At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.3% at 53,417. But the broad-based S&P 500 was down 0.3% to 7,652, and the tech-heavy Nasdaq Composite had declined 0.8% to 25,980.

This week will be defined by the earnings calendar, with Nvidia (NVDA, -2.9%) reporting fiscal 2027 second-quarter results and management sharing its vision of where the artificial intelligence (AI) revolution goes from here after the closing bell on Wednesday.

"Geopolitics, oil prices, high yields, and tech volatility all contributed to last week's stock market pullback, and they all look to be in play this week, too," writes E*TRADE from Morgan Stanley Managing Director Chris Larkin.

Larkin notes that U.S. economic sanctions on Iran, the Treasury's attempts to lower long-term yields and incoming data, including the Federal Reserve's preferred inflation gauge, may shape sentiment. "But," he concludes," Nvidia and other tech earnings are positioned to be a major weight on the market's momentum scale."

At the same time, with Treasury yields across the maturity spectrum trending higher, the week could be redefined by the economic calendar, beginning on Friday at 10 am Eastern Standard Time.

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.

That's when Warsh makes his first keynote speech as the leader of the most important central bank in the world at the Kansas City Fed's annual Jackson Hole Economic Symposium.

The yield on the 2-year Treasury inched up to 4.240% vs 4.234% on Friday. The 2-year yield was 3.379% on February 27, the day before the war in the Middle East between the U.S. and Iran began.

The 10-year Treasury yield ticked down to 4.706% from 4.738%, but is up from 3.960% on February 27. The 30-year Treasury yield declined to 5.235% vs 5.276% last week and 4.630% before the war.

The other chip stock on the earnings calendar

Marvell Technology (MRVL, -3.3%) follows fellow semiconductor stock Nvidia in the reporting-season order when it steps up after the closing bell on Thursday. But Marvell is ahead of Nvidia when it comes to year-to-date share-price performance, with MRVL up 179.3% vs 15.3% for NVDA (and 13.0% for the S&P 500) through Friday.

Wall Street expects MRVL management to report year-over-year earnings growth of 39% on revenue growth of 35%, pale compared to 99% and 97% growth anticipated for NVDA. Of course, much of Marvell's run is rooted in a $2 billion investment from Nvidia announced on March 31.

And there is significant demand elsewhere for its custom application-specific chips, and Wall Street is bullish. Indeed, Wells Fargo analyst Aaron Rakers reiterated his Outperform (Buy) rating and raised his 12-month target price on the tech stock from $240 to $310, citing its opportunity in custom silicon.

Meanwhile, Morgan Stanley analyst Joseph Moore maintained his Equal Weight (Hold) rating but raised his 12-month target price from $195 to $224.

The iShares Semiconductor ETF (SOXX, -2.7%), up 72.9% through Friday, was also down on Monday, as investors, traders and speculators continue to moderate their optimism with incoming data and updated guidance from Nvidia on the way.

Micron Technology (MU, -5.8%), which was up nearly 240% year to date through Friday, and Advanced Micro Devices (AMD, -3.5%), up 121% in 2026, posted big red numbers.

Expedia is on the move again

Expedia (EXPE, +5.4%) was the top-performing S&P 500 stock on Monday after Evercore ISI analyst Mark Mahaney reiterated his Outperform (Buy) rating and raised his 12-month target price for the online travel agency from $375 to $430.

Mahaney had reiterated his rating and raised his target from $350 to $375 on August 6 following a beat-and-raise second-quarter report from management of the consumer discretionary stock. His current target is now the highest among 35 analysts who provide one.

Since hitting a 52-week low of $185.34 intraday on February 23, EXPE is up more than 70%, far outpacing a gain of about 14% for the S&P 500. Mahaney still sees upside of almost 30% from here.

The travel stock has split the Wall Street analyst community, reflected in 17 Buy ratings vs 20 Holds and 1 Sell. The average 12-month target price through August 21 was $336.23.

Related content

• 33 Stocks That Could Rally 33% or More
• 5 Undervalued Stocks to Buy in This Market
• The Best Vanguard Bond Funds to Buy

In reality, even the most carefully designed estate plans can quietly fall apart when left unattended.

Anyone actively engaged in or preparing to start the estate planning process should be fully aware of where they may be exposed to vulnerabilities, which life events should prompt an immediate review and reevaluation and what to bring with them when meeting with an estate planning attorney.

Here are five of the biggest myths in estate planning, each paired with the best practice to follow instead.

Myth No. 1: The will and trust always have the final say

It seems logical that a will or trust controls where everything goes. In practice, beneficiary designations on retirement accounts, life insurance policies and similar assets generally take precedence over both.

Consider a revocable trust that thoughtfully establishes a separate share for each child in a family. If the largest retirement account names just one child as beneficiary, that single form quietly bypasses the entire trust structure. The funds go directly to the named child.

Strategy tip: Treat beneficiary designations as a core component of a coordinated and comprehensive estate plan and confirm that every designation is made with intent that is reflected within the will and trust.

Myth No. 2: Once beneficiaries are named, the job is done

Standard beneficiary forms carry default rules that routinely surprise families. For example, if three adult children are each named as one-third beneficiaries and one of them dies first, that child's share typically flows to the surviving siblings, rather than the deceased child's own children.

In such a scenario, the grandchildren are unintentionally disinherited by a form nobody thought to revisit.

When assets do reach minors through beneficiary designations, the results are rarely good: The child receives full control at 18. Custodial Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts are irrevocable, and compounding growth over time can gradually turn modest gifts into a substantial sum no teenager is properly prepared to manage.

In our own practices, these accounts have produced some of the most difficult conversations we have ever had — a parent watching a 17- or 18-year-old gain control of far more money than anyone ever intended, with no legal way to slow it down.

By the time a family realizes the account has ballooned, nothing can legally stop the transfer.

Likewise, divorce introduces its own trap. Some states automatically sever a former spouse's beneficiary designation the day a divorce is finalized. Anyone who intends to keep an ex-spouse as beneficiary must re-execute the designation after the divorce is final, or the law may quietly override the plan.

Strategy tip: Review every beneficiary designation after any major life event and at least every five years. Make sure to review beneficiary designations on accounts with less common beneficiary designation options such as payable on death (POD) or transfer on death (TOD).

Myth No. 3: More documents mean more protection

Complexity is not the same as security. While an estate plan may become more elaborate with every well-intentioned addition, it can also become more fragile. Key warning signs include:

An uncoordinated patchwork of paperwork. Wrangling several documents not designed to work together — such as a living trust from one attorney and powers of attorney from another — can add up to produce disaster.

Outdated assumptions. The federal estate tax exemption now sits at $15 million for individuals; roughly two decades ago, it was $1 million. Sophisticated structures built under the old rules can be obsolete today.

Assets ignored by documents. A closely held business, a buy-sell agreement or a family investment entity can derail everything.

Forced togetherness. A family cabin left jointly to three children living in three different states, further complicated by a provision forbidding its sale, is a recipe for resentment. So are co-fiduciaries, which generate an outsized share of estate litigation.

Strategy tip: Favor coordination over accumulation, revisit older structures as the law changes and name one person at a time.

Myth No. 4: The attorney will flag any problems

As former practicing estate planning attorneys ourselves, we say this with genuine affection for the profession: Attorneys are, by the design of their practice, reactive.

They respond to what clients bring them, and they rarely reach out unprompted to ask whether a plan still reflects a client's life.

So, the responsibility for noticing that a named guardian is no longer needed, or that a personal rift has made a chosen trustee a poor fit, tends to fall on the client.

Strategy tip: Complete three steps before any attorney meeting:

• Do a cursory self-review. Check who is named and in what roles, the ages at which distributions occur and whether significant assets are mentioned in the documents at all.
• Articulate wishes in plain language. An effective plan maps who receives what, in what proportions and under what conditions, no legal vocabulary required.
• Bring a personal financial statement. Provide a clear accounting of what is owned, how it is titled and who else holds an interest.

The stakes of that last step are easy to underestimate. We once worked through a client's entire plan, only to have her mention, almost in passing, that she had been diagnosed with stage IV cancer.

Attorneys can work with only what they are given, and one undisclosed detail can quietly undo an otherwise flawless plan.

It also pays to ask the attorney's opinion directly. Asking, "Would this work in my situation?" invites a far more engaging answer than a directive ever will.

Myth No. 5: A good plan is built to last a lifetime

An estate plan is not an immovable monument; it is a living document. Trying to solve for the next 30 years is a surefire recipe for decision paralysis.

The better question is simpler: If something major happened in my life within the next five to 10 years, how should my estate plan follow suit?

There is no standard estate plan. The power of a good estate plan lies in how precisely it reflects a particular family, its assets and the wishes of the person drafting it.

Strategy tip: Plan for the foreseeable future and resist any plug-and-play template.

The strongest plans are not the longest or the most sophisticated, but rather, the ones reviewed regularly, coordinated carefully and shaped by owners who stay engaged.

An intentionally designed plan does not simply sit in a drawer looking impressive; it makes a meaningful difference for the family it was designed to serve.

Ultimately, the most effective estate plan isn't the one with the most documents, but the one that stays coordinated across wills, trusts and beneficiary designations and is revisited after every major life event.

By staying actively engaged, individuals can ensure their plan continues to protect the family it was built to serve rather than falling victim to the default rules and outdated assumptions that catch so many families off guard.

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

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

Related Content

• Wills Gone Wild: How to Avoid Estate Planning Disasters
• Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning Attorney
• Protect Your Family's Future: Avoid These 12 Common Estate Planning Mistakes
• 5 Estate Planning Things You Need to Do Now, From a Financial Planner
• Estate Planning Checklist: 13 Smart Moves

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.

Dear Wealth Wise: My husband and I have saved about $300,000 for retirement combined, but we recently paid off some debt and are saving about $1,000 a month. We are in our mid-to-late 40s with one child. We could move from our current home (with almost $400,000 equity) to a smaller condo once our daughter graduates in a few years. Our parents have pledged to pay for our daughter’s college, but we will still need to support her financially until she gets a job.

Realistically, what can we expect to retire with and are we saving enough? Should we cut back on things like cable, or is our situation not that bad? — Late to the Party

Dear Late to the Party: It's not so unusual to reach your mid- to late 40s with modest retirement savings. Student loans, home down payment savings, and high mortgage costs can eat into your paychecks, making it hard to fund retirement until your earnings increase.

The average 401(k) balance among savers ages 45 to 49 was $163,200 in 2026, according to Fidelity. By that measure, this couple seems to be in good shape.

At the same time, Fidelity's average balance of $264,500 among savers 70 and over isn't so promising. Under the popular 4% rule, that's roughly $10,600 in annual withdrawals. So while our couple may be ahead of their peers, that doesn't mean they're in excellent shape. Here's what our experts suggest given their situation.

Don't get hung up on small changes

When you're trying to catch up on retirement savings, you'll often hear that every little bit helps. But one thing you don't want to do is cut out small luxuries to the point where life is miserable.

"Before deciding whether to cancel cable or eliminate every discretionary expense, I’d first determine whether they’re actually on track," says Ernie Cave, CFP, founder and wealth manager at Cave Wealth Management. "The biggest strategy many families miss isn’t finding another $200 per month. It’s building a retirement income plan."

As Cave explains, if this couple is in their mid- to late 40s, they may have 20 years before retirement.

"Consistent savings, investment growth, and future raises can dramatically improve their financial position over that time," Cave insists.

Before cutting cable, Cave suggests a few things. First, figure out when you want to retire, how much annual income you'll need, and how much money Social Security will provide.

"Without that roadmap, it’s impossible to know whether another $200 or $300 per month will meaningfully change the outcome," he says.

Next, Cave recommends focusing on big opportunities to build meaningful savings rather than small ones like cutting cable.

"Make sure both spouses are receiving the full employer retirement match. Increase retirement contributions every time income rises. Redirect every debt payment that disappears into retirement savings before that money quietly becomes lifestyle spending," Cave says.

Given that the couple is approaching 50, they should also plan to take advantage of catch-up contributions. Once they turn 50, they will be eligible to sock away an extra $8,000 each in their 401(k)s or $1,100 in IRAs. (Since they are not yet 50, these contribution limits will likely increase in future years)

These changes, he explains, may get you where you need to be without eliminating the smaller bills that make life more enjoyable.

Sabrina Carlson, CFP and owner of Carlson Wealth Solutions, agrees with Cave.

"Regularly review expenses less to squeeze dollars for more retirement savings, and more to ensure they are really valuing what they pay for and to keep the habit of frugality in retirement," she says.

Carlson also says that based on her calculations, increasing retirement savings by $300 a month could add around $120,000 to this couple's total assets in retirement. And, she says, while every little bit helps, "this amount could also be accounted for in many other ways."

Of course, we don't know whether the couple has saved in a traditional or Roth 401(k) or IRA. If they've invested in traditional accounts, they'll need to plan for substantial taxes when they withdraw funds in retirement.

Use home equity to your advantage

Another advantage this couple has is a nice amount of home equity.

"With approximately $400,000 in home equity, downsizing after their daughter graduates could reduce future housing costs and potentially free up additional retirement assets," says Cave. "I wouldn’t count the entire $400,000 as retirement savings because they’ll still need somewhere to live, but it should absolutely be part of the retirement plan."

That said, downsizing right after the daughter finishes college may not be feasible. A growing number of recent graduates are having trouble landing entry-level jobs in today's market.

You may be able to downsize eventually. But it's best to build a retirement savings plan that doesn't rely on downsizing at a fixed point in time.

The outlook may be better than expected

All told, the situation here isn't dire. If you take $300,000 in savings, add $1,000 per month, apply a 7% annual growth rate, and let it compound for 20 years, our couple could end up with roughly a $1.65 million nest egg.

A 4% withdrawal rate yields about $66,000 in annual income, not including inflation adjustments. And if we apply the average $2,084 Social Security retirement benefit today, that adds roughly $25,000 a year for one beneficiary or about $38,000 for a couple.

That average benefit, of course, will likely be much larger once this couple retires, so it's an imperfect measure. But throw in cashed-out home equity, and they may be looking at a $100,000 annual retirement income, which isn't shabby.

Carlson says that if our couple runs projections based on their current plan and finds that their estimated annual retirement budget should work for them, then they're "likely in good shape." But they should ask themselves what they want retirement to look like.

Carlson also recommends creating a strategy now for how to contend with potential long-term care.

"This couple is likely to be the most susceptible to one or both having a costly long-term care event, as they will have some assets which must be used before Medicaid would step in, but not enough assets to cover the bill without worry," Carlson explains.

A word from Wealth Wise

The internet is loaded with tips on how to save for retirement, with cutting your daily latte being a common one. The reality is that with a solid savings plan, you don't need to deny yourself small indulgences or sweat every penny. A better idea is to prioritize what's important to you and enjoy those small splurges without guilt.

ASK YOUR OWN WEALTH WISE QUESTION

Do you have a question for our Wealth Wise experts? We want to hear about your retirement-related financial dilemmas, especially those that impact relationships with partners, friends and family. You will remain anonymous. Fill out this Google Form or submit your question to KipAdvice@futurenet.com. Not all questions will be published. We may edit your questions for clarity.

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.

Read More Wealth Wise Articles on Retirement Advice

• Should You Upsize When College Tuition and Retirement Collide?
• I Have a Sizable Roth IRA. Do I Still Need a 529 for My Grandkids' College?
• Should We Bankroll Our Son's $180K Law School Tuition Even Though We're Retired?
• Can You Actually Get Paid to Care for an Aging Parent?
• He's 49 and 'Burned Out.' Can He Afford to Quit a $200K Job?
• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• Should Fully Funded Retirees Invest Like 30-Year-Olds?
• Is a 60/40 Portfolio Too Aggressive When You're in Your Seventies?
• You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• A Multimillionaire Wants to Marry Again. How Can She Protect Her Money?
• Should We Borrow Money From Our Elderly Father?
• Should We Downsize or Drain Our 401(k) to Pay Off Our Home?

"Using home equity is a puzzle," says Ashley Morgan, a debt attorney in Chantilly, Va. "It goes beyond whether you can afford to take the money out. You also need to consider how that decision fits with your future financial and housing goals."

Whether you need extra money now or simply want to understand the possibilities, here's what you should know about using home equity in retirement.

1. There are multiple ways to tap home equity.

Home equity is the portion of a property's value that you own outright. In other words, it's what you would receive if you sold, after paying any remaining mortgage debt and transaction costs.

Selling is the simplest way to cash out your equity, but there are other ways to access that value while staying in your home, each with its own tradeoffs.

The right option depends on what you need the money for, whether you can afford ongoing loan payments and whether the property still fits how and where you want to live in retirement.

2. A HELOC provides borrowing flexibility.

With a home equity line of credit (HELOC), you receive a borrowing limit based on the value of your property. You decide when and how much to draw, and typically owe interest only on the amount borrowed. After you repay the balance, that credit generally becomes available to borrow again.

"A HELOC gives you the ability to prepare for future expenses or cover projects that happen in multiple stages," says Fabien Thierry, head of home equity lending at Citizens Bank. However, HELOCs typically charge adjustable interest rates, so the monthly payment can change.

3. A home equity loan makes sense for a specific need.

A home equity loan provides a lump sum of cash upfront, which you repay on a set schedule, usually with a fixed interest rate and monthly payments.

Interest begins accruing on the full amount immediately, and some loans charge a prepayment penalty if you repay early. Home equity loans can work well for a specific expense, such as a major renovation or accessibility upgrade.

In a 2026 Citizens Bank survey of homeowners, 44% said renovating their property to fit their needs better was their most realistic housing option. Just 13% said buying another home felt achievable.

4. Borrowing against your home equity is affordable, but carries extra risk.

Home equity loans and HELOCs use your house as collateral. Interest rates for home equity loans and HELOCs averaged about 8%, compared with 12% for unsecured personal loans and nearly 20% for credit cards, according to a national Bankrate survey of lenders in June 2026.

The tradeoff is that if you fail to make the scheduled payments, the lender could eventually foreclose on your home.

5. A reverse mortgage lets you stay in the home without monthly loan payments.

A federally insured Home Equity Conversion Mortgage is available starting at age 62. You can receive the money as a lump sum, installment payments or as a line of credit.

Interest and fees are added to the loan balance over time. The balance becomes due when you sell the property, move out permanently or pass away. However, your heirs will not owe more than the property's value if the loan balance grows beyond it.

You must continue to cover property taxes and insurance, and keep the home in good condition. Otherwise, the lender could foreclose on the home.

6. Home equity investments offer cash, but at a high price.

With a home equity investment (HEIs), also known as a home equity sharing agreement, you sell a percentage of your equity to an investor. You get cash upfront and don't owe ongoing loan payments. Instead, the investor collects when you sell or refinance the home later.

These deals have grown more popular as homeowners look for ways to tap their equity without adding another monthly bill. Because the cost is deferred and tied to the home's future value, they can feel far less expensive than they are.

Here's an example: A homeowner receives $50,000, equal to 10% of a $500,000 home's value. They would owe $110,000 after 10 years if the property appreciates at 1.5% annually, or $187,000 if it appreciates at 5.5% annually, based on estimates from Point, an online provider of HEIs. Processing and other fees can also reduce the cash you receive.

By comparison, a 10-year home equity loan for the same amount at an 8% interest rate would cost about $73,000 to repay. "The seller may not realize how much upside they are giving away," says Luca Rassenti, a financial adviser in Tucson, Ariz.

7 Compare your options.

When borrowing against the equity in your home, compare offers from several lenders before committing. "Look at the rate, the support during the application process and how quickly you can get the money," says Thiery from Citizens Bank. Many banks offer online calculators that can give you an initial estimate of the rate and monthly payment.

Shopping around also matters for reverse mortgages and home equity investments, where fees and contract terms vary considerably.

Use the Bankrate tool below to explore and compare today's top refinance offers:

8. Selling unlocks your equity, but costs can add up.

Selling is the most direct way to access all your home equity. Downsizing to a less expensive property can also free up cash and reduce future housing costs.

However, you will lose value due to transaction costs and taxes, typically running up to 10% of the property for selling and 5% for buying another one, according to Zillow. So price out the full cost of the move before counting on a large amount of extra cash.

Single homeowners can exclude up to $250,000 of profit from their taxes for the sale of a primary residence, or $500,000 for a married couple filing jointly, as long as you (or your spouse) have lived in the home for two out of the last five years. "If you've owned a house for many years, you could have a substantial taxable gain," says Morgan, the debt attorney from Virginia.

9. Saving equity prepares for future needs.

Untapped home equity can serve as a reserve for later costs, including assisted living or long-term care. About 80% of 65-year-olds will need long-term care at some point, according to the Center for Retirement Research, and costs can run over $100,000 per year.

Before tapping your equity for a less urgent expense, consider whether other savings or assets could cover it and preserve that buffer.

10. Include your heirs in the plan.

When you pass away, your real estate receives a step-up in basis to its market value at that time. That means your heirs could sell it without owing taxes on the appreciation during your ownership.

If you need cash, Rassenti suggests asking your heirs whether they would provide a loan or gift today, with the expectation that they will inherit the property later. They may also have emotional reasons for wanting to keep a longtime home in the family. "Talk to the kids about what matters to them," says Morgan.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

Related Content

• How a Home Equity Line of Credit (HELOC) Works
• Thinking About Using Your Home Equity? What to Know About Rates and Risks
• Wealthy Households Want to Tap Home Equity Faster — and Options are Growing

A recent report from Citizens, where I am the head of Mortgage and Consumer Lending, found that only 13% of American homeowners say that buying a new home feels realistic in the current economic environment.

But not everyone has the luxury of waiting. Job relocations, family changes and caregiving responsibilities continue regardless of market conditions. For these "must-move" buyers, the question isn't whether to act, but how to move forward in a difficult market.

Many begin the process with a strategic, financially focused approach. Affordability remains a top concern. However, market conditions frequently prompt buyers to pivot.

Many buyers enter the process expecting their current home to be the biggest hurdle. Increasingly, we're seeing the opposite. Homes might sell quickly, while limited inventory and competition make finding the next property significantly more difficult.

Managing the gap

For homeowners who need to sell one home and buy another, the challenge is often less about completing a transaction and more about managing the gap between two transactions that rarely align perfectly.

Navigating this environment requires flexibility. A clear understanding of the financing and liquidity tools available can help bridge those gaps, but many buyers aren't sure where to start.

The same report from Citizens reveals that 63% of homeowners are likely to need financing for a home purchase or improvement within the next five years, yet 39% say they don't understand how financing options work.

In addition, 27% are either unfamiliar with home equity or have not yet explored how to use it.

Lots to discover

This knowledge gap can complicate an already complex process. Beyond finding the right home, buyers must evaluate loan options, compare costs and manage timing — all while dealing with uncertainty around rates and inventory.

For those who need to move quickly, liquidity and flexibility are critical. Some buyers are exploring ways to tap into their existing home equity, including home equity lines of credit (HELOCs) and home equity loans.

About 40% of HELOC applications at Citizens reach final approval in 10 days or less, helping borrowers act decisively without prolonged uncertainty.

These options allow homeowners to borrow against the value they've built in their current property, which can be useful when the competitive market makes the purchasing timeline difficult to pin down.

For example, a buyer relocating for work might have a defined timeline to sell the current home and secure housing in a new region. Too often, those timelines don't align.

A home might sell quickly, but a lack of suitable options can delay the purchase of the next property, creating the need for interim housing or temporary financing solutions.

In these situations, accessing home equity can help bridge liquidity gaps and reduce pressure to make rushed decisions.

Buyers can also strengthen their position by obtaining a fully underwritten commitment letter from a lender, which verifies income, credit and debt-to-income ratio before they begin making offers.

Explore your options

That said, home-equity products and a strong position in the market aren't the only paths toward a successful transaction, and they don't come risk-free. Sale contingencies are an option, but most sellers prefer to avoid them.

Alternatively, buyers who want to hold on selling their home before buying can consider a bridge loan, which is designed to provide short-term financing that "bridges" the gap between buying a new home and selling the current one, giving buyers the funds to make an offer before their existing home closes.

That opens the possibility of carrying two housing payments at once and causing great financial strain. The flexibility of a HELOC's draw period allows borrowers to pace principal and interest repayments, which can be useful for smoothing out cash flow in early repayment years.

Understanding these risks is key to making decisions that will best position the buyer financially, far beyond the transactional moment of moving.

Easing the strain

Even when equipped with solid information, buying a home under pressure can be difficult. Practical guidance and realistic expectations can help buyers make more confident decisions.

In today's challenging market, buyers should build a trusted team of advisers — including real estate professionals and lenders — early in the process. They can also anticipate setbacks and consider temporary housing if necessary to avoid compromising on their goals.

When buyers fully understand their options, they are better positioned to make decisions that support their long-term financial health.

While some experts suggest the housing market is at a standstill, the must-movers prove that the market hasn't shut down completely. People are still buying homes, just with a stronger need for reliable guidance when timing isn't ideal. They want to understand every possible financial risk before listing.

In this landscape, buyers who take the time to understand their financing options and plan for liquidity are better positioned to navigate the market thoughtfully, even when waiting isn't an option.

Related Content

• How Does the 10-Year Treasury Yield Affect Mortgage Rates?
• 5 Signs Home Buyers Have More Negotiating Power Right Now
• Think You Can Afford That House? Run These Numbers First
• Applying for a Mortgage Loan? Here's What to Expect
• Buying a Home With Your 401(k)? Consider the Risk to Your 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.

You were automatically enrolled in your 401(k) on your first day and never opted out. Your contribution rate climbs a little each year — automatically, whether you notice or not — and your money sits in a target-date fund that quietly rebalances while you live life.

On paper, you're a retirement success story — the exact "participant outcome" every employer hopes for and the entire financial services industry is built to produce.

Then the brakes on your car go, the emergency room copay hits, or the rent notice arrives with a number you simply can't cover this month. And you do the very thing you swore you'd never do: You log in and pull money out of the account you know you shouldn't touch.

If that stings a little, it's probably because it's a story about a lot of us.

In 2025, a record 6% of retirement plan participants took a hardship withdrawal from their 401(k), according to Vanguard's latest How America Saves report — the largest share the firm has ever recorded, and up from 5% the year before.

That happened in the very same year account balances climbed 13% and plan participation reached an all-time high of 86%. Read that again.

By those measures, the system looks healthier than ever. So why are more people than ever reaching into their retirement savings early? And how can we help mitigate this?

Hardship withdrawals aren't a discipline problem

The "easy" conclusion is that people simply aren't saving well, or that they lack discipline. I'd argue the opposite. The median hardship withdrawal last year was about $1,900. The two most common reasons were to stop a foreclosure or eviction and to cover a medical bill.

People aren't necessarily draining their retirement accounts for a vacation, a new pool in the backyard or an online shopping spree. They're reaching for the last cushion they have, because every other one is already gone.

That's the real story hiding inside the headlines: The early withdrawal isn't the problem. It's a symptom. The fragility was there long before the withdrawal; this is just where it finally became visible.

The rest of the data agrees. Worker confidence in retiring comfortably fell six points in a single year to 61%, the lowest since 2017, according to the Employee Benefit Research Institute. Fewer than three in five workers say they could handle an emergency expense, while 65% say debt is a problem in their household.

These aren't the numbers of a country that forgot how to save. They're the numbers of a country where paychecks stopped stretching as far as the plan assumed they would.

To be fair, part of the increase is mechanical. It's simply easier to take a hardship withdrawal than it used to be thanks to a 2018 rule change that removed a required step, resulting in less paperwork and fewer hoops to jump through.

Going back to the 6% taking withdrawals, this could mean friction is disappearing, not necessarily that distress is appearing. But that caveat doesn't rescue the overall story. In contrast, it sharpens it.

When someone is facing eviction, unexpected medical bills or a $1,900 shortfall and this is what they reach for first, you're not looking at carelessness. You're looking at a need.

A better way to cope with financial emergencies

If you find yourself eyeing that account in a hard month, instead of asking, "What's wrong with me?", ask some of these questions instead.

Am I measuring the right thing? A growing retirement account balance feels like security, but it's a promise about a life you'll live decades from now. It tells you nothing about your next 30 days.

The fragility lives in the gap between this paycheck and the next surprise, and that gap never shows up on your quarterly retirement account statements.

The number that may better predict whether you'll have to raid it is a different one: How long you could cover the basics if the paychecks stopped tomorrow, using money you can easily reach without touching retirement at all.

Is there anything between me and the next emergency that isn't my retirement account? For a lot of people, honestly, there isn't. But that's not a character flaw — it's the most changeable thing on this list.

A small, separate emergency fund, built however it gets built — a little set aside over time — is often all that stands between an unexpected bill and a withdrawal.

And what would actually make me feel secure, as opposed to just making the balance bigger? Those aren't always the same goal, and noticing the difference is where real security starts.

Rather than focusing too rigidly on standard savings advice, find the number that helps you sleep at night.

To be clear, none of this means the years of saving were pointless. It means retirement readiness and financial security are two different things, and we've spent a long time discussing the first as if it guarantees the second.

If you're doing everything right and still feel like you're one surprise away from it all coming apart, you're not imagining it, and you're not alone — you're paying attention. The account is never the whole picture. The life around it is.

Related Content

• 8 Costly 401(k) Mistakes That Could Tank Your Retirement
• The 401(k) Loan Dilemma: Is It Ever a Good Idea?
• 6 Steps to Quickly Build Your Emergency Fund
• How Much Savings Do You Actually Need to Feel Financially Secure? Start With These 3 Benchmarks
• Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest Egg

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

I still have their passbook savings accounts — small booklets filled with handwritten deposits and withdrawals that documented the flow of money through their lives. Every entry is a reminder of a time when financial stewardship was a necessity.

Today's teenagers and young adults live in a very different world. As many prepare to leave for college and manage money on their own, parents are asking important questions: Should they provide a monthly allowance? Encourage a part-time job? Help their children open a credit card?

Many families understandably provide financial support during college — whether for tuition, housing or living expenses. In fact, according to Edelman Financial Engines' What Money Means study, 43% of parents with adult children say they currently provide financial support, including 14% who say they provide a significant amount.

Financial assistance has remained remarkably consistent over the past several years, suggesting this has become a normal part of launching young adults into adulthood.

1. Start with awareness: Help them see how money moves

Most teens and young adults experience money only at the moment of spending. They tap a card, and the story ends there. But financial maturity begins with understanding how money actually flows into, out of and through our lives.

One good way to illustrate the value of money is to encourage them to track their spending — ideally for a month. The point is not to judge their choices — it's to help them see patterns.

If they are earning a paycheck, walk them through it. Show them the difference between gross and net pay, how taxes work and why payroll deductions matter. For students who take on a campus job, reviewing a paycheck can be an eye-opening lesson.

Understanding why take-home pay is less than expected — and learning to budget around it — builds practical financial skills.

Another way to teach financial responsibility is to let young adults pay for certain things themselves. Start small with discretionary purchases — the things they really want — and gradually move to necessities.

Whether support comes through a monthly allowance or helps cover larger expenses, establishing clear expectations helps young adults learn to budget while still benefitting from a parent's guidance. This is not about withdrawing support — it is about giving them the dignity of ownership.

2. Teach credit before they need it

College is often the first time young adults are exposed to credit card offers. Before they apply, help them understand the difference between building credit and accumulating debt. Explain how interest works, why paying the balance in full each month matters and how credit utilization affects a credit score.

It's also important to discuss common credit card mistakes, such as making only the minimum payment, carrying a balance month to month, maxing out available credit, missing payments or treating a credit card as an emergency fund.

These habits can lead to costly interest charges, damage credit scores and make it harder to reach future financial goals.

In fact, nearly 60% of Gen Z credit cardholders say they typically make only the minimum payment on at least one credit card, according to a recent LendingTree report.

The survey also found that many cardholders mistakenly believe carrying a balance helps their credit score and rely on credit cards as a substitute for emergency savings.

Relying on minimum payments can become an expensive habit because interest continues to accrue on the remaining balance, making debt more difficult and costly to pay off over time.

When used responsibly, a credit card can be a valuable financial tool. When used carelessly, it can become an expensive lesson.

3. Help them start saving and investing early

If your teen or young adult has income through a job, helping them open a Roth IRA may be one of the most valuable gifts you can give. Even modest contributions to an individual retirement account can be powerful because time — not investment brilliance — is the most valuable asset a young investor possesses.

The goal is not to teach them how to pick winning stocks. Instead, teach them the importance of regularly saving, broad diversification and patience. Show them how a low-cost index fund allows them to become owners of hundreds or even thousands of companies around the world.

More importantly, help them understand the extraordinary power of compounding over decades. A teenager who invests a few thousand dollars today may find that those early contributions may become some of the most valuable dollars they will ever save.

4. Model the behavior you want them to learn

Young adults learn far more from what they observe than from what they are told. One of the most effective ways to teach healthy money habits is to be open about your own experiences with money, including the lessons you've learned along the way.

Whether it's sharing how you paid off debt, recovered from an overspending habit or learned the importance of saving for emergencies, these real-life examples can make financial concepts feel more relatable and achievable.

According to the What Money Means study, 86% of Americans say their parents or upbringing influenced their relationship with money, including 35% who say the influence was major.

Financial responsibility is not learned in a single conversation. When we help young adults understand money, we give them confidence, independence and a foundation for lifelong financial well-being.

Related Content

• How to Budget for College Expenses Beyond Tuition
• 3 Ages, 3 Money Lessons: A Parent's Guide to Raising Financially Savvy Kids
• Schools Can Teach Kids About Money, But Guess Who They Learn From the Most?
• These Small Money Habits Stick (and Now Is the Perfect Time to Adopt Them)
• My 2 Key Rules for Investing Work Even When the Markets Are in a Tizzy

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.

Wondering if a piece of writing was generated by artificial intelligence? Anthropic has a solution: Watermarks.

But the company’s recent update is not based on market demands or innovation. It stems from the European Union’s Artificial Intelligence Act. The strict rules prohibit all sorts of conduct and come with a slew of new requirements for AI deemed high-risk. Rules for "high-risk" AI went into effect this month.

Prohibitions on AI systems include "deploying subliminal, manipulative, or deceptive techniques to distort behavior and impair informed decision-making, causing significant harm." AI systems also can’t "[infer] emotions in workplaces or educational institutions, except for medical or safety reasons." And much more.

The EU AI Act’s most severe penalties are fines of up to 7% of global revenue for companies found in violation. It’s sure to make the EU a tougher place for American AI companies to do business. But the impact will be global, as seen by Anthropic rolling out watermarks in all countries, noting that the change is related to the law’s transparency requirements.

Anthropic has detailed how watermarks work, adopting a method developed and already used by Google. The process involves how the AI model chooses specific words and word fragments within the text. Anthropic has a key that involves two lists of words and the text generated must include enough of the words from one list to be statistically significant. The method has limitations, such as not working well on shorter passages and only revealing the "likelihood" of being written by AI.

"Because the watermark is part of the text, it will travel with the text when it’s copied and pasted elsewhere, and may persist through some editing," according to Anthropic. "Watermarking will be applied at the model level, which means it will be present no matter which Claude product or surface the text comes from."

If it’s working well, readers should not notice. "You won’t see it, and it doesn’t change the meaning, quality, or readability of Claude’s response," according to the company. Theoretically, watermarks could help identify AI-generated text anywhere. But the move is likely to stir up concerns about Anthropic’s power over users’ text output and what it means for intellectual property.

Expect Anthropic’s adoption of watermarks to ignite more pushback from the Trump administration, with concerns about thwarting tech innovation and harming U.S. tech giants. President Trump said last month the administration will conduct a formal review to retaliate against the EU’s "discriminatory" digital practices, stemming from another EU digital law that has led to huge fines against U.S. tech giants. The growing backlash will also focus more attention on Google’s use of text watermarks for its AI model Gemini.

With the EU’s AI Act gradually coming into full force and American AI giants working to comply, the U.S. relationship with Europe is only set to get more tense.

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.

Related Content

• How the AI Entry-Level Freeze Is Delaying Retirement
• We Gave AI Chatbots 5 Financial Challenges. Here's How They Did
• The Future of AI-Powered Email
• California Leads the Charge as Privacy Fines Soar

Turns out Fido or Whiskers may have a bigger influence on your post-work happiness than you thought.

Full disclosure: I'm a retirement researcher by profession, and I'm also an animal lover. My wife is a veterinarian, and we're proud pet parents to three dogs, two guinea pigs and a tortoise.

In other words, I don't need to do any research beyond my own home to know the profound impact a pet can make at any stage of life.

Still, I was delighted that Prudential included a few questions about pet ownership in the Global Retirement Pulse Survey it did last summer. And it's really not much of a stretch — the cost of owning a pet should absolutely be a factor in building a comprehensive retirement income plan.

Some things we learned aren't particularly surprising: Pet ownership declines notably by age, people who owned pets before are likely to want a pet during retirement, and most people don't fully consider all the costs of owning a pet after they're done working.

Cats vs dogs

Now for the fun part, and I realize I may have buried the bone — I mean, buried the lede. I wanted to see whether pet ownership — specifically cats and dogs — is related to changes in life outlook. So, we asked whether someone's outlook on life has gotten better with age.

Drum roll, please: Go give your dog a treat! People who own dogs report having better life outlooks than those with cats. And people who have cats actually reported life outlooks that were worse than people without pets (I mentioned this to a few cats I know, and perhaps not surprisingly, they just don't care).

I was curious if other factors like wealth could be driving this, so I ran some additional calculations, and it turns out I wasn't barking up the wrong tree. See the results below.

So, I can't offer any guarantees from our research. But if you think owning a dog in retirement will bring a lasting smile to your face, who am I to disagree?

For over 20 years Prudential has been studying broader economic trends impacting Americans in its Pulse survey. The latest, the Global Retirement Pulse Survey, expands the geographic footprint and includes responses from the U.S., Brazil, Mexico, and Japan (for this analysis I just focus on just the U.S. respondents). The survey was conducted online by Brunswick Group between August 8-22, 2025 and there were 1,000 U.S. respondents. Note, the survey only included "mass affluent" adults, who are defined as age 30+ with at least $100,000 in investable assets.

Related Content

• How to Cut the Cost of Pet Care
• Is Pet Insurance Worth It?
• Why Your Pet Should Be In Your Estate Plan
• How to Find Your Pet Insurance Sweet Spot: A Financial Planner's Perspective
• From Pets to Paintings: The Little Things That Can Cause Big Estate Trouble

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.

State taxation impacts how much of your nest egg is truly yours. It shapes your monthly budget during your golden years and can give you a clearer sense of your long-term financial security.

And depending on where you live, your state may not tax retiree income at all. This can save you thousands on Social Security benefits taxes, pension payouts, and 401(k) withdrawals in retirement.

So check out these five quick questions to test your knowledge and see if your state makes the cut.

Good luck!

Remember that no matter where you live, federal income tax still applies. You may want to consult a tax professional for advice tailored to your specific financial situation.

Explore More

• How All 50 States Tax Retirees
• Test Your Knowledge of IRS Retirement Tax Rules
• States That Don't Tax Retirement Income in 2026
• Tax Breaks for Veterans: Retirement Pay, Disability and State Tax Exemptions

You’re probably wrong.

They don’t want their school trophies. They don’t want that fancy china that Grandma religiously took out of the hutch and served the Thanksgiving turkey on. Most of all, they don’t want those photo albums stuffed with black-and-white pictures of family members who were dead before your kids were even born.

Parting with your precious stuff is hard. Parting with stuff is even harder when your children — who you thought would be clamoring for it — want nothing to do with it. A generation of baby boomers is downsizing and flooding the market with stuff right now because they inherited so much from their own parents and grandparents.

"Gens X, Y, and Z don’t want these things," says Julie Hall, a professional estate liquidator and author of Inheriting Clutter: How to Calm the Chaos Your Parents Leave Behind. "I’ve got a 30-year-old, and I can count on one hand what she wants."

Which is precisely why you’re reading this story. We reached out to four downsizing experts for their unique insights into the ten things adult children typically want least of all — and why.

1. Anything from your living room or dining room

These are, by far, the toughest things to re-home, says Anna Novak, a downsizing expert, real estate agent, and founder of Simply Downsized, a consulting firm in Falls Church, Va. This accounts for a lot of big, dark, space-consuming stuff. Like giant mahogany dining room tables. And huge hutches filled with china and crystal from generations past.

"People don’t have formal dining rooms anymore," says Novak. Our lifestyles have changed so much that it’s increasingly rare to invite large groups of people into our homes and entertain them, she says.

Formal living rooms used to be a visual statement of success, says Novak. In another time, it was a place that was once a gathering spot where you’d feel just as comfortable bringing the Fuller Brush man who knocked at the door as you’d feel with family and friends. Now, few folks want them, and even fewer want all the stuff that fills them up.

2. Photo albums with nameless faces

It’s not that your kids don’t want any of your photos. They don’t want all of them. And they especially don’t want albums or boxes filled with images of distant family and friends whom they don’t even know, says Nonnahs Driskill, founder of Get Organized Already, a professional organizing firm in Pasadena, Calif.

Best bet is to simply offer them a few photos of their choice, she says. "When you give kids your stuff, it should feel like a gift — not a burden," says Driskill.

Best are digital albums, says Marguerita Cheng, a certified financial planner and downsizing specialist in Gaithersburg, Md. It’s especially helpful if the digital photos you share with your kids are organized in some simple way and identify who is in them, she says.

3. Books from another era

Bottom line is, whatever books your children actually want and love, they probably already have, says Driskill.

Books are big, heavy — and take up too much space, she says. They are also very personal. Think about it. Does your kid really want the textbook for the Introduction to Philosophy 101 class you took in college fifty years ago?

Ditto for CDs, records and tapes, says Driskill. Odds are, she says, your kid doesn’t even have anything to play these CDs, records or tapes on.

4. Matching, obnoxious bedroom sets

It used to be a sign of exquisite taste to have a massive, dark wooden bedroom set that included a huge dresser and mirror, a separate stand-up dresser, nightstands on either side of the bed, and a giant poster bed with a towering headboard. Now — not so much.

So, if you happen to have one of these monstrosities — or a bedroom set even remotely like this — please, please don’t foist it off on your kids, says Hall.

These days, matching bedroom sets are so uncool. And most younger folks opt for simple, platform beds that are high on function and low on decorative frills, she says. So, don’t be surprised, she says, if the only thing your kid wants from your bedroom set is a nightstand or two.

5. Linens — with or without stains

You can bet the house that your kids want absolutely nothing to do with those piles of old linens that you’ve got stored for them in a chest in the attic.

If they’re stored in a chest, that means you really don’t want them, either, says Hall.

This includes everything from tablecloths to placemats to napkins. Even that particularly onerous napkin, she says, with a shiny stain "where Uncle Joe spilled his beef gravy."

There’s probably not a woman under the age of 50 who would even consider putting out a matching linen set on the dining room table, says Hall. Why? Among other things, it requires starch and ironing. "My daughter would just throw them out," she says.

6. Collections of just about anything

Way back in the 1950s, collectibles evolved into a sign of success. If you had a Thomas Kinkade painting of a welcoming cobblestone bridge or a Maria Innocentia Hummel figurine of a young German lass standing with her bowl of porridge and geese on either side of her, well, you were the bee’s knees.

As much as you valued these collectibles, your kids don’t, says Novak. Never mind that these collections were a huge part of homemaking for so many boomer moms. They were marketed as lifetime keepsakes that would surely grow in value. But now, she says, "they are just seen as clutter. And kids don’t want them."

7. Sporting goods from another era

You might be a father who paid hundreds — even thousands — of dollars years ago for your then state-of-the-art golf clubs. They once looked so sleek and so shiny. But now, they’re yesterday’s news, says Novak.

Ditto for your one-time state-of-the-art exercise equipment, which did not age well, she says. Nobody wants an old treadmill laden with your coffee stains and sweat marks. "Your kids want their own equipment — not yours," she says. The one exception is the freestanding weights, which often look attractive even if they’ve aged a bit.

8. Your 50-year-old wedding dress

You’ve kept your wedding dress for decades and even tossed some pungent mothballs into the garment bag to keep it pristine. But guess what, neither your daughter nor your daughter-in-law wants it.

"Someone might want your wedding dress, but neither of them," says Driskill. You probably should have donated it to a charity 50 years ago, she says.

Ironically, they might want your grandmother’s wedding dress — because that would definitely be "far cooler," she says.

9. Your untimely timeshare

Timeshares get a bad rap — and as inheritable gifts, they probably deserve to, says Cheng.

Sure, as retirees, you had the time and money to book pricey timeshare vacations everywhere from the Galapagos Islands to Outer Mongolia. But do your adult children really have the time — and money — to take these vacations at this point in their lives?

"People have different needs in different stages of their lives," she says. For your adult children, timeshares probably aren’t one of those needs, she says. What’s more, timeshares often come with maintenance fees that are always spiraling upwards. So check with your kids first, but if they don’t want the timeshare, unload it.

Their own stuff

This one’s certain to surprise most parents. You’ve been saving your kids’ stuff in plastic bins and cardboard boxes for years. Their baseball card collections. Their school soccer jerseys. Even their pre-school graduation certificates. They basically want none of it.

"If they wanted it, they would have taken it by now," says Novak. Particularly, they don’t want all of their school art work — yes, even those clay dinosaurs they molded together in kindergarten — that you’ve been saving for them, says Driskill. "They don’t want their kindergarten stuff," she says. Perhaps the only clay dinosaurs they’ll want, she says, are the ones their own kids ultimately make.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

Related Content

• The Seven Worst Assets to Leave Your Kids or Grandkids
• You've Spent a Lifetime Amassing Your Stuff. Here's How to Get Rid of It.
• How to Get Rid of the Things Your Kids Don't Want While Downsizing

But there's one potential financial catch you may have overlooked: how you'll pay for things once you're abroad.

Exchanging money, withdrawing cash and using your credit or debit card overseas can all come with added costs. Unfavorable exchange rates, foreign transaction fees and ATM charges can quickly eat into your travel budget, and some of the most convenient options can also be among the most expensive. Before you leave, it helps to understand your payment and currency conversion options. Here are some common money mistakes to avoid when traveling internationally.

1. Accepting dynamic currency conversion

Some businesses offer dynamic currency conversion when you make a purchase using a credit or debit card. If you accept the conversion, you can complete the transaction using U.S. currency. The card processor automatically calculates the conversion and adds on any additional fees.

Dynamic currency conversion rates often include a markup over the exchange rate that your bank would use. Extra fees may also be bundled into the conversion rate, so you’ll often pay a higher rate for dynamic currency conversion than you would if your bank performed the conversion.

Generally, you will save money by choosing to complete the transaction using local currency, then letting your card network handle the conversion.

2. Exchanging money at the airport

Airport currency exchange booths are convenient, especially if you arrive without any local cash. But you may pay a premium for that convenience. These booths often offer less favorable exchange rates than banks and may charge additional fees, making them one of the more expensive ways to get foreign currency.

If you know you'll need cash when you arrive, consider planning ahead. Check whether your bank allows you to order foreign currency before your trip and compare the exchange rate and any fees. Another option is to wait until you reach your destination and withdraw a small amount of local currency from a bank-operated ATM. Just be sure to check your bank's international ATM fees before you travel.

3. Using the wrong ATM

When you need cash abroad, look for an ATM operated by a bank rather than an independent ATM in an airport, hotel, bar or other high-traffic area. Independent ATMs may charge higher fees or offer less favorable currency conversion rates. A bank-operated ATM, particularly one located at or inside a bank branch, may offer a better option.

But using a bank ATM doesn't necessarily mean the withdrawal will be free. You could still face several ATM fees. The ATM operator may charge a fee for the transaction, and your own bank may charge an out-of-network fee. International withdrawals can come with additional costs, too. According to Bankrate, international ATM withdrawals often carry an additional fee of 1% to 3% of the amount withdrawn.

Before your trip, check your bank's international ATM policy. Some banks reimburse certain ATM fees, while others have partnerships with overseas banks that may allow you to withdraw cash with fewer fees. Knowing which ATMs to look for before you arrive can help you avoid unnecessary charges.

4. Choosing U.S. dollars at a foreign ATM

When using an ATM abroad, you may be asked whether you want the transaction converted to U.S. dollars or processed in the local currency. You might see a message such as, "This ATM offers conversion to your home currency."

This is another form of dynamic currency conversion, similar to what you may encounter when paying with a credit or debit card at a store or restaurant. Choosing U.S. dollars allows the ATM operator to perform the currency conversion, often using an exchange rate that includes a markup or additional fees.

The wording on the screen isn't always straightforward. You may be asked whether you want to "accept conversion," "continue with conversion," or be charged in your home currency. In most cases, choosing the local currency and declining the ATM's conversion allows your bank or card network to handle the exchange instead.

Before completing the withdrawal, review the exchange rate and any fees displayed on the screen so you understand what you'll be charged.

5. Paying foreign transaction fees

A foreign transaction fee is an extra charge some credit card issuers apply when you make purchases outside the U.S. or with a foreign merchant. These fees are often around 3% of the purchase price, which may not sound like much until you add up everything you spend during a trip.

For example, if you charge $6,000 in hotels, restaurants, transportation, shopping and other expenses to a card with a 3% foreign transaction fee, you could pay an additional $180 in fees.

Before traveling, check your credit card's terms to see whether it charges foreign transaction fees. Many travel credit cards don't charge them. If your current card does, compare your options before your trip and consider whether a card without foreign transaction fees makes sense for your spending and travel habits.

6. Taking a cash advance on your credit card

A cash advance on your credit card lets you borrow cash against your available credit, but it can be an expensive way to get money while traveling. Unlike a debit card withdrawal, which takes money directly from your bank account, a credit card cash advance is borrowed money that you'll need to repay.

Cash advances typically begin accruing interest immediately, without the grace period that often applies to regular credit card purchases. You may also pay a cash advance fee, often around 3% to 5% of the amount withdrawn. Depending on where you get the cash, ATM fees may apply as well.

If you need cash while traveling, withdrawing money from your bank account with a debit card will generally be less expensive than taking a credit card cash advance. Check your bank's international ATM fees and withdrawal policies before your trip so you know what to expect.

7. Carrying too much cash

It might be tempting to withdraw plenty of cash for your trip, but think carefully about the potential theft or loss of that money. If you have leftover currency at the end of your trip, you'll need to convert that back to U.S. dollars, which isn't convenient and comes at a conversion cost.

Consider using a mix of payment methods to cover your expenses during your trip, such as a credit card that doesn’t charge foreign transaction fees and some cash that you've converted. Keep some backup cash separate from your primary wallet in case of theft or loss.

In certain situations, cash may still be necessary, such as for easily tipping hotel staff or when you’re making small purchases, like buying snacks. It’s also helpful to have cash as a backup in case you experience an issue with your card or a business’ card reader is down, but for safety's sake, don't go overboard with the amount of cash you keep on hand.

Preparing for your trip

There are plenty of ways to access and spend money abroad, but some options can cost significantly more than others. Before you leave, familiarize yourself with your choices and make a plan for how you'll pay for purchases and access cash.

A little preparation can help you avoid unnecessary conversion costs, foreign transaction fees and ATM charges, leaving more of your travel budget for the experiences you planned the trip for.

Put your vacation fund to work

Avoiding unnecessary fees can help you stretch your travel budget once you're abroad, but smart planning can start well before you leave. If you're setting aside money for an upcoming trip, consider keeping your vacation fund in a high-yield savings account or CD, where it can earn interest while you plan.

Use the Bankrate tool below to compare some of today's top savings accounts and CDs and find an option that fits your travel timeline:

Related content

• 23 Best Travel Websites and Apps to Find Deals and Save Money
• How to Find the Best Alternatives to Popular Travel Destinations
• 9 Ways To Save on Your Next Luxury Trip

One spouse has read that waiting until 70 gets you the biggest possible check, so that's the plan. The other wants the income now.

Neither of them has run the number that should be driving the conversation: Not the maximum benefit, but the spousal benefit and what happens to it if they wait.

That's the piece of Social Security planning I see skipped more than any other. It can be worth hundreds of dollars a month, for the rest of a spouse's life, and most people never calculate it until it's too late to matter.

The decision you can't undo

Social Security is one of the only truly irreversible decisions in retirement planning. Once you file, that's generally it. There's a narrow exception: You can withdraw your application within 12 months of filing, but only once, and you must repay every dollar you've received. Past that window, you're locked into whatever you chose, for life.

That permanence is exactly why this decision deserves more than a rule of thumb. "Wait until 70" is good general advice for a single person maximizing their own lifetime benefit. It's incomplete advice for a married couple, because it ignores a benefit that only becomes available once someone files.

The number most couples never calculate

If you're married, your spouse may be eligible for a spousal benefit worth up to 50% of your benefit at your full retirement age, even if they have little or no work history of their own, or if their own benefit is smaller than 50% of yours.

But here's the part that trips people up: Your spouse can't collect that spousal benefit until you file for your own.

Consider a hypothetical couple, Mark and Diane, both in their mid-60s, with a full retirement age of 67. Mark's full retirement age benefit is $3,200 a month, but he's planning to wait until 70 to collect $3,968. Diane spent most of her career raising their kids and working part-time, so her own benefit at full retirement age is only $700 a month.

Most couples in this position focus entirely on Mark's number. But Diane is also eligible for a spousal benefit of up to $1,600 a month, more than double what she'd get on her own record. The catch is that she can't touch it until Mark files.

While Mark waits, Diane can draw her smaller $700 benefit or wait alongside him. Either way, that's three extra years of a meaningfully smaller household income in exchange for a bigger Social Security check down the road.

Whether that trade-off is worth it depends entirely on the couple's full financial picture, which is exactly why this number needs to be calculated, not assumed.

Running the break-even math

The other number worth knowing is the break-even age: The point at which the extra money from delaying benefits catches up to and passes what you'd have collected by filing earlier.

For someone weighing full retirement age against age 70, that break-even point typically lands in the early-to-mid 80s, depending on the exact benefit amounts involved.

If you expect to live well past that age, delaying tends to pay off in total lifetime benefits. If your health or family history points the other way, filing earlier may make more financial sense, even before you factor in what it means for your spouse's income today.

The part everyone forgets: The survivor's check

Here's the piece that rarely comes up until it's too late to plan around: When one spouse dies, the survivor doesn't keep both checks. The smaller one stops, and the survivor keeps the larger one for the rest of their life.

That means whoever has the higher benefit, and their filing age, determines the income floor their spouse will live on if they're the one left behind.

That's a real argument for delaying the higher earner's benefit, especially when there's an age gap or a health difference between spouses. But it's not automatically the right call for every couple, and it needs to be weighed against the income the household is giving up in the meantime, not treated as a rule that overrides everything else.

3 steps to take this week

You don't need an adviser to start this process. You need 10 minutes and both spouses' numbers.

Pull both statements. Log into your accounts at SSA.gov and record each spouse's benefit at 62, at full retirement age and at 70.

Calculate the spousal benefit two ways. Compare each spouse's own benefit against 50% of the higher earner's full retirement age benefit, and use whichever number is larger.

Run your own break-even math. The 80s range in this article is a general guide, not your number. Free tools, such as Open Social Security, let you plug in your actual birth dates and benefit amounts to see your household's real break-even age and total lifetime income under different filing combinations.

See the math applied to a real filing decision. If it helps to watch this reasoning play out step by step, this video walks through a similar case, including the spousal benefit tension and the break-even trade-off.

Make the decision with the numbers in front of you

Social Security timing isn't a decision either spouse should make alone, and it's not one that should be settled by general advice in an article you've read, including this one. It's a decision that depends on your spousal benefit, your break-even age, your health and what happens to the survivor.

Do the math for your household, not someone else's. And have the conversation with real numbers on the table before you file, because after that, there's no going back.

Related Content

• Claiming Social Security: 7 Tools and Rules for DIY Investors
• When Spouses Clash on Retirement Age: Longevity Risk vs Early Retirement
• How Couples Can Manage Different Retirement Timelines
• The Mulligan Rule of Retirement — Seven Mistakes You Can Fix
• Social Security Do-Overs Quiz: Can You Undo a Claiming Mistake?

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.

But with so many Member’s Mark products available, it can be tricky to determine which ones are worth trying. Since some of these products are sold in large or even bulk portions, you want to be sure they deliver on value before you make a purchase.

We looked at what Sam’s Club shoppers are recommending, including products that repeatedly earn praise in Reddit discussions, to find 10 Member’s Mark favorites worth a try.

What is Member’s Mark?

Member’s Mark is Sam’s Club’s private-label brand, with products spanning groceries, household essentials, clothing and accessories, pet supplies, home decor and more.

Like other Sam’s Club merchandise, Member’s Mark products are backed by the retailer’s 100% satisfaction guarantee. Most items can be returned at any time, although some products, including electronics and alcohol, are subject to different return restrictions.

Private-label brands can help warehouse clubs keep costs down because they typically require less spending on advertising and marketing than national brands. They also give retailers more control over pricing and can help build loyalty by offering products shoppers can’t buy elsewhere.

That can translate into lower prices for members, but a store brand isn’t automatically the best deal. Compare unit prices, especially when buying in bulk, rather than relying on the package price alone. If you find a Member’s Mark product you like just as much as the national-brand alternative, choosing the lower-priced option could help you save.

Household essentials Sam's Club shoppers recommend

Member’s Mark offers plenty of everyday household essentials, and several consistently earn praise from Sam’s Club shoppers. These three picks combine positive shopper feedback with prices that can compete with national brands.

• Member's Mark Ultra Premium 2-Ply Toilet Paper — Member's Mark toilet paper receives some of the strongest recurring recommendations online. Many shoppers praise the quality of the toilet paper, saying it's better than Costco’s TP. The Member's Mark toilet paper's price breaks down to $0.0023 per sheet, while Quilted Northern Ultra Soft & Strong 2-Ply Toilet Paper breaks down to $0.0031 per sheet.
• Member's Mark Select & Tear 2-Play Paper Towels — The 15-roll pack of paper towels is another shopper favorite, offering the opportunity to save on a household staple. The Member's Mark paper towels cost $0.0093 each, while Bounty Select-A-Size 2-Ply Paper Towels cost more than twice as much at $0.19 each.
• Member’s Mark 33-Gallon Power Flex Drawstring Trash Bags — This 90-count package of large trash bags breaks down to a cost of $0.23 per bag. In comparison, you’ll pay $0.25 per bag if you buy a 90-pack of Hefty Ultra Strong 33-Gallon Drawstring Trash Bags.

Member's Mark foods Sam's Club shoppers recommend

• Member's Mark Southern Style Chicken Bites — Another fan favorite, these chicken bites are crafted with white meat chicken and are lightly breaded. They can be prepared with an air fryer, conventional oven or microwave, so they’re a quick option for a snack, party or dinner.  
• Member's Mark Pineapple Spears in Coconut Water — This unusual product gets enthusiastic recommendations. Yes, it costs substantially more than your typical jar of canned pineapple, but the flavor combination makes it a must-try. The pineapple is packed with vitamin C and is an ideal addition to smoothies, desserts, fruit salads and more.
• Member's Mark Fully Cooked Bacon — The 10.5-ounce package of Member’s Mark Fully Cooked Bacon sells for $13.46. It’s frequently mentioned by shoppers online, and since it’s already cooked, it’s an easy addition to breakfasts, BLTs, soups and more. It’s also slightly cheaper than a 10.5-ounce package of Hormel Black Label Fully Cooked Bacon, which costs $15.87.
• Member's Mark BBQ Baked Beans with Brisket— This flavorful side dish is a frequently mentioned item. It combines bites of slow-cooked brisket with molasses and brown sugar for a touch of sweetness. It’s a great choice for a dinner or BBQ side.
• Member's Mark Indian Butter Chicken — Member’s Mark Indian Butter Chicken is one example of the brand’s numerous prepared meal selections. Ready to heat and eat, this convenient 32-ounce meal delivers six servings, perfect for larger families or leftovers.
• Member's Mark Iced Cinnamon Rolls — Ready for breakfast or dessert, Member’s Mark Iced Cinnamon Rolls are a popular bakery pick. They’re crafted with the Member’s Mark Made Without Commitment, meaning they’re free of more than 40 ingredients like high fructose corn syrup and certified synthetic colors.
• Member's Mark Seasoned Rotisserie Chicken — Made fresh daily, Member’s Mark Seasoned Rotisserie Chicken is a simple and affordable mealtime solution. You can pair it with one of the Member’s Mark side dishes or make your own sides. The chicken is crafted without any antibiotics, MSG or artificial flavors or colors.

How to decide if a Member’s Mark product is a good deal

When shopping at Sam’s Club, Member’s Mark products may offer a good deal, but it’s still important to comparison shop. Compare unit prices, not just packaging prices, to get the most accurate idea of how prices compare and whether you’re really saving with a Member’s Mark product.

If you’ll be buying in bulk, consider whether you’ll actually use all of the product before it expires. Some products may be frozen, but others can go stale or can spoil.

When comparing a Member’s Mark product against a national brand, consider the ingredients, size and features. A lower price on a Member’s Mark product isn’t necessarily a better value if you don’t end up liking the product or if you can’t fully use the larger quantity without having to throw out some of the product. Always keep your household’s preferences and habits in mind when deciding which products are the best choice and truly offer the best value.

Related Content

• 7 Grocery Shopping Habits That Are Costing You Money
• Food Tax: Which States Still Tax Groceries in 2026?
• How to Spot Fresh Coffee and Stop Overpaying for Stale Beans

Living in a city with higher collision risks can lead to higher insurance premiums, regardless of your personal driving record. This is where Allstate's 2026 Best Drivers Report can shine some light on the safest areas to drive.

The insurer examined the 200 most populous US cities, using insurance claims and Drivewise app data — the app you download to monitor your driving behavior in hopes of a lower rate. These findings show how where you live can affect your insurance rate.

These are the safest cities for drivers

Allstate found that Brownsville, Texas, is the safest city in the US for drivers. Drivers living there only experience a collision once every 15 years. Meanwhile, in Boston, Massachusetts, drivers can experience collisions every 3.76 years. That makes it more than four times less likely you'll crash in Brownsville.

Along with Brownsville, here are the top 10 safest cities for drivers:

• Brownsville, Texas
• Fort Collins, Colorado
• Boise, Idaho
• Laredo, Texas
• Cary, North Carolina
• Madison, Wisconsin
• McAllen, Texas (New to top 10)
• Colorado Springs, Colorado (New to top 10)
• Eugene, Oregon
• Olathe, Kansas

You'll notice a few trends from this list. Not surprisingly, living in a smaller to medium-sized city lowers your risk.

And it isn't just about the sheer number of drivers you encounter on your commutes. Allstate's Drivewise data show that drivers in larger cities such as Miami and Boston tend to use their phones more while driving, resulting in elevated risk.

If you live someplace more collision-prone, check your insurance rate regularly to ensure you have the best deal. Use this Bankrate tool to compare options quickly:

Night driving is also more prevalent in larger cities. Allstate found that driving at night is highest in larger cities, such as Washington, DC, Las Vegas and New York. With nighttime driving come elevated risks such as drowsy driving, hard-to-see road hazards and drunk drivers.

Another trend is regionality. The Northeast is home to seven of the 10 most dangerous driving cities, with three being in Massachusetts (Boston, Springfield and Worcester). Meanwhile, the safest cities were predominantly western, with three in Texas and two in Colorado.

While geography plays a massive role in your insurance costs, it isn't the only factor you can influence. Even if you don't live in one of these top-tier cities, you can still take control of your financial protection.

How to protect your car insurance rate

Industry experts recommend the following tips to keep your policy low while protecting your finances:

• Buy a dash cam: Insurance fraud cases often involve "crash for cash" scams. A dash cam can provide irrefutable evidence to back up your claims. This can protect you financially from higher insurance rates and out-of-pocket expenses resulting from judgments exceeding coverage limits.
• Document everything during an accident: Take pictures of all vehicles involved, property, road conditions and skid marks. This can refute "soft fraud" claims where others might exaggerate damages.
• Be cautious of insurance deals: You'll see social media ads promising ridiculously low prices for insurance coverage. These ghost agents can take your money and cancel your policy without your knowledge, leaving you on the hook for any accidents caused in the meantime.
• Check for specific coverage gaps: Beyond standard liability, check your policy for exclusions. Some carriers won't cover damages animals cause to cars, resulting in thousands in repair bills. So, make sure to read your policy thoroughly and contact your agent with any questions on coverage gaps.

While your city's collision risk is a factor you can't control, your approach to insurance and risk management is in your hands. By staying informed about your coverage and taking proactive steps like installing a dash cam, you protect your wallet, no matter where you drive.

Related content

• These Cities Have the Most Dangerous Drivers — and It Could Cost You
• How to Cut Your Home and Auto Insurance Bills This Year
• A Dash Cam Could Be Your Best Defense on the Road (And Save Your Insurance Costs)

But it can also be one of the least effective times to make important financial decisions. Schedules are crowded as deadlines are closing in, while advisers, accountants and attorneys may have limited capacity to support.

Instead of rushing through year-end checklists, summer can give you the space and time to think more strategically. By this time of year, you can see how income, spending and investments are tracking, with several months left to make changes while they can still have an impact.

In my experience as a CFP®, that head start often leads to better decisions because families have time to consider trade-offs and adjust gradually.

1. Rebalance your portfolio and review asset location

Even if you haven't made any trades, market performance over time can change your portfolio's risk profile. Strong returns in equities, a particular sector or one concentrated holding can gradually increase risk, leaving the portfolio more aggressive than it was at the beginning of the year.

An end-of-summer review can identify where allocations have drifted and whether new contributions should be directed toward underweight areas. The goal is to ensure that the portfolio still reflects your goals, time horizon and tolerance for risk.

The review can also include asset location, or which investments are held in taxable, tax-deferred and Roth accounts. As markets move and contributions are added, assets may no longer be held tax-efficiently.

Income-producing investments may be better suited to a retirement account, while investments that receive favorable long-term capital gains treatment may fit better in a taxable account.

Liquidity needs, charitable plans, required minimum distributions and estate considerations also matter. Reviewing where assets are held can improve after-tax efficiency without changing the overall strategy.

2. Check your retirement contribution pace

Many employees choose their retirement plan contribution rate at the beginning of the year and rarely revisit it. By summer, however, a raise, bonus or promotion may have changed both cash flow and the contribution needed from each remaining paycheck to reach a retirement savings goal.

Reviewing your retirement strategy in late summer allows time to make smaller adjustments over several months. Waiting until November may require a much larger increase over only a few pay periods.

This is an overlooked aspect of financial planning that has come up often in my client conversations: People assume they are on pace because their contribution percentage has not changed, but soon discover that compensation or payroll changes have left them short.

A summer financial review can also consider a mix of traditional and Roth contributions. Retirees should confirm how much remains to be withdrawn from required minimum distributions and whether qualified charitable distributions fit into their giving plans.

3. Run a tax projection

By the end of the summer, your financial picture is typically much clearer and more comprehensive than it was at the start of the year. Wages, bonuses, business income, investment gains and equity compensation are easier to estimate, making summer an ideal time to determine whether tax withholding or estimated payments need to be adjusted.

A summer tax projection may also reveal valuable planning opportunities, including Roth conversion, gifts of appreciated securities, the timing of stock-option exercises or the use of investment losses to offset realized gains.

Some of these strategies may be better executed later in the year, once the full tax picture is clearer. But reviewing them now allows you to identify your options before year-end deadlines begin to dictate your decisions.

The goal isn't simply to lower this year's tax bill — it's to ensure every tax decision supports your broader long-term objectives without creating avoidable cash-flow constraints.

4. Put cash and debt to work more deliberately

Over time, cash can accumulate without a clear purpose. Conversely, some households may have too little set aside, forcing them to rely on credit or investment sales to cover predictable expenses.

An end-of-summer review can separate money needed for taxes, travel, home improvements or other near-term spending from assets intended for longer-term goals. It is also worth checking whether savings are earning a competitive return.

Borrowers with adjustable-rate loans, home-equity lines or other variable-rate obligations should understand how interest costs are affecting cash flow. Anyone planning a major purchase should consider how new debt would interact with retirement savings and other priorities.

Cash and debt can be managed intentionally rather than carried forward without review.

5. Prepare for employee benefit decisions

Open enrollment often leaves employees with little time to make important choices. Reviewing benefits during the summer creates more time to consider whether health, life and disability coverage still match the household's needs, particularly after a marriage, divorce, new child, home purchase or change in income.

Employees eligible for a health savings account can reassess their contribution pace and consider how the account fits into their broader plan.

Executives may also need to review stock options, restricted stock, deferred compensation or company-stock concentration before election deadlines arrive.

These choices affect taxes, cash flow and investment risk, and deserve more than a rushed year-end review.

6. Review estate documents before there is an emergency

Estate planning is easy to postpone when nothing feels urgent. Summer is a good time to ensure that wills, trusts, powers of attorney, health care directives and beneficiary designations still reflect the family's circumstances and long-term intentions.

Major life events — such as births, deaths, marriages, divorces, moves and significant changes in wealth — may also require updates to your broader financial plan.

For families considering significant gifts, planning should begin well before December, given valuations, legal documents and trust administration often require coordination among several advisers.

In conversations with clients, estate planning reviews often uncover practical issues that have little to do with estate taxes. An outdated beneficiary designation, an unfunded trust or a missing power of attorney can all create complications long before federal estate-tax exposure becomes relevant.

The goal is straightforward: Ensure the right people have the authority to act in an emergency and that your assets will be distributed as intended. Don't wait for an arbitrary year-end deadline to review your plan.

Act earlier to save stress later

Year-end planning will always matter. After all, certain tax, retirement and gifting decisions are tied to the calendar. But I believe that December should not be the first time you review and adjust your financial plan.

By summer, enough information is available to provide a clearer picture of your finances while still leaving enough time to make intentional adjustments without being rushed. Acting earlier can give investors the breathing room they need to make meaningful adjustments.

For many households, the most important question is simple: Has anything changed in the markets, my finances or my life that should change what I do next? Asking that question now — rather than in December — can lead to better decisions and less stress in the year-end.

Related Content

• Most Investors Aren't as Diversified as They Think: Are You?
• Eight Steps to Help Get You Through the Open Enrollment Jungle at Work
• Estate Planning Checklist: 13 Smart Moves
• School's Out — and Summer Is the Perfect Time to Reassess Your 529 Plan
• I'm a Financial Planner: Trump Accounts Are a No-Brainer if You're Eligible (How to Apply)

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.

Those tiny decisions feel weightless in the moment. That's the psychology of "just one small purchase" at work.

It shows up everywhere in modern consumer life. From coffee runs and in‑app upgrades to delivery fees and streaming trials. Understanding why small buys feel harmless helps explain why budgets leak even when we think we're being careful.

As a financial professional, I'm here to help you learn how to rise above this mentality.

The psychological drivers behind minimal purchases

Small purchases (or frictionless digital payments) don't slip past our radar by accident. A few well‑studied biases give them cover and make them easier to justify.

The denomination effect. The tendency to treat smaller units of money as easier to spend. Research in the Journal of Consumer Research finds people are more willing to part with smaller bills than a single large bill of the same value, which makes bite‑size buys extra tempting.

Mental accounting. This is a concept popularized by behavioral economist Richard Thaler. We mentally sort money into different buckets (like rent, groceries, fun money, etc.), then treat each bucket as if it's separate.

Our minds treat minor purchases differently from major ones, making people underestimate the impact of small buys.

Marketing cues and the environment. Placement at checkout, limited‑time offers, one‑click payments — these design choices shrink the "pain of paying" and turn a "maybe" into a "yes."

Social comparison also plays a role. We don't shop in a vacuum — we scan what peers are doing and use it as a yardstick.

For instance, blank apparel is often priced affordably, so adding an extra T-shirt or hoodie to your order may seem like a small decision. It's the kind of purchase that's easy to justify because each item doesn't feel expensive.

Combined with limited-time offers or free shipping thresholds, those small additions can quickly become part of the "just one more" mindset.

The slippery slope: How small purchases add up

The tricky part isn't a single latte or one delivery fee. It's the slow drip.

Picture this scenario for Sheryl:

• She grabs a $4.50 coffee three times a week on her commute
• She has two streaming services at $12 and $15 a month, plus $9 for cloud storage
• She makes a couple of $3 in-app purchases each month
• Her meal-delivery fees average $6 three times a month
• She gets a snack at the register once or twice a week for $1.50

None of these actions feel like decisions. They're habits.

Add it up over a year:

• Coffee: $4.50 x three times a week x 52 = $702
• Streaming: $27 a month = $324
• Cloud storage: $9 a month = $108
• In‑app extras: $6 a month = $72
• Delivery fees: $6 x three a month x 12 = $216
• Small snacks: $1.50 x two a week x 52 = $156

Total: About $1,578 a year

That's real money. And it doesn't include the costs of the food that came with delivery — just the fees.

Gregor Emmian, deputy chief digital growth officer at Rise, says today's digital payment experience makes it easier than ever to overlook small purchases.

"People rarely worry about a single small purchase," he says. "The challenge is that these purchases become routine. And over time, they can add up to much more than expected. "

For a bigger backdrop, U.S. households spend thousands each year eating outside the home, a category packed with small, frequent swipes. The Bureau of Labor Statistics (BLS) reports that average household spending on "food away from home" was over $3,600 in 2022.

How to combat the 'just one small purchase' mentality

You don't need heroic willpower to fight this mindset. A few small shifts can make a big difference. Why? Because they meet the problem where it lives: In the moment.

Track the tiny stuff, briefly and honestly. For two weeks, log every sub‑$10 purchase in one place. Patterns pop up fast. If you like budgeting with buckets, give minor purchases their own category so you can see the full picture.

Cap the category, not the item. Set a weekly "small flex" budget, say $25 or $40, to cover coffees, snacks, tips, microtransactions and more. When the bucket's empty, you're done for the week.

Use a wait‑and‑watch rule. A simple waiting period is one of the most powerful tools. When you give yourself 24 hours before a non-essential purchase, most of the urgency disappears. Pair that with clear financial goals, and every small decision starts serving a bigger purpose.

Tie every "yes" to a goal. Name the trade‑off: "If I buy this, I'm choosing it over an extra $25 toward my emergency fund." The clarity is usually enough.

Reintroduce gentle friction. Turn off one‑click checkout on discretionary sites or require Face ID for purchases. A six‑second pause is often all you need.

Make small swaps that feel easy. Take a travel mug two days a week. Batch your errands to avoid "I'm out anyway" impulse buys and order pickup once a week instead of delivery.

If you find mindfulness helpful, try this quick sequence when a small purchase tempts you:

• Notice the urge
• Name the feeling (Bored? Stressed?)
• Number it (1 to 10)
• Navigate (choose to wait, pass or buy with intention)

A final note

If you want to test this for yourself, total your past 30 days of sub‑$10 transactions. No judgment, just data. Then pick one change that would cut that number by 20% next month without making life feel smaller.

Related Content

• Are Digital Payments Making You Spend Too Much, Too Fast? These Simple 'Speed Bumps' Will Help You Slow Your Roll
• 8 Things You Need to Stop Wasting Money on in 2026
• How to Choose the Right Payment App
• 7 of the Best Budgeting Apps for 2026
• 6 Steps to Quickly Build Your Emergency Fund

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

They're sharing how they did it and what they're doing with it. This time, we hear from a soon-to-be retired 58-year-old vice president at an engineering consulting firm in Durham, North Carolina. He's married and reports his current salary at $185,000.

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?

Started with investing in getting a degree with which I could make a decent salary. After reading a book from the library on mutual funds, I began using them to save.

At 25, my first real estate investment was a duplex. I realized my wife and I could live in one side, and the rent from the other side paid 80% of our expenses.

I was hooked and used savings to keep buying single-family homes to rent.

After 9/11, I began heavily investing directly in the stock market through individual stocks.

The Fun Stuff

Did you do anything to celebrate?

We celebrated with a nice dinner out, but used a coupon to get the dinner for half off.

It is good to have goals. Mine was to get to a million by age 40. We made it by age 39.

What is the best part of making $1 million?

A feeling of accomplishment in reaping the results of hard work, the confidence in knowing you have a reasonable grasp of the investing world, the freedom of knowing your kids and the government will not have to support you in your old age and the ability to give to those in need and make significant investments in charitable organizations.

Did your life change?

Overall, financial freedom has been a blessing, but money has not changed who we are.

Does anyone know you're a millionaire?

Only my wife and I (know we're millionaires). Our kids are now all out of college (debt-free) and are starting to realize we are.

Any plans to retire early?

Planning to retire soon.

Looking Back

Anything you would do differently?

I would have had less fear. Coming from a family who thought any investment riskier than putting all your money in a mattress was too risky, I was afraid of real estate and the stock market.

If you avoid excessive leverage in real estate, and all leverage in the stock market, success over long periods is inevitable.

If you start in your 20s, as we did, you have a long time to invest.

What advice would you give to your younger self?

Start even earlier on Roths and maximizing my 401(k) contributions. Time is the real magic ingredient.

Also, don't listen to the smart money people who say today that the best years of the stock market are behind us and that unfortunate young people today can expect only mediocre returns over the next 20 years.

Warren Buffett, whom I greatly admire, said that very thing over 20 years ago when I first started buying stocks. He was very wrong then, and so are the people, including Buffett, who say that now.

Also, I would share the lesson that there are no experts in investing who know which stocks are going to take off or tank, including yourself. There are only those who get lucky for a while and con others — and sometimes themselves — that they have special powers.

As John "Jack" Bogle said, Nobody knows nothing. Realizing this is a key step in becoming a wise investor.

Did you read any books that helped you on your journey?

• Thinking, Fast and Slow by Daniel Kahneman
• Rich Dad Poor Dad by Robert Kiyosaki
• The Millionaire Next Door by Thomas Stanley and William Danko
• Warren Buffett's annual Berkshire Hathaway shareholder letters

Did you work with a financial adviser?

No. My experience in knowing people in the financial advice business is they are focused on their returns, not yours. My financial education mostly came from reading Money magazine — which was acquired several years ago by Kiplinger — religiously for the past 30 years and practice through actual investing.

Keeping fees to a minimum is a big key to success.

Today, when a financial adviser tries to pitch me to become their client, I can ask them a couple of investment or tax questions that show whether their education is subpar.

Did anyone help you early on?

The key kickstart was a cassette tape series about success that my mom gave me while I was a college student to listen to, by the late Pat Robertson.

That was the first time I heard basic financial principles such as the power of compounding.

Looking Ahead

Plans for your next $1 million?

That's well in the rearview mirror now. The first million is truly the hardest to make.

Any advice for others trying to make their first $1 million?

Live below your means, put your savings in a low-cost index fund and don't touch it.

Take advantage of Roth accounts as early as possible and get the full company match on your 401(k).

For a young person, (I would advise them) to start with generosity. My religious background encouraged me to budget a significant amount to give to charity and those in need.

This seems contradictory, but doing so when you are young with a small amount of money makes it easier to do so with a bigger amount later.

It also frees you from the stress that comes with money and gives you a purpose that matters.

Do you have an estate plan?

Yes. We have set up trusts to avoid probate and to help our adult children not receive a windfall all at once that could have negative consequences.

What do you wish you'd known …

Before you retired? Almost there, so can't answer yet. However, it seems from my research that planning is key. Probably, at least for a seasoned investor, the planning for the mental, emotional and physical side is more important than the financial side.

When you first started saving? Not sure I would change a thing. The joy of discovery along the way is part of the process.

When you first started investing? Again, not sure I would change a thing. I made mistakes and learned from them. By starting early with a small amount of money, the cost of those mistakes was small compared to the value of the lessons.

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.

Related Content

• Are You Rich? U.S. Net Worth Percentiles Can Provide Answers
• Compare Your Net Worth by Age
• Being Rich vs Being Wealthy: What’s the Difference?
• These 5 Rules Separate the Rich From Everyone Else
• Can Money Buy You Happiness? Yes, It Can. However…

That happens by default, unless you plan around it.

Most people who reach this point spent decades doing everything right: Saving consistently, maxing out their 401(k), following the advice they were given. That advice was built for accumulation, not for the withdrawal phase.

This is often called the Social Security tax torpedo. It shows up the same way in almost every retirement plan I, as the founder of MOKAN Wealth Management, review for the first time. It's not a mistake. It's what happens when there's no planning for the tax impact of retirement withdrawals.

How the IRS decides what gets taxed

The IRS uses a number called provisional income to decide how much of your Social Security check gets taxed: Your regular income, plus any tax-free interest, plus half of your Social Security benefit.

Once that number crosses certain levels, your Social Security starts getting taxed, and those levels have never been adjusted for inflation.

Married couples filing jointly start owing tax at $32,000 of provisional income. Above $44,000, up to 85% is taxable. Single filers cross at $25,000 and $34,000.

Frozen since the 1980s and 1990s, these thresholds mean a couple with a modest combined income can land at the maximum simply because the numbers are so outdated.

In retirement, income piles on top of itself:

• Your IRA withdrawal gets taxed
• Your Social Security gets taxed on top of that
• Medicare premiums climb along with both

If almost all your savings sit in a traditional IRA or 401(k), every dollar you pull out to pay the bills is fully taxable, and adding half your Social Security on top pushes most retirees past every threshold in year one, often by a wide margin.

Nobody made a bad decision. They just never built a different kind of account to draw from.

The one exception is a Roth IRA. Money pulled from a Roth doesn't count toward provisional income, doesn't show up on your tax return and doesn't raise Medicare premiums. It's the one source of retirement income the IRS leaves alone.

The three buckets every retirement needs

Think of your savings in three buckets:

• Money you've already paid tax on (a brokerage account, where you owe tax only on the growth)
• Money you haven't paid tax on yet (a traditional IRA or 401(k), where every dollar withdrawn is taxed as ordinary income and where most people hold nearly all their savings)
• Money you'll never pay tax on again (a Roth IRA, which grows and comes out tax-free and is invisible to the IRS)

When almost everything sits in the second bucket, every dollar you withdraw pushes more of your Social Security into the taxable zone.

Tax diversification means having enough in each bucket to choose which dollars to spend each year based on what creates the smallest tax bill.

Roth conversions: Moving money to the third bucket

The most reliable way to build the tax-free bucket is through a Roth conversion: Moving money from your traditional IRA into a Roth IRA and paying income tax on the converted amount that year.

After that, the money and all its future growth come out completely tax-free and never count toward provisional income again.

The window to do this well is shorter than most people think. It typically opens in the years just before or after retirement, before Social Security starts and before required minimum distributions (RMDs) force taxable income onto your tax return. Income is usually at its lowest point during that stretch, which means lower rates on any conversion done then.

Three approaches work well in practice:

• Filling your tax bracket by converting just enough each year to use up room in your current bracket
• Converting larger amounts over a shorter window when a balance is too large for small annual conversions to move the needle in time
• Converting more aggressively when the market is down, since the same number of shares costs less in tax

The biggest mistake is waiting. RMDs force taxable income onto your return at age 73 or 75 whether you need it or not — on a balance that's kept growing with the tax bill still attached.

A before-and-after example

John and Karen, both 60, have $1.8 million combined in traditional IRAs, $200,000 in a brokerage account and almost nothing in a Roth. They plan to retire at 63 and need about $150,000 a year to live on. Their combined Social Security benefit is roughly $70,000 at full retirement age, or about $53,000 if they claim benefits early at 63.

On the default path, they retire and claim at 63, then pull the remaining $97,000 they need straight from the IRA. Provisional income comes out to roughly $123,000, well past the $44,000 ceiling: The 85% maximum, or roughly $45,000 of taxable Social Security, stacked on top of the $97,000 IRA withdrawal.

On the coordinated path, starting at 60 while they're still working, they convert a portion of the IRA to Roth each year, paying the tax from income and the brokerage account so the full converted amount keeps growing tax-free.

They keep converting through their mid-60s and wait until 67 to claim Social Security, when the benefit reaches its full $70,000. By then, the Roth is large enough to cover roughly $40,000 of annual spending tax-free, with the remaining $40,000 from the IRA.

Provisional income lands around $75,000 instead of $123,000: Still above the ceiling, but with substantially less Social Security taxed and a large share of spending arriving with no tax bill.

Same retirement date, same lifestyle spending, a meaningfully different tax outcome for the rest of their retirement. The only difference was starting at 60 instead of waiting until the options had narrowed.

What to do now

Most people don't choose to pay the maximum tax on their Social Security. It happens because they didn't plan for it, which also means it's predictable enough to fix.

Run your own provisional income number. Figure out how much room is left in your current bracket. Then start moving money into the Roth bucket, even a few years before retirement. The window narrows every year you wait.

The Social Security Administration's benefit estimator and IRS Publication 915 are good starting points for running your own numbers.

Related Content

• Don't Let Low Tax Rates Lull You Into the Torpedo Zone
• Will Your Death Double Your Spouse's Tax Bill? 4 Ways Couples Should Prepare for the Widow's Penalty
• How to Retire at 62 and Build a Financial Bridge to a Maxed-Out Social Security Check at 70
• 9 Tax Surprises Retirees Don't See Coming Until It's Too Late
• I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement Income

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

Airport lounge access can make a long layover or flight delay a little more comfortable. But even if your card includes lounge benefits, getting through the door can sometimes require keeping track of another membership card or pulling up a digital pass on your phone.

For some American Express cardholders, that process just got simpler. Travelers who receive a Priority Pass membership through an eligible American Express card may now be able to use their physical Amex card to verify their membership at participating Priority Pass lounges.

Previously, members generally needed to present a physical or digital Priority Pass membership card. The update doesn't expand lounge access or change existing benefits. It simply gives eligible cardholders another way to verify their membership, potentially making lounge access a little easier.

What changed with Priority Pass access?

Priority Pass is an independent airport lounge program that partners with credit card issuers, including American Express, to provide eligible cardholders with lounge access.

Traditionally, travelers who received Priority Pass as a card benefit still needed their separate Priority Pass credentials to get into a participating lounge. Priority Pass now lists a bank-issued payment card as one of the possible ways eligible members can enter lounges, alongside its physical and digital membership cards.

The company notes that payment-card access is available only to members who receive Priority Pass as a benefit of an eligible payment card and that not every lounge accepts this method.

American Express has also updated terms for several eligible cards. For example, the terms for The Platinum Card® from American Express say enrolled cardholders may be able to enter select Priority Pass lounges by presenting their valid physical Platinum Card and airline boarding pass.

The change comes as Priority Pass has been directing some Amex members toward its newer Priority Pass+ app. Current members have also been notified that existing physical Priority Pass cards will continue working until their expiration date, after which eligible members can use their Digital Membership Card or qualifying American Express card.

The Priority Pass app isn't going away. Members can still use it to find participating lounges, check hours and amenities and confirm which forms of entry a particular lounge accepts.

Which Amex cards include this Priority Pass option?

The new option applies to travelers who receive an eligible Priority Pass membership through certain American Express cards. Simply carrying an American Express card doesn't automatically give you Priority Pass access.

Eligible U.S. cards include:

• The Platinum Card® from American Express
• The Business Platinum Card® from American Express
• Marriott Bonvoy Brilliant® American Express® Card
• Certain other eligible Platinum products, including some corporate and co-branded versions

Card benefits and eligibility can change, so check the current terms for your specific card before relying on lounge access.

There's another important step: You need to enroll in Priority Pass first.

The payment-card entry feature also isn't automatically available to everyone who receives Priority Pass through an eligible card. Priority Pass describes payment-card access as an exclusive feature for eligible card-linked memberships and advises members to contact their issuer to determine whether it's available to them.

Why you may want to carry your physical Amex card

If you're used to keeping your Priority Pass Digital Membership Card on your phone, you may wonder why this change matters. Think of your physical Amex card as another backup. Phones run out of battery, apps occasionally don't load and airport Wi-Fi isn't always reliable.

Priority Pass itself advises members whose smartphones run out of power to use an accepted physical card for lounge access. Having another way to verify your membership could be especially useful during an already hectic travel day.

What to know before visiting a Priority Pass lounge

Easier membership verification doesn't mean every Priority Pass lounge will automatically let you in. Before your trip, look up the airport and lounge in the Priority Pass app or on the Priority Pass website.

Check the lounge's operating hours, location within the airport, access rules and whether your physical payment card is an accepted form of entry.

You should also have your same-day boarding pass available. American Express's current Priority Pass terms require eligible members using their physical Amex card for entry to also present an airline boarding pass. Depending on the lounge and airport, you may also need identification.

Keep in mind that Priority Pass access is still subject to individual lounge policies and space availability. A lounge can restrict entry when it reaches capacity, and guest rules can vary by membership and location.

That's another reason not to delete the Priority Pass app just because your Amex card can now get you through the door at some locations. The app remains useful for checking lounge locations, hours, amenities and entry information before you arrive. Priority Pass specifically recommends reviewing a lounge's listing to confirm which forms of entry it accepts.

One less thing to carry when you travel

For eligible American Express cardholders, this is a small change, but potentially a useful one. If you've already enrolled in Priority Pass through a qualifying Amex card, your physical card may now double as your membership credential at participating lounges.

It doesn't add new lounges to your membership or change your guest privileges. What it does provide is another way to get through the door if you don't have your Priority Pass card handy or can't access the app.

Before your next flight, check the Priority Pass listing for the lounge you plan to visit and review the benefits for your specific American Express card. And even if you usually travel wallet-free, this may be one trip where it's worth bringing the physical card along.

Related Content:

• Which American Express Credit Card is Right for You?
• 5 Best US Airport Lounges for Your Money
• Best Rewards Credit Cards

If you don't want to bear the financial burden of buying and maintaining a vacation home on your own, you could opt to buy one with friends. For example, if there's a couple you and your spouse know who tend to vacation in the same spots you prefer, you could choose your ideal destination, buy a home together, and share in the benefits and costs.

In theory, it's a good idea. But it may be more complex and risky than you'd expect.

The right structure is key

At face value, co-owning a vacation home might seem smart. In practice, it's important to have the proper setup, says Raul Gastesi, partner and co-founder of Gastesi Lopez Mestre & Cobiella PLLC.

Set up an LLC

"Two couples buying a vacation home together should not take title in four individual names," Gastesi insists. "They should form a limited liability company, have the LLC purchase and hold the property, and have the couples own membership interests in the company."

The reason, Gastesi says, boils down to liability.

"A vacation home means guests, a pool or a dock, someone else's grandchildren, and, if the couples ever rent it out when they are not using it, a stream of strangers," he explains. "If someone is injured on that property, a claim against jointly held real estate is a claim against all four owners personally, which puts retirement accounts and primary residences into the conversation."

On the other hand, Gastesi says, if the LLC owns the property, any claims that arise are made against the company and its insurance.

"That protection matters most in the short-term rental scenario, which is where a lot of these arrangements end up once the couples realize the house sits empty 10 months a year," Gastesi says.

Gastesi also cautions that an LLC is not a substitute for good insurance.

"The policy needs to be written in the company's name for the right kind of use, but it is the layer that keeps a bad accident from reaching everyone's personal balance sheet," he explains.

Think through financing hurdles

Of course, one pitfall is that if you'll be financing the property, Gastesi warns that a mortgage may be hard to come by.

"Many residential lenders will not write a conventional mortgage to an LLC," he explains. "Some buyers close individually and transfer the property into the company afterward, but that transfer can trigger the mortgage's due-on-sale clause."

Gastesi also points out that a vacation home does not qualify for the capital gains exclusion available on a primary residence.

Know how co-ownership impacts estate planning

Co-owning a home with friends means you'll need to document everything carefully to ensure all parties pay their share and reap equitable benefits. That may seem easy enough to arrange. But what happens if an owner passes away?

According to Gastesi, this is where the LLC earns its keep a second time.

"When the company owns the real estate, each couple owns a membership interest, which is personal property rather than real estate," he explains. "That interest passes under their estate plan. It does not pass automatically to the surviving couple."

What this means, though, is that in the absence of careful planning, that interest may also land with heirs who may not want a vacation home, may not be able to afford their share of it, and may have no relationship with the other couple.

"That is how a friendly arrangement turns into a dispute between people who never agreed to be in business together," Gastesi says. The fix, he says, belongs in the operating agreement, not each couple's will.

"[That agreement] should contain buy-sell provisions triggered by death, divorce, incapacity, bankruptcy, or failure to pay, a right of first refusal in favor of the other couple, an agreed method for setting the price such as an independent appraisal, and payment terms spread over time," he says.

Another reason to go the LLC route?

"If the vacation home sits in a state where neither couple lives, real estate held directly requires a probate proceeding in that second state when an owner dies," Gastesi explains. "A membership interest in an LLC is personal property, which generally avoids that ancillary administration. For a Florida couple with a mountain house in North Carolina, or the reverse, that alone can justify the structure."

Keeping the friendship intact

The right structure and operating agreement can protect you and the couple you're looking to buy a home with financially if one of you passes away. But to preserve the friendship, Kevin Tamlyn, founder of Next Stage Financial, says it's important to set clear ground rules

"Relying on 'we'll just figure it out as we go' is a recipe for a ruined friendship," Tamlyn says. "Sit down together and get crystal clear on the money, day-to-day living, and an exit strategy."

Tamlyn also suggests pooling money into a shared checking account that covers three to six months of expenses like HOA fees, property taxes, insurance, utilities, and routine maintenance. Then pay all running costs from that account.

Tamlyn says it's also important to agree on how to split peak dates.

"A simple rotation, like flipping prime summer weeks or alternating Thanksgiving and Christmas each year, prevents quiet resentment," he insists.

Additionally, establish a clear policy on guests and pets. Also, spell out what happens if one couple wants or needs out.

"Life changes," Tamlyn says. "Someone might need cash for medical expenses, want to move closer to grandkids, or simply stop using the home. Agree on how you’ll value the home when someone wants to leave."

Gastesi agrees and says a strong operating agreement could be the ticket to keeping the friendship intact.

"Its job is to absorb the disagreements so the friendship does not have to," he explains.

Finally, Gastesi says, each couple should have their own attorney review the operating agreement to ensure that they're comfortable with its contents.

"It costs a little more at the start," he says. However, "it's the clearest signal that both sides understood what they signed, which is exactly what you want on the record if the arrangement is ever tested."

Read More

• We Bought a Vacation Home for Retirement We Never Use. Should We Sell or Rent It Out?
• How Smart Retirees Turn a Second Home Into a Financial Asset
• Vacation Rental in Retirement: Should You Airbnb or Vrbo Your Home for Extra Cash?

Contribute early, get the match, max out the IRA and let it compound. That part of the advice is sound, and most disciplined savers follow it well.

What gets far less attention is what happens after the money is in there. For some retirees who did everything right and accumulated a large IRA balance, that account can quietly turn into a complicated tax problem for themselves, a surviving spouse and, eventually, their kids.

The culprit is required minimum distributions (RMDs). Once RMDs start, at age 73 or 75 depending on your birth year, that money adds to taxable income whether you need it or not, on top of whatever else you're already reporting. That's the part most retirees eventually hear about, usually from an accountant and usually a year or two too late.

What almost nobody discusses is where that balance goes after the RMD math is finished for the year.

A large IRA won't create a tax bill only for the original owner. It can create a bigger one for the spouse who is left filing alone and a different one for the kids who inherit what's left when they're in their peak earning years.

One account, three tax bills, three different taxpayers.

John and Jane did everything right

John and Jane are 64. They maxed out their 401(k)s for three decades, didn't touch the money early and rolled everything into IRAs at retirement. Between them, they're sitting on $2.3 million in traditional IRA balances, a paid-off house and modest investment income each year.

Fast-forward to age 75, when their RMDs begin. Assuming reasonable growth and no withdrawals, that $2.3 million could be $3 million or more, generating an RMD of roughly $122,000 in the first year.

Add combined Social Security of about $65,000 and an additional $45,000 of investment income, and they're looking at $232,000 to report on their tax return. It's far more than they need, and none of it is optional.

That $232,000 lands on John and Jane's return, and it's the most straightforward of the three tax bills this balance is about to generate.

The widow's penalty

The problem doesn't stop with John and Jane filing jointly. Assume John passes first, which is statistically likely. Jane's income marginally changes. She still collects the survivor Social Security benefit, still owns the investment account and still has to take RMDs on essentially the same IRA balance.

What changes is her filing status. She moves from joint brackets to single brackets, which are roughly half as wide through most of the income range. Her standard deduction shrinks by close to half as well, pushing more income into taxable territory.

Income that used to be taxed at 12% or 22% when John was alive is now landing at 24% or 32%, even though her income hasn't moved.

Many couples model their household income. Very few model what that same income looks like once one spouse is filing alone. For a couple with John and Jane's numbers, the bracket and deduction squeeze alone can mean $10,000 to $15,000 more in tax every year, for the rest of her life.

This is what is referred to as the widow's penalty and could cost the taxpayer additional tax for decades.

The beneficiary problem

Push the timeline out further. Jane eventually leaves the remaining IRA to their two children, and by then, it's worth roughly $3 million combined, about $1.5 million to each child.

Under rules in place since the SECURE Act, most nonspouse individuals must empty an inherited IRA within 10 years of the original owner's death. Withdrawals don't have to be even, but if the original owner was already taking RMDs, annual withdrawals are typically required throughout that window, too.

For a child who's in their peak earning years, that inherited IRA doesn't always arrive as a windfall. It arrives as $150,000 or more of additional taxable income, stacked directly on top of a salary, a bonus and whatever else they've already got going on. A meaningful chunk of that inheritance can go straight to the IRS.

John and Jane spent 30 years deferring tax on that money, and their children may pay more on it than John and Jane ever would have.

Why this matters now

Two recent changes make this the right moment to make the projection.

First, RMD ages have moved. The SECURE 2.0 Act pushed the starting age to 73, moving again to 75 in 2033. That gives people born after 1959 a longer runway before distributions are forced and more years to plan around it.

Second, the One Big Beautiful Bill Act made the current tax brackets permanent instead of letting them expire at the end of 2025. For years, planners hedged Roth conversion advice with "rates might go up, might go down." That uncertainty has diminished.

Neither change fixes the underlying problem: A large traditional IRA is still going to generate a large RMD. But both make it easier to plan while there is still room to act.

The planning runway

John and Jane have an advantage most people overlook: They're 64, retired, and neither Social Security nor RMDs have started. That runway is valuable, but it won't last.

They could consider a Roth conversion. Every dollar converted gets taxed at today's rate, while their income is relatively low, instead of at a future rate stacked on top of Social Security, RMDs and investment income. A smaller traditional IRA can mean smaller future RMDs, less pressure on a surviving spouse's tax return and less taxable income passed to children.

Another move is a qualified charitable distribution, or QCD, once they turn 70½. IRA owners can send money directly from the IRA to a qualified charity — up to $111,000 per person in 2026 — and that amount counts toward the RMD without showing up as taxable income.

For the charitably inclined, it's one of the few ways to satisfy an RMD and lower a tax bill at once.

Neither move is automatically right for everyone, not even for John and Jane. The goal isn't converting for its own sake, it's optimizing the tax bill across a lifetime, and Roth conversions and QCDs are tools for that, not the whole strategy.

What matters more than picking a tactic is running the numbers every few years, since today's right answer may not be right in five years.

The real problem isn't the balance

There's nothing wrong with having a large IRA. It means the saving worked. The problem is assuming that planning is finished once the account is funded.

Left alone, a large traditional IRA sets off a chain reaction:

• Bigger RMDs than you need
• A tax increase left for the surviving spouse
• A tax bill handed to your kids on money you spent 30 years deferring

None of it is inevitable, but all of it takes years of lead time to fix.

The best time to deal with a large IRA is before the RMDs force the issue, not after.

Related Content

• Opportunities and Challenges When You Inherit an IRA
• Tending to Your Estate Plan This Spring? Don't Forget to Give Your IRA Some Love
• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s
• Why a Down Market is the Best Time for a Roth IRA Conversion
• Will Taxes Shred Your 401(k) or IRA During Your Retirement? It's Very Likely

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.

Claim at 62, and you'll receive reduced benefits for life. Wait until 70, and your monthly check rises roughly 76% (from delayed retirement credits of about 8% per year) — but you forgo eight years of payments.

What this misses: Timing, which is one of your most powerful tax-planning tools, capable of saving tens of thousands in lifetime taxes when coordinated with other income — often the difference between the 12% and 22% bracket, a swing that compounds over decades.

Understanding the Social Security taxation cliff

Up to 85% of your benefits can be taxed federally, depending on your combined income — adjusted gross income plus nontaxable interest plus half your benefits. The thresholds are low and haven't been adjusted for inflation since 1984:

For married couples filing jointly:

• Combined income of $32,000 or less: 0% of benefits taxable
• Combined income of $32,001 to $44,000: Up to 50% of benefits taxable
• Combined income above $44,000: Up to 85% of benefits taxable

For single filers:

• Income of $25,000 or less: 0% of benefits taxable
• Income of $25,001 to $34,000: Up to 50% of benefits taxable
• Income above $34,000: Up to 85% of benefits taxable

Here's where it gets painful: In the phase-in range, every extra dollar of income makes 85 cents of benefits taxable. In the 22% bracket, that dollar triggers about 40 cents in federal tax — a 40% effective marginal rate, approaching what's usually reserved for six-figure earners.

Strategy No. 1: Use low-income years for Roth conversions before claiming

The years between retirement and Social Security are a unique opportunity: Retire at 62 but delay until 70, and you have eight low-income years for strategic tax moves.

Consider a couple with $1.5 million in traditional IRAs who need $80,000 annually. Withdrawing that keeps them in the 12% bracket (which extends to $94,300 for joint filers in 2025), leaving room to convert another $14,000 to $20,000 to Roth — paying 12% now to avoid 22% or more later.

Once they claim at 70, a $60,000 benefit plus $30,000 in IRA withdrawals pushes them into the 22% bracket. Front-loading conversions beforehand shifts hundreds of thousands into Roth accounts. Those withdrawals won't affect Social Security taxation later.

Strategy No. 2: Coordinate RMDs with Social Security timing

Required minimum distributions begin at age 73, forcing taxable withdrawals from tax-deferred accounts — and their collision with Social Security can create a surge in your mid-70s.

Run the numbers first. If RMDs will push you into a high bracket regardless, delaying might not help. Claiming earlier and using those benefits to fund Roth conversions or spare your IRAs can be wiser.

If your balance is modest, delaying makes more sense: Withdraw at lower rates in your 60s, then lean on your higher benefit after 70.

Either way, model your income through your mid-80s to find the claiming age that minimizes lifetime tax.

Strategy No. 3: Use capital gains to fill low brackets before Social Security

Long-term capital gains and qualified dividends get preferential rates: 0% if taxable income is below $94,050 for joint filers in 2025, 15% for most others, 20% at the top.

The 0% bracket is an arbitrage opportunity: In pre-claiming years, if savings or modest IRA withdrawals keep income under the threshold, you can realize gains tax-free.

Consider a couple before claiming $50,000 from IRAs plus $44,000 in realized long-term gains is $94,000 of taxable income — all within the 0% capital gains and 12% ordinary brackets.

Once benefits and RMDs arrive, that same income lands them in the 22% bracket with gains taxed at 15%. Harvesting beforehand captures those gains tax-free.

Strategy No. 4: Consider state taxes in the equation

State-level taxation varies: Eight states tax benefits to some degree, while the rest exempt them entirely. If you're considering a retirement move, this could influence timing.

In a state that taxes benefits (Minnesota, Vermont, New Mexico), delaying can pay off if you move to a no-tax state such as Florida or Texas before claiming.

If you have high rates and plan to stay, claiming earlier to trim IRA withdrawals might keep you below state thresholds.

Strategy No. 5: Coordinate spousal benefits with tax planning

Married couples have added complexity and opportunity. Note that the threshold for married, filing separately is $0 — all benefits are taxable immediately — so you can't file separately to dodge the tax.

The strategy: The lower-earning spouse claims at full retirement age while the higher earner delays until 70, freeing cash flow for Roth conversions and gains harvesting while securing the survivor's maximum benefit. Keeping household income below the $44,000 threshold can also limit the 85% taxation.

Strategy 6: Factor in Medicare IRMAA surcharges

Social Security income counts toward the modified adjusted gross income thresholds that trigger Medicare's income-related monthly adjustment amount (IRMAA).

For 2026, surcharges run $70 to $419.30 per person monthly on Part B and $12.90 to $81 on Part D.

IRMAA is based on income from two years prior, so a large benefit claimed at 70 plus other income could push you above a threshold and add thousands annually to Medicare costs.

The opportunity: Model your income in your late 60s and early 70s to spot IRMAA cliffs. If delaying to 70 would push you slightly above a threshold, claiming at 69 — or funding expenses from Roth or cash reserves — might keep you below it. Advisers with tax-planning software can model the tradeoffs.

The holistic approach

Optimizing your claiming age for taxes isn't separate from optimizing for longevity or income — it's one part of a retirement tax plan that considers:

• When and how much to withdraw from IRAs
• When to convert to Roth and how much
• When to realize capital gains
• When to claim Social Security
• How to structure income to limit Medicare surcharges
• Whether income bunching or smoothing makes sense

Done well, this compounds meaningfully over a 30-year retirement. The worst approach is claiming based solely on when you need the money; the best is modeling scenarios with an adviser three to five years before you claim, while you can still position assets and income efficiently.

Related Content

• 5 Retirement Tax Traps to Watch in 2026
• 8 Expenses That Quietly Disappear After Retirement
• 7 Signs You Are Financially Ready to Retire Even if You Don't Feel Ready
• 7 Money Habits of Retirees Who Never Stress About Spending
• 5 Retirement Lifestyle Upgrades That Cost Less Than You Think

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

What if I told you that many of your most important life choices weren't entirely your own?

The career you chose. The amount of money you think you need. Your political and religious beliefs. Your definition of success. Even what you believe will make you happy.

We naturally assume these choices are ours. But what if they have been shaped over decades by forces you never stopped to question?

I call it the "concrete box."

Until you recognize that you were born inside a concrete box, and that you may still be living inside it, it can remain one of the greatest obstacles to building what I call "total wealth" — a life of meaning, fulfillment, authentic happiness and financial security.

For more than a decade, I have begun every graduate wealth management class that I teach at the University of California, Irvine with the same question:

"Imagine you are 60 years old. Someone offers you one final choice. You can receive $20 million in cash or a Nobel Prize. Which do you choose?"

Year after year, more than 95% of my students choose the money.

When I first began asking the question, their answer surprised me. Today it no longer does.

The question is not really about $20 million or a Nobel Prize. It reveals something much deeper. It forces us to examine the assumptions we carry about success, happiness and what makes a life worth living.

Somewhere along the way, many of us began believing that if we accumulated enough money, happiness, security and meaning would naturally follow.

After more than 25 years helping families build financial security and studying the relationship between wealth and human flourishing, I have come to believe that money is essential. But it is only half the answer.

The other half is much harder to recognize because it exists inside the invisible box through which each of us experiences the world.

The box you never chose

None of us chooses where we are born. We don't choose our parents, the genetics encoded in our DNA, our first language, our religion, our culture, our early education or the economic circumstances into which we arrive.

Long before we make our own decisions, these forces begin shaping how we think, what we value, what we fear and what we believe success should look like.

Consider a simple thought experiment. If you had been born to different parents in another country, speaking another language and immersed in another culture, would you hold the same beliefs you hold today?

Almost certainly not.

That realization is both humbling and liberating. It reminds us that many of our deepest convictions are not conclusions we arrived at independently. They are inheritances from the box.

Over time, those inheritances become so familiar that we stop recognizing them as influences. We no longer say, "This is how I was taught to think." Instead, we quietly assume, "This is reality. This is truth. This is simply how the world works."

Those assumptions, masquerading as unquestioned truths, form the concrete box.

The box is not your enemy. It gives you identity, belonging and community. It provides stability and helps answer many of life's earliest questions. But it also creates invisible boundaries around your thinking.

Like a fish that never notices the water surrounding it, most of us never realize that we are viewing life through walls we did not build.

Comfortable prisons rarely look like prisons.

Why it matters more than your portfolio

Traditional financial planning asks important questions. How much should I save? How should I invest? Will I have enough for retirement?

Those are essential questions. But over the years, I have become convinced that an even more important question comes first.

Who is making those decisions — and why?

Financial decisions are rarely driven by mathematics alone. They are deeply personal.

Two investors can own exactly the same portfolio. One watches the market every hour, convinced that disaster is always around the corner. The other pays little attention to daily headlines because experience has taught them that discipline, patience and time matter more than today's market commentary.

Although both investors own the same assets and experience the same market, they live in completely different emotional worlds.

Or consider buying a home. For one family it represents security. For another it symbolizes success — the large house with the pool and white picket fence becomes proof that they have finally "made it."

The transaction may look identical. The motivation rarely is.

That motivation often resides deep inside the concrete box.

We've been measuring wealth with only half the equation

Early in my career, I believed my primary responsibility was to help clients and students become wealthier. I still believe disciplined saving, intelligent investing and thoughtful planning are essential. It is difficult to experience peace of mind when financial stress dominates your thinking, and it is difficult to cultivate deep relationships when you are constantly worried about paying next month's bills.

Yet after working with families whose wealth ranged from almost nothing to many millions of dollars, I noticed something I could no longer ignore. Some of the happiest people I knew were not the wealthiest. Some of the wealthiest were not particularly happy.

That observation forced me to rethink what wealth really means.

Total wealth has two dimensions:

Total wealth = wisdom wealth + financial wealth

Financial wealth provides freedom and opportunity. "Wisdom wealth" provides perspective and direction.

Money can buy choices.

It cannot tell us which choices are worth making.

Building windows

The good news is that you do not have to destroy your concrete box. You cannot. Your history, your culture and your life experiences will always remain part of who you are.

What you can do is begin creating windows.

Every meaningful conversation with someone who sees the world differently allows more light into the room.

Every great book challenges an assumption you once accepted without question.

Every country you visit broadens your perspective.

Every difficult question you ask yourself weakens the concrete just a little more.

One window may not change your life. But enough windows eventually become a door. For the first time, you begin choosing your beliefs instead of simply inheriting them. You stop asking, "What does everyone expect from me?" and begin asking, "What kind of life is truly worth living?"

The most important investment you'll ever make

We devote enormous energy to improving our portfolios. We rebalance our investments, search for higher returns and look for tax efficiencies. Yet we rarely devote the same effort to improving the perspective of the person making those decisions.

A better investment strategy can improve your returns.

A better perspective can improve your life.

Before you adjust your asset allocation, examine the assumptions that shape your financial decisions

Before you purchase another investment property, ask yourself what you are truly chasing

Before you devote more energy to increasing your financial net worth, make sure you are also building a life anchored by purpose, gratitude and meaningful relationships.

Your portfolio will influence how much wealth you accumulate.

Your concrete box will influence what that wealth ultimately means.

So let me leave you with one final question.

Which decision you made this year was truly yours, and which one did your concrete box quietly make for you?

The moment you begin to recognize the walls surrounding your thinking, they become less permanent. You begin to question assumptions that once felt unquestionable. You become curious instead of certain. That curiosity creates windows. Those windows eventually become a door.

A larger portfolio may make the inside of your concrete box more comfortable. It cannot open the door.

You now have the key. Will you step outside?

To learn more, visit wisdomandwealthsolution.com or subscribe to The Wisdom and Wealth Solution YouTube channel.

Related Content

• The 4 Money Scripts We Learn in Childhood (Which One is Silently Threatening Your Retirement?)
• Three Ways You Can Create a Healthy Relationship With Money
• The Paradox Between Money and Wealth: How Do You Find the Balance?
• The Inheritance Your Kids Need More Than Money — and 5 Ways to Pass It On
• From 'Maximizers' to 'The Last Check Should Bounce' Club: Why Finding Your Legacy Tribe Will Help You Map Out Your Estate Plan

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

At the closing bell on Friday, the blue-chip Dow Jones Industrial Average had added 1.0% to 53,277, but still finished the week lower by 0.8%. The tech-heavy Nasdaq Composite was up 0.4% to 26,180, narrowing its weekly decline to 2.1%. The S&P 500 rose 0.4% to 7,674, though the broad-based index lost 1.4% this week.

"It's not surprising that the S&P 500 pulled back modestly after its early-August breakout to new record highs," observes Daniel Skelly, head of research and strategy for Morgan Stanley Wealth Management. "But the move may have taken on additional significance in some circles, given the role tech softness played."

Skelly notes that although we may see more volatility in the near term due to seasonal factors, "the longer-term AI capex story remains positive."

Meanwhile, the bond market continues to adjust to a Treasury Department plan announced on Wednesday to increase buybacks of longer-dated debt.

The yield on the 2-year Treasury was up to 4.232% vs 4.185% on Thursday. The 2-year was at 4.171% last Friday. The 10-year Treasury ticked up to 4.736% from 4.698% on Thursday and 4.696% a week ago. The 30-year Treasury climbed to 5.274%, up from 5.237% yesterday and 5.266% at the end of last week.

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.

Fed Chair Kevin Warsh will deliver the keynote address at the Kansas City Fed's annual Jackson Hole Economic Symposium on Friday, August 28, the highlight of next week's economic calendar.

According to University of Pennsylvania Wharton School Professor Patrick Harker, a former president of the Philadelphia Fed, "Warsh is going to have to address the elephant in the room, which is inflation."

Nvidia's growth is about supply and demand

Nvidia (NVDA, -1.0%) will offer fresh evidence for Skelly and others who see more support for stocks from AI capex when the chipmaker takes another turn on the earnings calendar after the closing bell next Wednesday.

Wall Street expects management to report year-over-year earnings growth of 99.0% on annual revenue growth of 97.0%. "Notably," Susquehanna analyst Christopher Rolland writes in a preview of Nvidia's report, "AI demand is supported by increasing hyperscale capex plans. The top five hyperscalers are now expected to nearly double capex spend in 2026."

Rolland also highlights a constructive outlook for 2027, when capex is expected to exceed $1 trillion. "We still view Nvidia as having one of the largest opportunity sets ahead," the analyst concludes.

Indeed, as Louis Navellier of Navellier & Associates writes, "Due to the anticipation of Nvidia's spectacular quarterly results, plus the fact that the financial media will be all excited about their annual trip to Jackson Hole for the annual Kansas City Fed Conference, investor optimism is expected to be sky-high next week."

HOOD tops the S&P 500

Robinhood Markets (HOOD, +12.9%) led S&P 500 stocks higher on Friday after President Donald Trump advocated for passage of federal legislation that would establish a regulatory framework for digital assets such as bitcoin during a White House summit on Thursday.

"We need Congress to take the next step by passing the Clarity Act — a fair version of the Clarity Act," Trump said in remarks prepared for the event. "It's a very, very powerful structured legislation which will keep us ahead of China, keep us ahead of everyone else, will open the door to the next wave of innovations and innovators."

Crypto trading platform Coinbase Global (COIN, +8.2%) and bitcoin treasury company Strategy (MSTR, +6.1%) have also rallied on the president's recent endorsement of a broad bill to support digital assets.

Moderna (MRNA, +8.9%) was the second-best performer in the S&P 500, following its 177% rise on Wednesday and 24% fall on Thursday with another dramatic move.

Merck (MRK, +2.4%), Moderna's partner on the melanoma cancer vaccine that triggered this week's volatility, was second only to Goldman Sachs (GS, +3.7%) among Dow Jones stocks.

Related content

• Earnings Calendar and Analysis for Next Week
• What to Look Out for in Economic Data Next Week
• The Best Vanguard Bond Funds to Buy

Creating your profile early isn't just about previewing your future monthly checks. It’s a critical cybersecurity move, a safeguard against employer reporting errors and a simple way to keep your financial records accurate throughout your career.

Three reasons you should set up an account today

Opening an online my Social Security account long before you ever plan to claim a single dollar of benefits is one of the easiest financial moves you can make. Waiting until retirement to set one up leaves a gap in your personal cybersecurity and could end up shrinking your future monthly check.

Once your my Social Security account is set up, you can easily estimate your future benefits and apply for Social Security and Medicare benefits when you're ready.

1. It’s a powerful anti-fraud defense. If you haven't created your online my Social Security account, anyone with your Social Security number and basic personal info can try to set one up in your name. Identity thieves target unmanaged SSNs to apply for fraudulent benefits or redirect payouts. Opening your official Login.gov or ID.me-backed account locks down your profile under your credentials, effectively blocking scammers from beating you to the punch.

2. Spot and correct earnings errors early. Your future retirement benefit is calculated using your highest 35 years of indexed earnings. If an employer mistypes your SSN, misreports wages, or fails to file a W-2, that year could show up as $0 on your official record.

The danger of waiting: The Social Security Administration (SSA) technically has a standard deadline — three years, three months, and 15 days after the tax year — to fix earnings records without extensive, hard-to-find documentation. Trying to track down pay stubs or contact a company that went out of business 20 years ago is time-consuming. Checking your statement online once a year lets you catch and fix glitches while your tax returns are still on hand.

3. Smart future planning and benefit awareness. An online account gives you a clear snapshot of your projected monthly payouts across different claiming ages (62, full retirement age (FRA), and 70), helping you build realistic retirement budgets.

As a side benefit, your statement also provides a quick baseline look at your coverage for safety-net protections for disability or survivor benefits if something unexpected ever happens.

How an account can help you during a shutdown

A government shutdown creates administrative friction, not a loss of benefits. Setting up your account today acts as an "express pass" that bypasses closed front doors, empty customer service counters and flooded call centers. Do it sooner rather than later.

If you try to set up an account during a shutdown, resolving any identity verification glitches could be tough. Should an automated ID check fail, requiring phone verification or manual confirmation, customer support for troubleshooting login issues could be affected. Setting up your profile, enabling multi-factor authentication, and confirming your identity in advance ensures seamless access when you actually need it.

In-person offices suspend non-essential routine services. During a shutdown, local SSA field offices run on skeleton crews and focus almost exclusively on emergency scenarios or basic claims processing. Routine in-person tasks — such as obtaining official Benefit Verification letters, requesting replacement Medicare cards or getting earning record printouts — are often paused entirely at field offices.

The hedge: With an online portal, these self-service tools stay available 24/7 regardless of government funding. You can generate an official proof-of-income letter or download a 1099 tax form instantly from home.

Phone support and customer service experience huge spikes in delays. Call centers remain open, but staffing reductions paired with a surge of anxious callers lead to long hold times on the 1-800 number. If you need to make a routine update — such as changing your direct deposit routing info or updating a mailing address — doing it over the phone during a shutdown can take hours.

The hedge: Managing direct deposit and contact information online takes 60 seconds and you avoid long phone queues.

Open your account in six steps

1. Go to the official Social Security portal. Visit ssa.gov/myaccount. Always type the URL directly into your browser rather than clicking email links to ensure you are on the official .gov site. Click Create an Account.

2. Select a credential service provider. Social Security uses two official, secure sign-in partners:

Login.gov: Best for most U.S. residents accessing multiple federal government services.

ID.me: Recommended if you live outside the U.S. or already use ID.me for state/federal portals.

3. Select Create an account with Login.gov (or ID.me). Enter your email and set a strong password containing at least 12 characters. You’ll receive a confirmation link via email; click it to confirm.

4. Set up multi-factor authentication (MFA). Choose a second layer of security to protect your account. You can opt for an authentication app (most secure option), text message/phone call code or security key.

5. Verify your identity. Follow the prompt to verify who you are:

• Provide your Social Security number, full legal name, date of birth and mailing address.
• Upload a quick photo of your driver's license or state ID. Complete a quick automated facial match if prompted to verify your photo matches your ID.

6. Agree to Terms and access your portal. Once identity verification is complete, you will be redirected back to the Social Security Administration site. Read and accept the "Terms of Service" to unlock your dashboard.

Once you've activated your account, turn on electronic notifications under your "Message Center Preferences," so that you receive email alerts whenever tax forms or annual benefit updates are posted.

A my Social Security account makes life easier once you retire

Once you do reach retirement, having an established online account makes managing your benefits effortless. Instead of waiting on hold or visiting a crowded field office, you can instantly:

• Update direct deposit routing numbers
• Change your mailing address and contact information
• Print official proof-of-income letters or tax forms, such as 1099s
• Access annual Cost-of-Living Adjustment (COLA) notices weeks before they arrive in the mail

Run, don't walk

Whether retirement is 30 years away or right around the corner, having your account activated and ready to go puts you in the driver's seat. You’ll save yourself hours of future administrative headaches, protect your hard-earned benefits from identity theft, and keep your career earnings records strictly accurate. Head over to the official site, set up your login, and cross one of the easiest retirement-prep tasks off your checklist today.

Related Content

• How Social Security Is Affected by a Government Shutdown
• How Medicare Is Affected by a Government Shutdown
• How to Find and Correct Errors on Your Social Security Earnings Record
• Why 'Locking' Your Social Security Number Is the New Credit Freeze
• The Average Monthly Social Security Check: June 2026

Almost no one was talking about the second, quieter piece of the law: Your employer may be allowed to put up to $2,500 a year into your children's accounts, tax-free, and most human resources (HR) departments haven't said a word about it.

That's not an oversight so much as a timing issue. The provision that lets employers contribute — new Internal Revenue Code Section 128 — didn't become legally operative until July 4, 2026, exactly one year after the One Big Beautiful Bill Act created Trump Accounts in the first place.

Employers are still building the framework, and this benefit lands in the same spot health savings accounts (HSAs) and dependent care flexible spending accounts (FSAs) occupied years ago: Legally available, valuable and functionally invisible until someone puts it in front of you at open enrollment.

Right now, the responsibility sits with you to ask, not your employer to make an announcement.

What Section 128 actually allows

Under Section 128, an employer can contribute up to $2,500 per year to the Trump Account of an employee or their dependent, as the IRS detailed in guidance issued this spring. The contribution is excluded from your taxable income and is a deductible business expense for the employer — similar to how an HSA contribution works.

It runs through a formal, written Trump Account Contribution Program that meets nondiscrimination requirements, and it shows up on your W-2 in Box 12 under a new code, "TA."

Two details matter more than anything else here:

• First, the $2,500 limit is per employee, not per child. If you have three children with Trump Accounts, your employer still tops out at $2,500 in total contributions — the money doesn't multiply per dependent.
• Second, employer contributions count against the overall $5,000 annual contribution cap per child. This isn't found money sitting outside the system; it's part of the same bucket your after-tax family contributions fill.

The coordination math

Here's the scenario I walk clients through: Say an employer commits the full $2,500 through a Trump Account Contribution Program. That leaves exactly $2,500 of room before the family hits the $5,000 annual ceiling for that child.

If the family had been planning to contribute $5,000 out of pocket without checking on the employer benefit first, they'd either over-contribute or find out too late that $2,500 of their planned funding was redundant.

For families with more than one child, the math gets more complicated rather than more generous. The employer's $2,500 cap doesn't stretch across multiple kids — it's capped at the employee level. If you have two children in the program, you need to fund the remaining room separately for each child's account, not assume the employer contribution covers both.

The questions to bring to HR

If you're heading into open enrollment, these questions are worth asking your benefits administrator:

• Does our company have a written Trump Account Contribution Program under Section 128?
• Is the contribution funded directly by the company, or offered through payroll as a salary-reduction option?
• Will this show up as code "TA" in Box 12 of my W-2?
• Is the $2,500 limit per child, or capped at $2,500 total for me as the employee?
• What's the deadline to elect this during open enrollment, and is it retroactive for this year?

HR and payroll teams are actively building these programs right now, and asking early gives your employer time to include you in the first wave rather than the next plan year.

Coordinating employer money with personal contributions

This is where tax planning and account structure meet. Once you know whether an employer contribution is coming, and how much, size your own contributions to fill the remaining room under the $5,000 cap — don't layer them on top without checking first.

I think about this the same way I think about bucket planning more broadly: Know what money is already working toward a goal before deciding how much more to commit.

A Trump Account functions as a long-horizon "later" bucket for a child, distinct from a 529 earmarked for near-term education costs. Employer contributions simply become one more funding source to sequence intelligently.

Not the right fit for every family

Before treating the employer match as free money, work through a few questions:

• What's your current vs expected future tax bracket? Pretax contributions defer tax, but if a child eventually withdraws funds in a higher bracket than yours today, that deferral can work against the family.
• Does this crowd out higher-priority savings? If you're still building an emergency fund or catching up on your own retirement contributions, redirecting money to a child's account — even employer-funded — isn't automatically the right sequencing.
• How does this interact with financial aid planning? Account ownership and structure can affect need-based aid calculations differently than a 529 does.
• Is the employer contribution free, or does it come with strings? Some programs may require you to also elect a personal salary-reduction contribution to unlock the match — worth confirming during the same HR conversation.

The employer benefit is worth asking about for nearly everyone — it costs nothing to inquire. Whether to lean into it, and how hard, is a household-specific decision, not a blanket recommendation.

The bottom line

Trump Accounts are only months old, and the employer contribution provision is younger still. The families who benefit most this year will be the ones who ask the right questions during open enrollment — before contribution decisions get locked in for the year.

If you have a workplace benefit sitting on the table, the only way to know is to ask.

Related Content

• I'm a Financial Adviser Who's About to Have a Kid: This Is How I'll Handle Trump Accounts
• Is a Trump Account Worth It? Projected Growth — and Who Should Skip It
• I'm a Financial Planner: Trump Accounts Are a No-Brainer if You're Eligible (How to Apply)
• Should You Start a Trump Account for Your Child?
• How Trump Accounts Compare With 529 College Savings Plans

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

That line is usually attributed to J.P. Morgan. Someone asks the financier what it costs to run his yacht, and Morgan replies, "If you have to ask, you can't afford it."

The phrase has survived because it flatters the person it describes. It suggests that not knowing the number is itself a kind of arrival. Accounting is for other people.

I have spent much of my working life among people for whom that line is more than a joke. Twenty-seven years ago, I founded TIGER 21, a global network of some of the most successful entrepreneurs and executives in the world.

Eighteen months ago, I ceded control to a new lead owner. I now spend much of my time running my own family office, though I remain non-executive chairman.

Over the years, I have sat through countless conversations about wealth, investing and legacy, and I have come to believe that the Morgan story survives for a reason its tellers never intended. The indifference to cost did not stop with yachts. It migrated, quietly, to portfolio performance.

How that wealth was built

Many successful entrepreneurs know what their assets are worth. Far fewer know what actual returns they have generated to build that wealth. Fewer still know whether those returns justified the risks taken, the complexity embraced and the fees paid.

This is not carelessness. Quite the opposite. These are often among the most accomplished business builders of their generation. On average, members of our family office groups in the U.S. are roughly 1 in 50,000 by financial accomplishment. What they understand deeply is how wealth was created. What they often understand less clearly is how wealth is managed once it has been created. That distinction matters.

It is here that a soft impression hardens into something measurable. The surveys that ask family offices about a single year's returns produce numbers that often swing with the market and reveal little — 15% in a boom, a fraction of a point the year before, maybe even a loss.

But the durable, across-the-cycle figure that keeps surfacing is sobering: The average family office investment portfolio compounds over time at something between 6% and 7% a year.

What to consider

It is worth sitting with that, because compounding is unforgiving. A dollar growing at 6% becomes about $5.74 over 30 years — a single generation. The same dollar in the broad American stock market, at its long run rate of roughly 10%, becomes about $17.50 over the same 30 years.

That's three times the money for likely taking less idiosyncratic risk, paying lower fees and making almost no decisions at all. The family office, with its staff and managers and quarterly meetings and access to everything, runs hard and arrives at a third of where it would have landed by doing nothing but invest in the indexes.

Yet many wealthy families employ investment committees, consultants, managers, advisers, private funds and specialized strategies only to discover that, over time, they have produced results that compare unfavorably with simpler alternatives. Why? Because the activity of managing wealth is fundamentally different from the activity that created it.

Entrepreneurs typically build fortunes through concentrated conviction. They identify a specific opportunity, commit extraordinary energy and accept substantial risk. The family office, however, is often designed to do the opposite. Its purpose is diversification, risk control and capital preservation.

Both approaches are rational. But they are not the same. The concentrated risk that created the fortune is frequently retired the moment the family office is established. What follows is not wealth creation in the entrepreneurial sense. It is wealth management.

This is the point

Over 42 years, I compounded capital at what my accountants calculate at a 21.7% return. I do not offer that as a benchmark for any investment office, mine included. It is not a portfolio return. It is the return on a life spent concentrated in things I largely created and largely controlled, and it carried risks no prudent steward of family capital should be fully exposed to. That's the point.

The person who builds the fortune likely earns financial returns three to five times the annual returns the later family office will likely produce when investing the proceeds.

The cure is not more software, though better tools certainly help. The cure is a decision about what the investment function is for. Twenty years ago, Billy Beane and the Oakland Athletics changed baseball by asking a simple question: What if many of the statistics everyone relied upon were the wrong statistics? The genius of Moneyball was not finding better baseball players. It was finding better ways to measure performance.

Wealth management may be approaching a similar Moneyball moment. For decades, wealthy families have measured success by account values, asset allocations, manager reputations and access to exclusive opportunities. Those metrics may be interesting, but they are not the scoreboard.

In the Morgan story, the man asked what it cost, and Morgan made him feel foolish for asking. The family office that refuses to measure its returns does the same to itself.

Measuring performance sensibly was never the foolish thing. The foolish thing is being able to find out, and choosing not to. That self-inflicted blindness compounds over a generation, and the wealth it quietly forfeits can end up larger in scale than the entire fortune the family started with.

To avoid the actions that quietly erode many family fortunes, I suggest these disciplines:

1. Measure performance over multiple time horizons and liquidity

Instill the discipline to track returns across short, medium and long-term time horizons, as well as liquidity and risk. Most families organize portfolios by asset allocation — stocks, bonds, private equity, real estate and cash — but that only tells part of the story.

A second framework groups investments according to how quickly they can be converted to cash and level of risk. These tiers include:

• Immediately liquid assets
• Less liquid assets that can be sold at a discount within 90 to 360 days
• Illiquid and cash-flow oriented assets such as operating businesses
• Aspirational investments such as venture capital, start-ups and development projects

Looking at returns through both frameworks often reveals strengths, weaknesses and concentrations that conventional reporting completely misses.

2. Recognize that investing is a different skill than entrepreneurship

Many entrepreneurs assume that creating wealth was the difficult part and managing it will be comparatively straightforward. The opposite is often true. Successful entrepreneurs usually built businesses where they possessed a genuine competitive advantage. After a liquidity event, however, they enter global capital markets — perhaps the most competitive marketplace in the world.

Without exceptional investment skills, or exceptional investment talent around them, a family office's portfolio returns will inevitably fall below the entrepreneurial returns that created the fortune in the first place.

3. Decide what the family office is aiming to accomplish

Before discussing investment strategy, answer three more fundamental questions:

• Do future generations want to keep their assets together, or would they prefer to manage them independently?
• Under what circumstances should financial and philanthropic assets remain unified or eventually divided?
• What role, if any, should spouses and heirs play in governance?

Questions of governance and structure almost always determine the success of a family office far more than investment selection.

4. Measure what matters

Organizations tend to improve the things they measure well. Businesses understand this instinctively. Understanding that most family offices earn only 6% to 7% over time will shape decisions about whether to sell an asset, how to staff and whether creating a family office is justified at all.

Once returns are consistently measured across both time horizons, asset allocations and risk to liquidity tiers, weaknesses become visible, edge becomes repeatable, and better decisions naturally follow.

Related Content

• Is a Family Office Right for You? The Multimillion-Dollar Question
• A No-Nonsense Checklist for High-Net-Worth Individuals
• Will Millennials' Attitude Toward Money Put the Family Wealth at Stake? A Wealth Adviser Explains How Families Can Find Common Ground
• Create a Family Dynasty for Lasting Security
• Are Hedge Funds Worth the Risk Today?

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.

1. Extended tax relief for an uninsured car

Question: I live in the Midwest, and my car was totaled by a tornado earlier this year. I didn't have insurance. Can I deduct the damage to my car on my Form 1040?

Joy Taylor: Yes, you should be able to. Individuals can deduct personal casualty losses that are not reimbursed by insurance to the extent those uninsured losses are attributable to federally declared disasters which affect a wide area. Your loss is equal to the smaller of the damaged property's adjusted basis or decline in value, less any insurance proceeds you receive or expect to receive.

Before the Senate left for its August recess, it approved a House-passed bill that extends tax relief that was given to victims of disasters that occurred in 2020 to mid-2025. The legislation applies to disasters beginning before January 1, 2027. We expect President Trump to sign this bill within the next few weeks.

It allows individuals to deduct uninsured personal losses in excess of a $500 threshold without regard to the offset —10% of adjusted gross income (AGI) — that generally applies. This tax break is available for taxpayers who claim the standard deduction and filers who itemize on Schedule A. The IRS refers to these losses as "qualified disaster losses."

2. Deducting disaster losses in a prior year

Question: My home suffered damage in a federally declared disaster a couple of months ago. I heard I can deduct the loss on my 2025 Form 1040, even though the disaster occurred in 2026. Is this true?

Joy Taylor: Yes. Individuals can opt to take a loss for the disaster year or the year immediately preceding the disaster. Since the disaster damaged your home this year, you can claim the loss on your 2026 return or your 2025 return, which gives you flexibility to claim the loss in the year that delivers the greatest benefit.

If you decide to claim it for 2025 and you have already filed your 2025 return, you can amend your tax return by filing Form 1040-X. Note: For this purpose, the filing due date for a 2025 amended return is six months after the normal due date for filing your return (without extensions) for the year in which the loss took place. So for 2026 disaster losses, you would need to file an amended 2025 return by October 15, 2027.

3. IRS safe harbors for calculating the disaster loss

Question: A wildfire damaged my home and lots of personal items earlier this year. Does the IRS provide any help for taxpayers who are trying to figure out what losses they can deduct on their Form 1040?

Joy Taylor: Yes. Computing the amount of loss to your home or belongings can be difficult. Luckily, the IRS has multiple safe harbors to help you with this calculation.

For example, one method lets a homeowner with casualty losses of $20,000 or less take the lesser of two repair estimates to determine the decrease in the home's value. Another has a table to compute the replacement cost of personal belongings destroyed in the federally declared disaster.

You can find out more about these safe harbors in IRS Publication 547 and IRS Revenue Procedure 2018-08.

4. Lost tax returns and calling the IRS

Question: My house was destroyed in a wildfire. I lost all of my prior-year tax returns. How can I replace them?

Joy Taylor: Individuals who lost prior-year tax returns in a hurricane, fire or other disaster have multiple ways to get a tax transcript, which is a summary of key tax information.

• You can view, print or download your tax transcript in your IRS individual online account if you have one.
• You can call the IRS’s automated phone transcript line at 800-908-9946 and follow the prompts or mail Form 4506-T to the IRS.
• You can get a paper copy of your full return by mailing Form 4506 to the IRS, but that would take much longer.

The IRS has a dedicated phone line for disaster-related questions. That number is 866-562-5227. The agency also has FAQs for disaster victims on its website.

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: Estimated Tax Payments and Withholding
• Ask the Editor: Questions on Selling a Home
• 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

While you can’t control the market, you can control what you pay. That’s part of the appeal of accounts marketed as "zero-fee" individual retirement accounts (IRAs). But a new white paper from PensionBee, an online retirement account provider, finds these accounts often charge savers in ways most will never see.

To measure the toll, PensionBee modeled the costs on a $107,000 account — roughly the median retirement savings for millennials and Gen X. Even a cost-conscious retirement saver, it found, pays 0.16% to 0.32% of their balance a year, or about $160 to $340. Under common investor behavior, such as unknowingly choosing pricier funds, that can climb to around 1.3%, or $1,400 a year.

"'Zero-fee' does not necessarily mean free," explains Romi Savova, founder and CEO of PensionBee. "It’s basically a catchy marketing term that refers to the removal of certain flat fees, like account opening fees, but it does not necessarily apply to other costs within the account."

Avoiding those costs, experts say, comes down to a little effort on your part and a clearer understanding of how your account works.

Six hidden ways "zero-fee" accounts can cost savers

First, a clarification. "Zero-fee" is not a new kind of IRA. As Marianela Collado, CFP® and financial adviser at Tobias Financial Advisors, puts it: "An IRA is an IRA is an IRA."

It’s the same account available at any financial institution or custodian that holds a saver’s money, and the label simply means a firm has waived some charges, not that the account is free to own.

Savova compares it to a trip to the grocery store. Walking in and out costs nothing, but your bill adds up depending on what lands in your basket.

Here are the six charges the paper identifies that can cost retirement savers without ever appearing on a statement.

1. Idle cash

When you open or roll over an IRA, your money arrives as cash — and it doesn’t invest itself. If you leave it sitting, the account provider often sweeps it into a low-yield account while keeping most of the interest, a practice known as a cash sweep.

It happens more than you might think. A Vanguard study found that 28% of rollover assets and 55% of direct contributions sit in cash a full year later, with nearly 30% of rollovers remaining uninvested for up to seven years.

"The biggest hidden tax in a 'zero-fee' IRA is the interest rate you don’t earn on your idle cash," says Sean Lovison, CFP® and founder of Purpose Built. Leave $10,000 parked, he notes, and you could forfeit $400 to $500 a year.

The fix can be as simple as choosing your investments once the money lands. "Set a calendar reminder for 48 hours after funding an IRA and actually select an investment," advises Jeff Judge, CFP® and managing partner of Chesapeake Financial Planners. "A target-date fund is a reasonable default if you don’t want to build a portfolio from scratch."

And if a financial adviser is steering you into cash, Lovison adds, "make sure you know why and what you are earning."

2. Securities lending

The stocks and bonds in your account can be loaned out to large institutions that pay to borrow them. While this is often routine, the account provider usually keeps most of the fee while you carry the risk. "They make money on your money," Collado explains. "As the lender, they charge a fee that they keep."

Some programs pay the customer as little as 15% of the proceeds, PensionBee’s analysis found. Its advice: understand how lending works before you opt in, and sit it out if you’re not comfortable with the risk.

3. Payment for order flow

When you buy or sell, your order may be routed through a middleman who pays your provider, leaving you with a slightly worse price than the market offers.

"That hidden execution drag adds up fast," warns Lovison, "which is why minimizing trade frequency remains important, even when the platform claims trading is 'free' — and why many providers will encourage you to make trades through gamification and faux educational materials."

Two factors drive the cost, according to Savova: what you trade and how often. Sticking to well-known, high-volume funds and trading rarely keeps it small. For someone who buys a few funds and holds them, this is a minor concern; it mainly adds up for frequent traders.

4. Fund choice

This is the $171,000 mistake.

An actively managed fund can charge nearly nine times what a comparable index fund does — 0.98% versus 0.11% — and the two can sit side by side with nearly identical names. As the report argues, active funds have their place for some savers, but many do not know the difference.

That gap of about 0.87% a year sounds trivial, but PensionBee estimates that on a growing balance, compounded over 30 years at a 7% annual return, it can quietly cost a saver around $171,000 in lost growth.

"The most overlooked cost is the expense ratio buried inside the funds themselves," says Judge. "A platform can charge zero dollars to open an account and still bleed a client 0.5% to 1% a year through the funds it defaults them into." To avoid the trap, he advises, "Read the prospectus, not the landing page."

5. Administration and service charges

Waiving account fees doesn’t rule out charges for specific actions. For example, wire transfers, moving money to another firm or foreign-exchange conversions.

None of it should come as a surprise, Savova notes, since "financial services companies are not charities and the products they offer will always come with a cost." There may be no single "right" price for a retirement account, she adds, but savers "should seek to balance cost against the level of service, management and portfolio grade you have selected."

6. The fine print

PensionBee's analysis found that "zero-fee" sometimes applies only below a balance limit, or that a small advisory fee — often 0.25% to 0.27% – kicks in once you cross a threshold. In other cases, a "zero-fee" account sits beside a pricier full-service option, and an accidental click at sign-up routes you into the wrong one.

Given the complexity, Savova recommends putting on your detective hat. Read the fine print and investigate any obscure charges. "Just because you don’t see a cost doesn’t mean you aren’t paying for it," she says.

Paying for professional help may be the right cost

A 2019 survey found two-thirds of Americans are not confident in their knowledge of IRAs, while assets in those accounts hit a record $18 trillion in 2026, up from $5 trillion in 2010.

For all their variety, these hidden costs can share a single root: nobody to tell savers what to look for. That’s where professional help can earn its keep. A 2026 TIAA Institute report found that people who work with a financial adviser reported a 14- to 19-percentage-point edge in financial confidence and preparedness, and were far more likely to invest consistently rather than let their money sit.

Of course, professional management comes at a cost, too, but typically with more transparency. As Collado puts it: "I’d rather you know what that is than have you think you’re paying $0.00 and then actually pay 3X what’s normal."

Read More

• Is Your Financial Adviser for Retirement Worth the 1% Fee?
• 6 Changes to IRAs, 401(k)s and HSAs in 2026
• I Thought My Retirement Was Set — Until I Answered These 3 Questions
• The '401(k)-Rich and Cash-Poor' Retirement Trap

Change doesn't have to mean overhauling your entire process. Minor adjustments — such as refining your annual strategy session or annual review — may be the ideal opportunity to explore a new service.

Something as simple as adding two additional questions to your strategy session or looking for small openings in your current process to dive deeper could make the difference in addressing your clients' needs and improving their retirement strategies.

Our team recently worked with multiple offices and identified three key opportunities for advisers to make small adjustments to the sales process that can have a large impact on your clients' planning.

Opportunity No. 1: From reviews to strategy sessions

A small mindset change can lead to a completely different conversation in what's often referred to as the annual review.

By calling this meeting a "strategy session" instead, you set an expectation with the client that you are actively reviewing their current approach with the intent to make purposeful adjustments for their benefit.

Examples may include discussing long-term care options, reviewing unused income riders to convert for legacy planning or simply revisiting their current strategy to help ensure it still meets their needs.

This approach doesn't add more meetings or appointments — rather, the same meeting with a few extra minutes of conversation could uncover more of the client's needs or wishes.

And the best part: A mindset change doesn't cost you anything!

Opportunity No. 2: The first 100 days

One adviser I work with has perfected the concept of the 100-day mark. When a new client reaches their 100th day with the office, the adviser schedules a milestone planning meeting.

In this meeting, they cover topics such as tax strategies, Medicare and life insurance — and they present a long-term care option to every client. This is a great time to have these conversations now that money transfers are complete, the client relationship has been established, and one of the biggest fears — income in retirement — has been addressed.

At this 100-day mark, the client has given your firm more time and greater trust to turn over more of their financial situation. They are also still new to the process and open to additional suggestions on how to help better protect their retirement future.

Opportunity No. 3: Find openings

Enhancing your sales process doesn't mean starting over. Taking a deep dive into your current process and finding small openings to add an extra question or tweak a current process can create new protection opportunities and revenue lines.

At a recent training event, one team laid out their three-bucket sales process. They realized that by simply adding a long-term care conversation to their "tomorrow" planning bucket, they can help protect their clients if they experience a future long-term care event.

This not only helps provide the client with some assurance but also prevents the depletion of other portfolio investments should they need care.

Challenge yourself and your team to look at your current process. Where is an opening to have a long-term care conversation?

When reviewing their policies, don't just look at performance — look for opportunities, unused income riders, old annuities that are not performing as well as current products or life events that have created new concerns, such as the need to provide future safeguards for their grandchildren.

Small adjustments, big results

Doing what's best for our clients sometimes requires us to evolve, but that change doesn't have to be a complete overhaul. Small steps can have big impacts, especially when they positively affect retirement outcomes.

If you can take two extra steps today to help mitigate risks to your clients' future, wouldn't you do that?

By proactively identifying these touchpoints and guiding your clients through these essential conversations, you not only demonstrate exceptional value but also open doors to new planning opportunities.

These efforts can lead to meaningful revenue growth for your firm through strengthened client loyalty, increased referrals and the implementation of insurance strategies that truly address your clients' needs.

Related Content

• You Don't Need a Magic Bean to Grow Your Advisory Firm — Just a New Approach to Your Existing Process
• From Vision to Value: A Blueprint for Helping to Build Your Advisory Practice
• To Build Client Relationships That Last, Embrace Simplicity
• Winning Strategies for Financial Advisers as Clients' Lives Evolve
• How Financial Advisers Can Deliver a True Family Office Experience

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

It sounds prudent. It feels prudent. Homeownership carries an emotional weight that no other line on the balance sheet carries, and "don't touch the house" honors that weight.

But follow the arithmetic of that advice across a retirement, and it does something no adviser would ever recommend on purpose.

The concentration no one plans

Start where most retiree households actually start: The home is a significant share of total wealth, often the single largest asset on the balance sheet. Now apply the standard sequencing. Spend the portfolio first. Draw down the stocks, the bonds, the cash, every non-housing asset, before the home is considered.

Each year that plan runs, the household's remaining wealth becomes more concentrated in a single asset. Carried to its conclusion, a client who began retirement reasonably diversified ends it with something approaching all of their wealth in one illiquid, undiversified position.

The entire premise of thoughtful financial advice is diversification, not the manufacture of a riskier position over time.

Yet that is precisely what the last-resort rule produces — not by accident of markets, but by design of the sequencing itself.

An asset that ages with its owner

The concentration would be concerning even if the asset were a strong one. The research suggests something more uncomfortable. A January 2026 research brief from Boston College's Center for Retirement Research found that home sellers begin realizing lower sale prices around age 70, with an 80-year-old netting roughly 5% less than a younger seller on a comparable home, and that deferred maintenance and upkeep explain about a quarter of the gap.

Related academic work reaches the same direction: As homeowners age, the capacity to maintain a property declines, and the home's relative performance tends to decline with it.

The last-resort rule therefore concentrates a client's wealth into an asset whose performance is most likely to weaken during exactly the years the concentration peaks.

The literature already moved

This is not a novel objection. Financial planning research has been building the case for more than a decade that housing wealth works harder when it is coordinated with the plan rather than quarantined from it.

Barry Sacks and Stephen Sacks, writing in the Journal of Financial Planning in February 2012, found that coordinated strategies outperformed the conventional last-resort sequencing.

John Salter, Shaun Pfeiffer and Harold Evensky at Texas Tech reached parallel conclusions the same year on housing wealth as a standby buffer that protects portfolios during drawdowns, and Wade Pfau's 2016 work on incorporating home equity into retirement income strategy points the same direction.

Notably, FINRA itself removed the "last resort" description from its investor guidance in early 2014. The research moved. Much of the advice has not.

What 'proactive' looks like

None of this argues that any client should access home equity, and nothing here is a recommendation. The point is that a sequencing question deserves the same scrutiny as every other allocation decision.

Some advisers have begun treating housing wealth that way: Evaluating it early in the plan, in a client's 50s and 60s, while the household still holds a diversified balance sheet and the widest range of options, rather than arriving at it last, by default, when the options have narrowed.

Timing carries a benefit that sharpens the point: Many of the strategies housing wealth can fund — life insurance and long-term care coverage among them — depend on insurability, and insurability narrows with age and health.

Evaluated early, home equity can still fund that kind of long-term planning. Deferred to the last resort, the same equity often arrives after the underwriting window has closed.

The instruments available for that conversation have also broadened.

Alongside traditional financing, newer structures such as home equity investment agreements — CHEIFS® (Cornerstone Home Equity Insurance/Investment Funding Solutions), where I am a co-founder, is one — allow housing wealth to enter the planning conversation without adding new monthly payments or interest, settling instead from the home's value at a future settlement event such as a sale, a permanent move-out or the homeowner's passing.

Which tool fits, if any, is a client-by-client judgment for the adviser and the homeowner's own professionals to make.

The question that is not client-by-client is the one the last-resort rule keeps answering by default. Advisers spend their careers protecting clients from concentration. The sequencing of housing wealth deserves the same protection.

Related Content

• Wealthy Homeowners Want Frictionless Ways to Tap Into Home Equity — and the Market Is Providing Them
• Home Equity Evolution: A Fresh Approach to Funding Life's Biggest Needs
• This Is How You Can Turn Your Home Equity Into a Retirement Buffer
• Does Your Retirement Plan Ignore Half of Your Net Worth? Here's How You Can Tap Your Housing Wealth for a More Robust Retirement
• How Combining Your Home Equity and IRA Can Supercharge Your 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.

I understand the fear, as it seems that every major new artificial intelligence technology comes with predictions that this time the profession is finished. The headlines are certainly not helping, as every week there seems to be another article explaining how AI can build portfolios, answer financial questions, analyze investments or generate financial plans in seconds.

For many advisers, it may feel as if AI is attacking the very value of the practice they have spent years building.

I think that perspective misses what is actually happening.

The clients using AI are not trying to replace their advisers.

They are simply trying to become better clients.

And that distinction may be one of the most important aspects for a financial adviser to understand, and when they do, I believe it will shed a new and exciting light on the future of our noble profession.

The empowered client

For decades, many clients walked into meetings feeling overwhelmed. For your clients, financial planning can be intimidating, which is exactly why they want to work with you.

Investment terminology can feel like a foreign language. Tax code, retirement income strategies, estate planning techniques and risk management concepts are not subjects most people spend their weekends studying.

As a result, many clients sat quietly through meetings, nodded politely and left without fully understanding what had just been discussed or what action they took in their portfolios.

AI is changing this.

Clients are becoming empowered through AI and can now ask questions whenever they want. They can learn the basics of Roth conversions, Social Security strategies, charitable planning, annuities, investment management and countless other topics within minutes, but here is the key: They arrive at meetings empowered and with more information than ever before.

They no longer have to sit there and nod politely as you explain why you believe duration risk needs to be accounted for in this market, without a clue about what "duration" means.

Many advisers see this as a threat, but I see it as an opportunity because an informed client is often a more engaged client, and a more engaged client asks better questions, which leads to deeper conversations.

These deeper conversations create stronger relationships.

The adviser who embraces this rather than fights it may find that AI does not weaken the client relationship but may actually strengthen it.

The emergence of the 'confidently wrong' investor

Of course, there is an important caveat.

More information does not always create a better understanding.

AI can not only help your client feel more empowered, but it may also create a uniquely new AI-driven challenge: The confidently wrong investor.

That may become one of the most important issues for financial advisers in the next decade.

AI is trained to sound authoritative, but it is not trained to always be correct.

AI hallucinates more often than people realize. It can confidently invent IRS rules, estate planning strategies, tax interpretations and legal concepts that simply do not exist.

Sometimes it pulls from outdated information. Other times it blends accurate information with misinformation in ways that sound incredibly believable.

The important thing to understand is that AI does not feel embarrassment the way you or I would if we confidently gave somebody the wrong answer over coffee. It does not pause and think that it should double-check things. It simply delivers information with remarkable confidence, whether the answer is accurate or completely wrong.

That changes the adviser's role, as I believe the future adviser becomes something very different.

The rise of the 'Epistemic Adviser'

That is why I think advisers who fight AI are making huge mistakes. The future adviser is no longer the person hoarding information. The future adviser is the person helping clients navigate information.

That is a much more meaningful role.

I call this role the Epistemic Adviser.

Now, I realize that sounds like something a philosophy professor would say, but the idea itself is simple. An epistemic adviser is somebody who evaluates the quality of knowledge before a client acts on it.

Who said my liberal arts degree was useless?

An Epistemic Adviser is a knowledge quality inspector. Your role is no longer simply delivering information, but it is now evaluating its quality before a client acts on it.

That is a very different profession.

And here is the key: You will use AI to become the Epistemic Adviser!

You encourage your client to use AI if they want to. You will both use AI in a manner compliant with your firm. Both AIs will recommend a Roth conversion, but you are the one who knows the human side of the client, and getting her to write a $182,000 check to the IRS is something she will never do.

Both AI recommendations were for a gifting program for estate tax purposes, but the client forgot to tell the AI that she lives in Illinois, which has one of the most complicated state estate taxes I have ever seen.

Are you starting to see my point?

Both you and your client are both using AI, but you, as the Epistemic Adviser, are essential to sort it out.

The difference between knowledge and judgment

This is where advisers become more valuable, not less.

You see, you are not competing with AI. You are helping clients navigate it and think about what they are really asking for.

With the endless supply of information, they are not asking for more information. They are seeking confidence that they are making the right decisions and in the right context.

They are asking for judgment.

They are asking for someone who understands how financial decisions interact with real life.

AI may recommend delaying Social Security benefits, but it is the adviser who understands the client's health concerns.

AI may recommend a gifting strategy, but it is the adviser who understands family dynamics and state-specific considerations.

You see, the difference is not information.

The difference is judgment.

Closing thoughts

As we move forward, I believe advisers should stop viewing AI as something happening to them and start seeing it as something they can use alongside their clients.

If the client is so inclined, encourage them to bring AI-generated ideas into meetings.

• Discuss those ideas openly
• Explore them together while validating what is useful
• Explain what may be missing and help them understand not only the answer but also the reasoning behind it

Clients are not looking for replacement.

They are looking for empowerment.

And advisers who help create that empowerment may find themselves more valuable than ever in a world where information is everywhere, but wisdom remains remarkably scarce.

Related Content

• Addressing Your Clients' Emotional Side: Communication Techniques for Financial Advisers
• How Advisers Can Steer Their Clients Through Market Volatility (and Strengthen Their Relationships)
• How Financial Advisers Can Build Retiring Clients' Confidence
• How Financial Professionals Can Empower Their Female Clients
• Optimize, Grow, Retain: The Power of Annual Client Reviews

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 main equity indexes snapped a three-day losing streak on Wednesday as bond yields fell following the Treasury Department's announcement that it will increase buybacks of longer-dated debt.

But yields on the 10-year Treasury (+5.1 basis points to 4.704%) and the 30-year Treasury (+5.4 basis points to 5.248%) resumed their climb today after a report released late Wednesday showed U.S. debt has crossed the $40 trillion mark.

Rising yields pressured the stock market, with the tech-heavy Nasdaq Composite closing down 1.0% at 26,067, the broader S&P 500 falling 0.9% to 7,641, and the blue-chip Dow Jones Industrial Average dropping 1.3% to 52,759.

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.

Walmart has its worst day in four years on same-store sales miss

Walmart (WMT) was the worst Dow Jones stock today, sinking 9.2% — its worst day since May 16, 2022.

Ahead of the open, WMT reported better-than-expected fiscal 2027 second-quarter earnings of 81 cents per share on revenue of $187.9 billion, but same-store sales growth of 2.6% fell short of what Wall Street anticipated.

The company also gave soft fiscal third-quarter guidance, even as it raised its full-year outlook.

"Walmart is not losing market share — contrary to what I heard after Target's earnings — in fact, the company continues to gain share across income tiers, driven by higher-income consumers seeking value," says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors.

Wagner adds that the same-store sales miss was a result of "non-competitive factors" such as lower prescription drug prices, an ongoing shift toward e-commerce and delivery services, and "persistent cost pressures that prompted thousands of selective price cuts to aid budget-conscious shoppers."

The portfolio manager believes the blue chip stock's post-earnings pullback should be viewed as a buying opportunity.

Advance Auto Parts plummets after earnings

Fellow retailer Advance Auto Parts (AAP) also sold off sharply, falling 24.6% — its worst day since May 31, 2023 — after its turn on the earnings calendar. While the auto parts chain reported higher-than-expected earnings of $1.03 per share, revenue of $2 billion came up short of what analysts were calling for.

AAP also said same-store sales were down 0.5% from the year-ago period. "Total enterprise sales performance was impacted by the DIY channel as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter," explained Advanced Auto Parts CEO Shane O'Kelly in the earnings release.

Deere jumps to the top of the S&P 500 after earnings

Not all of the day's earnings reactions were negative. Deere (DE) jumped 6.9%, making it one of the best S&P 500 stocks today, after the farm equipment manufacturer reported fiscal third-quarter earnings of $5.10 per share on revenue of $11 billion.

Wall Street anticipated earnings of $4.70 per share on revenue of $10.73 billion.

DE also raised the low end of its full-year net income forecast to $4.75 billion from $4.5 billion.

Related content

• What to Look Out for in Economic Data This Week
• 10 Cities Hardest Hit By Inflation: Did Yours Make the List?
• 5 Undervalued Stocks to Buy in This Market

According to a NerdWallet survey conducted in October, 43% of Americans have used artificial intelligence to help with personal financial planning. For younger generations especially, asking a chatbot about budgeting, investing or retirement is becoming as natural as searching the internet.

As CEO of Affinity Federal Credit Union, that trend doesn't surprise me. AI is available around the clock, answers questions in seconds and makes financial information easier to access than ever. For many people who have never worked with a financial professional, it's lowering barriers that have existed for years.

That's good news.

But as AI becomes more capable, I'm increasingly concerned that people are placing too much confidence in its answers without understanding its limitations. AI can be an outstanding financial assistant. It should not be mistaken for a financial adviser. Knowing the difference could save you from making an expensive mistake.

AI shines when the job is education and organization

There are plenty of financial tasks in which AI genuinely improves people's lives. If you're trying to build your first budget, understand how compound interest works, compare traditional and Roth IRAs or learn how to set up an automatic savings plan, AI can be incredibly helpful. It explains concepts in plain language, doesn't judge basic questions and is available whenever you need it.

It's equally useful for repetitive, data-driven tasks. Tracking spending, categorizing expenses, flagging unusual account activity and reminding you when bills are due are all areas at which technology excels. These jobs require consistency and speed more than personal judgment.

For many households, AI can also make financial education far more accessible. Someone who may never have scheduled an appointment with a financial professional can now learn the fundamentals of investing or retirement planning from the comfort of home. That's a positive development, particularly if it encourages people to become more engaged with their finances.

In other words, AI is very good at helping people become more informed and organized.

Where misplaced confidence can cause problems

Where I become concerned is when people begin treating AI-generated answers as personalized financial advice. Most AI platforms are designed to provide an answer, even when they don't have the full picture. That answer may sound thoughtful, detailed and authoritative, but confidence isn't the same thing as accuracy.

Researchers studying AI's role in personal finance have found that it can serve as a useful starting point, but its recommendations often remain generic because they lack the personal context that drives good financial decisions. That's the challenge.

Financial planning rarely comes down to numbers alone. The details that shape good advice often aren't found on a balance sheet. AI doesn't know that you're helping an aging parent who could soon require long-term care. It doesn't know your business partner is preparing to retire, your child has special financial needs or you're considering leaving a stressful career earlier than planned.

These are everyday realities that shape financial decisions in ways no algorithm can fully anticipate.

Similar finances don't always call for similar advice

Consider two people who are both 58. Each has $900,000 saved in a 401(k), owns a paid-off home and hopes to retire at age 65. On paper, they look almost identical. But one has a government pension and retiree health benefits. The other is self-employed, has no pension and expects significant healthcare expenses after retirement because of a spouse's chronic illness.

The numbers may be nearly identical, but the advice shouldn't be.

One household may be able to invest more aggressively because much of its retirement income is already secure. The other may need to prioritize preserving assets and building additional income reserves.

No AI tool can arrive at those conclusions unless someone first asks the right questions. Financial experts are best at interpreting these important details and suggesting the next best actions.

Money decisions are emotional

When conversing with AI, many people overlook the fact it can't recognize emotion the way a person can.

Some of the costliest financial mistakes happen during periods of fear or overconfidence. When markets become volatile, investors sometimes feel an overwhelming urge to sell everything and move to cash. During strong markets, others become convinced they've discovered a winning strategy that can't fail.

In either situation, these decisions are driven by emotions.

A trusted financial professional can hear hesitation in your voice, ask follow-up questions and help separate temporary emotions from long-term goals. AI can generate information, but it can't understand the personal circumstances behind a difficult decision or recognize when someone simply needs reassurance before making a life-changing move.

I don't believe consumers have to choose between AI and human guidance. The smartest approach is to use each when it adds the most value:

• Let AI help you organize your finances, answer basic questions, automate routine tasks and prepare for conversations about your financial future
• Rely on a trusted professional when decisions involve taxes, retirement income, estate planning, insurance, major investments or anything else that's difficult or impossible to undo

Here's a practical rule I encourage people to remember: If an AI recommendation leads you to move a significant amount of money, sign legal paperwork, claim Social Security, retire, or make a major investment decision, pause before acting.

Those are moments when a conversation with someone who understands your full financial picture is well worth the time.

Technology will continue to improve, and that's something we should welcome. AI has an important place in personal finance, particularly when it helps more people build healthier financial habits and better understand their options.

The goal is to make better decisions by combining the efficiency of technology with the perspective, context and accountability that only people can provide.

Related Content

• We Gave AI Chatbots 5 Financial Challenges. Here's How They Did
• If AI Is Doing More of the Work, What Are You Paying Your Financial Adviser For?
• No, AI Can't Plan Your Retirement: This (Human) Investment Adviser Explains Why
• Death by a Thousand Subscription Hikes: As Everyday Costs Creep Higher, It Might Be Time for an Expense Reset
• Obsessed With Rate Moves? This Financial CEO Explains How to Focus Less on the Fed

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.

To bypass the costly court process, some households turn to a trust.

It sounds simple enough — until you look at the price tag. With trust setup costs routinely running into the thousands, plus a dizzying choice between revocable and irrevocable options, it's easy to wonder:

Is a trust actually worth the headache, or is a basic will enough?

The short answer: it depends.

While an irrevocable trust can shield your wealth from taxes and nursing home costs, its legal complexity and ongoing maintenance fees might not suit your family. On the other hand, a revocable trust can spare your kids the nightmare of probate court, but paying higher setup costs upfront doesn't always guarantee a net payoff for smaller inheritances.

We'll break down the differences between wills and trusts, what each really costs, why your state's laws change the math, and how to choose the option that leaves the most money for your heirs.

Wills vs. revocable and irrevocable trusts: key differences

Before we dive into the numbers, let's start with the structural differences between a standard will, a revocable trust, and an irrevocable trust.

Key differences are highlighted in the table below.

*Changes may be made easier by an independent trustee through a process of "decanting" — pouring assets from an old trust to a new one with approval — if your state allows.

**However, if you have a "grantor trust," the creator of the trust still pays the taxes on their personal return, thus potentially saving some money.

As you can see from the above table, one of the general main advantages of a fully funded trust is skipping probate court.

• This can save your heirs time, keep legal filings private, and prevent your personal estate details from entering public record.
• In addition to these benefits, an irrevocable trust removes assets from your taxable gross estate, shielding wealth from transfer taxes and potential creditors.
• Plus, if you anticipate needing long-term care (e.g., a nursing home), an irrevocable trust (like a Medicaid Asset Protection Trust) can safeguard your savings while helping you qualify for government assistance, provided it's established well outside Medicaid's look-back window.

But all those advantages come with one big disadvantage: higher upfront costs.

You'll typically pay higher legal and accounting fees to set up your trust than you would for a standard will. So the key question for most families is whether paying those higher fees today will actually save their heirs enough in court costs and taxes down the road to make the investment worthwhile.

How much do wills and trusts really cost you?

From a purely financial standpoint, the cost-benefit analysis of a trust hinges on location, estate complexity, and overall asset value.

For instance, an estate that passes through a standard will may undergo probate for some or all of its assets. Probate expenses (court and attorney fees and filing costs) generally run 3% to 8% of the probate estate's gross value, according to industry-wide averages.

But if your assets pass automatically through joint ownership or designated beneficiaries (like a 401(k) or IRA), probate may be minimal or bypassed entirely.

Below is a cost comparison showing what you may pay today versus what your heirs could pay later if you chose a will vs. a trust. The data is compiled from nationwide legal surveys, consumer finance benchmarks, and historical probate data.

Note: The table utilizes national averages for probate and administrative costs, not estate tax rates. Exact numbers vary depending on your geographic location, state laws, attorney rates, and complexity of assets.

Households who opt for a revocable trust may do so to pay a larger amount upfront today to help save their kids from paying thousands in probate fees decades later.

But the savings aren't quite as high as you might think. Consider these facts, assuming a standard 2.5% to 3% long-term inflation rate, and an estate worth roughly $300,000 to $400,000.

• If a revocable trust saves your kids $15,000 in probate fees 30 years from now, those future savings might only be worth roughly $6,000 to $7,000 in today's dollars.
• Thus, if you paid $2,000 in setup costs today to save a net $5,000 in inflation-adjusted dollars down the road, it's still a win — but it's not the huge $13,000 windfall it would appear to be on paper.
• Whether those net savings of $5,000 justify the upfront effort and expense depends on your family’s priorities, estate complexity, and location.

Why where you live matters

Federal estate taxes typically only apply to very high-net-worth individuals ($15 million per person in 2026). However, individual state laws can dramatically alter the math for average-income families.

First, a handful of states impose their own estate or inheritance taxes with much lower thresholds. Second — and more commonly — probate fees, legal mandates, and court procedures vary widely from state to state.

That's why where you live (and die) matters to your heirs.

To see how this works, consider the following scenario.

A parent passes away, leaving $100,000 in non-real-estate probate assets to a child serving as an executor. In one scenario, the parent lived in Florida. In another, they lived in Missouri.

Note: The example provided represents averages and is not indicative of a particular taxpayer's financial situation.

In the table above, the heir can save $3,355 more in Florida compared to Missouri. Why? Well, there's a specific state rule about inherited personal property in the Show-Me State.

Under Missouri law, the threshold to file a simplified small estate return is capped at $40,000. That means the heir is forced into a standard, full court-supervised administration (the $3,300 in attorney fees).

Conversely, Florida allows a $100,000 estate to bypass the traditional court-supervised administration via "Summary Administration" (which applies to nonexempt personal assets up to $150,000 and exempt primary homestead property), meaning the heir can avoid formal executor appointments and ongoing court oversight entirely.

Meanwhile, in higher-cost states like California or New York, statutory attorney fees and executor commissions can push probate expenses significantly higher, making revocable trusts far more attractive than standard wills in those states.

Do tax benefits outweigh the setup costs?

It depends entirely on your estate size and which type of trust you choose.

Revocable trusts vs. wills.
A revocable trust or a standard will offers no direct income tax savings during your lifetime (beyond basic inheritance tax rules). Any income generated by assets inside either flows to your personal tax return (Form 1040) using your standard individual tax brackets.

From an annual tax perspective, a revocable trust and a standard will are treated almost identically. So don't expect to recoup your upfront setup costs through annual tax savings; they simply don't exist for wills and revocable trusts.

Irrevocable trusts.
An irrevocable trust offers structural estate tax savings by removing assets from your taxable personal estate. However, that benefit comes with two important annual tax trade-offs:

• Compressed tax brackets. If an irrevocable trust retains income rather than distributing it to beneficiaries, that income may be subject to the top federal tax bracket at much lower thresholds than an individual return. As a result, maintaining an irrevocable trust (non-grantor) can actually lead to higher annual taxes, even if it lowers the overall tax burden for your heirs when you pass away.
• Recurring maintenance costs. Because trust assets are legally separate from your estate, you must file a separate annual fiduciary tax return (Form 1041). This adds recurring accounting expenses every year.

Typically, irrevocable trusts make the most financial sense if your total net worth exceeds the federal estate exemption (over $15 million in 2026), if you live in a state with high death taxes, or if you need to protect assets from creditors or long-term care costs. In those specific scenarios, the long-term tax and asset protections can outweigh the setup and maintenance fees.

How to save your kids the most money

Ultimately, whether a trust or a will saves your kids the most money depends on high-end estate and gift taxes, as well as how you want to approach probate.

Here are a few sample scenarios outlining when a will vs. a trust could be more beneficial for you or your heirs:

However, these scenarios don't cover every person's unique financial situation. So before deciding, review your state’s specific inheritance and probate rules, take inventory of how your accounts are titled, and consult a qualified estate planning attorney or tax professional.

This article does not cover state income tax and is for educational purposes only. The content does not constitute financial, legal, or tax advice.

Read More

• How Your Inheritance Gets Taxed: From Stepped-Up Basis to IRA Rules
• Avoiding the Widows' Penalty Tax Trap After a Spouse Passes
• States That Won't Tax Your Death
• Estate Tax vs Inheritance Tax: Who Actually Pays the Bill?