reach that cutoff point. Keep talking, be more understanding, seek mediation, get help from a therapist, apologize — even if you feel you shouldn’t have to — and, most especially, ask yourself, Is this really worth it?"

The price of destroying a family over money, he notes, is almost always too high, and it’s the next generation that pays. "If two siblings cut off contact over an inheritance, they don’t lose only each other; their children lose their cousins. Your kids will inherit not only your assets one day but also the estrangements that came with them."

That’s the opposite of the legacy most parents hope to leave. The way to prevent it, Pillemer and other experts say, is to talk with your children, communicate your intentions and the reasoning behind them clearly and early, and be open to your kids’ views and feelings in return.

He says, "That’s the single most important thing parents can do."

Read more: Kiplinger Conversations: How to Talk Inheritance With Your Kids

Special considerations for blended families.

Families in which one or both spouses have children from previous marriages are the most likely to experience disputes around estate plans, according to research from the Society of Trust and Estate Practitioners (STEP). Unequal treatment of siblings and conflicts between children and stepchildren were among the most-common points of friction, second only to disputes between children and a surviving parent or stepparent.

"The core problem is that remarriage creates competing loyalties and competing claims, which can be difficult to resolve in a way that feels fair to everyone," says Karl Pillemer.

If you’re part of a blended family and want to keep the peace between your biological children and your stepkids after you’re gone, experts recommend these steps.

Formalize your wishes. Recent research from Yale shows parents often favor stepkids as beneficiaries over any relatives other than spouses and their own children. But state intestacy laws, which dictate how your assets will pass to others if you die without a will, typically don’t make provisions for stepchildren.

So if you want yours to inherit anything, you’ll need to make that intent clear and legally binding with bequests via a will or trust or by including them as beneficiaries on financial accounts that pass outside of a will.

Accommodate age differences. There are often big age gaps among children in blended families, notes Carly Doshi, head of family advisory planning and trust services at Flagstar Bank. So their financial needs and when they need to tap assets may be different — one child might be gearing up to, say, buy a first home while another might be nearing retirement.

The solution? Doshi says this is a situation in which trusts come in handy, giving you the ability to spell out when and under what circumstances different heirs get distributions from your estate.

Consider a neutral party for key roles. Parents often pick the oldest child as executor or trustee. But in a blended family, putting a child from one branch of the family in charge of assets for someone from a different branch can spark tensions.

An alternative: Appoint a neutral party, such as an estate attorney or professional fiduciary.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Medicare Part B enrollees are set to receive a one-time $90 rebate delivered automatically over the next few weeks, President Trump announced on October 2. Created in 2008 as a flexible budget tool for provider payment adjustments, the Medicare Improvement Fund (MIF) is now being tapped by the federal government to issue direct cash rebates to Medicare beneficiaries.

In 2027, Medicare Part B premiums are estimated to rise by $6.60 per month to $209.50, according to the 2026 Medicare Trustees Report. If the premium estimates hold, the $90 rebate would cover the $79.20 increase, with $10.80 to spare. A couple can receive a total of $180 if both spouses independently meet the eligibility requirements.

In September, President Trump announced $500 rebates for certain Affordable Care Act (ACA) enrollees in 30 states who purchased coverage through the federal marketplace, HealthCare.gov, and did not receive premium assistance.

Here is what you need to know about Medicare Part B premium rebates: Who qualifies, when to expect your payment and where the money came from.

Who is eligible for the Medicare Part B premium rebate?

Are you one of the 20.8 million eligible beneficiaries who will receive the $90 Medicare Improvement Fund Premium Rebate? Generally, to be eligible, you must live in the United States, not receive any premium assistance from Medicaid, not pay the income-related monthly adjustment amount (IRMAA), and not be enrolled in a Medicare Advantage plan.

If you do qualify, payments are scheduled to arrive this October. Are you registered for direct deposit? If so, your funds should arrive on Thursday, October 8.

Here are other factors that could impact your eligibility:

• Who can get it. To qualify for the $90 rebate, you must be:
  • Enrolled in original Medicare Part B
  • Pay standard Medicare Part B premiums without third-party or high-income adjustments.
  • Not in premium arrears or undergoing a coverage termination process for non-payment.
• Who can't get it. You are not eligible for the premium rebate if:
  • You are enrolled in a Medicare Advantage (Part C) plan
  • You pay the IRMAA
  • Your Part B premiums are fully paid or subsidized by state Medicaid programs (such as the Qualified Medicare Beneficiary (QMB) or Specified Low-Income Medicare Beneficiary (SLMB) beneficiaries), as you did not incur out-of-pocket Part B premium expenses.
  • You are enrolled exclusively in Medicare Part A (Hospital Insurance) without Part B coverage.
  • You have lapsed Part B coverage or active premium delinquencies.

Where did the funds come from?

The Medicare Improvement Fund (MIF) was established in 2008 via the Medicare Improvements for Patients and Providers Act (MIPPA). Before now, the federal government had never spent MIF funds directly on program operations.

For nearly 18 years, Congress used the MIF primarily as a budgetary mechanism. Lawmakers would inflate or reduce the fund's paper balance to help balance out the projected budget costs of unrelated health legislation.

The amount of funding available has changed 28 times since the fund was established. Lawmakers have increased the amount of funding available to the MIF 11 times and decreased it 17 times, according to a Congressional Budget Office (CBO) analysis published in April 2023.

Sit tight and your money should be along soon

The best part of this direct rebate program is that eligible beneficiaries do not need to fill out any forms, submit claims, or register online. Payments will be processed automatically by the Social Security Administration using your existing direct deposit details or mailed address.

Keep an eye out for scammers posing as CMS or SSA officials — Medicare and Social Security will never contact you directly asking for bank info to "claim" your rebate. If you don't receive your rebate in the expected time frame, contact Medicare directly at 1-800-MEDICARE (1-800-633-4227 or TTY 1-877-486-2048).

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• Projected 2027 IRMAA Brackets and Surcharges for Medicare Parts B and D

Dear Wealth Wise, I'm 64 (almost 65), work full-time, and I'm tired of being told to use AI at my job. Can I retire on $1.6 million if my yearly spending needs are roughly $90,000 and Social Security will pay $3,500 a month (if benefits remain fully payable)? — Seeking Analog

Dear Seeking Analog — In the past year or so, AI integration has picked up tremendously. While some folks are embracing it, for others, it’s quickly becoming a sore spot.

Earlier this year, Talker Research found that 54% of those polled are "getting tired of hearing" about AI, and 30% view it negatively.

Here, our almost-65-year-old reader has clearly had enough of AI and is looking to retire because of it. Is he being impulsive? Does the math work in his favor? Here’s what our experts say.

The numbers might work, but they need to be tested

Our reader’s estimated $42,000 annual Social Security benefit should cover roughly half of annual spending needs. The remaining $48,000 will need to come out of savings.

Using the popular 4% rule, $1.6 million could support $64,000 in annual withdrawals. Since our reader only needs $48,000, they have a pretty good buffer, says Bryan Kuderna, CFP and founder of Kuderna Financial Team. However, he cautions, the often-overlooked factors are taxes and Medicare premiums.

"Spending $90,000 annually is obviously $90,000 of after-tax money," Kuderna explains. "At least a portion of their Social Security benefit [might] be taxable. Then it will be reduced by Medicare premiums, which can be around $200 monthly to much higher depending on their modified adjusted gross income. To have a rough estimate, they [should] assume a $2,500 monthly net Social Security check."

In that case, Kuderna explains, our reader could be looking at a gap, especially if their $1.6 million is sitting in traditional retirement accounts that are subject to taxes on withdrawals. If most of that money is in a Roth account, the math could work, he says. But that "if" needs to be addressed before our reader dives into retirement.

Taxes will vary heavily depending on whether the reader files jointly or as a single taxpayer. Our reader should also factor inflation into his plan, since that $90,000 per year will be worth much less over time.

'Shaky' Social Security is the wild card factor

Our reader suggested Social Security benefits might not be fully payable. They’re not making that up. Social Security Trustees recently reported the program could face broad benefit cuts by late 2032 if Congress doesn’t find a way to shore up its finances sooner.

Caleb Moyer, CFP, CFA, EA, and owner of Moyer Tax Services, says Social Security’s future is worth considering, but it shouldn’t necessarily shape a retirement plan.

"I wouldn't tell someone to keep working indefinitely because they're worried about Social Security cuts," Moyer says. "Instead, I would build a retirement plan that shows what happens if those cuts actually occur."

As Moyer explains, if Social Security benefits are reduced by 25%, our reader would receive $31,500 annually instead of $42,000. (Social Security’s Trustees project a 22% cut, so this builds in even more of a buffer.) That means they would need to withdraw $58,500 from their portfolio each year to maintain their $90,000 spending level.

"Their initial withdrawal rate would increase from 3% to approximately 3.66%," Moyer says.

"That's a meaningful difference, but it doesn't automatically mean retirement is off the table."

This especially holds true if our reader’s $1.6 million is housed entirely in a Roth account. In that case, our reader might not face taxes on their Social Security benefits.

The formula that determines whether taxes on benefits apply accounts for modified adjusted gross income (MAGI) and 50% of one’s annual benefit. Roth withdrawals aren’t part of MAGI, so even without a cut to Social Security, our reader would still be in the clear on benefit taxation, assuming they have no other income.

Social Security cuts aren’t the only thing to stress test.

"I would also want to see what happens if they experience poor investment returns early in retirement or live well into their 90s,” Moyer says. "The short answer is they should be able to retire, but it would be wise to work with a CFP to formulate a distribution strategy."

The right investment mix is key

If you’re going to retire at roughly 65 on $1.6 million, investing that money carefully is key, says Moyer.

"One of the biggest risks for someone retiring at 65 isn't necessarily running out of money because they spent too much," he says. "It's being forced to sell investments after the market has fallen significantly, particularly during the first few years of retirement."

That’s why Moyer recommends what he calls the three-five-seven plan.

"We look at how much someone expects to withdraw from their investments over the first three, five, or seven years of retirement, after accounting for Social Security and other income," he explains. "We then consider setting aside enough money in fixed income … with maturities aligned to their expected withdrawals to cover those years."

Addressing the burnout factor

"If someone has spent decades working and saving," Moyer says, "and their retirement plan shows they can reasonably support their desired lifestyle, there's a real argument for allowing themselves to enjoy the money they've accumulated."

But, he says, "That doesn't mean they need to make an impulsive decision and retire tomorrow. I would encourage them to build a financial plan, understand the potential risks, and determine what their retirement would actually look like."

The reader's birthday is also important. If he burns out and quits with six months to go before turning 65 (when he can start receiving Medicare), he will need to pay out of pocket for private health insurance (ACA). That can easily cost $800–$1,200 a month and derail his $90k year-one budget. If he is only one month away, those healthcare expenses are easier to manage.

David Talley, CFP, ChFC, EA, founder and lead advisor at Talley Wealth, says he understands that AI burnout is real. However, he says, retirement doesn't have to be one big jump.

"A lot of the people I work with step down in stages — maybe part-time, maybe consulting, maybe something totally different they actually enjoy," he says. "Even a little income in those first few years takes pressure off the portfolio right when it matters most."

At the same time, working part-time offers a chance to explore new activities or hobbies and ease the transition. That way, you’re not running away from burnout only to eventually replace it with boredom.

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

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For many public school teachers and other K-12 employees, retirement planning involves more than a pension and a single workplace savings account.

Depending on the employer, educators might have access to both a 403(b) plan and a governmental 457(b) plan, each offering tax-advantaged savings and features that can become particularly useful at different stages of a career.

Because the plans are often presented separately during benefits enrollment, employees might assume they need to choose one or the other.

In many cases, eligible workers can contribute to both, creating additional savings capacity along with more flexibility in determining when and how retirement assets are eventually used.

Why having both plans can matter

A 403(b) is available to employees of public schools and certain nonprofit organizations and functions in many ways like the 401(k) plans commonly offered in the private sector.

A governmental 457(b) is available to many state and local government employees.

Both generally allow employees to save through payroll on a tax-deferred basis, with Roth contributions also available under some plans.

For 2026, the standard employee contribution limit is $24,500 for each plan. Eligible workers age 50 and older might also qualify for catch-up contributions, while participants ages 60 through 63 might be able to make larger catch-up contributions if their plans allow it.

A 403(b) might also provide an additional catch-up opportunity for certain employees with at least 15 years of service.

The separate contribution limits can be especially valuable for educators who are able to save beyond the maximum permitted in one account. An employee with access to both plans could potentially contribute $24,500 to a 403(b) and another $24,500 to a governmental 457(b) in 2026 before applicable catch-up contributions.

Few households will be in a position to contribute the maximum to both accounts every year, but the additional room can become valuable later in a career when earnings are higher, major expenses have declined, or an employee is trying to accelerate retirement savings.

A 457(b) can offer added flexibility

The differences between the two plans become more important as retirement approaches.

Governmental 457(b) plans can provide added flexibility for employees who leave their employer before age 59½ because distributions after separation from service generally are not subject to the 10% additional tax that can apply to early withdrawals from other retirement accounts.

Different rules and exceptions apply to 403(b) plans, making the expected timing of retirement an important consideration when deciding how to allocate savings between the two accounts.

Consider a teacher who began working in her early 20s and expects to retire after more than 30 years of service. If she leaves her school system before she expects to draw heavily from her other retirement accounts, assets accumulated in a 457(b) could provide another source of income during the transition.

An educator planning to remain employed longer might place more emphasis on features of the 403(b), including the additional catch-up provision that might be available to long-tenured employees.

How the plans can work together

The value of having access to both accounts can change over the course of a career. A teacher in the middle of a career might contribute primarily to a 403(b) while balancing housing costs, college expenses or other financial priorities.

As those expenses decline, adding contributions to a 457(b) can provide another way to increase tax-advantaged retirement savings.

Retirement timing should also factor into the decision. An educator considering an earlier retirement might value the withdrawal flexibility of a governmental 457(b), while a long-tenured employee trying to increase savings late in a career might want to determine whether the 403(b) plan's additional catch-up provision applies.

Employees with sufficient income to contribute to both can also build separate pools of retirement assets that could provide additional flexibility when they begin drawing income.

Investment choices, fees and plan features should be part of the comparison, as well. Two plans offered by the same employer can have different investment menus, administrative costs, Roth options and loan provisions.

Understanding those differences can help employees decide where additional retirement dollars can be best directed.

Review your options before retirement

Educators approaching retirement should review the rules governing each account well before they expect to leave the workforce. The tax treatment of withdrawals can depend on the type of plan, the employee's age, when employment ends and other circumstances.

Reviewing those provisions several years ahead of retirement can provide more opportunity to coordinate workplace accounts with pension income, Social Security and other savings.

Benefits enrollment can also be a useful time for employees who have spent years automatically contributing to the same plan to revisit what their employer offers.

Asking whether both a 403(b) and governmental 457(b) are available, reviewing contribution and catch-up provisions, comparing investment choices and understanding withdrawal rules may uncover options that received little attention earlier in a career.

Teachers spend much of their professional lives planning around school years, grade levels and milestones that can be seen well in advance. Retirement benefits deserve the same periodic review.

Understanding how a 403(b) and 457(b) can work together might give educators more room to save during peak earning years and greater flexibility when the time comes to turn those savings into retirement income.

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• What to Do If You Plan to Make Catch-Up Contributions in 2026
• Pros and Cons of 403(b) Plans

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

In a Berkshire Hathaway shareholder letter, Warren Buffett once advised, "Leave the children enough so that they can do anything but not enough that they can do nothing."

Many parents share this sentiment. A recent survey from Kiplinger and Morning Consult found that parents hope their adult children use an inheritance to improve their lives (22%), not waste it (20%).

Once it's handed over, though, an inheritance can go toward things you'd never condone, or the windfall can shift a child's behavior in unhealthy ways in the long run.

Take David and Kathy, a hypothetical couple who gave their 20-something twins $100,000 each. Instead of using it to buy a house or invest wisely, one twin quit a steady job to day-trade, while the other used it to buy a luxury car that would depreciate over time. What was meant as a gift to open up the future instead became a setback or wasted opportunity.

As Joy Slabaugh, a certified financial planner (CFP) and founder of the Wealth Alignment Institute, explains: "Money can unintentionally interfere with motivation, identity, autonomy or family relationships."

Fortunately, avoiding that outcome doesn't have to change your desire to give or how much, just the way you give it. This holds true for parents as well as grandparents.

Why early inheritances can backfire

An early inheritance is a chance to help adult children while you're still around to see them enjoy it. While more adult children would rather get financial help now (45%) than a larger inheritance later, only 14% of parents say they'd prefer to give now, according to Kiplinger's survey.

Part of that hesitation might stem from research such as a 2026 study that found 42% of heirs spend their entire inheritance within a single year of receiving it. Going from having little to suddenly having a lot can trigger impulsive spending. Depending on the amount, it can also dull the motivation to work hard or invest.

Psychological factors are at play, too. Heirs can experience what researchers call "mortality salience" — the subconscious discomfort of handling "death money," which can prompt rapid spending as a coping mechanism.

Unearned money also tends to be treated more casually than a paycheck. Behavioral economists call this the "house money effect." People spend windfalls, gifts and winnings more freely than money they worked for, as though it were the casino's money rather than their own.

Control of an early inheritance with incentive trusts

For parents who want to give each adult child an early inheritance without fear that it will become a slush fund to live on, one possible solution is an incentive trust.

An incentive trust releases money only when your child meets certain conditions you've set, rather than handing everything over at once. Think of it as a gift with instructions attached. You, the parent, write the rules, while a trustee checks that each one is met before releasing any money. Your child receives a payout only after clearing the bar you set.

If David and Kathy had used an incentive trust, they could have nipped the twins' spendthrift behavior in the bud. Some common conditions they might have required are: a college degree; matching income from a job; or releasing money for a specific step such as buying a first home. Other requirements act as guardrails, such as pausing payouts if a child struggles with substance abuse.

Jon Lapp, a CFP and founder of Haven Financial Advisors, suggests, "Reasonable provisions might support college or vocational training, match retirement savings, help purchase a first home, fund a credible business plan, or give an independent trustee discretion to make staged distributions as the beneficiary demonstrates financial responsibility."

Ultimately, the purpose of an incentive trust is to encourage a desired action or prevent mismanagement. "I would consider this type of trust when the inheritance is large relative to the child's experience, or when there are specific concerns involving addiction, impulsive spending, creditors or an unstable relationship," Lapp says.

What to know before setting up an incentive trust

While an incentive trust sounds good on paper, it can turn into a problem in practice without careful planning.

For instance, Lapp says, "Conditions based on earning a particular salary, entering a certain profession, getting married or having children can become unfair very quickly. Even an earned-income match can penalize a teacher, caregiver, entrepreneur or disabled beneficiary."

Rigid rules can also become outdated, fail to account for unexpected life events such as illness or injury, and place trustees in difficult emotional positions. "When parents use wealth to protect, control, rescue or reward their children, the financial gift can become emotionally complicated for everyone involved," says Slabaugh.

When weighing how best to give an early inheritance, she recommends first asking the right question: "Rather than asking, 'How do we keep our kids from wasting the money?' I encourage families to ask, 'What do we want this wealth to make possible for our children, and what do we want it to teach or reinforce?' "

Other ways to help sooner rather than later

If you plan to give as much as a six-figure sum to your adult children, Lapp advises starting small. "Smaller gifts over several years can provide a useful test of how the child handles money," he says.

Other options Lapp offers include helping fund a Roth IRA when the child has eligible earned income, using a parent- or grandparent-controlled 529 account, paying tuition or medical costs directly to the provider and structuring housing help as a formal loan rather than an informal blank check. He points out that direct tuition and medical payments can also qualify for specific federal gift-tax exclusions when handled correctly.

When the money supports positive choices a child has already made, it can set healthier expectations. That's what parents want most. As Lapp puts it, "The primary goal is to help the next generation, without enabling poor financial management, or creating the expectation that they will always be 'bailed out' by mom and dad."

More Trillion Dollar Talk

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By spring 1961, NASA was already launching rockets. Alan Shepard had just ridden one into space and back, a 15-minute flight.

Twenty days later, President John F. Kennedy raised the stakes in one sentence: "I believe that this nation should commit itself to achieving the goal … of landing a man on the moon and returning him safely to the Earth."

A quarter of a million miles, and back. Getting home wasn't an afterthought. It was in the mission from day one.

Nobody responded by shopping for a bunch of equipment. This was unknown territory. The mission plan came first, followed by years of engineering and training.

Once they had the mission mapped out, and engineering had their strategies in place, then they gathered the materials and tools needed for the job ahead.

How retirement planning is like that

Retirement planning is no different. While you are working and the paychecks keep coming in, you're flying short missions. Mistakes get refueled by the next contribution.

Retirement raises the stakes the way the moon did: The trip is longer, refueling stops, and the whole point is coming home safely (not running out of money).

The retirement planning mission is defined by your lifestyle and legacy goals. The engineering comes second, and its job is to get more out of your money while it carries out that mission.

Some retirees want more legacy or more flexibility and will accept a bumpier ride to get it. That's not wrong — it's your preference.

Others give up some upside for a smoother, more predictable ride, trading what matters less for more of what matters more.

There is no right or wrong answer. You decide the mission. Everything else is engineered around it.

The problem today is that too many soon-to-be retirees start buying tools and materials before the mission is defined: An annuity here, a REIT there, a CD because the rate looked attractive.

After the equipment is bought, they look to see what they can build. That's backward, and it's what often gets in the way of a good retirement plan.

Here's how to build a more comprehensive retirement plan, step by step.

Projections: The mission comes first

Your plan is your mission statement:

• What kind of retirement experience do you want?
• How much of your wealth is for lifestyle and income?
• How much is for legacy?

On the income side:

• Do you want more flexibility with a wilder ride?
• More predictability with less thrill?
• A happy middle built just for you?

Remember Kennedy's second clause: The mission was the safe return. Growing your money to become the richest person in the graveyard was never the mission either. Living on it, for decades, is.

Notice what we're doing here: We're defining the path forward, guided by the mission expectations. Not one product has been mentioned.

Strategies: Engineering comes second

Apollo crews logged thousands of simulator hours, and the engineers running the simulations rarely allowed a clean flight. They fed the crews the broken versions: Failed engines, dead radios, alarms mid-descent.

The crews knew the conditions ahead better than anyone alive and still trained for the ones no one could foresee.

This is your strategy session. If these dollars are going on this journey, how do they travel efficiently? This is where tax strategy and withdrawal sequencing come into play, where income, taxes, healthcare and legacy get coordinated. Mini missions, all serving the big one.

During Apollo 11's landing on the moon, computer alarms flashed, and then they discovered the landing zone was full of massive boulders. Neil Armstrong didn't panic or wing it. He flew past them to smoother ground and landed.

The crew never predicted that moment. However, they were prepared to react, and a prepared reaction is better than a risky prediction.

Investments and products: Equipment comes third

Only after the mission was set did the equipment get its assignments, and every piece was a specialist. The Saturn V was the rocket itself, 36 stories tall and nearly all of it fuel. It had one job: Throw the crew toward the moon. It burned itself out in minutes and fell away into the ocean, stage by stage.

The lunar module was the spindly, foil-wrapped lander riding up top, so specialized it could fly only in the vacuum of space. It carried two men down to the surface, lifted them back off and was left behind.

And the heat shield did absolutely nothing for eight days. Dead weight, riding in silence, until the capsule hit the atmosphere at 25,000 miles per hour, and the shield burned away, layer by layer, so the three men inside wouldn't.

No component was chosen on a vendor's pitch. Each was recruited because the mission required it.

Your investments and products deserve the same discipline. Diversify your assets by strategy, not investment ambiguity or hope that growth solves everything. Each investment or product should do a specific thing, at a specific time, in a specific way.

Some fund income in the early years. Some chase growth you won't touch for a decade. Some sit quietly until the markets crash and then get tapped for income while your other accounts recover. (For more on this strategy, check out my book, How to Retire on Time.)

Follow systems, not sentiment

Mission Control ran on flight rules, checklists and go/no-go polls written before launch. When an oxygen tank exploded on Apollo 13, nobody improvised from the gut. They worked the procedures and brought the crew home. They followed systems, not sentiment.

Write your processes down while you're calm so that when the markets crash, taxes go up, or something else unexpected happens, you'll know what to do. A process invented mid-crash is not a process. It's a fear-based reaction.

Run your retirement in this order:

• Plan (mission) first
• Strategies (engineering) second
• Investments and product (equipment) third

That way, the product pitch loses its power. Buy this annuity. Lock in this rate. Try this tool. Those lines don't work on someone with a mission. When the plan comes first and the strategies second, the right tools naturally select themselves.

So, before anyone shows you another product, ask the questions NASA asked before anything left the ground: What's the mission?

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

It starts at the very beginning. You hold your baby in your arms and feel a deep, primal desire to give them everything they need. At some point, though, it's time to tighten the purse strings and help them make responsible decisions.

Giving your kids everything they want can cause more problems than it solves, not only during their formative years, but also when they're well into adulthood. There can be a fine line between financially helping adult children and putting them into a situation in which they're financially reliant upon you.

The 'too-nice neighborhood' problem

According to a recent survey from mortgage lender Veterans United Home Loans, more than half of parents of adult children are willing to help their kids purchase a home. Sometimes that's helping with a down payment or closing costs. Other times, it's cosigning a loan.

Problems quickly arise when parents help kids buy houses they can't afford to maintain on their own. Whether it's a monthly payment that burdens the budget or homeowners association (HOA) fees that feel excessive, helping your kids buy a house that they can't afford can be more of a curse than a blessing.

Instead, help them buy within their means or match their down payment to ensure they have some financial skin in the game.

Avoid lifestyle inflation by proxy

If you paid for a somewhat luxurious life for your kids or took extravagant vacations when they were younger (and continue to do so into their adult years), your kids might feel that a certain lifestyle is the norm and come to expect it.

Trying to keep up with a lifestyle once provided by financially established parents can rapidly become problematic.

Covering rent, vacations or luxury expenses tells your kids that their current lifestyle is normal even when it's not sustainable. Once support stops, the adjustment can be brutal, and the kids might try to scramble to afford the same niceties to which they've become accustomed.

This isn't to say that you can't occasionally splurge on a fun family vacation or other luxury, but rather to suggest that boundaries are clear that such a splurge isn't to be expected.

You've probably learned how to deal with lifestyle inflation, as many successful people have. Don't allow it to become your kids' problem by proxy.

Gifts should build habits, not dependence

You can be generous with your adult kids without risking bigger problems. Offer to pay for tools that can create momentum so they can stand on their own, such as professional certifications, seed money for a business or contributions to a retirement account.

The goal is empowerment, not entitlement. If you can help set them up for success, do it with clear expectations that you thoroughly discuss.

Ensure the "help" you provide is actually helpful — a certification in a career your child has no interest in will likely be a waste of money, as would seed money for a business your child wouldn't be able to keep afloat.

Talk openly about the trade-offs

If you gift something to adult kids, explain what the gift does and doesn't cover. If you buy a home, clarify who handles taxes and maintenance. If you pay their tuition, make clear it's a one-time payment. Clarity today prevents conflict tomorrow.

Examine the complications and relational strain that can come with changing your role with your child from "parent" to "lender" and decide if it's worth it. If you expect your child to pay you back, have a clear agreement on the terms so there's no ambiguity in the payback of the funds.

Protect your own financial health

Parents often dip into retirement savings to help adult children, but that kindness can jeopardize long-term stability. It can be a bad idea to earmark money to fund your adult child's lifestyle when you might need that money for your retirement.

Remember: Your kids can borrow money for a house or an education, but you can't borrow your way through retirement. Being financially ill-prepared for retirement because you're helping your kids can backfire on everyone involved if they have to then step in to help you survive.

Helping your adult kids in a productive way can be beneficial, but putting your own finances at risk can damage your financial health. Instead, choose when you want to help, and be clear in your intentions of wanting to help your kids thrive in adulthood on their own.

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• If You're in Your 50s or Nearing Retirement, Protecting Your Well-Being Is as Important as Protecting Your Savings
• Turning Everyday Spending into Free Flights, Hotel Rooms and More
• The Secret to Life, Liberty and the Pursuit of Happiness? It Isn't Money. A Financial Planner's Take on the American Dream
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Do I need a will, a trust or both? It's one of the most common questions we hear, and the answer is rarely simple. It depends on your family, your assets, your priorities and how much work you're willing to do now to make things easier for the people you leave behind.

Here's how we typically walk clients through the decision.

The core difference

A will is an ancient tool, which traces back to English common law and the Middle Ages. In many ways, it still operates on a system that's hundreds of years old.

When you die with a will as your primary estate planning vehicle, your estate goes through probate, which is a court-supervised process of settling what you owned. In most places, probate is slow, expensive and public.

Some states are less slow, less expensive or less public, but in general, probate is a complex and costly legal process.

A trust does much of the same work as a will, but it's a far more modern structure. A revocable living trust functions as a will-replacement vehicle. It helps you arrive at the same destination — your assets go to the people you choose. However, while a will typically goes through the probate court process, a trust can bypass it.

Some people need both

If your plan is built around a revocable trust, you still need a will. It will just play a different role. This fact tends to surprise a lot of people.

Think of it this way. A "will-only" plan uses the will to say who gets what and when. But once you have a revocable trust, the trust holds those details, and the will becomes a safety net beneath it.

For a trust to work, assets must be inside it or have a way to get in. If you pass away before you've retitled an account or updated a beneficiary designation, your will acts as a catch-all.

Instead of spelling out your whole family story, this will just says one thing: Sweep whatever is left in your probate estate into the trust to be administered under its terms.

The myths that hold people back

The biggest misconception we hear is that trusts are wildly expensive and only for the wealthy. Most people simply don't know what a trust is or how it works.

About 95% of the time, when someone says "trust," they mean a revocable living trust (also called a living trust). There are many other kinds of trusts, including spousal lifetime access trusts, life insurance trusts and more. These trusts typically don't enter the picture until you've built significant wealth.

Myths exist on the will side as well. Many people believe a will avoids probate. It doesn't. Others assume that being named executor (or personal representative) automatically puts them in charge. It doesn't either.

Until a will goes through the probate process and a court appoints someone as the executor or personal representative, the person named in the will has no legal power or authority.

Three key questions to ask yourself

If you're trying to decide between a will and a trust, ask yourself the following:

1. How would your family get by in the weeks after you're gone?

Probate can slow down access to money. Ask how important it is that your loved ones, especially a surviving spouse, can pay bills and keep living their lives. If immediate access matters, avoiding probate through a revocable trust deserves a serious look.

2. Who do you want doing the work?

Setting up a trust takes effort during your lifetime. Some families place a high value on making things efficient for their kids and grandkids while others don't. The question is whether you'd rather put in the work now or leave the next generation to handle it later.

3. How much do you care about privacy?

Probate usually produces an inventory of what you owned. In most states, that inventory is a public document.

Some people do nothing but go through probate records looking for houses to purchase at a discount, and few families enjoy getting a "sorry for your loss, want to sell the house?" call. A trust keeps those details private.

Overall, the choice between a will and a trust isn't about which is fancier or who's wealthy enough to need one. It comes down to how much you value privacy, how quickly your family needs access to your assets, and whether you'd rather do the work now or leave it to the next generation.

Once you understand what each document does and what it doesn't, the right answer will come into focus.

Shelby Anderson, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Shelby works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

Patrick Schultz, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Patrick works closely with clients' legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.

Related Content

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• Who Needs a Trust and Who Doesn't? A Financial Planner Explains
• The 5 Biggest Myths in Estate Planning and the Strategies to Follow Instead
• Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who Knows
• When a Will Isn't Enough, Families Can Let Trusts Do the Heavy Lifting: Here's How

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

One of the biggest misconceptions I encounter is that inherited investments should simply be sold.

Stocks are not cash. Many portfolios are built around long-term goals, whether that's preserving family wealth, generating future income or supporting future generations. Selling everything may often seem like the easiest option, but it doesn't always align with the investor's wishes.

This happens all too often. Investors spend years building wealth through brokerage accounts. They follow the markets, make strategic decisions and carefully build portfolios designed to achieve long-term financial goals.

Then, when it's time to put an estate plan in place, those same accounts are often left out of the conversation.

When stock portfolios aren't properly addressed in an estate plan, loved ones can be left trying to answer questions they were never prepared for.

• Should certain investments be kept or sold?
• Was the portfolio intended to support future generations?
• Were there specific goals behind the investment strategy that beneficiaries should understand before making big decisions?

If there are no clear instructions, even the most well-intentioned estate plans can become a headache for beneficiaries and cause confusion or worse — costly mistakes.

Most Americans haven't planned for their assets

Estate planning remains widely neglected. More than half (56%) of Americans don't have a will or trust, according to Caring.com's 2025 Wills Survey. People still view estate planning as something that can wait until later or is only for wealthy individuals.

This myth leads to countless assets being left without clear instructions for the people who will eventually inherit them.

Investing has also become more accessible than ever. More than 145 million people globally used stock trading apps in 2024, according to the Business of Apps Fintech App Report 2025. These apps give individuals easy, user-friendly access to building and managing their own portfolios.

The challenge is that while investing has become easier, planning for what happens to those investments after death often doesn't take place. Countless investment accounts exist without any clear estate planning instructions attached to them.

This problem isn't limited to people who have no estate plan at all. I often see it among people who have already taken the important step of creating one.

They may have a will. They may have discussed their wishes with family members. They may even have worked with attorneys or financial professionals. Yet their stock portfolio remains largely undocumented.

Family members may know the accounts exist but have little understanding of the intentions behind them. They may recognize certain holdings but don't understand why they were purchased in the first place.

• Was a particular investment intended to be held for another decade?
• Was the portfolio built to generate income for a surviving spouse?
• Was preserving the account more important than distributing it immediately?
• Who was the investor's financial adviser?

Those answers, along with important details about the investor's risk tolerance, are rarely documented, and beneficiaries are often left making important financial decisions without the context that guided the investor's strategy in the first place.

Stock liquidation isn't always the best plan

I've seen beneficiaries inherit a portfolio and begin liquidating positions simply because they don't know what else to do. That tactic is understandable. When there are no instructions, people are forced to make decisions based on limited information.

Some investors may have wanted heirs to retain certain long-term investments. Others may have wanted the portfolio to support goals such as education, home purchases or broader family support.

There may also be important tax implications beneficiaries should understand before taking action. Without guidance, those intentions can easily be lost.

The situation becomes even more complicated when there is no transfer on death (TOD) designation, no beneficiary designation or no trust directing the asset.

In those cases, the stock portfolio will typically become part of the probate estate, creating additional delays and expenses, and leaving the management of the portfolio to the administrator or executor rather than the ultimate beneficiary.

Before assuming a portfolio should simply be liquidated upon their death, investors — whether self-managed or accredited — should decide how they want those assets handled.

• Should certain investments be retained?
• Should others be sold and distributed?
• Have those wishes been documented clearly enough for beneficiaries and executors to carry them out?

The goal here is to leave enough context behind so beneficiaries aren't forced to guess. That starts with:

• Maintaining an inventory of brokerage accounts
• Keeping beneficiary information current
• Documenting the purpose of the portfolio
• Clarifying which holdings should be kept or sold
• Leaving contact information for any financial professionals involved

These details will make a significant difference when beneficiaries are trying to make informed decisions during a difficult time.

What happens when no instructions exist

When no instructions exist, families are often left piecing together information on their own. In many cases, the first challenge is simply identifying what accounts exist. A family may know a loved one invested throughout their lifetime, but have no idea where those accounts are held.

Locating records, accessing accounts and understanding how they fit into the broader estate can take significant time, creating unnecessary administrative burdens for executors.

Then comes the decision-making. I've seen beneficiaries inherit portfolios and immediately begin selling assets because they believe that is what they're supposed to do. I've also seen families disagree because each person has a different understanding of what the investor intended.

Nobody is acting with bad intentions. The problem is that they're trying to make important decisions without enough information. What should have been a relatively straightforward transfer of wealth becomes a far more complicated process than it needs to be.

What investors owe their beneficiaries

A few clear instructions go a long way and can help loved ones understand the purpose behind a portfolio, preserve wealth where appropriate, avoid unnecessary confusion and make more informed decisions.

Estate planning is not simply about transferring assets. It's about transferring clarity. You have to remember that the more guidance investors leave behind today, the easier it will become for beneficiaries to make thoughtful decisions when they don't have someone to guide them.

Related Content

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

There's a well-known study that Fidelity produced years ago that reviewed thousands of brokerage accounts and looked at the returns in each. The anecdotal conclusion: The best-performing accounts belonged to deceased account holders.

Right behind them were accounts belonging to people who had simply forgotten their passwords. I find that finding remarkable — and completely logical.

You can't panic if you're not paying attention

The thesis is simple. Investors who aren't actively managing their accounts don't panic-sell, don't try to time the market and don't interrupt their investments' ability to compound.

Those combined factors tend to produce better returns than what more anxious, hands-on investors experience. The least-engaged accounts are effectively emotionless — no second-guessing when markets spike, no panic when they drop.

This tracks with what plays out in financial advising every day. Some clients want to be deeply involved in their portfolios — joining every call, making market calls of their own, flagging sectors they want to chase, constantly tinkering.

Others barely discuss their investments at check-ins, admit they haven't looked at their accounts in months and place full trust in their plans.

Categorically, the highly engaged, informed, opinionated investors tend to fare worse than the ones who stay mostly hands-off.

Markets go up and down — reliably

Detaching from day-to-day market noise can be a genuinely effective strategy for many investors. It keeps emotion — and the fight-or-flight instincts that come with it — out of the decision-making process.

It's tempting to make market calls or share strong opinions about the economy. The markets, unfortunately, aren't listening. They don't care about anyone's fears, predictions or analysis. They largely just do what they've always done, and they do it fairly predictably.

What does "predictably" mean here? Markets have historically averaged roughly 10% annual returns and have been up in about three out of every four calendar years. That's simply the pattern.

Knowing that in advance, a down year shouldn't come as a shock. Nor should the fact that some pullback happens during nearly every calendar year, even the good ones — that's the norm, not the exception.

There's no getting around it: Investing in the markets means living with volatility. The real question is how an investor responds to it.

The realistic middle ground

Being completely detached from an investment plan isn't the right answer either. It makes sense to keep some pulse on a portfolio, but for most people, an arm's-length relationship works best.

That might mean placing trust in a professional or building enough personal discipline to avoid constant tinkering.

The goal isn't to ignore the markets entirely — it's to stop reacting to every headline or talking head on a financial news show.

What matters more is staying allocated in a way that's aligned with long-term goals. Changes should be occasional, not reactive, grounded in research and represent a strategic shift worth committing to for an extended period.

Above all, an investor should be comfortable enough with the plan to stick with it through every kind of market.

Why this matters more in retirement

This dynamic becomes more important once someone shifts from saving to spending down a portfolio. During accumulation years, a rough patch in the market can often be corrected by continuing to contribute and letting time do the work.

In retirement, that safety net disappears. A retiree reacting emotionally to a downturn — selling at the wrong moment, abandoning a withdrawal strategy, chasing yield into something unfamiliar — can do lasting damage to a plan that took decades to build.

The retirees who tend to do best are often the ones who set an allocation aligned with their income needs, then largely leave it alone.

No one has to be dead to earn great long-term returns, but acting a bit more like it — staying invested, resisting the urge to tinker and tuning out short-term noise — might be the closest thing to a reliable strategy that exists.

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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.

Let's play a little "would you rather," retirement edition.

Would you rather retire somewhere warm or somewhere warm? Somewhere you can get a tee time, or somewhere you can also get a tee time? Somewhere popular among retirees or… you get the idea.

The playground version of "would you rather" pits opposites against each other: hot or cold, sweet or sour. But one of the biggest decisions of your life — where to retire — often comes down to two places that, on paper, both sound good. According to the moving-services platform HireAHelper, more than 2 million people aged 65 and older were essentially playing this game in 2025.

Take Naples, Florida, and Palm Springs, California. Both are sun-soaked, golf-mad, upscale havens that have been drawing retirees for decades.

Look closer, though — at the taxes, the risks, the culture, the whole character of each place — and the similarities fall away fast. Get past the sunshine, and one of them is probably a much better fit for your next chapter than the other. Here's how they stack up.

What to know about retiring in Naples, Florida

When you picture the Sunshine State, you probably think sandy beige and ocean blue. In Naples, the defining color might be fairway green. It's the self-titled "Golf Capital of the World," with the second-most golf holes per capita of any U.S. city.

So, head in any direction, and you’ll likely run into a golf course or a millionaire, since Naples also has one of the highest concentrations of them per capita in the country.

The price of this side of paradise

Cost of living matters at any age, but especially in retirement when living on a fixed income. It's usually dominated by one thing: housing. Naples is a case in point. Overall, the Economic Research Institute pegs the city's cost of living at about 29% above the national average, but everyday expenses — groceries, utilities, gas — actually run close to or just below the national norm.

The median home sale price is around $1.2 million, according to Redfin, with rents typically $2,000 to $2,500 a month. Set against a median household income near $153,000, it's a market that rewards those who arrive with equity already in hand.

What the taxman takes

Here's where Naples really shines. If you love the word 'no' and hate taxes, this is the place for you because Florida is about as tax-friendly as retirement gets. No state income tax. No tax on Social Security, pensions or 401(k)/IRA withdrawals. No estate or inheritance tax. For a retiree drawing down a pension and retirement accounts, that can mean keeping thousands of dollars a year that other states would claim.

Still, as nice as it is to worry less about taxes, it’s rarely the sole reason people choose Florida. "Clients do not move to Naples just to save on taxes," says Patrick Huey, a CFP® and founder of Victory Independent Planning in Naples. "They move because they want to enjoy the lifestyle, and then we test whether the numbers support that decision."

When you need a doctor

Retirement and healthcare go hand in hand, and Naples delivers. NCH (Naples Comprehensive Health) has been named one of Healthgrades' America's 50 Best Hospitals — the top 1% nationally — and is a Mayo Clinic Care Network member. It is also the region's only Joint Commission-accredited Comprehensive Stroke Center.

Sunshine… with an asterisk or two

Naples is known for warm, sunny days averaging around 83°F. But you can have too much of a good thing. The area logged 53 days with a heat index of 105°F or higher in 2023.

And there's a bigger asterisk. Hurricane season runs June through November, and Naples' low coastal elevation leaves it exposed to storm surge and flooding (Hurricane Ian hit in 2022; Helene and Milton followed in 2024). Redfin flags nearly all Naples properties as facing severe flood and wind risk over the next 30 years. That risk shows up on the bill. Home insurance averages around $9,660 a year for $300,000 in coverage, with flood insurance a separate policy on top.

Huey points to the ongoing cost of property and casualty coverage as the real planning issue in coastal Florida. "For many retirees, the question is no longer simply, 'Can I afford to buy here?' It is, 'Can I comfortably carry this house for the next 20 or 30 years when insurance, maintenance, and association costs are layered on top?'" he says.

His firm has even rewritten a client's retirement plan so they could move out of a floodplain and cut decades of insurance costs. As he puts it, insurance "is what increasingly determines whether the plan will help them sleep at night."

The Naples vibe check

AARP gives Naples an overall Livability Index score of 55 — solid, though dragged down by a low "opportunity" score (fitting for a place more about winding down than climbing up). With a median age of 67.3, this is unmistakably an older community, and a very safe one, with violent crime well below the national average.

It's also politically conservative and roughly 89% white. The lifestyle is upscale and traditional: white-sand Gulf beaches, luxury shopping along Fifth Avenue South and Third Street South, fine dining, and culture at Artis–Naples and The Baker Museum.

"People choose to retire here because they are buying a lifestyle as much as a tax profile," Huey says. "Warm winters, access to the water, strong golf and social communities, and the feeling of being in a place built around retirement all matter a great deal."

What to know about retiring in Palm Springs, Califonia

Tucked into the Sonoran Desert two hours east of Los Angeles, Palm Springs made its name on hot springs, stylish hotels, golf and spas. It’s a glamorous throwback to the era of Frank Sinatra, Marilyn Monroe and mid-century Hollywood. It's been a retiree magnet since the 1970s, drawing people who want an active, artful, unapologetically freer version of retirement.

The price of this side of paradise

Like Naples, Palm Springs isn't cheap. The Economic Research Institute puts its cost of living at about 29% above the national average too, essentially neck-and-neck with Naples. The difference is what it costs to get in the door. The median home sale price is around $590,000, per Redfin — roughly half of Naples' — with rents running roughly $1,480 to $1,970 a month. Median household income sits at about $73,119, notably lower than Naples, reflecting a broader mix of residents.

What the taxman takes

If Naples is the taxman's friend, Palm Springs is where he collects. California is among the least tax-friendly states for retirees with heavy pension and 401(k) income. Social Security is exempt, but pensions and IRA/401(k) withdrawals are taxed as ordinary income at rates from 1% up to 13.3% — the highest top rate in the nation — with most retirees landing near a 9.3% marginal rate.

The one bright spot for legacy-minded retirees: like Florida, California levies no estate or inheritance tax.

"The biggest drawback is California's income tax,” says Joon Um, a CFP® and advisor at Secure Tax & Accounting in Beverly Hills. But he points out that "most retirees are nowhere near the 13.3% top rate" (for state tax).

Um says retirees can manage the bite through "Roth conversions, managing withdrawals before RMDs, and using a mix of taxable, IRA, and Roth accounts to better control taxable income."

Even so, he adds, the tax hit often isn't the deciding factor: "Many retirees accept the higher taxes for California's weather, lifestyle, family and healthcare. Taxes matter, but lifestyle often matters just as much."

When you need a doctor

If the hot springs can't cure what ails you, the medical care can. Desert Regional Medical Center sits right in the city, a Level II trauma center, graded "B" for safety by Leapfrog. And a short drive away in Rancho Mirage, Eisenhower Health earned Leapfrog's top "A" grade for 10 straight cycles and ranks as the #1 hospital in the Riverside County–San Bernardino metro by U.S. News.

Sunshine … with an asterisk or three

This is the desert, so sunshine is the whole point. The area boasts about 300 days of it a year and less than five inches of rain. Winters are glorious, with highs in the 60s and 70s. Summers are the catch, with triple digits for months on end, frequently topping 108°F.

The other asterisks are geological and environmental. The San Andreas Fault runs through the region (earthquake coverage is a separate policy through the California Earthquake Authority), and the area faces extreme drought plus some wildfire and flash-flood risk. The state's broader insurance market is under strain, but Palm Springs proper is less exposed than California's fire country.

The Palm Springs vibe check

AARP scores Palm Springs a 49 on its Livability Index. The environment is its weak spot, a common knock on Southern California, thanks to air pollution. With a median age of about 57, it skews a touch younger than Naples, and the vibe follows.

This is active, sociable retirement. Palm Springs is also one of the most prominent LGBTQ communities in America, with among the highest concentrations of same-sex couples of any U.S. city, and that openness shapes its whole character. It's a mid-century-modern design mecca (Modernism Week is a marquee event), with a lively arts scene (the Palm Springs Art Museum, galleries, a film festival), golf and serious outdoor recreation, from hiking the Indian Canyons to riding the Aerial Tramway up Mt. San Jacinto.

While crime is slightly higher here than in Naples, it’s generally property crime, the bane of resort towns.

So, would you rather?

The choice isn't really about weather or golf since both cities have those in spades. Naples rewards you at tax time and with a genteel, traditional feel, if you can clear the higher cost of buying a home and stomach hurricane season. Palm Springs asks more of you at tax time and costs less to enter, trading hurricanes for heat and earthquakes while giving you a livelier, more diverse, more design-forward scene.

The right answer comes down to your priorities, your budget, and perhaps your politics just as much as your postcard. But if choosing between two sun-drenched havens is your biggest retirement dilemma, that's a pretty good problem to have.

Read More on Where to Retire

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You may be ready to call it quits and start your next chapter in retirement, but is your partner ready? They may not be as eager as you to throw in the towel on their career — or, if they are already retired, they might not be ready for all that unplanned 'quality time' together.

After all, gray divorces (age 50 and over) are on the rise, accounting for close to 40% of all divorces in the U.S., and one reason is the sudden shock of all that unplanned time together.

While you may be worried about yourself — getting work done around the house, playing rounds of golf with your friends, or finally going on that bucket list trip — your partner's feelings matter too.

"It should always start with 'am I ready,' and the follow-up question should be 'is my spouse ready,'" says Kyle Moore, founder and financial planner at Quarry Hill Advisors. The goal is to make both feelings fit into the retirement picture.

To keep harmony at home, ask your partner these three questions before picking a retirement date.

1. Are you ready to make all our financial decisions as one?

Assuming you can afford to retire and live on one income (or your retirement savings plus Social Security and any pension income you have), a big financial change when one half of a couple retires is the commingling of finances and money decisions. If the other spouse or partner is still working, it's one 401(k) saving for two, a shared Social Security claiming strategy, and a single-earner household budget.

That's why the first question to ask your partner is: Are you ready to make all our financial decisions as one? "If you're used to looking at things separately, now you have to look at them as one," says Moore. "It's a lot to coordinate."

2. Are you ready for me to be around the house all the time?

"Familiarity breeds contempt" couldn't be truer when one partner is suddenly around all the time thanks to retirement. The road is paved with tales of marriages that fell apart once the working spouse retired and had nothing but free time.

That's not the case for Ellen Kennedy and her husband, Kent Marcoux. The married couple of 26 years have been living as wife and self-appointed "house husband" for about three years, ever since Kent retired.

Ellen is still working full-time as an editor at Kiplinger, while Kent busies himself kayaking — he even got accredited as a whitewater kayak instructor — volunteering to teach veterans with Team River Runner. He also reignited his passion for music, playing in several bands and logging time at a local recording studio. He does the food shopping, laundry, taxes and pet care, freeing up Ellen to focus on work. The arrangement works for them because Kent had a retirement plan separate from Ellen. While he's home more often, it doesn't feel suffocating.

"From my perspective, it took him about two years to transition from work to this new 'house husband' life structure," says Ellen. "He surprises me with cappuccinos in the morning and often asks what my 'HH' can do for me. It's a sweet new phase to our relationship."

To emulate this happily married couple, the second question you should ask your partner is: "Are you ready for me to be around the house all the time?" Hopefully they will say yes! If not, you have some talking to do.

3. What does an average Tuesday in retirement look like?

When most people think about retiring, they romanticize those big bucket-list items — the trip to the Sahara Desert, the move to Florida, or finally buying the RV to traverse across the country. But they don't think about everyday life, how much time they will spend with their spouse, what they will do together and apart. Ignoring that could cause problems, which is why the third question is: What does an average Tuesday in retirement look like?

"One of the things people don't think about is what happens on a random Tuesday. What are my day-to-day expectations of each other?" says Moore. "Having an open conversation about that would avoid conflict."

Keep the dialogue going

Picking a retirement date isn't a one-and-done decision, especially when someone else is involved. If your partner isn't ready for you to call it quits, continue to have open and honest conversations about why.

If it's financial, devise a strategy to shore up extra cash or commit to work an extra few months or a year. If it's about boredom and personal space, make a plan for how you'll spend your time together and apart. Remember, at the end of the day, you're not just planning your retirement date; you're designing a next chapter for both of you.

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If you're already contributing enough to capture your full 401(k) match, you've got the basics covered. The bigger opportunities — and the ones I see even diligent savers miss — are found a level up from there.

After more than a decade of helping people build their retirement plans as a CFP® professional, I've found that most people stop optimizing right after the match.

Other savings accounts and strategies that could work in their favor go unused for years, not because they're complicated, but because nobody ever walked through them step by step.

Here are five that can make a meaningful difference for people who are already saving well and want to do more.

1. Take advantage of an HSA's triple tax benefits

If you're eligible to contribute to a health savings account (HSA), it may be the most underused account you have.

HSAs offer a rare triple tax advantage: Contributions can be made pretax or may be deductible, earnings grow tax-free, and withdrawals are tax-free when used for qualified medical expenses.

For 2026, you can contribute up to $4,400 for self-only coverage or $8,750 for family coverage, plus another $1,000 if you're 55 or older.

Most people treat their HSA like a checking account for copays and prescriptions. You don't have to. You can pay medical costs out of pocket now, let the HSA grow untouched for decades and reimburse yourself years later, as long as the expenses were incurred after you established the HSA, weren't previously reimbursed or deducted and you kept adequate records.

I've worked with people in their 50s who'd been quietly saving old medical receipts for this exact reason, without ever calling it a strategy. Used that way, an HSA functions like one of the most tax-advantaged retirement accounts you have access to, not just a place to park money for copays.

2. Choose pretax or Roth in your 401(k) on purpose

Most people never actively decide between pretax and Roth contributions. Their 401(k) defaults to whatever the plan set up on day one, and they never revisit it. I've reviewed plans for people who hadn't looked at this choice in over a decade, even though their income, and the right answer for them, had changed completely in that time.

The difference matters. Pretax contributions generally reduce your taxable income now, while withdrawals are generally taxed as ordinary income later. Meanwhile, Roth contributions don't provide a current deduction, but qualified withdrawals are tax-free.

A useful starting point is to compare your marginal tax rate today with the rate you reasonably expect when the money is withdrawn. Keep in mind future required minimum distributions (RMDs), tax-law uncertainty, and the value of having both taxable and tax-free income sources in retirement.

For 2026, the 401(k) employee deferral limit is $24,500, with an additional $8,000 available if you're 50 or older.

One change worth flagging for this year: If your 2025 FICA wages from the employer sponsoring the plan exceeded $150,000, your 2026 catch-up contributions generally must be made as Roth contributions. It's a rule that's easy to miss.

There's no universal right answer here, only the one that fits your specific tax situation. Modeling your expected income and tax bracket in retirement with a retirement planning tool can help you make that call instead of guessing. (Note: I'm head of support and a financial planning educator at Boldin.) Make it a real decision, not a default.

3. Look into a mega backdoor Roth if you still have room to save

This one is for higher earners who've maxed out the accounts above and still have money left over to put away.

If your 401(k) plan allows after-tax contributions, separate from Roth contributions, you may be able to save well beyond the standard deferral limit. For 2026, the combined 401(k) employee-and-employer contribution limit is $72,000, or 100% of your compensation if less.

Catch-up contributions generally sit on top of that limit, potentially bringing the total to $80,000 if you're 50 or older, or $83,250 if you qualify for the higher age-60-to-63 "super" catch-up.

Once you've maxed your regular deferral and accounted for any employer contributions, the remaining room can sometimes be filled with after-tax dollars, then converted to Roth, either through an in-plan conversion or an in-service rollover to a Roth IRA.

This only works if your plan specifically permits both after-tax contributions and one of those conversion paths, so call your HR department or plan administrator before assuming it's available. Not every plan offers it, but for the people it fits, it's one of the more overlooked ways to build tax-free savings.

4. Stack a backdoor Roth IRA on top of your mega backdoor Roth

If you've just read about the mega backdoor Roth and assumed you've now used up your Roth options for the year, you haven't.

A backdoor Roth IRA lets high earners get money into a Roth IRA even after they've been phased out of contributing directly. You contribute to a traditional IRA on a non-deductible basis, then convert it to Roth shortly after. For 2026, the IRA contribution limit is $7,500, plus $1,100 more if you're 50 or older.

Here's the part I get asked about constantly: Your IRA contribution limit is separate from the limits that apply to your workplace plan. If you're otherwise eligible for each strategy, you can fund a backdoor Roth IRA and execute a mega backdoor Roth in the same year.

The one thing that can complicate a backdoor Roth IRA is the IRS's pro-rata rule, which requires you to consider all of your traditional, SEP and SIMPLE IRA balances together when calculating the tax on a conversion.

The calculation looks at the year-end value of all of those IRAs, not just the account holding your nondeductible contribution.

A mega backdoor Roth, whether converted inside your workplace plan or rolled directly to a Roth IRA, generally doesn't count toward those IRA balances.

If you don't have pretax traditional, SEP or SIMPLE IRA money sitting around, the backdoor Roth IRA stays clean from a tax standpoint. Either strategy can have tax consequences, so confirm the details with your CPA before you move any money.

5. Don't underestimate a plain taxable brokerage account

After three accounts built around tax breaks and rules, a taxable brokerage account can feel almost boring by comparison. But it doesn't get nearly enough credit.

There's no statutory contribution limit, no income cap and no early withdrawal penalty. You can invest as much as you want and sell investments or withdraw cash whenever you want, although selling appreciated investments can create a taxable gain.

That flexibility is rare among the accounts on this list, especially if you're hoping to retire before 59½ and need a bridge to cover expenses before your retirement accounts are penalty-free.

The tax treatment isn't as generous as a Roth or an HSA, but it's still better than most people assume. Long-term capital gains and qualified dividends get preferential rates, not your ordinary income rate.

For 2026, the 0% federal long-term capital gains bracket for married couples filing jointly extends through $98,900 of taxable income. Ordinary taxable income uses that bracket first, so only gains that fall within the remaining space qualify for the 0% rate.

There's also tax-loss harvesting: Selling an investment at a loss to offset capital gains and potentially up to $3,000 of ordinary income, subject to rules such as the wash-sale rule, something you simply can't do inside a 401(k) or IRA.

I've worked with many who treat their brokerage account as an afterthought, something they'll "get to eventually" once the tax-advantaged accounts are maxed. Fund it on purpose instead, particularly if flexibility and access before retirement age matter to your plan.

These add up faster than you'd think

Some of these moves require additional savings, while others change the tax treatment or destination of money you're already saving. The goal is to direct each additional dollar toward the account that best supports your plan.

That distinction compounds. A few percentage points redirected toward a Roth or an HSA in your 50s can mean a different tax bill in your 70s and 80s.

I've watched people run these strategies side by side and see for themselves how much of a difference the right combination makes over 20 or 30 years.

You don't need to implement all five at once. Start by identifying which strategies are available to you, then prioritize the one that best fits your tax situation, savings capacity and need for flexibility.

Before you know it, you will be on your way to a confident retirement knowing that you have optimized your savings.

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• Retirement Milestone Ages Most People Miss (And What to Do About Each One)
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• 4 Smart Ways to Use Your Tax Return for Financial Planning

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

From meal planning and research to fact-checking, copy editing and document summarization, artificial intelligence (AI) is rapidly altering the contours of daily life, becoming as indispensable as a basic internet connection.

But AI is not a magic wand. It's a tool that, when used responsibly, can improve efficiency and fill in specific knowledge gaps.

Within financial services, AI is becoming a bigger factor, both at the adviser level and among consumers, who have more access than ever to educational tools to support planning and investing.

In some ways, this access can be beneficial to consumers and participants, giving them unprecedented access to resources that help them be more involved and invested in their financial planning.

1. Everyday efficiency

I'm probably not the only person who uses ChatGPT to help with shopping and meal planning. With a single prompt, I have a ready-made grocery list and budget-friendly dinner plan built around my specific tastes and dietary guidelines.

Could I achieve the same thing by flipping through cookbooks or doing a Google search? Probably. But it would take a lot longer to sift through all the recipes that don't meet my criteria.

In finance, AI can serve a similar purpose, helping potential investors to get the lay of the land. Someone can use it to compare two investment options or learn about complementary opportunities.

It's a low-stakes way to familiarize yourself with the dizzying array of investment options.

2. Learning and definitions

AI is a great learning tool. At a basic level, you can use Claude or ChatGPT to provide definitions for common terminology: What is a stock? What is a bond?

Of course, Google does the same thing, but AI does it more efficiently and effectively.

3. Fact-checking professionals

Though AI can't replace a professional, it is effective for fact-checking, much in the way that patients can consult with another doctor to get a second opinion.

Humans are fallible (though they're less prone to errors than their robotic cohorts), so it's always healthy to do some quick fact-checking

However, when it comes to your finances, AI is not, and can't be, a substitute for professional expertise. It can't replace the empathy and connection that another human can provide.

4. Bad prompts produce errors

Ever heard of "garbage in, garbage out"? If you give AI a confusing prompt, you're likely to get a muddled answer.

I experienced this firsthand during planning for a group bike trip. As an avid cyclist, I turned to my trusty AI assistant to help plan a multiday bike route for me and some of my colleagues.

Apparently, something in my prompt was confusing, and on the last day, instead of setting out on a 30-mile ride, we discovered that it was, in fact, an 80-mile route.

I learned a hard lesson: Clarity is everything, and even small errors can lead to mistakes that you might not catch until it's too late.

5. Easily confused

AI is not great at juggling multiple thoughts at once. Specifically, it can conflate similar-sounding but different concepts such as a separately managed account vs an adviser-managed account, or a retirement-plan brokerage window vs a retail-brokerage account.

While these distinctions might seem small to the layperson, they're important because they involve different fee structures, governance and access rules. AI can slip up when multiple concepts converge, even if it gets them right individually.

6. Bias and data limitations

Studies have shown that large language models (LLMs) have consistently demonstrated bias across categories such as gender, race and age. While this is a discrimination problem, it also contributes to functional errors as diversity of thought leads to better, more accurate outputs.

Even in a perfect world, Claude or ChatGPT could never replace your doctor, lawyer or financial adviser. People want to look across the table at someone they trust when discussing critical issues such as their health and finances.

They also want accountability. A couple of years ago, I started working with a running coach. If you're not an avid runner, the idea of a coach might seem ridiculous. Running is just putting one foot in front of the other, right?

Well, in addition to helping with training, sleep and diet, my coach keeps me accountable. I pay for a coach not because I don't know how to run, but because someone showing up to my house in the morning keeps me accountable. I won't skip a run if I know Jeremy is going to be there. AI is not going to solve that issue.

Likewise, the value of the adviser-client relationship is accountability, trust and follow-through. As an investor, AI can be a useful tool to help you become more efficient and better informed, but it will never be a substitute for your financial adviser. Supplement, don't supplant.

You're likely not the only one using AI. Your financial adviser might use it, too, which is OK, even smart, but you're entitled to know how they're using it and make that part of the decision-making process.

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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 this: You receive a check with the proceeds of an inheritance. Whether you were expecting it or not, the question now is: What do you do with it?

Here's where you might run into some problems. If the amount is larger than $10,000, most banks won't accept a mobile deposit. A Kiplinger colleague recently experienced this after losing a loved one and encountered unexpected challenges.

The check arrived, but they couldn't deposit it electronically. Another issue? They didn't live close to any of their bank's brick-and-mortar branches. If you find yourself in a similar situation, here's what to do.

Ask your bank for solutions

My colleague reached out to their bank, which suggested overnighting the check. If you go this route, send the check via certified mail, then you can track the package and have proof that the bank received it.

But mailing a large check can be uncomfortable for many, including my colleague. If you don't want to mail your check, contact your bank directly to explain your situation.

Chances are, they'll find ways to work with you. Banks usually set deposit limits based on your average daily balance and account age for both savings and investing accounts such as IRAs. Yet, they'll give you more clout when depositing a larger amount.

Other ways to deposit your beneficiary check

Some banks partner with other institutions. This is more prevalent with credit unions. If you don't have a local physical branch, a partner institution might, allowing you to conduct in-person transactions seamlessly.

Another option is to contact the will's executor. Ask them to cancel the check and wire your funds electronically. This can bypass any deposit limits the bank imposes, giving you quicker access to your funds.

My colleague reached out to their brokerage firm for help. The firm eventually decided to send someone to their house to pick up the check for deposit. This is likely a last resort, as many banks don't have the resources or won't offer that service.

Once you deposit your inheritance check, another question emerges: What do you do with the funds?

Buy yourself some time with this step

Proper planning goes a long way to ensure the gift you receive helps you achieve your goals. I recommend opening a high-yield savings account, a money market account or a short-term CD until you decide if there's anything further or more specific you want to do with the funds.

Look for online banks since they offer higher APYs, lower fees and many accept mobile deposits. On the high-yield savings end, here's a smart recommendation:

Money market accounts are great if you want to grow your cash with the purchasing power of a checking account. Keep in mind that some banks set transaction limits, so this account works best for someone who wants guaranteed returns while making minimal transactions.

Meanwhile, a CD locks in a decent rate of return without market volatility, thanks to its fixed interest rate. I recommend a short-term option of three to six months or a jumbo CD (if the deposit is $50,000 or more) to earn a sizable return while you figure out next steps.

Use this Bankrate tool to find and compare options fast:

When choosing an account, look for FDIC insurance. This protects your deposit up to $250,000 per account holder, giving you peace of mind.

Once you choose a savings account, do this next.

Set goals to create lasting wealth

Your loved one left you a valuable resource. It's up to you to determine what to do with it. If you haven't been in a position in which you've had this much money before, my first tip is to find a reputable financial adviser or personal banker.

When searching for a financial adviser, look for the following qualities:

• Fiduciary designation. This ensures they act in your best interest rather than prioritizing commissions or sales targets.
• Reputation. Read client feedback to gauge trustworthiness. Common complaints across reviews can point to recurring issues you might experience too.
• Personal. Find an adviser who asks open-ended questions about your financial goals and values rather than boxing you into a one-size-fits-all approach.
• Services. Can they cover all your financial needs, such as retirement planning, tax strategies, asset allocation and estate planning?
• Proactivity. Goals evolve. Look for an adviser who commits to meeting regularly, so they can update plans as priorities change.

One of the best things about working with a reputable financial adviser is that they can take some of the planning off your plate. Once they understand your goals and values, they can tailor a plan to pay off debt, save/invest, plan your estate and address any other financial concerns you might have.

If you don't have an adviser yet, you can use this Bankrate tool to find a reputable one quickly:

Ultimately, receiving an inheritance check can be a challenging process at a time when you're experiencing the fog of grief. However, by following these steps, you can find the right deposit solutions, give yourself time to figure things out and develop a plan that helps you build wealth now and well into the future, as the gift was intended.

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• How Real Families Are Handling The Great Wealth Transfer

For savers, the sharp spike in interest rates has a silver lining: higher annuity payouts and larger risk-free guaranteed income streams.

When interest rates rise, annuity yields typically follow; insurers earn more on bonds they buy with customer premiums, so they can pass along higher rates to new annuity buyers.

An annuity is a contract between you and an insurance company that converts savings into guaranteed income — for a set period or for life.

With borrowing costs rising from the Federal Reserve’s benchmark short-term rate to the 10-year Treasury note, annuities are back in the spotlight. Preretirees and retirees seeking a guaranteed income stream beyond Social Security can take advantage of the rate spike and lock in higher annuity rates.

With equity markets near record highs and interest rates surging, U.S. annuity sales rose 2.2% in the second quarter to $121.2 billion, according to LIMRA. Sales in the first six months of 2026 totaled $228.7 billion, a new first-half record.

Money parked in annuities reduces market exposure and provides protection against a downturn in stocks.

There are many types of annuities. But we'll focus on two common types that offer fixed payouts or lifetime income and are simple to understand. Examples include:

Multiyear guaranteed annuity (MYGA). This is a "fixed annuity" that locks in a guaranteed interest rate for a set term — typically, three to 10 years — with tax-deferred growth and no market risk. As with a certificate of deposit (CD), this annuity is used for accumulation. You give the insurer a lump sum for, say, five years, earn a fixed annual rate of return and get your principal back at the end of the contract.

For example, if you put $100,000 into a five-year MYGA yielding 6.55%, you'll earn $6,550 each year and get your principal back five years later at the end of the contract.

Single premium immediate annuity (SPIA). Often called immediate annuities, this type of annuity is similar to an old-fashioned pension, as it turns a lump sum into guaranteed income for life. You give an insurer a lump sum today, and the company writes you a monthly check for the rest of your life or a fixed number of years starting immediately.

With SPIAs, be aware that once you turn over your money to an insurer in a "life only" SPIA, and they start providing a guaranteed income stream, the money you forked over is gone. For this reason, many buyers purchase SPIAs with a "period certain" or cash refund rider so their heirs get the remaining balance if they die early.

SPIA math is simple. To determine the monthly income an annuity will pay out, multiply the premium (or lump-sum payment) by the annual payout rate, then divide by 12. Using a $100,000 premium and a 5% payout rate, the monthly income would be $416.67. Monthly income = $100,000 x 5% / 12 = $416.67. At a 5.25% payout rate, the monthly income climbs to $437.50.

Why are annuities attractive now?

What makes these annuities attractive currently is the high income they generate because of the spike in rates.

As of October 1, 2026, the best fixed annuity rate for a three-year annuity is 6.10%, five-year annuities pay 6.55%, seven-year annuities earn 6.95%, and a 10-year annuity pays 6.35%, according to My Annuity Store.

With Wall Street penciling in another full percentage point of Federal Reserve rate hikes through the end of 2027, potentially taking the Fed’s overnight bank lending rate from 4% to 5%, investors must weigh whether now is the time to lock in higher rates.

From an income opportunity standpoint, those yields are attractive, and investors or retirees should take advantage of them, says David Lau, founder and CEO of DPL Financial Partners, an online platform that offers commission-free annuities.

"It’s a terrific time to lock in these rates," says Lau. A perk of owning a MYGA or fixed annuity is that most insurers let you withdraw up to 10% of your account value per year without a surrender charge, according to AnnuityExpert.com.

Despite forecasts of higher rates in the months and year ahead, it's difficult to predict the direction of rates. Timing interest rates is as difficult as accurately timing when to jump in and out of the stock market. Waiting for a better entry point could always net you an even higher rate on a new annuity. But it's not a guarantee.

"You can't get paralyzed by hoping or wondering whether you can get maybe a little better rate if you wait," says Lau.

Ed Massaro, CEO of Knighthead Life, an insurer that sells annuities, says savers shouldn't place too much emphasis on where rates are headed next when weighing whether to purchase an annuity.

"The right question isn't whether rates are at a peak; it's whether today's rates get you enough income to meet your retirement goals," says Massaro.

Options for annuity buyers as rates rise

Since nobody knows where rates will go, here are four options for an income-oriented preretiree, retiree or conservative saver to consider.

1. Lock in today’s rates. With the 10-year Treasury hovering at around a 19-year high of 5.25%, locking in today's annuity rates that range from 6% to nearly 7% makes sense for a saver who wants a guaranteed return today rather than betting on a higher rate in the future.

The sweet spot for fixed-income annuities or MYGAs is a five-year annuity with yields as high as 6.55% and a seven-year product that offers a top yield of 6.95%. "As long as you have the liquidity (e.g., available cash to meet your spending needs), lock in those longer-duration annuities," says Lau. Since the highest current yield on a 10-year annuity is 6.25%, Lau sees no reason to lock money up in an annuity for a decade.

2. Build an annuity ladder. One way to lock in today's elevated rates while minimizing interest rate risk is to build an annuity ladder that invests in a number of annuities spread across different maturity dates, says Steve Azoury, owner of Azoury Financial.

This strategy is similar to building a CD ladder, but it benefits from tax-deferred growth. Given that annuity rates offered by insurers currently top out at around seven years, you could spread money equally among annuities that offer fixed rates for one, two, three, four, five, six and seven years. If rates keep climbing, you can roll over an expiring annuity into a higher-yielding one, says Azoury. On the flip side, if rates dip for some reason, you'll have locked in today's higher rates.

Before committing any money to an annuity, Azoury says you should review your retirement goals and objectives and decide how big a weighting of annuities you want in your retirement portfolio.

3. Wait and see. If you're willing to bet on rates moving higher, you can wait to buy an annuity to take advantage of higher yields in the future. The risk is missing out on higher yields now and losing purchasing power on cash sitting in lower-yielding investments, says Lau. If the money you plan to deploy in an annuity is sitting in a risk asset such as a stock mutual fund, you risk losing money if the stock market goes down.

"That's the biggest risk, especially those within five years of retirement," says Lau. Losses in the stock market close to retirement can be hard to overcome (an effect known as "sequence of returns risk") and can deplete retirement savings faster than planned.

4. Buy now and buy later. Another strategy is to hedge your bets by putting a portion of your money into an annuity at today's rates and adding more later to hedge against future rate volatility. "Average in,” says Massaro. "Don’t try to pick the top."

Whatever strategy you choose, shop around for the highest rates available from highly rated insurers. An insurer with an A or higher credit rating is a less risky bet than going for a higher rate offered by a lower-rated insurance company.

The bottom line: today's annuity rates are plump enough to generate a solid income stream.

"It’s a good time to participate," says Massaro.

Weigh the downsides

Before you lock in an annuity, consider the drawbacks of fixed annuities.

Inflation. The most serious threat to a long-term annuity contract is inflation. For example, consider the buying power of the 5-year MYGA example above, with $100,000 invested and a 6.55% interest rate. At the end of five years, the insurance company will hand you a lump sum of $137,331, but its real purchasing power, adjusted for inflation, is $116,189.

You've beaten inflation and grown your real wealth by roughly $16,189, but your effective "real" rate of return after inflation is about 3.05% per year.

Penalties for early liquidation. Steep surrender charges, often up to 10%, apply if you liquidate your MYGA early. (SPIAs are similar to pensions and can't be cashed out.)

Taxed as ordinary income. Your annuity will enjoy tax-deferred growth, but gains will be taxed at higher ordinary-income rates rather than capital gains rates.

Read More

• The 'Ultra-Low-Risk Portfolio': A Good Choice for Wary Retirees?
• Do You Know the Pros and Cons of Annuities? Test Your Knowledge With Our Quiz
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• Kiplinger Readers' Choice Awards 2026: Annuity Providers

If you thought of your client's career as an investment, what would it be? Would it be safe, like a bond? Or risky, like a stock?

Conventional wisdom says a person's career is more like a bond. The rationale is simple: Most people receive a relatively stable paycheck, so their career income has low volatility.

From there, the traditional advice follows that younger people can afford to take more risk in their investment portfolios and then gradually reduce their equity exposure as they approach retirement.

The logic sounds reasonable as a rule of thumb. The problem is that it's disconnected from how careers actually work. For starters, volatility and risk are not the same thing.

What can go wrong with a career?

Think about some of the risks embedded in human capital:

• Job loss. Career income is illiquid. You can sell a bond whenever you want, but you have to work to get paid. Even a temporary disruption to income can create a cash crunch.
• Disability. This is an obvious risk for certain professions, such as professional athletes, but an unexpected health event can leave anyone temporarily or permanently unable to work.
• Death. For someone with dependents, this raises a very practical question: What happens to my spouse or children if my income disappears?
• Displacement. This risk is particularly relevant in the age of AI. It's anyone's best guess which jobs and industries will be disrupted over the next decade.
• Professional liability. Doctors, lawyers, accountants, executives and others may have substantial career risk tied to litigation or professional mistakes.
• Skill. Career success isn't guaranteed. You may be a CEO spending as though you have another 10 years of high income ahead of you, but a few bad decisions can quickly bring humility to those expectations.
• Volatility. And yes, volatility matters too. Income can fluctuate considerably for people who rely on bonuses, commissions, equity compensation or other forms of variable pay.

Are all these risks important for every client? No, every career is different, and that's a key point.

Looking only at the volatility of somebody's paycheck misses the bigger picture. Human capital isn't a "safe" income stream that we can simply drop into a Monte Carlo simulation. It is a major source of wealth with its own liquidity, concentration, personal and economic risks.

The good news: Many of these risks are manageable

Many of these problems have solutions. A reserve fund can cover expenses during a job loss, buying someone time to find the right next position instead of taking the first available paycheck. Insurance can address disability, death and professional liability risks.

The investment portfolio can also play a role. If a client works in technology and much of their future wealth already depends on the technology sector, maybe their portfolio should have less exposure to tech stocks.

The portfolio can help diversify risks that already exist elsewhere in the client's financial structure.

Of course, not every career risk can be neatly hedged. If AI displaces your job, the solution may involve retraining, changing industries or reducing spending for a period.

Professional liability insurance may cover a malpractice settlement, but it doesn't find you another job. Disability insurance can replace some income, but it generally can't re-create the full economic value of a career.

Risk management doesn't mean eliminating uncertainty. It means identifying the things that could materially affect the client and putting practical protections in place where you can.

So what type of asset is human capital?

In my view, human capital looks much more like a private business than a bond.

Start with the opportunity. For most people, their career is one of the most important engines for wealth creation. Outside of the ultra-wealthy (and even many of those families originally created their wealth through somebody's career or business), human capital is often responsible for producing the majority of lifetime wealth.

Then consider the risks. Like a private business, human capital is:

• Illiquid. You have to work to realize its value. You can't sell 20% of your career tomorrow because you need cash.
• Concentrated. Your eggs are largely in one basket. An injury can end an athlete's career just as a professional mistake can materially impair the career of a doctor, lawyer or executive.
• Non-tradeable. You can't exchange careers with somebody else. If your profession becomes obsolete and you need to retrain, you may be starting over.
• Uncertain. You own both the upside and downside of your future earnings. The result will depend on some combination of skill, effort and luck.

Once you start thinking about human capital this way, the planning implications become more interesting. Instead of simply saying, "You're young, so you can own more stocks," an adviser can ask more useful questions:

• How resilient is this person's career?
• How accessible is their wealth?
• What happens if their income disappears?
• Is their investment portfolio doubling down on risks they already have through their job?
• What protections would allow them to take career or investment risk more confidently?

Those questions get us much closer to real risk management.

Human capital can also offset bad luck

Human capital isn't just something we need to protect. It can be an important risk management tool in itself.

Imagine someone is about to retire and the stock market suddenly falls 30%. If they're already retired, their options may be limited. They may need to cut spending or sell investments in a down market.

Someone who is still working has another lever available: Their career. They could delay retirement for a few years. They might work additional hours, pursue a higher-paying role or temporarily trade some work-life balance for additional income.

None of those choices is necessarily desirable, but having the option is valuable.

This flexibility can offset bad luck elsewhere in the financial structure, and that has implications for the portfolio. Someone with significant career flexibility may reasonably be able to tolerate more investment risk because they have another resource available if markets disappoint.

The opposite may be true for retirees, or even for younger individuals with fewer marketable skills.

Of course, the right approach depends on how human capital relates to the broader financial picture and interacts with an individual's unique risks.

Bringing human capital into the total wealth picture

Ultimately, I don't think advisers should treat human capital as a safe bond or simply as another line item in a planning projection.

It is a unique asset that creates wealth and carries risks. It can be protected with reserves, insurance and diversification. And, because careers give people the ability to adapt their future income, human capital can sometimes help absorb bad outcomes elsewhere.

That's why it belongs in the same conversation as the investment portfolio, private assets, real estate, liabilities, insurance and other components of a client's total wealth.

Advisers are in a unique position to see all those pieces together. When you understand the client's career as part of that broader financial structure, you can move beyond simplistic rules of thumb and start asking a more useful question:

What can we do to help the client navigate their key risks and maximize their wealth potential?

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• Taming Risk: Offensive vs Defensive Investing Strategies
• The Retirement Mindset Shift: Deciding When to Ease Off Risk
• Starting to Advise Ultra-Rich Clients? Don't Rebuild Your Firm, Just Rethink 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.

Editor's note: This is part one of a two-part series on how financial professionals can help their clients avoid costly retirement mistakes.

For many pre-retirees, the transition into retirement doesn't unfold as carefully as they expected.

After years of disciplined saving, the focus suddenly shifts to income — and that's where things can feel rushed. Decisions are made quickly. Accounts are tapped without a clear sequence. Tax consequences show up later.

In other words, their approach is: Ready, shoot, aim.

At Wealthcare Advisors (WCA), we believe retirement income planning isn't something clients should figure out on the fly. This is where they need a skilled and knowledgeable financial advisor.

Before your client locks in their retirement date, there are several key questions — and more importantly, the how and why behind them — that deserve attention. That's what we'll look at in this two-part series.

Which accounts should you tap first — and why?

Retirement income doesn't come from a single paycheck. It comes from a coordinated strategy across different types of accounts:

• Tax-deferred (IRAs, 401(k))
• Tax-free (Roth IRAs)
• Taxable brokerage accounts

The question for clients isn't just, "Where do you pull money from?" It's also, "Which order makes sense for your situation?"

A structured withdrawal strategy can prolong the life of their assets, smooth out tax exposure over time and create flexibility in future years.

For example, drawing only from tax-deferred accounts early may seem logical, but it can create larger required minimum distributions (RMDs) later, potentially pushing a client into higher tax brackets and increasing Medicare premiums.

On the other hand, using taxable or Roth assets strategically in earlier years may allow them to proactively manage their tax position before RMDs begin. The difference-maker is intentional design — not convenience.

How do market conditions affect withdrawal decisions — and how should advisors respond?

Market volatility doesn't stop at retirement, but your client's strategy should account for it differently. The biggest risk isn't just market decline — it's withdrawing income during that decline. That is where sequence of return, or sequencing, risk becomes a reality.

So, how should you respond? Collaborating with your team and developing a plan mitigates much of this quote unknown risk.

A thoughtful income plan may include maintaining a short-term income "buffer" to avoid selling assets in down markets, adjusting which accounts clients draw from based on current market conditions, and diversifying income sources so they're not relying solely on portfolio withdrawals.

Instead of reacting emotionally, the goal is to build a system that anticipates market cycles and adjusts accordingly. You and your clients can't control the markets — but together, you can control how and where they get their income.

Related Content

• The Best Advisers Help Their Clients Use Their Retirement Fear Constructively: Here's How
• Advisers: This Outdated Retirement Rule Actually Un-Diversifies Your Clients
• How to Turn Wealthy Clients' Charitable Giving Into a Cohesive Plan
• Old Annuities Contain Untapped Potential for Clients and Advisers: Here's Why
• What's the Best Age to Take Social Security? 3 Questions Advisers Should Ask

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 part of our Trillion Dollar Talk campaign, Kiplinger editors — Alexandra Svokos, Kiplinger digital managing editor and Diane Harris, Kiplinger Personal Finance Magazine deputy editor — brought together three of our favorite experts to discuss inheritance.

We had an invigorating conversation about how families can approach these conversations and the types of problems that often come up, as well as highlighting possible solutions for those scenarios.

Joining us for our panel conversation were: Valerie Galinskaya, managing director and head of the Merrill Center for Family Wealth®; Brad Klontz, associate professor of practice in financial psychology at Creighton University Heider College of Business; and Ryan Coon, attorney at Anderson Advisors and J.D. from Willamette University.

Watch the full conversation here:

During this episode of Kiplinger Conversations, we asked viewers to send us their questions. Here's a round-up of those questions, along with our responses. If you have questions on this topic, please reach out to us at KipInheritanceTalk@futurenet.com.

We will do our best to answer as many questions as we can, and your questions might inspire future articles for Kiplinger. The answers provided by our editors are for general informational purposes only. Not all questions submitted will be published, and some will be edited for clarity.

1. Addressing specific numbers.

Question: The overarching question is, how do you have an informed conversation with your adult children without having to discuss specific dollars and cents?

Diane Harris: Great question! It's a very common concern among parents, not wanting to disclose exact numbers.

And you don't need to, honestly. Your general intentions, and why you've made the decisions you've made, and what plans you have in place are what the kids need to know, not numbers. After all, those numbers can change, depending on how long you live and what your expenses will be, particularly when it comes to health or long-term care.

The critical details are not the amounts you intend to leave but whether you have a will and other estate planning documents and, if so, where to find them; the kind of assets you have (for example, do you have accounts that will pass outside of a will, property in addition to your primary residence, investment accounts, and so on); and how you plan to divide them and why.

In particular, it's important to explain your thinking if you intend an unequal distribution of assets among your children, so they understand your reasoning.

And if you have money you intend to give for specific purposes during your lifetime — say, if you plan to help pay for a wedding or assist with the down payment on a home or your grandchildren's college education — it would be good for the children to know that too, so they can plan accordingly.

Alexandra Svokos: It's not unheard of to be concerned about this. In our Trillion Dollar Talk survey, conducted by Morning Consult, we asked adult children to write in the one question they would want to ask their parents about a possible inheritance. The most common response we heard was a version of, "How much will I receive?"

On the flip side, the most common reason parents said they haven't talked to their kids about inheritance yet is that "there are too many unknowns."

Don't let this uncertainty stop the conversation from happening in the first place.

As Diane said, you don't have to lay out everything in your estate — but I would recommend you aim to give your children a ballpark idea of what's in your estate so you can both plan appropriately. Again, exact numbers aren't what matter here; you just don't want to leave them surprised and unprepared when you're gone.

Additional reading:

• We Know You'd Rather Talk to Your Kids About Politics Than Inheritance. Here's the Right Way to Have That Conversation Anyway.
• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What to Do About It
• Counting on the Great Wealth Transfer? Why It May Not Pan Out the Way You Hope

2. One-on-one vs group conversations

Question: Do you feel it is better to have a family group inheritance discussion or one-on-one with each family member?

Alexandra Svokos: The answer to this largely depends on your own family dynamics. If your family regularly has open (and healthy) conversations about finance and future planning, a group setting would make sense. If, however, group settings tend to bring up arguments, you may want to start the conversations one-on-one.

Starting with a one-on-one conversation is also helpful if you're splitting an estate anything besides explicitly equally — that way, you can explain your reasoning without having to balance group dynamics, and you'll be in a space where the heir can openly ask questions to understand your decisions.

But what I would keep in mind, as Ryan said, is that it's not a one-and-done conversation. You can have both group discussions and one-on-one conversations to make sure everyone feels comfortable and confident.

Additional reading:

• The Conversation You’re Avoiding: How to Bring Up Estate Planning with Your Family

3. Handling older parents' finances

Question: My husband is an only child, and his parents own two homes. They are 88 and 87. They have made it clear that everything is coming to us and have started to gift us the max each year $76,000.

We don't know how much they have, and we don't need the money. We worry that they might need extensive care as they get older (her mother lived to 106 years old). We are keeping the money in an interest-bearing account so we can use it for them if they need it later. Are there any recommendations as to how/where we keep these funds they are gifting to us? We want to do what is best for them.

Alexandra Svokos: Thanks for your question. Long-term care costs are something many families are worrying about. In fact, our survey found that 24% of older parents fear that ongoing care costs will deplete their estate.

First and foremost, we recommend speaking to professionals for advice on your own particular case. Our answers here are for general information purposes only.

As a general principle, it's worth having a conversation to ask parents if they have their own plans for managing long-term care. They may feel comfortable making gifts because they have a plan in place, for example, and if not, you can discuss how to set up a plan and what makes sense for you both.

Again, this is generally speaking: If you have funds you may need to use within a short time span, an interest-bearing account where you can immediately access funds (like a high-yield savings account) is a decent idea. If you feel sure you won't have to use funds for a longer time period, you can consider CDs (which typically have higher rates, but lock your money in for a set time period) or investing in the market, although that comes with higher capital gains tax rates if sold within a year, and of course, more risk than, say, a locked-in CD.

Additional reading:

• No One Wants to Ask Their Aging Parents About Their Finances, But Here's How
• Where to Put Inherited Money
• Gift Tax Exclusion 2026: How Much You Can Give Tax‑Free This Year
• I Have $150,000 That I Don’t Need Anytime Soon, but I Don't Want To Put It in the Market. What Should I Do?

4. Estate planning for blended families

Question: Given the realities of today’s blended and often fractured family dynamics, is there a provision that allows us to safeguard the inheritance so it stays within the family?

Diane Harris: Yes, in blended families, as our panelists mentioned during the discussion, a will is often not sufficient to ensure your assets pass as you want them to and protect the people you love and want to provide for.

One key estate-planning tool that helps with this is a trust, which allows you to make stipulations — for example, you might set up a trust in a way that provides for a surviving spouse during his or her lifetime but then ensures that the remaining assets will pass to your children from a previous union. Whatever the specifics you want to put in place, a trust is often a good tool. Laying out your intention for personal property in a letter of intent, while not legally binding, is also often helpful.

Often the most contentious items in an estate — in all families, not just blended ones — are items with emotional resonance, not the investment portfolio. Who gets Mom's engagement ring or Dad's prized watch or the ornament that sat on top of the Christmas tree or Grandma's yellow pie plate… those are the items that can cause the greatest friction in families, experts tell us.

An estate planning attorney can help with all of these decisions. You can find them either via personal recommendations from people you trust or by checking a professional directory such as those from the National Association of Estate Planners and Councils or the American College of Trust and Estate Counsel (ACTEC) Directory.

Additional reading:

• The 5 Essential Trusts You Need for 2026 Estate Planning
• This Is How the 'Brady Bunch' Safety Net (aka a QTIP Trust) Protects Your Kids' Inheritance
• The Six Estate Planning Steps Every Blended Family Must Take
• The Little-Known Tool to Protect Your Retirement Savings in a Divorce

5. Children with particular circumstances

Question: How do I or you address issues of a child with dementia and estrangement, re any or partial benefits of an inheritance?

Alexandra Svokos: This is where you definitely want to make sure to get professionals involved. If you are planning to leave something to a child or other heir with whom you're estranged, a letter of intent can help explain the inheritance to them without breaking an estrangement. I would just caution you to remember that a letter of intent is about explaining an inheritance, not about reopening conversations when you're not around to have them.

For a child with dementia or special needs, the answer here is again to make use of trusts. You can, for example, set up a special-needs trust. This is also why I say you'll need professionals involved – be careful about setting these systems and guardrails up so that your legacy gets used in the way in which you want it to be used.

Additional reading:

• The Benefits of a Special Needs Trust
• A 5-Step Plan for Parents of Children With Special Needs, From a Financial Planner
• Managing the Financial Dominoes of Special Needs Planning: A Practical Guide for Long-Term Security
• How to Plan for Retirement When Your Child Has Special Needs
• Is a Living Trust the Right Move for Your Estate Plan?

For many Americans, a traditional measure of financial success has been straightforward: Build wealth and grow net worth.

Saving, investing and planning for retirement are as important as ever. Increasingly, however, people are also evaluating financial success through a broader lens.

Today, many people measure financial progress not only by what they've accumulated, but also by the opportunities, confidence and stability their finances provide.

That shift is reflected in research by Thrivent, where I am the president and CEO: 69% of Americans say long-term financial success is about financial security and peace of mind, while only 3% say it's primarily net worth.

This broader perspective reflects the realities many people face today. While Americans continue to value saving and investing, they also want confidence that their finances can help them navigate uncertainty, support the people and causes they care about and create opportunities for the future.

Money is a tool to build a better life

Nearly two-thirds of Americans say money is a tool for creating the life they want, rather than something to accumulate for its own sake. When money becomes a means rather than an end, financial success takes on a broader meaning. The focus shifts to what it makes possible:

• Preparing for the unexpected
• Caring for loved ones
• Pursuing meaningful experiences
• Supporting important causes
• Building a legacy

A growing account balance can strengthen someone's financial position, but confidence also comes from understanding where you stand, where you want to go and how your financial decisions support that journey.

What this shift means for financial services

As people's definition of financial success evolves, the role of the financial services industry must evolve alongside it.

People will always need sound financial fundamentals and expertise. But increasingly, they're also seeking guidance that helps them align their finances with what matters most to them.

That requires the industry to see the person behind the portfolio. Financial decisions are never just about dollars and cents. They're connected to people's goals, responsibilities, values and aspirations.

Our role is not to define success for someone else, but to help people make informed decisions in pursuit of the outcomes that matter most to them.

That's why trusted guidance is essential. Our industry can help people navigate complex decisions while keeping their goals, priorities and values at the center of the conversation.

When those elements come together, financial planning becomes a way to help people move forward with greater clarity and confidence.

The bottom line

Financial success can't be captured by a single number. It includes what people accumulate, but also the security, choices and opportunities their money creates.

Building wealth remains important. But ultimately, financial success is about aligning money with what matters most and using it to create the life you want to live.

Related Content

• Your Legacy Is More Than Your Money: How to Plan for Values, Not Just Valuables
• Value Investing and Values-Based Investing Gain Momentum
• The Inheritance Your Kids Need More Than Money — and 5 Ways to Pass It On
• How to Support Local Communities With Your Fixed-Income Strategy
• What Will They Remember About You? It's Not Just About Your Money

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

Could you live off $10,000 a month in retirement, or $120,000 a year? It seems easy. Most not-yet-retired Americans polled by Schroders 2026 US Retirement Survey said they would be comfortable with $5,094 a month in retirement. But depending on your zip code, healthcare needs and lifestyle, you may need a lot more.

After all, at last check, a retired 65-year-old can expect to spend $172,500 in out-of-pocket healthcare expenses, and that doesn't include any stints in a long-term facility or visits to the emergency room.

Then there are Homeowners Association fees — which can top $500 a month — plus insurance, food and other daily expenses that quickly add up. Throw in costly hobbies and a pricey retirement community, and that $10,000 won't stretch nearly as far.

Wondering just how far? Wonder no more; we did the heavy lifting for you. From rent to auto insurance, here is what retirees pay monthly for key expenses, so you can see how your budget stacks up. Keep in mind this is just the national baseline. Depending on where you live, your health, and your lifestyle, it could be a lot higher or lower.

Housing

When it comes to housing expenses, retirees who own their home outright won't have a mortgage, but they still face property taxes, homeowners insurance and HOA fees. Those with a mortgage or who rent will have those monthly payments to manage.

Rent: A two-bedroom, 997-square-foot apartment costs $1,932 per month, according to Apartments.com.

Property taxes: The average annual property tax in America was $4,427 in 2025, up 3.7% from the prior year, according to ATTOM. That's $368.92 per month.

Homeowners insurance: The average annual cost of homeowners insurance is $ 2,808, or $234 per month, according to Insurify.com. The price you pay varies depending on your location, the size of your home and amenities.

Homeowners association fees: The national median HOA fee in 2024 was $135, according to the U.S. Census Bureau, but it can be much higher. For example, in New York, it's $739 a month.

Total housing expenses: $2,669.92

Healthcare

Between Medicare premiums and out-of-pocket costs, healthcare is a big part of a retiree's budget.

Medicare Premiums
Part B: The standard for 2026 is $202.90 per month. High earners pay an additional Part B surcharge, ranging from $81.20 to $487.

Part D: The standard for 2026 is $38.99 per month, although high earners will pay an additional Part D surcharge, ranging from $14.50 to $91.

Out-of-pocket expense: $172,500 for a person age 65 during his or her lifetime, according to Fidelity. An individual who lives to 85 would pay $719 per month or $8,625 per year.

Total health care expenses: $960.89 to as much as $1,538.89

Transportation

Car payments: The average monthly car payment for a new car was $765 a month in the first quarter of 2026, according to Experian. A used car payment was $542 a month. Your payment can be higher or lower, depending on vehicle type.

Auto insurance: The national average for auto insurance, according to U.S. News & World Report, is $209.17 a month, or $2,510 annually. However, the price you pay varies based on your age, where you live and how you drive.

Gas: A gallon of regular gas currently goes for $4.47. That means filling the tank of a 12-gallon sedan costs $53.64. Filling an SUV with an 18-gallon tank will cost $80.46. Do that once a week, and in a month you've spent $214.56 to $321.84 on gas.

Ridesharing: If you downsize to one vehicle or get rid of your car altogether and need a ride from time to time, it can cost an average of $18 to $40 per ride depending on where you live and how far you're going. Do that four times a month, and you've spent between $72 and $160.

Transportation total: From $1037.73 to as much as $1456.01.

Food

Food at home: Based on the U.S. Department of Agriculture's official food plans — which provide nutritional baselines including whole grains, produce, lean proteins and dairy — a retiree aged 51 to 70 can expect to spend $375 a month on a moderate-cost plan and $448.80 a month on a liberal plan.

Dining out: The Bureau of Labor Statistics' Consumer Expenditure Survey shows that consumers spend an average of $328.75 a month, or $3,945 per year, on dining out.

Food total: $703.75 to $777.55

Entertainment and leisure

While the remaining funds in a $10,000 monthly budget can cover fun and travel, retirees typically budget for hobbies, subscriptions, social outings and leisure. According to the U.S. Bureau of Labor Statistics' Consumer Expenditure Survey, that totals $252.08 per month, or $3,025 per year for people 65 and older.

Total: $252.08

Retirement Monthly Budget Totals

Low-End Total: $5,624.37

High-End Total: $6,694.43

Can you pull it off? It depends

A $10,000 monthly income offers a strong financial cushion in retirement, but whether it's doable for you depends on where and how you live. In a moderate-cost area, that budget leaves plenty of room for travel, hobbies and peace of mind.

But in high-cost metro areas with steep property taxes, high HOA fees and active lifestyle demands, fixed costs can eat away at the total fast. The key is aligning your location and personal habits to make that money last.

Related Content

• Can Your Nest Egg Survive Rising Costs? Ask Yourself These 3 Questions to Find Out
• 5 Unexpected Costs of Aging in Place — Even With No Mortgage
• The 7-Month Deadline That Determines Your Lifetime Medicare Premiums
• Got $2.5 Million Saved for Retirement? Here Are the Huge RMDs You Must Take at 73, 75, 80 and 85

If you take care of a child or another loved one who has a disability, you'll need a plan to provide for them after you pass away. One option is a special needs trust, a legal entity that holds assets for the beneficiary's future care without affecting their eligibility for income-based government services, such as Medicaid health insurance and Social Security Supplemental Security Income. A special needs trust adds another layer of financial support for your loved one and reduces their vulnerability to exploitation.

These trusts are commonly created for people who have permanent or severe disabilities that prevent them from working, such as vision loss, paraplegia or chronic mental illness.

A special needs trust funded by someone other than the beneficiary is known as a third-party trust. By contrast, a first-party trust is funded with the disabled person's assets.

A benefit of a third-party trust is that it offers more agency in how the remaining assets are distributed after the beneficiary dies, says Nicky Amore, a certified financial planner and chartered special needs consultant at Parallel Advisors in San Francisco. The money may, for ex-ample, go to a sibling or a favorite charity. With a first-party trust, however, any remaining funds must first be used to reimburse Medicaid for services the beneficiary received during their lifetime.

A third-party trust can be revocable, meaning that you can change the terms after it's established, or irrevocable, meaning that it can't be easily altered or terminated. Families often choose to set up an irrevocable trust to provide the strongest long-term protection.

Funding the trust

You can put a variety of assets in a special needs trust, including cash, real estate, and investments such as stocks or bonds.

If you have a life insurance policy, you can list the trust as the beneficiary, says Jehan Crump-Gibson, founder and managing partner of Great Lakes Legal Group in Southfield, Michigan. If you do this instead of designating the disabled individual as the beneficiary, the proceeds won't count as income that could jeopardize their government benefits. Similarly, you could name the trust as the beneficiary on your retirement accounts, such as 401(k)s or IRAs.

The beneficiary can use funds from the trust to help pay for expenses that government benefits or other income don't cover, such as caregiving services, medical equipment and supplies, transportation, and travel and entertainment.

Designating trustees

A trustee manages the assets in the best interest of the beneficiary. While living, the parents (or other individual who established the trust) may choose to act as trustees.

But you'll need to name a successor trustee to take on the responsibility after your death. Amore advises using a corporate trustee, such as a bank, to be an impartial guardian that can take care of such tasks as record-keeping and paying taxes. A corporate trustee may charge 1% to 2% of the trust's assets each year in fees. You could also designate a trusted friend or family member as a co-trustee.

Amore recommends giving trustees a letter of intent that details your loved one's medical and emotional needs. While the document isn't legally binding, it can provide valuable direction on the beneficiary's abilities and interests and outline your preferences for care.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Related Content

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Understanding when your Social Security benefits will arrive each month is essential for budgeting and financial planning. The Social Security Administration (SSA) operates on a fixed calendar, but certain holidays can shift payment dates.

Here, we break down the full 2027 Social Security payment schedule and clarify the key dates based on your birthday and benefit type. Read on to find out exactly when to expect your payments throughout the year, and learn about the important exceptions and rules that apply to your benefits.

Schedule of Social Security benefit payments in 2027

The general rule for Social Security payments is that the date you receive your benefit check is primarily determined by your birth date and the type of benefit you receive.

A key exception: If a payment date falls on a weekend or federal holiday, Social Security issues the funds on the preceding weekday.

For most Social Security retirement, survivor and disability beneficiaries who began receiving payments after May 1997, checks are distributed on the second, third or fourth Wednesday of the month, corresponding to their birth dates.

Here are all confirmed payment dates for retirees based on the 2027 Social Security payment schedule (PDF). Find the day of the month you were born on the left side of the table. Then look under each month for the specific payment date.

Supplemental Security Income (SSI) payments arrive on the first of the month or the preceding business day if the first falls on a weekend or holiday. In 2027, SSI-only recipients will see their May, August and January 2028 benefits arrive at the end of the previous month.

Those who started receiving benefits before May 1997 or who receive both Social Security and SSI will receive their Social Security benefit on the third of the month.

January 2027 payments: For those who get SSI only, SSI and SS, or started SS benefits before May 1997, January 2027 payments will arrive on Friday, December 31.

The average monthly Social Security check

In August 2026, the average monthly Social Security check for retired workers was $2,087.52, according to the Social Security Administration's Monthly Snapshot. If you're interested in learning more about Social Security benefit payments and how your check measures up to peers, take a look at the average Social Security check by age or by state.

Why you should have a 'my Social Security' account

You should definitely have a "my Social Security" account, the online portal managed by the Social Security Administration. The account helps you manage tasks such as requesting a replacement Social Security card, receiving updates about the cost-of-living adjustment (COLA), updating your direct deposit information and getting your Social Security 1099 form.

If you're concerned about mail theft or travel often, you can opt out of mailed notices for those available online.

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If you have a pension and substantial retirement savings, your tax situation could look very different from that of the average retiree.

You might have heard the statistic: Roughly 80% of retirees pay no federal income taxes. If you have a pension and a million dollars or more saved for retirement, you might read that statistic and think, "There's no way that applies to me."

You're probably right.

As a CERTIFIED FINANCIAL PLANNER® and the founder and CEO of Peak Retirement Planning, we work primarily with what we call the 2% Club — people who have pensions and $1 million or more saved (I wrote a book about this group — you can request it for free here).

We see a pattern that runs counter to the retirement advice many of us have heard throughout our working years. We were told that we would be in a lower tax bracket once we stopped working, but for retirees with substantial pensions and significant tax-deferred savings, that outcome isn't guaranteed.

In fact, you might find yourself in the same or an even higher tax bracket.

The good news is that having to pay taxes in retirement is hardly a bad problem to have. It means you have income and assets that many retirees don't.

However, I don't believe you should pay a penny more than necessary, and the key is understanding why most retirees can avoid federal income taxes and why your situation may require a different strategy.

You can watch my video on this topic:

Why so many retirees pay no federal income tax

The primary reason is the standard deduction. The standard deduction allows taxpayers to exclude a certain amount of income from federal taxation. For retirees with relatively modest income, that deduction can eliminate much or all of their taxable income.

Consider a hypothetical retiree with $500,000 in an IRA, no pension and Social Security as their primary source of income. At age 73, that person would begin taking required minimum distributions (RMDs). A roughly 4% withdrawal from a $500,000 account would generate about $20,000 of taxable income.

That isn't a particularly large amount of income when compared with the standard deduction, especially when additional deductions available to older taxpayers are considered.

Social Security also isn't necessarily fully taxable, as the amount of Social Security benefits included in taxable income depends on a retiree's overall income, and in this case, little or none of their benefits will be taxable.

That's how you can arrive at a retiree with retirement income who still owes little or even $0 in federal income taxes.

Now let's change the equation.

A pension can change everything

A pension is one of the greatest retirement benefits you can have. It provides something that millions of Americans don't have, which is a predictable income for life.

But from a tax-planning perspective, that guaranteed income often creates a challenge. Instead of starting retirement with relatively little taxable income, a pension holder frequently has three significant sources of retirement income:

• A pension
• Social Security
• Withdrawals from tax-deferred accounts such as 401(k)s, IRAs, TSPs or 403(b)s

I call this the three-legged stool of retirement income. It can provide tremendous financial security, but it can also create a substantial tax bill.

If your pension alone provides $50,000, $100,000 or even several hundred thousand dollars annually, you have already moved well beyond the situation facing the retiree with $500,000 saved and no pension.

Then add Social Security and eventually RMDs, and your taxable income can climb even higher. That's why I tell pension holders to stop comparing their tax situation with the average retiree. Your retirement income strategy needs to be built around your specific numbers.

Your Social Security could become taxable, too

Social Security taxation is another reason pension holders can find themselves paying more than expected. Depending on your income, up to 85% of your Social Security benefits can be included in taxable income.

For many of the clients we work with, that full 85% is taxable because their pension and other income push them above the relevant thresholds.

This can create a compounding effect. Your pension generates taxable income, which can cause more of your Social Security to become taxable, which then increases your overall taxable income.

And that's before we even get to your retirement accounts.

RMDs can become a bigger problem over time

One of the biggest mistakes I see is treating RMDs as if they're a problem for someone else. They're not. If you have substantial tax-deferred savings, you need to think about what those accounts could look like when RMDs begin.

Let's say you're 60 years old with $1 million in tax-deferred retirement accounts. If those assets grow significantly over the next decade or more, you could reach your RMD years with substantially more than $1 million.

This creates a very different tax problem. The percentage you are required to withdraw increases as you age, and you have to take those distributions regardless of whether you actually need the money for spending.

This could leave you in a situation where your pension and Social Security already provide enough income to live comfortably, yet the government requires you to withdraw additional money from your IRA. This additional income can push you into higher tax brackets and affect other parts of your retirement plan.

Medicare adds another layer

Your income doesn't just determine your federal income tax bill; it can also affect your Medicare premiums through the income-related monthly adjustment amount, or IRMAA.

If your income increases enough, you will find yourself paying more in premiums for Medicare Part B and D for the exact same coverage as someone with a lower income.

This is one reason I don't think retirement tax planning should focus solely on the federal tax bracket you're in. The real question is: What is your all-in cost?

This includes federal income taxes, Social Security taxation, Medicare premiums, capital gains and, depending on where you live, state income taxes.

Tax diversification can give you more control

Most diligent savers we work with did exactly what they were told to do throughout their careers: They put money into their 401(k), IRA, TSP or other tax-deferred accounts, received the tax deduction and kept saving.

That's a great way to build wealth, but there's a potential downside when you reach retirement: You could have too much of your wealth sitting in one tax bucket.

If nearly all of your retirement savings are tax-deferred, you don't have complete control over your future tax bill, and when you need additional income, you typically have one option: To recognize more taxable income.

That's why I like the concept of tax diversification. Instead of having all your money in tax-deferred accounts, consider building a combination of:

• Tax-deferred accounts. Traditional IRAs, 401(k)s, TSPs and similar accounts
• Tax-free accounts. Roth IRAs and Roth 401(k)s
• Taxable accounts. Brokerage and other investment accounts

The goal isn't necessarily to maximize one category but to create flexibility. If tax rates are high, having money in a Roth account could give you a source of retirement income without creating additional taxable income, and if tax rates are lower, you could draw from tax-deferred accounts instead.

You can't predict exactly what tax laws will look like 10, 20 or 30 years from now, but you can build a portfolio that gives you choices.

Roth conversions could be especially valuable for pension holders

This is where Roth conversions enter the conversation. A Roth conversion allows you to move money from a tax-deferred account into a Roth IRA, paying the applicable taxes on the converted amount today. Once the money is in the Roth, qualified withdrawals are tax-free, and Roth IRAs don't have RMDs during the original owner's lifetime.

For a pension holder with substantial tax-deferred savings, this can be a powerful planning tool, but I don't recommend converting money simply because someone says, "Roth is tax-free."

The question is more nuanced: What tax rate are you paying today compared with the tax rate you could face later?

If you have a large pension, substantial retirement savings and years before RMDs begin, you could have an opportunity to gradually move money into the Roth while managing your tax bracket.

For example, someone with a $100,000 pension has a very different future tax picture from someone with no pension. Add $1 million or more in tax-deferred accounts, and future RMDs could become significant.

A Roth conversion could reduce the size of those future RMDs while also creating a pool of money that grows without future RMDs for you.

But there's an important caveat: Don't convert blindly. Converting too much may push you into a higher tax bracket, increase your Medicare premiums or create other unintended consequences.

Converting too little might leave valuable lower tax brackets unused. The objective is to find the right amount, not simply the biggest amount.

Don't forget about the widow's penalty

There's another tax issue that married couples need to consider long before it happens: The so-called widow's penalty. While you're married, you generally file a joint return and benefit from married-filing-jointly tax brackets and deductions. When one spouse dies, the surviving spouse eventually files as a single taxpayer.

At the same time, the surviving spouse could lose one Social Security benefit while continuing to have pension income and retirement assets. In other words, income declines while the tax brackets become less favorable.

That's why I encourage couples to plan for both spouses, not just the tax situation they have today.

One strategy could be taking larger withdrawals or completing Roth conversions during the years when both spouses are filing jointly. Doing so could reduce the amount of tax-deferred money that remains for the surviving spouse. It's essentially risk management for your tax plan.

Your retirement goal matters, too

Tax planning isn't only about minimizing taxes; it's about aligning your tax strategy with what you actually want to do with your money.

If your goal is to spend your savings during retirement, it could make sense to take advantage of the earlier years of retirement, when you're healthy enough to travel, pursue hobbies and enjoy the wealth you've accumulated. I call these the "go-go years."

If your goal is to leave a significant legacy, the strategy could look different. A Roth conversion could turn tax-deferred assets into a potentially tax-free legacy for your heirs while also eliminating lifetime RMDs on the converted Roth assets.
Either way, your retirement tax strategy should start with your goals, not simply a desire to pay the lowest possible tax bill this year.

You might not be able to join the 80%, but you can still pay less

If you have a pension and substantial savings, you probably aren't going to replicate the tax situation of a retiree with modest income and no pension. And that's OK. I'd rather have a large pension and substantial retirement savings and pay some taxes than have no taxable income because I didn't save enough.

But there's a big difference between paying taxes because you have significant income and paying more taxes than necessary because you didn't plan ahead. If you're a pension holder with significant retirement savings, start by asking yourself some questions:

• How much taxable income will my pension create?
• How much of my Social Security will be taxable?
• What will my RMDs look like at 73, 75 and beyond?
• Could my RMDs push me into a higher tax bracket?
• Could my income increase my Medicare premiums?
• How much of my retirement savings is tax-deferred vs tax-free?
• Would Roth conversions make sense while I'm still working or early in retirement?
• What happens to my spouse's tax situation if I die first?
• What happens to my heirs if I leave them a large tax-deferred account?
• Where will I live in retirement, and how will state taxes affect the equation?

You might not be able to eliminate your retirement tax bill. But with the right planning, you can potentially reduce it, spread it out and gain more control over where and when you pay it.

That's the goal we have for our clients: Pay your fair share, but not a penny more.

Related Content

• 8 Retirement Tax Strategies Your CPA Won't Tell You
• When Is a Roth Conversion a Bad Idea? 6 Situations Retirees Should Consider Carefully
• Why a Roth Conversion Is Wrong for Most People But Often Right for Pension Holders
• 13 Things to Know About How Your Pension Affects Your Taxes in Retirement
• 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.

Enrolling in Medicare Part D isn’t a "one-and-done" decision. Leaving your plan on autopilot during open enrollment (October 15-December 7) could cost you hundreds in unexpected premiums and out-of-pocket fees. A different plan might offer a much better deal — especially if you’ve started new medications or your current drugs have transitioned to generic over the past year.

Between major legislative redesigns — like the permanent end of the infamous "donut hole" — and routine plan changes, the Medicare Part D coverage landscape shifts every year. Even if your health hasn’t changed, your insurer’s formulary tiers, preferred pharmacy networks and deductibles likely have.

To make sure you aren’t overpaying, use the official Medicare Plan Finder tool to compare coverage in your area. By entering your specific medications, dosages and preferred pharmacies, you can see your true costs for 2027.

Here are 10 critical Medicare Part D rules and changes you need to know before enrolling.

1. Part D is offered by private insurers — not the government

Unlike original Medicare (Parts A and B), which is administered directly by the federal government, Medicare Part D prescription drug coverage is managed by private insurers. Similar to Medigap and Medicare Advantage (Part C), the government sets baseline rules and benefit structures, while private carriers set the actual plans, premiums, pharmacy networks and formularies.

Because private insurers compete for your business, shopping around during open enrollment is critical — two plans in the same zip code can carry wildly different monthly premiums and out-of-pocket costs for the exact same set of prescriptions.

2. Don’t rely on premium costs alone when choosing a plan

For starters, there isn’t a single "standard" Part D premium — rates vary widely by plan. The Centers for Medicare & Medicaid Services (CMS) establishes a standardized base beneficiary premium, but that figure is only a benchmark used to calculate late enrollment penalties and IRMAA surcharges. For 2027, the base premium is $41.33. Keep in mind that the cheapest plan by monthly premium is rarely the most cost-effective option overall.

When shopping via the Medicare Plan Finder tool, always sort plans by "lowest drug + premium cost." This calculates your total estimated out-of-pocket costs (premiums + deductibles + copays) based on your specific drug list and preferred pharmacies, giving you the actual bottom-line cost

3. Formularies and preferred pharmacies change every year

Even if your medications haven’t changed, your insurer’s formulary and tier structures likely have. Look over their list of covered drugs and which tier your medication falls into — generic, preferred brand or non-preferred brand — because this affects your costs. Additionally, plans regularly change their "preferred pharmacy" networks. Filling a drug at a standard pharmacy versus a preferred one can double or triple your copay.

4. Your deductible depends on your plan

Your deductible can vary, and you may not have to pay one at all. However, if you are subject to a Part D deductible, there is a maximum that no policy may exceed.

If your plan has a deductible, you pay 100% of your gross covered prescription drug costs until the deductible is met. For 2027, the federally mandated maximum deductible a Part D plan can charge is $700, $85 more than the 2026 amount of $615.

You pay all out-of-pocket costs until you meet your plan’s full deductible. After that, you’ll pay 25% coinsurance for both generic and brand-name drugs. This continues until your total out-of-pocket spending on covered Part D drugs reaches $2,400 for 2027.

5. The ‘donut hole’ is gone

The infamous coverage gap or "donut hole," in which beneficiaries faced steep out-of-pocket costs after reaching a certain limit, was officially eliminated as of January 1, 2025.

Under the Inflation Reduction Act(IRA), the absolute limit you will spend out-of-pocket on covered formulary drugs in 2027 is $2,400, a $300 increase over the 2026 limit of $2,100. Once you hit the $2,400 out-of-pocket cap, your copays and coinsurance drop to $0.

6. There are no spousal discounts

Most spouses don’t take the same medications. One plan may have much better coverage for your drugs while another may be better for your spouse’s needs.

You should each look up your drugs and dosages using the Medicare Plan Finder to estimate out-of-pocket costs for the plans in your area.

Before you and your spouse sign up for plans with different preferred pharmacies, consider if you are willing to go to more than one pharmacy to fill your monthly prescriptions. Some plans only give you the best rates if you use their network.

7. You can opt into the Medicare prescription payment plan

This optional, fee-free program allows you to spread your drug costs out into capped monthly installments over the year instead of paying a massive chunk all at once at the pharmacy counter. You can directly opt in to the Medicare prescription payment plan through your Part D plan sponsor.

If you opt into the Medicare Prescription Payment Plan, you won’t pay at the pharmacy counter; your plan will be notified automatically. Instead, your insurer will send you a monthly bill detailing what you owe for your prescriptions with instructions on how to pay.

If you used this program last year and stayed with the same plan, your enrollment automatically renews; however, if you switch Part D plans during open enrollment, you must manually opt in again with your new insurer.

8. The options for stand-alone plans are shrinking

Over the last five years, the number of stand-alone plans available to the average Medicare beneficiary decreased from 30 in 2021 to 11 in 2026, according to KFF, a health information organization formerly known as the Kaiser Family Foundation.

From 2025 to 2026, plan availability decreased by 22%. With fewer plans to choose from, you cannot assume your current plan will remain competitive or even exist.

9. Premium subsidies will end this year

An IRA premium stabilization demonstration, established in 2024 to prevent substantial premium increases due to the Part D benefit redesign, subsidized and stabilized average monthly premiums in 2025 and 2026. The demonstration has ended, and no subsidies will be paid to offset premium increases in 2027. CMS scaled back that support earlier this year, stating in a memo that reducing federal subsidies is intended to help the Part D program "return to operating under regular market conditions."

The federal government provides roughly $190 in annual premium subsidies per enrollee under the stabilization demonstration in 2026, based on a projected $16 per member per month premium reduction, according to KFF.

"Without these subsidies in place for 2027, some Part D stand-alone drug plan enrollees could see a larger premium increase for drug coverage next year than they’ve faced in recent years, though plan-specific premiums are not yet known," says Juliette Cubanski, vice president and director of the Program for Medicare Policy at KFF.

10. Avoid the permanent late enrollment penalty

If you don’t enroll in Part D when you are first eligible, and you go 63 consecutive days or more without "creditable" drug coverage (coverage deemed as good as or better than Medicare’s standard), you will face a permanent late enrollment penalty when you eventually sign up. The penalty is assessed per month for each month you went without coverage and is added directly to your monthly premium for as long as you hold a Part D plan.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

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Retirement doesn't unfold in a straight line. It behaves more like a lake. Every financial decision, whether a withdrawal, major purchase, tax strategy or claiming choice, creates ripples that spread across a retiree's financial future.

Some ripples fade quickly. Others reshape the entire retirement landscape. Understanding those ripples is key to building a retirement plan that is resilient, flexible and sustainable.

Every decision has an outcome or a consequence. Every financial decision does, too. Your experience is what clients need to navigate them.

Here's how we use the lake metaphor at Wealthcare Advisors.

Lifetime savings: The first major ripple

Lifetime savings form the depth of the lake — the reservoir that determines how much flexibility your retiree or soon-to-be retiree client has when making major decisions later. Choices made during the accumulation years shape their entire retirement.

Key drivers include:

• Savings behavior. Consistency, contribution levels and discipline
• Asset location. Taxable, tax‑deferred and tax‑free positioning
• Liquidity reserves. Cash availability for large purchases
• Volatility exposure. How much risk the portfolio carries into and through retirement

These choices determine how disruptive a major expense will be later in life. A deep lake absorbs ripples. The second ripple, tax planning, magnifies them.

Tax planning: The second major ripple

Tax planning is the bridge between accumulation and distribution. It determines how efficiently your client can access their savings and how long those savings will last. Important tax ripples include:

• RMD exposure
• Roth conversion windows
• Withdrawal sequencing
• IRMAA thresholds

This is where real‑world decisions, such as buying a car or a home, become powerful teaching moments.

Imagine your clients decide to buy a $50,000 car at age 70. That single decision creates a cascade of ripples across their "retirement lake." We would frame it like this:

Ripple one: Liquidity shock. The source of the $50,000 determines the size of this ripple.

Should the clients decide to make a tax‑deferred withdrawal, that may lead them into a higher tax bracket, IRMAA penalty risk and reduced Roth conversion space.

Using assets within their taxable account may lead to additional capital gains and reduced future income‑producing asset base.

If the decision is to use some of their cash reserves, they may be concerned about lower emergency liquidity and higher portfolio withdrawal pressure.

A combination of two or all three of these sources may solve the issue.

Ripple two: 18-24 month spending impact. A $50,000 purchase will often reduce discretionary spending for 18 to 24 months. Here are just a few decisions that may be affected:

• Planned travel may be delayed and home projects postponed
• Gifts to family or charitable giving are reduced
• The clients may have to lean harder on the assets you manage as portfolio withdrawals may also need to be increased

This is the ripple clients feel most immediately — the stone hitting the water.

Lifetime income planning: The third major ripple

This is where all prior ripples converge. Lifetime income planning (LIP) is the art of turning savings, tax strategy and spending decisions into a coordinated, predictable income stream. And LIP is the most crucial and difficult of these tasks.

At Wealthcare Advisors, we explain it this way. Clients will have assets they "lean on," assets they "live on" and a legacy they will "leave behind." LIP is the successful combination of our first two. Key components include:

• Sustainable withdrawal strategies
• Bucket or time‑segmented planning
• Guaranteed income tools
• Longevity protection
• Sequence‑of‑returns mitigation

Using our prior example, a $50,000 car purchase becomes part of the client's income plan — not an isolated event. That may require adjusting withdrawal rates, rebalancing accounts or shifting guaranteed income sources to maintain stability.

Social Security claiming: The last major ripple

Once spending, taxes and lifetime income have been coordinated, the final major planning decision is often Social Security claiming strategy.

Social Security can either calm the lake or amplify the waves. It interacts directly with spending decisions, tax strategy and income planning and gives us several scenarios to consider:

• A major purchase may influence whether delaying benefits is still optimal
• Claiming now may reduce portfolio withdrawals in the future
• If planning for a couple's lifetime, how do survivor benefits fit into the plan?

Finally, we need to scope out exactly how Social Security interacts with other taxable income and IRMAA.

For example, if a client had planned to delay claiming to age 70 but now needs cash flow, claiming earlier may reduce strain on the portfolio but permanently reduces lifetime benefits. This is why Social Security must be evaluated after lifetime income planning, not before.

The question is more complex than, "When should I/we claim?" It's "How do I/we design the income bridge so delaying benefits becomes sustainable in practice, not just on paper?"

Why the lake metaphor works

Clients instantly understand:

• The stone = the decision
• The ripples = the consequences and trade-offs
• The shoreline = long‑term impact and outcomes

It is intuitive, visual and memorable. And it reinforces your core message: The ripples never stop.

Retirement planning is not a series of independent decisions. It is an interconnected process where every choice influences the next. A withdrawal affects taxes. Taxes affect income. Income affects Social Security strategies. And together, these decisions shape a retiree's long-term financial security.

Like a stone cast into a lake, every financial decision creates ripples. Some are small and short-lived. Others travel far beyond the initial event and can impact a client's lifestyle, legacy and confidence for years to come.

The advisor's role is not simply to react to the ripples, but to anticipate them and help clients understand their potential consequences.

When savings, tax planning, lifetime income planning and Social Security claiming are coordinated through a thoughtful process, clients are better positioned to allocate assets according to their goals and priorities.

They gain the confidence to spend what they have worked so hard to accumulate, support the people and causes they care about, and enjoy a retirement that is meaningful, secure and dignified.

At Wealthcare, we believe that understanding the ripple effect of every retirement decision helps advisors deliver more than a financial plan. It helps them provide clarity, confidence and a road map for lasting retirement success.

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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 families reach a point when a loved one requires part-time or full-time care due to health issues or aging. In families with multiple children, caring for an aging or ill parent often falls on one sibling more than the rest.

Caregiving in any capacity can take a financial toll, known as the "caregiver penalty." Research from the Employee Benefit Research Institute finds that caregivers are likely to have fewer financial assets than non-caregivers, and more debt. This isn't shocking, since caregivers typically have to sacrifice career growth and associated wages.

Typical estate plans compound the problem, since many parents split their assets equally among their children even when one child stepped up to provide care more than the others. This inevitably penalizes the caregiver, even if unintentionally. But there are ways around that.

Here's how parents can make things right when one child sacrifices their own financial well-being to provide care.

Create a caregiver contract

Some parents choose to reward their children for providing care through an inheritance. But that's not the only avenue to explore.

"If parents want to pay for their child to care for them, they can create a caregiver contract that outlines the caretaker duties, how much they will be compensated, and mileage for driving parents," says Kelsey Simasko, attorney at Simasko Law. That agreement can have a specific equity clause designed to compensate the caregiver using property, home equity, or other assets.

As Simasko explains, a caregiver contract can be worded to make it clear that the payments are not a gift, but for services rendered. This allows a grown child who may be working less and therefore earning less to receive compensation immediately, thereby reducing near-term financial stress.

Of course, Simasko recognizes that not all parents have the funds to begin paying their child for caregiving services.

"If this is not the case, then providing their compensation as inheritance may be a better option," she says.

But if you do decide to pay a child for caregiving services, you should have an elder law attorney create a contract for you so you can be sure it complies with Medicaid rules, Simasko insists.

Misty Ralston, owner and attorney at Ralston Law, says a caregiving contract should spell out the caregiving duties and associated compensation. She also says such a contract should ideally be in place before services are rendered, and that the caregiver should maintain a log of the hours they work.

"Otherwise," she warns, "those payments will be treated as a gift or uncompensated transfer for Medicaid or might be considered as something coerced upon the parent as an afterthought rather than a true contract for services."

Keep in mind that Medicaid uses a five-year look-back period, so the transfer of certain assets may compromise eligibility.

Ralston also says that before drafting such a contract, it's best to research what the average professional is being paid for these services. Also, she insists, "You want to make sure that the person signing has capacity to do so, and get a letter from the doctor stating the person’s capacity as well as the need for these services."

And, Ralston says, "If the child doing the work is also the power of attorney, they should not sign for the parent. Allow the parent to sign themselves [and] have the parent meet with their own attorney."

Before putting such a contract in place, Ralston recommends having a family meeting to discuss what is happening and why. All family members should sign a written acknowledgment confirming they understand the arrangement. Many families find discussing inheritance difficult, so we have tips to get you started in How to Talk to Your Adult Kids About Their Inheritance.

Finally, any family entering into a caregiver contract should consult a tax professional. The parents paying for care may owe a "nanny tax." And the adult child receiving compensation may have to report it as taxable income.

Compensate the caregiver with a larger inheritance

In a caregiving situation, it's often easier, logistically and financially, to give a caregiving child a larger share of an inheritance. Ralston says there are several ways to do this.

One option is to make a specific bequest that provides a preset sum to the caregiver as a thank you for stepping up during the parent's time of need. That can sometimes be "easier to swallow," she says, "than an extra percentage of the estate."

Another option is to gift the home to the caregiving child. If they lived with the parent for two years prior to going into a nursing home for Medicaid, they may be entitled to use the Caregiver Child Exemption during estate recovery.

"Since the house might otherwise have to get sold to pay for the Medicaid 'bill,' why not give that to the child that has been caring for the parent and for the home all this time?" Ralston says.

Otherwise, a parent might choose to designate a certain account or life insurance policy to the child.

"It doesn't matter what option one chooses," Ralston says. "What matters is how it looks to others."

Simasko agrees. While adjusting a will or trust to give a caregiving child a larger inheritance than their siblings is always an option, "this always carries the risk of the siblings fighting," she says.

One approach Simasko recommends is having parents adjust each child’s inheritance from time to time to ensure it reflects the actual amount of care needed. The flipside, though, is that amending a trust costs money, so adjusting beneficiary designations could get expensive, even if it's only done once a year.

No matter which option you choose, the key is to have open conversations at the family level before one sibling starts providing consistent care. That way, everyone is on the same page, and there are fewer surprises, conflicts or ill feelings.

More Trillion Dollar Talk

• Why Leaving an Equal Inheritance to Your Children Could Backfire
• 8 Estate Planning Secrets You Can Borrow from the Ultra-Wealthy
• Why So Many Families Are Unprepared for the Great Wealth Transfer — and What You Can Do About it

The sharp spike in mortgage rates may hobble older homeowners who plan to use their homes as a key source of retirement cash. With the average 30-year fixed-rate mortgage climbing above 7%, the so-called "golden handcuffs" of low rates are keeping many retirees trapped in homes they'd otherwise leave, says Robert Laura, founder of the Retirement Coaches Association. Trading a super-low rate for a higher one can easily wipe out the savings of downsizing.

Since housing wealth in primary residences is the largest asset held by U.S. households, according to the Federal Reserve, figuring out the right way to extract housing wealth is a key personal finance challenge for aging Americans.

The golden handcuffs are also forcing pre-retirees who plan to sell their existing home in the next one to five years to weigh closing a deal now, versus waiting until borrowing costs fall, or nixing the sale and aging in place instead.

"It's paralyzing," says Laura. It's also freezing retirees' mobility.

Where are mortgage rates heading?

Simply hoping for lower rates isn't really a strategy. Why? Mortgage rates aren't expected to come down anytime soon, with sticky inflation, elevated oil prices, and ballooning U.S. government deficits. The 30-year fixed-rate mortgage is expected to hover close to 7% through 2028, according to the Mortgage Bankers Association (MBA). The MBA's latest forecast has the benchmark mortgage rate averaging 6.7% in 2027 and 2028.

Most economists and consulting firms agree with this "higher for longer" outlook. "We're not calling for any rate relief anytime in the near term," said Alex Thomas, research manager, macro, at John Burns Research & Consulting.

Rising rates are hurting affordability and are a big reason why home prices in many areas are falling. The median sale price of an existing home was $429,100 in August, down 3.1% from $442,800 in June, according to the National Association of Realtors (NAR).

Higher borrowing costs could crimp selling prices at a time when retirees are looking to sell their homes and downsize.

So what should a retiree or pre-retiree do to monetize their home? Get creative, Laura advised. Multiple strategies can help nullify or offset the worst impacts of the rising-rate environment. A retiree's financial profile should dictate how to proceed. Someone who owns their home free and clear and can downsize to a home they can pay for in cash is less impacted by higher rates. In contrast, an older homeowner who sells their current home and needs to take out a new, likely more expensive mortgage to buy a new home could face a financial squeeze.

Older homeowners with no mortgage less impacted by rate spike

If you have enough equity in your home and can buy your downsized home in cash, today's higher mortgage rates are unlikely to interfere with your quest to downsize or relocate to a place with lower housing costs, experts say. The only catch is if rates keep climbing and affordability becomes so tight that buyers dry up. One way to overcome that obstacle is to accept a slightly lower price to expand the pool of potential buyers who can afford it.

If you're like most homeowners, you likely have sizable equity in your home, which can make selling at a tad lower price easier to swallow financially and emotionally. The average homeowner with a mortgage now has $310,000 in equity (meaning the house is worth $310,000 more than what’s owed on it), according to the September Home Equity Insights Report from Cotality. Buyers who purchased in 2020 hold roughly $86,000 more equity than buyers who purchased in 2023, according to Cotality.

"A high share of baby boomers actually own their homes free and clear," says Selma Hepp, chief economist at Cotality. Nearly 71% of Americans aged 65 to 74 who own homes are mortgage-free, according to the Federal Reserve.

When it comes to moving or downsizing, Hepp says the decision goes beyond interest rates. "It's more about: Do I need to move right away? What is the potential savings or non-savings from relocating? Timing the mortgage market is a very tricky proposition."

If you're a homeowner sitting on hundreds of thousands of dollars in home equity, getting "10 or 20 grand less (on the sale of your home) isn't really going to matter all that much," says Jeff Ostrowski, housing market analyst at Bankrate. If you fit into this category, you'll likely have a good chance of buying a new home with cash and having money left over to supplement your retirement nest egg.

Retirees with lots of equity in their homes also have the advantage of not having to sell. They can simply wait a few years for high rates to dissipate and market forces to become more favorable, experts say.

How older homeowners can navigate the spike in mortgage rates

It's a different ballgame for older homeowners who can't buy a downsized home in cash and must take out a mortgage at twice their current home loan rate. Here are some strategies to consider if you want to downsize despite the higher rate hurdle.

1. Roll future interest costs into sale price

If you'll need a mortgage on your new home, add the extra interest costs you'll incur over the next two to three years to your existing home's sale price. "Bake the extra costs into your asking price," says Laura. If you live in a seller’s market because of a housing shortage or high demand, you can increase your home's price by an amount that will cover higher future interest costs for several years.

Let's say the new home mortgage will cost you $500 more per month. If you were thinking of an asking price of $400,000 for your home, you could list the home for $412,000 instead. If you get your price, you could use the extra $12,000 to cover two years of higher mortgage payments, buying time until you can refinance at a lower rate, says Laura.

Laura says older homeowners nearing retirement who try to time the mortgage market and wait for lower rates face another risk: they could have trouble getting approved for a mortgage if they retire and no longer have a paycheck. "If you need to qualify for a mortgage, you want to apply while you're still working,” says Laura.

Let's run the numbers. A year from now, the 30-year fixed-rate mortgage will be 7.43%, predicts LongForecast.com. So, for a median-priced home of $429,100 with 20% down, the monthly payment a year from now would be $2,381, or $97 more than at today’s 7% rate. Long Forecast, however, expects the 30-year fixed-mortgage rate to fall to 6.88% in September 2028 and down to 5.35% in September 2029. At 5.35%, the monthly payment would be just $1,917, or $367 less than at 7%. Of course, these are predictions. No one really knows for sure where mortgage rates will be in the future.

2. Sell in a seller's market and buy in a buyer's market

Just like opportunistic selling in the stock market can be profitable, so too can selling in a hot market and buying into a cooler housing market, says Ostrowski.

"If you're getting close to retirement and maybe want to move to (a less-expensive) state, it definitely would be smart to start thinking about selling now," says Ostrowski. "But it depends on what part of the country you live in." He notes that housing markets in parts of the Northeast and Midwest are still strong, whereas prices are weaker in places like Florida and Texas, giving you some (price) leverage when shopping for a home. "It's a pretty favorable trade because you're moving from a seller's market to a buyer's market," says Ostrowski.

For older homeowners who expect to keep working for, say, three more years but plan to move in retirement, it could make financial sense to sell into a strong housing market now and rent for a few years. That way, you can cash in on the hot seller's market and hopefully buy into a different, less-pricey market in another state in a few years, when rates are hopefully lower. "That (could be) a really good tradeoff, but it's an individual decision," says Ostrowski.

If you’ll need financing for your next home, comparing current mortgage rates can help you estimate how a move could affect your monthly housing costs.

Use the tool below to search and compare some of today's top mortgage offers:

3. Buy new construction homes with incentives

Homebuilders in many parts of the country that overbuilt are now looking to reduce inventory. "In some of these home communities, builders are offering pretty substantial incentives," says Thomas. Many builders are "covering closing costs, offering design credits, and probably most significantly, interest rate buydowns. They’ll buy down your mortgage rate so that it is significantly below market rates. And that can really make a difference in terms of your monthly payment."

4. Age in place if your house is suitable

Another option is to retrofit your existing home and stay in it for the long haul or at least until interest rates fall enough to make the downsizing math work in your favor. Under this scenario, you can still benefit from your existing low mortgage rate. You can also borrow against your home via a home equity line of credit (HELOC) — albeit at a higher rate — to renovate your home. While the HELOC rate will likely be higher than your current mortgage, you won’t be forced to finance a new home at an interest rate that is double what you currently have.

There's one big caveat to aging in place. If your current home isn't age-friendly now or will be hard to make safe as you age, Laura says you're likely better off selling and moving on. (Here's how to know if your home is ready to age in place.)

"Spending a bunch of money on a three-story condo (with stairs) is a lot more difficult than renovating a one-story ranch or being able to create a main floor master bedroom," said Laura.

If you stay put and have an adjustable-rate mortgage that might reset at a higher rate, you should consider refinancing into a fixed-rate mortgage. That move will lock in a payment that won’t change or spike substantially in the future and hurt cash flow.

What you don't want to do is spend so much on a renovation that it puts you in a worse financial situation than when you started, warns Thomas. "You don’t want to get into a scenario where you spend $100,000 on a bathroom remodel and home prices go down and you don't get your money back on it," says Thomas. "You have to run the numbers carefully. Not every renovation pays for itself."

5. Be careful what you wish for

Those waiting for lower rates risk getting what they asked for, but at a cost, warns Thomas. If rates come down a lot, it will likely be due to a weak economy and subsequent job losses, which may make it harder for pre-retirees or retirees to sell their homes and downsize.

"You have to think about what the situation would be if you did see a significant reduction in mortgage rates," says Thomas. He notes that rock-bottom mortgage rates became available in the past two major economic downturns in the U.S.: the great financial crisis in 2008-09 and during the COVID-19 pandemic in 2020-21. "If rates come down to a point where you're getting a meaningful impact to affordability, it's likely the economy is not in a great place. And that impacts (the ability to) sell your house as well."

The bottom line: "I think just going forward with the assumption that we're in this higher-for-longer rate environment is probably the best route to take," says Thomas.

Read More

• The Cost of Staying Put: Aging in the Neighborhood You Love
• You May Not Want to Downsize in Retirement: Here's Why
• 10 Things You Should Know About Tapping Home Equity
• We Are Retired, Mortgage-Free, With $970K in Savings. My Husband Wants to Downsize to Lower Our Costs, but I Love Our House. Help!

Travel the country in an RV. Build the wine cellar in the basement. Who doesn't have big dreams for when they retire? But instead of paying for these items outright, like so many retirees do, the smarter approach may be to rent instead.

Just ask any RV owner who can't afford the gas. Or the homeowner who spent thousands on power tools for one project, only to never use them again.

Cash is king in retirement, and to keep more of yours, here are five things retirees are better off renting than buying.

1. Recreational vehicles

Seeing the country from behind the wheel of an RV is the quintessential retirement dream. But buying an RV can quickly turn into a financial nightmare for several reasons. RVs are expensive to buy and maintain. Plus, they depreciate very quickly.

Let's not talk about insurance and ROI, or the number of times you'll have to use the RV to get your money's worth. To read more about what can go wrong with owning an RV, click here.

A cheaper option is to rent an RV. Options abound when it comes to renting, including:

-Peer-to-Peer services: Platforms including RVshare, Outdoorsy and RVezy let you rent an RV directly from private owners. RV options range from camper vans to Class A motorhomes, with rates ranging from $50 to $300 per night. This approach gives you the most options.

-Traditional Rentals: Rental companies including Cruise America, Indie Campers and El Monte RV let you rent a range of RVs in locations across the country. Some let you rent it in one location and drop it off in another. Rates range from $80 to $250 per night.

2. Recreational boats

Number two on many retirees' lists, especially for snowbirds or those who retire to Florida full-time, is recreational boats. What better way to soak up the sun? But like an RV, recreational boats come with many costs, starting with the hefty price tag.

At last check, the average new power boat costs $25,000 to $150,000. Add maintenance, docking and fuel to the mix, and owning a boat can cost you $2,500 to $15,000 per year.

A luxury cruise, on the other hand, would cost about $5,500 per person. Even if you wanted to rent your own private yacht, that would set you back $50,000 for a week at sea. Do that four times a year for ten years, and you are still ahead in savings versus owning a boat for the same time period. But for modest retirees, you can rent pontoons, fishing boats, speedboats, sailboats, and yachts ranging from around $200 to $10,000 a day or $1,000 to $50,000 a week.

GetMyBoat, Boatsetter and Click&Boat are P2P marketplaces for renting boats, while MarineMax, Freedom Boat Club and United Yacht Sales let you rent boats directly. There are also local marinas, boat clubs and waterfront charter operators you can rent from.

3. Vacation homes

Diversifying your portfolio, building generational wealth and having a place where everyone can gather are all wonderful reasons to buy a vacation home in retirement.

But sometimes those dreams don't pan out. Your kids may not want to visit that often. Upkeep can become a headache, and instead of building wealth, the second property can start to drain your cash flow.

Another option is to rent a vacation home instead of owning one. By renting, you save on property taxes, insurance and ongoing maintenance. You can also potentially choose a different location for every trip. Even if you want to visit the same place over and over, there are benefits to renting instead of owning in retirement, including:

-More financial flexibility: Your capital stays invested in liquid assets like stocks or high-yield savings rather than tied up in real estate.

-No off-season stress: You don't have to worry about the home when it's vacant.

-Avoid HOA fees or Special Assessments: You avoid costly homeowner association dues and surprise repairs for shared amenities like roofs or pools. The average median monthly HOA fee in America is $135, but more than 3 million residents pay more than $500 per month.

-You're not stuck: If your health changes, you can easily get rid of the rental. You don't have to worry about selling a property.

4. Power tools

Who doesn't have a list of home improvements they plan to complete when they finally retire? Maybe it's the wine cellar, the she-shed, or the flower boxes for the garden. And what respectable home improvement project wouldn't be complete without a set of new tools?

But new tools can set you back hundreds, if not thousands, of dollars. After all, a high-end remodeling miter saw costs up to $1,000, while a heavy-duty rotary hammer drill can set you back up to $1,100. Meanwhile, a commercial paint sprayer can be as much as $1,200. That's a lot of money you've spent before you even spend on supplies.

A cheaper option is to rent the tools you need or, even better, borrow them from your local library. Granted, your choices will be limited with the latter option, but libraries across the nation let you borrow everything from power drills to power washers, and all you need is a library card.

As for rentals, Lowes, Home Depot, and local tool rental companies let you rent power tools for the day or week. Renting a cordless hammer drill from Home Depot costs $29 a day, while a medium paint sprayer costs $104 a day.

5. Medical equipment

If an illness or injury in retirement requires short-term medical equipment, buying it outright can seem easier — no worrying about damages or monthly payments. However, renting can yield significant savings that outweigh those minor hassles, especially for equipment needed for less than a year that Medicare won't cover.

If you need equipment for less than a year, renting is cheaper than buying. Consider the pricing: The average cost for a wheelchair is $2,500, while a stair lift starts around $2,900. By comparison, renting a wheelchair costs $50 to $150 per month, depending on the model, and gives you the option of standard, lightweight or motorized. You can rent a stairlift for $300 to $500 per month, plus installation and removal fees.

You can rent wheelchairs and stairlifts through local durable medical equipment (DME) suppliers, national mobility equipment providers, and online medical rental services.

Preserve you time, money and freedom

Retirement should be about enjoying your time and freedom, not worrying about asset depreciation, maintenance schedules, or high upfront costs. Whether it’s hitting the open road in an RV, getting to that remodeling project, or recovering from a temporary health setback, renting allows you to enjoy all the perks of ownership without the long-term financial burden. Before writing a big check, check your rental options first. Your nest egg will thank you!

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