Oil prices surged and the stock market's "fear gauge" spiked as the war between the U.S. and Iran escalated again on Wednesday. Violence in the Middle East continues to impede traffic through the Strait of Hormuz, while even exponential growth for AI-related companies is letting down investors, traders and speculators.

"We'll be hitting them hard," President Donald Trump told Fox News after Iran struck a U.S. base in Jordan. "They're going to get a beating." The front-month West Texas Intermediate crude oil futures contract was up 7.2% at $84.94 per barrel.

The Cboe Volatility Index (VIX) rose from 18.21 on Tuesday to as high as 20.34 on Wednesday, breaching its "normal" range of 12 to 20 and settling at 20.05.

The July Fed meeting ended where investors, traders and speculators thought it would: with interest rates unchanged for the fifth straight time but central bankers worried about inflation and the energy shock.

The target range for the federal funds rate remains 3.50% to 3.75%. But three voting members of the Federal Open Market Committee (FOMC) dissented from the decision because they favored raising it by 25 basis points.

"Economic activity is expanding at a solid pace," reads a repeated sentence in a subtly updated but still brief FOMC policy statement, "despite elevated uncertainty that owes, in part, to the conflict in the Middle East."

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As Fed Chair Kevin Warsh said during his press conference, "We'll be watching inflation data over the period ahead," but he also said the central bank wouldn't rely exclusively on any one piece of it.

Acknowledging a steep rise in market-based rates over the last 42 days, the Fed chair noted shocks the economy seems to be absorbing relatively well so far.

By the closing bell, the tech-heavy Nasdaq Composite had shed 1.7% to 24,442, the broad-based S&P 500 was down 1.5% to 7,316, and the blue-chip Dow Jones Industrial Average had declined 2.2% to 51,594.

SKHY leads chip stocks lower again

The earnings calendar is the market's main focus following an overnight preview from South Korea-based SK Hynix (SKHY, -2.6%). The Nvidia (NVDA, -3.6%) supplier reported 257% top-line growth, as well as a 557% rise for operating profit and a 1,242% earnings increase.

But SK Hynix stock was down 9.6% on its local exchange because it failed to meet high expectations, and trading was halted on South Korea's KOSPI Index to stem a broader sell-off. The KOSPI closed lower by 6%.

Losses were similar for Nvidia and other semiconductor stocks such as Advanced Micro Devices (AMD, -5.5%), Broadcom (AVGO, -2.8%) and ASML (ASML, -2.0%), with Micron Technology (MU, -9.9%) suffering like fellow memory stock SKHY.

Up now are Meta Platforms (META, -1.3%) and Microsoft (MSFT, -0.7%), with Apple (AAPL, -0.6%) and Amazon (AMZN, -1.8%) to follow on Thursday.

CAT dogged by data center debate

Caterpillar (CAT, -6.9%) was the worst-performing Dow Jones stock on Wednesday after Baird analyst Mircea Dobre cut his rating on the heavy equipment maker from Buy to Hold and reduced his 12-month target price from $1,200 to $900.

Dobre cited rising regulatory opposition to AI data centers due to environmental strains and power grid pressures.

"The ground is shifting in many ways; the recent New York State moratorium on data center construction is the highest-profile example of a bigger (and growing) trend towards regulatory action at state and local level targeting data centers," the analyst observes. "This raises costs, adds new development approval hurdles, limits site availability, and likely slows future investment."

Caterpillar is scheduled to report second-quarter results before the opening bell next Tuesday, August 4. Wall Street expects to see earnings of $6.20 per share (+31.4% year over year) on revenue of $19.17 billion (+15.7% YoY).

CAT hit new all-time intraday and closing highs on June 30. The industrial stock is down 20.9% since then, shedding more than $100 billion in market cap.

What the 2-year Treasury yield says about a rate hike

According to LPL Financial Chief Technical Strategist Adam Turnquist, markets have adjusted to a "higher-for-longer" environment, with the 2-year Treasury yield up about 90 basis points from its February 27 low of 3.375% and outside the target range for the federal funds rate since April.

Turnquist describes eight periods since the 1980s during which the 2-year yield was above that range while policy was on hold, defined as at least three months without a change in the fed funds rate, along with a "crossover period" of at least 20 consecutive trading days.

"As of July 28, 2-year yields have remained above the fed funds target rate for 68 trading days," Turnquist notes, "with the spread reaching a maximum of 0.60% so far."

The median maximum spread for the comparison period was 0.97%. And Turnquist concedes the limited nature of the historical data set means it can't be used to either confirm or rule out a rate hike.

Still, he concludes, "The comparison suggests the current crossover is less mature than the three completed historical signals that ultimately preceded tighter monetary policy."

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As someone who reviews savings accounts and inflation for a living, it's become easier to see where things are heading. Understanding how these trends move can be the difference between keeping your money in the right account and missing opportunities to maximize growth.

Case in point, inflation remains stubbornly high, and ongoing tensions in the Middle East could keep pressure on energy prices. David Payne of the Kiplinger Letter projects inflation will be around 4.0% to end the year. If higher inflation persists, it could eventually force the Federal Reserve to hike rates. For now, though, the Fed left its benchmark interest rate unchanged at 3.5% to 3.75%, signaling that policymakers are still waiting for clearer evidence that inflation is moving back toward its 2% target. For savers, the Fed's decision means today's high-yield savings accounts and CDs remain attractive options, though the next move will depend on how inflation evolves.

Navigating these shifts is the difference between letting your money stagnate and putting it to work. If you have $10k sitting on the sidelines, here are the smartest places to park it — and the traps you need to avoid.

The smartest places to park your cash in the interim

First, if you're building an emergency fund or have short-term savings goals that require liquidity, a high-yield savings account will be the best option. And when you're looking for one, I recommend finding an account earning at least 4.00% APY, since that's likely where inflation will remain for the foreseeable future.

Based on my research, this savings account is a home run option:

Meanwhile, if you have an emergency fund and don't require any liquidity, I would recommend a short-term CD. Look for options between three and six months, since if a rate hike happens, it will likely be in the fall or winter.

If it does, it puts you in prime position to capitalize on even higher rates when your CD matures. Use this Bankrate tool to compare and find the best solution for your money:

Another positive about this approach is that if the Fed doesn't hike rates and inflation remains high, you have flexibility to decide where to hedge your cash in the near future.

Whether that's renewing your existing CD or putting money in the market, you won't have to worry about your future purchasing power eroding due to inflation.

These are the savings accounts I would cautiously consider

Long-term CDs are cozy solutions. After all, once you open one, you're guaranteed to earn that APY no matter what happens. If you're approaching retirement and are concerned about market volatility, it can be a smart approach.

Here are some of the top options I found to help you:

One thing to remember is that the longer your money sits in a CD, the more susceptible it could be to losing future purchasing power if inflation continues to rise. So these options work best for savers with an emergency fund, short-term savings and retirement goals all either fully funded or on course to be.

Avoid this savings trap

The only savings accounts I don't recommend using right now are those at brick-and-mortar banks, where your APYs will be much lower than the current inflation rate of 3.50%. This means every dollar you have in one of these accounts loses purchasing power every month you keep it there.

That said, some local banks do offer higher returns on money market accounts or CDs if you deposit enough money into them, usually between $10,000 and $25,000. So, if you're in a position where you don't feel comfortable moving away from your local bank, ask about any savings incentives they have that can help you.

Ultimately, managing your cash effectively requires a strategic approach. Take a moment to audit your current accounts against the 3.50% inflation rate.

By prioritizing high-yield options that keep your money working for you, you can strike a balance between liquidity for immediate needs and growth to hit your long-term targets. You'll also protect your purchasing power and make the most of your $10k savings.

The right savings strategy is a strong starting point, but a financial professional can help you build on that foundation with a personalized plan for your long-term goals.

Use the tool below to connect with a financial advisor and get started today:

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Retirement has a lot of moving parts, and planning for them can be overwhelming.

Taxes, investments, Social Security, estate planning, healthcare and income strategies all compete for attention, and many retirees end up postponing important decisions because they aren't sure where to start.

As a CERTIFIED FINANCIAL PLANNER® and CEO of Peak Retirement Planning, I can tell you that the good news is that not every improvement requires a complete overhaul of your financial plan.

In fact, some of the most impactful retirement moves can be implemented relatively quickly.

While no single strategy is a silver bullet, taking action on a handful of key areas today could improve tax efficiency, simplify your finances and create more flexibility later in retirement.

Below are 10 retirement fixes worth considering.

1. Review whether Roth conversions make sense

For many retirees and pre-retirees, Roth conversions remain one of the most powerful tax-planning opportunities available (I talk about Roth conversions more in depth in my bestselling book I Hate Taxes, which you can request for free here).

The basic Roth conversion concept is straightforward: Move money from a traditional IRA into a Roth IRA, pay taxes on the converted amount today and enjoy tax-free withdrawals in the future.

This strategy can be especially attractive for retirees who expect a higher future taxable income from pensions, required minimum distributions (RMDs) and Social Security. By paying taxes now, while rates remain historically low, you could reduce future tax burdens and create greater flexibility later.

That said, Roth conversions are rarely as simple as they appear. They can affect Medicare premiums, Social Security taxation and other aspects of your tax return.

Before making a move, it's important to run the numbers and look at them carefully.

2. Take advantage of available charitable tax benefits

Many retirees are charitable by nature, yet they often miss opportunities to maximize the tax benefits of their giving. Recent tax law changes have expanded charitable deduction opportunities for some taxpayers, even those who don't itemize deductions.

A little organization today could result in significant tax savings when it's time to file.

3. Improve your tax location strategy

Most investors focus heavily on asset allocation. Far fewer pay attention to asset location.

Asset allocation determines what you own, but asset location determines where you own it.

For example, growth-oriented investments might be more valuable inside Roth accounts because future appreciation could be tax-free.

Meanwhile, more conservative holdings could be appropriate inside tax-deferred retirement accounts.

Two investors can own identical portfolios yet experience very different tax outcomes depending on how their investments are positioned across account types.

Reviewing account placement might not require changing your investments at all, but it can have a meaningful impact over time.

4. Maximize retirement account contributions

Many workers increase their salaries over time but forget to increase their retirement contributions. If you're still employed, review your current contribution levels to workplace plans, IRAs and health savings accounts (HSAs).

Contribution limits often increase, and individuals age 50 and older may qualify for additional catch-up contributions.

A small adjustment to your payroll deductions today could translate into thousands of additional dollars for retirement down the road.

5. Reevaluate where excess cash is sitting

Many retirees and near-retirees accumulate large balances in savings accounts or taxable brokerage accounts while underutilizing tax-advantaged retirement vehicles.

If you have excess cash and are eligible to contribute to retirement accounts, consider whether those dollars could be working harder in a Roth IRA, Roth 401(k), traditional IRA or HSA.

In many cases, repositioning existing assets can improve long-term tax efficiency without changing your overall investment strategy.

6. Become more tax-efficient in taxable accounts

For investors with substantial brokerage accounts, tax management can be just as important as investment management.

One opportunity many people overlook is tax-loss harvesting, which involves realizing investment losses to offset gains or reducing taxable income. Over time, these tax savings can add up significantly.

Investors with larger taxable portfolios could also benefit from strategies such as direct indexing, which can provide additional opportunities to harvest losses while maintaining market exposure.

Even modest improvements in tax efficiency can create significant long-term value.

7. Audit your mutual funds

Many investors continue to hold mutual funds purchased years ago without reviewing whether those holdings remain appropriate. Some mutual funds carry higher internal expenses than comparable ETFs or index funds, and others may generate taxable distributions that create unexpected consequences in brokerage accounts.

Conducting a mutual fund audit doesn't necessarily mean replacing every holding.

However, reviewing expenses, tax efficiency and performance relative to alternatives can help identify opportunities for improvement.

8. Update your estate planning documents

This might be the least exciting item on the list, but it could be among the most important.

Wills, trusts, powers of attorney and healthcare directives are foundational components of a retirement plan, and yet, most Americans either don't have these documents or haven't reviewed them in years.

Life changes. Laws change. Family circumstances change. If your estate plan hasn't been updated recently, now may be the time to revisit it.

Equally important, make sure beneficiary designations on retirement accounts and insurance policies align with your overall plan and goals.

9. Simplify and consolidate accounts

Many retirees accumulate accounts over decades of employment. A former 401(k) here. An IRA there. A brokerage account somewhere else. Before long, keeping track of everything becomes unnecessarily complicated.

Consolidation might not improve investment returns, but it can make your finances easier to track.

It could also simplify tax reporting, improve organization and reduce confusion for spouses or heirs if something happens to you.

Sometimes the greatest benefit isn't financial performance; it's peace of mind.

10. Don't forget to enjoy the money

This final fix may be the most challenging one for diligent savers. Many successful retirees spent 30 or 40 years accumulating wealth and have developed strong saving habits, avoided lifestyle inflation and consistently prioritized financial security.

The challenge is that those same habits can make it difficult to spend money in retirement. Retirees still need a plan to avoid overspending, but many aren't in danger of running out of money; they're in danger of never fully enjoying what they've worked so hard to build.

Whether it's traveling with family, helping children and grandchildren, supporting charitable causes or simply creating memorable experiences, retirement isn't just about preserving assets; it's about using those assets to support the life you want to live.

After all, while running out of money is a legitimate concern, running out of time might be the greater risk.

The most successful retirement plans balance both sides of the equation: They protect your future while giving you permission to enjoy the present.

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• This Changes Your Social Security Decision (Especially if You're in the 2% Club)
• Should You Take the Survivor Option on Your Pension?
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• 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.

Even after paying off a mortgage, rising property taxes can be a significant financial challenge, especially for retirees living on fixed incomes.

Recent data show that property tax bills nationwide average $4,427 annually per single-family home, a more than 3% jump from the previous year.

But…several states are currently considering changes to their property tax systems. As a result, this November, many voters will decide whether to freeze taxable home values, expand homestead exemptions, or cap annual assessment spikes — changes that could provide relief to many homeowners struggling with affordability.

So, if you're an older adult homeowner, or someone helping an aging loved one manage housing costs, here are some key property tax changes to watch this year.

Louisiana property tax exemption for seniors

Voters in Louisiana will decide in November whether to expand property tax relief for some older homeowners through a proposed constitutional amendment created by House Bill 514 (Act 274).

• The measure would allow parishes and municipalities to provide an additional property tax exemption for qualifying homeowners age 65 or older.
• Eligible taxpayers must own and occupy a homestead and qualify for Louisiana’s existing special assessment level program.

How it could affect older homeowners: The proposal wouldn’t eliminate property taxes for older adults statewide. Instead, the measure would give local governments the option to offer this additional benefit.

• If a parish or municipality adopts the exemption, qualifying homeowners age 65 and older could receive an additional reduction in their taxable home value.
• That could, in turn, potentially lower their property tax bills.

Supporters say the tax measure would help older adults stay in their homes as property values rise. It could also provide relief to retirees whose incomes may not keep pace with housing costs.

Note: Louisiana already provides a special assessment level program that protects certain qualifying seniors from increases in the assessed value of their homes. But advocates see the proposed exemption as an additional layer of protection.

Opponents’ concerns focus primarily on the effect on revenue. Property taxes help fund schools and local services, and expanding exemptions could mean less money for local government priorities.

If approved by voters on the November 3, 2026 Louisiana ballot and adopted by local governments, the exemption would apply to tax years beginning January 1, 2028.

Oklahoma property tax cap & senior protection tiering

Oklahoma voters will decide this fall whether to approve State Question 847, a constitutional amendment to slow property valuation growth statewide while restructuring tax protections for older adult homeowners.

For homeowners overall, the measure would reduce the annual cap on homestead property valuation growth from 3% to 1.75% and non-homestead real property from 5% to 4%.

How it could affect older adult homeowners: Unlike general property tax caps, State Question 847 would modify Oklahoma's existing Senior Valuation Limitation (senior freeze) program for homeowners age 65 and older:

• Seniors with low-to-moderate income: Retirees earning at or below their county's HUD median income would retain a 0% freeze on taxable property value increases.
• Seniors with higher income: Currently, seniors earning over the median income receive no valuation protection. Under the proposed measure, senior property valuation increases would be capped between 0.35% and 1.75%, scaled according to household income brackets.

Supporters argue that replacing the "all-or-nothing" income threshold with a sliding scale ensures that older adults with middle incomes on fixed pensions aren't suddenly exposed to full market-value spikes, while keeping baseline caps predictable for all Oklahomans.

Opponents argue that altering senior freeze structures creates uncertainty for local school districts and municipal services that rely heavily on property tax revenues to fund local infrastructure and career centers.

State Question 847 will appear on the November 3, 2026 ballot. If approved, the new valuation caps and senior income tiers would take effect for tax year 2027.

Florida homestead exemption: Amendment 3

Florida voters will decide in November whether to approve a constitutional amendment that would significantly increase the state’s homestead exemption.

The measure, known as Amendment 3, would raise the exemption from $50,000 to $150,000 in 2027 and then to $250,000 in 2028 for qualifying homesteaded properties. The increased exemption wouldn’t apply to school district taxes.

Those who qualify for the homestead exemption would have a larger portion of their home’s value excluded from tax, potentially lowering their property tax bills.

How it could impact older adult homeowners: Unlike the Louisiana proposal, Florida’s measure isn’t limited to those 65 and older. It would apply broadly to homeowners who qualify for Florida’s homestead exemption.

However, the measure could have a significant impact on older homeowners in part because of the state’s large retiree population. The savings could be particularly helpful for Florida retirees with fixed incomes, who are increasingly facing rising insurance, housing, and living expenses.

• Supporters argue that Florida homeowners need relief after years of rising property values and higher housing costs. They say expanding the homestead exemption would allow residents to keep more of their income and make it easier for some of them to remain in their communities.
• Critics argue that the proposal could reduce funding for vital public services or force local governments to find other revenue sources.
• Legal Challenge to Watch: The measure is currently facing legal challenges in state court over its ballot language. Opponents contend the title and summary written by lawmakers are overly promotional rather than objective. While the court challenges don't contest the proposed tax cuts, an eventual ruling could potentially force revisions to how the measure appears on the November ballot.

Amendment 3 would need at least 60% voter approval to pass. If approved, it would represent one of the largest expansions of Florida’s homestead exemption.

Ways to lower a property tax bill

While voters in these and some other states decide on tax changes this November, homeowners across the country don't necessarily have to wait for election day to potentially lower their property tax bills.

Check whether your state, county or local government offers property tax exemptions, freezes or deferral programs for older homeowners.

Keep in mind that eligibility rules vary, and some programs require homeowners to apply each year.

It also could be worth reviewing your property assessment.

If your home’s assessed value appears too high compared with similar properties in your area, you may be able to appeal the assessment and potentially lower your taxable value.

For more information, see our report: How to Lower Your Property Tax.

Related

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• New Bill Proposes $1 Million Capital Gains Tax Exclusion for Those 65 and Older
• College Towns Are Becoming Retirement Destinations: How Does the Tax Math Add Up for Retirees?

Google has updated its cloud storage policy for Android device backups. For existing users, the change will take effect 45 days after they receive Google's notification email. Android device backups will count toward the 15 GB of free storage included with every Google Account. The company is also rolling out more detailed backup controls for devices running Android 9 and newer.

For many users, the impact may be small because photos, videos and other media files already count toward the same 15 GB storage limit. However, adding device backups could push some accounts closer to — or over — that cap.

If your account exceeds the free storage limit, your Android device will stop automatically updating its backups until you free up space or upgrade your storage. Checking how much storage you currently use can help you avoid interruptions once the policy takes effect.

Who will notice the biggest impact?

Users who are already close to Google's 15 GB free storage limit are likely to notice the biggest impact. If their account exceeds the storage limit, automatic backups will be paused.

People with years of Gmail, Google Photos and Drive files might also exceed the Google Storage cap when their device backup data counts toward the limit.

People who use multiple Android devices, such as a phone and tablet, may also see their storage fill more quickly. Every device under the same account syncs to the same storage space, so adding in backup data for multiple devices might push the account past the storage limit.

How to check your available Google storage

Google has started emailing Android users with details about the policy change, including how much Google storage they've already used and an estimate of how much space their device backup may require. You can also check your storage usage at any time.

To see how much storage you have available, sign in to your Google One account. Your dashboard shows how much of your 15 GB of free storage you've used and breaks down what's consuming that space.

Gmail, Google Drive and Google Photos all count toward your storage limit. Reviewing the breakdown can help you identify opportunities to free up space before the new backup policy takes effect.

What happens if you run out of storage?

If the new backup policy pushes your account over the storage limit, some Google services may stop working until you free up space or upgrade your storage plan.

Your Android device's automatic backups may be paused, Gmail may stop receiving new emails, Google Drive uploads could fail and Google Photos may stop syncing new photos and videos.

Five ways to avoid paying for more storage

While you can pay to increase your Google storage, there are workarounds that can help keep your storage functioning without you having to pay:

• Delete unnecessary files from Google Drive: Large Google Drive files can quickly eat into your storage capacity. Go through your Google Drive account and delete any unnecessary files. Deleted files are stored in your Trash folder for 30 days, so be sure to go to the Trash folder and permanently delete the files to free up the storage.
• Remove large email attachments: Large Gmail attachments can take up extra storage. The Google One Storage Manager allows you to identify and delete the largest email attachments.
• Clean up Google Photos: Go through your Google Photos and delete any photos you no longer need. The deleted images will sit in your Trash folder, so be sure to delete them from the Trash folder to free up storage.
• Review what your phone backs up: Use the Google One app or your Android phone's backup settings to review what's backed up. If certain apps take up a lot of storage, you can toggle those apps off so they aren't backed up.
• Delete old device backups you no longer need: You can use the Google One app to delete old device backups that you no longer need to free up more space.

When paying for Google One makes sense

While there are several ways to free up storage and avoid paying for additional space, upgrading to a Google One plan may be worthwhile in some situations.

Google One offers four paid storage tiers ranging from 100 GB to 2 TB. Plans cost $1.99 to $9.99 per month, and you can save about 16% by paying annually instead of monthly.

A paid plan may make sense for households with multiple Android devices sharing the same Google Account or for people who rely heavily on Google Photos and regularly store large files in Google Drive.

It can also be worthwhile if you'd rather not constantly manage your files to stay under the free 15 GB storage limit. Some Google One plans include additional perks, such as access to the Gemini app and Google Flow AI, making an upgrade worthwhile for users who want those premium features.

Preparing for the Google Storage changes

Google has started emailing Android users about the upcoming storage policy change. Once you receive the email, you'll have 45 days before the new policy takes effect for your account, giving you time to review your storage usage, free up space if needed and prepare your device.

Taking the time to review your storage usage now can help ensure a smooth transition and uninterrupted use of your device once the storage policy change takes effect.

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I've used peer-to-peer services for years, and Cash App has become my go-to. Its combination of ease of use with expanded financial features exceeds what some traditional banks offer.

Therefore, it's no surprise that Kiplinger readers also think highly of the platform. Each year, Kiplinger holds its Readers' Choice Awards, an online survey conducted in the winter, to learn which services and products you recommend most. For peer-to-peer payment services, we asked readers to rank their favorites based on ease of use, most recommended and overall satisfaction.

With this in mind, I'll show you three reasons why Kiplinger readers ranked Cash App so highly. I'll also cover other peer-to-peer services earning high marks in our survey.

1. Cash App is simple to use

Many Kiplinger readers rated Cash App highly for its ease of use. Opening an account takes a few minutes, and you can link your bank using your debit card.

From here, moving money from your bank account to Cash App is instant, making it quicker to send payments and more beneficial for recipients, who don't have to wait days for funds to arrive. I regularly use it to send payments to stylists, lawn care companies and pet sitters and have never experienced problems.

Most importantly, it's free to send money using bank funds or a debit card. If you use a credit card, there's a 3% transaction fee, though some credit card companies can treat this as a cash advance, imposing fees and higher interest charges, so double-check with your bank before using this method.

Along with ease of use, Cash App also excels in this one category.

2. Cash App offers advanced security features

Sending money online is never a 100% comfortable process, yet Cash App does a lot to dispel any fears you might have. When you set up an account, you can activate two-factor authentication. How it works is that it texts or emails a code you confirm before accessing your account.

The platform also has other ways to safeguard your cash. You're required to set up a PIN code, fingerprint or face ID before sending money. This ensures that every time you send money, it comes from you, and not someone pretending to be you.

Cash App also watches your payments closely for any signs of errors. To demonstrate, if you try to send the same amount of money to the same recipient in a short time, it will ask if you meant to send it, helping you avoid any unintended duplicate payments.

3. Cash App offers other financial services

While many use Cash App for sending money, it has a wealth of other features you can use, such as:

• A high-yield savings account: Earn up to 3.25% APY when you spend $500 monthly with your Cash App card
• Investing: Buy stocks and ETFs from your favorite companies starting at $1
• Parental tools: Teach your kids and grandkids responsible cash use with custodial accounts for children six to 12, and parent-sponsored teen accounts from ages 13-17
• Tax filing services: Unlike many tax services, with Cash App, you can file your taxes for free no matter how complicated your tax situation is
• Accepts cash from other providers: If you have friends who need to send you money but don't have Cash App, you can use the Pool feature to receive money via Apple Pay or Google Pay

Along with Cash App, the other two top-rated peer-to-peer payment services were Zelle and Apple Cash. In both instances, Kiplinger readers remarked that the services had excellent customer service and delivered superior satisfaction.

Overall, Kiplinger readers chose Cash App as the top peer-to-peer payment service provider for its ease of use, security features and robust financial offerings.

Is it for everyone? No. If you're uncomfortable using digital services like Cash App, you can always pay via check or cash. Keep in mind that peer-to-peer services, such as Cash App, don't offer FDIC insurance, so I would only use them for payment services, not a standalone bank account.

However, if you send peer payments often, this is among the easiest and most secure ways to do so.

Here's how to get started with Cash App:

• Link your bank account using your debit card for instant transfers
• Enable two-factor authentication
• Set up a PIN to protect outgoing payments
• If you plan to use your credit card for payments, check with your bank to see if they charge cash advance fees
• Explore other financial features, such as savings, investing or even filing your taxes for less

Digital payment apps can simplify your day-to-day finances, but a financial professional can help ensure you're also making progress toward your long-term financial goals.

Use the Bankrate tool below to connect with a financial professional who can help you build a personalized financial strategy.

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The original Financial Independence, Retire Early (FIRE) movement paved a path to early retirement through aggressive saving and extreme frugality. Today, many people view FIRE as a way to gain financial independence and flexibility, rather than retiring as early as possible.

Many early FIRE advocates aimed to save 50% to 75% of their income, working toward a goal of accumulating about 25 times their annual expenses before retiring.

But in today's world of high housing prices, inflation and healthcare costs, the FIRE movement might feel impossible. While some individuals may have found financial independence through the FIRE movement, there's a shift in the movement and in how people approach financial independence.

Why the FIRE movement is changing

The FIRE movement was popularized in the 1990s, but today's economy is vastly different, and the conversation has shifted from early retirement to financial flexibility.

Take the housing market, for example. According to the National Association of REALTORS, the median existing-home sales price was $114,600 in 1995. By 2023, the median price had climbed to $389,800. Simply buying a home now requires more of your paycheck, making it much harder to save 75% of your income under a traditional FIRE strategy.

Inflation has created additional financial strain, and tariffs and geopolitical tensions have contributed to higher costs for some goods. Healthcare costs have also skyrocketed. According to the Peterson-KFF Health System Tracker, which uses Centers for Medicare and Medicaid Services data, in 1990, annual per-person health spending averaged $2,835 in 1990, or $5,864 when adjusted for inflation. By 2024, per-person annual spending averaged $15,474.

In short, Americans have less left in their paychecks after paying for essentials like housing, food and healthcare. In many cases, consumers are increasingly prioritizing financial stability rather than planning for an early retirement.

Coast FIRE vs. traditional FIRE

Several variations of the FIRE movement exist. The traditional FIRE strategy focuses on building a large portfolio that can fully fund your retirement early, requiring you to save aggressively and potentially change your lifestyle to reflect your early retirement goals.

The Coast FIRE strategy takes a more moderate approach to save enough money early, so your investment portfolio can compound and support your retirement. Once you've amassed enough savings, you might continue to work to cover your living expenses, but early retirement isn't usually the goal. Since you won't be withdrawing from your investment portfolio early, the Coast FIRE strategy may be a more conservative option because it doesn't rely on withdrawing from investments decades before traditional retirement.

If you choose to pursue the Barista FIRE strategy, you'll work to build your savings and ultimately quit your traditional job. From there, you'll combine part-time work with your savings. Many people pursuing Barista FIRE choose to reduce their expenses so part-time income is enough to cover their living costs. Given the availability of freelance and gig work, this strategy may be a solid option for some, but you'll need to consider the limitations and expenses of securing health insurance without full-time employment.

How much money do you need to make work optional?

The amount of money that you'll need to make work optional will depend on everything from your lifestyle to your location and age.

Many individuals use the rule of 25 to determine how much they’ll need in investments to be able to retire. A commonly cited guideline suggests accumulating investments equal to about 25 times your annual expenses. The guideline is based on the widely known 4% rule, which suggests a retiree may be able to withdraw about 4% of a diversified portfolio annually, though there's no guarantee it will work in every market or retirement scenario.

Following the rule of 25, if you make $100,000 a year, you would need approximately $2,500,000 in investments to make working optional. In that situation, the guideline would suggest an initial annual withdrawal of about $100,000.

Emergency savings and retirement assets play a role, too. It's advisable to have at least three to six months of your living expenses in emergency savings. Your retirement assets may play a role, too. In addition to building up 401(k)s and Roth IRAs, consider how other assets, like Health Savings Accounts and rental properties, might support you financially once you no longer work.

Identifying the right balance of assets and the ideal amount of money you need to retire can be tricky, so consider consulting with a financial advisor.

Use the Bankrate tool below to connect with a financial professional who can help you tailor a strategy to reach your retirement goals:

Why many people keep working after reaching financial independence

Becoming financially independent and having the option to retire may sound appealing, but many financially independent individuals choose to continue working.

That's because some individuals enjoy their careers and find their work fulfilling. Some want the social engagement that comes with a career, while others may prefer having the additional income that they're able to generate.

Even if you choose to continue working, having the option to retire on your own terms can be a reassuring milestone.

Is financial independence realistic for average earners?

While reaching financial independence may take longer for average earners, many people can make meaningful progress through consistent saving, investing and keeping expenses under control.

To achieve financial independence, you may need to start early on in your career, and you'll need to be willing to live modestly. Focus on making consistent contributions to your retirement accounts and accumulating emergency savings in a high-yield savings account where your money can earn maximum interest.

Taking steps to increase your income will also help. Look for promotions and overtime opportunities, and consider taking on a side hustle where you can put your skills to work to earn extra money.

Perhaps most importantly, make a budget and stick to it. Your budget may help you identify ways you can cut spending and save money. By consistently living below your means, you can put your money to work for you and lay the pathway toward financial independence.

Financial independence can mean more than retirement

Becoming financially independent doesn't necessarily mean you'll retire early. Instead, it gives you the freedom to decide if, when and how you want to work. Rather than focusing on reaching a specific retirement age, financial independence offers greater flexibility, security and peace of mind — benefits that can be just as motivating as the prospect of early retirement.

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Everywhere you look, there's a monthly plan. TV, movies and music. Software and cloud storage. Meal kits, pet supplies, workout apps, even car features.

Subscription culture has moved from a niche corner of entertainment into everyday life, and that shift changes how we spend and save. Rather than asking, "Should I buy this?" we're asking, "Does it fit into my monthly budget?"

It's not just one industry either. Streaming platforms changed how we watch TV. Software as a service (SaaS) flipped how we pay for business software. Health and fitness apps rely on recurring fees. Retail has boxes for everything: Razors, snacks, skincare — you name it.

So how can you stay in control of your spending when subscriptions seem to make life so easy?

Why the subscription economy is booming

At its core, the subscription economy trades ownership for ongoing access, and that trade shapes spending. You pay a recurring fee, and the service keeps flowing. Think of content updates, software features, product deliveries and perks layered on over time.

It's built on predictable revenue for companies and personalized experiences for users.

The subscription model has also reshaped business operations. Instead of making long-term hiring commitments for every administrative need, some companies now subscribe to virtual assistant services to handle recurring administrative work.

This reflects the same shift toward predictable, ongoing service models that has transformed software and other subscription-based industries.

The numbers show just how fast it's grown. Companies in Zuora's Subscription Economy Index have experienced an 11% faster revenue growth rate compared to the broader economy (represented by the S&P 500) over the past two years.

Why does it land so well with people? Because it lowers the friction around spending.

For example, people who take regular medication can use online subscriptions for convenient access to consultations and deliveries, which they can pay for through a predictable monthly plan.

That convenience is a big reason subscription services continue to grow across many industries.

Impact on personal spending habits

There's an art to spending money, and subscriptions are part of that. Here's how they affect your personal spending habits.

The upside to subscriptions is predictability. You can plan for costs that hit on the same day each month. The downside is spending invisibility: Those small charges add up faster than we expect. One or two are nothing. Ten or 12? They start to crowd out real goals.

Autopay makes this easier to miss. You don't feel the pain of paying, so you keep the service around "just in case." That's different from a one-time purchase that you feel and remember. Annualized thinking matters here. A $12 subscription is $144 a year. Maybe worth it, maybe not.

There's also the broader budget picture. Recurring costs nudge us to build spending "floors" that keep rising. Add a new platform here, tack on a premium feature there, and total costs can escalate.

C+R Research suggests the average American now spends $219 each month on subscriptions.

Subscription creep happens. That's the disconnect between what you think you're getting from a subscription and how much you actually use it.

Subscription culture across key sectors

Media and entertainment. Streaming changed everything. We moved from buying albums and DVDs to paying for libraries we can dip into anytime. Deloitte's Digital Media Trends research shows people are juggling multiple subscriptions and regularly reconsidering lineups as content moves around and prices shift.

Tech and software. In software, the one-time purchase is nearly extinct. Everything from the tools we work in to the apps on our phones now runs on a subscription. It guarantees updates and continuous service.

However, it also means customers are effectively renting the essentials they once bought and kept forever.

Retail and consumer goods. Subscription boxes promise convenience and delight. Think of razors that show up before you run out, or coffee that lands on your doorstep.

For some, it's a time-saver. For others, it drifts into overconsumption. The best services now let you pause or skip.

Financial services. Fintech has entered the fray. Robinhood Gold is one example of a paid tier that bundles research and a high-yield cash program. Budgeting tools like these can pay for themselves if they help you save more than they cost. But they can also become another unexamined line item.

Potential downsides and consumer awareness

When everything is a subscription, fatigue sets in. It's not just the money. It's the mental load of keeping track. Companies that design smooth sign-ups but maze-like cancellations make it worse. The FTC has flagged these "dark patterns" and is pushing for click-to-cancel options.

A few practical ways to keep control:

• Make a subscription list. Consider what it is and why you have it. Factor in the monthly and annual cost and the renewal date.
• Review your online subscriptions. Check your app store and card-on-file portals (retail sites where you've stored your credit or debit card details) for hidden or inactive subscriptions.
• Have calendar reminders. Set them seven to 10 days before annual renewals or a trial.
• Rate usage monthly. Use a simple scale (0–3). Anything at zero or one for two straight months gets paused or canceled.
• Bundle intentionally. If you're already deep into an ecosystem, a bundle like Apple One can cut net costs compared with paying piecemeal.
• Rotate streaming. Keep two "must-have" services and a shortlist of "rotate-in" options. Make sure to switch monthly.
• Annualize everything. If the yearly total makes you pause, that's useful friction.

The bottom line

Subscriptions aren't going away. For many of us, they make life easier, and they can be a smart way to spread out costs. However, the same features that make them convenient can blur our view of what we're actually spending.

That said, take an hour to list what you pay for and what you truly use. Keep the services that pull their weight, and pause those that don't. Ultimately, every subscription should earn its place in your budget, month after month.

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

There's not much that can pry investors' attention away from the fireworks in the stock market this year — but a big jump in Treasury yields will do it.

A springtime swoon in the bond market pushed yields on 10-year Treasury notes to nearly 4.7% in mid-May before they settled back to 4.45% by the end of the month. (Prices and yields move in opposite directions.) That's up from 3.96% before the start of the war in Iran — a big move for bonds.

Yields on 30-year bonds reached nearly 5.2% in mid-May — a level not seen since the summer of 2007 — before closing out the month at 4.99%.

"We expect the bond market to remain sensitive to geopolitical events, Federal Reserve policy announcements and economic developments, especially around the trajectory of inflation," says Luis Alvarado, co-head of fixed-income strategy at Wells Fargo Investment Institute.

The bond vigilantes mount up

Bond traders have been reacting to inflation reports showing that price increases are not only persistent but also starting to bleed beyond energy to other parts of the economy.

The government's release of the April Producer Price Index, for example, which measures inflation at the wholesale level, came in far above expectations, logging the largest year-over-year increase since December 2022.

"Despite another upside inflation surprise, the report mainly confirms that higher energy prices are spreading directly and indirectly to broader prices," said analysts at BCA Research in a recent note. "Broadening inflation should continue in the near-term," they added.

April's Personal Consumption Expenditures Index, the Fed's preferred inflation gauge and the first inflation report of new Fed chair Kevin Warsh's tenure, showed prices continuing to accelerate.

When they sell off Treasuries on bad inflation news, so-called bond vigilantes are sending a clear message to the Fed and its new chair, says market strategist Ed Yardeni, of Yardeni Research (who coined the "vigilantes" moniker for disgruntled bond traders back in the 1980s).

"Bond vigilantes don't believe lower rates are the right course," he says. "They're taking charge here."

Indeed, the expectation of Fed easing this year has swung sharply and rapidly to a more hawkish view. At the start of May, more than 90% of traders expected the Fed's benchmark rate target to hold steady at 3.50% to 3.75% or be a quarter-point lower by year-end, according to CME Group's FedWatch tool. By May 31, nearly 44% of traders expected the federal funds rate to go higher — most thought by one-quarter of a percentage point, but a few by as much as three-quarters of a point.

How should investors prepare for higher bond yields?

Investors should brace for more yield volatility and stay agile, says WFII's Alvarado. A jump in 10-year yields well above the 4.75% level boosts the attractiveness of long-term maturities, he says; a drop below 4.25% favors shorter-term IOUs.

But focus more on clipping your coupons. "We think the income component of fixed-income should remain a key driver of total return for investors in 2026," Alvarado says.

So far, the stock market has remained largely impervious to the intermittent mayhem in bonds, though rate-induced pullbacks are possible.

"Higher rates do not derail bull markets when growth remains strong," says Ulrike Hoffmann-Burchardi, chief investment officer, Americas, at UBS Financial Services, "though there can be short-lived drawdowns when the market adjusts to a higher-rate environment before getting back on its uptrend."

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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This is a story about the largest lizard and the largest health care payer in the country. But mostly, it’s about the millions of Medicare beneficiaries who might receive coverage of GLP-1 drugs.

Americans have taken to these drugs fast. Eleven percent of U.S. adults now use a GLP-1 for weight loss, while 15% say they’ve used one at some point, according to Gallup.

Now Medicare has joined in. As of July 1, it covers weight-loss drugs for the first time in the program’s history. Eligible beneficiaries can get Wegovy, Zepbound or Foundayo for $50 a month through the Medicare GLP-1 Bridge.

Sounds great, right? Well, as with most things involving Medicare, it’s more complicated than the headline. There’s a catch. Or rather, catches.

Here’s what to understand before counting on cheap GLP-1 coverage in retirement.

Catch #1: The coverage has an expiration date

It helps to know where GLP-1s come from.

GLP-1 drugs trace back to a compound in the saliva of the Gila monster that mimics a human gut hormone signaling fullness. Researchers originally built it into a treatment for type 2 diabetes, not weight loss.

That distinction still governs everything. When Congress created Medicare Part D, it barred coverage of drugs used for weight loss, which were then considered unsafe, ineffective or both. The exclusion is still law today.

The wrinkle is that it applies to the use, not the molecule. Prescribe GLP-1s for type 2 diabetes, cardiovascular risk or sleep apnea and Part D covers them like any other drug. Prescribe the identical injection for obesity alone and Medicare is legally forbidden to pay.

So the Centers for Medicare & Medicaid Services, the federal agency that runs Medicare, built a workaround. The Bridge is a demonstration program that operates outside your Part D plan, through a separate CMS claims processor. It expires on December 31, 2027.

Catch #2: Long-term coverage remains in limbo

The Bridge was supposed to have a sequel. A longer-term program called the BALANCE Model would take over in 2027 and run through 2031.

BALANCE, however, needed insurers. Plans representing at least 80% of Part D enrollment had to volunteer by April 20, 2026. They didn't.

Therefore, CMS responded by extending the Bridge from six months to 18. That patched 2027 and did nothing for 2028. That leaves older adults trying to plan prescription costs around a program with no confirmed successor.

It’s why Jeff Judge, CFP® and managing partner of Chesapeake Financial Planners who works with Medicare-age clients, treats that date as fact rather than forecast.

“We build the plan assuming the Bridge ends on schedule, then treat any extension as a bonus, not something to count on,” he says.

Catch #3: You probably don’t qualify

An estimated 38.9% of U.S. adults 60 and older are living with obesity. Yet, very few will get this deal.

You’ll need a body mass index (BMI) of at least 27 paired with a qualifying condition such as prediabetes, a history of heart attack or stroke or peripheral artery disease. At a BMI of 30 or higher, heart failure, uncontrolled hypertension, chronic kidney disease or severe sleep apnea can open the door.

KFF estimates 3.8 million beneficiaries qualify, out of more than 69 million people on Medicare. That’s roughly one in 18.

Your doctor also has to clear prior authorization through the central CMS processor, not your own Part D plan.

Dorothea Vafiadis, the National Council on Aging’s Senior Strategist for Healthy Aging, expects people to get stuck well before that.

"Medicare beneficiaries aren’t routinely monitoring CMS demonstration programs, and many won’t know if this benefit exists unless they hear about it from a trusted source," she observes.

Catch #4: The $50 hides a few things

Without insurance, these drugs run roughly $900 to $1,400 a month, so $50 looks like a rounding error. Two design quirks, however, could make it cost more than it appears.

First, the $50 doesn’t count toward anything. Because the Bridge sits outside Part D, that copay never touches your deductible or your annual out-of-pocket cap, which is $2,100 in 2026.

"Clients assume hitting the cap means their drug costs are done for the year," Judge says. "This one keeps billing regardless."

Second, Extra Help doesn't apply. Beneficiaries in the Low-Income Subsidy program, who typically pay little or nothing for medications, owe the full $50.

"For many older adults living on fixed incomes, an additional $50 per month, or $600 annually, is a substantial financial burden that may put treatment out of reach," Vafiadis says.

A third cost catches people who aren’t in Part D at all. Roughly 14 million people eligible for Part D aren’t enrolled, Vafiadis notes, and the Bridge requires a drug plan. For them, she says, the true cost extends well beyond the $50 copay, adding monthly premiums and possibly late enrollment penalties.

Catch #5: Getting on it is easier than staying on it

Say you qualify and the drug works. Three things can still take it away.

Your plan can change, as any successor to BALANCE would likely be voluntary. So keeping your medication could require switching Part D plans.

"Switching Part D plans to chase GLP-1 access can quietly wreck coverage on someone’s other five prescriptions," Judge says. "A plan that covers the GLP-1 beautifully might reformulate their blood pressure medication into a higher tier."

You may also stop on your own. Between 50% and 65% of patients quit within the first year, usually over cost, side effects or coverage barriers. A 2026 meta-analysis in eClinicalMedicine found patients regain about 60% of lost weight within a year of stopping.

Perhaps most importantly, your doctor may hesitate. Only about one in 10 participants in the trials that made these drugs famous was 65 or older, which means information about benefits and side effects in the 60-and-older population is limited. Consider that muscle loss is a known side effect. In an older adult, that’s a fall risk rather than a cosmetic issue.

Steps you can take now to secure GLP-1

Older adults mostly aren’t chasing the cultural version of these drugs. KFF polling found that among adults 65 and older, 8% had taken a GLP-1 for a chronic condition while 1% took one for weight loss. For most, this is disease management, which makes it worth handling carefully.

Ask about a covered diagnosis first. If you have type 2 diabetes, sleep apnea, MASH or qualifying cardiovascular risk, that route runs through your regular Part D plan, counts toward your cap and isn’t scheduled to disappear at the end of 2027.

"For a client who qualifies both ways, I generally point them toward the covered-diagnosis route for the long-term stability, even if the near-term cost looks less predictable," Judge says.

Budget the $50 separately. That's about $900 over the program, and neither your out-of-pocket cap nor Extra Help will soften it.

Document your conditions now. Prior authorization requires it, and the paperwork could move slowly.

Bring your whole drug list to open enrollment, October 15 through December 7. Not just the GLP-1.

Ask your prescriber about 2028 before you start. What happens if coverage lapses? Have that conversation in year one.

Price your fallbacks. Manufacturer direct-to-consumer programs, TrumpRx and pharmacy discount pricing all exist.

Because of the growing popularity of these drugs, Congress or CMS may yet build something permanent. But that’s still to be determined.

The Gila monster gets through the desert by hunkering down and waiting out conditions. We don’t have that luxury. Better to start planning now, while the program is still in front of you, so you’re not left in a desert of information when the coverage runs dry.

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One of the most enjoyable aspects of retirement for married couples is finally having more time to spend together and the financial freedom to maximize those years.

That's possible because during their working years and into retirement, they've had a unified financial structure that's worked well — filing taxes jointly and budgeting based on their combined income.

But eventually, they must plan for the time when one of them is alone and make sure the survivor will be as financially protected as possible. Most married couples do not plan for that clearly enough.

When a spouse dies, the surviving spouse may still need much of the same income for the usual expenses — the house, property taxes, utilities, insurance, medical costs, family support and lifestyle.

But their tax structure changes, and they may be subject to the "widow's penalty" when their tax filing status changes from married filing jointly to single. Suddenly, tax brackets compress, the standard deduction changes and income that once fit comfortably inside a married tax structure may become more heavily taxed.

Picture a surviving spouse sitting at the kitchen table, looking at the same accounts, needing the same dignity but having less tax room to work with. No one wants to think about that. This is where many retirement plans fail emotionally, not just mathematically. They may protect the portfolio, but they do not protect the person who is left behind.

A new tax world for a surviving spouse — and its cascading effects

I remember when this issue first became real to me. It was years ago, when a longtime client — widowed a little more than a year — came into my office with her tax return and asked a question that seemed simple: "Why did my tax bill go up after my husband died?"

Her household income had gone down. Her husband's Social Security check was gone. Certain expenses had changed. Emotionally, she was still trying to adjust to life alone.

But financially, something did not add up. She had less income than before, yet her tax situation felt worse.

That is the widow's penalty. And once you understand it, you begin seeing it everywhere.

After one spouse dies, the surviving spouse often moves into a very different tax world. The tax code treats married couples filing jointly more generously than single filers.

• The brackets are wider
• The standard deduction is larger
• Medicare income thresholds are higher
• Long-term capital gains thresholds can be more favorable
• The net investment income tax (NIIT) threshold is also higher

For the 2026 tax year, a married couple filing jointly does not enter the 24% marginal income tax bracket until their taxable income exceeds $211,401 (the ceiling for that bracket is $403,550). But the single threshold is roughly half the joint threshold. A single filer for 2026 reaches the 24% bracket once taxable income exceeds $105,700 (up to $201,775).

The standard deduction compresses, too. For 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers. The surviving spouse may still have the same expenses and lifestyle needs they did when their spouse was alive, but has less tax room to absorb the income that funds them.

A surviving spouse may lose one Social Security check but typically keeps the larger of the two benefits. Pensions with survivor elections may continue. Required minimum distributions may continue. Portfolio income may continue. Rental income, annuity income and investment distributions may continue.

The survivor may end up retaining 70%, 80% or even 90% of the household income but lose the joint tax structure entirely.

For example, a couple with $140,000 of taxable retirement income may sit comfortably in the 22% bracket, but a surviving spouse with $115,000 of taxable income — less income than the couple had together — can suddenly be pushed into the 24% bracket. Over 15 or 20 years, the lifetime cost can become substantial.

Medicare adds another layer. For 2026, Medicare Part B IRMAA surcharges begin when modified adjusted gross income exceeds $109,000 for an individual, versus $218,000 for a married couple filing jointly. The premium is simply higher because income now lands on the single-filer scale.

That is where many widows and widowers get blindsided. They expected grief, paperwork and adjustment. They did not expect the tax code and Medicare rules to make retirement feel financially tighter at the exact moment life became harder.

How to use a Roth conversion efficiently

If you are already widowed and reading this, the situation is not hopeless. Meaningful planning may still be available. Roth conversions during widowhood can still make sense in some cases, even inside single tax brackets, if the alternative is allowing a large traditional IRA to compound into larger future RMDs.

Qualified charitable distributions (QCDs) can become powerful after age 70½. Asset-location changes, tax-efficient withdrawal sequencing and Medicare-income management can still reduce future drag.

But if you are still married, the best planning window may be before widowhood.

For many couples, the richest tax-planning window occurs after retirement but before RMDs begin. That may be five to 10 years, or sometimes less.

The core strategy often involves multiyear Roth conversion planning while both spouses are alive and still filing jointly. The goal is not to convert blindly but to use available joint brackets intentionally, reduce future tax-deferred concentration and give the surviving spouse more tax-free flexibility later.

The math requires discipline. Each year, evaluate how much traditional IRA money can be converted without creating unnecessary tax damage. You pay tax at known joint rates today to potentially reduce larger future taxable distributions later.

Repeat the analysis annually and stop when the math no longer supports it. Document the plan clearly so the surviving spouse is not left guessing.

The long-term care effect

Long-term care can destroy the planning runway.

Consider this scenario. One spouse becomes ill. The healthy spouse becomes the caregiver. Assets may be spent faster than expected. IRA withdrawals may increase. Roth conversion planning gets delayed. Tax planning gets pushed aside because the family is dealing with doctors, facilities, medications, stress and exhaustion.

Then, after months or years of care, the healthy spouse becomes the surviving spouse and may inherit a weaker financial structure with fewer clean choices.

Wade Pfau, author of the Retirement Planning Guidebook and a professor at The American College of Financial Services, has described long-term care as one of retirement's most unpredictable risks.

The cost data explains why. CareScout's 2025 Cost of Care Survey reported national median annual costs of $74,400 for assisted living, in excess of $114,000 for a semi-private nursing home room and more than $129,000 for a private nursing home room.

Those are not just care costs; they are tax-planning costs. If the money comes from an IRA, the withdrawal may create taxable income. If that income pushes the household across Medicare thresholds, the cost can compound.

If the healthier spouse is left with fewer assets and less flexibility afterward, the widow's penalty becomes more painful.

IRAs and 401(k)s: A structural blind spot in retirement planning

IRA guru Ed Slott, founder of IRAHelp.com, has spent years warning that tax-deferred retirement money is not tax-free money. That warning becomes especially relevant here. The surviving spouse may inherit the same IRA or 401(k) balance, but under compressed single-filer brackets.

The mistake is not having an IRA or 401(k). The mistake is assuming they behave the same way after the first spouse is gone. They do not.

If you are wondering why this may not already be in your plan, the answer is not necessarily that anyone has been negligent. For three primary reasons, the widow's penalty sits in a structural blind spot across much of retirement planning.

• Many plans focus heavily on the retirement date, not the surviving-spouse phase.
• Most people do not enjoy a planning conversation that says, "Pay taxes voluntarily today to potentially reduce a larger tax problem later." Not having the conversion often feels better in April. It may feel much worse 10 years later.
• Many reviews are organized around investments, not the household tax structure after the first death.

Understand the potential stakes. The table below is only a simplified illustration. It assumes the surviving spouse retains a high percentage of joint retirement income, which can happen when income is driven by pensions, RMDs and portfolio distributions rather than mostly by Social Security.

These estimates may include federal income tax and Medicare surcharge effects. They do not include state income taxes, the net investment income tax or other household-specific factors. The point is not that every household will match the table but that the annual cost can become a six-figure lifetime issue if it persists for 10, 15 or 20 years.

A surviving-spouse tax map

Married couples with meaningful IRA balances, pensions, taxable investment income, deferred compensation or future RMD exposure should not guess. The next practical step is specific: Ask for a surviving-spouse tax map.

That map should show, in dollars, what happens to income, taxes, Medicare premiums, IRA withdrawals and cash flow after the first spouse dies.

A useful version of that analysis can often start with last year's joint 1040. Run the same income through the single-filer tax structure, compare the result and then project the difference over 10 to 20 years with RMDs, Medicare thresholds and Roth conversion options included.

If the exposure is small, you should know that. If it is large, you should know that, too, while both spouses are still here, while both can still make decisions together and while the cleanest planning years may still be available.

The window closes a little further with every tax year that passes. You should at least know what is inside it.

Dan Dunkin contributed to this article.

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

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

The debate about whether Americans should be allowed to hold private-market assets in their retirement accounts has, once again, produced more heat than light.

Critics of recent proposals to open 401(k)s to alternatives such as private equity, private credit and real estate warn of systemic risk and suggest that ordinary savers can't be trusted with anything more complex than an index fund. They're solving the wrong problem.

The question has never been whether Americans should have access to alternatives in their retirement accounts. Under existing tax law, they already can. Self-directed IRAs and Solo 401(k)s have permitted investments in real estate, private equity, private credit, precious metals and digital assets for decades. The infrastructure exists.

What Congress has done

The legal framework was settled in 1974. When Congress created IRAs and 401(k) plans under ERISA, it deliberately chose to allow retirement accounts to be invested in both traditional and alternative assets.

That was not an oversight. Congress could have easily restricted retirement vehicles to conventional holdings, as it later did with 529 education savings plans. It chose not to.

Pension plans, endowments and individual retirement investors were meant to have the ability to diversify across asset classes. That original intent has never changed.

The real question is whether we extend that access responsibly to everyone or continue reserving it for those wealthy enough to know it exists.

That's the two-tiered system critics should be concerned about. Today, institutions and high-net-worth investors allocate heavily to private markets, capturing illiquidity premiums, diversification and long-term return profiles that public markets increasingly can't offer.

Who gets to access what

For years, Yale's endowment, the model every sophisticated allocator studies, has invested more than 60% of its portfolio in alternatives.

Meanwhile, ordinary retirement savers get a menu of mutual funds and target-date vehicles, most anchored to the same handful of large-cap tech stocks. The diversified portfolio is already available. The question is who gets to access it.

This concentration risk is not theoretical. American retirement investors exclusively in traditional assets are, in practice, not well diversified. Their life savings are heavily exposed to a narrow set of equities, and that concentration is far riskier than a portfolio that includes a measured allocation to alternatives.

The argument that alternatives introduce undue risk ignores the risk already embedded in a retirement account that rises and falls with a handful of stocks.

In 2022, the market made this imbalance impossible to ignore. Stocks and bonds declined simultaneously, exposing the structural vulnerability at the heart of the traditional 60/40 portfolio.

In a high-inflation, rising-rate environment, fixed income lost its cushion precisely when investors needed it most. Alternatives, real estate, private credit and hard assets held value. The investors who owned them were protected. Everyone else absorbed the full impact.

This doesn't imply that a free-for-all is the way. Structured access allows us all the best path forward.

Access with guardrails

Everyday retirement savers should have access to professionally managed, fiduciary-governed exposure to private markets, with clear guardrails around fees, liquidity, custody, investor education and suitability.

The concern that unsophisticated investors will be handed illiquid, higher-fee private equity funds with no understanding of what they own is legitimate. The answer to that concern is smarter regulatory frameworks, not a blanket prohibition.

It's also worth noting that retirement accounts might be among the most appropriate vehicles for alternative investments. Retirement funds and 401(k) plans are generally locked up for years or decades. That illiquidity is a feature, not a flaw.

Many alternative assets — private equity, real estate, hedge funds — share that same long time horizon.

Investors who hold illiquid alternatives in retirement accounts are positioned to capture the illiquidity premium and patience premium these assets typically generate, the higher returns that compensate long-term holders for forgoing liquidity.

A natural alignment

The structure of a retirement account and the structure of a private market investment are, in many respects, naturally aligned.

The accredited investor rules that already exist provide meaningful guardrails for investors seeking exposure to alternatives outside retirement accounts. Those rules serve an important function, and there is a strong case for the SEC to expand the definition of accredited investor to allow more Americans access to private markets and better diversification.

But those guardrails aren't an argument for keeping alternatives out of retirement accounts entirely. They're evidence that thoughtful, structured access is achievable. That same spirit of structured access can and should extend to the broader retirement market.

Complex rules with thoughtful integration

Building successful self-directed platforms requires thoughtfully integrating complex tax and ERISA rules into systems and processes that investors, advisers and planners can use confidently and effectively in the long term.

Compliance isn't an obstacle to access. It's what makes access durable. Prohibited transaction rules, disqualified person restrictions, custody requirements, reporting obligations — these aren't bureaucratic annoyances.

They're the guardrails that keep the system honest. The right policy goal is to extend those guardrails to the broader 401(k) market, not to wall off private markets entirely and call it protection.

The Department of Labor's recent proposal to provide plan fiduciaries a clearer safe harbor for adding certain alternative assets to 401(k) lineups is a meaningful step in this direction.

Plan sponsors have long avoided alternatives not because they're inherently inappropriate but because the legal exposure of offering them was unclear

A safe harbor built around diversification, fee transparency and liquidity requirements doesn't invite abuse. It eliminates ambiguity and legal uncertainty. That's how you expand access without abandoning responsibility.

Protection vs preservation

Critics who argue alternatives don't belong in retirement accounts are, in practice, arguing they should remain exclusive to those wealthy enough to access them elsewhere.

That's not a protection argument. It's a preservation argument, preserving a system in which the sophisticated investor has options, and the ordinary saver does not.

Americans deserve a retirement system built for the economy they actually live in, not the one that financial institutions find easiest to administer.

That means access to a broader opportunity set, delivered through structures that protect investors rather than simply exclude them. It means fiduciary oversight without fiduciary paralysis, and better rails rather than narrower choices.

The debate is not about whether to protect retirement savers. Everyone agrees they should be protected.

The debate is about whether protection requires keeping them permanently locked out of the same assets that have built generational wealth for institutions and individuals who already have enough. It does not.

The work is building the infrastructure that makes broader access safe. With that work well underway, it's time that policy catches up.

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• Is Private Equity Behind the Scenes in Your 401(k)? Here's What That Could Mean for Your Retirement
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Stocks were choppy early on Tuesday, but falling oil prices and a round of well-received corporate earnings helped the Dow Jones Industrial Average and S&P 500 climb higher into the close. The Nasdaq Composite, however, couldn't sidestep an extended slump in chip stocks.

At the close, the tech-heavy Nasdaq Composite was 0.2% lower at 24,876, pressured by weakness in semiconductor stocks. The iShares Semiconductor ETF (SOXX), which counts Advanced Micro Devices (AMD, -8.2%) and Micron Technology (MU, -8.9%) among its biggest holdings, fell 4.8% and is now down 23% for the month to date.

The continued sell-off is being "driven by concerns about capital return prospects, valuations, circular financing dynamics and Chinese competition," says José Torres, senior economist at Interactive Brokers.

But the broader S&P 500 (+0.2% at 7,428) and the Dow Jones Industrial Average (+1.0% to 52,747) advanced thanks in part to falling oil prices. Front-month West Texas Intermediate crude futures fell 4% to settle at $79.26 per barrel.

Strong earnings for several blue chip stocks also helped buoy the benchmarks. Coca-Cola (KO), for one, jumped 5.0% after the soft drink maker beat second-quarter estimates and raised its full-year guidance.

The company credited the FIFA World Cup as one catalyst behind its strong results, seeing Trademark Coca-Cola volume growth of 5% in Q2, its best volume growth since the COVID-19 pandemic.

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

Boeing (BA) was another post-earnings winner, rising 4.8% as the aerospace giant's Q2 revenue came in higher than expected, which offset a wider-than-anticipated per-share loss.

Sherwin-Williams has its best day since 2022 after earnings

Sherwin-Williams (SHW) emerged as the best Dow Jones stock today, surging 8.3% — its best day since April 26, 2022 — after the paint maker reported stronger-than-anticipated second-quarter results.

"Sales improvement was driven by continued growth investments, new account wins and increased share of wallet," said Sherwin-Williams CEO Heidi Petz. "We also implemented pricing actions to offset raw material inflation that pressured our gross margin in the quarter."

In mid-June, Argus Research analyst Alexandra Yates said SHW is "uniquely positioned to benefit from significantly higher demand trends and margin expansion in the long term, this due to its dominant market position." Yates added that she views the materials stock as a "core long-term holding."

Corning suffers its biggest one-day drop in six years

Not all earnings reports were well received. Corning (GLW) plunged 12.1%, its biggest one-day drop since March 16, 2020, after the Gorilla Glass maker's disappointing third-quarter revenue forecast overshadowed a second-quarter beat.

Susquehanna analyst Mehdi Hosseini says the softer-than-expected revenue guidance is due primarily to "weakness outside Optical Communications, particularly within the Solar segment."

And he maintained a Positive (Buy) rating on the tech stock, saying it "remains well positioned to benefit from growing AI cluster sizes and increasing and width requirements, while also enabling alternative manufacturing approaches for fiber array units (FAUs), which we believe are among the most critical components in the commercialization of optical CPO (transceiver) architectures."

These transceiver architectures have a variety of use cases, including in data centers, AI chip connections and high-performance computing.

Buckle up

There are plenty more events this week that could spark market volatility. On the economic front, Wall Street is waiting for tomorrow afternoon's policy announcement from the Federal Reserve.

While it's unlikely the central bank will raise the federal funds rate this time around, rate hike odds have been rising. According to CME Group FedWatch, futures traders are now pricing in a 32% chance the Fed will increase rates tomorrow, up from 26% one week ago.

We're reporting live on the July Fed meeting. Follow along with Kiplinger for all the news and updates.

And on the earnings calendar, Wednesday's after-the-close announcements from Meta Platforms (META, -0.08%) and Microsoft (MSFT, +1.1%) will likely draw a crowd. Apple (AAPL, +0.9%) and Amazon (AMZN, -0.2%) will report on Thursday.

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What direction is the stock market headed next? Nobody, of course, has a crystal ball. And the market can't converse with you like ChatGPT can, so it can't warn you of trouble ahead or confirm that a bull market is alive and well. There are tools, however, that can help you read the tea leaves and better gauge the market's next move.

Fundamental stock market indicators such as corporate earnings growth and price-to-earnings (P/E) ratios, and economic data such as gross domestic product (GDP), interest rates and inflation, tell only part of the story.

A more complete picture of the market's health includes analyzing visual clues found in Wall Street charts that focus on price action, for example, or market breadth (a measure of how many stocks are participating in a rally or sell-off). The research strategy is known as technical analysis.

This type of evaluation provides key market intelligence. Technical analysis tells you whether a broad index such as the S&P 500 is in a sustainable uptrend or in a downtrend. It shows whether a stock's price momentum is strengthening or fading. And it reveals potential directional pivots.

"Technical analysis is a framework for identifying what the current market trend is and the likelihood of it continuing," says Adam Turnquist, chief technical strategist at LPL Financial.

Technical analysis provides an alert system for investors

Technical analysis is something akin to an early alert system. Analyzing charts and price patterns can tip you off when leading stocks, sectors (such as white-hot semiconductors) or benchmark indexes are rolling over or breaking out to new highs.

That's particularly important when the stock market is near all-time highs, as it is now, or trading at depressed lows after big downturns, such as the April 2025 swoon following the rollout of President Donald Trump's "Liberation Day" tariff plan.

Technical analysis won't supplant market research based on the fundamentals. Think of it as another tool in your investment toolbox. Arming yourself with this type of market surveillance can help you better understand what's going on underneath the surface of the market and better inform you about its underlying strength.

And you don't need to add an arsenal of indicators to your market routine, either. Asked what his favorite indicators are, Mark Arbeter, a technical analyst and president of Arbeter Investments, says: "Number one, two and three is price action."

Pundits and market noise aside, all known information about the market is reflected in its price movements, say technical analysis adherents. What Arbeter likes to see in charts is higher highs and higher lows with strong trading volume on up days, as that suggests most market players, including big institutional investors, are buying. A bearish sign is when the market is going down and volume is through the roof.

Below, we share some of Wall Street's favorite technical indicators and what they're telling us now about the stock market's prospects. (All data is through May 31.) Although there are a slew of indicators that professional chart readers use, many are wonky, proprietary and hard to replicate. So we'll focus on key indicators that are easy to grasp and track at home.

1. Spot the trend

Trend following is a key aspect of technical analysis. Long-term trendlines — such as the 200-day simple moving average, which tracks the average price of an asset over the previous 200 trading days — are the most useful to follow. Why? They smooth out volatility and provide a key piece of information: whether the trend of an index, sector, fund or stock is up or down.

"The longer the trend line, the more important it is," says Mark Newton, global head of technical strategy at Fundstrat, a Wall Street research firm — and "the more effective it is in keeping investors on the right side of the trend," he adds.

To get a reading on the broad market's health, pull up a three-year chart of the S&P 500 on your online broker's website or a financial site such as wallstreetnumbers.com. Then overlay the 200-day moving average on the chart. If the S&P 500's price is above its 200-day moving average and the line on the chart is upward sloping, it means the market has upward momentum and is in a long-term uptrend. A classic bullish setup is when both the index and the moving average are rising in tandem.

In contrast, a downward-sloping chart with the S&P 500 trading below its 200-day moving average indicates that the broad market is in a downtrend. When stocks lose their mojo, it's not time to bargain hunt because the trend is no longer your friend. "You generally want to avoid stocks in a downtrend," says Adair Rufty, technical analyst at Strategas Research Partners.

What are the charts telling us now? As of May 31, the S&P 500's closing price of 7,580 is above its 200-day moving average of 6,831. So for now, despite daily volatility due to Iran war news and oil and interest rate spikes, the S&P 500 remains in an uptrend.

If there's a negative, it's that the number of stocks in the S&P 500 trading higher than their 200-day moving average is moving lower, says Arbeter. As of the end of May, just 55% were above their average price over the past 200 days, down from a 2026 peak of 69% before the U.S. attack on Iran in late February, according to financial data site Barchart.

Arbeter prefers to see 70% to 80% of S&P 500 stocks trading above their 200-day moving average in up markets. "There are technical cracks," he says. "Overall breadth is not great, and it's not indicative of historical periods when the market just keeps going higher."

You can gain more clarity on the market's technical strength by layering in a shorter-term moving average — such as the 50-day moving average, which is a barometer of near-term momentum.

If the asset or index you are tracking, such as the S&P 500, is trading above both its 200-day and its 50-day moving average, that suggests the market's short- and long-term momentum are both flashing the same positive signal. Good news: Currently, the S&P 500 is above both its 50-day and its 200-day moving average.

One goal of chart-watching is to be on the lookout for divergences, which occur when the price of an asset moves in the opposite direction of a technical indicator. A sign of early trouble, for instance, is when the S&P 500 is hitting new highs but its average price over the past 50 or 200 days begins to weaken, with moving-average lines beginning to slope downward.

A classic technical warning signal is when the S&P 500's 50-day moving average crosses below its 200-day moving average. This divergence is called a death cross. It tells you that the short-term trend has turned bearish, signaling a likely market downturn. As of May 31, the 50-day moving average was 7,058, well above the 200-day's 6,831.

But be on the lookout for signs that the 50-day moving average is in danger of undercutting the 200-day average. "At that point, your antenna should flare up a bit," says Rufty. "Something's changing. It's a point where you should start thinking, Could a topping sequence be happening?"

2. Measure momentum

Simply put, momentum tells you what's working in the stock market and what's not. The 14-Day RSI is a popular technical indicator that tracks pure momentum, flagging stocks that are either soaring or sagging and helping to determine whether they're flashing "buy" or "sell" signals.

The acronym stands for Relative Strength Index. The RSI determines whether an investment is overbought or oversold by measuring the speed and magnitude of price movements.

Here's how it works: The index tracks the momentum of a stock or index according to a formula that includes average gains and losses, usually over the past 14 days. The calculations are plotted as a line graph on a scale from 0 to 100. The higher the number, the stronger the momentum. A reading above 50 suggests an asset has positive momentum, while a reading below 50 indicates downward momentum.

Typically, Wall Street traders use these readings as contrarian signals. The more extreme the reading, the more apt they are to trade on it. In general, RSI levels of 70 and above indicate an overbought condition, suggesting the stock or index has gotten ahead of itself, which could serve as a potential sell signal. Low RSI levels (below 30) indicate an oversold condition, which might indicate a potential entry point to buy a beaten-down asset. A May 31 RSI reading of 74 indicates an overbought market.

From a trading perspective, however, RSI works best when viewed in the context of the market's broader trend. Technical analysts typically give larger weight to longer-term trendlines, such as the 200-day and 50-day moving averages. If a stock, for example, is flashing an overbought RSI reading but the broad market is in an uptrend, as now, that's less concerning than if a stock is overbought and the market is in a downtrend.

On the flip side, if the market is reaching higher highs but the RSI momentum indicator is starting to decline from its peak, that's a bearish divergence, according to Turnquist.

3. Beware of bad breadth

You can get even more insight into the market's health by looking at measures that tell you how broad the underlying strength or weakness of the market is. "Market breadth is really important," says Newton. "Are all sectors going up in unison, or are you starting to see bifurcation?"

Lists of stocks that are hitting new highs and those hitting new lows are a good place to start. If the number of stocks reaching new highs is rising as the market marches higher, that's a good sign, as it tells you there's broad participation in the rally. But if the market is still going up and even hitting new highs but the number of stocks sinking to new lows is rising, that could be hinting at weakness under the surface.

This price data is particularly helpful during market turning points. "It's useful in gauging how flushed a sell-off is or how potent a rebound is," says Rufty. You can get daily new highs and lows from market-data-focused sites, such as The Wall Street Journal.

If you're looking for new highs and new lows over longer periods, such as one month, six months or 52 weeks, you can find that data at Barchart. (A related measure of market breadth is the advance-decline line, which tracks the difference between the number of stocks on, say, the New York Stock Exchange that are advancing each day and those that are declining.)

Craig Johnson, chief market technician for investment firm Piper Sandler, tracks 26-week highs and lows (or six-month readings). He looks at all U.S. stocks, including all 416 industry groups. Currently, he doesn't like what he's seeing.

"The market is hitting all-time highs, and I've got very few groups participating," says Johnson. Less than half (49%) of the stocks were at six-month highs in mid-May. And only 26, or 6%, of the industry groups Johnson tracks were hitting 26-week highs.

Most of the groups hitting new highs were tech-related, meaning the market's gains are concentrated in a single sector. Johnson says he's watching new lows closely. By his count, 21, or 5%, of the industry groups were at new lows, with the bulk of those in consumer-related areas. "When I start seeing an expansion in the number of groups that are making new lows, that is worrisome," he says.

4. Find floors and ceilings

It's also important to monitor how the market is trading around market "support" or "resistance" levels.

Support is a level akin to a floor. "That's where buyers have consistently stepped in to buy a stock or the S&P 500 in the past," says Turnquist. A resistance level acts like a price ceiling; it's where buying has dried up in the past.

You'll often find such floors and ceilings around big, round numbers on a market index. For example, it often takes a few attempts before a broad index can break through a resistance level — the S&P 500 flirted with 7,000 as far back as October 2025 before finally topping that milestone for the first time in April 2026. A breakout above a resistance level is a healthy sign.

Conversely, in the wake of the S&P 500 hitting 7,500 for the first time in mid-May, market technicians are watching for signs that the broad market is beginning to weaken. The first key support area to watch is the 7,150 level on the S&P 500, according to Arbeter. But he says he'd be more worried if the index breaks below the range of 6,800 (around its 200-day moving average) to 7,000 (the most recent breakout zone for stocks). "That would be a major concern," says Arbeter.

As you eye those benchmark levels, consider pulling up some stock charts to read Wall Street's tea leaves. With the help of technical analysis, Fundstrat's Newton says, "you oftentimes can find very important turning points."

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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Jean Chatzky is the CEO of HerMoney.com and host of the podcast HerMoney With Jean Chatzky. Here, she speaks with Kiplinger about her new book, The Forever Paycheck, and what retirees struggle with in the transition to spending.

Kiplinger: You've referred to your new book, The Forever Paycheck, as the most important work you've done in your 40-year career. Why is this book such a passion project for you?

Chatzky: The book is about how to spend down your savings once you retire — or decumulate, as experts call it — and it is not something you can afford to get wrong. If you overdo withdrawals, you'll run short of resources late in life. If you underdo them, you're essentially underliving — not getting the most out of this phase of your life that you saved so long for. I think that's incredibly sad. For me, this issue feels both urgent and important.

Why do many re­tirees struggle with the transition from saving to spending?

It's emotionally really hard, because spending from savings feels like a loss. When you put so much time into accumulating something, it feels precious. You want to hold on tight.

Tactically, we've also had a lot of help accumulating, with automatic enrollment and escalation in retirement-savings plans and target-date funds. It has become super easy to do the right thing without doing anything. Those automatic hacks don't exist yet for managing withdrawals from savings.

You think the solution lies in creating what you call a forever paycheck. How can this help retirees?

A forever paycheck is a stream of income that will last for the rest of your life, and that enables you to live comfortably without the fear you'll run out of money. The income stream ideally should be enough to cover your needs and some of your wants — the ones you really don't want to give an inch on.

It is not a solution for all of your money. Everybody still needs to have some money invested in the market to grow. But researchers have found that having a regular income stream enables you to feel much more comfortable about spending.

How do you fund a forever paycheck?

If you can afford to, waiting as long as possible to claim Social Security so you maximize benefits is typically the right move for most people. That's the base of almost everyone's forever paycheck, plus any pensions you may get.

Then look at your expenses, those necessities and wants, to figure out how much money you'll need on an ongoing basis. Deduct the income you'll get from Social Security and pensions, and what is left is your gap. You can fill that gap with guaranteed income from annuities or withdrawals from your investments.

Personally, I'm going the guaranteed route. About a third of my retirement income will come from Social Security, another third from the rest of my forever paycheck, and a third from money invested in the market for growth.

How can retirees prevent an unpredictable event such as inflation or a big drop in stock prices from derailing their plans?

The whole point of building a forever paycheck is so these events will not derail you. If you've got a paycheck that covers your needs and key wants, and the market takes a tumble, you don't have to sell. You can give the market time to come back. And maximizing Social Security is your best friend when it comes to fighting inflation because it has a cost-of-living increase that's recalculated each year.

What else do retirees get wrong when it comes to spending?

Besides underspending and not living as well as they could be because of fear, many retirees think that spending across retirement will be consistent. It's not. People spend more in the early years, when they take their bucket-list trips and do home-improvement projects. Once we get into our mid-seventies, things slow down, and we don't spend as much. That fact should give people license to spend a bit more early on.

We should also think about ways to pass money along, whether it's to children or charities, while we're living. If I die in my nineties, my kids will be in their sixties. I really hope they don't need my money by then.

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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If you are being billed by the hour for professional services, now is the time to renegotiate, as AI has put the billable hour on life support.

In January 2024, during his recuperation from surgery and radiation treatment of thymoma — an extremely rare cancer — Los Angeles-based attorney Aaron Shechet, "wanted to do something for my wife and law partner, Leigh, who proved what being there 'for better or for worse' means. She said, 'Make an app that helps me bake better sourdough.'

"So I built an app to take pictures of her sourdough bread — AI analyzes the picture and tells how to improve it. It came out so good that I released it on Android and Apple."

Then an idea came to Shechet. "What if I could develop a platform that helps service providers, accountants, lawyers and other professionals use AI programs that would save them hours and result in significant cost savings to their clients?"

Veilgrid was the result. "It is a platform that creates custom AI-powered tools tailored to specific business activities," he notes, "such as drafting contracts, leases, various sorts of documents and automating related office functions, saving upwards of 75% of the time required to do the same work manually."

AI impacts professionals and their clients/customers

Shechet has been a mediator and fee arbitrator in Los Angeles for years, and he has impressed me with his concern for clients trapped in billable-hour spirals. He sees a tsunami coming to those professions that view efficiency as their mortal enemy.

"Billable hours reward lawyers, accountants, management consultants — to list just a few — for spending more time on a task," he says. "Faster work — efficiency — directly reduces total revenue, as you can't bill a whole lot of hours.

"With AI, the incentive is to be more efficient, as you will invoice on the completion of work, not the hours to do the work."

He adds, "Clients do not care how the final product was produced — they just want results, the more economical the better. And they know that AI saves an enormous amount of time in producing reproducible items, such as contracts, leases, tax returns and so much more."

A new standard of care

Shechet strongly believes that the new standard of care for law and other professions, figuratively speaking, will be a $5 charge with "AI quality," instead of hundreds of dollars an hour with potentially less quality.

"What clients pay must come down," he says. (For the record, AI is wrong sometimes, so someone still needs to check the work to make sure it's accurate.)

He lists tasks where AI is most effective in law that would take hours to do manually and cost clients hundreds to thousands of dollars:

• Anything written, including contract drafting, pleadings, motions and discovery
• Summaries of depositions for senior partners that can be generated in minutes
• Legal research that requires dramatically reduced time
• Tasks that once took teams of junior associates weeks can now be completed by a single attorney in a few hours or even seconds

AI also works 24 hours a day. It doesn't have student loans or employment insurance, it doesn't complain, and it doesn't face employee lawsuits.

New billing methods

Shechet and many other observers expect to see subscription models where a lawyer, accountant or other professional is on call to handle all the matters a client needs for a flat monthly fee.

"We should also see more per-job and contingency fees," he notes, adding, "AI is no longer in the experimental stages for many professions. It is being widely adopted. Clients need to ask their lawyers, accountants and other professionals who bill by the hour, 'Are you using AI to save me money? And if not, why not? Why does this professional service cost so much?'"

What's the impact on lawyers?

I asked Shechet what impact AI will have on the human side of the legal profession.

"There will be little justification," he says, "for massive law firms — that have been compared to pyramid schemes — to reward senior partners while demanding impossible 2,000 yearly billable hours from junior lawyers. That (practice) has invited decades of bill-padding and outright fabricated work and destroyed marriages and families.

"The need for lawyers will shrink, and hopefully, the ability to go home at 5 p.m. and have dinner with the family and have a life will return to the legal profession."

For anyone considering law as a career

Shechet cautions that law can no longer be recommended as a safe, automatic path to a high-income career.

"But if law is pulling you, go for it. Follow your instincts, but do not expect the profession to look the way it did 20 years ago. Veilgrid came from following what presented itself: I built it for our practice, then other lawyers, then other professions, and finally, it became a platform.

And he cautions, "Anyone considering law should think very carefully about debt. Do not borrow an enormous amount of money because this seems like a safe profession. The supposedly safe, predictable part of legal work is exactly the part AI is commoditizing most quickly."

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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

If you're aiming to retire at the standard retirement age of 65, your 50s can feel like crunch time. Whether you're falling behind or you're pretty sure you're on track, this is the decade to nail down exactly how much you need to save for the retirement lifestyle you want and exactly what it's going to take over these next 10 to 15 years to get there.

At the same time, you might be part of the sandwich generation – those who have been stretched thin by the need to take care of both their aging parents and their older children, all while still trying to keep up with their own financial goals.

Suddenly, you hit 50 and realize the runway to retirement has gotten a lot shorter and you're not sure if you're anywhere close to where you should be at this point. If that sounds familiar, this checklist should help you get back on track.

4 financial priorities for your 50s

In your 50s, you have one major financial goal: get your retirement fully funded. With a few exceptions, anything else will take a back seat for this next decade. The question is less about what your financial priorities should be and more about building a personalized plan to get you where you want to be.

1. Come up with a realistic retirement number

When you first started putting away money in your 401k or other retirement accounts, you might have had a vague sense of how much money you needed to save up for your golden years. Now that those years are moving closer, it's time to revisit your goal and, if it's not already, make it more concrete.

You'll find some rules of thumb around what percentage of your current salary you should plan to spend each year in retirement — like 70% or 80% of your pre-retirement income — in order to maintain your current lifestyle. And you might have an idea of your expected lifespan based on how long your parents or grandparents lived.

But in reality, the amount you should plan to have for retirement depends on so many different factors. Do you want to maintain your current lifestyle or do you want to do more, like travel or rent out your home and retire in an RV for a few years?

This answer can change how much you need to save. Do you have a lot put away already or have you only just started to really save seriously for retirement? This answer can change how much you can realistically save (or what age you can realistically retire). Do you want to hang up your boots right at 65 or do you plan to retire sooner (or later) than that?

The best way to find the magic number that fits your retirement goals and your current financial situation is to meet with a financial planner. More than any online calculator or broad rules of thumb, a professional financial planner can talk through your finances with you and help you create a personalized plan to get you from wherever you are today to where you want to be when you retire.

Use the Bankrate tool below to connect with a financial professional who can tailor a plan to help you reach your financial goals:

2. Start learning about social security, Medicare and other retirement benefits now

How much can you expect social security to contribute to your retirement income? How much will that number change depending on what age you begin claiming it? If you plan to, say, start a business or take a part time job to keep busy and pad your budget, how will working affect your benefits?

Navigating the paperwork and logistics of social security, Medicare or a pension (if you have one) can be complicated and you don't want to wait until you actually need that income to figure it all out. If you haven't spent much time learning about how it all works yet, here are a few resources to get you started:

• How to estimate your Social Security benefits
• How to maximize your Social Security benefits
• A guide to Medicare basics
• What is Medigap insurance and who needs it?
• How does your retirement strategy change if you will have a pension?
• What happens to your benefits and taxes if you work past retirement age?

These are all great things to discuss with a financial planner as well. But if you're not ready to work with one just yet, take advantage of all the online resources you can right now to familiarize yourself with how it all works.

3. Aim to be debt-free by retirement

If you're still wrestling with debt, the idea of putting anything extra toward retirement might seem impossible. In that situation, think of your debt payments as part of your retirement plan. If you tally up everything you're spending now on your mortgage and other debts, that's the amount you can subtract from your retirement budget – or redirect toward pursuing the hobbies and bucket list adventures you're planning to do in retirement – once you've paid it all off.

Instead of feeling like those debt payments are holding you back, know that paying that debt down is just as important for your post-retirement future as contributing to your 401k is.

4. Prioritize your health now

A healthy retirement is just as important as a fully-funded one. Not only does physical health allow you to do more in retirement, it can also be a financial boost by lowering your future medical costs.

Work with your doctor to come up with a comprehensive and personalized diet and exercise plan so you can establish the right healthy habits now to slow the progression of conditions you might already have and prevent ones you don't.

The changes you make now can have a big impact, even if you weren't keeping up with regular exercise or a healthy diet before.

What to do if you're behind on retirement savings

By 55, the typical American has just $185,000 in retirement accounts, according to the Federal Reserve. That's just over two years worth of the median income of $82,150 at that age. In other words, it's not enough to retire on. If you're in a similar situation and feel like you might never be able to retire, here are a few strategies that can help you catch up.

Max out every retirement account you can

Once you hit 50, the IRS allows you to contribute even more than the standard maximum contributions to your retirement funds. By age 60, you'll enjoy super catch-up contributions to help you reach your goals even faster. All of these give you more wiggle room to catch up on your retirement savings if your fund isn't where you want it to be right now.

Before contributing more beyond the tax-advantaged limits on your 401k and IRA, however, make sure you also contribute to your health savings account (HSA) if you have one. HSA contributions are tax-free when you contribute to the account and tax-free when you withdraw later — provided you use them for medical expenses.

By treating your HSA like an extra retirement account, you can build up a sort of separate healthcare fund so you're not tapping your main retirement savings to pay for the medical expenses that inevitably come up as you age.

Be realistic about how much financial support you can provide others

As the sandwich generation, you love your kids and your parents. If you can afford to help out financially without sacrificing your retirement, that's great. But right now, your top priority needs to be a fully funded retirement, so you may need to set some boundaries.

You can still provide support to your loved ones in other ways. For example, instead of handing your kids cash, consider letting them move back home so they can focus on saving up for their own goals without worrying about rent.

If your parents are struggling to make ends meet, you can help them navigate the paperwork and logistics of setting up the long-term care they need through Medicare or other resources rather than writing the checks yourself.

If you have debt, work on lowering your interest rates

Juggling debt and catch-up retirement savings at the same time can be exhausting and make you feel you're not really making a lot of progress on either goal. To break through that plateau feeling, one of the most accessible tricks that many people overlook is lowering your interest rates.

Every percentage you can shave off that interest rate means more of each monthly payment is paying down the actual principal instead of being eaten up by interest.

Here are a few ways to lower your interest rates:

• Ask for lower rates. Yes, you can simply call up your credit card or loan provider and ask for a lower interest rate. Your chances of a yes are better if you have a good track record of on-time payments. But it doesn't hurt to ask regardless of your payment history.
• Use 0% intro offers on credit cards. 0% introductory rates on new cards or balance transfer offers on your existing cards can be a useful way to build momentum on debt repayment. The key is limiting the amount to what you can pay off before the introductory rate expires — and making sure you don't build up new debt now that the old debt is gone.
• Tap home equity to consolidate higher interest debt. By your 50s, you may have built up a healthy amount of home equity. Often, home equity loans can come with much better interest rates than you'll find elsewhere. So, whether you're battling credit card debt or a high interest auto loan, tapping some of that equity to consolidate that into a lower interest loan can help you pay down debt faster and pay less in interest overall.

These aren't one-off tricks, either. You can repeat these strategies regularly as you chip away at your debt. When your 20% credit card debt is gone, for example, your 10% personal loan becomes the "high interest debt" that you can consolidate into either a better rate loan or a 0% introductory offer credit card.

Use the tool below, powered by Bankrate, to compare today's top home equity offers:

Consider taking a side job

If you don't think you'll get anywhere close to your retirement goal with the amount you're currently able to contribute, it might be worth taking on a flexible second job for the next few years to help you catch up. You can dump those entire paychecks into retirement savings or debt to build some strong momentum toward your financial goals.

This isn't an option for everyone. But if you're able to take on the added stress of a side job for a few years in your 50s, it might be the ticket that unlocks the retirement you've been dreaming about 10 to 15 years from now.

Create retirement back up plans

Depending on where your retirement savings are at right now, it can help to come up with a few different scenarios for what your retirement might look like. For example, maybe you don't have the savings to fully retire at 65, but you have enough to cut back to part time work at that age for a few years to finish funding your retirement.

Maybe you're only slightly behind and can pull it off if you just push your retirement age up to 67 instead of 65 — or maybe you can retire at 65, but only if you downsize your home and throw that extra equity into retirement.

There are a lot of different ways to retire, and no one size fits all. Even if your alternatives don't sound quite as ideal as the retirement you envisioned, having those back-up plans can help you breathe easier. You'll know that no matter what, you've got a plan in place.

Related content

• A 5-Part Financial Checklist for Your 30s
• An Essential Money Checklist For Your 40s
• Sell, Borrow or Stay? How to Use Home Equity in Retirement
• How to Help Your Adult Kids Without Hurting Your Retirement

If you have a travel-focused credit card that offers points on your spending, you can usually redeem them for flights and hotel rooms by visiting the issuer’s booking platform or getting statement credits for travel purchases.

And some cards offer another way to use your points: Transferring them to airline and hotel loyalty programs. The key is knowing conversion ratios, as this can help you maximize the value of the points you're transferring to a participating partner.

Here's a look at the credit card companies that offer points transfer, some of the participating partners they work with and how you can maximize your points value for elevated travel.

Transferring points: What are my options?

American Express allows customers who collect Membership Rewards points with its cards to convert them to 20 loyalty programs, including Delta SkyMiles, Hilton Honors and Marriott Bonvoy.

Those who use the Chase Sapphire Preferred and Chase Sapphire Reserve cards can transfer their Ultimate Rewards points to 14 partners, such as Southwest Rapid Rewards, United MileagePlus and Marriott Bonvoy.

Eligible Citi cardholders can transfer their ThankYou points to about 20 programs, including American Airlines AAdvantage and Choice Privileges.

Capital One’s credit card miles are transferable to more than 15 partners; among them are JetBlue TrueBlue and Wyndham Rewards.

How to maximize your transfer value

Especially for premium airline tickets or luxury hotel stays, you may get the best value out of your rewards by making a transfer and redeeming the miles or points through the airline or hotel loyalty program.

But as you compare the options, factor in the transfer conversion rate. Some transfers take place at a 1:1 ratio, meaning 1,000 credit card points translate to 1,000 points with the loyalty program. In other cases, the ratio may differ. A transfer of 1,000 credit card points may result in 800 airline miles with some programs, for instance.

"Keep in mind that these transfers are irreversible," says Nick Ewen, editor-in-chief at travel website The Points Guy. He advises using transferred points as soon as possible. If you delay, you may miss out on any award bookings you were planning to make. And over time, loyalty programs may devalue their points or miles.

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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For many adult children, one of the hardest conversations to have is with their parents about finances.

• Do Mom and Dad have updated estate documents?
• Who would make financial or health care decisions if one of them became incapacitated?
• Where are the accounts, insurance policies, passwords and key documents?
• Have they thought about whether they want to age in place, downsize or move closer to family?
• Are they vulnerable to scams?
• Is one spouse carrying all the financial knowledge while the other remains largely uninvolved?

These are practical questions. But inside a family, they rarely feel that way.

For parents, the conversation can feel like a threat to independence. For adult children, it can feel like overstepping, prying or implying that a parent is no longer capable.

Add sibling dynamics, second marriages, privacy concerns and years of family history, and it's easy to understand why so many families avoid the conversation altogether.

The problem is that silence doesn't preserve independence. In many cases, it puts it at risk.

When families wait until a health event, cognitive issue, hospitalization, death of a spouse or financial emergency forces the conversation, decisions often must be made quickly, emotionally and with incomplete information.

Adult children might not know where assets are held, whether estate documents exist, who the attorney is, how bills are paid or what their parents wanted.

A better approach is to reframe the conversation entirely. This is not about taking control. It's about helping parents remain in control for as long as possible and making sure their wishes are known, documented and respected.

Start with values, not account balances

One of the biggest mistakes adult children make is starting with the numbers.

"How much money do you have?" or "Where are all your accounts?" might be well-intentioned, but those questions can feel invasive. A more productive entry point is to start with values, preferences and peace of mind.

For example:

• "I don't need to know every financial detail, but I want to make sure I would know how to support you if something happened."
• "If there were ever a medical emergency, I would want to be certain I was helping make decisions in the way you would want."

This shifts the tone from investigation to support. It also makes clear that the goal is not to take over, but to understand the plan.

In my experience, families make more progress when the first conversation is about wishes.

• Where do your parents want to live if their health changes?
• Who do they trust to make medical decisions? Who should be contacted first in an emergency?
• What would comfort, dignity and independence look like to them?

Those answers can open the door to the more technical planning that needs to follow.

Consider a scenario we see more often than families expect. A spouse passes away after decades of careful saving. He was an electrician who built nearly $3 million through discipline and frugality, but managed everything himself.

The surviving spouse discovers accounts scattered across multiple banks, IRAs she can't access, missing passwords and a life insurance policy with no instructions on how to claim it. She doesn't know what her income will be, how to manage the investments or even how to pay the electric bill.

He meant well. But what he intended as good stewardship became an avoidable burden for the person he loved most.

That is what this conversation is really about.

Make the conversation smaller

Another common mistake is trying to solve everything at once.

Aging, estate planning, long-term care, digital access, beneficiary designations, powers of attorney and family roles are too much for one discussion. When adult children try to cover every topic in a single sitting, parents can feel overwhelmed or defensive.

Instead, think of this as a series of smaller conversations.

• "Do you have the right documents in place, and does someone know where they are?"
• "Have you thought about where you would want to live if staying in the house became difficult?"
• "Would you be comfortable introducing me to your adviser, attorney or accountant so I know who to call in an emergency?"

Smaller conversations reduce pressure. They also make the topic feel like part of normal family life rather than a one-time intervention.

Focus on organization before decision-making

Many families don't realize how much stress can be avoided simply by getting organized.

At a minimum, every aging parent should consider creating a central financial life organizer. This doesn't have to include every dollar amount, but it should tell trusted family members where to find essential information if needed.

That might include:

• A list of financial institutions and account types
• Retirement accounts, pensions and Social Security information
• Insurance policies, including life, home auto and long-term care
• The location of wills, trusts, powers of attorney and health care directives
• Names and contact information for the financial adviser, CPA, estate attorney and insurance professionals
• Mortgage, property tax, utility and recurring bill information
• Beneficiary designations and trusted contacts
• Key digital accounts and legacy access instructions

This kind of organization can be especially important when one spouse has historically managed the household finances. The surviving spouse might be fully capable, but if he or she does not know where things are, who to call or how bills are paid, the transition can become unnecessarily stressful.

A financial life organizer isn't just an administrative tool. It's a gift to the people who might one day have to step in.

Be careful with the word 'help'

Adult children often say, "I just want to help." Parents often hear, "You think I can't handle this anymore."

That disconnect can derail an otherwise important conversation. A better approach is to ask permission.

• "Would it be helpful if we sat down together and made sure everything is organized?"
• "Would you be open to walking me through who I should contact if there were ever an emergency?"
• "Would it give you peace of mind if we made sure your documents and beneficiaries still reflect your wishes?"

The difference is subtle but important. Asking permission preserves dignity. It allows parents to remain the decision-makers.

Bring in the right professionals

Some families are comfortable having these conversations on their own. Others benefit from involving a neutral professional.

A financial adviser, estate attorney, elder law attorney, CPA or geriatric care manager can help separate the emotional family dynamics from the technical planning. They can also help identify gaps that family members might not know to look for.

For example, an estate plan might exist, but beneficiary designations on retirement accounts or life insurance policies may be outdated.

A parent could have a power of attorney, but the named agent might no longer be the right person.

A parent might want to age in place, but the home could need modifications, additional support or a plan to fund future care.

The right professional team can help families move from vague concern to specific action.

Don't ignore fraud and exploitation

Another reason these conversations matter is financial safety.

Older adults are frequent targets for scams involving fake government agencies, tech support schemes, romance scams, grandparent scams and urgent requests for money. The most dangerous scams often involve fear, secrecy and pressure to act immediately.

Families can create a simple rule: No major financial decision, wire transfer, unusual payment or urgent request should be acted on without first speaking to a trusted family member or adviser.

That rule can prevent significant financial harm.

Keep the conversation going

The goal is not to have one perfect conversation; it's to normalize the topic.

Plans change. Health changes. Laws change. Family dynamics change. Documents that were appropriate five years ago might no longer reflect a parent's wishes today.

A brief annual family check-in can help keep everyone aligned. It doesn't need to be formal, and it does not require parents to disclose every financial detail. But it should confirm that key documents are current, trusted contacts are still appropriate, family members know who to call, and parents' wishes are understood.

The families that navigate aging and wealth transitions best are not the ones that avoid hard conversations. They're the ones that learn how to have them with respect, patience and love.

Talking to parents about money doesn't have to mean taking away their independence. Done well, it can do the opposite, preserving their voice, protecting their dignity and giving the entire family greater confidence about the road ahead.

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

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• 10 Ways to Talk to Your Aging Parents About Their Finances
• How to Talk About Touchy Subjects With Loved Ones, Before a Crisis Turns 'Ifs' Into Reality
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• How to Talk to Your Family About Estate Planning (Without the Drama)
• 11 Tips for Talking to Your Aging Parents About Their Finances and Future Care

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

Medicare premiums are set to rise again for 2027. The latest Social Security and Medicare Trustees Report (page 207) estimates that Part B premiums will climb 3.5% in 2027, reaching $209.50 per month, up $6.60 from 2026. While another price hike is never good news for retirees, the increase is a relief compared to the almost 10% spike experienced in 2026.

Unlike Part B, Medicare Part D is sold through private insurance companies, either as a standalone drug plan alongside traditional Medicare or as part of a Medicare Advantage policy.

Because individual plan costs vary, the average premium enrollees pay is typically lower than the base beneficiary premium. According to the latest Trustees Report, the Part D base premium is projected to reach $41.33 per month in 2027.

Medicare Part B premiums in 2027

Medicare Part B pays for doctor visits, outpatient care and some home healthcare. When enrolled, you pay both a deductible and a monthly premium. For 2027, the premium is currently projected to rise 3.5% to $209.50, up $6.60 from $202.90 in 2025.

The Part B deductible is projected to reach $292 in 2027, a $9.00 increase from $283.00 in the previous year. On a percentage basis, it's an increase of 3.2%, in line with the estimated increase of the Part B premium.

The projected Part B increase impact on Social Security benefits

The 2027 Social Security COLA is projected to rise 3.8%, after accounting for the June CPI. In terms of dollars, if implemented now, that would translate into an increase of $79.14 per month or $949.68 per year, when using the average Social Security check amount for May 2026 ($2,082.76) as the base amount.

The Social Security Administration (SSA) automatically deducts the Part B premium cost from the Social Security benefits of most Medicare recipients. For 2027, the average Social Security check would fall from $79.14 to $72.54, subtracting the projected Part B increase ($6.60) from the projected COLA raise (79.14). In that scenario, the Part B increase would consume approximately 8.3% of the monthly increase.

Understanding Medicare Part D premiums

Unlike Part B, there isn't a single "standard" Part D premium, as it varies by plan. The Centers for Medicare & Medicaid Services (CMS) establishes a standardized base premium amount used to calculate late enrollment penalties and to determine Part D IRMAA surcharges. For 2027, the base premium is $41.33.

Most final premium and deductible amounts won't be announced until late October or early November; however, most of the Part D amounts have been finalized.

Annual deductible: The standard Part D deductible will increase to $700 in 2027, up from $615 in 2026. That's a steeper increase than in 2026, when the deductible rose to $615 from $590 in 2025, a $25 increase.

Out-of-pocket spending cap: On a positive note for 2027, Medicare Part D's annual out-of-pocket prescription cap will rise to $2,400, up $300 from the $2,100 limit in 2026. Once beneficiaries reach this cap, they no longer pay out-of-pocket costs for covered prescription drugs for the rest of the year.

Premium protections and stabilization: To shield enrollees from steep rate hikes, the premium stabilization provision of the Inflation Reduction Act (IRA) caps annual base beneficiary premium (BBP) growth at 6% yearly through 2029, while limiting how much extra cost plan sponsors can pass along.

While an IRA demonstration program previously stabilized average monthly premiums, CMS scaled back that support in 2026, stating in a memo that reducing federal subsidies is meant to help the Part D program "return to operating under regular market conditions."

Full table

Below you will find the projected deductible, premiums and coinsurance amounts for Part A and Part B. The Part D amounts are final.

*The 2027 Part D base premium, deductible and maximum out-of-pocket limit have been finalized. These numbers are not estimates.

The value of tracking the projected premiums

Medicare open enrollment runs from October 15 to December 7 annually. During this period, you can switch from original Medicare to a Medicare Advantage plan, or vice versa. You can also choose a new Advantage plan or Medicare Part D prescription drug coverage.

To get the most from your plan, it’s important to understand your out-of-pocket costs for premiums, which will vary depending on your plan and income. For instance, you could also owe a monthly surcharge on Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA).

Your IRMAA liability for 2027 will be based on the MAGI shown on your 2025 return. While you can't do anything to change your 2025 tax return, you can look over your finances to see if you are in danger of paying the IRMAA in 2028, which will be based on your yet-to-be-filed 2026 tax return.

Income planning can go a long way in limiting your exposure to the surcharge. For instance, a well-timed Roth conversion can reduce your taxable income and eliminate required minimum distributions (RMDs).

Projections for Medicare Part B 2026 are primarily derived from the annual Medicare Trustees Report. While the final figures are usually announced by CMS in November of the preceding year (so, November 2026 for 2027 premiums), the Trustees Report provides strong estimates. The Part D base premium, deductible and out-of-pocket maximum for 2027 have been finalized and are reflected in our tables.

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Whenever I meet with new investors, one of their first questions is, "What are your fees?"

While this might seem like a natural question, it's often misguided and asked too early in the process. Before you ask about an adviser's fees, you should first want to know what services they can provide.

When I was in college, I ran a house-painting franchise. Every spring, homeowners would collect bids and try to decide who to hire. This is when I discovered that a price is comparable only after you define the job.

One painting crew might scrape, sand, prime, caulk, protect landscaping and do two coats, with a written warranty. Another might spray on a quick coat and disappear.

If all customers did was compare two quotes that were only a couple of hundred dollars apart, they weren't comparing value; they were merely comparing the costs of vastly differing services.

Choosing an investment professional works the same way. As one SEC article notes, "Just as a grocery store offers more products than a convenience store, some investment professionals offer a wide range of products or services, while others offer a more limited selection."

The key is to work with one that fits you well and can deliver advice specific to your needs and wants.

So instead of leading with a question about fees, here's the sequence that makes fees meaningful and helps you avoid paying for the wrong thing.

1. Name the job

One of the biggest mistakes people make when seeking financial advice is failing to clearly define what they need.

When I ask someone what they want from an adviser, the answer is often something vague like "to do better," "to get the highest rate of return" or "to make sure I'm on track for retirement." Those are ambiguous goals, not a clear job description.

Before you compare advisers, decide what problem you want solved. Do you need:

• A one-time second opinion?
• A written, comprehensive and holistic financial plan that connects retirement income, taxes and investments?
• Ongoing portfolio management?
• A "quarterback" relationship where one adviser helps coordinate investing, tax strategy and estate planning?

2. Understand what the adviser does for you

If you walk into a meeting and ask an adviser, "What are your fees?" and they say, "1%," what exactly does that number mean? What will you compare it to? Another adviser might also say 1%, but the two of them could provide completely different services.

One might be building a comprehensive, written retirement plan, coordinating tax strategies, helping with estate considerations and managing your investments. Another might simply be recommending funds from a menu their company provides.

The price might be identical, but the work behind it could be completely different. The depth and breadth of each adviser's capabilities would, in many cases, yield vastly disparate results.

If you only compare the cost, you may think you are comparing identical services when you are not. That is why the better question early in the conversation is not, "What do you charge?" but, "What exactly do you do for clients like me?"

Once you understand the services, the process and the expertise being offered, the fee discussion finally has context. And that is when you can decide whether the price is fair for the value being provided.

3. Determine adviser licensing, designations and background

Knowing what licensing and certifications your prospective adviser carries is critical to differentiating between professionals you may wish to engage. A narrow range of licensing may indicate both limited experience and limited access to industry products, services or strategies.

Also, certifications, such as the CERTIFIED FINANCIAL PLANNER® designation, may indicate the extent of training, depth and professional standards your practitioner brings to the table.

This can come into play when you notice an adviser does not use or recommend (or even denounces) certain financial instruments, which they are also conveniently not licensed to recommend or provide.

Unless you are aware of their licensing and certification, or even company affiliation, you may not be able to determine whether the advice you are seeking may have significant limitations.

The SEC's Investor Bulletin on using Investor.gov's Investment Professional Search tool suggests always researching an investment professional, including confirming registration and checking for disciplinary events, before deciding to work with them.

If your professional is licensed in the brokerage business, you can also use FINRA BrokerCheck. It's a free tool to research the professional backgrounds of investment professionals and firms.

You're not hunting for "gotchas." You're looking for patterns — repeat customer complaints, repeated job-hopping or disclosures that don't match the story you're being told. If you find something you are curious about, make sure you ask the adviser about it.

Ask for the documents that put fees and any conflicts of interest in writing. If an adviser is truly transparent, they'll gladly show you the paperwork that regulators care about.

If you'd like a ready-made interview script, the SEC's "Questions to Ask when Hiring an Investment Professional" bulletin includes practical questions that turn fuzzy conversations into measurable answers.

4. Now talk fees

Only after you've defined the scope and read the disclosures does "What are your fees?" become a useful question.

Since fees that look small can still have a major impact over time, ask what you will pay in year one and what you'll pay in a typical ongoing year.

Then ask what you can expect for those dollars, such as meeting cadence, written deliverables, tax coordination, rebalancing discipline and how recommendations will be documented.

Making better decisions

The real goal isn't simply to find the lowest fee. It's to find the right experience, the right process and the right fit for the problem you're trying to solve.

Once you know the job, understand the services and confirm the credentials, the conversation about price finally becomes meaningful.

When you follow this order, you don't just get clearer answers about fees. You make better decisions about the advice itself, and that's what ultimately protects your money and gives you clarity about your financial future.

Ezra Byer contributed to this article.

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

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

Crude oil prices sank and interest rates were lower Monday on renewed hope for peace in the Middle East. But semiconductor stocks sold off as markets continue to wonder when escalating hyperscaler capex budgets will generate returns on investment.

The front-month West Texas Intermediate crude oil futures contract was down 8.1% to $82.04 per barrel. The 2-year Treasury yield declined by nine basis points to 4.322%.

Both are still much higher than they were before the war between the U.S. and Iran started on February 28. But the immediate reaction to the suspension of attacks in the U.S.-Iran war "implies further equity upside when the conflict is fully over," according to Louis Navellier of Navellier & Associates.

"The Fed decision on making a change in the fed funds rate will be the big event of the week," Navellier observes about the economic calendar.

The July Fed meeting starts tomorrow and ends Wednesday. Price action in the fed funds futures market shows a 64% probability the central bank keeps its primary benchmark where it is this week. But, according to CME FedWatch, odds of a rate hike in September are now up to 55.5%.

Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.

It's also a big week for the earnings calendar, as Navellier notes: "By the end of the week, more than a third of S&P companies will have reported."

At the closing bell, the Dow Jones Industrial Average was up 0.5% to 52,209, and the broad-based S&P 500 had inched up 0.02% to 7,413 But the tech-heavy Nasdaq Composite was down 0.2% to 24,932.

AAPL > NVDA

Nvidia (NVDA, -5.0%) was the worst-performing Dow Jones stock during a rough session for chipmakers. The iShares Semiconductor ETF (SOXX, -2.1%) reflected broadening concern about the sustainability of the AI revolution as its leader makes new and bigger deals.

Bloomberg reported that Nvidia is discussing one deal worth as much as $250 billion to help its customer OpenAI lease computing power from a U.S. data center and another to finance $350 billion of OpenAI's chip purchases for the project.

On Friday, Nvidia announced a $500 billion deal with South Korea-based chipmaker SK Hynix (SKHY, -7.5%) that illustrates what skeptics describe as "circular" AI deals supporting the infrastructure build-out.

Apple (AAPL, +1.2%), meanwhile, overtook NVDA to become the biggest company in the world in terms of market cap. The iPhone maker will carry a year-to-date return of about 23% into its fiscal third-quarter earnings announcement after the closing bell on Thursday.

Meanwhile, amid rising anxiety about their capex plans, Meta Platforms (META, -0.2%) and Microsoft (MSFT, +1.9%) will report after the closing bell on Wednesday. Amazon (AMZN, -0.3%) joins AAPL in the spotlight on Thursday.

As Navellier writes, these four Magnificent 7 stocks account for 17% of the weight of the S&P 500 "and will be very telling of the continued confidence in the AI theme." Nvidia will report fiscal 2027 second-quarter earnings on Wednesday, August 26.

QBTS + T

D-Wave Quantum (QBTS, +8.9%) is one of the best ways to invest in quantum computing right now because it's making deals with classic blue-chip companies such as AT&T (T, +1.2%).

On Monday, D-Wave Quantum announced the expansion of a partnership teased in January when AT&T executives appeared at the Qubits 2026 conference. The telecommunications giant will now use D-Wave's tech across its network operations, most notably outage detection and traffic management.

"AT&T's initial focus is on layering D-Wave's annealing quantum computing technology into the tools that are already powering AT&T's agentic AI solutions," D-Wave said in its press release.

Mizuho Securities analyst Vijay Rakesh reiterated his Outperform (Buy) rating and raised his 12-month target price for QBTS from $29 to $35 following management's first "analyst day" event in June, citing its leadership in annealing QC.

Rakesh says D-Wave's updated financial model shows long-term gross margins for quantum computing as a service (QCaaS) at 65% to 75%, professional services at 40% to 50% and computing systems at 75% to 90%.

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The July Fed meeting kicked off on Tuesday, July 28, and concluded today, July 29, with the central bank's latest policy decision.

Oil prices have been volatile recently amid on-again, off-again fighting between the U.S. and Iran. But while crude futures were lower to start Fed week, they're up more than 20% for July, which is likely to keep headline inflation readings hot in the near term.

Still, Federal Reserve Chair Kevin Warsh and the rest of the Federal Open Market Committee (FOMC) voted to interest rates steady this time around, though a few committee members voted to raise rates.

The Kiplinger team is reporting live on the July Fed meeting, bringing you the news and expert analysis of what it could mean for the economy and your money. Scroll for the latest updates.

How Does the Federal Reserve Work? | How the New Fed Chair Could Impact What You Pay in Taxes this Year | Navigating the New Fed: 5 Conflicts Kevin Warsh Has to Tackle Now

The stock market trades mixed to start Fed week

Stocks are mixed at midday Monday as market participants weigh falling oil prices and a continued sell-off in semiconductor stocks.

At last check, the blue-chip Dow Jones Industrial Average was up 0.3% at 52,099, boosted by strength in mega caps Microsoft (MSFT) and Alphabet (GOOGL).

But the broader S&P 500 is down 0.04% at 7,408 and the tech-heavy Nasdaq Composite is off 0.2% at 24,924, with heavy losses for Micron Technology (MU) and SanDisk (SNDK) dragging on the indexes.

Over in the bond market, the yield on the 2-year Treasury yield is off 1.5 basis points at 4.316% and the 10-year Treasury yield is 3.2 basis points lower at 4.647%, though both remain near their highest points since early 2025.

- Karee Venema

Fed meeting schedule for 2026

The next Fed meeting, which runs from July 28 through July 29, marks the fifth gathering of 2026.

"The committee meets eight times a year, or about once every six weeks," writes Kiplinger contributor Dan Burrows in his feature, "When Is the Next Fed Meeting?".

The Federal Open Market Committee "is required to meet at least four times a year and may convene additional meetings if necessary," Burrows adds, noting that "the convention of meeting eight times per year dates back to the market stresses of 1981."

Fed meetings last two days and wrap up with the release of a policy decision at 2 pm Eastern Standard Time. This is typically followed by the Fed chair's press conference at 2:30 pm, though this could change under Warsh's leadership.

Here is the full remaining Fed meeting schedule for 2026:

• July 28 to 29
• September 15 to 16
• October 27 to 28
• December 8 to 9

- Karee Venema

Oil prices are lower Monday as U.S. and Iran pause fighting

Oil prices are starting Fed week on a negative note, with front-month West Texas Intermediate crude futures down 6.5% at $83.50 per barrel.

This comes after a Reuters report indicated that Iran has agreed to pause strikes in the region as long as Washington agrees to do the same.

But "the situation remains far from resolved," says Daniela Hathorn, senior market analyst at Capital.com. "Shipping risks through the Strait of Hormuz and continued disruption in the Red Sea mean energy markets remain vulnerable to fresh headlines, and any setback in negotiations could quickly send crude prices higher once again."

- Karee Venema

Who is Kevin Warsh?

The July Fed meeting will mark Kevin Warsh's second as head of the Federal Reserve. But who is Kevin Warsh?

Warsh previously served on the Federal Reserve Board from February 2006 through March 2011. He was Fed Chair Ben Bernanke's right-hand man during the 2008-09 global financial crisis and was his primary liaison to Wall Street, which earned him credibility he still retains.

Before his time at the Federal Reserve, Warsh was special assistant to the president for economic policy and executive secretary of the White House National Economic Council from 2002 through 2006, during the George W. Bush administration. From 1995 to 2002, Warsh worked for Morgan Stanley.

Leading up to his May 2026 confirmation as Fed chair, Warsh was a visiting fellow in economics at Stanford University's Hoover Institution, a lecturer at the Stanford Graduate School of Business and a member of the Panel of Economic Advisers of the Congressional Budget Office.

He is widely viewed as a "hawk" on monetary policy who generally favors higher interest rates rather than the risk of inflation.

At the same time, Warsh, who was said to be a candidate for Treasury secretary before Trump picked Scott Bessent, was on the short list because he has a great relationship with the president.

Warsh said in mid-2025 that "the independent operations in the conduct of monetary policy is essential," adding "that doesn't mean the Fed is independent in everything else it does."

Though he consistently took the hawkish line on inflation during his time inside the central bank, Warsh has more recently advocated for lower interest rates.

Read more: The New Fed Chair Was Announced: What You Need to Know

- David Dittman

The July Fed meeting is a "live" one

With inflation risks elevated amid geopolitical uncertainty in the Middle East, Wall Street isn't sure what the Federal Reserve will do with interest rates this time around.

The odds of a rate hike have been climbing recently. According to CME Group FedWatch, futures traders are now pricing in a 36% chance of a quarter-percentage-point increase to the federal funds rate on Wednesday — up from 16% one week ago.

And given Chair Warsh's "clear hawkish bias," this makes the July Fed meeting a "live" one, says Kyle Rodda, senior financial market analyst at Capital.com.

In addition to the "will they or won't they" narrative on interest rates, markets are also contending with the additional "challenge of working out the potential path forward for policy from here, given [Warsh's] antipathy towards forward guidance," Rodda adds.

- Karee Venema

Who gets to vote at the July Fed meeting?

The Federal Open Market Committee (FOMC) has 12 total members, eight permanent and four who rotate each year.

The eight permanent voting committee members include the Fed chair and vice chair, the five Fed governors and the president of the New York Fed.

Four regional Fed presidents are rotated in each calendar year.

The 2026 FOMC voting committee consists of:

• Fed Chair Kevin Warsh
• Vice Chair Philip Jefferson
• Fed Governor Michael Barr
• Fed Governor Michelle Bowman
• Fed Governor Lisa Cook
• Fed Governor Jerome Powell
• Fed Governor Christopher Waller
• New York Fed President John Williams
• Cleveland Fed President Beth Hammack
• Minneapolis Fed President Neel Kashkari
• Dallas Fed President Lorie Logan
• Philadelphia Fed President Anna Paulson

In 2027, the presidents from Chicago, Richmond, Atlanta and San Francisco will rotate in as FOMC voting members, according to the Federal Reserve.

- Karee Venema

How higher inflation — and interest rates — will impact Big Tech

Oil prices and their impact on inflation are just one uncertainty keeping Wall Street wondering what the Fed will do with interest rates. But there are others, says Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company, including President Donald Trump's recently announced tariffs, which will impose 10% to 25% levies on a variety of goods from major trading partners.

And this has major implications for Big Tech, which is ramping up capital expenditures to support artificial intelligence (AI) initiatives. Until recently, many of the biggest companies have been financing this spending boom through free cash flow, meaning higher interest rates weren't really an issue.

But now, says Schutte, several of these free-cash-flow-positive firms have tapped capital markets — both debt and equity — to fund their spending. He points to Alphabet (GOOGL), which said last week that it has increased its full-year capex budget to $205 billion at the high end and posted its first-ever quarter of negative free cash flow. It also announced an $80 billion stock sale in June to raise cash.

"We believe this marks an important shift," explains Schutte. "These companies, and the AI build-out more broadly, now increasingly rely on external capital to fund ever-growing investments, making them more economically sensitive as higher interest rates increase the cost of capital. The rising expense also raises questions about whether companies deploying AI will realize benefits quickly enough to justify continued spending."

Schutte does not expect the Federal Reserve to raise rates this week. He wonders, though, if the central bank will move to lift the federal funds rate sooner rather than later to ensure that higher inflation, which has been running above target for several years now and is unlikely to recede soon given mounting price pressures, does not become embedded in the economy. And this could have a major impact on Big Tech.

- Karee Venema

How well do you know the Fed?

Fed meetings have become key events as central bank officials try to balance high inflation and labor market hiccups against the White House's desire for lower interest rates.

But how well do you know the Fed?

With the next Fed meeting on deck, we decided to test your basic knowledge of the Federal Reserve with a quick quiz.

Master Your Fed Knowledge: Take Our Quick Federal Reserve Quiz

There's a range of possible outcomes for the July Fed meeting, says Johnson Investment Counsel's chief economist

The July Fed meeting could have several potential outcomes, says Brandon Zureick, chief economist and senior managing director at Johnson Investment Counsel.

The central bank made clear following its June meeting that it remains focused on price stability. And while the June Consumer Price Index (CPI) report was much softer than expected, Zureick notes, "geopolitical tensions have flared once again, reviving concerns that higher energy prices could renew upward inflation pressure."

But the FOMC will not see any July inflation data before this week's meeting, so the chief economist expects the Fed to keep interest rates at their current range of 3.5% to 3.75%. "However, policymakers are also likely to emphasize that they remain prepared to raise rates if subsequent inflation reports surprise meaningfully to the upside," he adds.

And with no Summary of Economic Projections released this time around, meaning market participants will not see any new economic forecasts or interest-rate projections from committee members, Wall Street will watch Chair Warsh's post-meeting press conference "closely for any clues about the Fed’s desired path for monetary policy," says Zureick.

- Karee Venema

Dow, S&P 500 close higher as oil prices decline

Stocks closed mixed Monday as market participants weighed falling oil prices against an extended sell-off in chipmakers.

The front-month West Texas Intermediate crude oil futures contract was down 8.1% to $82.04 per barrel. The 2-year Treasury yield declined by nine basis points to 4.322%.

Both are still much higher than they were before the war between the U.S. and Iran started on February 28. But the immediate reaction to the suspension of attacks in the U.S.-Iran war "implies further equity upside when the conflict is fully over," according to Louis Navellier of Navellier & Associates.

At the closing bell, the Dow Jones Industrial Average was up 0.5% to 52,209, and the broad-based S&P 500 had inched up 0.02% to 7,413 But the tech-heavy Nasdaq Composite was down 0.2% to 24,932.

Read more: Markets Weigh Peace Hope Against AI Fear: Stock Market Today

Markets remain mixed ahead of the July Fed meeting

Crude oil prices are trending lower and interest rates are also easing back, but equity futures indicate a mixed stock market about an hour before Tuesday's opening bell.

The S&P 500 and the Dow Jones Industrial Average are poised to open higher, though the tech-heavy Nasdaq Composite continues to be weighed down by concerns about returns on AI investments.

Still, like most investors, traders and speculators, Fed Chair Kevin Warsh will welcome another lull in the war in the Middle East and will hope it evolves into sustainable peace between the U.S. and Iran.

Indeed, rising energy prices because of the bottleneck at the Strait of Hormuz are the primary reason price action in the fed funds futures market suggests the Fed's next move will be to raise interest rates.

It probably won't happen at the July Fed meeting, which starts today and ends tomorrow. But multiple voting members of the Federal Open Market Committee (FOMC) have expressed fear of inflation accelerating again.

That makes this meeting a "live" one, meaning Warsh & Co. could raise rates. And CME FedWatch says the central bank will raise the fed funds futures rate as soon as September.

– David Dittman

Citadel strategist says the Fed hikes this week

"The market may once again be underestimating the extent of the hawkish shift at the Fed," writes Frank Flight, head of macro strategy at Citadel Securities, in a note previewing this week's FOMC meeting.

Indeed, Flight says the Fed will raise the target range for the federal funds rate by 25 basis points on Wednesday, a move that "would emphatically end the forward guidance era."

The strategist refers to new Fed Chair Kevin Warsh's campaign to rein in central bankers' talk about the future.

Raising interest rates would also strike a blow for Fed independence, Flight notes, and underscore Warsh's commitment to "price stability."

– David Dittman

Trump says Fed Chair Warsh is "fantastic"

President Donald Trump has carved out a safe space for Fed Chair Kevin Warsh, even as markets price in higher interest rates.

"Kevin's fantastic, but he's got a board, and the board members are very political, I would say," Trump said to reporters on Monday. "He wants to do the right thing. I know what he wants to do."

Warsh wants "price stability," though it's fair to say Trump put him at the Fed to the federal funds rate.

Indeed, on Monday the president repeated his claim that the U.S. should have the lowest interest rates in the world.

"You need the consent of some people that have perhaps bad intentions. Rates should be lowered. This country could be at 8%, 9%, 10%, 12% GDP. That’s what it should be," he said.

"We should have the lowest interest rate in the world, like it used to be 30 years ago," he added.

The main equity indexes remain mixed, with the Dow Jones Industrial Average and the S&P 500 in positive territory, but the Nasdaq Composite still suffering the burden of heavy AI expectations.

Crude oil prices are down, and Treasury yields are lower across the maturity spectrum.

– David Dittman

Are you ready for "higher for longer" long-term rates?

"Interest rates have steadily risen since the start of the Iran War," Moody's Analytics Chief Economist Marc Zandi writes in a preview of the July Fed meeting, "and are an increasingly heavy burden on the economy."

The 10-year Treasury yield was at 3.960% on February 27, the day before the war in the Middle East started, and closed at 4.641% on Monday. The 30-year fixed-rate mortgage, as Zandi notes, has risen from below 6% to above 6.8%.

"Somewhat surprisingly, the runup in rates is not because of higher inflation expectations," Zandi observes. "They’re unchanged."

Indeed, the market believes Fed Chair Kevin Warsh when he says he's committed to "price stability," and that the central bank will "press on the brakes" and raise interest rates to stem inflation. Hence the rise in the 2-year Treasury yield.

"Arguably more surprising is that the other half of the increase in T-yields is an increase in the term premium," the economist says.

The "term premium" is extra yield on a longer-term bond because there's more risk vs a shorter-term bond or other alternative. It's not a good thing that it's "suddenly about as wide as it has been since the wake of the Global Financial Crisis."

And Zandi is concerned about the new Fed chair's communications policy. "It can’t help that the new Fed chair believes the Fed should be less transparent in setting monetary policy. This means greater uncertainty and, thus, volatility in rates," Zandi explains.

"Then there is the Iran War, which is increasingly costly to the Treasury," Zandi adds. "The nation's dark fiscal outlook is getting darker."

Higher prices for crude oil and other commodities have left a notable economic impact. "But the damage from the conflict’s fallout on monetary policy and long-term interest rates is mounting quickly," the economist concludes.

"Higher-for-longer interest rates will be increasingly tough for the economy to bear."

– David Dittman

What Warsh (and Bessent (and Trump?)) really want

The solution to the basic problem Moody's Analytics Chief Economist Marc Zandi describes–higher-for-longer long-term term rates–could be an increase to the federal funds rate.

That's how Wells Fargo Securities Chief Economist Tom Porcelli sees it.

"By raising rates, Warsh (and by extension Bessent) will get what they ultimately want: back-end rates to move lower. The thinking goes that by hiking, Warsh will firm up his inflation fighting cred and squeeze out the inflation premium built into the back end of the rates market."

Zandi emphasized the "term" part in his note. But the operative part is the premium. If it comes down, things like 30-year mortgage rates could move lower.

That's what recent history suggests, as Bloomberg's Robert Burgess observes: "The recently deceased Fed Chairman Alan Greenspan found that out back in 2024, when the central bank started raising its target for the federal funds rate from 1% to 4.25% by early 2006 only to see longer-term bond yields fall."

Amid "Greenspan's conundrum," 30-year mortgage rates fell from 6.34% to 5.47%.

– David Dittman

Crude oil sell-off reaccelerates

Prices for the front-month West Texas Intermediate (WTI) and Brent crude oil futures contracts spiked lower late Tuesday morning amid more fresh hopes for peace in the Middle East.

WTI was down 0.7% at the opening bell, Brent 0.4%. A sell-off that started on Monday with President Donald Trump saying there's a chance the U.S. and Iran could make a deal to end the war in the Middle East accelerated shortly after 11 am Eastern Standard Time.

WTI, the domestic benchmark, plunged to $77.80 per barrel, down 5.8% from its Monday closing price. Brent, the global crude benchmark, slid 6.6%.

Interest rates are also falling, with the 2-year Treasury yield down to 4.266% vs 4.323% on Monday, the 10-year down to 4.59% from 4.641%, and the 30-year at 5.092% vs 5.125%.

The Nasdaq Composite rallied to join the S&P 500 and the Dow Jones Industrial Average in the green for the day.

Semiconductor stocks are still struggling, though Nvidia (NVDA) was among 27 of 30 Dow Jones stocks in positive territory.

– David Dittman

Rate hike odds recede

CME FedWatch showed a 68.5% probability the target range for the federal funds rate will still be 3.50% to 3.75% when the July Fed meeting wraps up on Wednesday. That's up from 63.7% at the closing bell on Monday.

At the same time, price action in the fed funds futures market shows the odds of a 25 basis-point rate hike in September have ticked back to 55.6% from 55.7%.

The front-month West Texas Intermediate crude oil futures contract is down more than 4%, and the 2-year Treasury yield is lower by five basis points.

The Dow Jones Industrial Average is up more than 1% heading into the final hour of trading for the first day of the July Fed meeting. The S&P 500 is in positive territory, too.

The tech-heavy Nasdaq Composite is struggling to stay above the breakeven line. But investors, traders and speculators seem encouraged again by prospects for peace in the Middle East.

– David Dittman

Trump v Fed governors

Whether threats against the Fed's independence create upward pressure on interest rates seems a moot point when the executive branch is using tariffs and wars of choice as its principal tools of foreign policy.

Both the 2-year and the 30-year Treasury yields have hit new 52-week highs in recent weeks, pushed up by the energy shock emanating from the Strait of Hormuz, mostly, but also due to the lingering impact of Trump's tariffs.

Still, when President Donald Trump says things like, "Kevin’s fantastic, but he’s got a board, and the board members are very political," and refers to those board members as "some people that have perhaps bad intentions," Fed watchers are going to pay close attention.

There is, after all, an active case on the federal docket about whether President Trump can fire Fed Governor Lisa Cook.

Indeed, among the multiple conflicts Fed Chair Kevin Warsh must navigate is a potential attempt to remove Fed Governor Michael Barr.

– David Dittman

Chip stocks are still a drag on the Nasdaq

Stocks were choppy early on Tuesday, but falling oil prices and a round of well-received corporate earnings helped the Dow Jones Industrial Average and S&P 500 climb higher into the close.

Front-month West Texas Intermediate crude futures fell 4% to settle at $79.26 per barrel.

The Nasdaq Composite, however, couldn't sidestep an extended slump in chip stocks.

Read more: Dow Soars 537 Points on Strong Blue-Chip Earnings: Stock Market Today

The most important day for stocks?

Today may be the most important day for stocks in recent memory, says Rick Gardner, chief investment officer of RGA Investments. One thing Wall Street does not like is uncertainty, so today's update from Fed Chair Warsh on interest rates and inflation amid volatile oil prices will be welcome.

Gardner does not expect a rate hike this time around given that "bond yields have already risen to the upper end of their trading range, and have essentially acted as a rate hike without the Federal Reserve making any adjustments."

In addition to the Fed meeting, market participants will also see quarterly results from mega-cap companies Meta Platforms (META) and Microsoft (MSFT) after tonight's close.

These earnings reports, as well as those from Amazon (AMZN) and Apple (AAPL), which are due out after Thursday's close, "may help shed light on whether or not we are finally seeing a return on investment for the massive amounts of AI spending taking place," explains Gardner.

- Karee Venema

Stocks trade lower on Fed Day as oil prices spike

Stocks are in negative territory early Wednesday as oil prices jump. At last check, the blue-chip Dow Jones Industrial Average was down 1.2% at 52,105, the broader S&P 500 was off 0.4% at 7,400, and the tech-heavy Nasdaq Composite was 0.4% lower at 24,769.

After falling in recent sessions, front-month West Texas Intermediate crude futures have spiked 7.1% to $84.88 per barrel as Iran initiated "surprise attacks" against U.S. forces in the Middle East, according to a U.S. Central Command social media post.

Semiconductor stocks are also creating headwinds, with the iShares Semiconductor ETF (SOXX) down 1.8%.

- Karee Venema

What time will the Fed statement be released and what changes are expected?

The Federal Open Market Committee will release its updated policy statement at 2 pm Eastern Standard Time today, July 29.

"Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East," the FOMC stated in its scaled-back June statement. "Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little."

The committee reiterated its goal to deliver price stability as inflation remains above its 2% goal.

This time around, "the policy statement will likely lay out another mixed picture of inflation's drivers," says Bill Adams, chief U.S. economist at Fifth Third Commercial Bank. "On the one hand, good news from relatively tame house prices and rent increases, and from the dissipating impact of 2025's tariff hikes. On the other, bad news from rebounding energy prices as disruptions to Mideast and Russian exports resurface; new tariffs; AI-related pressure on electronics prices; and labor supply bottlenecks pushing up prices of services like home health care and nursing care."

Adams feels that if the FOMC or Fed Chair Warsh gives "even an inkling of guidance," it will be for a data-dependent approach to the September policy decision.

- Karee Venema

Why boring is an attractive option for investors right now

Brian Rehling, co-head of Global Fixed Income and Digital Asset Strategy at Wells Fargo Investment Institute (WFII), doesn't expect the Federal Reserve to raise rates at all this year.

But he does believe that if inflation remains above the Fed's 2% target, the central bank will keep the federal funds rate higher for longer. This makes the next few inflation reports critical ones for Wall Street.

In this environment, Rehling says that short-term fixed income is an attractive option for investors because it allows for attractive yields without interest-rate risk.

"Short-term Treasuries, certificates of deposit (CDs), and money-market funds may not be flashy, but they can do a lot of work in a portfolio when the Fed is focused on inflation and rates are likely to stay elevated," he explains. "Sometimes the boring part of the portfolio earns its keep."

- Karee Venema

Kevin Warsh's dilemma

All eyes are on the Federal Reserve today, and whether it will raise interest rates, or signal an intention to raise them later this year, to combat inflation that remains persistently above the Fed's own 2% target.

Unfortunately for Kevin Warsh, the central bank's new chair, much of the inflationary pressure hitting the U.S. economy comes from a source he can't do much about: High oil prices. The conflict in the Middle East has limited oil exports from the Persian Gulf and pushed U.S. retail gas prices up by about $1 per gallon since late winter.

As the fighting continues with no immediate resolution in sight, Warsh has got to be feeling like he's caught between a rock and a hard place. Raising interest rates won't ease the oil crunch, but it's the main tool the Fed has for slowing the economy to cool off inflation. So which will be the less-bad option in his view? We'll find out soon.

- Jim Patterson

What time does Kevin Warsh speak today?

Fed Chair Warsh will host a press conference at 2:30 pm Eastern Standard Time today, July 29.

"With little forward guidance to lean on, the statement language and Warsh's press conference will carry outsized weight," explain Jason Pride, chief of Investment Strategy & Research and Michael Reynolds, vice president of Investment Strategy at Glenmede. "Markets will be parsing both for any signal on how the Committee is weighing the balance between still-firm inflation and an economy that continues to hold up, offering the clearest read yet on its evolving reaction function."

The two don't expect a rate hike this afternoon as the central bank waits to see if the energy shock dissipates. "For markets, the greater near-term uncertainty is less about this meeting's outcome and more about learning how a Warsh-led Fed will communicate and react going forward," they conclude.

- Karee Venema

Stocks trade lower ahead of the Fed, bond yields rise

Blue chip stocks outperformed on Tuesday, but they're selling off on Fed Day. The Dow Jones Industrial Average was last seen down 1.4% at 52,033 as high-priced component Caterpillar (CAT) sinks 6% on a downgrade to Hold from Buy at Baird.

The S&P 500 is off 0.5% at 7,389 and the Nasdaq Composite is 0.5% lower at 24,759.

Over in the bond market, the 2-year Treasury yield is up 5.3 basis points at 4.33%. Yields on the 10-year Treasury note (+4.3 basis points at 4.647%) and 30-year note (+2.4 basis points at 5.121%) are higher, as well.

- Karee Venema

The Fed keeps rates unchanged in split decision

The Fed just announced that it is keeping its benchmark interest rate unchanged, in a range of 3.5-3.75%. In a terse statement, it noted that the economy is "expanding at a solid pace," but also acknowledged that inflation remains above its target of 2%, due in part to the situation in the Middle East causing energy prices to rise. "The Committee will deliver price stability," it declared, but with no details on how.

Worth noting, three voting members of the FOMC — Beth M. Hammack, Neel Kashkari and Lorie K. Logan — dissented from the no-change policy and voted to raise the Fed's rate by a quarter of a percentage point. Such dissensions have not been typical in recent years, raising questions about how long the Fed can maintain rates at their present level.

- Jim Patterson

Where can I watch Fed Chair Warsh's press conference?

Fed Chair Kevin Warsh's press conference will begin at 2:30 pm Eastern Standard Time this afternoon.

The presser can be viewed on the Federal Reserve's website or on the Fed's YouTube channel.

Who voted to raise rates?

The July Fed meeting decision was a split one, with three committee members voting to raise rates by a quarter-percentage point.

Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan are considered to be the super hawks on the FOMC, while Minneapolis Fed President Neel Kashkari is hawkish, but less so than the other two.

There are two other moderate hawks on the committee — Fed Governor Michael Barr and Fed Governor Christopher Waller — who voted in favor of holding rates steady.

The seven remaining members are considered to be either dovish or middle-of-the-road.

- David Payne

September rate hike odds spike

Following today's split decision from the Federal Open Market Committee, futures traders are now pricing in a 72% chance the Fed will raise rates by a quarter-percentage point in September.

This is up from around 55% ahead of this afternoon's announcement and 30% odds one month ago, according to CME Group FedWatch.

- Karee Venema

The Fed has one inflation target, says Warsh

At the beginning of his prepared remarks, Chair Warsh acknowledged that inflation has been above the Fed's target level for five years now, and that that sustained period of inflation has taken a toll on consumers and businesses.

He was adamant that on his watch, the Fed is totally committed to returning inflation to its 2% target, and that there is no "soft" target higher than 2% that he and his colleagues would accept as good enough.

- Jim Patterson

Markets have done plenty to tighten financial conditions

In his prepared remarks, Warsh emphasized that he does not want the Fed to drop hints about what it might do with interest rates in the future.

He has already announced that the Fed won't be using such "forward guidance" as a policymaking tool. He wants the markets to "play the ball, not the referee," to use a sports metaphor, meaning that he wants the financial markets to determine things like the yields on Treasury bonds without trying to guess what the Fed will do with its benchmark short-term interest rate.

Yields on Treasuries have in fact risen since his first FOMC meeting, Warsh noted. "The markets have done quite a bit" to tighten financial conditions without the Fed acting.

- Jim Patterson

How close was today's FOMC vote?

"This is a period of watchful thinking, not watchful waiting," Warsh said, when asked how close the vote to keep the Fed's rate steady really was among his colleagues.

Some voting members of the FOMC were more or less firm about whether to keep rates steady as they try to determine where inflation is going, he said. The implication was that, while most of the FOMC members voted to not raise rates at this meeting, it was not a decision made on autopilot.

And given how emphatic he has been about assuring that the Fed will get inflation down to its 2% target, that certainly opens the door to interest rate hikes at coming Fed meetings.

- Jim Patterson

What will Warsh talk about at Jackson Hole? He's not sure yet.

Asked how he sees the speech he will give at the Fed's annual retreat in Jackson Hole, Wyoming, in August, Warsh joked that it looked like a blank piece of paper to him right now. In other words, while he noted that the annual Jackson Hole speech by the Fed chair is typically treated as an opportunity to set the stage for changes to monetary policy, he said he has not yet made any specific decisions about what he will be signaling next month.

Meanwhile, financial markets are showing strong odds of a Fed rate hike at its September meeting. So even if he doesn't know yet what he's going to say in August, Warsh will probably know exactly what markets and investors will be wondering about when he addresses them in Jackson Hole.

- Jim Patterson

The Fed should not hint at its plans outside of extreme circumstances, says Warsh

While he does not want the Fed to telegraph its policy moves in advance, and wants to let financial markets trade without trying to guess what it will do, he also says that the central bank does not want to surprise markets. And during times of severe turmoil, such as the 2008 financial crisis, he said the Fed should give markets ample guidance about what it is likely to do.

But outside of those extreme circumstances, he wants the Fed to pull back, let markets operate, and not put his thumb on the scale by giving hints about future rate changes. It remains to be seen how markets react to being told to operate without any hints on what the Fed is planning to do.

- Jim Patterson

Can the Fed chair avoid raising rates? Time will tell.

A final takeaway from Kevin Warsh's press conference is that the Fed chair appears to hope he can avoid raising short-term interest rates.

But others on the committee may not agree that changing inflation expectations and counting on rising long-term rates will do the job of reducing inflation.

September 16th (the next meeting), here we come.

- David Payne

To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

A pricing war is afoot among cutting-edge artificial intelligence vendors. Meta will jolt the competition with cheaper advanced AI tools for businesses from its new AI model, Muse. SpaceX’s latest Grok AI is built for efficiency and low costs, priced 60% cheaper than Anthropic. Microsoft is shifting from Anthropic and OpenAI to its own, cheaper internal AI tools for apps such as Excel and Outlook.

Meanwhile, cheaper Chinese AI models such as DeepSeek and Kimi are quickly gaining ground, though congressional investigations may lead to attempts to put curbs on the foreign tech. The latest version of Kimi, developed by Chinese company Moonshot AI, has sparked equal measures of excitement from U.S. customers and concern from leading American AI companies and federal officials. U.S. policy concerns include China’s massive government subsidies, intellectual property theft, cybersecurity risks and the general threat of Chinese competition.

The competition could put pressure on profit margins for AI leaders, which still must invest massive sums of money to develop and deploy leading tech. The latest Grok 4.5 model is a threat to Anthropic and OpenAI since it is a "'good enough,' fast, and super-cheap model," writes Neil Shah, analyst at Counterpoint Research, in a recent post. “Now enterprises have an attractive option, allowing them to optimize their AI spend before it spirals out of control.”

But there’s a catch for companies excited to see lower prices: Customers aren’t likely to save money because their AI use is rising so fast — AI is billed based on how much is consumed, which is far outpacing per-unit cost declines.

That remains true even as the long-term trends look promising for customers. Market research firm Gartner says a combination of efficiency improvements in chips, data centers, software and more will drive down prices. "By 2030, performing inference on a large language model with one trillion parameters will cost GenAI providers over 90% less than it did in 2025," according to their analysis from March.

Not all the savings will be passed on to customers, says Gartner, and cutting-edge agentic AI, which automates all sorts of computing tasks, consumes far more AI compute. "Agentic models, for example, require between 5-30 times more tokens per task than a standard generative AI chatbot," says Gartner. (Tokens are the units of data processed by AI. Companies are commonly billed by how many tokens they use.)

So what are companies going to do to reel in AI budgets? “Enterprises will learn and become prudent not to stick to one vendor or model,” according to Shah. That means that most complex tasks can be accomplished with the most expensive, best AI. Simpler tasks can be done with cheaper AI tools.

Gartner recommends that companies maintain a list of tasks that require high-end AI tools, train employees on how to reduce AI costs, post limits on individual token consumption and closely track AI usage.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Chances are, you've been with the same bank for years. After all, it's easier to stick with the checking account you have now than to switch to a new one. But every once in a while, it's worth looking at what else is out there.

Even if you're mostly satisfied with your current bank, you may find that a different one better fits your needs, whether with lower fees, higher interest rates, superior in-person services, or more-attractive premium account packages that layer on the perks as your wealth grows. Or you may choose to stick with your current institution for everyday banking and open a savings account or certificate of deposit at an online bank or credit union, taking advantage of high yields on your extra cash.

You'll find plenty of great options to consider here. With the help of LendingTree, which collects deposit-account information, we've analyzed interest rates, fees, balance requirements and other features of accounts at national banks, credit unions, online banks and regional banks, and we've named winners in each of those categories. We've also highlighted two institutions that may be strong choices for customers in each of four profiles: Retirees, high-net-worth clients, travelers and families with kids.

For regional banks, we chose one winner in each of four areas: The Northeast, the Midwest, the South and the West. Interest rates change frequently, so before you commit to any of these accounts, check the current yield. Yields and other terms listed here are as of early July.

Regional banks have between $10 billion and $100 billion in assets and serve specific areas. As a result, they often have more-personalized customer service than you may find with a national bank, and they often reinvest money into the community.

Best in the Northeast: ConnectOne Bank

Where it is: More than 60 locations across New York, New Jersey and South Florida.

Totally Free Checking is, as the name implies, free of monthly fees. It's a simple account, but it allows customers to send money via Zelle. Simply Better Checking also charges no monthly fee, and it reimburses up to $10 monthly in out-of-network ATM fees if you use direct deposit and maintain a $500 average daily balance.

Consumer Interest Checking yields 1.15% on balances of $1,000 or more, and it reimburses up to $10 a month in ATM surcharges if you use direct deposit and have an average daily balance of $1,000. (By keeping your balance at $1,000 or more, you'll also skip the $10 monthly fee.)

Among ConnectOne's savings options, Connect Money Market has a 2% yield, or 2.1% for balances above $25,000. It requires a $1,000 minimum opening deposit, and you need to maintain an average daily balance of at least $5,000 to avoid the $10 monthly fee. Connection Plus Savings offers a 3% yield on balances of at least $2,500, and the CDs come with a relatively low deposit requirement of $500. The four-month penalty-free certificate pays 4%.

Best in the Midwest: Old National Bank

Where it is: About 350 locations in Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, North Dakota, Tennessee and Wisconsin.

Old National has four popular checking-account options, including one for students and another for customers 50 and older. ONB Everyday Checking is the basic account for everyday needs, and a recent promotion offered a $600 bonus for signing up and making $12,000 in direct deposits in the first four months. The account comes with a $6.95 monthly fee, but you can get it waived with $500 in monthly direct deposits, a daily balance of $500, a $1,500 daily balance across all qualifying accounts with Old National, or 15 or more debit card transactions during the statement cycle.

ONB Preferred Checking offers free standard checks, and the bank won't charge you for the first five monthly transactions at out-of-network ATMs (but you may pay fees to the ATM operator). Preferred Checking has a $15 monthly charge, but it goes to zero if you have a daily balance of $5,000 in the account or $25,000 across all eligible accounts.

Old National offers a variety of savings options, including a savings account for kids. Among CDs, one with a four-month maturity recently had a 4% yield, with a $500 minimum deposit requirement.

Best in the South: FirstBank

Where it is: About 90 branches across Tennessee, Kentucky, Alabama, Georgia and North Carolina.

Essential Checking includes the basics for no monthly fee, while the free FirstRewards Checking pays a yield of 1.51% on balances up to $25,000 (0.55% on the portion of the balance higher than that) if you meet certain monthly requirements: making 10 debit card purchases, having one qualifying transfer into or out of the account, and receiving e-statements. The account also refunds out-of-network ATM fees.

Swipe Smart Checking, another free account, may make sense for people opening their first account or students who primarily use a debit card (the account doesn't offer paper checks). Other checking accounts include USA Checking for Seniors, for those 62 and older, and Interesting Checking ($8 monthly fee if your balance falls below $1,000), offering a yield of 0.41% on balances of $1,000 to $24,999, 0.45% on balances of $25,000 to $49,999, and 0.5% on higher balances.

For savers, FirstBank's options include FirstUp Savings, yielding 3.82% on up to $25,000. The bank waives the $5 monthly fee if you have a minimum balance of $50. The six- and 30-month CDs ($500 minimum deposit) yield 3.8%, and the Consumer Fed Funds Money Market account recently paid 1.46% on balances up to $99,999, and 2.93% on higher balances (you avoid the $10 service fee if you have an Essential Checking account or keep at least $100,000 in the money market account).

Best in the West: WaFd Bank

Where it is: More than 200 branches across Arizona, California, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington.

Free Checking is WaFd's basic checking account, and Rewards Checking is an elevated version that comes with a $6 monthly fee in exchange for perks such as a discount of 5 cents per gallon on gas at Shell stations, cell phone insurance, free access to the Greenlight program for managing money with kids, and a credit-monitoring service.

Premium Rewards Checking has a $9 monthly fee but comes with more benefits, including dark-web monitoring, 24/7 roadside assistance and telehealth services. Interest Checking offers those benefits plus a yield as high as 0.25% (on balances of $250,000 or more). It waives the $12 monthly fee if you have a $5,000 average daily balance or $50,000 across eligible accounts with WaFd.

WaFd's Savings account, yielding 0.1% on balances of at least $100, is free for minors; otherwise, you can avoid the $3 monthly fee by maintaining a balance of at least $100. Start Savings offers a 5% yield on a balance up to $500, 2.47% on the portion of the balance between $500 and $1,000, and 0.1% on larger amounts. (To open this account, you must have a WaFd checking account.)

If you're looking for better yields on big balances, check out the money market accounts, such as the High Yield Money Market (yielding as much as 2% on $500,000 or more) and CDs. Recently, a certificate with a seven- or 13-month maturity yielded 4% ($1,000 minimum deposit).

Use the Bankrate tool below to connect with a financial professional who can help you build a strategy to reach your personal finance goals:

Methodology

With data from LendingTree, which collects deposit-account information, as well as from financial institutions and other sources, we evaluated national banks, credit unions, online banks (including online accounts from brokerage firms) and regional banks. We reviewed checking accounts, savings accounts, money market deposit accounts and certificates of deposit.

We looked at features including interest rates; minimum deposit and balance requirements; monthly maintenance fees and the ease of waiving those fees; ATM benefits, such as waived or reimbursed fees for out-of-network withdrawals; free or discounted benefits, such as personal checks, cashier's checks, paper statements and overdraft-protection transfers; overdraft fees; and online and mobile banking features, such as the availability of peer-to-peer payment services. Yields and other data listed in the article are as of early July.

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.

More Best Banks

• Best National Banks
• Best Credit Unions
• Best Online Banks
• Best Banks for Retirees
• Best Banks for High-Net-Worth People
• Best Banks for Travelers
• Best Banks for Families with Kids

Chances are, you've been with the same bank for years. After all, it's easier to stick with the checking account you have now than to switch to a new one. But every once in a while, it's worth looking at what else is out there.

Even if you're mostly satisfied with your current bank, you may find that a different one better fits your needs, whether with lower fees, higher interest rates, superior in-person services, or more-attractive premium account packages that layer on the perks as your wealth grows. Or you may choose to stick with your current institution for everyday banking and open a savings account or certificate of deposit at an online bank or credit union, taking advantage of high yields on your extra cash.

You'll find plenty of great options to consider here. With the help of LendingTree, which collects deposit-account information, we've analyzed interest rates, fees, balance requirements and other features of accounts at national banks, credit unions, online banks and regional banks, and we've named winners in each of those categories. We've also highlighted two institutions that may be strong choices for customers in each of four profiles: Retirees, high-net-worth clients, travelers and families with kids.

These institutions offer specialized accounts for young people as they learn the ropes of spending and saving, as well as tools for parents to help manage and monitor the accounts.

Interest rates change frequently, so before you commit to any of these accounts, check the current yield. Yields and other terms listed here are as of early July.

Bank of America

Where it is: About 3,600 branches in 38 states and Washington, D.C. (Rates and terms are for customers in Charlotte, N.C.)

For families who want to take their kids to a local branch to learn about banking, Bank of America is a good bet, with locations in most states. And it offers a couple of its Advantage accounts with families in mind; both have no monthly maintenance fee for those younger than 25 and charge no overdraft fees.

The parent-owned SafeBalance for Family Banking checking account, designed for elementary and middle-school children, lets your kids use a debit card, but you can monitor their spending, get alerts when they make purchases, and lock and unlock the debit card. Children 6 and older can log in to their account online to view balances and monitor transactions, but they can't deposit or transfer money.

Teens and young adults can use the SafeBalance Banking checking account, which parents co-own. Starting at age 16, a teen can become the sole owner of the account. Account holders can make deposits and transfer money online, and those 13 and older can send and receive money with Zelle.

For account owners younger than 25, Advantage Savings charges no monthly fee. It yields 0.04%.

Capital One

Where it is: About 250 branches in a handful of eastern and southern states and Washington, D.C.

Children 8 and older can jointly own Capital One's online MONEY Teen Checking account with their parents. The account has no monthly maintenance fee or minimum deposit requirement, and it offers a yield of 0.1%.

Kids get a debit card, which parents can lock or unlock, and you can monitor their transactions with your own account login. You can make transfers into the MONEY account from your own checking account, regardless of whether your account is with Capital One or another institution.

Capital One also offers the no-fee, no-minimum Kids Savings Account, with a 2.5% yield. You can open multiple accounts for various savings goals.

Planning for retirement while raising a family isn't easy. A financial advisor can help you balance today's expenses with tomorrow's goals.

Use the Bankrate tool below to connect with a financial professional and get started:

Methodology

With data from LendingTree, which collects deposit-account information, as well as from financial institutions and other sources, we evaluated national banks, credit unions, online banks (including online accounts from brokerage firms) and regional banks. We reviewed checking accounts, savings accounts, money market deposit accounts and certificates of deposit.

We looked at features including interest rates; minimum deposit and balance requirements; monthly maintenance fees and the ease of waiving those fees; ATM benefits, such as waived or reimbursed fees for out-of-network withdrawals; free or discounted benefits, such as personal checks, cashier's checks, paper statements and overdraft-protection transfers; overdraft fees; and online and mobile banking features, such as the availability of peer-to-peer payment services. Yields and other data listed in the article are as of early July.

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.

More Best Banks

• Best National Banks
• Best Credit Unions
• Best Online Banks
• Best Regional Banks
• Best Banks for Retirees
• Best Banks for High-Net-Worth People
• Best Banks for Travelers

For many Americans, there's a disconnect between what's happening on Wall Street and how they're feeling about their personal finances.

The markets have remained resilient despite periods of volatility. But many people nearing retirement are worried about whether their money will last.

Much of that anxiety stems from inflation, which, for the first time in three years, is now outpacing wages.

That's why retirement planning shouldn't focus on cutting expenses, but rather on building a flexible income plan that can absorb higher costs over time.

Start with net income, not gross salary

Most people think they need to replace their full working salary when they retire. That's not necessarily true.

It's not just about replacing a paycheck. You need to replace the net income that supports your life today while accounting for some expenses that may go away or change in the future.

Instead of gross salary, start with your current net income. This will help you determine what you spend. Add up how much money is coming in each month and compare that to how much is going out.

Once you know what your income needs are, you can determine whether your current assets are enough, whether your retirement timeline needs to shift or whether your investment strategy should be adjusted.

Add a lifestyle and inflation cushion

One of the most overlooked tools to help combat inflation in retirement is the travel budget. Most retirees spend more on travel during the first part of their retirement and then gradually reduce that spending, whether that's owing to poorer health or simply wanting to spend more time around family.

Instead of viewing travel as a temporary expense, think of it as a built-in financial cushion for your retirement. An amount as small as 10% can provide flexibility if inflation rises faster than expected.

While that money may go toward dream vacations, new hobbies and experiences early in retirement, later on, those same dollars can be reallocated toward healthcare costs or other expenses.

Retirement spending categories shift rather than disappear. Because you know the money is there, the travel budget becomes less about leisure and more about being the buffer you need to feel confident in your plan.

A built-in buffer also helps retirees avoid overreacting to temporary market drops or cost increases.

Build the income plan around the gap

Retirement planning isn't only about how much you have saved in your portfolio. $1 million may be more than enough for one retiree but not enough for another. Your retirement depends on spending needs, income sources and your unique timeline.

Once you calculate your expected spending and account for guaranteed income sources such as Social Security or pensions, you can then identify the investment gap.

Your investment decisions should support your income needs. The strategy should be based on what you need your money to accomplish.

While some people may find out they need to work a few more years, many of the people we work with at Blue Ridge Wealth Planners are actually surprised to learn they may be able to retire sooner than expected. Income planning helps you make retirement decisions based on facts, not fear.

In conclusion

Unfortunately, inflation isn't something that you can avoid. It's always going to be a factor that you must account for when planning your retirement, but you don't have to let it eat away at your hard-earned savings. Remember:

• Inflation-proofing your retirement isn't just about investment returns
• It starts with realistic income planning and creating built-in cushions
• You then identify income shortfalls and fill in the gaps

Retirees who create room in their plan through travel budgets or spending cushions are often better positioned to handle rising costs. They can then enjoy a fulfilling and financially confident retirement.

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

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it to us.

Dear Wealth Wise: At 49, I have more retirement savings than I ever imagined. My IRA is worth almost $2 million, and I inherited my house, so there’s no mortgage. It’s worth almost $1 million, so the taxes on it are high. I also have $300K in investments outside of my IRA and a 6-month emergency fund.

I’m burned out and want to take a sabbatical, which my company will not support. I would have to quit and start over. I want to spend the time traveling and seeing old friends. I have several living in Europe I can stay with.

I'm single, no kids, no pets. I'd use the $300K investment account and emergency fund to pay my bills while not working. I want to take a break of six months to a year. My usual expenses are about $100K a year and I make $200K, so I save a lot of my income. I'll be spending more while out of work to pay for travel and health insurance.

I’m not really worried about affording the sabbatical so much as what happens next. If I can’t get back to a big salary, do I have enough in my IRA to retire on? And is there anything I’m missing in my sabbatical plan? — Wealthy But Weary

Dear Wealthy But Weary: When you've been working hard for more than two decades, there may come a point when you feel you need a break — and not just a long vacation, but a months-long period to recharge, pursue hobbies, and take time for yourself.

Here, we have a 49-year-old reader in great financial shape. They're set on taking a sabbatical, even though they know it will mean starting a job search from scratch upon their return. Let's see what our experts have to say about this plan, and what tweaks they might recommend.

You can probably swing the time off, but make sure to fund it the right way

Many people in their late 40s are scrambling to catch up on retirement savings. With an IRA worth close to $2 million, our reader is in the opposite boat. Between that and their $300,000 portfolio, they're in a strong position to take an extended break, says Rob Burnette, investment advisor representative and professional tax preparer at Outlook Financial Center.

"For the short term, you certainly have sufficient funds for a one-year sabbatical. Using your non-IRA investment account for living expenses is very tax-efficient and doesn’t run afoul of early distribution penalties on your IRA," he says.

However, Burnette cautions, "I would try to keep your emergency fund intact for its purpose — emergencies."

Trevor Houston, CEO at ClearPath Wealth Strategies, LLC, agrees.

"My advice is to set up a separate savings account dedicated to covering expenses during an intentional career break. Don't start raiding retirement accounts or building debt. This fund should be separate from the emergency fund. A planned career break is not an emergency," he says.

Houston also emphasizes the importance of planning for extra costs during a workforce break.

"The biggest mistake I see people make when planning a career sabbatical is assuming they only need to replace their regular paycheck," he says. "Unfortunately, things like health insurance, taxes, inflation … can end up totaling more than people may expect."

Before moving forward with a sabbatical, Houston recommends mapping out the costs, including surprise expenses that may arise, like home repairs. If your budget can support unplanned costs, you should be in good shape.

And speaking of home repairs, Mike Dunlop, CFP and co-founder at Ignite Financial, says that as a homeowner, you have an opportunity to help fund your sabbatical without raiding your investment account too heavily.

"I'd also at least have them look at that $1 million paid-off house sitting empty with a big property tax bill while they're in Europe. Renting it out might cover a good chunk of the trip," he says.

The only catch? Rental income will boost your modified adjusted gross income (MAGI), which could bump up your premiums for marketplace healthcare.

Your sabbatical year could be a good tax-planning opportunity

Giving up your paycheck for a year may be daunting. But it could actually serve as an opportunity to make a smart long-term tax-planning decision.

"While you have a large IRA, that is also a tax bomb that will go off when you do draw funds from it in retirement. For full tax diversity, you need to add a Roth IRA to your mix so that you have everything covered," Burnette explains.

"During the year on sabbatical," he continues, "you could look at doing some Roth conversions on your IRA while you aren’t drawing a large salary. The Roth conversion would certainly improve the status of making your $2 million in retirement assets go further when you finally retire."

Dunlop agrees that a Roth conversion could be a smart move during a planned sabbatical. But he also cautions that a conversion could lead to higher health insurance costs.

"I'd want them watching the health insurance piece, because ACA coverage can be cheap when income's low," he says. "But a Roth conversion bumps that income up and can shrink the subsidy, so those two levers work against each other."

Make sure you have a re-entry strategy

If you take a sabbatical at 49 and return to the workforce at 50, you may not be nearly ready to retire. Houston says it's important to plan for a re-entry that may take longer than anticipated.

"What happens if it takes longer than you expect and your sabbatical savings are gone? What's happening in your industry? How might you need to adjust your career plans?" Houston says.

Dunlop says that at your age, there's some risk of age discrimination working against you.

"The over-50 job market is real, and I won't pretend otherwise," he says.

However, Dunlop insists you have one thing going for you: You don't necessarily need to replace your $200,000 salary if you only spend $100,000 a year and have a robust IRA to fall back on. And trying to find a job is less scary when you can accept a lower number.

"The next job really only has to cover what they actually spend," Dunlop insists. "When you don't need the paycheck, you can usually interview better and hold out for something you actually want."

Enjoy your time off

So there you have it. Our three experts agree that you're in a great position to take a much-deserved sabbatical. Even if you end up in a lower-paying job upon your return, you've built up a large enough IRA balance that you can let that money sit and grow until retirement age and still have more than enough.

If you want to approach that career break with even more confidence, it could pay to consult a professional.

"This would be a great conversation to have with a financial planner that will look at all aspects of your financial situation," Burnette says.

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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"John" called me on a Tuesday. He had just accepted an offer on a strip center he had owned for 26 years. He was happy about the price and miserable about everything else.

He did not want to find another building. He did not want to sign another lease, chase another tenant or fix another roof. What he wanted, in his words, was to never get another midnight phone call about a toilet.

Somebody had told him about a Delaware Statutory Trust (DST). He did not know what it was. He only knew it was supposed to make his problem disappear. By the end of our call, I told him a DST might be exactly right for him. I also told him that if one detail had been different, it would have been exactly wrong.

That is the honest truth about DSTs. They are a wonderful tool for the right person and a poor fit for the wrong one. The trouble is that most of the people selling them only describe the right person. So before you exchange a dime, sit with these five questions.

1. Are you actually done being a landlord?

Not tired. Done.

There is a difference. Tired is Saturday morning after a bad week. Done is a decision. You give up control completely. The sponsor makes every decision about the building, the financing, the tenants and the eventual sale. You collect monthly distributions and you wait. You cannot vote on a roof. You cannot fire the manager. You cannot decide to sell next spring because you found something better.

For the man with the strip center, that loss of control was the entire point. He had been the manager for 26 years and he was finished. For the next person, that same loss of control is a cage. If part of you still loves the hunt, the negotiation, the ownership, a DST will frustrate you. Be honest about which person you are.

2. Do you meet the DST accredited investor requirements?

Most DSTs are offered through private placements generally limited to accredited investors. The current thresholds are a net worth above $1 million not counting your home, or income above $200,000 a year as an individual, or $300,000 jointly with your spouse, in each of the last two years with the expectation of the same this year.

Most people selling an appreciated property clear this bar without thinking about it. But you have to actually meet it and be able to document it. If you cannot, the door does not open and no adviser can open it for you.

3. Is your money big enough to spread out, but not so big you should buy a building?

Most DSTs set a minimum investment between $25,000 and $100,000, depending on the offering. The properties themselves are large, often $30 million to $100 million, which is how a single investor ends up owning a sliver of an apartment complex or a distribution center they could never buy alone.

Here is the sweet spot. If your 1031 exchange proceeds are large enough to split across several DSTs, you get something a single replacement building can never give you: Diversification.

You can own a piece of an apartment community in one state, a medical building in another and an industrial property in a third, all inside one tax-deferred exchange. One bad tenant no longer ruins your year.

But there is a ceiling to the logic. If you are exchanging a very large sum and you genuinely enjoy ownership, buying your own replacement property may still be the better answer.

A DST trades control for convenience. The more capital you have, the more that trade is worth examining rather than assuming.

4. Do you understand DST illiquidity and are you at peace with it?

This is the question people skip and the one that causes the most regret.

A DST is not a stock. You cannot sell it next Tuesday because you changed your mind or because you need the cash. There is no real secondary market to speak of.

Your money is committed until the sponsor sells the underlying property, which typically happens somewhere between five and 10 years out, on a timeline you do not control.

If everything you are putting into the DST is money you will need to touch in the next few years, stop. This is the wrong vehicle. A DST is for capital you can leave alone.

Before anyone exchanges, I want to see that the rest of their financial life is liquid enough that locking up this piece does not keep them awake at night.

5. How does this fit your estate plan?

This question matters because the answer can change the whole calculation, and most people never get to it.

If the goal is income and simplicity for the rest of your own life, a DST can deliver both. But think one step further. Under current law, when you die, your heirs generally receive a basis adjustment that can eliminate the deferred capital gain for income tax purposes.

The gain you carried for years does not have to pass to them as a tax bill. The DST interest transfers at its value on the day you die, and the embedded gain can be wiped clean.

That single feature changes the math for a lot of families. A property you might have been afraid to sell because of the tax can be exchanged into a passive, diversified DST, held for income while you are alive, and then handed to your heirs without that gain following them.

If your spouse or children are part of the plan, a DST is not just an exit. It is part of an estate strategy worth discussing with your adviser and your estate attorney before you commit.

A word on DST investment risks

DSTs draw their tax treatment from IRS Revenue Ruling 2004-86, which lets you exchange real property for an interest in a DST without recognizing gain under Section 1031, provided the other 1031 requirements are met.

That treatment comes with a set of strict requirements, also known as the Seven Deadly Sins, and one of them matters most to you: Once the offering closes, the sponsor generally cannot raise new money or restructure the financing. If the property runs into trouble, the trust's hands are largely tied.

That puts enormous weight on one thing: Who the sponsor is. A DST is only as sound as the company managing it and the building underneath it. Distributions are not guaranteed. Real estate values can fall. Some sponsors have run into serious trouble, and their investors had little recourse.

Anyone who tells you a DST is safe is selling, not advising. The right question is not whether DSTs are safe. It is whether this specific property, run by this specific sponsor, at this specific price, is worth your money.

So, is a DST right for you?

Go back to John, the man with the strip center. He was done being a landlord, he was accredited, his proceeds were large enough to spread across three properties, he had plenty of liquidity elsewhere and he wanted what was left to pass cleanly to his daughter. Five for five.

For him, the decision to invest in a DST was close to perfect, and that is exactly what we did.

If you answered those five questions the way he did, a DST may be one of the best decisions you make in retirement.

If you stumbled on even one of them, that is not a reason to give up. It is a reason to slow down and look harder, because the wrong DST is far more expensive than no DST at all. The vehicle rarely fails those investors. The question they skipped does.

Related Content

• What Is Capital Gains Tax Deferral?
• Don't Defer Retirement if You're a Landlord, Defer Taxes Instead
• DST Inventory Just Hit a Record $3.9 Billion: What 1031 Exchange Investors Should Do Next
• Why Your Next 1031 Exchange Decision Might Not Be About Taxes (It Could Be About Life)
• A 1031 Exchange May Look Great for You on Paper, But It's Not Just About Taxes

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

Investors continue to hope for signs of progress as negotiations between the United States and Iran have broken down. The logic is straightforward: A peace agreement could reduce geopolitical risk, lower energy prices and reduce concerns about disruptions to the Strait of Hormuz. This should all be good news for the broader stock market.

Perhaps.

But I suspect many investors are focusing on the wrong takeaway.

The more interesting question is whether the conflict permanently changes how countries approach energy security.

Think about COVID-19 and the way it transformed global supply chains. For decades, companies optimized for efficiency. The pandemic then exposed the risks of depending on a single supplier or a single region.

"Just in time" became "just in case." A movement toward diversifying suppliers, reshoring production and prioritizing resiliency soon followed.

I expect energy will follow a similar path.

If recent events encourage governments and energy companies to place a greater value on resiliency and dependability — even when it comes at a higher cost — I believe the setup for oilfield service stocks may be more attractive than many investors realize.

How has the oilfield service industry changed?

Oilfield service companies provide the technology, equipment, expertise and manpower needed to find, drill, complete and maintain oil and gas wells. Whether an energy company is developing a new offshore field, maximizing production from an existing reservoir or repairing aging infrastructure, oilfield service companies are often central to the process.

Historically, the industry developed a reputation as one of the market's ultimate boom-and-bust sectors. When oil prices surged, producers rushed to drill more wells. When prices collapsed, spending dried up almost overnight. Service companies were often caught in the middle.

That history is real. But the oilfield service industry today is very different from the one many investors remember.

The three dominant players are SLB, Halliburton and Baker Hughes.

• SLB (SLB) is widely regarded as the industry's technology leader and has the deepest international footprint
• Halliburton (HAL) is perhaps best known for its leadership in hydraulic fracturing and remains the most direct way to gain exposure to North American shale activity
• Baker Hughes (BKR) has differentiated itself through growing exposure to liquefied natural gas, power generation and other energy technology

While each company has different strengths, all three stand to benefit from a world that increasingly values dependable energy supply.

This opportunity comes at a time when energy producers themselves have changed quite a bit. A decade ago, many exploration and production companies prioritized production growth above all else.

Today, shareholders are demanding capital discipline, free cash flow and returns. That shift may not generate the explosive growth that once characterized energy upcycles, but it could also result in a less extreme boom-and-bust cycle for service providers than investors experienced in the past.

Why should investors be optimistic about the sector?

The first reason I am optimistic about the oilfield service industry's long-term prospects is straightforward: The world still needs enormous amounts of oil and natural gas.

That may sound obvious, but investors continue to underestimate how difficult it is to replace existing energy infrastructure. Even as renewable energy grows, economies remain heavily dependent on fossil fuels and the countless products derived from them. The Iran conflict served as a reminder of that reality.

The second reason is that energy security is becoming more important.

For years, many countries focused primarily on securing the cheapest energy available. Going forward, some may place greater emphasis on securing energy from dependable partners and politically stable regions.

That shift could encourage development in areas that previously looked less attractive economically but offer strategic advantages.

More development means more drilling. More drilling means more demand for oilfield services.

The third reason is international growth.

Many investors instinctively think about U.S. shale when they hear the word "oil." Yet some of the most attractive opportunities for service companies may be found overseas.

International and offshore projects are often larger, more technically demanding and more service-intensive than their North American counterparts. They also tend to be driven by long-term development plans rather than short-term commodity price movements.

That plays directly into the strengths of the industry's largest participants.

Where are the opportunities?

Venezuela offers an interesting example.

Recent agreements involving Shell (SHEL) and BP (BP) suggest international energy companies see potential in bringing portions of the country's vast energy resources back into production.

After years of underinvestment and deteriorating infrastructure, doing so would require extensive technical expertise, well rehabilitation, equipment upgrades and project management — the exact types of services oilfield service companies provide.

Importantly, investors do not need Venezuela to become a success story for this thesis to work. Nor do they need oil prices to surge.

That is what makes the opportunity interesting.

The investment case does not depend on a single country, a single conflict or a single commodity forecast.

Oil and gas fields naturally decline over time. Existing infrastructure must be maintained. New projects must be developed. Production must be optimized.

The world needs energy today and will need enormous amounts of energy for years to come.

Some investors spend a tremendous amount of time trying to predict where oil prices will go next. I believe a more productive exercise is identifying the companies that help make energy production possible, regardless of where oil trades next month, and considering what recent events may mean for energy security over the next decade.

Oilfield service stocks are increasingly removed from the cyclical industry of the past that was tied to the next move in crude oil.

Here's the more durable reality: The world needs dependable energy, and oilfield service companies may play a critical role in making that possible.

Related Content

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• I'm an Investment Pro: This Is Why Gold Isn't Shining Right Now (Plus, an Alternative That Is)

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

For years, people have been encouraged to build digital libraries of movies, TV shows, music and books. Buying a movie online seems just as permanent as buying a DVD, until it suddenly isn't.

A recent licensing dispute involving Sony has reignited the debate over digital ownership after hundreds of purchased movies disappeared from customers' libraries. While streaming and digital downloads remain incredibly convenient, many customers are realizing that clicking "Buy" often doesn't provide the same ownership rights as purchasing a physical copy.

That realization is helping fuel an unexpected comeback for DVDs, Blu-rays and other physical media. As subscription costs rise and digital content becomes less predictable, owning a tangible copy is beginning to look like a smart financial decision rather than a nostalgic one.

The Sony situation is a reminder that digital ownership has limits

Sony recently removed access to roughly 500 movies from users' digital libraries after a licensing agreement ended. Many affected customers had purchased the movies years earlier believing they would have permanent access. Instead, those titles simply disappeared from their collections.

While the situation frustrated customers, it also highlighted something that many people don't realize when they purchase digital content: in many cases, you're buying a license to access a movie and not ownership of the movie itself.

When you purchase a DVD or Blu-ray, you own that physical copy and can watch it whenever you like. With digital purchases, access depends on licensing agreements between retailers, studios and distributors. If those agreements change, your access can change too.

That's not unique to Sony. Other digital storefronts have also removed purchased content over the years when licensing deals expired or services shut down, reminding consumers that digital ownership often comes with important limitations.

Why your digital purchases can disappear

Most digital purchases work differently than traditional ownership. Instead of buying the content outright, you're typically purchasing the right to access it through a specific platform under certain conditions.

Several situations can cause that access to disappear:

Licensing agreements expire

Movie studios frequently renegotiate distribution rights. If a retailer loses the rights to host certain content, customers may also lose access depending on the licensing terms.

Platforms can shut down

Digital storefronts don't last forever. If a service closes or eliminates support for purchased content, subscribers may have limited options for recovering their libraries.

Rights change hands

Studios regularly merge, sell content libraries or shift distribution strategies. Those business decisions can affect where and whether certain titles remain available.

Account problems happen

Forgotten passwords, hacked accounts or violations of platform policies can temporarily or permanently affect access to purchased digital libraries.

While many companies work to preserve customer purchases whenever possible, the reality is that digital libraries depend on businesses continuing to operate and maintain the necessary licensing agreements.

Why physical media is making a comeback

DVDs and Blu-rays once seemed destined for extinction. But today, they're quietly returning to store shelves, and into collectors' homes.

Even younger movie fans who grew up with streaming are discovering the appeal of owning physical media. Some are browsing thrift stores, used bookstores and secondhand retailers looking for inexpensive DVD collections.

Several factors are driving renewed interest.

Subscription fatigue

Many households now pay for multiple streaming services every month. Instead of subscribing to five or six platforms indefinitely, some people are choosing to purchase the movies they know they'll watch repeatedly.

Movies disappear from streaming

Streaming catalogs constantly rotate. A favorite movie available today may disappear next month when licensing agreements change, forcing viewers to rent it elsewhere, or wait for it to return.

Better picture and sound quality

For home theater enthusiasts, 4K Blu-ray discs often deliver higher video bitrates and lossless audio that exceed what many streaming services can provide.

If you've invested in a large television or surround sound system, physical media can still offer the best viewing experience.

Collectability

Special edition releases, director's cuts, collectible steelbook editions and bonus features continue to appeal to movie fans.

Reliable offline access

Physical media works without internet outages, buffering or changing licensing agreements. Whether you're traveling, living in an area with slower internet or simply want dependable access, DVDs and Blu-rays provide peace of mind.

When buying physical media makes financial sense

Not every movie belongs on your shelf. But buying physical copies can save money in certain situations.

• Movies you watch every year: If you rewatch the same films multiple times, buying a DVD or Blu-ray once may cost less than repeatedly renting or subscribing to services that carry it.
• Children's favorites: Parents know children often watch the same movie dozens of times. Owning those titles avoids the frustration of discovering they're no longer available on your streaming service the day your child wants to watch them.
• Holiday classics: Many families revisit the same holiday movies every season. Purchasing physical copies guarantees they'll be available every December regardless of streaming rights.
• Hard-to-find films: Independent movies, older classics and niche documentaries often rotate on and off streaming services, or disappear entirely. Collectors who value these titles may prefer owning them outright.
• Box sets and special editions: Complete television series, anniversary collections and bonus-feature editions often provide extras unavailable through streaming platforms.

When streaming is still the better value

Physical media isn't replacing streaming for everyone. Streaming continues to make financial sense in many situations.

Casual viewing

If you only plan to watch a movie once, streaming or renting is usually much cheaper than purchasing a physical copy.

Discovering new content

Streaming services offer thousands of movies and shows for a single monthly subscription, making them ideal for viewers who enjoy exploring new releases.

Convenience

There's no need to store discs or switch media between movies. Streaming also makes it easy to watch across multiple devices while traveling.

Lower upfront costs

Building a large DVD or Blu-ray collection requires an initial investment.

For many households, paying one monthly subscription remains the more affordable option, especially if they watch a wide variety of content.

Don’t count physical media out entirely

Streaming isn't going anywhere, and for many households it remains the easiest and most affordable way to watch movies and television. But the recent Sony incident serves as an important reminder that digital purchases don't always provide permanent ownership.

For favorite films, family classics or movies you plan to revisit for years, buying a physical copy can offer something streaming can't guarantee: lasting access that's not dependent on licensing agreements, internet connections or the future of a digital platform.

In an era where "Buy Now" often means "License Until Further Notice," owning a DVD is starting to feel like true ownership again.

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• There's A $1,000 Reason to Find Out How Much You're Paying A Year For Streaming

When planning for retirement, state taxes on your 401(k), pension, and Social Security benefits should be part of your strategy.

Yet while some states offer no retirement taxes on any of these sources, a zero-percent tax rate can lose its shine if you can't get a doctor's appointment when you need one.

After all, an average 65-year-old retiring in 2026 can reportedly expect to spend $185,500 on healthcare and medical expenses throughout retirement. And living comfortably on a fixed income requires balancing healthcare costs with other top retiree concerns, like housing and daily living expenses.

To help you navigate this balancing act, we cross-referenced states that don't tax retirement income against property tax data, cost-of-living metrics, and senior healthcare rankings. The final list highlights the five most tax-friendly states for retirees, ranked by the quality and accessibility of their older-adult healthcare.

How we ranked these retirement states

Our list draws from Kiplinger's analysis of states that do not tax retirement income. Among the 13 states meeting that baseline, we filtered for the ten with the lowest median property taxes paid on mortgage homes (using PropertyShark data referenced from the latest U.S. Census Bureau data points).

Cost-of-living data was drawn from the Missouri Economic Research and Information Center (MERIC) index, where a score of 100 represents the national average.

Then, states were ranked using the United Health Foundation's "America's Health Rankings Senior Report," specifically focusing on "Clinical Care for Seniors." This metric evaluates:

• Healthcare access: Including availability of dedicated primary care providers, home health aides, and care affordability.
• Clinical services: Including rates of routine cancer screenings, avoided care rates due to high costs, and flu and pneumonia vaccinations.
• Quality of care: Including hospice care usage, nursing home quality ratings, and preventable hospitalization stays (per Medicare beneficiaries aged 65 to 74).

Scores range around a national benchmark of 0.00. Positive scores indicate above-average healthcare performance, while negative scores reflect below-average metrics. However, it's important to note that these scores are statewide averages and are not indicative of any one area within a specific state.

This list evaluates state income tax only. Federal income taxes still apply. Consult with a qualified tax professional when necessary.

1. Washington: Outstanding healthcare, higher cost of living

Senior healthcare ranking: +0.528 (Top 10 nationwide)

Median property taxes paid: $4,556

Cost-of-living score: 114.6 (14.6% above national average)

Washington takes the top spot on our list. The Evergreen State exempts all retirement income from state tax, meaning your Social Security, pensions, 401(k)s, and IRAs remain untouched by local authorities.

Another retiree benefit is its healthcare system. With a score of +0.528, per the Clinical Care report, Washington's medical care for older adults is above average, placing it in the top 20% of all states nationwide, just behind Colorado.

Yet everyday affordability remains an issue.

• Washington's median annual property tax bill exceeds $4,500, and overall living expenses — like groceries and housing costs — run roughly 14.6% higher than the national average.
• Plus, Washington recently approved an increased capital gains tax structure ranging from 7% to 9.9% on certain high-value investments, which can make the state more expensive for higher-wealth individuals.

But if you're retired and can comfortably afford the often higher price tag of Pacific Northwest living, Washington delivers an ideal combination of state retirement tax income exemptions and top-tier healthcare.

Related: 10 Cheapest Places to Live in Washington

2. Pennsylvania: Strong healthcare and moderate living costs

Senior healthcare ranking: +0.320 (#16 nationwide)

Median property taxes paid: $3,311

Cost-of-living score: 96.2 (3.8% below national average)

Pennsylvania slides into second on our list. The Keystone State exempts retirement income from state tax, including Social Security, pension payouts, and 401(k) or IRA distributions.

Senior healthcare access also remains strong here. With a score of +0.320, older adults may expect high-quality medical care, placing the state in the top 32% nationwide, according to data from the United Health Foundation. Plus, the average cost of living sits nearly 4% below the national average.

• But while retirement income is exempt from state taxes, all other income sources (like interest and dividends) are subject to a flat 3.07% state income tax.
• Additionally, the median property tax bill, while lower than Washington, remains 11% above the national average according to data from PropertyShark.

For retirees, Pennsylvania may offer a more balanced financial profile than higher-tax northeastern neighbors, like New York. However, elevated property tax bills can be difficult on a fixed income.

3. Iowa: Affordable living with above-average care

Senior healthcare ranking: +0.185 (#21 nationwide)

Median property taxes paid: $2,897

Cost-of-living score: 88.6 (11.4% below national average)

Iowa may be a true hidden gem for budget-conscious retirees. The state exempts retirement income from state taxes for residents aged 55 and older, meaning you don't have to wait long before you get state income tax relief.

On top of that tax exemption, Iowa boasts the lowest property tax bill among our top three states on this list, at just under $2,900. This is right below the national average, according to the U.S. Census Bureau, and the savings don't stop there. The Hawkeye State's cost of living is more than 11% below the national average, according to MERIC.

And perhaps more importantly, low cost doesn't automatically mean low healthcare quality, either. Iowa's senior healthcare ranking sits in the top 42% of the nation (ranking 21st overall in the Clinical Care United Health report), supported by lower rates of preventable hospitalizations.

• While Iowa ranks high nationally for average senior clinical care, its rural geography can create more care disparities for some areas than in, say, Washington or Pennsylvania.
• Plus, if you're used to a top #20 state for prime medical care, Iowa falls just short of that in the Clinical Care report.

Yet for fixed-income retirees seeking a balance of affordability and dependable healthcare (at least in more urban areas), Iowa may be considered a standout choice among tax-friendly states.

4. Florida: Low taxes, but rising costs and healthcare strain

Senior healthcare ranking: -0.103 (#31 nationwide)

Median property taxes paid: $2,730

Cost-of-living score: 100.7 (0.7% above national average)

Florida remains a classic choice for retirement because it levies no state income tax at all, protecting not just retirement distributions but also interest and dividends (and who doesn't love the weather?).

However, the Sunshine State's significant influx of retirees in recent years has created new friction points.

• Rapid population growth stretches the doctor-to-patient ratio, lowering Florida's senior healthcare access score to slightly below the national benchmark, according to the United Health Foundation.
• Additionally, rising housing expenses and skyrocketing home insurance rates have pushed Florida's overall cost of living slightly above the national average, according to MERIC.

So while Florida remains viable, a 2026 retirement plan in the Sunshine State might mean preparing for higher everyday expenses and longer waits for medical specialists than in previous decades.

Related: 10 Cheapest Places to Live in Florida

5. South Dakota: Maximum tax relief, lower healthcare access

Senior healthcare ranking: -0.263 (#35 nationwide)

Median property taxes paid: $2,724

Cost-of-living score: 94.1 (5.9% below national average)

Like Florida, South Dakota levies no state income tax on personal income (though its cold weather stands in sharp contrast to the Sunshine State).

South Dakota also has the lowest median property tax bill on this list, per U.S. Census Bureau data, and a cost of living roughly 6% below the national average.

One drawback for seniors requiring medical care in the Mount Rushmore State is medical availability, per the Clinical Care report.

• South Dakota ranks 35th in older adult clinical care, with a score below the national average.
• Rural geography and fewer medical centers mean accessing specialized care can require travel.

But if your primary goal in retirement is stretching your dollars as far as possible and you are comfortable with traveling for specialty care, South Dakota may offer your retirement nest egg significant financial benefits.

Read More

• How All 50 States Tax Retirement
• States That Won't Tax Your Death
• 5 Retirement Tax Traps to Watch in 2026

Most people love saving money. But when the cheapest option wears out quickly, those upfront savings can disappear through repeated purchases, wasted time and constant frustration.

That’s become a recurring theme in online communities like Reddit’s r/BuyItForLife, where consumers regularly compare products that lasted decades against cheaper versions that failed after only a few months or years. Many shoppers say they eventually learned the hard way that "saving money" upfront sometimes meant spending more overall.

From office chairs that fall apart after a year to cookware that fades, luggage that breaks mid-trip and phone chargers that constantly need replacing, certain "budget" purchases can trap shoppers in an expensive cycle of replacing the same items over and over.

Avoiding these money traps doesn't mean you need to buy luxury products or overspend on every purchase. Instead, knowing when it's worth paying a little more for better quality can help you avoid constantly replacing things and save money in the long run.

Replacement cycles add up quickly

One of the biggest problems with buying the cheapest option is how quickly those purchases can turn into a cycle of replacing the same item over and over again.

At first, a $40 office chair or $25 pair of shoes might feel like a smart financial decision. But if that chair starts wobbling after a year or those shoes fall apart after a few months, you may end up spending more replacing them repeatedly than if you had purchased something sturdier from the start.

The hidden cost isn't always just the money either. It’s the wasted time researching replacements, dealing with returns, making extra shopping trips and feeling frustrated when something breaks sooner than expected.

The purchases people regret buying cheap

Certain products come up again and again when consumers talk about purchases they wish they had spent a little more on.

Office chairs and mattresses

People who work from home often say they underestimated how important a comfortable chair really is until they started spending eight or more hours sitting in it every day. Cheap office chairs tend to wear out quickly, lose cushioning and offer poor back support. One Reddit user said they finally upgraded to a better office chair after replacing multiple cheaper versions over the years.

When comparing office chairs or mattresses, consider more than the sticker price. Brands such as Herman Miller, Steelcase and HON have earned reputations for durable office chairs backed by strong warranties.

Mattresses are similar. Lower-quality materials may sag prematurely, leading to discomfort and poor sleep. One Reddit user described replacing a mattress after it developed what they called a "sinkhole" in the middle that caused ongoing back pain.

Mattress brands including Saatva, Helix and Brooklyn Bedding are often recommended for their trial periods and warranty coverage. Many shoppers also turn to Costco, whose generous return policy and Kirkland Signature mattress line make it a popular destination for value-conscious buyers.

Shoes and winter coats

Footwear is another category where shoppers often regret prioritizing price over quality. Cheap shoes may wear down quickly, lose support or crack after heavy use. Higher-quality shoes sometimes last years longer and may even be repairable.

When shopping for shoes or winter coats, it's worth paying attention to materials, construction and warranty policies instead of focusing only on price. Footwear brands such as Red Wing, Danner, Blundstone and Birkenstock are frequently recommended for their durability, and some styles can be repaired or resoled to extend their lifespan.

For everyday athletic shoes, brands like Brooks and HOKA are often praised for comfort and support, though replacement is typically recommended after several hundred miles of wear.

Winter coats can also vary dramatically in quality. Better materials, insulation and stitching often make a noticeable difference, especially in colder climates where coats get daily use for months at a time.

For winter coats, shoppers often point to brands such as Columbia, L.L.Bean, Eddie Bauer and Patagonia for dependable construction and customer service. Patagonia offers repair services through its Worn Wear program, while L.L.Bean and Eddie Bauer have long been recognized for standing behind their products.

Retailers like REI are also popular because of their knowledgeable staff and customer-friendly return policy for members.

Luggage

Luggage might not seem worth splurging on until you're standing in an airport with a broken wheel or jammed zipper. Frequent travelers on Reddit often mention eventually upgrading to sturdier luggage after dealing with repeated travel headaches from cheaper sets that didn't hold up well.

Experienced travelers often recommend luggage brands such as Travelpro, Briggs & Riley, Samsonite and Away for their durability and customer support. Briggs & Riley is especially well known for its lifetime repair guarantee, while Travelpro has long been a favorite among airline crews.

Cookware and appliances

Cookware is another area where cheaper products sometimes create more hassle than savings. Thin pans can warp, nonstick coatings may peel quickly and inexpensive kitchen appliances are often difficult or impossible to repair once something goes wrong.

Several Reddit users also pointed out how frustrating it can be when appliances fail after only a few years and replacement ends up being cheaper than fixing them.

When buying cookware, look for durable materials like stainless steel or cast iron that can last for decades with proper care. Brands such as All-Clad, Lodge, Tramontina and Cuisinart are often recommended for balancing quality and value.

For small kitchen appliances, shoppers frequently praise brands like KitchenAid, Breville and Vitamix for their reliability.

Phone chargers and electronics accessories

Many people have experienced the cycle of buying cheap charging cables that fray, stop working or charge inconsistently after a few months. While replacing a charger may not seem like a huge expense, constantly rebuying low-quality electronics accessories can quietly add up over time.

Instead of buying the cheapest charging cable available, consider using accessories from your phone's manufacturer, such as Apple, Samsung or Google, or trusted brands like Anker and Belkin. These companies have built reputations for durable cables, dependable charging and products that meet safety standards, helping reduce the need for frequent replacements.

Why these purchases often fail

Not every inexpensive product is poorly made, but certain items are more likely to wear out quickly when manufacturers cut corners to keep prices low. Products that get heavy daily use, like shoes, office chairs, cookware and appliances, usually need stronger materials and better construction to truly hold up over time.

Here are some of the biggest reasons cheaper products often fail sooner than expected:

• Lower-quality materials: Thin fabrics, weak plastics and low-grade foam tend to break down faster with regular use, especially when exposed to heat, moisture or heavy wear.
• Weak stitching or construction: Poor assembly can lead to issues like broken seams, loose handles, wobbling furniture or parts falling apart much sooner than they should.
• Poor repairability: Some cheaper products are designed to be replaced rather than repaired, making even small fixes difficult or impossible.
• Lack of replacement parts: When replacement batteries, filters, wheels or other parts aren't available, consumers are often forced to buy an entirely new product instead of fixing the old one.
• Short warranties: Limited warranty coverage can sometimes signal that manufacturers don't expect the product to last very long under normal use.
• Planned obsolescence: Some products are intentionally designed with shorter lifespans so consumers will eventually need to replace them and buy again.
• Heavy daily wear and tear: Items used constantly, like mattresses, shoes and vacuums, naturally experience more stress, so lower-quality versions may wear out much faster.

When spending more actually saves money

This is where the idea of "cost per use" becomes helpful. Instead of focusing only on the sticker price, some shoppers calculate how much value they'll get from an item over time.

For example, a $200 pair of boots worn regularly for 10 years may ultimately cost less per wear than replacing a $50 pair every winter. That doesn't mean you always need the most expensive version. But it can make sense to pay a little more for products that are:

• Used daily
• Difficult to replace
• Important for comfort or safety
• Repairable
• Backed by longer warranties

Shoppers in online discussions often say they now pay closer attention to things like warranty coverage as well as material quality and whether replacement parts are available before making bigger purchases.

How to know when quality matters most

One helpful way to decide where it's worth spending a little more is to consider how often you use something and how much it affects your daily comfort, convenience, or safety.

A common rule of thumb is to prioritize quality for things that separate you from the ground, including:

• Shoes
• Mattresses
• Tires
• Office chairs

These purchases directly impact your body and overall comfort. Cheap shoes can lead to foot pain, poor mattresses can affect sleep quality and low-quality office chairs may contribute to back or neck strain over time.

It can also make sense to spend more on items you use almost every day. For example, if you cook frequently, investing in durable cookware or reliable kitchen appliances may save you from replacing warped pans or broken gadgets every few years.

Another factor to consider is repairability. Products with replaceable parts, longer warranties or repair options may last significantly longer than items designed to be disposable. Before buying, it can help to check whether replacement parts are available and read reviews that discuss the item's long-term durability rather than just first impressions.

At the same time, not every purchase needs to be built to last forever. Trend-based items, seasonal décor or products you rarely use may not require premium materials or top-tier pricing.

You don't always need the premium version

While some products are worth upgrading, there's also a point where spending more stops providing meaningful value.

For many purchases, the best option is often somewhere in the middle: not the cheapest version, but not the luxury version either.

Take kitchen appliances, for example. A basic coffee maker that costs too little may break after a year, but a high-end model with dozens of specialty features may not make sense for someone who simply wants a reliable cup of coffee each morning. In many cases, a well-reviewed mid-range product offers the best balance between durability, functionality and price.

The same idea applies to clothing, electronics and household items. Paying more for solid materials, good reviews and dependable performance can be worthwhile, but chasing every premium upgrade or luxury feature can quickly lead to overspending.

You can save money by focusing on value instead of branding alone. Reading reviews carefully, comparing warranty coverage and choosing products based on actual needs can help you avoid both cheaply made products and unnecessary splurges.

Trying to save money is important, especially as everyday costs continue to rise. But some purchases end up costing more in the long run when they need to be constantly replaced. Being intentional about which purchases deserve a little extra investment can help you save money over time, avoid constant replacements and get more value out of the things you use every day.

Every smart purchase is part of a bigger financial plan. Use the Bankrate tool below to connect with a financial advisor to build a strategy that helps you make the most of your money:

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• Why 'Revenge Saving' Is Replacing Spending

Each April, Americans, or someone they hire, work through income tax forms, fill in totals from their financial records and send the results to the IRS.

The goal is usually simple: Pay as little to the federal government as legally possible so you can keep more of your hard-earned money.

But what if paying more in taxes today could leave you with more money tomorrow? What if voluntarily paying additional taxes now could reduce the amount you and your family pay over your lifetime?

Opportunities like these are rarely discovered while filling out tax forms in April. Effective tax planning must be part of a broader retirement strategy that considers income sources, future tax rates, healthcare costs, estate planning goals and the rules governing retirement accounts.

Many people use Roth conversions to reduce their lifetime tax burden. While the objective is often to pay less tax over the long run, the process often results in paying more tax in the short run, but that may be exactly what your long-term financial plan needs.

In other words, you intentionally elect to pay more tax today in exchange for the potential of a smaller tax bill later.

When implemented correctly, a Roth conversion allows you to pay taxes on your terms, at a rate you find acceptable, rather than taking a chance on future tax laws and rates at a time of the IRS' choosing. If implemented incorrectly, however, it may cost you more than you expected.

The silent partner

Imagine going into a business partnership where you provide all the capital, do all the work, take all the risk and spend years building something valuable. Then, when the time finally comes to enjoy the rewards, your partner suddenly appears and tells you how much of the business belongs to them.

No rational person would willingly enter into that kind of arrangement. Yet people all across America do something very similar through tax-deferred retirement accounts.

They contribute the money. They assume the investment risk. They watch their balance climb over decades and mentally count that balance as part of their retirement nest egg. The problem is that they don't know how much belongs to them until they begin taking withdrawals. At that moment, the IRS steps in and determines how much it gets to keep.

This is where a Roth account comes into the picture. Money placed in a Roth account grows tax-free, and qualified withdrawals in retirement are generally free from federal income tax because the taxes were paid before the money entered the account.

Many investors consider converting a portion of their tax-deferred accounts into a Roth account. The process is relatively straightforward: Money is transferred from a tax-deferred account into a Roth account.

However, when you make the conversion, you must pay income tax on the amount being converted.

At first glance, that may sound counterproductive. Why would anyone voluntarily create a larger tax bill? The answer is simple: You may be exchanging a known tax bill today for a potentially larger and less predictable tax bill in the future.

Roth assets can also create meaningful tax advantages for beneficiaries who may inherit those accounts.

When should you convert?

While Roth conversions may benefit many people preparing for retirement, it is not always advisable to convert all of the funds held in tax-deferred accounts. Maintaining tax diversification can be just as important as maintaining a diversified investment portfolio, yet it is often overlooked in traditional retirement planning.

Using the tax code efficiently later in life may require a blend of income sources, including taxable income, long-term capital gains, dividend income and Roth income.

I have seen situations where aggressively converting every available dollar to a Roth account has cost a retired couple nearly as much as if they had never converted at all. They lost opportunities to strategically fill lower tax brackets later in retirement and paid substantially more than necessary.

This highlights an important point: A Roth conversion is not the goal. The goal is to create the most efficient retirement income strategy possible. The rules surrounding Roth conversions can be complex, but the decision should be evaluated within the context of your overall retirement strategy.

At R.D. Smothers (RDS) Wealth, we encourage clients to begin by estimating their expected income for the year and determining how much room they have available within their current tax bracket.

Lower-income years can present some of the best opportunities for Roth conversions because they allow you to convert more assets while potentially remaining in a favorable tax bracket.

Taxes are only one piece of the equation. A well-designed Roth conversion strategy should also account for Medicare premium surcharges, commonly known as IRMAA, future healthcare expenses, estate planning objectives and the income needs of both you and your beneficiaries.

How much should you convert? Understanding the tax fountain and your 'Opportunity Zone'

This brings me to an important point about understanding your own unique relationship with the tax code. After all, the tax code is how your silent partner ultimately determines how much of your money you get to keep and how much they get to take.

Many retirees spend decades building wealth without fully understanding how that partnership works. Failing to understand the tax code will likely cost you at some point in retirement, whether through unnecessary taxes, Medicare surcharges, inefficient withdrawals or missed planning opportunities.

What makes this even more challenging is that the tax code you retire under may not be the same tax code you die under. I often tell clients that the tax code is written in pencil, not ink. Congress can change it, modify it or rewrite portions of it at any time. That's why successful tax planning requires ongoing adjustments as your circumstances and the tax laws evolve.

If you want to use Roth conversions to help manage your future tax burden, understanding tax brackets is essential. Before you can determine whether a Roth conversion makes sense, you need to understand how much of a conversion may be appropriate.

At RDS Wealth, we often refer to this as identifying your "Opportunity Zone." This is the portion of the tax code where additional income can potentially be recognized at rates that may be favorable relative to what you might pay in the future.

The U.S. tax code contains seven federal income tax brackets, ranging from 10% to 37%. Many people assume that if they fall into the 22% tax bracket, all of their income is taxed at 22%. That's not the case. Each bracket applies only to a specific portion of your income.

For example, in 2026, a married couple filing jointly receives a standard deduction of $32,200. Let's say the same couple has a gross income of $165,000 and no other deductions or credits. Their taxable income would be $132,800. They are squarely in the 22% tax bracket, but they will not pay 22% federal income tax on all of their money.

They will pay 22% federal income tax on only about $32,000 of their taxable income. When we look at this through the lens of Roth conversion planning, something interesting begins to emerge.

One way to grasp how the brackets work is to imagine them as a multitiered fountain. Each year, you pour all of your income into the top of the fountain.

The first tier to fill is the deduction bucket. No tax is paid on any income that lands in this bucket. Once that bucket is full, income spills into the 10% tier. Every dollar that lands there is taxed at 10%. The water then overflows into the 12% tier, then the 22% tier and eventually into higher tiers as more income is added.

In the example of the married couple earning $165,000, their income fills the lower tiers and then partially fills the 22% tier. Because they have not yet reached the top of that bracket, a portion of the 22% tier remains empty.

The empty space remaining in that tier is what we call the Opportunity Zone. It's the amount of income you may be able to recognize before spilling over into the next tax bracket.

In this example, the Opportunity Zone represents more than $78,000 of available space. That doesn't mean this couple should convert the entire amount, but it does mean they have room available to recognize additional income at a known tax rate rather than waiting until later when tax rates may be higher.

This is where Roth conversion planning becomes so powerful. If appropriate for your situation, you may be able to convert enough money to fill the remainder of that tier without spilling into the next bracket.

In doing so, you knowingly pay tax on those dollars today, move them into a Roth account and potentially allow future growth to occur in a tax-free environment.

The fact that you paid tax on the conversion means your tax bill may be higher this year than it otherwise would have been. However, if executed properly, that higher tax bill today may result in substantially lower taxes over the lifetime of the account.

Again, the goal of a Roth conversion is to pay a known and acceptable rate of tax while strategically reducing the future claim your silent partner has on your retirement assets.

The goal is not to eliminate taxes. The goal is to choose when you pay them. The families who often benefit most from Roth conversions are those who proactively manage their tax brackets rather than allowing future tax laws and required distributions to blindly manage it for them.

Ronnie Blair contributed to this article.

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

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• Risk On, Risk Off: The Mr. Miyagi Approach to Retirement 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.

Members of Generation X grew up navigating the challenges of such video games as Pac-Man, taking care of themselves after school and riding bikes without a helmet.

Today, as they approach retirement, one of their most profound challenges will be ensuring they have enough money to see them through their later years.

Born from 1965 to 1980, Gen X is now in its peak retirement-planning years.

With retirement on the horizon, many are confronting complex questions about financial security and how to make their savings last.

If the U.S. is to avoid a widening of the retirement savings gap beyond its current estimated size of $7 trillion, it's imperative that the next cohort of retirees is better positioned to achieve long-term financial security.

Unlike the baby boomer generation, most Gen X workers have spent their careers without access to traditional defined benefit-pension plans. Instead, they've relied primarily on 401(k) defined-contribution plans.

At the same time, many are also facing major financial headwinds, including rising housing and education costs, as well as dual caregiving responsibilities for both their children and aging parents.

As a result, many members of Generation X report either insufficient savings or low confidence in their ability to make their savings last.

An opportunity for financial pros

This shift presents a significant opportunity for financial professionals. While baby boomers have been much of the industry's focus, Generation X has now entered a pivotal stage of retirement preparation.

The need for help is undeniable. About 37% of Generation X have either postponed, or are contemplating postponing, their retirement due to financial concerns, compared to 19% of boomers.

Meanwhile, nearly 20% of Americans age 65 and older remain employed — up from 11% in 1987. As Gen X progresses toward traditional retirement age, financial pressures might further expand the proportion of older Americans remaining in the workforce.

Generation X faces tough decisions about how to manage asset decumulation. While defined-contribution and IRA plans serve as effective accumulation vehicles, they're limited in their ability to convert savings into guaranteed income streams.

Annuities address this challenge by turning a sum of money into predictable payments that one can't outlive.

In addition, anticipated intergenerational wealth transfers from boomer parents might increase demand for structured income solutions, if it fits the goals of the Gen X recipient.

The fragile decade is coming

Many Generation X individuals are still years from retirement and haven't planned for comprehensive income strategies. This presents both a challenge and an opportunity for the retirement and annuity industry.

Historically, annuities are most commonly purchased by individuals age 55 to 70. Today, the oldest members of Gen X are around 60, while the youngest are now 45.

As more enter the "fragile decade" — the five years before and after retirement, the period when market volatility can severely impact long-term financial security — the importance of downside protection and income certainty becomes more pronounced.

According to trade association LIMRA, 69% of surveyed Gen X respondents indicated they would prefer an annuity over investing a $100,000 inheritance in the stock market. And 37% said they would be "most interested" in purchasing an annuity, compared with 21% of boomers.

However, 64% of respondents find annuities the hardest product to understand. This suggests a clear need for improved education and transparent communication.

While annuities are one tool in the retirement toolkit, albeit a useful one, there are several areas that Gen Xers should understand before incorporating them into their plans.

Chief among these should be understanding how the contract value can grow — for example, is the return offered by an annuity set at a fixed rate or is it tied to the stock market?

Providers often present hypothetical back-tested scenarios to illustrate potential outcomes, but as with any investment, past performance is not a reliable indicator of future results.

Equally important is evaluating the provider. Given the longevity of an annuity, they must feel confident in the insurer's ability to meet its obligations:

• How long has the firm been in business?
• What is its financial rating?
• Are you confident in their ability to pay out when due?

Other considerations

Generation X investors should also assess how an annuity will fit within their broader financial planning. Guaranteed income products are most effective when they complement, not replace, other assets and align with liquidity needs, risk tolerance and long-term retirement goals.

By the same token, there are a variety of areas that the financial-services industry should consider to enhance education and adoption among Generation X. These include:

• Deepening collaboration with financial planners to address retirement savings gaps and clarify how annuities might contribute to sustainable income planning
• Expand access through employers, including integrating annuity options into 401(k) plans and other retirement programs
• Encourage comprehensive retirement-planning discussions that include guaranteed income solutions as part of decumulation strategies
• Help reduce debt burdens and increase savings, both within and outside of retirement plans
• Support multigenerational planning, helping Generation X households balance the financial decisions of baby boomer parents and dependent millennial children
• Reframe annuities beyond retirement, using them to help fund known future expenses such as education
• Incorporate anticipated wealth transfers into long-term income planning, helping Gen X clients prepare for how future inheritances might support their retirement income strategies

Generation X is digitally fluent and accustomed to mobile financial experiences. Although the annuity industry has historically lagged in this area, substantial progress has been made in recent years to serve financial professionals and consumers digitally.

Online platforms that simplify onboarding, allow for self-service, and provide real-time income illustrations will be critical to engaging with Generation X.

Without significant change, this "forgotten generation" faces a serious risk of entering retirement less secure than any generation before it.

The retirement industry has both an opportunity and a responsibility to engage Generation X proactively to help prevent a deepening of the retirement savings crisis across a new generation.

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• How Gen X Could Reinvent Retirement

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

In 1964, The Beatles released A Hard Day's Night, a soundtrack to a whirlwind year that captured the frenzy of Beatlemania.

Buried among the album's better-known hits is a John Lennon song called "When I Get Home." The song is energetic, upbeat and driven by a simple desire: After a long and exhausting journey, he just wants to get home.

More than 60 years later, many young Americans share that same desire. The difference is that today's journey home is proving far more difficult than Lennon could have imagined.

For generations, buying a first home was considered one of the defining milestones of adulthood. It wasn't easy, but it was attainable. A starter home represented more than four walls and a roof. It was a foundation for building wealth, raising a family, and creating a sense of stability and belonging.

After nearly four decades of working with families, I have observed that most families build their wealth primarily through two pillars.

The first is the home equity they build as prices rise over time and mortgages are paid down a little each month.

The second is the regular deposits they make to their 401(k) plans through payroll deduction over decades of employment.

Today, that first step onto the property ladder is becoming increasingly difficult.

Hurdles for first-time buyers

According to a recent Zillow report, there are now 242 cities across the United States where a starter home costs $1 million or more. Before the pandemic, that number stood at just 80. In just a few years, the number of cities where a modest entry-level home carries a seven-figure price tag has more than tripled.

The challenge facing young families extends well beyond the purchase price itself. Home values have risen substantially over the past decade, but so have many of the ongoing costs associated with homeownership. Property taxes, insurance premiums, utilities and maintenance expenses have all climbed, making ownership more expensive even for families that can afford the mortgage itself.

Then there is the mortgage.

For much of the decade following the Great Financial Crisis (GFC), prospective buyers could borrow money at historically low interest rates. While home prices were rising, monthly payments remained relatively manageable because financing costs were exceptionally low.

That equation has changed dramatically. Higher interest rates combined with higher home prices have pushed monthly mortgage payments to levels that would have seemed unimaginable only a few years ago.

Many younger buyers view mortgage rates near 6% as unusually high, but historically, they are not. When I began my career in 1987, mortgage rates were often between 9% and 10%, and rates above 5% were considered normal for much of the following two decades.

The difference today is that buyers are confronting those rates after spending more than a decade anchored to the exceptionally low borrowing costs that followed the GFC. Economists call this recency bias. When rates returned to more historically typical levels, many buyers experienced sticker shock.

As a result, many young families find themselves squeezed from both directions. Saving for a down payment has become more difficult because everyday living expenses consume a larger share of household income.

Student loan payments, childcare costs and rising insurance premiums often leave little room for accumulating the savings needed to buy a first home.

At the same time, even those who successfully save enough for a down payment often discover that the monthly mortgage payment remains out of reach.

Real cost of delayed homeownership

In many ways, this story is about more than housing.

Homeownership has historically been one of the primary ways middle-class Americans build wealth. A home is often the largest asset a family will ever own. It provides the opportunity to accumulate equity, benefit from appreciation over time and create financial flexibility for future goals.

Delaying homeownership by five, 10 or even 15 years can have meaningful consequences for long-term wealth creation by delaying the accumulation of equity and the compounding effect of home price appreciation.

According to research from MBS Highway, an organization that conducts economic research and forecasting on the real estate and mortgage markets, homeowners tend to have substantially higher net worth than renters over time. Property ownership serves as a forced savings plan, an inflation buffer and a stability anchor for long-term financial security.

This is one reason housing affordability has become such an important economic issue. It is not simply about real estate markets or mortgage rates. It is about whether younger generations will have access to the same wealth-building opportunities that previous generations enjoyed.

Helping others break into the market

Of course, every generation faces its own challenges. The path to homeownership has never been perfectly smooth. Markets change, interest rates fluctuate and economic conditions evolve. Yet the combination of higher prices, higher financing costs and higher ongoing ownership expenses has created a particularly difficult environment for today's first-time buyers.

I have had many conversations with clients who have children and grandchildren struggling to buy their first home. They understand the frustration and, at times, the feeling that the math simply doesn't work.

In some cases, families that have used the financial planning process and are confident they have achieved their own retirement goals are exploring ways to help younger generations with down payments or other housing-related expenses as they work toward financial independence.

Many young families are simply looking for a place to start. They are looking for a place to put down roots, build a life and create a sense of permanence. In other words, they simply want to get home.

Back in 1964, Lennon sang about the anticipation of finally reaching the place where he wanted to be. For many young Americans today, that same destination remains the goal. The challenge is that the road home has become far longer and more expensive than it was for the generations that came before them.

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• A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and Around

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

When a family member or close friend passes away, the person named as executor often steps into the role thinking of it as an honor. In reality, it can quickly become something much more demanding.

Consider a typical situation: An individual dies with a family home, investment and retirement accounts and has named beneficiaries. The executor will need to gather financial records, coordinate with attorneys and accountants, manage or sell property, file tax returns and make decisions that directly affect what each beneficiary ultimately receives.

Add in multiple properties in different states, business interests, artwork and digital assets, and settlement of an estate can take several years.

When choosing an executor, many people focus first on trust. While trust is essential, it is only one part of what the role requires. Choosing an executor deserves the same level of attention as creation of the estate plan itself.

Serving as executor is more than an honor — it's a job

Acting as executor comes with a great deal of responsibility and requires a broad range of skills. The role may be filled by an individual, a professional fiduciary such as a trust company or bank or a combination of both serving as co-executors.

In practice, the responsibilities of settling an estate often include:

• Locating, collecting and safeguarding assets
• Paying debts, taxes and administration expenses
• Coordinating with attorneys, accountants and financial advisers
• Managing or selling property
• Communicating with beneficiaries
• Distributing assets according to the terms of the will

Throughout the process, the executor serves as a fiduciary, with a legal duty to act prudently, impartially and in the best interests of the estate and its beneficiaries.

But even this list captures only part of the picture. Administering an estate is often an extended process that requires ongoing judgment, coordination and attention to detail.

Choosing the right executor: What to look for

The most qualified executor is not necessarily the person closest to you. Instead, consider whether they have the qualities needed to manage what can be a lengthy and complex process.

Financial judgment is critical. Executors are often required to evaluate complex or illiquid assets, address liquidity needs and ensure obligations, such as taxes and expenses, are met without unnecessarily diminishing the value of the estate.

Additionally, they must make decisions concerning the sale, retention and investment of the estate assets.

Experience in tax matters is helpful. Executors are responsible for the preparation and filing of the decedent's federal and state income tax returns and applicable estate and gift tax returns.

These filings can involve detailed valuation and reporting, making tax coordination one of the most demanding aspects of estate administration.

Objectivity matters, particularly in families. When an executor is also a beneficiary, decisions such as tax elections or timing of distributions can affect outcomes unevenly. The ability to act impartially is essential to avoiding unnecessary conflict.

Time and availability are often underestimated. Settling a complex estate can easily extend for several years, particularly if an audit issue arises. What begins as a defined responsibility can become an ongoing commitment. Your executor must be willing and able to commit time and energy to the task.

For these reasons, some individuals consider naming a professional fiduciary as sole or co-executor. Professional fiduciaries bring specialized expertise, continuity and established administrative resources, particularly in more complex estates.

Why it's important to revisit your choice

Even thoughtful executor choices should be revisited over time to ensure that each named executor is up to the task.

A lot of things can change between the time an executor is named and when they serve.

• The amount and complexity of assets can change
• Individuals move and may acquire property across multiple jurisdictions, requiring coordination of different probate processes
• Digital assets and cryptocurrency have introduced new legal and practical considerations

Additionally, tax rules are always changing.

Make sure that the person named years ago is still the best fit for today's realities.

The difference between a plan and a successful outcome

For some families, a spouse, adult child or trusted friend may be the right choice. For others, a professional fiduciary or co-executor arrangement may provide valuable expertise, continuity and objectivity.

It's also important to remember that estate administration is often just the beginning. In many estate plans, the executor's work lays the foundation for trusts that may continue for years, or even generations, after the estate has been settled.

Decisions made during administration can influence how efficiently assets are transferred, how taxes are managed and how effectively long-term planning objectives are achieved.

Ultimately, an estate plan is only as effective as the people responsible for carrying it out. Taking time to thoughtfully select and periodically review your executor can help ensure your wishes are fulfilled and ease the burden on the people you leave behind.

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• An Estate Planning Guide for Women: 5 Essential Moves to Prepare for When Life Happens

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.

Welcome to Kiplinger's My First $1 Million series, in which we hear from people who have made $1 million.

They're sharing how they did it and what they're doing with it. This time, we hear from a 45-year-old married mental health professional in social services who lives in Arkansas. She reports that she and her husband have a combined annual salary of $250,000.

See our earlier profiles, including a writer in New England, a literacy interventionist in Colorado, a semiretired entrepreneur in Nashville and an events industry CEO in Northern New Jersey. (See all of the profiles here.)

Each profile features one person or couple, who will always be completely anonymous to readers, answering questions to help our readers learn from their experience.

These features are intended to provide a window into how different people build their savings — they're not intended to provide financial advice.

To learn what these millionaires have taught us, check out the articles 5 Key Insights We Learned From 50 Millionaires and 5 Things 50 Millionaires Wish They'd Known Before They Retired.

And to hear more about My First $1 Million, you can check out this podcast with bestselling author and tax attorney Toby Mathis:

The Basics

How did you make your first $1 million?

Building a net worth of a million dollars took around 12 years for me and my husband. We got married in 2004. Thanks to scholarships and family help, we were both able to go to college. We both graduated with bachelor's degrees with no debt.

It was important to me that he eliminate his credit card debt before we got married, which he did. We were dirt poor but made ends meet working minimum-wage jobs.

We met (while we were getting) our master's degrees and were able to graduate the program without debt again. This was due to my mother paying for my tuition, his grandmother giving him money for a third of his tuition and us paying cash for the remainder.

When we entered the working world, we had no debt but quickly dove in. That's what we had been told adults did. I wish I wouldn't have listened.

We both got jobs that paid $50,000 each. We bought a house with no money down, we financed a car and a motorcycle and decided to have a baby.

I didn't like the state of our financial health, so I educated myself with lots of YouTube videos, blogs and articles. I had a basic understanding of finances but didn't have a good strategy.

Once I figured out how debt held us back and investment could push us forward, we paid off the car, sold the motorcycle, refinanced the house and eventually sold one to buy another.

Buying houses helped build the first million, but we really did it by investing in our company's 401(k), opening and investing in an IRA and steadily saving.

We went from a negative $150,000 net worth in 2008 to a million dollars in 2020.

What are you doing with the money?

Most of our first million is invested in a variety of accounts and investment types. Nothing fancy. Some high-risk, some low-risk, some mutual funds, some bonds.

Our only real estate is our home.

When we hit the million-dollar mark, we didn't do anything fun. I simply just told him with a big grin, and we moved on.

The Fun Stuff

Did you do anything to celebrate?

Not a thing! It was nice to know we did it. Then it was on to the next million.

What is the best part of making $1 million?

Peace of mind.

Did your life change?

Yes. It freed us to make some decisions that were important to us. I was able to drop down to part-time work to spend time with our three children while they were small.

I don't remember much about that time, but I'm glad I did it. We have flexibility at work. We can choose if we wish to continue, and that makes it easier to do so.

Does anyone know you're a millionaire?

I disclosed our financial standing to others. I don't think I will continue doing that. I told my work supervisor so they could understand my motivation for work — I'm not motivated by needing a paycheck, and that's nice. I thought it was important to tell them so they could trust my motivation for helping others.

It changed things when I didn't have to go to work. Now I choose to go to work, and that makes it easier to handle the stress.

My husband feels the same. We keep showing up — and will as long as it suits us. If we suddenly lose our jobs, we would be OK. There's peace in that and peace in having confidence in the choices we make.

I have disclosed it to a sibling, but I think this was a mistake. I won't continue to share growth or changes. My hope is they will assume it's gone badly.

I have told one parent, and they are able to celebrate crossing milestones with me without it complicating the relationship.

I have avoided disclosing to the other parent because they seem to have a different view about money. My intuition says it would be unhelpful to share what we have.

My husband hasn't told anyone. He views money differently than I do. He wants to have enough to enjoy hobbies, have a nice home, travel, and that's about it. He isn't driven by ensuring security like I am. It works out well for us.

Any plans to retire early?

We would like to retire early, I suppose. I'm not sure what life will look like then, so I don't put much dreaming toward those years.

I would like to work less if and when my children have children.

We would like to travel more and work less.

Retirement isn't the goal. Living well and by our values is the goal. Having money makes that possible.

Looking Back

Anything you would do differently?

I don't think we would have done anything differently. However, I wish there had been better financial literacy in my high school and college.

I didn't have any money to invest, but I wish I'd understood the dramatic difference time can make when investing. No one stressed that to me when I was turning 18.

The internet was just getting going at that age, so the wealth of information out there was quite limited.

What advice would you give to your younger self?

The same advice I would give to others (see below). Invest early, even if it's just $10 a pay period.

Saving is a practice, and developing that habit is best if it's done early.

Live below your means.

Avoid paying interest so you can earn interest.

Look for a good deal on big assets.

Did you read any books that helped you on your journey?

I've read a few. Most are pop hits:

• The Total Money Makeover (by Dave Ramsey)
• Rich Dad Poor Dad (by Robert Kiyosaki)
• Die With Zero (by Bill Perkins)

Did you work with a financial adviser?

I hired a financial adviser after we crossed the million-dollar mark. The first person we hired was a nice person but wasn't really available. It was fine, but then he passed away.

The firm handed me over to another person. They notified me by letter, and the new person didn't take the time to call and get acquainted with me.

I took that opportunity to exit that service. We moved over to Wells Fargo. Our adviser there is approachable and kind.

He also keeps our earnings in a good place. I have no complaints. He helps with a longer-term strategy, which I like.

Did anyone help you early on?

My mother told me not to buy anything if I didn't have the money for it. That stuck with me like nothing else. So much so, I wish I would have had cash to pay for the house. Maybe someday we will get to that point.

Looking Ahead

Plans for your next $1 million?

We are almost there. We have been building the second million the same way we reached the first million. If our net worth grows like it has been, we will have accomplished the second million in about six years after getting to $1 million.

I have enjoyed watching the money work and grow.

The news, friends and family are often naysayers, talking about how it's all going to hell. I haven't had that experience.

The plan once we get there is to keep it growing. We will have more money than we will know what to do with, and that's a nice feeling.

Of course, we understand it could all go away, but if it does for us, then it will for everybody else. There's peace in that, too. At least we will all be miserable and stressed together.

Any advice for others trying to make their first $1 million?

Invest early! Don't wait. Put saving first like a bill you pay. Make it a priority. Know what your spouse/partner believes about money.

I lucked out with my husband. He and I have shared goals and values surrounding money, so planning is easy. He trusts my decision-making and goes along with strategies I present.

We fight, but it's not about money. We have enough that we both do what we like.

Invest in any employer plan if you can. We take full advantage of employer matches, and that has given us a healthy boost.

I've shared with my coworkers often that they shouldn't leave that money on the table. Get the match. It's an instant return on investment, often at 100%.

I would also share that we avoided debt like the plague. You won't have money to invest that will earn you money if you are paying all your money to someone else for the privilege of borrowing their money. For example:

We bought into the sales pitch of the local car salesman peddling the idea that having a car payment was beneficial. That lasted about six months, and we got over it. The interest on auto loans butchers any chance of having enough money to invest.

We have paid cash for every car we've owned after that first one. We never buy new, always used.

We were fortunate enough to take advantage of some gains through homebuying. Our first home was financed at 9%. We pitched that as soon as we could and refinanced for 6%. That was still too high, so we sold the house and bought an older home with more square footage.

I kept my eye out for a house and saw one on social media. The owner had died, and their family was looking to finalize the estate, so we made an offer at about 20% lower than market price. Thankfully, they accepted the offer.

We paid the house off within three years. No house payment was amazing, and we hope to be there again soon.

That allowed us to build up $100,000 to put down on our next home.

We sold our home during COVID. That was a fun time to be in the housing market. We sold it, making around $20,000 on the sale.

We stumbled into another great homebuying opportunity. We had enough to make a 20% down payment, so we avoided some costs on a mortgage.

The house was also undervalued, so we gained $60,000 at purchase. That was nice.

We got an interest rate of 3%. We put as much as we can on the house. Saving is the priority, but the house is second. We have a 15-year fixed-rate mortgage.

We should have it paid in half that time.

We avoid credit cards. People tell us that they don't know how we do it. I find them to be tedious. I've had them but hate the idea of having any kind of a balance.

I'd rather just pay for what I need, and the credit card companies can keep their rewards.

We've tried two in the last decade, and both were compromised. I'd rather not fool with it.

Do you have an estate plan?

We do have an estate plan. We each have a will and powers of attorney in place.

We chose a will because we have three minor children who we want to be taken care of should we die unexpectedly.

We also have term life insurance. If one of us dies within the policy time frame, the other will get a healthy little boost. If we both die, then our children will each inherit about a million each.

We have a plan in place for our children should that happen.

Choosing a will was mostly for the purpose of providing direction to the adults in their life.

We chose power of attorney for healthcare decisions and for each other. The healthcare POA was to have something in place in case the worst happened and we needed to make healthcare decisions for the other.

The power of attorney over the rest was for ease. We wanted to be able to conduct business for the other if we needed to.

What do you wish you'd known …

When you first started saving? I wish I had known about the power of compound interest.

When you first started investing? I've invested for as long as I've had the money to do so. I haven't faced a regret just yet. Let's hope that continues.

When you first started working with a financial professional? Our net worth has grown with a financial adviser. I don't know what it would be like without one and find it helpful to have someone who can sort through financial decisions with us.

What do you wish you knew now about being retired?

That question always itches in the back of mind. What am I missing, and what wisdom do retired people have for me? I value learning from the people who've done and can let me in on the strategies they've used.

If you have made $1 million or more and would like to be anonymously featured in a future My First $1 Million profile, please fill out and submit this Google Form or send an email to MyFirstMillion@futurenet.com to receive the questions. We welcome all stories that add up to $1 million or more in your accounts, although we will use discretion in which stories we choose to publish, to ensure we share a diversity of experiences. We also might want to verify that you really do have $1 million. Your answers may be edited for clarity.

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Is the best way to invest in bonds to buy individual IOUs or shares in a bond fund? "We get this question all the time," says Collin Martin, head of fixed-income strategy and research at the Schwab Center for Financial Research. "And every time, I give the same answer: It depends."

Mutual and exchange-traded funds certainly make bond investing easy. You pay an annual fee, of course, but the initial investment outlay is low, the fund offers instant diversification, and experts do all the work.

But for investors who seek a specific level of income or who have cash needs at a specific time in the future, a portfolio of individual bonds can make a lot of sense. There are pros and cons to investing in individual bonds, however, and much to consider if you want to invest that way.

The main upside to holding bonds to maturity is that doing so neutralizes interest rate risk. Bond prices and interest rates move inversely — when rates rise, bond prices fall, and vice versa.

When the Federal Reserve hiked rates 4.25 percentage points in 2022, for instance, the Bloomberg U.S. Aggregate Bond Index sank 13.0%. But when you hold individual bonds to maturity, interest rate fluctuations don't impact your coupon or principal payouts.

Better yet, when you plan to hold individual bonds to maturity, you know with near certainty, barring a default or an early payoff, exactly when and how much money you'll get back. That certainty of a payout at maturity is one reason an investor with a looming large expense — a balloon payment on a home equity loan, say, or a tuition bill — might opt to invest in individual bonds.

"Few investments give you that kind of predictability," says Martin.

But it's not for everyone. At least $100,000 is required to build a well-diversified portfolio of corporate or municipal bonds, spread across 10 different bonds in different sectors, among other traits, says Martin.

At U.S. Bank, $250,000 is the preferred minimum for a portfolio of high-quality corporate bonds, says Bill Merz, head of capital research at U.S. Bank Asset Management Group. "And that's 25% to 30% of the total portfolio," which will include stocks and other assets.

The larger the transaction size, the better the price and the easier it is to execute. Although it's possible to buy corporate and municipal bonds in $5,000 tranches, if you invest less than $10,000 in any given bond issue, you may find it difficult to trade, says Schwab's Martin.

Be prepared to research and monitor your individual bond holdings. The sheer number of bonds on the market can be daunting. Ford Motor (F) has one symbol for its common stock, for example, but hundreds of distinct bonds, says Richard Carter, vice president of fixed income strategy at Fidelity.

Proper vetting is required to ward against the risk of default. In a portfolio of individual IOUs, every holding matters. "A default can meaningfully impact the portfolio yield," says Merz. That's less of a risk in a fund that holds 1,000 securities.

If you don't have the time or the appetite to do the work required, a bond fund makes better sense. Certain pockets of the bond market — low-grade credit, such as high-yield municipal bonds, high-yield corporate debt and bank loans — are better suited to mutual funds or ETFs, too.

Instead, focus on high-grade sectors such as certificates of deposit, Treasuries, and investment-grade (rated triple-A to triple-B) corporate bonds or municipal debt, and plan to hold to maturity if you're going to buy individual IOUs.

Many online brokers, including E*Trade, Fidelity and Schwab, offer screening tools to help you select individual issues. It helps to have a rough idea of what you're looking for at the start. To that end, consider the following traits below to begin narrowing your choices.

Time horizon matters when buying bonds

When do you need your money back? Match your time horizon with the bonds you're investing in. "If you have a two-year time horizon, don't invest in a 10-year bond," says Martin.

A bond's maturity and its interest rate risk are connected. Bonds with a one-year maturity are less sensitive to interest rate moves than a 10-year bond.

Keep an eye on credit risk, too

Even within high-grade debt, default risks can vary. A triple-A bond has less credit risk than one rated triple-B. But two single-A bonds issued by different companies may differ, too.

If one yields more than another, for instance, there's probably an added risk. For that matter, the credit quality of a triple-B bond issued by a firm with improving fundamentals may be more attractive than that of a bond rated single-A from a company with deteriorating fundamentals.

"Look at the issuers yourself. Don't blindly follow the credit ratings," says Erin Kolo, manager of private wealth management equity and fixed income research at Baird.

Key bond terms to know

Coupon rate is the fixed annual rate of interest a bond issuer promises to pay. That's different from current yield, which fluctuates depending on the bond's price (it is the bond's annual income divided by its current market price). The greater the risk, the bigger the potential reward, so a bond's yield can be a telling clue in that regard.

Yield to maturity is the all-in return you would get from coupon payments and the repayment of principal. Yield to worst is the lowest possible yield a bond investor can receive without the issuer defaulting.

Call features of a bond

Most high-quality corporate debt is callable, which means after a certain period the company can "call" in the bond and pay it off before maturity. That allows firms to refinance if rates have fallen, for example.

But what's good for the firm is not always beneficial for bondholders. Although a callable bond typically yields more than a noncallable counterpart, if your promised coupon payments end, you'll have to reinvest elsewhere, potentially at lower interest rates.

The bond tools at Fidelity and Schwab allow you to sift for "call-protected," or noncallable, bonds. But that can limit your choices. Fortunately, both tools also allow you to view the terms on a callable bond, and it pays to check. A callable Walmart issue that matures in April 2028 can't be called until March 2028, for example, just one month before it matures. "Some might say, that's not material. It doesn't really matter," says Fidelity's Carter.

At a minimum, if you're weighing an investment in a bond that's callable, pay attention to its yield to worst to get a measure of what your return would if the bond gets called, says Baird's Kolo.

A bond ladder, an investing strategy that involves buying multiple bonds with staggered maturities, is one of the best ways to build and maintain a simple bond portfolio. As one bond matures, reinvest the principal into a new bond at the far end of the ladder. Or use the proceeds to cover necessary expenses. If college tuition bills start in 2027, for instance, you'd buy Treasuries maturing in 12-month intervals over the next four years, just in time to cover the bills.

Some online brokers, including Schwab and Fidelity, offer tools that can help you build and maintain a bond ladder. Schwab's tool is limited to CDs and Treasuries; Fidelity's covers those asset classes, plus corporate and muni bonds.

Building a bond ladder is one way to create a more predictable income stream, but deciding how bonds fit into your broader retirement or investment strategy can be more complicated.

Use the Bankrate tool below to connect with a financial advisor to create a portfolio that aligns with your income needs, risk tolerance and long-term goals:

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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Keith Ward, 61, is proud of his son, who graduated from college in December of 2025 with a degree in information systems. His son was focused during his studies and worked hard to build skills he thought would lead to gainful employment.

Instead, Ward's son is living at home and struggling to find work.

"He's applied to more than 250 jobs, and I think has gotten seven interview requests," Ward lamented. "Five years ago, employers would've been having fist fights to hire him."

Ward's son's experience isn't unique. The rise of AI has made an already tight job market for new applicants even tighter.

As of March 2026, the unemployment rate among recent college graduates aged 22 to 27 was 5.6%, compared to a 3.1% unemployment rate across all college grads, according to the Federal Reserve Bank of New York.

Underemployment is an equally big issue. As of January 2026, 41.5% of recent graduates were underemployed.

The Federal Reserve also found that as of May 2026, 15% of adults ages 18 to 29 who weren't working said they couldn't find a job, while 10% were working part-time because they were unable to find full-time work.

Ward's son is trying to stay positive. For now, he's working part-time in a bookstore.

"It's been frustrating for him because now he's living with us," Ward says. "He wants to be independent. He wants to be working in this field that he trained for. When he started four years ago, there was no thought that AI was going to be taking jobs."

And it's not just Ward's son who's been struggling.

"My wife and I have been planning for retirement. Now we have three of our grown children living with us," Ward says.

Ward's initial plan was to retire within five years.

"But I don't think it's going to happen," he says now. "We're going to continue working until circumstances force us to do something else because we want to have a place for our kids to be."

A troubling trend

Ward's experience isn't unique. A late 2025 AARP survey found that 75% of parents are providing financial support to a child 18 or older. That's apt to impact a lot of people's retirement plans.

Julianne Coleman is 62 and has plans to retire with her husband abroad. Now, those plans are on hold indefinitely as her two 20-something children grapple with the reality of today's workforce.

Her 22-year-old, who's a recent college grad, is especially struggling.

"I just don't know how someone like him who's relatively new to the workforce and relatively green is going to find something fulfilling," Coleman says. "There's all this economic uncertainty created by the AI bubble."

Coleman's daughter, who's 26, is in the midst of a career pivot after landing a job out of college that was too AI-heavy.

"She doesn't want anything to do with AI, even though she's well-versed in it," Coleman says. "She wants to move another way because of how damaging she sees it being."

In the near term, Coleman is spending her own resources to feed her grown kids and provide a roof over their heads. Her dream of retiring abroad hinges on being able to sell her home, which she can't do with her children living in it.

"If my kids were fully independent, we would downsize," Coleman says. But since her kids only have roughly $10,000 in savings each and limited job prospects, Coleman feels stuck.

"The next 15 years are critical in terms of mobility," Coleman says. She's afraid she'll lose out on an opportunity she saved for because her kids can't leave the nest.

Mostly, however, she feels for her kids.

"I'm sad for them," Coleman says. "I feel like we had it so much better."

Data from the Federal Reserve Bank of New York points to the fact that remote work is sidelining young job applicants more so than AI right now. On the other hand, Challenger, Gray & Christmas found that U.S. employers implemented 45,849 job cuts in June, largely fueled by AI. And while those cuts weren't necessarily specific to younger workers, they speak to a worrying trend.

Adam Spiegelman, founder and wealth advisor at Spiegelman Wealth, says he's seeing firsthand how much young adults are struggling.

"In my 25 years as a wealth advisor, I’ve never seen anything like this year," he says. "I’ve received about a dozen unsolicited emails from college juniors, seniors, and recent grads … asking to shadow me or intern at my firm. That’s never happened before."

The trend is much broader, though.

"Many of my own clients are telling me their kids and grandkids are struggling to find work," Spiegelman says. "Whether it’s inflation, the broader economy, AI, or some combination, this generation is having a genuinely hard time landing that first real job, and I’m seeing it push some parents to seriously reconsider their retirement timelines."

Should you delay retirement because your kids are struggling to find work?

AI may not be the only reason your 20-something children can't find work. But should you be altering your retirement plans because of it?

Spiegelman says that while it's natural to want to help your grown children, he thinks it's important to separate support from enabling.

"I have a client right now who’s buying a home for his adult child to live in rent-free — a full-time, able-bodied adult with only a part-time job. That’s a very different situation from a family giving a new grad six months to a year of breathing room while they find their footing," he says.

As Spiegelman explains, both are examples of support, but only one has an exit plan.

"Parents need to have that conversation with each other first, before their child even graduates, and agree on what their expectations are and where the line is," he says.

Steve Sexton, retirement planning expert at Sexton Advisory Group, agrees.

"It's natural for parents to want to help their children, especially when they’ve done everything right," he says. "But the biggest thing I would tell parents is support your adult children in a way that does not quietly derail your own retirement."

Of course, that's easier said than done when your child can't find a job and may be sitting on a pile of student loans to boot. But like Spiegelman, Sexton feels parents should put a dollar amount and timeline around the help they'll provide.

Most importantly, Sexton says, parents should avoid tapping retirement accounts, pausing retirement contributions, or taking on new debt to support an adult child.

"Your child has time to recover financially. You may not. A 23-year-old can rebuild from a tough job market, but a 62-year-old who drains savings … may have a much harder time catching up," he says.

You're allowed to fulfill your own dreams

Ultimately, there are many parents like Ward and Coleman who are in a position to help their kids without necessarily compromising their finances as much as their dreams. But that's also a problem, Spiegelman insists.

"People spend 20, 30, 40 years working and saving so they can retire in their sixties, and that window to actually enjoy retirement — travel, health, time — isn’t unlimited," he says. "Continually pushing that back to subsidize an adult child who could be working is usually not serving anyone well, including the child."

If parents feel they haven’t set their kids up with the right financial habits, Spiegelman says it’s not too late to have that conversation now.

"Start charging rent after a reasonable grace period, and scale support down deliberately rather than indefinitely," he says.

Spiegelman also recommends bringing in a financial adviser or CPA as the “bad guy.”

"It’s a lot easier for a parent to say 'our adviser says we can’t keep this up if we want to retire on schedule' than to have that conversation alone," he says.

Of course, some young adults are as fiscally responsible as can be, yet have simply fallen victim to circumstances. That's the situation Ward and Coleman are in. And they're working to make their peace with a potential change of plans.

As Ward says, "We're fortunate enough to live on five acres in a great setting. It's a large house and a good place for grandkids."

And, he says, "I certainly do love having the kids around."

If he's ultimately forced to delay retirement, that's at least one consolation prize.

Read More

• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• I Retired at 63 to Enjoy My Free Time, But My Grown Kids Want Help With Childcare
• The Real Cost of Funding Adult Children: Postponing Retirement
• We Are 65 With $2.6 Million. One of Our Two Daughters Struggles Financially. Is It Fair if We Only Help Her?

Retirement is supposed to be the reward for decades of disciplined saving. But for many retirees, a hidden tax problem quietly erodes what they've worked so hard to build — not through fraud or negligence, but through a lack of coordination between their income sources and their tax exposure.

Most retirees don't realize they're overpaying until after the damage is done. In retirement, the biggest tax triggers aren't wages — they're the benefits and accounts you spent a lifetime accumulating.

Understanding how they interact is what separates a tax-efficient retirement from an expensive one.

How IRA withdrawals can make Social Security taxable and Medicare cost more

Your income in retirement flows from multiple sources: Social Security, IRA withdrawals, investment income, sometimes a pension.

Each is governed by its own rules. The problem is that these streams don't exist in isolation. They stack on top of one another, and the IRS adds them together when determining what you owe.

A retiree who pulls $40,000 from an IRA to cover living expenses may not realize that withdrawal just made more of their Social Security taxable, bumped their Medicare premiums, and pushed them into a higher tax bracket.

None of those outcomes required earning a dollar more. They were triggered purely by the order and size of withdrawals from accounts they'd already paid into for decades.

Social Security: How much of your benefit is taxable

Whether your Social Security benefit is taxed depends on your provisional income: Adjusted gross income, plus tax-exempt interest, plus half of your Social Security benefit.

For individuals, once provisional income exceeds $25,000, up to 50% of benefits become taxable. Above $34,000, that rises to 85%. For married couples filing jointly, those thresholds are $32,000 and $44,000, respectively.

These thresholds have not been adjusted for inflation since they were established in the 1980s and 1990s. That means a retiree in 2026 with a modest lifestyle can easily find that 85% of their Social Security is taxable, not because they're wealthy, but because the brackets never kept pace with rising benefit amounts and retirement account balances.

RMDs: The income you're forced to take whether you need it or not

Required minimum distributions begin at age 73 (under the SECURE 2.0 Act, the starting age for RMDs will increase to age 75 for individuals born in 1960 or later). The IRS requires a calculated percentage of your tax-deferred accounts to be withdrawn each year, regardless of whether you need the money.

On a $1 million IRA, the first RMD is roughly $36,000 to $40,000. That amount grows as a percentage of the account each year.

Because RMDs count as ordinary income, they don't just generate their own tax bill. They push provisional income higher, which makes more of your Social Security taxable.

They can move you from the 12% bracket to the 22% bracket. They can trigger IRMAA surcharges on Medicare premiums that won't show up until two years later.

For retirees who spent decades deferring taxes to build a larger account, the RMD is often when the full bill arrives, on the IRS's schedule, not yours.

IRMAA: The Medicare surcharge most retirees don't see coming

The standard Medicare Part B premium in 2026 is $202.90 a month. But that is only what lower-income beneficiaries pay. Once your modified adjusted gross income crosses certain thresholds, you pay significantly more through IRMAA surcharges, and the lookback period means the income that triggers those surcharges was reported two years earlier.

For a married couple filing jointly, crossing into the first IRMAA tier costs $2,297 a year. Moving from Tier 1 to Tier 2 adds another $3,475, bringing the couple's total annual surcharge to $5,772. At the top tier, the combined Part B and Part D surcharges reach $13,872 a year for a couple on Medicare together.

The cliff structure matters: Exceeding a threshold by even one dollar triggers the full surcharge for that tier. A retiree who crosses an IRMAA threshold owing to a one-time Roth conversion or asset sale will pay elevated premiums for the entire following year, regardless of whether income normalized.

What to do about it

This is where most retirement plans fall short. Knowing these rules exist is not the same as having a strategy around them. Here is what proactive planning looks like in practice.

1. Use the pre-RMD window for Roth conversions.

The years between retirement and age 73 are often the most underused planning opportunity retirees have. During this window, income is typically lower, brackets are more favorable and there are no required distributions yet.

Converting portions of a traditional IRA to a Roth account during this period means paying taxes at today's rates on a smaller balance, reducing the size of future RMDs, lowering provisional income in later years, and shrinking the Social Security tax exposure and IRMAA risk that come with large mandatory withdrawals.

The right conversion amount each year is the one that fills your current bracket without crossing into the next one or triggering an IRMAA tier.

2. Sequence withdrawals with the bracket in mind.

The order in which you draw down accounts determines your tax rate each year. A common approach is to spend from taxable brokerage accounts first, then tax-deferred IRAs, then Roth accounts last.

But the more useful framework is to think about filling your current bracket each year deliberately: Taking enough from tax-deferred accounts to use the lower brackets fully, while leaving Roth assets intact to avoid pushing income higher when you don't need to.

3. Map your IRMAA exposure two years out.

Because IRMAA is based on income from two years prior, you need to be thinking about Medicare premiums before you're on Medicare.

A retiree who does a large Roth conversion at 63 needs to understand the Medicare premium implications at 65. The specific IRMAA thresholds for 2026 for married couples filing jointly start at $218,000 in MAGI.

Staying below a threshold is worth real money, and in many cases a modest adjustment to a conversion amount or the timing of an asset sale is enough to avoid crossing a tier entirely.

4. Use qualified charitable distributions (QCDs) to satisfy RMDs tax-free.

Retirees who are 70½ or older and charitably inclined can distribute up to $111,000 a year directly from an IRA to a qualifying charity. That amount counts toward the RMD requirement but does not appear as taxable income.

For a retiree who gives regularly, routing those gifts through a QCD rather than writing a check from a bank account eliminates a dollar of ordinary income for every dollar donated, which reduces provisional income, protects Social Security taxation rates and can keep MAGI below an IRMAA threshold.

The bottom line

Overpaying taxes in retirement is rarely the result of one bad decision. It is the result of income sources that interact in ways most retirees never planned for, because no one mapped those interactions before distributions began.

The strategies above are not complicated, but they require lead time, comprehensive financial planning and strategic coordination. Roth conversions done at 67 change what your RMDs look like at 73. Income decisions made at 63 affect your Medicare premiums at 65.

The retirees who pay the least in taxes are not the ones who earned the least. They are the ones who planned specifically for the way retirement income actually works, before the compounding consequences had already arrived.

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• Will Taxes Shred Your 401(k) or IRA During Your Retirement? It's Very Likely
• Will Your Retirement Income Trigger the IRMAA This Year? (Plus, 6 Ways to Avoid it in the Future)
• When Estate Plans Don't Include Tax Plans, All Bets Are Off: 2 Financial Advisers Explain Why

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

Every retirement plan is built around the same fear: Outliving your money. The industry has developed sophisticated tools to address it.

• Monte Carlo simulations model the probability that a portfolio will survive 30 years of withdrawals
• Safe withdrawal rates are debated to the decimal point
• Longevity risk is taken seriously

The research has identified a different risk, one that is statistically more common, demonstrably more devastating and absent from virtually every financial plan in circulation.

The risk is outliving your mind.

A 2025 systematic review in Health Psychology Review confirmed what longitudinal research has been building toward for a decade: Retirement is associated with measurable cognitive decline, not only because people age but because structured cognitive demand disappears.

Researchers gave the mechanism a name: The mental retirement hypothesis. When the brain is no longer required to perform at the level a career demanded, it follows the body's example and withdraws from challenge. The decline is not inevitable. It is, however, predictable — and far more preventable.

The professor

Margaret spent 41 years as a professor of developmental psychology at a major research university. She published extensively, advised doctoral students, taught graduate seminars and worked at the edge of her discipline for three decades. She retired at 68 with a comfortable pension and her health intact. Within 16 months, she quietly realized that something she had always taken for granted was beginning to slip.

She knew the research. She had assigned papers on neuroplasticity and cognitive aging to her students. She understood, at a scholarly level, exactly what was happening. She simply had not planned for it.

What work does for your brain

The workplace offers something most people never consciously notice until it is gone: A daily cognitive stimulus framework they did not have to design.

• Novel problems arrived uninvited
• Deadlines imposed urgency
• Colleagues challenged assumptions
• Students asked questions with no clean answers
• The environment kept the brain engaged

Margaret's career was among the most cognitively demanding. Her days required reading new research, evaluating evidence, constructing arguments, defending conclusions under peer scrutiny and translating complex ideas for audiences that expected precision. None of it was easy. All of it was, neurologically, exactly what the brain requires to sustain function.

This is where the research presents an inconvenient finding for high achievers: The steeper the cognitive demands of the career, the steeper the potential decline when those demands end. Retirees from high-complexity occupations, such as physicians, executives, lawyers and academics, face the greatest gap between career-level cognitive engagement and the engagement that retirement, by default, provides.

The person who built the most sophisticated mind is, in the absence of deliberate design, at the greatest risk of watching it diminish.

Margaret's retirement did not end her paycheck. It removed the daily stimulus her brain had organized itself around for four decades. The seminars ended. The doctoral students graduated. The editorial reviews stopped arriving. The conferences, the department meetings, the weekly urgency of a discipline that never stopped moving — all of it faded within a single academic year.

What replaced it was quiet and comfortable. And, by the standard the research now applies, cognitively insufficient.

The antidote isn't what you think

When people learn that cognitive engagement protects the aging brain, the response is predictable: Crossword puzzles, brain-training apps and sudoku. These feel like the right answer. They are not wrong, exactly. They are simply not enough.

The research draws a distinction most people miss. Practicing a skill you already possess is maintenance. The brain grows through novelty, not repetition. A crossword puzzle that takes 45 minutes is not the same as a problem with no known solution that requires you to build new mental frameworks to approach it. The first sustains what is already there. The second creates something new.

Researchers at Binghamton University have identified social engagement as, in their words, "simply the single most powerful factor for cognitive performance in old age," ranking it above brain games, supplements, and even formal education. The engagement they describe is social complexity: Relationships that require reading another person, managing disagreement, sustaining a connection through difficulty and being genuinely accountable to another person's expectations.

The research consistently identifies three protective conditions:

• Novel learning, meaning acquiring skills and knowledge you do not already possess
• Social engagement with real complexity and mutual accountability
• Purposeful challenge, meaning goals that require sustained effort and carry real consequences

Margaret's daily crossword does not meet the level of challenge her brain requires. A structured role mentoring junior faculty two mornings a week meets all three. She is learning how her discipline has evolved since she last taught it. She is accountable to people who need her. The outcomes matter. The cognitive demand is functional, not decorative.

The distinction is not about difficulty. It is about demand and whether that demand is connected to something with genuine stakes.

Designing the cognitive portfolio

The financial planning vocabulary that dominates retirement conversations offers, perhaps unintentionally, a useful frame.

A well-managed financial portfolio is diversified across asset classes, actively monitored and adjusted as conditions change. Left unmanaged, it is exposed to risks the owner has not accounted for.

The same logic applies to what might be called the cognitive portfolio: The collection of activities, relationships and challenges that keep the brain operating at a level commensurate with its capacity.

Most retirees do not deliberately manage their cognitive portfolio. They leave it to chance — and chance, without intention, follows the path of least resistance.

Three non-negotiables belong in a well-designed cognitive portfolio:

Novelty. Learning something genuinely new, not merely practicing what is already mastered. A retired professor of developmental psychology who is learning a new language, building furniture or navigating a community board where she holds no authority qualifies. A retired professor reviewing papers in her own specialty, while valuable, does not yield the same neurological return.

Social complexity. Relationships with real stakes, mutual accountability and the productive friction that keeps the mind alert.

Purposeful challenges. Goals that require sustained cognitive effort and carry consequences the retiree genuinely cares about.

For Margaret, this meant three commitments in her second year of retirement:

She joined a community mediation program, a field where her expertise did not transfer and her credentials carried no weight

She accepted an invitation to co-teach a public seminar with a colleague 30 years her junior, a role that required her to learn as much as she taught

And she began meeting weekly with two graduate students whose dissertation committees she had agreed to serve on as an external reader

None of it re-created her career. All of it replicated the conditions her career had provided: Novel inputs, social accountability and a goal that demanded her best thinking.

Intellectual stimulation is one of the five pillars of a fulfilling retirement. Among the five, it is the one most often treated as supplementary. Research on cognitive decline suggests it is anything but. It is load-bearing.

A different kind of risk management

Margaret knew the theory. She had spent four decades teaching it. The gap in her retirement plan was not ignorance; it was application. She understood, in the abstract, that the brain requires challenge to sustain function. She had simply not built that requirement into the concrete architecture of her daily life.

That gap is not unique to academics. It is the structural condition of traditional retirement applied to a brain that was never designed to stop working.

The paradox the research holds without resolving, the very qualities that made a career exceptional, such as the appetite for intellectual challenge, the drive toward mastery and the need for work that matters, are the same qualities that make retirement cognitively risky when they are not deliberately redirected. The high achiever's greatest professional asset becomes, without intentional design, the high achiever's greatest retirement vulnerability.

Financial planning has developed precise tools for managing money over a 30-year retirement. It has not yet developed equivalent tools for managing the mind over the same span. Both are depletable. Both respond to how they are managed. Both require a strategy.

Every retirement plan should answer two questions. The first is familiar: Will the money last?

The second has been absent from the planning conversation for too long.

Will the mind?

To learn more about designing a fulfilling retirement, pick up my new book, Your Encore Years: The Psychology of Retirement.

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

The transition of wealth carries a quiet, universally recognized paradox: The very resources designed to provide security and boundless opportunity can inadvertently destroy a child's drive, purpose and self-reliance.

Parents across the wealth spectrum fear that an unearned windfall will leave their children in a permanent "financial hammock," devoid of the struggles that forge character.

Warren Buffett famously summed up the ideal wealth transfer philosophy: Leave children "enough money to do anything, but not enough to do nothing."

Achieving this delicate equilibrium — providing a robust launchpad without extinguishing personal ambition — requires an intricate understanding of behavioral psychology, modern trust structuring and intentional family governance.

How to tell if your children are ready to inherit

How can you predict if passing on wealth will act as a catalyst or a corrosive force? Evaluating an heir's readiness requires moving beyond subjective parental hope and observing concrete behavioral indicators.

Financial literacy is the foundational "green flag." If an heir understands basic budgeting, contributes to retirement accounts and manages personal debt responsibly, they demonstrate a baseline respect for capital.

Emotional regulation is equally critical. Wealth is a relentless amplifier of existing behavior. If an individual cannot handle themselves gracefully without money, they definitely won't be able to handle themselves with it.

Perhaps the most definitive indicator of readiness is the pursuit of a self-directed mission. Wealth provides profound freedom, but freedom devoid of purpose is a psychological poison.

Heirs who thrive post-inheritance possess a mission independent of the family balance sheet — whether that's building a business, advancing in the arts or sciences, or mastering a profession. Inheriting money requires no skill, but building something from scratch tests the discipline, humility and resilience required to handle sudden wealth.

To evaluate, or build, financial fortitude, challenge your heirs to create an 18-month liquidity buffer for their fixed expenses. Demanding that they achieve this independently — through their own labor, discipline and budgeting — serves as a profound behavioral filter. They must balance short-term gratification with saving.

They may develop a sense of security and greater respect for capital. And, depending on their performance, that may indicate how an inheritance will affect their behavior.

The architecture of preservation: Principal trusts

Historically, estate planning relied heavily on age-based milestones — distributing a third of the principal at age 25, half at 30 and the rest at 35, for example.

This structure rests on the flawed assumption that chronological age directly correlates with emotional and financial maturity. A 25-year-old who adheres to a strict budget may be vastly more prepared for wealth than a 45-year-old who has relied on parental subsidies their entire adult life.

To mitigate the unintended consequences of rigid rules, sophisticated planners increasingly use principal incentive trusts. Rather than dictating an inflexible formula for distributions, a principal incentives trust outlines the wealth creator's core values, guiding philosophies and ultimate intents for the capital.

The trustee is granted broad, discretionary power to evaluate the heir's unique life circumstances. If an heir chooses a noble but lower-paying profession, such as public school teaching or social work, the trustee can authorize distributions to supplement their income — for example, to buy a home and fund other important large purchases.

This highly adaptable structure requires an exceptional trustee who deeply understands the family's ethos and can wield subjective power judiciously.

Cultivating the family enterprise

As family wealth scales into the $50 million-plus tier, the psychological and structural requirements can shift. If your goal is multigenerational funds, the rising generation must not view the wealth as a personal checking account. Rather, it must be conceptualized as a shared, multi-generational family enterprise.

Family wealth pioneer James E. Hughes Jr. advocates for the "family bank" concept. He redefines family wealth as a composite of three distinct capitals: Human (well-being and character), intellectual (knowledge and skills), and financial.

In this paradigm, financial capital is strictly subordinate. Its sole driving purpose is to protect and dramatically expand the family's human and intellectual flourishing.

Instead of passively receiving trust distributions, heirs apply to the family bank for structured loans to start a business or pursue advanced training. This mimics commercial lending but evaluates risk based on the potential growth of human and intellectual capital.

Even if a business venture ultimately fails, the intellectual capital gained by the heir more than offsets the temporary financial loss to the family's balance sheet.

Philanthropy as the ultimate sandbox

For parents wondering how to teach responsibility before the ultimate transfer, philanthropy serves as an exceptional training ground. By establishing a donor-advised fund (DAF) or private family foundation, you can mandate that the rising generation actively participate in its management.

Tasking younger heirs with researching charitable causes and presenting formal grant proposals develops profound empathy while rapidly dismantling entitlement.

It also teaches complex financial mechanics — from asset allocation to administrative costs — in an environment where the stakes are high for the community, but personal financial enrichment is completely removed from the equation.

Transferring wealth without destroying ambition is not a single act executed by signing a legal document — it is a decades-long, highly intentional process. By shifting focus from the mere legal transfer of assets to the psychological preparation of the heirs, families can help ensure their legacy fuels ambition for generations to come.

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

The family vacation is taking up a much larger share of the budget in 2026.

The cost of airfare is up more than 26% compared to last year, according to research from NerdWallet, mostly because of the higher price of oil.

When you add inflation's impact on hotels and dining, you're looking at a pretty penny for the average family of four.

It would be fair to question how much one vacation can really impact a long-term retirement plan.

However, it's not the vacation causing trouble — it's how you pay for it that could have long-term ramifications. One in three travelers who put their summer vacation on a credit card in 2025 are still paying it off today, another NerdWallet report found.

That accumulation of long-term, high-interest debt is what makes plans veer off track.

As the cost of living continues to rise, managing spending may need to move higher up the priority list in your financial plan.

Whether you're considering vacations, home renovations or buying that boat you've been dreaming about, here are three questions you should ask yourself before making a major spending decision in 2026.

1. Will the purchase put me in debt?

High-interest debt is a wealth killer. If you take the cost of your proposed vacation and add 24%, are you happy with the figure that comes out? Not all debt is inherently bad, but rolling credit card balances for unnecessary purchases certainly can be.

You can always cut costs on the vacation plans. Maybe you scale back the timeline of your visit or choose a road trip instead of a flight overseas. The value of a vacation doesn't come from the dollar amount spent, but from the time spent with family or friends.

There are always expenses that can be removed or reduced to bring your spending in line with your long-term plan. Making your purchases outright is always better than letting thousands of dollars accumulate on your credit card. If that debt is going to linger beyond your return date, consider when and where you can save along the way.

2. Does this purchase align with my priorities?

The most frugal among us may call vacations frivolous spending. Others will say that vacations are essential to relaxing, refreshing and allowing us to return to work rested and ready.

Burnout is a real consequence of the work-driven mantra that America loves to push. If a vacation is essential to your wellbeing, then by all means, make it happen.

That said, any large purchase should be in line with your long-term priorities. Does this short-term expense build toward your goals, or does it hinder them?

That answer will look different for every individual, but if you find yourself agreeing with the latter, there are alternatives to travel that can be equally rewarding.

One example is a home renovation. There's more of an investment in your purchase, which will keep you in line with your long-term plan. For instance, the rise in remote and hybrid jobs has made expansive home offices an increasingly valuable feature.

Meanwhile, finishing and renovating your basement is shown to have a potential 70% return on your investment.

Renovating your home may not be as restful as a vacation, but it's the kind of mentality to consider as costs rise and you find your plan being stretched to the limits. Is there some way to put your hard-earned dollars toward a purchase that returns value in the long run, is more in line with your priorities and still gives you satisfaction?

3. Will this impact my long-term goals?

A singular major purchase rarely determines whether or not someone retires successfully. But repeatedly overspending or delaying retirement contributions can. Will this vacation dig into your emergency savings? Will the impact be temporary or become an ongoing financial burden?

Vacation spending can be a slippery slope. You're getting away to enjoy yourself, and it's not enjoyable to type every purchase into a budget while you walk along the beach. It is enjoyable to get a few extra cocktails or room service. The dollar amount spent could end up much higher than you intended.

Time to decide

More and more families are living paycheck-to-paycheck across the country. This year, you may benefit from skipping a major purchase.

If you do decide to go away, make sure the trip doesn't compromise your good money habits. That means keeping savings intact, staying out of debt and keeping your retirement contributions on track. The goal is that your long-term plan remains in place, regardless of where you choose to spend your money.

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

Costco has agreed to a $14 million settlement to resolve a class action lawsuit alleging the warehouse club sent misleading promotional emails to customers in Washington. While the settlement has received preliminary court approval, the details — including how much each eligible customer will receive — are still being worked out.

The promotional emails in question were sent out between June 2, 2021, and July 7, 2026. As part of the terms of the settlement, Costco denies any wrongdoing and says it complied fully with the law.

While the settlement awaits final approval, here's what Costco members need to know about who's eligible, how to file a claim and what to expect.

What is the Costco class action lawsuit about?

The class action lawsuit filed on June 2, 2025 alleges that Costco sent out promotional emails with misleading subject lines, violating the Washington Consumer Protection Act and the Washington Commercial Electronic Mail Act.

For example, the warehouse club sent out emails with allegedly misleading subject lines like "Today is the last day to access Member-Only Savings" and "Hot Buys available for 5 Days Only." The lawsuit alleges the emails "advertised temporary or time-limited promotions to consumers, when in fact Costco knew it was going to extend those promotions past the stated time frame."

In short, the lawsuit claims Costco used misleading statements to pressure customers into making purchases during "limited time" sales that the company already intended to extend beyond the stated end date.

If the settlement receives final approval, the case will end without Costco being found liable under Washington's Commercial Electronic Mail Act. That means even if you're eligible to file a claim, you shouldn't expect to receive the law's maximum statutory damages of $500 per qualifying email. Instead, eligible customers will receive a share of the settlement fund based on the final terms approved by the court.

Who is eligible for a payout from the Costco settlement?

To be eligible for a payout, you must have lived in the state of Washington and received a commercial email from Costco at some point between June 2, 2021 and July 7, 2026. You may have already received an email about your eligibility to file a claim. If so, you can use the Claim ID and other information in that email to file a claim online.

If you haven't already received an email notifying you that you might be eligible, you can go to the court-approved website, washingtoncommercialemailsettlement.com, to file a claim without a Claim ID and see if you are, in fact, eligible.

What is the deadline to file a claim?

If you believe you're eligible, file a claim through the court-approved website by August 24, 2026. If you don't submit a claim, you won't receive a payment.

If you want to be excluded from the settlement — say, because you'd like to file a lawsuit on your own — you need to opt out by that same August 24 deadline.

When will payments go out in the Costco settlement?

A date has not been set yet for the payouts because the complete terms have not been finalized. A final approval hearing is scheduled for October 2, 2026 so you can expect to see more specific details sometime after that.

In the meantime, make sure you file your claim (or your intention to opt out) by the August 24, 2026 deadline to ensure you'll get any money you're entitled to.

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Stocks rallied off their mid-morning lows on Friday on reports that Pakistan is attempting to restart peace talks between the U.S. and Iran. But worries about the impact of rising oil prices and new tariffs on inflation, as well as another round of poorly received tech earnings, had main indexes reversing course heading into the weekend.

At the close, the blue-chip Dow Jones Industrial Average was up 0.5% at 51,947 and the broader S&P 500 was 0.05% higher at 7,411. The tech-heavy Nasdaq Composite, on the other hand, was 0.6% lower at 24,975. The S&P 500 and Nasdaq notched back-to-back weekly losses, while the Dow extended its weekly losing streak to three.

Retreating oil prices somewhat eased inflation worries ahead of next week's Federal Reserve meeting. But while front-month West Texas Intermediate crude futures fell 3% to $89.31 per barrel, they're still up more than 28% for the month.

And the Trump administration's newly announced tariffs, which impose 10% to 25% tariffs on a variety of goods from major trading partners, kept price concerns at the forefront.

"The administration has found a replacement for the IEEPA tariffs struck down by the Supreme Court in February," says Sonu Varghese, chief macro strategist at Carson Group.

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While the effective tariff rate "will still be below the worst-case scenario feared after Liberation Day," he explains, the tariffs "add another layer of inflationary pressure, raising companies' costs for raw materials and intermediate goods that have yet to be fully passed on to consumers."

The Fed will conclude its July policy meeting next Wednesday afternoon. According to CME Group FedWatch, futures traders are pricing in a 64% chance the central bank will hold interest rates steady — down from 87% one week ago.

Intel swings lower after earnings, DLR has its best day since 2020

Market participants also sifted through a busy earnings calendar. Intel (INTC) was one of the most noteworthy reports. The chipmaker reported its highest year-over-year revenue growth in 15 years — up 25% from Q2 2025 to $16.1 billion — sending its shares higher at Friday's open.

But Intel closed down 7.9% on the day. "Even earnings reports that appear to be positive are often not enough in the current environment," write Argus Research analysts. And for INTC, in particular, Argus is concerned that key end markets, such as servers and PCs, "are at risk from soaring component costs, particularly for memory."

Digital Realty (DLR), meanwhile, surged 11% after its beat-and-raise quarter, its best day since March 13, 2020.

Results from the real estate investment trust (REIT), which owns, operates and invests in data centers, underscored "accelerating AI-driven demand, market share gains, and the strength of its global platform," says Stifel analyst Erik Rasmussen.

And given the company's strong execution, sufficient liquidity and increasing AI-related deployments, Rasmussen believes "Digital Realty remains well positioned to sustain double-digit earnings growth."

He has a Buy rating on the REIT and a $235 price target, representing implied upside of 17% to current levels.

Bank of America hikes its dividend by 14%

In non-earnings news, Bank of America (BAC) jumped 1.3% after the financial giant announced a 14% dividend hike.

"The increase in our dividend reflects the strength of our earnings, the power of our franchise and our confidence in Bank of America’s ability to drive long-term growth and create value for shareholders," said CEO Brian Moynihan in the press release.

This is welcome news for income investors who have watched Bank of America raise its payout for 13 years straight. And the most well-known person in that group is Warren Buffett, who first added BAC to the Berkshire Hathaway equity portfolio in 2017.

While Berkshire has been slowly reducing its exposure to the bank stock in recent quarters, it was still the third-largest equity holding at the end of Q1. And BAC has been an income-generating machine for Berkshire over the years, paying the holding company $625 million in cash dividends in 2025 alone.

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Each week in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four tax questions from readers on the taxation of I bonds in various situations. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Buying and owning I bonds

Question: I am thinking about buying I bonds for the first time. I heard that holders of I bonds get generous tax breaks. What are the tax consequences of owning these bonds?

Joy Taylor: I bond buyers have a choice when they acquire the savings bonds. They can pay federal income tax each year on the interest earned or defer the tax bill to the end. Most people choose the latter. They report the interest income on their Form 1040 for the year the bonds mature (generally, 30 years) or when they're cashed in, whichever comes first.

Deferring tax on the full amount of accrued interest for up to 30 years may sound like a great idea until you get the tax bill for three decades' worth of interest. Also, taking the tax hit all at once can push you into a higher federal income tax bracket, making the tax bill even more expensive than it needed to be.

Interest earned on I bonds is exempt from state and local taxation.

2. Gifting an I bond you own

Question: I own about 50 I bonds that will begin to mature in 2030. I elected to defer taxation of the bonds' accrued interest until maturity. I am considering giving some of the I bonds to my grandchildren before they mature. If I do this, can I avoid paying federal income tax on the deferred interest?

Joy Taylor: Nope, this will not work taxwise. Making a gift of an I bond before maturity will accelerate taxation of the interest income. Giving away bonds you already own to someone else doesn't get you off the hook with the federal government for owing tax on previously untaxed interest. Even if the bonds are reissued in the gift recipient's name, you're still taxed on all that interest in the year of the gift.

3. I bonds used for education

Question: I have owned I bonds for many years. I heard that if I cash in the bonds and use the bond proceeds for higher education for my children, then I won’t have to pay tax on the interest when I cash them in. Is this true?

Joy Taylor: It depends on whether you meet all of the rules. One way to avoid paying federal income tax on accrued I bond interest is to cash in the bonds on or before the maturity date and use the proceeds to help pay for college or other higher education expenses for you, your spouse or your dependent. Note that there are lots of hurdles to jump over to be able to take advantage of this tax perk. Here are some of them:

• You must have purchased the bonds after 1989 when you were at least 24 years old.
• The bonds must be in your name only.
• The bonds must be redeemed to pay for undergraduate, graduate or vocational school tuition and fees for you, your spouse, or your dependent (grandparents cannot use this tax break to help pay for their grandchild’s college tuition unless the grandparents can, on their Form 1040, claim the grandkid as a dependent).
• Room-and-board costs aren’t eligible for the exclusion.
• The exclusion is subject to strict income limits. For 2026, it begins to phase out at modified adjusted gross income (MAGI) of more than $152,650 for joint filers and completely phases out at MAGI of $182,650. For all other filers, the phase-out range for 2026 is $101,800 - $116,800. These figures are adjusted for inflation each year, so they would be higher for 2027 and so forth. MAGI for this purpose starts with the AGI on line 11 of your Form 1040 (figured without taking into account any I-bond interest exclusion). Then you add back any tax breaks from working abroad, the exclusion for employer-provided adoption assistance and any deductions for student loan interest.

If the proceeds from all I bonds cashed in during the year exceed the qualified education expenses that you pay for the year, the amount of I bond interest you can exclude is reduced proportionally. You would use IRS Form 8815 to compute your MAGI and the amount of any I-bond interest exclusion that you would be entitled to.

4. Inherited I bonds

Question: I inherited I bonds this year from my father, who recently passed away. It is my understanding that my dad elected to defer being taxed each year on the I bonds during his lifetime. Do I have to report all the accrued, deferred interest on my federal tax return?

Joy Taylor: It depends. The executor of a decedent's estate can choose to include all pre-death interest earned on the bonds on the decedent's final income tax return. If this is done, the beneficiary reports only postdeath interest on Form 1040 for the year the bonds mature or are redeemed, whichever comes first.

If the executor doesn't include the interest income on the deceased owner's final federal income tax return, the beneficiary will owe taxes on all pre-death and post-death interest once the bond matures or is redeemed, whichever is earlier.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

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 editors and experts, in this Q&A series, 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 or tax advisor regarding any questions you may have in relation to the matters discussed in this article.

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: Tax Basis in Inherited Property
• Ask the Editor: Estimated Tax Payments and Withholding
• Ask the Editor: 10-Year Rule for Inherited IRAs
• Ask the Editor: Tax Questions on Roth IRA Conversions
• Ask the Editor: Tax Rules for Landlords

Saving for retirement is hard. For many, investing that money may be even harder. Target-date funds have become a nearly $5 trillion industry by largely solving that problem.

The "target date" is the year of an investor's expected retirement (but it could apply to any other long-term savings goal, such as college tuition). The funds have a heavier weighting in stocks early on, when the investor is younger and can better weather losses. They shift gradually over time to bonds, when safety becomes more important.

It's investing on autopilot, so much so that many call the premise of the funds "set it and forget it." That works for many holders of the funds. But target-date funds come with no guarantees. It's important to choose the right fund for you and to determine where it fits in your portfolio.

It can be an all-in-one diversified solution to a savings challenge, a core around which you layer other holdings or just one of many investments. As with any fund, it's also important to check in periodically to see how well it still fits.

Failing to do so may cause you to veer off course — a serious risk for retirement savers. "The negative thing with the target-date funds is that they don't know your life," says Mark Wilson, founder of MILE Wealth Management in Irvine, California.

Whatever the weaknesses, target-date funds' growth has been explosive: The market increased 20% in 2025 to $4.8 trillion, according to research firm Morningstar. Assets held by target-date funds, both inside and outside of workplace retirement plans, have grown 11.9% per year for a decade. A large part of that is performance, in addition to popularity.

With bonds in the mix, they won't keep up with stocks in a bull market, but most target-date fund holders saw double-digit returns in 2025, Morningstar reports.

A long-term trend toward sharply lower costs has added to the appeal. The average target-date fund had an expense ratio of 0.55% in 2015; in 2025, it was 0.27%. Competition has pushed fees for the cheapest offerings from fund companies including Vanguard and Fidelity to less than 0.10%.

And the funds, which largely contained actively managed investments at the industry's inception, have followed the larger trend of the fund industry by increasingly embracing index investing.

Encouraging good behavior

There are certainly benefits to a "set-it-and-forget-it" approach. Andrew Jacobs Van Merlen, a portfolio manager of the target-date strategies for fund company T. Rowe Price, says his firm conducted a study that suggests target-date investors are about 7.5 times less likely to trade in any given quarter.

"And that relationship holds in periods of market volatility, which is really critical," he says. Adds MILE's Wilson: "People who are in target-date funds tend not to panic. They're better behaviorally than other folks typically are."

The downside is that investors may lull themselves into thinking a retirement-oriented fund is safer than other funds. Many target-date funds tumbled in the financial crisis of 2007-09. More recently, investors who were shifting into heavier bond allocations just as interest rates started to climb in 2022 were in for a rude shock, because bond prices fall as interest rates rise.

William Connor, a wealth adviser at SAX Wealth Advisors, says one of his clients came to him, bewildered. "He asked, 'What happened? Wasn't I supposed to get more conservative?' "

A word about workplace plans

Although substantially similar to target-date offerings that anyone can buy, the funds you're likely to find in your workplace retirement plan may sport some key differences. For one, they're probably cheaper than conventional offerings. You'll likely have access to a less expensive institutional share class, for starters.

Or you may be offered funds legally structured as "collective investment trusts," or CITs, available only in workplace plans. Typically, a fund company takes the exact same asset mix that's in their conventional target-date mutual fund and places it in the CIT structure. Less administration, marketing and regulation — including lighter disclosure requirements — for CITs has added up to lower costs.

You may also see more innovation, at least at first, in workplace funds — for good or bad. On the plus side, some firms, as part of their target-date offering, are including an annuity or some other structure for guaranteed annual income post-retirement. BlackRock launched an annuity-based fund in its LifePath series in 2024, and Vanguard has announced a partnership with TIAA, the long-time pension and annuity provider.

On the jury-is-still-out side is the introduction of private assets into workplace target-date funds. Franklin Templeton, for one, introduced a line of Retirement Advantage Plus funds, with the "plus" indicating that the series provides "modest allocations to private real estate and private credit."

Private real estate has been part of some target-date allocations for years, but proposed rule changes at the Department of Labor could broaden the push into private assets, with the DoL estimating the changes could prompt 4.5 million plan participants to put $178 billion in target-date funds with alternative investments.

"I'm a big fan of private investments for sophisticated investors," says SAX's Connor. "I'm very wary about them going into these retirement plans."

Pay attention to the glide path

No matter whether you're choosing a retirement plan offering or considering a target-date fund for your personal portfolio, the so-called glide path will be one of your most important considerations. The glide path refers to a fund's progression from a heavy stock weighting to a majority allocation to bonds — and that can vary meaningfully from fund to fund.

Target-date funds are classified as "to" retirement — meaning they stop adjusting allocations on their target date — or "through" retirement, meaning managers tweak the mix for up to decades more after. (Most of the funds mentioned here are through retirement.) Some funds with a retirement date 40 or more years in the future are 99% stocks, while others are barely over 70%, according to Morningstar. The median allocation to stocks in funds with a target 40 years from 2025 is 93%.

Target-date funds today, in the aggregate, contain a higher allocation to stocks than their forebears did, in recognition that people are living longer in retirement and need the "growthier," inflation-beating returns of stocks to pay for it.

Even so, many advisers think the stock allocations are still not high enough. And some investors may decide they're able to tolerate a bit more risk than allowed by the fund that corresponds to the target date they have in mind. There's a workaround for that, Connor sometimes tells his clients: "You want to retire in 2045? Pick the 2055 fund. That'll keep you a little more aggressive for a little longer."

Investors adding a target-date fund to their own portfolio must also choose whether the underlying investments in their target-date fund are actively or passively managed. (A target-date fund can never be totally passive, because choosing how to allocate investments in each year of the path to retirement is an active choice by its managers.) The companies that sponsor target-date funds typically invest in a mix of their own mutual funds. Vanguard, not surprisingly, uses its index funds. Other target-date sponsors use active funds; some, including Fidelity, offer the choice of a blend of active and passive.

Today, 80% of target-date fund assets are held by five firms. Vanguard is at the top with 37% market share, followed in order by Fidelity, T. Rowe Price, BlackRock and Capital Group. To help you understand your workplace options or choose a fund on your own, we took a closer look at each of their offerings. Returns, expense ratios and other data are as of May 31 and apply to publicly available fund offerings, unless otherwise indicated.

Note that most target-date funds have several share classes, aimed at different types of investors, with varying expenses. The funds mentioned here either carry no sales charge or can be found load-waived at some, but not all, major online brokerage platforms, such as Fidelity, Schwab and E*Trade.

Vanguard Target Retirement

Vanguard's index-based approach drives one of the lowest expense ratios among target-date funds: 0.08% across publicly available mutual funds with target dates from 2020 to 2070.

The funds start with an allocation of about 90% in stocks and about 10% in investment-grade bonds, then start down the glide path about 25 years before the target date, around age 40 for someone retiring at age 65. At age 60, the split is 60% stocks and 40% bonds, and at 65, it's 50-50. Vanguard believes 72 is the most common age to start withdrawals, so the funds move to their final allocation, 30% stocks and 70% bonds, seven years after the target date.

Investors in Vanguard's CITs, but not in its mutual funds, have the choice to remain on the default glide path or freeze their stock allocation at 50% by converting to a balanced fund offered in workplace plans with a higher weighting in stocks.

For nearly the entire glide path, the underlying holdings of Vanguard's target-date funds include just four Vanguard index funds: Total Stock Market, Total Bond Market, Total International Stock and Total International Bond.

"With target-date funds, you're talking 40, potentially 50 years of investment if you hold this throughout your entire life cycle into retirement," says Brian Miller, the head of multi-asset product management for Vanguard. "It's hard for any manager, even a really good manager, to consistently outperform over that period of time."

Miller says Vanguard evaluates the allocations every year, considering population characteristics and capital market assumptions, and has not recently changed its asset allocations. "We continue to feel that those numbers make sense for our investors."

The funds have typically been middle-of-the-pack performers, although they meet or beat their benchmarks in most years. Vanguard Target Retirement 2030 (VTHRX), as well as the 2045 (VTIVX) and 2065 (VLXVX) iterations, rarely fell into either the top or bottom 25% of their categories in each of the past 10 years. The 2030 fund, however, finished in the top 15% of its category from 2023 to 2025. It has landed in the bottom half only once in 10 years. (Morningstar rates target-date funds only against their peers with the same target year.)

Workplace investors can expect to see CITs with an annuity option debut later this year. A portion (up to 25%) of investors' target-date fund holdings will fund the annuity in the years leading up to retirement; at retirement or later, investors can choose whether (and how much) of those savings to annuitize for guaranteed lifetime income.

Fidelity Freedom

The firm has three series: Freedom funds, which are actively managed; Freedom Index funds, which are passive; and Freedom Blend funds, which mix the two strategies.

For individual investors, the Freedom funds have expense ratios ranging from 0.46% to 0.68%; the Blend funds have expense ratios from 0.41% to 0.47%; and the Freedom Index funds have an expense ratio of 0.12%.

Last September, Fidelity said it would update its glide paths to boost stock allocations and reduce bond exposure for both early career investors and investors in retirement. The boost to the early career stock allocation is 5 percentage points; retirees will see stocks increase between 0.5 and 0.9 percentage point, depending on the target date.

The allocation shifts started in the fourth quarter of 2025, and Fidelity expects to complete the change by the end of the first quarter of 2027. That means that by then, Fidelity's 2070 funds will invest 95% of assets in stocks, while the 2030 funds will have a bit less than 60%. The firm's 2010 funds, whose holders would be at least 80 years old right now if they retired at age 65, will hold 30.5% of assets in stocks.

Fidelity also said it will increase exposure to inflation-sensitive assets for investors near and in retirement through an addition of commodities and an increase in U.S. Treasury inflation-protected securities. Fidelity says it's making the changes because investors are concerned about longevity and an increasing reliance on personal savings and workplace-plan assets instead of guaranteed pensions to support their retirement spending. The firm also says it sees the potential for continued inflation.

The Fidelity Freedom Index funds have been strong long-term performers, but they "have experienced some headwinds of late," says Morningstar analyst Hyunmin Kim, who notes that the funds had a smaller allocation to U.S. stocks than many peers and moved into bonds in 2021, just before a sharp increase in interest rates. (Bond prices fall when interest rate rise.)

That stock allocation, however, helped the funds beat most peers in 2025 as international stocks outperformed. Fidelity Freedom Index 2030 Investor (FXIFX) and Fidelity Freedom Index 2045 Investor (FIOFX) have finished in the top half of their peer group in seven out of the past 10 years.

Fidelity Freedom Index 2065 Investor (FFIJX), which has only a six-year history, has turned in a mixed performance over that time, finishing in the top 25% in 2025 and near the top third in 2022, but worse than 85% of peers in 2021.

T. Rowe Price Retirement, Target and Retirement Blend

T. Rowe Price has one of the heaviest allocations to stocks of any target-date fund provider. The firm has three sets of target-date mutual funds available to individual investors: Retirement, Target and Retirement Blend.

The Retirement series is 98% invested in stocks 45 years out from the retirement date and falls to just 55% at the retirement date. Stock exposure remains at 30% roughly three decades after retirement, when a fund holder who retired at age 65 would be about 95 years old. The Target series has a less-aggressive glide path that starts similarly but shifts more to bonds slightly sooner than the Retirement series and ends up at 42.5% in stocks in its target year.

The firm's philosophy is that a tilt toward stocks is a must for most savers. "If you're looking at savings behavior of most Americans versus what they're going to need, they're under-saving," says Jacobs Van Merlen. "That means that they need their assets to work a little bit harder to mitigate the risk of running out of money."

T. Rowe's Blend series, introduced in 2018, mixes the active management of the Retirement series with passive index investing. The Blend funds retain the same glide path, including stock allocations, as the Retirement series funds.

Fees across all three series of funds for individual investors range from 0.34% to 0.64%, with the Blend funds at the low end of the range.

The stock-heavy mix has helped the firm's funds outperform in many years of the bull market. T. Rowe Price Retirement 2030 (TRRCX) has four top-10 annual finishes in the past decade, and the fund ranked in the top 11% and 13% in two other years.

The shop's managers aren't infallible, however, with some "uncharacteristically weak" security selection and tactical calls recently leading to a mixed performance for the Retirement series, which otherwise has strong long-term returns, says Morningstar analyst Greg Carlson.

T. Rowe Price Retirement 2065 (TRSJX) has finished in the top half of its peers only twice in its five full calendar years of existence, and it has twice landed in the bottom 20%.

BlackRock LifePath

BlackRock's target-date strategy is called LifePath, and its path can be traced back to the beginnings of the industry, when Wells Fargo Investment Advisors launched its funds in 1993. (Barclays Global Investors acquired the Wells Fargo business in 1995, and BlackRock bought the Barclays operation in 2009. The LifePath name has been constant.)

There are two main series of funds: LifePath Index and the actively managed LifePath Dynamic. A smaller series, LifePath ESG, uses environmental, social and governance factors in its investing. A newer series called LifePath Paycheck, launched in 2024, includes an annuity-based income option that is only available in workplace-based retirement plans.

LifePath funds have heavy stock weightings early on but make a greater shift toward bonds during the glide path than most target-date products. At 45 years from the target date, the LifePath Index glide path is 99% stocks, 1% bonds. It drops to 95% stocks 25 years out and 65% stocks 10 years out. At retirement date, stocks make up just 40%.

LifePath Index funds have an expense ratio of 0.39%; the ESG Index funds charge 0.50%; and the Dynamic funds have annual expenses ranging from 0.84% to 1.59%. Availability of the funds with no load or fee varies depending on the brokerage platform.

Thanks in part to heavier bond holdings than its peers, BlackRock LifePath Index 2030 Investor A (LINAX) has finished in the bottom half of peers in eight of the past 10 years. BlackRock LifePath Index 2045 Investor A (LIHAX) has three finishes in the top third of peers over the past decade but may struggle to outpace peers as it adds to its bond mix.

BlackRock introduced target-date exchange-traded funds called iShares LifePath ETFs in November 2023. The funds, which invest in iShares stock and bond index funds such as the iShares Russell 1000 ETF, have target dates ranging from 2030 to 2070. The expense ratios range from 0.08% to 0.12% — comparable to the cheapest index mutual funds from Vanguard and Fidelity.

American Funds Target Date Retirement

The glide path for Capital Group's American Funds moves in two ways: The ratio of stocks to bonds grows more conservative over time, and the types of stocks also change. Early in the glide path, the funds' stock investments tilt toward growth-oriented stocks; as the target date approaches, the funds tilt more toward dividend-paying stocks.

The glide path keeps stocks near 90% of holdings until about 15 years to retirement. At retirement, stocks fall to just below 50%. The funds are designed "through retirement," so the final stock allocation, at about 30 years after retirement, is roughly 30%.

That post-retirement stock allocation is a slight downward adjustment of a few percentage points, says Kelly Campbell, who leads the multi-asset solutions business at Capital Group. "In our most recent assessment we decided to modestly adjust equity allocations for essentially the first time in a decade and a half because we believe it will make the glide path a bit more resilient."

Schwab, Fidelity and E*Trade all sell American Funds' F-1 shares with no load. The F-1s mirror the company's Class A shares, which have a 5.75% sales charge. The F-1 class of funds have expense ratios ranging from 0.63% to 0.75%.

The American Funds offerings have some of the better performance records among target-date funds: About 20% with a 10-year track record rank in the top 10% of their category, according to Morningstar. American Funds' 2030 Target Date Retirement (FAETX) has six finishes in the top 25% of peers in the past decade. American Funds' 2045 Target Date Retirement (FATTX) has five. The funds' move from growth stocks to dividend stocks as the target year gets nearer has hurt those funds' performance in years when more growth-oriented fare shines.

Strong long-term performance is important, but the best retirement investment is the one that fits your overall financial plan. Use the Bankrate tool below to connect with a financial adviser to build a retirement strategy tailored to your goals:

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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Investors tend to view dividends as a general signal of corporate financial quality. The logic is sound: Companies typically don't pledge to pay their shareholders a regular, fixed sum unless they can afford it with plenty of room to spare. So where you find dividends, you'll often find a healthy bottom line.

But that assumption has its limits. As a dividend yield starts to climb well above market and sector norms, investors begin to wonder about that payout's sustainability. It could be that the company is dedicating too high a percentage of its profits to maintaining that dividend. Or it could be that the yield is growing because shares are diving, reflecting some sort of fundamental weakness.

For many reasons, "high" and "reliable" are two yield adjectives that aren't frequently joined at the hip. But it doesn't mean you'll never find the two hanging out.

Today, we'll explore five stocks doling out yields north of 4% — well above the average — that appear to be reasonably safe.

Data is as of July 22, 2026.

Our methodology for finding "safe" dividend stocks

Before we move on, let's be crystal clear: No dividend on this planet is 100% safe.

Dividend Aristocrats. Dividend Kings. Companies that have paid dividends for more than a century. All of these have seemingly bulletproof dividend programs, and every single one of them could shrink or outright suspend those distributions tomorrow.

That doesn't mean we think they're about to or even that they ever will. We're just stressing the importance of understanding the nature of dividends. With few exceptions — namely, real estate investment trusts (REITs) and business development companies (BDCs) — businesses aren't inherently obligated to pay us a dime, and they certainly don't have to ensure that we collect a certain level of income.

The best we can do is look for signs that a company can afford its dividend, and that management values maintaining or growing that dividend.

To get to our list of five safe, high-yield dividend stocks, I've looked for U.S.-domiciled and traded equities with the following features:

• At least $500 million in market capitalization
• A dividend yield of at least 4%
• At least 10 consecutive years of stable or growing dividends
• A dividend payout ratio of no more than 60% of estimates for 2026 adjusted earnings per share (in other words, they pay out no more than 60% of their profits as dividends)
• An average broker recommendation of 2.5 or lower within the ratings scale established by S&P Global Market Intelligence, implying they're a consensus Buy.

Again, while that doesn't guarantee that any of these dividends will be the same size (or be around at all) next year, next month or even next week, it may help us identify generous dividends that are more stable than similar-yielding companies.

Stocks are listed in reverse order of their consensus ratings — the lower the number, the better the analyst rating.

OceanFirst Financial

• Sector: Financials
• Market value: $1.1 billion
• Dividend yield: 4.1%
• Consensus rating: 2.29 (Buy)

OceanFirst Financial (OCFC) is the bank holding company for OceanFirst Bank, which is a 124-year-old community bank with 40 locations across five Northeastern states: Maryland, Massachusetts, New Jersey, New York and Pennsylvania.

There's little out of the ordinary here. OceanFirst offers consumer products such as savings and checking accounts, money market accounts, auto loans, student loans and mortgages. It also provides commercial and industrial loans, as well as real estate loans for commercial and multifamily properties.

OceanFirst is looking to bolster that latter business through its "Premier Banking" initiative, in which the company is prioritizing relationship-building and tailored solutions to attract commercial clients.

"Although we believe there remains a good amount of uncertainty regarding the ultimate ROI of the Premier Bank initiative (and the [commercial and industrial] banking hires), the project is off to a strong start and has the potential to meaningfully enhance OCFC's deposit base and franchise value if successful," write Keefe, Bruyette & Woods analysts Tim Switzer and Emily Lee, who rate the financial stock at Outperform.

The company also recently acquired commercial bank Flushing Financial, then announced it would be selling $1.4 billion in multifamily loans, which would amount to most of the multifamily loans it acquired from FFIC. In so doing, OCFC significantly reduced its overall exposure to multifamily housing.

OceanFirst isn't an annual dividend raiser, but it has improved its cash distribution a few times over the past decade. Its current quarterly payout of 20 cents per share amounts to a reasonable 43% of this year's earnings estimates — and more encouraging, just 35% of expected 2027 profits, which are expected to pop by 24% year over year.

Verizon Communications

• Sector: Communication services
• Market value: $184.9 billion
• Dividend yield: 6.4%
• Consensus rating: 2.27 (Buy)

Verizon Communications (VZ) is an American telecommunications giant, providing wireless phone service, broadband internet, fiber-optic service, wireline service and more. At the moment, it boasts about 147 million wireless retail connections and almost 17 million broadband connections.

Verizon somewhat resembles a utility stock, operating against precious few competitors — VZ, AT&T (T) and T-Mobile (TMUS) account for virtually all of the postpaid market — but also within saturated businesses that have limited room for organic growth.

It's currently trying to fend off its competitors by improving the customer experience.

"VZ delivered a major turnaround in subscribers despite being early days of its customer first strategy," Oppenheimer analysts (Outperform) wrote in April following the company's most recent earnings report. "Management is shifting from price increases and expensive device promotions to adding value, improving segmentation, and increasing automation. This improves CX, retention, and margins. The pivot comes at a slight sacrifice to short-term revenue growth, but is critical for growing subscribers — where share losses had caused the stock to lag peers over the past five years."

Verizon's growth plans also include its buyout of local exchange carrier Frontier Communications, which closed in January 2026. "Verizon is looking to expand both its spectrum asset and geographic footprint through acquisitions," says Argus Research analyst Marie Ferguson (Buy). "We think the acquisition with Frontier, a local exchange carrier (LEC), will help Verizon expand into the contested U.S. suburban and rural broadband market and drive earnings growth of about 6% in 2026."

VZ is also like utilities in that it makes up for its lack of growth prospects by paying a generous dividend. The payout, which has improved for 20 consecutive years, currently represents 58% of 2026 profit estimates.

Eastman Chemical

• Sector: Materials
• Market value: $7.98 billion
• Dividend yield: 4.8%
• Consensus rating: 2.00 (Buy)

Eastman Chemical (EMN) is a specialty materials company whose products are used across numerous industries, including agriculture, consumer goods, personal care, transportation and textiles. It offers acids, aviation fluids, animal nutrition products, copolyesters, plasticizers, heat transfer fluids, process fluids, solvents, turbo oils, and more.

Materials stocks are inherently cyclical, hinging not only on broader economic strength but also industry demand and individual product-demand cycles. For instance, right now, Eastman and other chemicals firms are struggling with weak demand from more cyclical industries such as construction, automobiles and consumer durables (i.e., appliances and electronics).

Still, Wall Street is broadly bullish on the name compared to its peers.

"Innovation and sustainability initiatives will likely help the company outpace end market demand trends," say Jefferies analysts, who call the stock a Buy. "The company's methanolysis technology is now proven at scale, and growth will likely be driven both by premium recycled content displacing mechanically recycled alternatives, and by new product launches from consumer brands seeking differentiated sustainability offerings. Strategic customer commitments from major packaging and consumer goods companies reinforce the durability of this demand even in a weaker macro environment."

Cyclical companies have to be somewhat conservative with their dividends, as their bottom lines can be more volatile than other industries. Still, despite what a high yield of almost 5% might suggest, Eastman's payout ratio of 54% isn't out of line with its peers.

Fidelity National Financial

• Sector: Financials
• Market value: $13.5 billion
• Dividend yield: 4.1%
• Consensus rating: 1.60 (Buy)

Fidelity National Financial (FNF) is a title insurance company that serves the real estate and mortgage industries. It provides title insurance, escrow and other title-related services; technology and transaction services; and mortgage transaction services. It also offers financial products such as annuities and life insurance.

Title insurers benefit from mortgage volumes, which tend to be spurred by lower interest rates. Just consider this bull case from Truist Managing Director Mark Hughes (Buy):

"FNF is the nation's largest title insurer; the company should be a beneficiary of lower interest rates as a result of Federal Reserve [easing]. … The macroeconomic indicators for the housing market are a primary driver of FNF's stock price."

However, Fidelity National Financial might be trying to swim upstream right now. Because while lower rates appeared to be the Federal Reserve's path of least resistance earlier in 2026, persistently high inflation has America's central bank increasingly poised to raise its target rate by the end of the year.

But even without Fed help in the near term, there are other reasons to like Fidelity National. Hughes adds that "Chairman Bill Foley and his team have a long track record of generating outsized returns across a broad spectrum of end markets." And Keefe, Bruyette & Woods' Bose George and Frankie Labetti (Outperform) add that, "As the largest title insurer in terms of market share, we believe FNF will continue to be able to use its scale to generate industry-leading margins."

Insurers also tend not to go out on a ledge when paying for their dividends, and FNF is no exception. It pays only about 40% of 2026 earnings estimates to fuel its 4.1% dividend.

American Tower

• Sector: Real estate
• Market value: $77.4 billion
• Dividend yield: 4.3%
• Consensus rating: 1.56 (Buy)

American Tower (AMT) is a global telecommunications REIT that leases out space on nearly 150,000 communication sites across five continents. Its tenants include wireless data and/or service providers, radio and television broadcast firms, companies in other industries, even municipal governments and federal agencies.

AMT shares a headwind with Verizon — a saturated U.S. market — but has other routes to growth.

"The company is a leader in tower services, and while domestic mobile spending has flattened, the company is focusing on international expansion of 5G networks and growth in mobile data consumption," says Argus Research's Ferguson (Buy). "It also entered the data center market through its 2021 joint venture ownership of CoreSite, which we see as a positive."

American Tower has been the weakest of these five safe dividend stocks over the past year, losing about 25% of its value. That's at least in part over worries that more promotional activity in the wireless business could dampen longer-term investments, which could in turn mute tower leasing growth.

But Citi's Michael Rollins (Buy) sees leasing activity stabilizing and the possibility for a new entrant into the mobile service space. "We also see potential for AMT to continue to evolve its data center business strategy, while management commentary leads us to believe the leaning is still as a net investor, rather than a net seller," he says.

As for the distribution? While higher-than-average payouts are the norm because of REITs' dividend mandate, AMT has never flashed a monster headline yield — indeed, January 2026 marked the first time shares have regularly paid above 4%.

Still, for now, the dividend is well-covered. When it comes to evaluating REIT dividends, the metric to use isn't EPS, but funds from operations (FFO), which measure the cash generated from a REIT's core operations. Typically, anything below 80% is considered safe, and American Tower's dividend currently represents just 70% of this year's FFO estimates.

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