Shoppers looking to stretch their holiday budget this year have a powerful tool to help: Artificial intelligence. Already, nearly seven in 10 consumers use AI tools to assist them as they shop, the marketing firm LDWW reports. And various surveys have found that anywhere from 29% to 65% of consumers specifically plan to use AI to help with holiday purchases this year, from coming up with gift ideas to finding the best deals.

"Going into the holiday season, AI is going to be very helpful, especially when you are trying not only to stick to a budget but also to get help with product recommendations," says Stephanie Carls, a retail analyst at coupon website RetailMeNot.

Getting the most useful guidance from AI, however, depends heavily on the directions you give it. As you make your holiday gift list and check it twice, here are the specific tasks the technology can perform and how you can make the most of the tool.

Use AI to build a gift budget

Before you shop, AI can help you determine the best way to allocate your funds, based on the total amount you want to spend and the recipients on your list. "Get as detailed as possible about the number of gifts and types of people you're buying for," says Brad Jashinsky, a director analyst at Gartner.

Sample starter prompt: My total holiday budget is $1,000. My list includes my partner, two adult family members, three children, two teachers, my best friend, three coworkers and a Secret Santa present with a $50 limit. Suggest a dollar amount to spend on each person, including the cost of taxes, wrapping paper and cards.

Follow-up prompt: Adjust this budget to spend less on the children and more on my partner. Include a few gift ideas for each person.

Use AI to brainstorm gift ideas

Give AI as many specifics as possible about your intended recipient to get a tailored, creative shortlist of potential presents. Kelly Askew, global retail lead at Accenture, says that a good prompt should contain three elements: context (that is, details about who the gift is for, such as their age, life stage and relationship to you); intent (the kind of gift you want, such as practical, fun or low-cost); and the desired action (the specific information you want AI to provide, such as a certain number of ideas or gift suggestions from a particular store).

"People are often overwhelmed by the number of choices or are trying to buy for someone they might not know well," Askew says. "AI can help them go down the funnel of every item in the universe to land on the top two or three gifts they could buy."

Sample prompt: Give me 10 fun gift ideas for my 18-year-old niece who just started college, likes art and anime, is into skincare, and loves Olivia Rodrigo and Gracie Abrams. Her favorite stores are Lululemon, Hollister and Brandy Melville. I want to spend $100 or less.

Follow-up prompt: She goes to school in Florida and does not own a record player. Give me a new list that doesn't include vinyl or winter apparel.

Use AI to narrow your choices

Once you know the type of gift, you can use AI to cut through choice overload and select the best product in that category. Include any must-have features as well as potential deal breakers.

Sample prompt: Find three lightweight laptops that are good for gamers, have a long battery life and cost less than $500. Do not include options without a standard USB-C port.

Follow-up prompt: Make a comparison table showing the pros and cons of each model, based on customer and expert reviews.

Use AI to get the best deals on gifts

AI makes it easier to compare multiple prices across various stores without constantly re-entering the search terms and keeping track of offers yourself.

"AI turns all of that into a single question," Carls says. "You say what you want once, and it looks across retailers for you, so you land on the decision faster instead of spending your night collecting the pieces."

Sample prompt: Find the best deal available now, including shipping costs, for the Acer Aspire Go 16 laptop.

Follow-up prompt: Search for discount codes that could lower the cost.

Use AI to get the best value from a specific store

Many retailers, ranging from Amazon and Walmart to Lowe's and Sephora, now have proprietary AI assistants you can chat with on their site or app while you're shopping. You can ask those assistants questions about specific products, to make suggestions and for additional discounts.

Sample prompt: Show me green, size-medium sweaters suitable for an office holiday party. My budget: $75.

Follow-up prompt: Which sweater has the best reviews? Show me accessories to complete the outfit.

AI shopping do's and don'ts

About one-third of shoppers regret an AI-recommended purchase, a recent survey from the review site SmartCustomer found. To help ensure you're not among them, follow these do's and don'ts.

DON'T use prompts that are too vague. The more specific the details you provide, the better the answers you'll get. Asking AI to identify the "best headphones" will yield less-useful results than asking for the "best wireless, over-the-ear headphones with noise control under $200."

DO double-check the results. AI sometimes pulls outdated information and prices or can distort product reviews. "Trust the technology to build your shortlist, then confirm the price and other product information on the retailer's page," says Stephanie Carls of RetailMeNot.

DON'T rely on the first answer. AI's initial response may be helpful, but the iterative answers that come from a back-and-forth exchange lead to the most useful recommendations. "The more you give AI, the more it will give you in terms of the criteria and considerations you have in mind," says Lars Perner, a professor of clinical marketing at the Marshall School of Business at the University of Southern California.

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

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There’s gold in them thar homes. And a growing number of Americans are mining it.

A combination of rising house prices and a decade of bargain-basement mortgage rates has allowed homeowners to amass a record $35.8 trillion in home equity this year — a 2.2% increase from 2025 and almost quadruple the 2012 level, Federal Reserve data shows.

That has proved to be an attractive resource for homeowners looking to finance an upgrade of their property, pay off high-interest debt, fund college or cover living expenses in inflationary times.

All told, more than 1 million Americans borrowed against their home equity in the first half of 2026, the highest first-half level since 2022, reports data company Intercontinental Exchange.

Variable-rate home equity lines of credit (HELOCs) have been the most popular option, by dollar amounts and number of borrowers. But lately, interest has soared in cash-out refinances, in which an existing mortgage is replaced with a new loan at a new rate. The number of homeowners choosing this rose 12% in the year that ended June 30, and 33% since 2024, while HELOCs edged up just 1%.

This fall’s Fed rate hike, with hints of more to come, has made accessing cash through home equity more expensive. Even with primary and secondary mortgages now in the 7% to 8.5% range, however, they’re still less expensive than other forms of financing and "can make a lot of sense if you are wrapping up high-interest credit card, student or car loans," says Michael Fratantoni, chief economist of the Mortgage Bankers Association.

But the rise in rates does make it imperative to be more strategic about your options. If you’re thinking about tapping home equity, experts suggest these steps.

Choose a loan that best fits your needs.

The key factors to consider are when you need the money, how much you need and how much risk you're willing to take on interest rates. Your answers will determine whether you’d be better off with a flexible line of credit with a variable rate or a fixed-rate loan, either a home equity loan or a cash-out refi.

"A lump-sum need calls for a home equity loan. Ongoing flexibility calls for a HELOC," says Charley Corbett, a certified financial planner who is based in Naples, Fla.

Also consider how rising rates could affect your payments. Steven Rogé, a certified financial planner based in Beverly, Mass., says if a rate increase of one or two percentage points from the initial rate on a HELOC would squeeze your budget, then it is safer to lock in a fixed-rate loan. (You can compare different rate scenarios at mortgagecalculator.org.)

Higher rates are also a key factor in deciding between a cash-out refi and one of the second-mortgage options. Generally, homeowners with first mortgages in the 2% to 5% range will be better off with a HELOC or home equity loan, Corbett says.

Plan, don't rush.

Even with rates rising, you’ll save more in the long run if you take time to be strategic. "When you're in a hurry, that's when mistakes get made," says John Donlon, cofounder of a mortgage broker in Beverly, Mass.

Small adjustments can often generate big savings. For example, paying down enough credit card debt to raise your FICO credit score from, say, 735 to 740 could cut half a point from fees, or at least an eighth of a percentage point off the interest rate you’re offered, Donlon says.

Also check the impact of different loan amounts. Lowering the sum you're borrowing from 75.01% of your home's appraised value to 75% could cut up to a quarter-point off your interest rate, he says.

Shop around.

Data shows rate variations of almost half a percentage point for borrowers with nearly identical credit profiles. Andrea Bopp Stark, senior attorney for the National Consumer Law Center, recommends using AI or shopping websites such as Bankrate to get a sense of the rates and fees you'll face.

You can use an independent mortgage broker to help you shop or get bids on your own from several lenders, including one or two financial institutions with whom you have relationships. With a few competing offers you can then try negotiating lower fees, Stark says.

The uncertain economy may even work to your advantage. When other borrowers are discouraged, Fratantoni says, "a large number of lenders will be eager to work with you."

Whether you're looking to refinance your mortgage or tap into your home's equity with a HELOC, comparing offers from multiple lenders can help you find competitive rates and terms. Use the tool below to explore your home equity options:

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

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• How You Can Use the Financial Resource Built Into Your Home to Help With Your Long-Term Goals
• What to Watch for When Refinancing Your Home Mortgage

Affordability is a top concern for voters heading into the 2026 midterm elections (November 3), as rising prices squeeze household budgets. But interestingly, Social Security's future is also emerging as an important election issue for some.

An October AARP survey of likely voters in 43 competitive congressional districts found that 83% of voters age 50 and older see Social Security as very or extremely important when deciding how to vote. A Peterson Foundation survey of voters in five battleground states found that 81% were more likely to support a Senate candidate with a plan to prevent automatic benefit cuts.

Many would also support Social Security fixes that involve higher taxes for some workers.

The concerns come as Social Security's retirement trust fund is projected to deplete its reserves in just six years, 2032. To avoid an across-the-board reduction in scheduled benefits of about 22%, Congressional lawmakers will have to act before then to help close the program's funding gap.

Here's more to know about voter sentiment and what Social Security changes could mean for taxes.

Tax changes that could help shore up Social Security

First, Social Security isn't "going bankrupt," and benefits wouldn't completely cease if the trust fund reserves are depleted. However, without action from Congress, the retirement and survivor trust fund is projected to only have enough ongoing revenue to pay 78% of scheduled benefits after the reserves run out in late 2032, according to the 2026 Trustees Report.

Lawmakers could address the shortfall by increasing revenue, slowing benefit growth, or implementing a combination of changes. However, given deep divides in Congress, it's unclear when lawmakers will feel the urgency to pass bipartisan legislation.

In the meantime, several proposals are being floated.

Raise or eliminate the Social Security wage cap

One of the most widely discussed proposals would raise or eliminate the cap on earnings subject to Social Security payroll taxes.

• In 2026, workers pay the 6.2% Social Security tax on the first $184,500 in wages. Employers pay a matching amount, while self-employed workers generally pay the full 12.4%.
• Earnings above the annual cap/Social Security tax limit aren't subject to Social Security payroll taxes.

Sens. Elizabeth Warren (D-Mass.) and Bernie Moreno (R-Ohio), are calling for eliminating the Social Security payroll tax cap. The proposal would require higher-wage earners to pay Social Security taxes on more of what they earn.

But changing the Social Security tax cap would be more complicated than simply asking high earners to pay more taxes. Key questions Congress would have to address include how to change the cap and whether additional taxes would increase Social Security benefits for high earners.

The Peterson Foundation survey found that 72% of voters supported a proposal to impose an additional 1% payroll tax on earnings above the current 2026 $184,500 wage cap.

The Social Security Administration (SSA) estimates that eliminating the cap could close about 58% of the 75-year funding shortfall if additional taxed earnings don't count toward future benefits, or about 45% if they do.

Increase the payroll tax rate

Another option is to increase the Social Security payroll tax rate for workers and employers. The combined rate is currently 12.4%, split evenly between employees and employers. Self-employed workers generally pay both shares.

• The SSA has modeled a gradual increase of 0.1 percentage points annually beginning in 2032, bringing the combined rate to 14.4% in 2051.
• That would mean the employee share eventually rises from 6.2% to 7.2%, with employers paying the same increase.
• The change could close about 33% of the long-range funding shortfall.

A broader tax increase would bring in more revenue but would also likely impact workers across income levels — not just those earning above the current wage cap.

Tax investment income

Lawmakers could also look beyond wages for additional Social Security revenue. One SSA-modeled proposal would impose a separate 12.4% tax on net investment income for taxpayers with modified adjusted gross income (MAGI) above $200,000 for single filers or $250,000 for married couples filing jointly.

Such a proposal would:

• Apply to the lesser of net investment income or the amount by which MAGI exceeds the applicable threshold.
• Direct the additional revenue to Social Security, in addition to the existing 3.8% net investment income tax, which generally applies to certain investment income above those income thresholds and helps fund Medicare.

Note: The NIIT is a separate tax established under the Affordable Care Act; it does not fund Social Security.

This approach would shift some of the funding burden to higher-income households with investment income, rather than relying solely on payroll taxes on wages. SSA estimates that the proposal could close about 30% of the program's long-range funding shortfall.

Change to a fixed-rate cost-of-living adjustment

Under the current Social Security system, the annual cost-of-living adjustment(COLA) is a percentage based on inflation. The same percentage applies to each beneficiary's monthly benefit, so the dollar increase varies with the benefit amount.

• However, under a flat-rate SS COLA, the inflation-adjusted annual increase would be converted into a dollar amount based on the benefit of someone around the 20th percentile of the benefit distribution.
• Every beneficiary would then receive that same dollar increase.
• That would mean smaller annual increases for most beneficiaries, although people receiving lower benefits could fare better.

An AARP Public Policy Institute analysis found that 80% of beneficiaries would receive a smaller adjustment. For 2026, the average retired worker would have received an estimated $34.20 monthly increase under the proposal, compared with the actual $57.90 COLA.

The difference could compound over time. AARP estimated that a hypothetical retiree who began collecting benefits in 1998 would have received a benefit about 20% lower by 2026 under the flat-rate approach.

An analysis commissioned by the Committee for a Responsible Federal Budget (CRFB) found that giving smaller COLAs to retirees with higher benefits could close about half of Social Security’s long-term funding gap.

The SSA has studied a different approach: cutting annual COLAs by 0.5 or 1 percentage point, which estimates show could close about 24% or 46% of the gap, respectively.

Raising the retirement age

Another option would be to gradually increase the full retirement age (FRA), currently 67 for people born in 1960 or later. Workers could still claim retirement benefits as early as 62, but claiming before full retirement age permanently reduces monthly benefits. Raising the FRA would make those early-claiming reductions larger.

Supporters argue that longer life expectancies make a higher retirement age reasonable and that the change would reduce Social Security costs. But the actual effects wouldn't be the same for everyone.

• The SSA estimates that gradually raising the full retirement age to 68 could close about 11% of the long-range funding shortfall; raising it to 69 could close about 32%.
• In the Peterson Foundation survey, 52% of voters opposed gradually increasing the retirement age for younger workers.

What about Social Security for younger workers?

Speaking of younger workers…they may seem far removed from retirement, but they're already paying into Social Security and could face higher taxes or smaller future benefits depending on what Congress decides.

• Under the SSA's gradual payroll tax increase scenario, for example, the employee tax rate would eventually rise from 6.2% to 7.2%.
• For someone earning $50,000 a year, that would mean paying an additional $500 in Social Security payroll taxes annually once the increase is fully phased in.

Meanwhile, high housing, healthcare, and everyday living costs can make it harder for younger workers to save for retirement. With traditional pensions increasingly rare, many wonder how much they can count on receiving from Social Security when they stop working.

• A December 2025 Cato Institute survey found that only 34% of Americans under age 30 believed Social Security would exist when they retire.
• Nearly eight in 10 (78%) expected to receive less than their full scheduled benefits.
• A separate Nationwide Retirement Institute survey found that 45% of Gen Z and 39% of millennials believed they would never collect Social Security benefits.

And keep in mind, Social Security isn't just about retirement. The program also provides survivor benefits to eligible children and spouses when a working parent dies, as well as disability benefits to eligible workers who can no longer earn a living.

Social Security solvency: Bottom line

It's worth noting that even if Social Security reserves are depleted, payroll taxes and other incoming revenue would continue to fund a substantial share of scheduled benefits. So, Congress still has time to change the program's financing trajectory.

For now? Check your earnings record and estimated benefits through your Social Security account. Younger workers can use the estimates to understand what they may receive under current law, while those nearing retirement should compare benefits at different claiming ages and consider how Social Security fits into their retirement income plan.

But also stay tuned. With the 2026 midterms approaching and the 2028 presidential election on the horizon, pay attention to where your representatives stand on Social Security and what they propose to secure its future.

Related

This article is part of a mini-series on the tax impacts of various proposals to shore up Social Security.

• What a Flat-Rate Social Security COLA Could Mean for Retiree Taxes
• How Eliminating the Social Security Tax Cap Could Mean for High Earners

For more on midterm ballot measures, check out our reports: Midterm Election Tax Measures Target High-Income and Property Tax Changes on the Ballot in 7 States.

If the upcoming Thanksgiving holiday and Giving Tuesday have you thinking more about giving generously, you're not alone. Charitable giving typically ramps up in the holiday season as the end of the year approaches. When done right, giving can benefit both you and the causes you care about.

Turn RMDs into tax-free giving A qualified charitable distribution (QCD) allows you to donate up to $105,000 a year directly from your IRA to a qualified charitable organization. The donation counts toward your required minimum distribution (RMD), lowering your income (and lowering your tax obligation) while also allowing you to support a charity of your choice.

Qualified charitable organizations are typically 501(c)(3) organizations in which the person donating the funds doesn't hold any advisory capacity. QCDs can be an impactful move to not only extend generosity to a worthy cause, but also to potentially lower your tax bill.

If you want to increase your impact with charitable causes with which you're already heavily involved (for example, if you're a board member), you may not be able to give through a QCD since you have advisory privileges with the organization.

But if you're looking for a way to give to other causes you care about, while also decreasing your taxable income, ask your financial adviser if a QCD might be a good option for you.

Donor-advised funds: Give now, decide later

A donor-advised fund (DAF) establishes an irrevocable giving account to a 501(c)(3). The account allows you to consolidate several years of donations into one tax year to maximize deductions. You then recommend grants over time.

A DAF can be ideal for high-income years or in preparation of retirement years since this route can grant you flexibility, control and lasting impact.

A DAF allows you to take on an advisory role to suggest where the funds should go, but the giving account falls under the legal ownership of the sponsoring organization. A sponsoring organization can be a foundation, or the charitable arm of a financial institution, or even a specific charitable organization.

It's up to the sponsoring organization to handle the bookkeeping and to distribute the funds, keeping your recommendations in mind.

If you want to maximize your charitable donations and create a lasting impact, a DAF might be a good option to explore. But if you want full control over where your donations go, or if you want to give to a cause that's not a 501(c)(3), other giving options might be more appropriate for you. It's definitely worth a discussion with your financial adviser.

Donate appreciated assets, not just cash

One method for giving more while paying less to Uncle Sam is to donate appreciated assets. Gifting stocks, ETFs, or mutual funds that have grown in value can help you avoid capital gains taxes while also potentially claiming a tax deduction for the full market value.

Instead of cashing in appreciated assets and then turning around and donating that money to a charity, directly donating the appreciated assets can result in a bigger donation overall. You get to avoid capital gains taxes, and the charity benefits from the full donation.

Not every charitable organization will have the capability to accept appreciated assets, though even the smallest charities can typically partner with a third-party processing agent to accept the donation. If that's not an option, consider a DAF, which can typically accept appreciated assets before distributing funds to charities.

Make giving a family value

Giving can feel quite personal, but bringing your kids and grandkids into the philanthropy conversation can foster a family culture of giving that can endure for generations. By making charitable giving a family decision, the next generation learns about the power of stewardship.

Take a cue from the Rockefeller family. For nearly a century, they have met twice a year, not only to discuss family news, but to discuss shared values. Charitable giving by the family has the buy-in of the entire family, and legacy and impact are at the forefront of philanthropic conversations. A shared purpose can be powerful, especially when it endures through the generations.

Set time aside for an annual "family meeting" to discuss the causes everyone can get behind. This demonstration of solidarity and philanthropy sets the stage for kids and grandkids to eventually regard giving as a joyful act instead of something that's someone else's responsibility.

If you're at a loss as to how to facilitate a family meeting, your financial adviser likely has tips and resources they can offer you.

Define your 'why' before you write the check

The most meaningful giving starts with clarity about the causes that align with your values. It's important to be intentional about your giving and to support charities that do the work that is meaningful to you.

Potentially lowering your tax obligation is only one of the many benefits that come with being generous to charitable causes. Research suggests that being charitable can benefit your mental well-being and provide a deeper sense of purpose.

Beyond those benefits, of course, are the benefits derived from your donation by the charitable organization and the surrounding community as a whole.

Whether it's education, health or community, focus your donations on causes that align with your values. Get your family involved so you create a lasting legacy of joyful giving.

Related Content

• Donating Complex Assets Doesn't Have to Be Complicated
• Six Steps to Plan Your Charitable Giving
• Giving Tuesday Is Just the Start: An Expert Guide to Keeping Your Charitable Giving Momentum Going All Year
• How to Give Money to Your Kids Without Setting Them Up for Failure
• If You're in Your 50s or Nearing Retirement, Protecting Your Well-Being Is as Important as Protecting Your Savings

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

Jim and Mary, now 76, had been taking their required minimum distributions (RMDs) for several years and were quite diligent in following the RMD rules. But as it turned out, their "rule following" wasn't doing them any favors.

I asked these new clients to bring in their tax return for a review.

"How do you take out income and RMDs each year?" I asked them.

"Well, we don't need the income," Jim replied, "but we have to take out the RMDs. Each January, we called our previous investment adviser and sent the RMD to our bank account. I know other people wait until December, but we never want to miss a year."

"Then in December each year, Mary and I figure out which charities we want to donate money to and we generally give away our full RMD each year, since we don't need it ourselves. We keep records of it all to give our tax person so we get our tax deduction."

I asked Jim and Mary if either of those advisers had introduced them to the concept of qualified charitable distributions (QCDs), or if they had ever figured out how much of their charitable giving was actually tax deductible.

"We haven't heard about QCDs," they replied, "and isn't all of our charity tax deductible anyway?"

"A QCD is available once you turn 70 ½," I told them. "You can then have your IRA custodian send money directly to an eligible charity. The distribution doesn't show up as taxable income to you, but it still counts towards your RMD amount."

It turns out that despite giving $10,000 a year — their whole RMD — Jim and Mary weren't getting even one dollar in a charitable deduction, because they weren't itemizing.

They had missed out on $2,200 in tax savings in both 2021 and 2022, and neither of their trusted advisers had told them.

Jim and Mary thought they were doing the right thing. They got all the right forms, took care of their RMDs and tracked all their donations.

They also thought their days of high taxes and complicated returns were over, so they were paying less attention to their tax situation.

But like many retirees, they were unwittingly making more of their Social Security taxable, paying more in taxes because of how they were giving to charity, and failing to plan for the future tax changes the surviving spouse was likely to face.

Here are the three biggest tax mistakes I see people making in their 70s — often because they assume that once RMDs begin there is nothing left to plan for tax-wise.

1. Treating your RMD as an isolated event, not part of your retirement tax plan

Jim and Mary were quite focused on meeting the RMD rules — even doing the calculations and distributing the RMD in January, much earlier than most.

What they weren't doing was seeing how their RMD fit into their retirement tax plan.

For them, making use of QCDs would have met their goals and lowered their taxes significantly.

For others, using RMDs to do tax withholding, instead of estimated payments might work better.

2. Assuming you're 'too old' for Roth conversions once RMDs begin

I must have heard it a thousand times over the past 23 years as a financial adviser: "My CPA says I'm 'too old' to do Roth conversions."

Thankfully, there are no age limits with Roth conversions, and beginning your RMDs doesn't stop you from doing them.

If they are a good idea — because they're projected to save you, your widowed spouse or your heirs on the total taxes paid from your IRA — your age shouldn't be a factor in your decision.

You do need to follow some extra rules, though, once you hit RMD age:

• You cannot convert your RMD
• You must satisfy your RMD before you do a Roth conversion

Jim was a retired pastor, and the income tax treatment from his minister pension was going to change if he died first. Mary would thankfully get the same amount, but now it would be all taxable instead of nearly tax-free.

Once we helped them meet their RMD obligations, we found the right amount for them to convert to their Roth IRA each year so Mary could start building up tax-free money, assuming the Roth IRA distribution rules were met, for when her tax situation changed after Jim's passing.

3. Giving to charity but missing out on tax benefits

Jim and Mary were quite generous giving to the charities they supported, but they were also quite generous to the IRS. They were overpaying their taxes by $2,200 each year just because they got the sequencing wrong with their giving.

Once they sent their RMD to their bank account, they weren't able to later count that distribution, or the gifts they personally sent out, as a QCD. To meet those rules, they needed to have the money go directly from their IRA to an eligible charity.

Like many other retirees I've seen over the years as a financial adviser, they thought it really didn't matter since they would get a tax deduction anyways.

But there are two other factors they forgot about.

Because the RMD payout showed up as taxable income, it made more of their Social Security taxable. In 2026, that could also cause someone to miss out on part of the enhanced senior deduction.

Because the standard deduction level is so high now, many retirees think they are getting itemized deductions when they aren't.

There is now a charity deduction for non-itemizers that helps you deduct up to $1,000 for single and $2,000 for married filing joint taxpayers in 2026, but Jim and Mary were giving well beyond that number.

They were keeping great tax records for their $10,000 in charitable donations, but they weren't getting the large tax break they thought they were.

Tax planning doesn't stop in your 70s

The underlying problem in each of these three mistakes is that the decision was made in isolation, not in coordination.

There's nothing wrong with taking care of your RMDs, doing Roth conversions or giving to charity and keeping track of your donations.

Where Jim and Mary went wrong was treating their RMDs as a get-it-over-with transaction, not as a part of their larger retirement puzzle.

Putting those individual retirement, investment and tax decisions into the right place in the puzzle can help you avoid tax mistakes not just in your 70s, but before and after.

That's why I developed the 5-step "Retirement Master Plan" process, which you can learn about in my book Retire Today.

Many people hit their 70s thinking their tax planning days are behind them. That's the kind of stuff you do when you're working and saving for retirement, right?

Nope. Don't fall into the trap of thinking that the start of your RMD years means the end of your tax planning years.

When you hit your 70s, the IRS starts choosing the minimum amount that has to come out of your IRA each year. But it doesn't choose your charitable, tax withholding, investment and Roth conversion strategies.

With thoughtful planning, and a coordinated retirement process, you can still make tax planning choices in your 70s that help you avoid common mistakes.

Related Content

• Year-End RMDs: 10 Ways to Invest, Spend or Donate Them
• The 7 RMD Tax Traps Waiting for You in Your 70s — and How to Start Disarming Them in Your 60s
• QCDs Are a Tax-Smart Way for Retirees To Donate to Charity
• The 3 Biggest Tax Mistakes Retirees Can Make in Their 60s: One Involves Roth Conversions
• Just Retired? This Could Be Your Once-in-a-Lifetime Opportunity to Lower Your Lifetime Taxes

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

Investors looking for swing plays in November need to keep an open mind.

I know what you're thinking: "It's still October. Can't we please enjoy Halloween before yammering on about the holiday season?"

Or maybe even "The last thing I want to read about right now is anything politics."

Don't worry. I'm on your side.

That's why I'm going to look at some of the best investing options for November … without even considering the month's two biggest events.

November's 2 best sectors aren't the usual suspects

All I'm going to say about Black Friday is that it's not as big a factor here as you'd think it would be.

The consultant set expects another banner shopping year in 2026, according to recent estimates from Bain & Co. Their research shows that some $85 billion should be spent between Black Friday and Cyber Monday — almost 9% more than during the same period last year.

That number ignores the rest of the month, which is increasingly falling victim to the mushrooming blob that is "early Black Friday" sales.

But it's enough to set up the idea that (at least as far as headlines are concerned) the month would seem to belong to retailers, and thus consumer discretionary stocks … and to a lesser extent, tech stocks, which power and even produce many of the big-ticket products pushed during the holiday rush.

In reality? Not so much.

* The XLC was launched in 2018, while the XLRE was launched in 2015, amid changes that created these specific sectors. Each of these sectors' percentages represent their actual returns multiplied by a market-average-difference factor to approximate how they might have performed in those environments.

The consumer discretionary sector has been historically fine during November, but there's nothing to suggest that Black Friday pushes the sector as a whole forward. And why would it? Many of those names are competing against one another for the same consumer dollars, and Wall Street generally expects people to spend during that period.

Sure, I could try to handicap individual consumer names anyways, but that would boil down to a childless man trying to divine the next Tickle Me Elmo, Furby or Grogu. Not happening.

And technology has been relatively weak during November — both before and after the 2018 sector shake-up in which names such as Meta Platforms (META) and Alphabet (GOOGL) became communication services stocks.

We should've been listening to "Santa Baby" for hints. Eartha Kitt wasn't asking for dolls and iPhones. She wanted convertibles and mines, which belong to the realms of industrials and materials.

What about the election?

What about it?

You find me someone who predicted all of the market-moving political events of even the past 18 months, and I'll ask you to get their stock picks for me, too.

Personally? I side with Dan Burrows, who dropped this recent gem about what the midterms mean for your portfolio:

"Predictions about which sectors are set to outperform or lag are too often just plain wrong. Recall that ahead of President Donald Trump's first term, investors were advised to load up on Big Oil and small-cap stocks (wrong and wrong) and avoid Big Tech and renewable energy names (wrong and wrong, again)."

So if we're going to do this, we're going to do this by the numbers. And over the past 20 years, materials and industrials boast at minimum top-five average returns in all Novembers, all election Novembers, and all midterm Novembers.

Each of the picks below enjoys some of the highest analyst ratings in their sectors, as determined by their average broker recommendations, courtesy of S&P Global Market Intelligence.

Data is as of October 29.

2 industrial stocks to buy in November

SPX Technologies (SPXC) is an industrial manufacturing and infrastructure equipment company that specializes in heating, ventilation and air conditioning (HVAC), as well as detection and measurement.

The company is off by nearly 20% year to date amid general weakness in the industrial sector (and small- and mid-cap industrials specifically), but it maintains a highly convicted bull camp of 13 Buys versus one Hold and zero Sells.

"Our confidence in sustained HVAC outgrowth is unchanged, D&M remains well positioned to leverage critical infrastructure and defense technology spending, and we see no reason to question SPX's proven M&A playbook and flywheel value creation runway," Oppenheimer analyst Bryan Blair, who rates SPXC at Outperform (equivalent of Buy), wrote in an early October note. "Combining that setup with increasingly attractive valuation, SPXC remains among our top picks and we believe recent weakness affords a strong buying opportunity in shares."

While SPXC currently trades at 19 times next year's earnings and a PEG (price/earnings-to-growth) of 1, which indicates it is merely fairly priced, Oppenheimer says the stock warrants a premium compared to its peers.

GXO Logistics (GXO) is a contract logistics provider offering warehousing, distribution, order fulfillment and e-commerce services. It followed the rest of the market south during the March swoon, then it never really got up off the mat despite posting a pair of better-than-expected quarterly results.

But Wall Street continues to believe in GXO — unanimously, in fact. The company has 17 ratings, all of which are Buys, according to S&P Global Market Intelligence data.

"GXO remains near the top of our ‘misunderstood-and-undervalued' list, trading at trough valuation levels despite having a highly visible and predictable earnings profile," say Jefferies analysts, who rate the stock at Buy. "The company's underlying commercial signals are the strongest they have been in years, with a record $2.7 billion sales pipeline and accelerating wins in strategic B2B verticals like aerospace and life sciences."

And GXO has a potential November catalyst: its Investor Day, scheduled for Monday, November 16. Jefferies believes it "will be a significant catalyst for a multiple re-rate as investors gain confidence in the company's structural margin expansion and robust free cash flow generation."

2 materials stocks to buy in November

One of the best-rated materials-sector stocks on the market right now also made a list of undervalued stocks just a couple of months ago.

I'm talking about Smurfit Westrock (SW), which is a global provider of containerboard, corrugated containers and other paper-based packaging products. Yes, a boffo holiday shopping season would indeed benefit Smurfit, whose fortunes have been lifted by worldwide growth in e-commerce. But it would take a better-than-expected result for the entire online shopping season, which we wouldn't really be able to confirm until December.

Here's a more material headline: paperboard producer Paperworks recently said it would raise prices on all grades of recycled paperboard by $60 per ton, which Truist analysts believe is positive for several industry names, including Smurfit, which it rates at Buy.

And if you're buying with more than November in mind, Argus Research's Alexandra Yates (Buy) sees "long-term upside potential and expects earnings growth congruent with growth in e-commerce and growth in demand for sustainable paper and packaging goods." They're two of the unanimously Buy-rated 17 analysts on this value-priced name.

Smurfit also pays us a generous dividend that currently yields 4.4%.

Lastly, there's Newmont (NEM), the world's largest gold mining company, though it produces far more than the yellow metal. Its Peñasquito operation in Mexico is one of the world's largest silver mines; it produces copper, silver, zinc, lead and molybdenum, too.

Newmont has the largest analyst following of these four stocks, which makes a unanimous consensus less likely. But it still boasts 19 Buys to three Holds and one Sell, which is still mighty bullish.

The stock is up by double digits, albeit in roller-coaster fashion. But UBS analyst Daniel Major (Buy) believes there's more room to roll, writing in September that "clarity on cash returns and ability to grow [gold equivalent ounces] production per share through the combination of sustained share buybacks and modest improvement in production differentiates Newmont vs gold peers."

He adds that the company's August agreement to settle a joint-venture dispute with rival Barrick (B) eliminated a significant overhang on the stock — and that the market is underappreciating how much relief that provides.

And while Newmont doesn't mine for platinum, it does own shares in Canada's Metallic Minerals, which does. I hope that's enough for Catwoman.

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Welcome to Kiplinger's My First $1 Million series, in which we hear from people who have made $1 million. They're sharing how they did it and what they're doing with it.

This time, we hear from a 70-year-old married and retired banking vice president in Bexley, Ohio. He reports his salary was $95,000.

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?

When I was 18, I laid out a plan to have $1 million by the time I reached 40. That plan involved saving and investing a significant amount of money each paycheck.

Of course, that plan required that I also lived under my means for some time.

I began investing in stocks when I turned 18, first in a mutual fund that I invested $25 a month, then individual stocks.

I started working full time at 15 in a small pizza place, making $1.35 an hour (but there was all the pizza we could eat!).

In college, when I was 20, I moved over to a national food chain on the night stock crew. At that point, I began investing $50 a week in the company stock.

After 12 years in the grocery business, I moved over to the company credit union (actually took a pay cut to make that move). By that time, I had accumulated over 10,000 shares of the company stock and had branched out to buying many other equities as well.

I reached my goal of having a million dollars well ahead of schedule. This was largely driven by consistently investing and the compounding that occurs over time.

Again, living under our means helped free up more capital to invest. My wife and I have continued to invest throughout our lives and now, in retirement, have found ourselves to be multimillionaires (many times over).

Note: My wife was a grocery clerk at the same food chain and eventually retired from that food chain after 45 years as a CPA.

What are you doing with the money?

Continuing to invest.

The Fun Stuff

Did you do anything to celebrate?

I was in my mid-30s, which was about 35 years ago. I'm sure I did something, but nothing that would draw attention to it.

Most folks who knew me knew I invested, but had no idea how much it had grown.

What is the best part of making $1 million?

I enjoyed the journey. The challenge of selecting and making good investments kinda fed on itself over the years.

Did your life change?

Not the first million, not at all. Thirty-five years later, we are taking more frequent trips and gifting much more. We do have a very nice home.

But as far as lifestyle goes, we are still very careful shoppers (coupons, sales pricing, markdowns, etc.), drive older cars (2008 and 2011) and still live well under our means.

Does anyone know you're a millionaire?

My wife, of course. And one friend from college, who also invested (we inspired each other through the process). He is also a multimillionaire now.

Did you retire early?

A little early at 64. I would have retired around 60, but the company kept asking me to stay one more year. After four more years, I did retire at 64.

Looking Back

Anything you would do differently?

Maybe start contributing to a Roth IRA earlier.

What advice would you give to your younger self?

Not much advice. Whether luck or destiny, what I did worked out pretty well.

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

Think and Grow Rich (by Napoleon Hill), The Kiplinger Letter, The Wall Street Journal, Barron's, The Millionaire Next Door (by Thomas Stanley and William D. Danko).

Did you work with a financial adviser?

No. Always did my own investments and research. It was a hobby that has paid off very well.

Did anyone help you early on?

My mom's oldest sister and her husband started a small business in the basement of their house in the 1920s. It grew into a good-size business with hundreds of employees.

When I was young, we would visit my aunt, who at that time had turned the business over to her son, and talk with her about her stock investments.

I was probably about 10 at the time and found it very interesting. That probably started my interest in investing.

Looking Ahead

Plans for your next $1 million?

I heard a quote once that making your first million is much harder than making your fifth or 10th million. I have found that to be absolutely true.

Speaks to how powerful compounding your savings and investments over time can be.

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

Be consistent with saving and investing and live under your means. Not rocket science, just need to be consistent and persistent.

Do you have an estate plan?

We have a modest estate plan. We set up children and grandchildren as beneficiaries on all of our investment and savings accounts and set up the house as TOD (transfer on death). That is probably 95% of our wealth.

The remaining amount is handled by our will. We have also aggressively converted money from our traditional IRAs to our Roth IRAs.

What do you wish you'd known …

When you first started saving? My parents were very good role models for developing excellent savings habits.

When you first started investing? Have a better balance between speculative stocks and more stable equities.

Before you retired? That COVID was going to hit six months after I retired. I would have retired earlier because travel was so much easier.

If you have made $1 million or more and would like to be anonymously featured in a future My First $1 Million profile, please fill out and submit this Google Form or send an email to MyFirstMillion@futurenet.com to receive the questions. We welcome all stories that add up to $1 million or more in your accounts, although we will use discretion in which stories we choose to publish, to ensure we share a diversity of experiences. We also might want to verify that you really do have $1 million. Your answers may be edited for clarity.

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• Can Money Buy You Happiness? Yes, It Can. However…

For Americans over 65, a single mistyped digit in a government database can abruptly cut off healthcare and monthly benefits. Each year, thousands of living citizens are mistakenly flagged as deceased by the Social Security Administration (SSA), triggering an automated cascade that halts Medicare, freezes bank accounts and invalidates prescription coverage at the pharmacy counter.

While these errors are rare, when an individual’s Social Security number is accidentally entered into the federal "Death Master File," the fallout can be devastating. Fixing it requires immediate action — starting with an in-person visit to your local Social Security office.

The likelihood of a person accidentally being declared dead is admittedly small. The SSA boasts a 99.7% accuracy rate, with erroneous reports and internal recording errors together accounting for just one-third of 1% of the 2.9 million death records the SSA processes each year. Still, for the 7,000 to 12,000 living people mistakenly recorded as dead on the agency's Numident database annually, that tiny fractional margin of error brings severe, life-altering consequences.

A recent audit from the Office of Inspector General (OAIG) revealed that 24,219 beneficiaries were erroneously marked as deceased between January 2020 and December 2024. These errors occurred in the Numident — the SSA’s master database of Social Security card records — which directly feeds the government’s widely shared Death Master File.

The immediate fallout: Cut benefits, lost Medicare, frozen accounts

Once the SSA enters a death record into its core database, it publishes weekly and monthly updates to the public-facing or restricted Death Master File (DMF). Major credit bureaus, banks, insurance companies, state tax authorities and medical systems subscribe to these updates to automatically cross-reference their own databases.

The fallout hits every area of your life:

• Benefit termination/income stoppage: Social Security, SSI, SSDI, or pension direct deposits are abruptly suspended or recalled.
• Medicare cancellation: The Centers for Medicare & Medicaid Services (CMS) terminates healthcare coverage, leading to denied medical claims and the inability to fulfill prescriptions.
• Frozen financial accounts: Banks and credit unions lock checking accounts, stop automatic bill pay and reject direct deposits.
• Credit destruction: Credit bureaus flag the SSN as deceased, instantly freezing lines of credit and credit card access.
• Employment and tax issues: Employers and the IRS may also be notified, which can complicate tax filings and affect your ability to work.

The road back: Fixable, but it takes persistence

While a simple data entry error can trigger this nightmare, it is fixable. Restoring your identity and financial stability will require diligence and patience, likely involving multiple calls and visits.

Keep a detailed log of every conversation, noting dates, representative names, and key details. If progress stalls, reach out to your congressional representative's office — staff members regularly help constituents navigate federal agency roadblocks. You can find contact information online through Find Your Representative or by calling the U.S. Capitol switchboard at (202) 224-3121.

Once you are verified, the SSA issues an official document called the "Erroneous Death Case - Third Party Contact" Letter. To recover your life, you must share this letter with banks, doctors and credit bureaus to compel those institutions to reopen your accounts while the electronic clearinghouse catches up.

Getting your benefits back: 4 clear steps

• 1- Contact the SSA immediately. As soon as you discover the error, contact the Social Security Administration. You must visit a local Social Security office in person, as the SSA does not resolve erroneous death markers over the phone or online. To find an office, use the online Office Locator or call 1-800-772-1213 (TTY: 1-800-325-0778) Monday–Friday, 8:00 a.m. to 7:00 p.m. local time.
• 2- Bring proof of life. You will need to bring one or more original, unexpired forms of identification to prove that you are, in fact, alive. This may include:
  • Passport
  • Driver's license
  • Employee ID card
  • Military record
  • School ID card, record or report card
  • Marriage or divorce record
  • Adoption record
  • Health insurance card (except a Medicare card)
  • Certified copy of medical record
  • Life insurance policy
  • Court order for name change or
  • Church membership that establishes your identity.
  • Other documents that can help establish your identity, such as a birth certificate, utility bill or recent pay stub.
• 3- Request an "Erroneous Death Case" notice. Once the SSA corrects your record, they can provide you with a notice that states the death report was an error. This is a crucial document. Ask for it by name, and ask for more than one copy. It will help you unfreeze bank accounts, restore benefits and access medical care.
• 4- Notify other agencies. Use this notice to contact all other affected institutions, including:
  • The IRS, to ensure your tax filings are not rejected. Call 800-829-1040 from 7 a.m. to 7 p.m. local time or 844-545-5640 to schedule an appointment at your local IRS office.
  • Contact your bank and credit card companies to unfreeze your accounts.
  • Contact the credit reporting agencies (Experian, Equifax and TransUnion) to correct your credit report.
  • Contact Medicare, Veterans Affairs (VA) and other health insurance providers to reinstate your coverage. To reach Medicare, call 1-800-MEDICARE (1-800-633-4227) — available 24 hours a day, 7 days a week (except some federal holidays) or 1-877-486-2048 if you use a TTY. You can reach the VA health benefits hotline by calling 877-222-8387, available Monday through Friday, 8:00 a.m. to 8:00 p.m. ET

The root of the error: How living people get flagged as dead

Around 7,000 to 12,000 living Americans are mistakenly marked as dead by the SSA each year. The OAIG audit noted that simple typographical slips by hospital workers, funeral directors and SSA clerks most often result in people being accidentally declared dead.

In calendar year 2025, the SSA posted approximately 5.6 million death records to the DMF. The SSA subsequently determined that 12,504 records (0.22%) were erroneous, according to an OAIG press release.

Common causes for the error included:

• Typographical errors: A clerk mistypes a single digit of a Social Security Number (SSN) when logging a death report.
• Similar names/shared info: Confusion between family members with identical names (e.g., a father and son who are "Jr." and "Sr.") or similar birth dates.
• Fraud or identity theft: Misreported numbers on formal documentation.

The path forward: What it takes to untangle the red tape

Fixing an erroneous death record eventually restores bank accounts, Social Security benefits and Medicare coverage, but it does not undo the financial trauma or medical risks endured during the blackout. Recovering from an erroneous death report requires overcoming many administrative hurdles, an in-person identity verification process and persistent follow-up to restore revoked benefits and services.

With persistence, however, you can successfully reclaim your identity, reinstate every benefit you've earned, and put this ordeal behind you.

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Should I convert? And if so, how much? And when? And how do I actually do it? This is usually the sequence of questions I receive around Roth conversions. And the answer to all of them, I know you'll be surprised to hear, is it depends.

Each person has a unique financial, tax and life situation. What makes perfect sense in one situation might not be as elegant in another.

Roth conversion basics

A Roth conversion is when you move money from a pretax retirement account, such as a traditional IRA or, in some cases, a 401(k), into a Roth IRA.

You pay the tax when you convert. Generally, the amount you convert that hasn't previously been taxed is added to your ordinary taxable income for that year.

Suppose you have $100,000 in a traditional IRA and convert $20,000 to a Roth IRA. Assuming all of the money in the IRA is pretax, that $20,000 generally gets added to your taxable income for the year.

If those dollars fall within the 22% federal tax bracket, the conversion could create roughly $4,400 of additional federal income tax.

Of course, the actual amount depends on your entire tax situation, including your income, deductions, state taxes and whether you have any after-tax money in your IRAs.

Why would you voluntarily pay the tax before you have to? Because you are essentially making a decision about when you want to pay it.

With a traditional IRA, you get tax-deferred growth, but taxable distributions are generally taxed as ordinary income when the money eventually comes out.

With a Roth IRA, you pay the applicable tax on the conversion today, the assets can continue to grow inside the Roth, and qualified distributions can ultimately come out free from federal income tax. Roth IRAs also don't have required minimum distributions during the original owner's lifetime.

This is where it gets really interesting. Reducing the amount of money sitting in pretax accounts can potentially reduce your taxable income later in retirement. That can help with things like Medicare premiums and IRMAA, the taxation of Social Security, your capital gains tax rate and the taxes you pay on your other sources of income.

But, and this is a big but, a Roth conversion increases your taxable income in the year you actually do it. So doing too much at once could push you into a higher tax bracket, increase future Medicare premiums through IRMAA or cause more of your Social Security to become taxable.

This is why the question isn't really, "Should I do a Roth conversion?" It is, "How much should I convert, when should I convert it, and how much tax am I willing to pay to do it?"

Three factors to consider: Income tax rates, longevity and Social Security

Broad strokes, we are in a relatively low federal income tax environment compared with several periods in modern U.S. history. The highest federal individual income tax rate for 2026 is 37%.

For some perspective, the top marginal rate was 91% through much of the 1950s and early 1960s, 70% through much of the 1970s, 50% from 1982 through 1986, 28% from 1988 through 1990, 39.6% from 1993 through 2000, 35% from 2003 through 2012, 39.6% from 2013 through 2017 and 37% beginning in 2018.

Does that mean taxes are definitely going up? No. Does it mean you should run out and convert your entire IRA tomorrow? Also no. But it's important context when we're deciding whether we want to pay a known tax rate today versus an unknown tax rate 10, 20 or 30 years from now.

No one knows what Congress will do with tax rates in the future. What we do know is what the tax rules look like today, how much you currently have sitting in pretax accounts and, with reasonable assumptions, what those accounts could look like in the future if we do absolutely nothing.

Another consideration is that the number of Americans age 65 and older is growing rapidly. The Census Bureau has projected that by 2034 there will be approximately 77 million Americans age 65 and older.

At the same time, Social Security is facing a significant long-term funding challenge. According to the 2026 Social Security Trustees Report, the combined Social Security trust funds are projected to have sufficient reserves to pay scheduled benefits until 2034.

If no changes were made, continuing program income would be sufficient to pay about 83% of scheduled benefits when those reserves are depleted.

That doesn't mean Social Security disappears in 2034, but it does mean that something eventually has to change.

It's like a household budget: When we're consistently spending more than we're bringing in, there are only so many levers to pull. More money needs to come in, less money needs to go out or some combination of the two needs to happen.

What exactly that means for future tax rates, Social Security or Medicare is impossible to know today, and I certainly don't have a crystal ball. But "let's wait and see what happens" isn't much of a retirement tax strategy either.

Your future tax liability

Here's the other thing people miss. If you have $2 million in a traditional IRA, you see $2 million on your statement. But you don't necessarily have $2 million available to spend.

If those dollars have never been taxed, the government still has a claim on some portion of that money when taxable distributions occur. We don't know exactly how large that claim will ultimately be because we don't know what your income or tax rates will be at the time.

That is your future tax liability. And if you have accumulated $2 million, $3 million, $5 million or more almost entirely in pretax retirement accounts, that is something I want to understand before the IRS starts telling us how much you have to take out every year.

There are also certain windows where Roth conversions can become particularly interesting.

• Maybe you retire at 62 and have several years before required minimum distributions begin
• Maybe your income temporarily drops
• Maybe you delay Social Security
• Maybe you have unusually large deductions in a particular year
• Maybe we deliberately convert just enough each year to use a particular tax bracket without unnecessarily spilling into the next one

This is where tax planning becomes financial planning, rather than simply tax preparation.

Regardless of whether right now is the right time for you to execute a Roth conversion, it is the right time to be evaluating your future tax liability and planning for how you're going to deal with it.

I have so many clients who come to us when they're nearing or recently retired. When we review their circumstances, there are things they could have done five or 10 years earlier that are no longer possible, or simply aren't nearly as attractive, because they missed the window.

Saving $100,000 in taxes may not seem like too much in the grand scheme of things when you have a net worth of several million dollars, but money has an opportunity cost.

If that $100,000 remained invested over a 25-year retirement and hypothetically earned a 6% annual rate of return, it would grow to approximately $429,000. That is $429,000 that could have gone to your children or grandchildren, your favorite charity or that amazing trip around the world you always wanted to go on.

Of course, a 6% return is hypothetical and isn't guaranteed. Actual investment returns fluctuate, and this example doesn't account for taxes, fees, inflation or differences in investment strategy.

The point is simply that every unnecessary dollar that goes out the door is a dollar that no longer gets to compound for you.

How to get ahead

So, if you're a high-income earner or have accumulated a lot of assets that are currently sitting in qualified accounts such as IRAs, 401(k)s and 403(b)s, you need to get ahead of this. Ask the following:

• What will your required minimum distributions eventually look like?
• What will your taxable income look like in retirement?
• What happens to your Medicare premiums?
• What happens when one spouse dies and the surviving spouse is suddenly filing as a single taxpayer?
• What happens when your children inherit these accounts?
• And, most importantly, if you don't like the answers, what can you do about it while you still have options?

The goal isn't simply to pay the least amount of tax this year. The goal is to understand what you and your family could pay in taxes over your lifetime and make intelligent decisions today while you still have the ability to influence that number.

Related Content

• The 3 Biggest Tax Mistakes Retirees Can Make in Their 60s: One Involves Roth Conversions
• Here's Why You Shouldn't Put All Your Money Into Roth IRAs
• 5 Times You Should Absolutely Not Do a Roth Conversion
• Avoiding IRMAA Can Actually Cost You More in Retirement: A Financial Adviser Explains Why and What You Can Do Instead
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

If you have $2 million invested towards your retirement, you've accomplished something most Americans haven't. You're likely right around the top 10% by net worth.

But here's the problem: Being "ahead" of most Americans doesn't mean you are ready to retire, even if you are sitting on a seven-figure nest egg.

For many 65-year-olds, $2 million might be more than enough to support their retirement goals.

For others, $2 million might not.

When you have a $2 million net worth, you're "ahead" of 90% of Americans and averages and comparisons stop mattering as much.

What matters is: Does your $2 million support your specific retirement goals?

$2 million, 2 very different retirements

Dave and Susan are both 65. They live in a $600,000 home with no mortgage. Their ongoing housing costs are limited to property taxes, insurance and maintenance.

Dave has a pension of $25,000 per year, and between their two Social Security benefits, the couple collects another $50,000 annually. That's $75,000 per year in reliable, predictable income.

Dave and Susan want to spend about $115,000 per year, including income taxes. They have no credit card debt, their cars are paid for, and their travel plans consist of a couple of road trips each year to visit their grandchildren.

Because their guaranteed income covers $75,000 of their $115,000 lifestyle, Dave and Susan only need their $2 million portfolio to generate $40,000 of income per year. That's an initial withdrawal rate of just 2% — half the percentage of the often quoted 4% rule.

That relatively low initial withdrawal rate gives them more flexibility to weather market downturns or unexpected expenses without immediately making significant changes to their lifestyle.

For Dave and Susan, $2 million seems plenty.

Mark and Karen are also 65. They live in an $800,000 home that has a $300,000 mortgage balance, in addition to property taxes, insurance and maintenance.

Mark and Karen were high earners during their careers, so their Social Security benefits will be substantial — nearly $70,000 combined.

Neither has a pension or any other source of reliable retirement income.

They want to live on $170,000 per year. In addition, they also plan to purchase a $1 million vacation home in Florida.

They are asking their $2 million portfolio to generate $100,000 every year to cover their annual spending budget, including a mortgage payment, at a 5% withdrawal rate.

According to Morningstar's latest retirement spending research, the 5% portfolio withdrawal rate is within the range supported by a dynamic, or guardrail spending approach. These flexible withdrawal methods suggest a higher initial portfolio withdrawal if you're willing to reduce your withdrawals when needed, based on the market or inflation.

But here's where they might get into trouble.

Their $2 million will also have to produce the down payment for a second, million-dollar property, as well as cover a second set of mortgage payments, property taxes, utility payments and maintenance costs.

If they take out $400,000 total from their retirement nest egg for their down payment, including the income taxes due on their large traditional IRA withdrawal, that leaves them with $1.6 million.

Asking your $2 million portfolio to generate $100,000 income does fall within the ranges supported by some of the flexible spending strategies, but those approaches make assumptions, too, about your stock mix, retirement length and willingness to reduce withdrawals in times of market volatility or high inflation.

But asking your $1.6 million portfolio to generate $100,000 income is a 6.25% withdrawal rate, much higher than the percentages supported in the flexible withdrawal research — and that's without accounting for the new mortgage from their vacation home.

With two mortgages now, Mark and Karen are running out of room to be flexible.

If the market drops, Dave and Susan have the room to cut back.

Mark and Karen, however, have to pay their monthly mortgage no matter how their investments perform. For them, $2 million seems like a stretch.

Two couples, both with $2 million dollars saved, with two very different visions for retirement. An account balance is only one part of a retirement plan.

What $2 million actually has to accomplish

When I meet soon-to-be retirees for the first time, they often worry that their investments need to replace their entire working salaries.

That's almost never true.

Your retirement portfolio only needs to fill the gap between what you want to spend and what you already receive from other reliable income sources, such as a pension and Social Security.

The question is: How big is that gap? How much work will your portfolio need to do?

Let's go back to Dave and Susan. Their gap was $40,000. With Dave's pension and their Social Security benefits, they have a manageable initial withdrawal rate of 2%.

Meanwhile, Mark and Karen were asking for much more from their portfolio, at a 6.25% withdrawal rate.

Both sets of retirees had $2 million, but the right question isn't "How does $2 million compare with the rest of America?"

The right question is, "Will $2 million be enough for me in my retirement?"

5 questions that determine if $2 million is enough

1. How much will you spend?

Don't rely on a generic general rule that tells you to spend 70% or 80% of your pre-retirement income or withdraw 4% every year. Start instead with your current spending — that's how much is going to your current lifestyle, and often you'd prefer to maintain your current lifestyle.

The easiest way to estimate your spending is to look at your current take-home pay. You'll have to adjust for taxes and healthcare costs, but as I always say, "What goes into your checking account usually gets spent."

2. How much guaranteed income will you make in retirement?

Every dollar of guaranteed income from Social Security or a pension is a dollar your portfolio doesn't have to produce. If you're able to optimize your Social Security and pension, you don't have to rely as much on your investments in retirement.

3. How much money will you keep after taxes?

This largely depends on which types of accounts hold your money:

• Traditional IRAs and 401(k)s. Withdrawals are generally taxed as ordinary income.
• Roth IRAs. Qualified withdrawals are generally tax-free
• Taxable brokerage accounts. Long-term capital gains from investments held for more than one year are generally taxed at preferential federal capital gains rates.
• Cash savings. Withdrawals out of savings aren't by themselves taxable, although the interest earned is reported as taxable.

Your choices on which accounts you withdraw money from, and when you withdraw that money will be a big determinant to how much taxes you pay each year.

4. How will you invest your money?

In retirement, you need both short-term money to pay your living expenses and long-term money that's positioned for growth.

If your portfolio is exposed to too much market risk, you might feel uneasy about spending.

But if you're not exposed to enough market risk to drive up long-term returns, your money might not grow enough to support you in the later years of retirement.

5. What type of legacy will you leave?

Think about our second couple, Mark and Karen, who were planning to buy a $1 million vacation home. While that might be a worthy goal, they need to consider how things work out if their projections don't go as planned.

What's their plan for long-term care expenses, or what happens if one of them passes away earlier than expected?

How will the surviving spouse deal with a lower income? What are the tax consequences to how their kids inherit their remaining money?

In my book, Retire Today, I show retirees how to coordinate their answers to these questions into a simple five-step master plan: Spend, Make, Keep, Invest and Leave.

Your account balances matter. But only after you understand what the money needs to accomplish can you create your own retirement master plan.

Is $2 million enough to retire at 65?

For many retirees, the answer is yes.

That's a more likely yes if the lifestyle and spending needs you're planning for in retirement are aligned with your Social Security choices, tax planning, investments and legacy planning.

But high-earners whose salaries are paying for an expensive lifestyle today might find that a $2 million portfolio can't do all the work once their paychecks stop coming in.

Being 'ahead' doesn't always count as 'having enough'

Building a $2 million nest egg by age 65 puts you well ahead of most Americans.

But retirement isn't about being ahead of your peers. It's about having enough to support your lifestyle, your bucket list goals and your legacy.

So stop asking yourself, "Do I have enough compared with everyone else?"

Instead work on answering, "What does my money need to do for me in retirement?"

Once you answer that question, you'll stop comparing your retirement with everyone else's and start building the retirement that works for you.

Related Content

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• The Average 401(k) Balance Hits Record High in the Second Quarter — Is Your Nest Egg Keeping Up?
• Retirement Savings On Track? How Much You Should Have By 60 and 65
• If You're Nearly 65, You Need to Know How to Avoid These 5 Common Medicare Mistakes
• Just Retired? This Could Be Your Once-in-a-Lifetime Opportunity to Lower Your Lifetime Taxes

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

All three main equity indexes gapped down at Friday's open, as the rotation out of technology and artificial intelligence infrastructure accelerated to a frightful pace on All Hallows Eve. Investors, traders and speculators are seeking safety in energy, consumer staples and healthcare stocks, as well as Treasury bonds, amid rising concern about capex plans and return on AI.

By the closing bell, the Nasdaq Composite had fallen 2.9% to 25,437, the tech-heavy index's steepest single-day decline since March 2025, turning what had been a modest weekly gain into a 2% weekly loss.

The broad-based S&P 500 was off 1.8% at 7,580, resulting in a 0.6% decline for the week. The blue-chip Dow Jones Industrial Average was down 1.1% today to 51,770. Papa Dow dipped 0.9% this week.

"Mega-cap stocks have faced increased selling pressure over the past two weeks as elevated AI-related spending and rising financing costs raise concerns over the path to profitability," LPL Financial Chief Cross-Asset Strategist Adam Turnquist observes. "Recent earnings reports have added to these concerns, revealing slowing growth in select hyperscalers' core businesses."

Alphabet (GOOGL, -1.4%) reported its weakest ad revenue growth in five quarters, while e-commerce sales for Amazon (AMZN, -1.4%) slowed to a three-year low. But Microsoft (MSFT, -1.6%) reported a nice pop for cloud revenue, including expectations-beating Azure sales.

Still, according to Turnquist, the Magnificent 7 stocks are showing signs of weakness from a technical perspective.

Indeed, the Magnificent Seven Index has broken below support near its May highs and is approaching another key level. Relative strength "is also at a critical inflection point," with more deterioration from here suggesting leadership "is rotating away from mega-cap stocks."

The wider technology complex was also destabilized on Friday by a reported $6.3 billion hack of cryptocurrency exchange Binance engineered by agents of North Korea's government.

Intel is way outside

Intel (INTC, -28.6%) was the worst S&P 500 stock on Friday after management reported mixed results and offered weak guidance, amid a more-rapid-than-anticipated deceleration for its core PC market.

The chipmaker expects to report earnings of 25 cents per share for the fourth quarter on revenue of $15 billion to $16 billion. Wall Street forecast EPS of 45 cents on revenue of $17.3 billion.

Other semiconductor stocks got dragged down, too, including Advanced Micro Devices (AMD, -10.9%), which is scheduled to report third-quarter earnings after the closing bell on Tuesday.

Nvidia (NVDA, -4.2%) was the worst Dow Jones stock. Fellow Mag 7ers Meta Platforms (META, -1.5%) and Tesla (TSLA, -0.9%) looked better by comparison.

Apple (AAPL, -1.2%) will be the sixth Magnificent 7 stock to report this season when it reveals fiscal fourth-quarter results after Monday's closing bell.

As Turnquist explains, AAPL outperformed this month because the iPhone maker is "more asset-light compared to peers" and is still generating strong positive free cash flow.

Crude oil up, bond yields down

The front-month West Texas Intermediate crude oil futures contract rose 2.4% to $104.45 per barrel, and Brent futures added 1.5% to $112.44, reflecting expectations the war in the Middle East will intensify after midterm elections in the U.S.

The 2-year Treasury yield (-6.4 basis points, 4.592%), as well as the 10-year (-5.8 bps, 4.931%) and the 30-year (-1.9 bps, 5.31%), declined as investors bid up bond prices in their search for safety.

Meanwhile, the Bureau of Labor Statistics (BLS) will share its October update on the employment situation before the opening bell next Friday. Markets expect the data to reflect continuing stability.

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.

Indeed, even after a cooler-than-expected September jobs report, the Federal Open Market Committee (FOMC) remains focused on the inflation problem.

That includes Cleveland Fed President Beth Hammack, who dissented from the decision to hold interest rates steady at the October Fed meeting and promises to generate economic calendar sparks next Thursday.

Note that the Treasury Department announced an I-bond rate of 5.51%, which is fixed for the six months through April 30, 2027, and looks even more attractive after today's price action.

What is it about Berkshire Hathaway?

Berkshire Hathaway (BRK.B, +0.3%), because of what's inside Warren Buffett's and Greg Abel's portfolio, is a lot like an equity index fund. It's actually the biggest financial stock in the S&P 500.

But Berkshire's holdings include American Express (AXP, -1.4%) and Bank of America (BAC, -2.2%), as well as Apple, which remains the biggest holding, and Alphabet, which will go down as Buffett's last major equity buy.

It also includes consumer staples such as Coca-Cola (KO, +1.4%), energy stocks such as Chevron (CVX, +1.7%) and industrials such as Delta Air Lines (DAL, -1.8%).

Today, the blue chip stock traded like a safe haven. Next Saturday, Abel's team will report quarterly earnings for the first time since Buffett's retirement as chairman of the board in September.

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Sir Patrick Stewart, the Shakespearean actor best known for playing Captain Jean-Luc Picard in "Star Trek" and Professor Charles Xavier in "X-Men," not only captured the hearts and imaginations of fans worldwide but also inspired countless others through the reflections he shared over the decades.

Stewart was candid about his life, from growing up in a poor, working-class household in Yorkshire, to becoming a world-renowned stage and screen legend, and all the hard-won triumphs and setbacks in between. While Stewart is no longer with us, having passed away at 86, these quotes offer retirees a map to live by.

Five Life Lessons from Sir Patrick Stewart

1. "I am not averse to risk-taking and I don't judge myself. I used to do that so much. That gets in the way of spontaneity. So I'm braver now than I was when I was much younger."
NPR's Fresh Air interview, July 2, 2020

Maybe you planned to save $2 million for retirement but only have $500,000. Or maybe you planned to age in place but have no choice but to sell your home. Just because things didn't go the way you expected doesn't mean you have to beat yourself up or stop living. You can still take risks in retirement. That's what Sir Patrick is conveying with these reflections.

For example, instead of lamenting the house you had to leave behind, you might take a chance on downsizing to an active community where you can make new friends.

2. "I am now in a place where I can feel and see gratitude for what I have been given. I don't just mean in terms of talent. I mean in terms of friendships."
Bullseye With Jessie Thorne interview, December 12, 2023

Work, work, work. We spend decades working, amassing money for retirement. Then the day comes, and we are in a state of despair. We don't know what to do with our time or our money, so we do nothing.

But that's not what retirement should be about. It should be a time to feel grateful for all the hard work you put in and to enjoy the fruits of your labor.

If you are like the countless retirees who are reluctant to spend, create a withdrawal plan that permits you to do so. Some popular approaches include the 4% rule, the bucket approach, and the guardrails strategy.

3. "You will never achieve success by insuring against failure."
Roundtable Interview With Patrick Stewart And Stephen Belber On Match, April 28, 2014

Are you thinking of moving to a new city in retirement, or have you always dreamed of starting a new business for your second act? If you have big dreams and the only thing stopping you is fear of failure, then don't let it.

That doesn't mean you should take out a loan against your retirement savings to go back to college or launch a startup, but if you have money set aside, you shouldn't let fear of failure stop you from pursuing your dream. At last check, more than half the businesses in America are owned by people 55 and older.

4. "Four years ago I became a skier, I'm officially now an intermediate level skier, and that was at the age of 69." Esquire interview, August 4, 2015

You may think it's too late to go on that trip, pursue that degree or pick up that hobby, but as Sir Patrick shows us, you are never too old to live.

If Sir Patrick could learn to ski at 69, you can pursue your passion in retirement whether you are 60 or 80. Many retirees get stuck in a trap of thinking they are too old to try new things like skiing, but if you are healthy, you should get out there.

5. "I have been inclined to be solitary in huge chunks of my life. I don't think that's a good thing anymore. I think the interaction of being with people, especially people you like, is very important for keeping you sharp, alert, active, and connected."
AARP interview, March 18, 2014

One of the hardest adjustments in retirement is losing the social connections you had at work. For many people, work provides their second families, their best friends, and when they retire, it's gone.

Replacing those social connections is crucial. Without the interactions of people you care about, it could lead to loneliness and depression. So take a page from Sir Patrick and spend some time with friends and family or find ways to stay connected.

Get out there and live

Whether Sir Patrick was reflecting on taking risks or feeling grateful, one thing is sure: this icon lived life to the fullest and made a profound impact on his grieving fans worldwide.

If there’s one lesson to take away from his remarkable journey, it’s that it’s never too late to reinvent yourself. Whatever that means to you, make sure to get out there and live.

Now, make it so.

Editor's note: This article is part of an ongoing series featuring the best retirement quotes and wisdom from top financial experts, leaders, and public figures. Other articles feature Warren Buffett, Michael Jordan, Mark Cuban, Jimmy Buffett, Dr. Seuss, Bruce Springsteen, Bob Dylan, Vince Lombardi, Ronald Reagan, Ozzy Osbourne, Stevie Nicks, George Carlin, Billy Joel, Dave Ramsey, Lionel Messi , Cristiano Ronaldo, Mark Cuban and Dolly Parton.

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I frequently have to remind myself of the old parental axiom "it's not bad, it's just different" whenever I think about rising-rate environments.

You can always catch a little funk in someone's voice when they discuss Federal Reserve interest-rate hikes. That's in part because stocks often throw short-term tantrums in response to climbing rates. Not to mention, rising rates make mortgages, auto loans, credit cards and other lending products — and thus the goods they're used to purchase — more expensive.

Yet there's a wealth of data that shows stocks can be plenty productive no matter rates' direction. While Fed cuts help ease lending costs for corporations and help spark big-ticket consumer spending, hikes are often a response to a hot economy in which demand is usually expanding and corporate earnings are usually rising.

Still, going back to what I said originally, a rising-rate environment might not necessarily be bad, but it's certainly different than a period of flat or declining rates … and for some investors, that might prompt a little tweaking to their playbook. With that in mind, let's discuss a few exchange-traded funds that make sense during periods of rising rates.

Rising rates … and nothing else

You'll frequently hear that no two bear markets are perfectly alike. While there are a variety of investments that have provided defense and even positive performance during market downturns, they don't always act the same way because a bear market driven by, say, a financial crisis might affect sectors differently than one sparked by a tech-bubble collapse.

The same goes for rate environments. The Federal Reserve literally has a "dual mandate" for both inflation and employment. That means two entirely different inputs can hold enormous sway over its monetary-policy decisions. Consider this from our David Payne, describing the circumstances around the Fed's September 16 hike, its first in more than three years:

"Chairman Kevin Warsh's tough inflation talk at his press conference boosted long rates above 5.0%. Bond investors likely interpreted his words as a promise to raise rates more than they had expected over the next year. … The September 16 Fed policy meeting did tell us one thing about Warsh: That he has settled on conventional rate increases as his primary means of fighting inflation."

I say that to say this: If September was more than just a one-off, and we're in for a period of rising rates, how different parts of the market respond might be different than in the past. There's simply no way of knowing.

Instead, the best we can do is consider rising interest rates in terms of their most direct effects, then look for investment products that are shielded from these mechanics … or actually benefit from them.

Data is as of October 29. Dividend yields represent the trailing 12-month yield, a standard measure for equity funds. SEC yields reflect the interest earned for the most recent 30-day period after deducting fund expenses, a standard measure for bond funds. Seven-day SEC yields reflect the interest earned after deducting fund expenses for the most recent seven-day period, a standard measure for money market funds.

Vanguard 0-3 Month Treasury Bill ETF

• Type: Ultra-short bond
• Assets under management: $14.3 billion
• SEC yield: 3.7%
• Expenses: 0.06%, or $6 on every $10,000 invested annually

We'll start with bond ETFs, but first, a bond primer:

Bond yields and bond prices move in opposite directions. If interest rates rise, the yields on existing bonds look less attractive compared to new issues, prompting investors to sell. If rates fall, the higher yields on existing issues look more attractive and draw buyers' interest.

However, that effect isn't felt equally across the bond spectrum. An investor might not be so quick to jump ship for a higher yield if both their old bond and the new bond have, say, just one year's worth of coupon payments to make before they expire. But that switch will look a lot sweeter if those bonds don't mature for another 20 years.

Summed up: The shorter a bond's maturity, the less its interest-rate risk.

That's why investors who want to collect bond income but want to hedge against future Fed hikes often gravitate toward ultra-short bond funds like the Vanguard 0-3 Month Treasury Bill ETF (VBIL). This dirt-cheap Vanguard index fund currently owns 25 T-Bills with maturities between zero and three months. And U.S. Treasury debt is among the best-rated debt on the planet.

This mix of sky-high credit quality and uber-short maturity translates into a duration of just 0.1 years, which implies that a 1-percentage-point rise in market interest rates would result in a mere 0.1% decline in VBIL's net asset value (NAV), and vice versa. But while it's very difficult for this bond fund to lose value, it also pays nearly 3.7% right now, meaning investors can come out ahead even in the face of future rate hikes.

The iShares 0-3 Month Treasury Bond ETF (SGOV) is often called out to fill this need because it has roughly 10 times the assets. But VBIL's annual expenses are 3 basis points cheaper; it's not an enormous difference, but when you're dealing with the thin returns of ultra-short bond ETFs, it's still meaningful.

Learn more about VBIL at the Vanguard provider site.

VanEck IG Floating Rate ETF

• Type: Ultra-short floating-rate bond
• Assets under management: $3.7 billion
• SEC yield: 4.4%
• Expenses: 0.14%

A traditional bond pays a fixed coupon that is set when the bond is issued. The yield you receive depends on the price at which you bought it, but the coupon itself generally doesn't budge.

But floating-rate bonds pay a coupon that's based on a short-term benchmark — nowadays, that's usually the Secured Overnight Financing Rate (SOFR) — plus a fixed credit spread. When the benchmark rate goes up, the coupon increases; when it goes down, the coupon decreases.

You can own these securities via the indexed VanEck IG Floating Rate ETF (FLTR), which invests in roughly 450 investment-grade corporate debt issues with an average maturity of a little more than three years.

That's considerably longer than Vanguard 0-3 Month Treasury Bill's average maturity. However, because FLTR's components are floating rate, they have a similarly almost nonexistent duration of 0.13 years. For that marginally higher risk and just 8 more basis points in annual expenses, we get about 50 more basis points in yield … making this an ETF that should do just fine and dandy in a rising-rate environment.

The flip side, of course, is that you won't get as much out of FLTR as you would from similarly built traditional bonds in the event that interest rates decline.

Learn more about FLTR at the VanEck provider site.

iShares Prime Money Market ETF

• Type: Money market
• Assets under management: $797.1 million
• 7-day SEC yield: 3.9%
• Expenses: 0.20%

Money market funds own low-risk, short-term debt like T-bills, commercial paper and certificates of deposit (CDs). They're the ultimate volatility hedge, quite literally designed to remain at a $1 NAV.

There's no price upside in money-market funds, but you collect income — and when benchmark yields go up, the new debt they eventually buy will pay more, too.

Money market funds have historically been the realm of mutual funds, but in early 2025, BlackRock's (BLK) iShares division launched one in an exchange-traded wrapper.

The iShares Prime Money Market (PMMF) owns U.S. government agency repurchase agreements (repos), CDs, asset-backed commercial paper and other short-term debt with an average maturity of just about 40 days.

It's not a perfect facsimile of the traditional MMF, but it's mighty close. Rather than trading at $1, PMMF typically trades at little more than $100. During its first year or so, its prices ranged between $100.04 and $101.40 — a band of about 1%. But since about April 2026, its band has tightened to between $100.23 and $100.37, which is a much thinner 0.14% spread and a negligible amount of volatility. Meanwhile, you can collect almost 4% at today's prices.

And unlike a mutual fund, there's no required minimum investment threshold. If you can afford a single share — or less, if your brokerage offers fractional shares — you're in.

Learn more about PMMF at the iShares provider site.

State Street SPDR S&P Regional Banking ETF

• Type: Regional bank stock
• Assets under management: $4.0 billion
• Dividend yield: 2.3%
• Expenses: 0.35%

Bonds aren't the only option for leveraging higher interest rates. You can make hay with a few areas of the stock market, too.

Financial stocks and bank ETFs are popular choices when interest rates are on the rise. Banks, after all, make much of their income from the spread between the interest they charge on products such as mortgages and auto loans, and what they pay out to depositors via savings and other accounts. This is called the net interest margin, or NIM.

When rates rise, sure, a bank will offer higher yields on savings and money market accounts, but they'll typically boost what they charge on loans by even more, further boosting their NIM.

That's the logic behind owning funds such as the State Street SPDR S&P Regional Banking ETF (KRE), an index fund that owns predominantly mid- and small-cap regional banks. Holdings include the likes of Montana-based Glacier Bancorp (GBCI), New Jersey's Valley National Bancorp (VLY) and online banking specialist Axos Financial (AX).

Why regionals? Local banks largely stick to many of the rate-tied business lines I mentioned above, whereas Big Four banks and super-regionals tend to have additional businesses such as trading desks and global wealth management that aren't as directly tethered to interest rates.

And unlike bonds, regionals provide both a decent amount of income (more than 2% in yield as I write this), as well as the much more significant upside potential that comes with owning equities.

Even then, there are risks to using regional banks as a rate play. Too-aggressive hiking can depress lending activity. And competitive environments for customer deposits can depress banks' margins.

Learn more about KRE at the State Street Investment Management provider site.

Simplify Interest Rate Hedge ETF

• Type: Trading
• Assets under management: $256.3 million
• Dividend yield: 1.9%
• Expenses: 0.50%

If you're tired of all this subtlety, you're probably ready to hear about the Simplify Interest Rate Hedge ETF (PFIX).

This is a complex trading fund that uses over-the-counter derivatives to create performance similar to what you'd get by owning long-dated put options on 20-year U.S. Treasuries. (Buying a put option is a wager that the underlying asset's price will decline.)

Note that I said "20-year U.S. Treasuries." While the other four ETFs I mentioned are primarily influenced by shorter-term rate moves, PFIX is a hedge against rising long-term rates. Yes, the Fed's rate policy can eventually bleed down to longer-term debt, but many other factors — inflation expectations, economic growth, Fed balance-sheet actions such as quantitative easing/tightening — exert influence, too.

Still, Simplify's ETF is effective at what it does. The 20-year Treasury's rate has bubbled up from about 4.8% at the start of the year to 5.3% recently. PFIX has delivered a 21% total return (price plus dividends) during that time, outdoing the S&P 500.

Learn more about PFIX at the Simplify provider site.

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Homeownership has traditionally been viewed as a financial milestone, but in today’s housing market, that milestone comes with a hefty price tag. From increasing mortgage interest rates to rising home prices as well as the ongoing costs of ownership, many Americans may be considering whether buying a home makes financial sense.

When it comes to renting, that isn't necessarily cheap either. But recent data does suggest it could offer some financial breathing room for households that are considering moving.

If you're wondering if it's more affordable to rent or buy a home in late 2026, here's how the numbers compare and what to consider before making your next move.

How much does it cost to rent in 2026?

According to Realtor.com's September 2026 rental report, the median asking rent across the 50 largest U.S. metropolitan areas was $1,694 per month, down $6, or 0.4%, from a year earlier. This marked the 38th consecutive month of year-over-year rent declines.

Renters are still paying considerably more than they did pre-pandemic though. The national median asking rent remains 14.5% higher than in August 2019, but it's also $80 below its summer 2022 peak.

These figures reflect advertised asking rents for studio, one-bedroom and two-bedroom properties rather than what existing renters necessarily pay.

How much does it cost to buy a home in 2026?

Buying a home has always required a much larger financial commitment upfront when you consider factors like a down payment, closing costs, insurance and taxes, and savings for possible maintenance and repairs. But monthly mortgage payments themselves have left many potential buyers feeling tight on cashflow.

According to the National Association of Realtors, the median existing-home sale price reached $417,500 in September 2026, up 1.3% from a year earlier.

Meanwhile, the average 30-year fixed mortgage rate was 7.24% as of October 29, according to Freddie Mac.

Here's what buying a median-priced home could look like with a 20% down payment:

• Home purchase price: $417,500
• Down payment (20%): $83,500
• Mortgage amount: $334,000
• Mortgage term: 30 years
• Interest rate: 7.24%

Under this scenario, the monthly principal and interest payment would be approximately $2,280.

But your mortgage payment isn't the only expense to consider. Property taxes and homeowners insurance can add hundreds of dollars to your monthly housing costs. Maintenance, repairs and homeowners association (HOA) fees can increase those costs even further.

Buyers who put down less than 20% may also have to pay private mortgage insurance (PMI), which would increase their monthly payment. All of these expenses can add up quickly, potentially making some prospective buyers hesitant if the costs stretch their budget.

However, that doesn't necessarily mean buying a home is the wrong move. If homeownership is one of your goals, take time to review your budget, build up your savings and make sure you're financially prepared for both the upfront and ongoing costs of owning a home.

National averages only tell part of the story. Compare current mortgage options to see what buying a home could look like for your budget with the tool below:

Renting vs. buying: Here's the monthly cost difference

Based on current housing prices and mortgage rates, renting is significantly cheaper than buying when comparing monthly payments.

Here's a breakdown of the estimated monthly costs using national housing data and illustrative property tax and insurance expenses.

Sources: National Association of Realtors, Realtor.com and Freddie Mac. Buying calculations assume a $417,500 purchase price, 20% down payment and a 30-year fixed mortgage at 7.24%. Property taxes and homeowners insurance are illustrative estimates. Renters insurance, maintenance and HOA fees are not included.

Based on these estimates, buying a home costs approximately $1,130 more per month than renting, or about 67% more. Over 12 months, that difference adds up to roughly $13,560.

And that doesn't include the $83,500 down payment, closing costs or ongoing home maintenance expenses.

However, this comparison reflects monthly out-of-pocket costs rather than the long-term financial benefits of renting versus owning. While homeowners typically pay more each month, a portion of their mortgage payment goes toward building equity.

It's also important to remember that this comparison doesn't account for differences in property size, location or amenities. The national median rental and median-priced existing home aren't necessarily comparable properties.

Is it better to rent or buy right now?

For Americans looking to keep their monthly housing expenses manageable, renting may be the more affordable option in today's market, but it ultimately depends on your current financial situation and goals along with the housing market in your area.

Generally, though, renting can also make sense if you're planning to move within the next few years or don't have enough savings for a down payment, closing costs and unexpected home repairs. Plus, renters typically don't have to worry about paying for major maintenance expenses, such as replacing a roof or repairing an HVAC system.

However, buying a home still has its advantages, especially if you're financially prepared and plan to stay there for several years. Homeownership allows you to build equity over time, and a fixed-rate mortgage provides predictable principal and interest payments, even as property taxes and insurance costs can fluctuate.

Ultimately, the right decision depends on your budget, long-term plans and local housing market. National averages offer a useful starting point, but comparing rental prices with the full cost of owning a similar property in your area will give you a clearer picture of which option makes the most financial sense.

Related Content:

• Think You Can Afford That House? Run These Numbers First
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If you run a small business or work for yourself, you may be preparing for Affordable Care Act (ACA) marketplace open enrollment this fall. Business owners and the self-employed account for roughly 28% of working-age marketplace enrollment.

Most people in this position are also their own benefits department. There is no HR team to walk through the options during open enrollment, and no enrollment specialist to follow up with.

That's worth keeping in mind this year in particular, because eligibility rules changed in a way that affects the plans this group buys most, and the change is easy to miss.

What changed

Starting in 2026, enrollment in a Bronze or Catastrophic plan through the ACA marketplace makes an individual eligible to contribute to a health savings account (HSA). That's true even for Bronze or Catastrophic plans that don't meet the IRS definition of a high-deductible health plan (HDHP), which was previously the only avenue to funding an HSA.

More than seven million people fall into this newly eligible category, making it the largest expansion of access to HSAs to date.

The newly eligible group is also growing. For 2026 coverage, nearly 9.2 million marketplace enrollees selected Bronze plans — nearly 40%, up from roughly 30% the year before — as many buyers moved to the lowest-premium tier when enhanced federal premium subsidies expired.

How an HSA can help your finances

First, the limitation: An HSA can't be used to pay insurance premiums, which many Bronze-plan enrollees saw increase substantially this year with the end of the enhanced ACA subsidies. If premiums are where your budget hurts most, an HSA does not address that directly.

What an HSA can do is reduce the after-tax cost of the healthcare you pay for out of pocket. If you chose a Bronze plan, out-of-pocket costs are precisely the trade-off you accepted: A lower premium in exchange for a higher deductible.

An HSA is built for that structure. No other type of account, whether for spending or investing or both, offers the combination of:

• In most states, no taxes on funds added to the account
• No taxes on growth within the account (whether bank interest or investment returns)
• No taxes on withdrawals from the account, so long as funds are used for qualified healthcare expenses

Here is a simplified example for someone who pays income tax. Say you add $1,000 to your HSA for the 2027 calendar year, and this $1,000 is part of your overall income that would otherwise be subject to income tax. When you use that $1,000 to pay for healthcare expenses, you have the full $1,000 available.

Contrast that with paying a $1,000 healthcare bill from ordinary funds. In that case, you would have needed to earn more — say, $1,100 or $1,200, depending on your tax rate — to pay the same bill. You are functionally reducing your healthcare expenses by $100 or $200. For someone who is self-employed, that difference comes straight out of the income the business generates.

There is also no "use it or lose it" provision with HSAs. The balance in your HSA can grow year over year, which is why the tax-free growth can become more significant over multiple years of contributions.

Open enrollment elections

Open enrollment for 2027 marketplace coverage runs November 1 through December 15 in most states — a shorter window than in past years. If you are shopping for Bronze and Catastrophic plans, the plan information will note that HSAs are permitted.

However, insurers generally don't promote that fact, and most state and federal exchange sites are only beginning to incorporate HSA guidance. For those buying coverage on their own, knowing the option exists is the first step.

Putting an HSA to work

You can open and set up an account with a qualified custodian, typically a bank. In 2027, the maximum contribution is $4,500 for individuals and $9,000 for those with family coverage, plus an extra $1,000 if you are 55 or older.

If you contribute on your own, you report those contributions when you file your taxes, and the amount nets off your income — reducing taxes due or increasing your refund.

Balances can be spent on qualified medical expenses for you and your covered dependents, including telehealth services and — new this year — fees for direct primary care arrangements, up to an IRS monthly limit.

Be sure to keep your receipts because you can reimburse yourself for a qualified expense even years after incurring it, allowing the account to grow tax-free in the meantime.

With steady contributions, you may eventually build a balance larger than your plan's annual out-of-pocket maximum. At that point, you may want to consider shifting some of your HSA into investments with the potential to grow faster than bank interest.

The process is similar to making choices within a 401(k) plan, subject to your custodian's options and minimums.

For a business owner or self-employed professional without access to a workplace retirement plan's full toolkit, an HSA used this way becomes a second tax-advantaged savings channel that's specifically matched to a category of expense that tends to grow later in life.

Healthcare costs are a fact of running your own working life. For the millions who became HSA-eligible this year, the account won't solve the premium problem, but it is a durable tool for the costs that come after the premium. This open enrollment season is the natural time to put it to work.

Related Content

• Most Changes to HSAs in the One Big Beautiful Bill Did Not Make the Final Cut
• 10 Myths About Health Savings Accounts
• 15 Ways To Lower Your Healthcare Costs
• How to Handle Costly Medical Bills — Smartly
• Four Ways to Make the Most of Your Benefits During Open Enrollment

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

Few career moves in wealth management generate as much excitement, or as much deliberation, as going independent. Yet advisers keep making the leap, and the data suggests most are glad they did.

The shift isn't a passing trend. Over the past decade, the number of advisers working at independent RIA firms grew at a compound annual rate of 5.2%, according to Cerulli, while other channels stayed flat or shrank.

Freedom is the draw, but it isn't free

When we asked advisers in Betterment's 2024 Advisor Survey why they went independent, 59% pointed to business freedom as their top reason, ahead of personal freedom (51%), access to better technology (44%) and earning potential (43%).

That tracks with what we hear every day. Advisers want to run their practice their way and choose the tools and investments that fit their clients best.

But freedom comes with a new set of responsibilities. On top of giving advice, a breakaway adviser now has to build a brand from scratch, stand up compliance, pick a tech stack and manage every piece of business operations without the infrastructure a larger firm provides.

The first year won't be easy, and many decisions made in the early months will shape the business for years to come.

The good news is that most of the missteps that slow new firms down are avoidable. Here are three we see most often, and how to sidestep them.

1. Skipping the legal review

In the rush to get started, it can be tempting to focus on your new firm before fully understanding your obligations to the firm you are leaving. Questions about client information, outreach and employment restrictions deserve attention before you set a resignation date.

What to do instead: Hire an attorney to review your employment agreement, noncompete and non-solicit terms, and broker protocol status before you resign. Keep your resignation letter short and professional, and don't tell clients your plans until after you've officially resigned.

A compliance consultant can also be worth the investment here, since one small misstep can delay a launch by months and/or result in fines.

2. Underpreparing for client conversations

While reasons for going independent may be clear to you, your clients need to understand what the decision means for them and their money. Advisers often overestimate how hard it will be to bring clients along to their independent practice, and that anxiety can lead to one of two mistakes: Winging the conversation or over-engineering it.

What to do instead: Plan your announcement around what independence means for clients, whether that's better service, stronger technology, transparent fees or a fiduciary commitment.

Anticipate the questions you'll get:

• Why are you leaving?
• How will my accounts transfer?
• Will my investments change?
• How long will it take?

Have clear, confident answers ready, and choose the format that fits each relationship, from an email to a phone call or a face-to-face meeting. Then trust the relationships you've built. Your clients chose you once, and most will choose you again.

3. Trying to manage everything yourself

Launching a new firm involves many moving parts: Selecting technology, establishing workflows, preparing paperwork, coordinating transfers and keeping clients informed. That's a recipe for burnout and a fragmented tech stack, which, according to InvestmentNews, more than half of advisers already cite as their biggest technology pain point.

What to do instead: Treat your custodian as a partner, not just a place to hold assets. The right custodial relationship can provide a dedicated transition team, communication templates, digital onboarding, automated account transfers and real-time tracking of where each client stands.

When evaluating options, ask direct questions:

• Who will support my transition?
• How long will it take?
• What help is available after launch, and is any of it restricted to larger firms?

The degree of human and technology support you can receive will make a significant difference in how heavy that first year feels.

Build the right team around you

A common thread runs through all three potential pitfalls: Going independent doesn't mean going it alone. Legal counsel, tax advisers, compliance experts, peers who have made the move before you and a custodian invested in your success can all take real weight off your plate. That frees you to focus on what you set out to do in the first place, which is serving clients better.

Independence offers the chance to build the business you've always envisioned, serve clients without conflicts and create lasting value. With the right preparation and the right people by your side, the challenges of year one can become the foundation for all the success that follows.

There's no sugarcoating it: Launching your own firm takes grit, planning and a tolerance for a demanding first year. But the advisers who've done it overwhelmingly say they would do it again.

Related Content

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• Savvy Marketing Tips for Financial Pros From a Financial Pro
• How Client Segmentation Can Help Your Advisory Boost Profitability

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.

Deciding between cremation and burial can be difficult, whether you're planning funeral arrangements for a loved one or even pre-planning your own final arrangements. You'll need to weigh cultural and personal wishes against a complex landscape of costs and changing industry standards.

Price is also a factor. According to the National Funeral Directors Association (NFDA) 2023 General Price List Study, a traditional funeral service featuring a viewing and burial has a median cost of about $8,300, while a funeral paired with cremation costs about $6,280.

For those seeking a simpler and more budget-friendly approach, direct cremation — which skips formal viewings and ceremonies — typically ranges from $1,000 to $3,500.

These price points reflect a significant cultural shift in how Americans prefer to handle remains (or "final disposition"). Cremation is now the majority choice, with the U.S. cremation rate reaching 63.4%, compared to a traditional burial rate of 31.6%, according to the 2025 NFDA Cremation and Burial Report (PDF).

Driven by shifting consumer preferences and cost considerations, the cremation and burial industry projects this trajectory to continue climbing — with every U.S. state anticipated to surpass a 50% cremation rate by 2035, and national cremation rates projected to reach 82.3% by 2045.

While national medians offer a helpful baseline, they obscure wide regional and state-level variations. The 2026 National Funeral Cost Index gives us a look into burial and cremation costs around the country. Costs fluctuate significantly depending on local overhead, real estate prices and state regulations, meaning families face vastly different price tags depending on where they live.

Don't count on the Social Security death benefit to help cover the costs. The $255 lump sum death payment has been the standard since 1954, when the average funeral cost $700. Even then, the benefits are payable only to surviving spouses and to dependent children under limited circumstances.

There are alternatives to traditional burials and cremation, but their availability is limited even though interest in them is growing. These options include a green burial, human composting and water cremation.

Burial costs

Much like housing, traditional burial costs across the United States show a steep price gap that highlights how geography, local economies and logistics influence final arrangements.

Traditional burial costs vary dramatically across the country due to a mix of economic and geographic pressures. In high-cost regions like the Northeast and Hawaii, steep real estate prices, high commercial overhead and land scarcity drive up facility and plot fees. For island markets like Hawaii, geographic isolation adds an extra layer of expense through the cost of importing caskets and materials.

Conversely, lower-cost states benefit from suburban and rural settings with minimal operating overhead, while varying state regulations and local wage differences further shape the final price tag families face.

Another major cost factor is the extra expenses not included in a "traditional funeral." Quoted averages typically cover only basic professional services, embalming, body preparation, facility use for a viewing and ceremony, a hearse and a casket. The overlooked extras — which can add $3,000–$8,000 or more to the final bill — include a cemetery plot, grave vault, headstone, flowers, music and obituary notices.

Most expensive states: Hawaii ($11,000) and New York ($10,800) — along with the broader Northeast corridor, including Massachusetts ($10,400) and New Jersey ($10,200) — consistently alternate for the top spot. In these areas, traditional burial costs generally range from $9,000 to $14,000+ (with major metropolitan centers like New York City ($14,040) pushing median costs even higher).

Least expensive states: States in the Deep South, such as Mississippi ($5,900), consistently report the lowest traditional burial costs, with averages typically ranging from $5,500 to $7,500.

Cremation costs: Direct vs full service

When families choose cremation, direct cremation — a service where cremation takes place without formal viewings, embalming or funeral home ceremonies — is the far more popular, budget-driven choice. Nationally, direct cremation averages between $1,000 and $3,500.

By contrast, cremation with a service (which includes a viewing, formal ceremony or gathering) remains a secondary option. While it carries a significantly higher national median average of $6,280, it appeals to families looking to blend the cost efficiency of cremation with traditional memorial rites.

Most and least expensive states for cremation

Just as with traditional burial, specific state price tags reflect local cost of living, commercial real estate overhead and local provider competition. Depending on the specific service level, Hawaii and New York once again contend for the highest costs nationwide, while states in the South and rural West consistently offer the lowest baseline pricing for cremation.

Direct Cremation: Hawaii tops state-level direct cremation baselines at $3,000, followed closely by Alaska ($2,800), New York ($2,600), and Massachusetts ($2,500). Mississippi, Oklahoma and West Virginia share the lowest starting baselines at $1,400.

Cremation with Service: Hawaii leads again with an average of $8,200, with New York ($8,000), California ($7,800) and Massachusetts ($7,800) trailing right behind. Mississippi offers the lowest full-service average at $4,800, followed by Arkansas and Oklahoma at $5,000.

Burial and cremation costs for all 50 states

Your final gift to loved ones

Beyond navigating the financial realities of funerals, preplanning final arrangements offers a profound emotional benefit for surviving family members. By making key decisions in advance — whether choosing between burial and cremation, selecting preferred service details or funding arrangements ahead of time — you relieve loved ones of burdensome financial decisions and logistical guesswork during a time of grief.

These averages are calculated across all 50 states using data from the NFDA 2023 General Price List Study, the Funeral Consumers Alliance, the CANA (Cremation Association of North America) 2024 Annual Report, state funeral board filings made under the FTC Funeral Rule (16 CFR Part 453), CDC NCHS mortality data, and federal consumer expenditure data from the BLS Consumer Price Index: Funeral Services (CUUR0000SEGD).

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Each week in our Ask the Tax Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at five tax questions from readers. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Reverse mortgages

Question: I am planning to take out a reverse mortgage on my primary home. Will I owe federal income tax on the money I receive in the transaction?

Joy Taylor: No. The payments you get from a reverse mortgage are treated as nontaxable loan proceeds. Note that you cannot deduct the interest that you eventually pay on Schedule A of Form 1040. That's because you are not using the reverse mortgage proceeds to buy, build or substantially improve the home that is securing the mortgage.

2. 529 plans and college studies abroad

Question: I have a 529 plan for my son. He is currently in college in the U.S. and is planning to study abroad in the spring. I have been using 529 funds to pay for his college education. Can I use 529 funds to pay for his schooling abroad?

Joy Taylor: In your case, yes. A 529 plan can be used for any college that participates in the U.S. federal student aid program.

If a student is enrolled in a U.S. college and chooses to study abroad through the school's program for a semester or two, as your son appears to be doing, the study-abroad program will be 529-eligible, provided the U.S. college is eligible and the college accepts the study-abroad credits.

If a child decides to enroll in a non-U.S. college for his or her full college education, then that foreign university must participate in the U.S. federal student aid program. And believe it or not, many foreign colleges do participate and would therefore qualify as eligible schools for 529 purposes.

3. Pet insurance provided by an employer

Question: I have a dog, and my employer offers pet insurance as an employee benefit. Can I pay for pet insurance with pretax wages?

Joy Taylor: No. Unlike employer-paid health insurance for workers, which isn't included in an employee's taxable wages, the value of employer-paid pet insurance is taxable income to you. Most employers who offer pet insurance benefits don't subsidize the cost, however, and employees who opt in pay their share through post-tax payroll deductions.

4. Charitable donations

Question: My wife and I usually make large cash donations every year to charity and deduct the gifts on Schedule A of our 1040. Can we still deduct cash contributions up to 60% of our adjusted gross income, or did Congress change this rule?

Joy Taylor: Last year's "One Big Beautiful Bill" made permanent the rule that charitable cash contributions are deductible on Schedule A in a year only to the extent that total cash contributions don't exceed 60% of adjusted gross income (AGI). Excess contributions can be carried forward five years. The AGI limit for donations of capital gain property, such as stocks, bonds and shares in mutual funds, is generally 30%.

You should also be aware of the following new rule, starting with 2026 returns filed in 2027. Charitable deductions claimed by itemizers get a bit of a haircut. The Schedule A charitable write-off is deductible only to the extent that total charitable donations exceed 0.5% of AGI reported on your Form 1040. This is akin to the long-standing rule for deducting medical expenses on Schedule A, in which total medical costs are deductible only to the extent they exceed 7.5% of AGI.

5. How long to keep tax records

Question: How long should I keep supporting tax records, such as Forms 1099 and monthly brokerage records?

Joy Taylor: Generally, we suggest keeping tax returns, 1099 forms and other third-party information returns for at least three years from the due date of your return. But don’t automatically throw out all of your tax returns and records after three years. Look over old documents to see if you might need any parts of them in the future. And there are some records you can toss earlier than three years. How long you keep monthly brokerage statements depends on various factors.

Read more: How Long to Keep Tax Returns and Records and How Long Should You Keep Tax Records?

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.

Read More

• Ask the Editor Archive
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: Is It a Hobby or a Business?
• 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

For decades, Generation X earned a reputation as the pragmatic generation.

• They were the first 401(k) generation, starting in the workforce as traditional pensions gave way to defined-contribution plans
• They learned early that retirement security would largely be up to them
• They saved, invested and have weathered bull markets and crises along the way

Conventional wisdom suggested that these investors would continue working well into their 60s, maximizing earnings, growing career status, and steadily building retirement assets.

Yet, something interesting appears to be happening.

At New Canaan Group, where I am a financial planner, we have observed a growing number of Gen X clients expressing a desire not to merely retire, but to leave careers that no longer align with how they want to spend their time.

Some intend to fully retire years earlier than originally planned. Others envision a second act, perhaps consulting, teaching, working part time, volunteering or pursuing a passion that generates far less income but delivers greater personal fulfillment.

While every client situation is different, the trend is noticeable enough that it raises an important question.

Why is Gen X suddenly rethinking the role of work in their lives, and how can we, as advisers, help them plan for this?

The Great Wealth Transfer

A significant reason that Generation X households are exploring these options is that they increasingly have the financial resources to consider them. One of the largest drivers is the Great Wealth Transfer.

As reported in Kiplinger's recent Trillion Dollar Talk report, nearly $124 trillion will transfer between generations through 2048, with Gen X expected to inherit more than any other generation over the next 10 years, receiving nearly $1.4 trillion annually on average.

The timing of the Great Wealth Transfer is particularly noteworthy because it coincides with the peak earnings years of many Gen X households. Inheritances are arriving when balance sheets are already strong, creating financial flexibility that previous generations did not have.

A different definition of success

Historically, many Gen X professionals were conditioned to view career advancement as the primary path toward financial security and personal achievement. Climbing the corporate ladder, increasing compensation and accumulating assets were often viewed as natural milestones to success.

Today, however, many Gen X investors appear to be redefining what success means. Rather than exclusively focusing on maximizing their assets, clients are increasingly asking us different questions:

• How much is enough?
• What if I no longer earned my current salary?
• Could I retire on my current assets?
• How can I regain more control of my life and time?

This mindset shift closely resembles attitudes often associated with younger generations. Gen Z, for example, has become known for placing high value on flexibility, work-life balance and personal wellbeing. What's surprising is that Gen X investors now seem to be reaching similar conclusions, albeit later in life and from a different starting point.

In addition, for much of their careers, Gen X measured their success against immediate peers and coworkers.

Today, they're exposed to daily stories of early retirees, entrepreneurs, hobbyists and those who have designed lifestyles around lived experiences rather than work.

Whether these examples represent reality or not, the message is still powerful. Life is finite, time is valuable, and there may be alternative ways to spend your most productive years.

The pension challenge — and opportunity

Research highlighted in Equitable's recent Gen X retirement study notes that only 14% of Gen X households have access to traditional pensions, compared with 44% of baby boomers. With pressure on other retirement systems such as Social Security, Gen Xers must rely primarily on assets they have accumulated themselves to generate retirement income.

This creates both opportunities and planning challenges, but gives households more flexibility to leave careers early without worrying about the cost of leaving a pension system.

Turning the dream into reality

For Gen X households who aspire to retire early or pursue a second career, enthusiasm alone is not enough. The goal requires thoughtful planning and disciplined execution.

The first step is defining the goal — what does retirement mean? For many clients, it doesn't necessarily mean never working again. Instead, it might mean replacing the high-stress career with something more manageable.

Just as important, lifestyle goals need to be defined. Does the big house really matter? Would we be willing to relocate to a less expensive area? Does the lawn need to be this green?

Second, investors should focus on maximizing savings during their peak earning years. Catch-up contributions to retirement plans, health savings accounts, deferred compensation plans and taxable investment accounts can help build the financial independence necessary to support a transition from traditional employment.

Third, healthcare planning deserves special attention and is where we see many early retirement plans derail. Bridging the gap between employer-sponsored health insurance and Medicare eligibility can be incredibly expensive.

After years of having subsidized employer healthcare, it's easy to be blown away by the cost of self-insurance. Understanding these costs in advance, long before leaving the workforce can prevent unpleasant surprises later.

Fourth, investors should stress test their plans. Retirement should be properly modeled, and should account for inflation, market volatility, longevity, tax changes and unexpected expenses.

Running conservative projections might help determine whether an early retirement target remains realistic under less than favorable conditions.

Finally, investors should consider the role inheritance might play in their planning, but avoid becoming dependent on it, as its timeline is uncertain. While many Gen X households will ultimately benefit from the Great Wealth Transfer, the timing and amount of inheritance is uncertain.

Sound retirement planning should remain viable even if inherited assets arrive later than expected or differ from assumptions.

Why wait?

Whether influenced by social media, changing cultural values, economic success or the largest intergenerational wealth transfer in history, many Gen X investors are beginning to ask a new question: If money is a tool designed to create freedom, what exactly am I waiting for?

For advisers, helping clients answer that question will be our defining purpose for the next decade.

Related Content

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• The Overlooked Generation: An Expert's Guide to How Gen X Can Finally Get Ahead
• Why So Many Gen Xers Feel Financially Stuck — and What You Can Do About It
• The Right Way and the Wrong Way to Use a 529 Plan That Doesn't Cover the Full Cost of College
• I'm a Financial Planner: Here Are Five Lesser-Known Ways to Avoid Estate Tax

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

Stocks opened lower Thursday and stayed there through the close as market participants wondered what another hot inflation reading means for a December rate hike. The latest batch of corporate earnings also kept a lid on sentiment, with a rare miss from Google's parent, Alphabet (GOOGL), sending the mega-cap stock sharply lower — and renewing fears over big AI spending.

At the close, the tech-heavy Nasdaq Composite was down 1.4% at 26,184, the broader S&P 500 was off 0.3% at 7,720, and the blue-chip Dow Jones Industrial Average was 0.3% lower at 52,342.

Alphabet created a massive drag on the three main equity benchmarks, shedding 12.6% — its worst day ever — after the Google parent unveiled its third-quarter results.

GOOGL reported earnings of $2.67 per share, down 7% year over year, on revenue of $127.6 billion (+25% YoY). The results fell short of Wall Street's estimates for earnings of $3.00 per share on $127.9 billion in revenue, and marked the company's first double miss since Q4 2022.

Alphabet also reported negative free cash flow of $9.07 billion and Q3 capital expenditures of $51.4 billion. The company maintained its full-year capex forecast of $195 billion to $205 billion.

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Long-term debt, meanwhile, jumped to $125.1 billion from $21.6 billion the year prior, signaling a sharp rise in borrowing to fund its AI initiatives.

The quarter-over-quarter slowdown in Search ad revenue growth (+12% YoY in Q3 vs +17% YoY in Q2) outweighs all other points in the print, says Wedbush analyst Ygal Arounian. Worries over free cash flow and spending also weighed on the stock.

But Arounian, who has an Outperform (Buy) rating on Alphabet, believes the company is "well positioned, with a strong ecosystem that, yes, is evolving, but with the pieces in place to capitalize." And Google, he adds, "will prove a winner as AI advertising evolves."

Caterpillar stock has its worst day in six years

Alphabet was the worst Dow Jones stock today, but Caterpillar (CAT) came in a close second. The blue chip stock sank 9.3% — its biggest one-day decline since March 9, 2020 — after the construction equipment maker reported its Q3 results.

CAT said earnings grew 45.5% year over year to $7.20 per share, more than analysts expected. But revenue of $20.7 billion (+17% YoY) fell short of the $20.8 billion Wall Street called for.

"Results reflected strong sales to users across all three primary businesses, led by 75% growth in" its Power & Energy segment, says Oppenheimer analyst Kristen Owen. This division, which supplies AI data centers, has seen impressive growth in recent quarters.

"On the outlook, CAT called for moderate year-over-year growth in Q4 despite difficult YoY comps and change in dealer inventory headwinds, supporting its unchanged mid-to-high teens FY26 revenue growth expectation," Owen adds.

September PCE shows inflation remains elevated

Wall Street also kept a close eye on today's economic calendar. In the wake of what many are describing as a hawkish pause from the Federal Reserve at its October meeting, data from the Bureau of Economic Analysis (BEA) showed the Personal Consumption Expenditures (PCE) Price Index — the central bank's preferred inflation gauge — rose 0.5% from August to September. PCE was up 3.6% year over year.

Core PCE, which excludes volatile food and energy prices, increased 0.3% month over month and was 3.1% higher than the year-ago period.

"Although the inflation data came in line with expectations, because it is higher than the prior month, it emphasizes the problem we face — inflation is not coming down to the 2% target," says Chris Zaccarelli, chief investment officer for Northlight Asset Management.

Still, he says the current inflation level "isn't terrible; it will just require slightly higher interest rates. And despite all of this, growth is very good." Indeed, a separate BEA report showed the U.S. economy grew 3.4% in the third quarter.

Expectations for a December rate hike fell slightly after Thursday's economic data. CME Group FedWatch shows futures traders are pricing in a 78% probability the Fed will increase the federal funds rate by a quarter-percentage point in December, down from 84% one day ago.

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Homeowners who secured adjustable-rate mortgages (ARMs) when interest rates were near historic lows may be in for an unpleasant surprise. As those introductory rates expire, some borrowers could see their monthly mortgage payments jump by hundreds of dollars or more.

Unlike fixed-rate mortgages, ARMs have interest rates that can change periodically after an initial fixed-rate period. For homeowners who locked in rates around 3% during the pandemic, the first adjustment could create a significant strain on their budgets.

Refinancing into a fixed-rate mortgage may seem like the easiest solution, but today's rates could make that an expensive move. Fortunately, there are other ways to prepare. Here are five steps to take before your ARM resets.

1. Find out when your ARM resets and what your new payment could be

If you financed your home with an ARM, your first step should be to confirm when your initial fixed-rate period ends.

For example, with a 5/1 ARM, the initial fixed interest rate period lasts for five years. Then, the annual adjustments start to kick in. With a 7/1 ARM, you can keep your initial mortgage rate for the first seven years. Some ARMs may even adjust rates every six months, so depending on your specific loan, your payments can vary quite a bit.

Your new interest rate typically depends on two factors: a benchmark index, such as the Secured Overnight Financing Rate (SOFR), and a fixed margin set by your lender. The index and margin are added together to determine your fully indexed rate.

Most ARMs have caps that limit how much the interest rate can increase at the first adjustment, at subsequent adjustments and over the life of the loan. Be sure to review your original loan documents or contact your mortgage servicer to confirm your reset date, index, margin and rate caps.

For most standard ARMs, your servicer must send an initial adjustment notice at least 210 days before the first payment at the adjusted rate is due, with certain exceptions. But you should definitely start planning and preparing before that notice arrives.

2. Run the numbers before refinancing into a fixed-rate mortgage

With an ARM, the biggest risk is that your interest rate could cause your mortgage payment to increase past an amount you're able to pay. This is where refinancing can come in handy. However, while refinancing can provide payment stability, it doesn't necessarily mean you'll save money.

If your ARM has a low introductory rate, refinancing before the reset could actually increase your monthly payment. Even after the interest rate adjusts, keeping your existing loan may be more affordable than replacing it with a new fixed-rate mortgage.

For example, let's say you have a $300,000 remaining mortgage balance with 25 years left on your loan. Your ARM's interest rate is increasing from 3% to 5%. Meanwhile, the average 30-year fixed-rate mortgage was 7.32% as of Oct. 22, 2026, according to Freddie Mac.

Here's how your monthly principal and interest payments would compare:

In this scenario, keeping the ARM would cost about $307 less per month, or $3,684 annually, than refinancing into a 30-year fixed-rate mortgage. However, the ARM could adjust again in the future, potentially increasing your payment further.

Refinancing might make more sense if you plan to stay in your home for many years, want predictable payments or expect your ARM rate to rise substantially.

Before making a decision, compare offers from multiple lenders and factor in closing costs, which commonly run around 2% to 5% of the loan amount. Also consider whether restarting a 30-year loan term would increase your total interest costs.

Refinancing isn't always the most affordable option, but comparing current mortgage rates can help you decide whether it's worth considering.

Use the tool below to explore today's refinance offers:

3. Consider making extra principal payments before your rate adjusts

Paying down your mortgage balance before your ARM resets could help reduce the financial impact of a higher interest rate. When your loan adjusts, the new principal and interest payment is generally calculated using your outstanding balance, adjusted interest rate and remaining repayment term.

Making extra principal payments could reduce the amount of interest you owe and potentially lower your payment when your ARM adjusts. However, extra payments won't necessarily reduce your required monthly payment right away.

Another option is a mortgage recast, which allows eligible borrowers to make a lump-sum principal payment and have their lender recalculate their monthly payment based on the lower balance. Not all loans qualify for recasting, and availability for ARMs varies by lender and loan type.

Before making extra payments, contact your mortgage servicer to find out how paying down your balance would affect your payment at the next adjustment and whether a recast is available.

Keep your emergency savings in mind, too. Putting thousands of dollars toward your mortgage could save you money on interest, but it also means having less cash available for unexpected expenses.

4. Talk to your mortgage servicer before you fall behind

If you're concerned about affording your new mortgage payment, you should contact your loan servicer as early as possible. Depending on your loan type, financial situation and eligibility, your servicer may offer assistance such as a loan modification or another mortgage relief program.

A loan modification changes certain terms of your existing mortgage, potentially making payments more manageable. While approval isn't guaranteed and some assistance programs require borrowers to meet specific hardship criteria, it’s worth exploring.

You can also speak with a HUD-approved housing counselor for free or low-cost guidance on managing your mortgage and reviewing available options.

If the higher payment would put a lasting strain on your finances, selling your home or downsizing may be worth considering, particularly if you've built substantial equity. Selling isn't an ideal solution for everyone, especially when moving expenses and the cost of purchasing another home are considered.

Still, exploring your options before falling behind could help you avoid more serious financial consequences.

5. Start preparing your budget for a higher mortgage payment

Homeowners who took out an ARM likely knew the day would come when their interest rate would increase. So one of the simplest ways to handle this is to prepare in advance so it doesn't have a huge financial impact.

First, estimate how much more you'll owe each month. If your payment is expected to rise by $400, that's an additional $4,800 per year you'll need to account for.

Review your current household spending and identify areas where you could free up cash. That might mean reducing discretionary purchases, canceling unused subscriptions or temporarily adjusting other savings goals.

You can also build a dedicated reserve to help cover the difference during the first several months after your rate changes. For example, if your mortgage payment is expected to increase by $400 per month, setting aside that amount for six months would give you a $2,400 cushion. It also provides an opportunity to test whether your budget can realistically handle the higher payment.

Remember that your mortgage rate isn't the only housing expense that could increase. Property taxes, homeowners insurance, HOA fees and maintenance costs can also affect your overall housing budget.

If you're approaching retirement or living on a fixed income, preparing for these expenses is especially important. A higher mortgage payment could leave less room for healthcare costs, travel or other financial priorities.

Don't wait until your ARM resets to prepare

An adjustable-rate mortgage reset doesn't automatically mean financial trouble, but it can create an expensive surprise if you're unprepared.

Before refinancing, review your loan terms and compare what your adjusted payment could look like against the cost of a new mortgage. Paying down principal, exploring assistance programs and building extra room in your budget may also help.

The earlier you start planning, the more options you'll have to manage a higher payment without disrupting your other financial goals.

If you're unsure how a higher mortgage payment could affect your long-term financial goals, a financial adviser can help you evaluate your options and create a plan.

Use the tool below to connect with a vetted financial professional:

Related Content:

• 5 Ways to Shop for a Low Mortgage Rate
• My Mortgage Rate is 6.5%. Should I Refinance If Rates Fall By Half a Point
• Fixed vs. Adjustable-Rate Mortgages: Which Is Better for Buying a Home?

With rising mortgage rates, high home prices, and strict lending standards, intergenerational wealth is becoming the key to homeownership among younger adults.

A recent LendingTree down payment survey revealed that 40% of all current homeowners in the U.S. received financial help with their down payment. That's up from 35% in 2023. More importantly, over a third of those buyers admitted they couldn't have bought their home without that outside assistance.

Helping a child buy a house is an exciting family milestone. But cutting a check without analyzing the tax code can trigger unintended IRS reporting rules, potential capital gains liabilities, and complex estate-planning math.

Failing to plan before moving the money can transform a generous gift into one with unintended tax consequences. Read on.

Where down payment cash originates

The reliance on family wealth for a home down payment breaks down along sharp generational lines. LendingTree found that:

• Generation Z (ages 18–29): Nearly 78% received financial assistance with their down payment.
• Millennials (ages 30–45): Over half (56%) obtained financial help.
• Baby Boomers (ages 62–80): Just 12% received outside assistance when buying their current home.

The demographic splits reveal another layer. Women were far more likely to consider financial assistance necessary: 44% reported they couldn't have purchased without outside backing, compared to just 29% of men.

However, household income had less influence on who asks for help. Homeowners earning less than $30,000 (43%) and those earning $100,000 or more (42%) received down payment help at virtually identical rates.

Yet how that money gets structured dictates tax compliance. Almost half of recipients (48%) received the funds as a gift, 28% took the money as a loan, and 25% used a combination of both. For the gift cohort, tax rules kick in when the funds leave the parents' account.

The $19,000 exclusion rule

Perhaps the most common tax fear among parents is that wiring a gift triggers immediate taxes. In reality, the tax code protects almost all families from paying a dime out of pocket.

Recipients never pay federal income tax on cash gifts, regardless of the size. The donor rarely pays an immediate tax either; parents incur no federal gift tax liability unless their cumulative giving crosses a statutory threshold.

For 2026, the annual gift tax exclusion sits at $19,000 per donor, per recipient. This means:

• A single parent can give up to $19,000 in a calendar year without reporting anything to the IRS.
• Married filing jointly donors can contribute up to $38,000 per child without triggering paperwork.

The limit may be even higher for some families, according to financial experts at American Century Investments. If an adult child is buying a home with a spouse or partner, both parents can give $19,000 to each person in the couple. That allows two parents to transfer up to $76,000 in a single calendar year ($19,000 × 2 donors × 2 recipients) without triggering IRS reporting.

What happens when parents cross the cap

Exceeding the annual gift threshold doesn't trigger an instant tax payment from the parent. Instead, it triggers an informational reporting requirement.

The donor must submit IRS Form 709 (Gift and Generation-Skipping Transfer Tax Return) by the April 15 tax deadline following the year of the gift.

Form 709 tracks how much of the federal unified lifetime exemption has been used. The 2026 lifetime estate tax exemption sits at roughly $15 million per individual (or $30 million for a married couple).

Because that cap is so high, almost no one ever pays an actual gift tax. However, standard home down payments easily overshoot the annual allowance.

• Federal Reserve Economic Data (FRED) shows the national median home sales price hovering around $408,500 in the first quarter of 2026.
• At the same time, LendingTree data shows that buyers put down a significant amount to secure a home. For instance, 23% paid at least 20% to avoid private mortgage insurance (PMI) and minimize monthly payments.
• A 20% down payment on a median-priced home comes to about $81,700.

If a single parent wires $81,700 directly to a child's escrow account, the gift exceeds the annual exclusion by $62,700. The parent must file Form 709 the following spring.

While no tax is due, failing to file the form means the IRS statute of limitations never starts running. That leaves the transaction open to audit scrutiny indefinitely and can create messier estate reconciliation for heirs later.

Watch out for capital gains tax and asset traps

Although the cash transfer itself is rarely taxed, how parents generate that cash can create immediate financial liabilities. For instance, parents may liquidate investments — which can trigger three primary tax traps:

• Capital gains realization: Selling appreciated stocks or mutual funds in a taxable brokerage account triggers capital gains taxes in the year of sale. Depending on income, long-term capital gains tax rates can sit at 15% or 20%, plus a potential 3.8% net investment income tax (NIIT).
• Retirement account income spikes: Pulling cash from a traditional IRA or 401(k) counts as regular taxable income. Parents may be bumped into a higher federal tax bracket or trigger Medicare IRMAA surcharges if they tap these accounts for a down payment.
• Loss of the step-up in basis: Transferring appreciated property or assets directly during life forfeits the step-up in basis that heirs would receive upon inheriting the asset after death. (For more information, see Kiplinger's report, How Your Inheritance Actually Gets Taxed: From Stepped-Up Basis to IRA Rules.)

Before liquidating a portfolio, financial advisors often suggest that taxpayers consider state down-payment assistance programs first. For example, North Carolina offers a $15,000 forgivable mortgage for eligible first-time homebuyers.

If parents choose to move forward with financial help, experts typically also recommend explicitly formalizing whether the funds are a gift or a loan. The IRS requires private family loans to charge at least the Applicable Federal Rate (AFR), and lenders report that interest as taxable income.

Key takeaways for parents

Helping adult children secure a home provides a valuable financial leg up in a tight housing market. But making a large financial gift requires balancing parental generosity with sound tax management.

Before writing the check, parents should keep these three fundamentals in mind:

• Leverage gift timing: Use year-end timing across December and January to transfer larger sums without triggering extra paperwork. For example, a parent can give $19,000 before December 31 and another $19,000 in January without exceeding the annual exclusion in either tax year (though the 2027 annual gift tax exclusion may be higher).
• File Form 709 without fear. If a parent's gift exceeds the annual cap, file the informational return. It tracks against the multi-million-dollar lifetime exemption and will not cost taxpayers out-of-pocket tax dollars.
• Calculate the cost of cash. Parents should factor in the capital gains tax or retirement-income hit before liquidating assets, ensuring that helping their child buy a home doesn't compromise their own long-term financial security.

A quick conversation with a qualified tax professional and a clear paper trail today can ensure that parents helping their children build home equity doesn't create an unnecessary tax bill tomorrow.

This article does not cover state income or gift taxes and is for educational purposes only. The content does not constitute financial, legal, or tax advice.

Read more

• How the IRS Values (and Audits) an Inherited Home
• About 40% of Heirs Say They Can't Afford an Inherited Home
• The Gift Tax Exclusion 2026: Limits, Rules and Filing Tips

Triple net lease (NNN) commercial real estate means that the tenant handles insurance, taxes and maintenance on the asset along with rent and utilities, leaving the landlord with minimal responsibilities.

For real estate investors who are sick of managing multifamily buildings or juggling a dozen different residential assets, they can be a great option if you want to 1031 exchange into something that's a little bit more hands-off (with the understanding that every asset will, at some point, require at least some of your attention).

With NNN, ongoing day-to-day maintenance is significantly lower than it is with other types of real estate that you directly own. No one will be calling you about a leak. No one will need you to fix a toilet. As long as the tenant keeps paying rent, your responsibilities are largely limited to filling out some paperwork here and there.

Put a different way: On the passive-active continuum, NNN is somewhere between a REIT and a rental.

If you clicked on this article, you're likely already interested in investing in your own NNN asset. You might have even checked some of them out with a broker or an adviser.

But what should you be looking for before going under contract?

We're a private family office that specializes in triple (NNN) and double (NN) net lease commercial real estate, having facilitated over $470 million worth of transactions over the past few years.

Here's what our team looks at first.

1. Tenant creditworthiness

Imagine you're renting out a single family home and your renter pays the property taxes, insurance and takes care of the maintenance. You're ecstatic.

When you first hear about NNN commercial real estate, you might have a similar reaction.

There's only one problem: What happens if that tenant loses their job? Or, in the case of commercial real estate, what happens if the tenant goes bankrupt?

That's why tenant creditworthiness is the number one factor when evaluating single tenant net lease assets. Your tenant's ability to pay rent is essential, which is why it's prudent to invest in the highest quality tenant you can find. If that tenant stops making money, there's a chance that they'll default on the lease.

Look for national corporate tenants with an investment grade of BBB- or higher (depending on your risk tolerance), with the understanding that there's a close relationship between risk and return. If you're investing in McDonald's corporate-guaranteed ground leases, you're taking on very little risk, so you can expect very little reward.

If you invest in a regional quick service coffee operator, you can expect significantly higher reward while taking on more risk.

2. Corporate guarantee

A corporate guarantee is a legal promise by one company (often a parent company or affiliate) to cover the financial or contractual obligations of another business entity (such as a subsidiary) if it defaults.

For instance, let's say you purchase an oil change garage in what turned out to be a bad location, but your lease is corporately guaranteed by a national operator with 500+ locations across the country.

The beautiful thing about economies of scale is that even if that location underperforms, the operator might be willing to not turn a profit on it. Intelligent accounting might allow them to use the losses from that location to offset gains from another location.

Suffice it to say, it's important to have a corporate guarantee on your lease — and it's important for this guarantee to be backed by the corporate entity involved in the transaction, not just single LLC or franchisee.

This is a common pitfall for newbie commercial real estate investors: You might think you're getting a great deal on a property only to find out that the lease guarantor isn't necessarily connected to the actual tenant — or at least not in any way that would allow you to recoup significant losses.

If the Wendy's is "corporately guaranteed" by Wendy's 456 Lakewood Dr LLC, for instance, that LLC could be easily dissolved in the event of that location's underperformance.

Commercial real estate can get confusing fast, particularly when there are multiple LLCs involved in a single transaction. Always pay attention to who is actually guaranteeing the lease. If it's a franchise entity, you need to know that going in.

3. Long-term leases

Let's return to that residential metaphor and assume you have a tenant who's been diligently paying the taxes and insurance on your property, fixing up the roof, replacing the gutters and so on.

What if they decide to leave one day?

You'll be stuck trying to find a new tenant just like them, and if it's a location that's perfect for them (but not necessarily anyone else), you might have a difficult time finding a new tenant. That's when your low landlord responsibilities might become a little bit more intensive.

Take a dialysis clinic as an example. In a dialysis clinic, there will be 20 to 40 bays with mechanical, electrical and plumbing coordination. A water treatment room houses the reverse osmosis and bicarbonate distribution infrastructure. Usually, this is all purpose-built to be used as a dialysis clinic, since finding a new tenant for that space can be difficult.

That's why you'll want to secure a tenant with a long-term lease (anywhere from eight to 20 years or more). That way, you'll have plenty of room to plan accordingly if you ever run into any re-tenanting issues.

Know the difference between NN, NNN and absolute NNN

There's unfortunately no authoritative definition for these that everyone sticks to, and offering memorandums for net-lease assets tend to conflate NNN with what we would call NN. The three "Ns" typically refer to insurance, taxes and maintenance.

Some offering memorandums will say that it's an NNN lease with the tenant handling the roof and structure.

In our opinion, that's maintenance. Some might say that the "maintenance" in NNN only refers to "common area maintenance." We think that's confusing.

We only use two definitions: Absolute NNN (tenant handles all maintenance, insurance and taxes) and NN (tenant handles insurance, taxes and maybe some maintenance, but you're on the hook for roof and structure).

In conclusion

If you're interested in investing in NNN and NN assets, there are three specific things to look for:

1. Tenant creditworthiness (look for national tenants with credit ratings north of BBB-, depending on what you're looking for)

2) Corporate guarantees (from the parent company, not an individual franchisee or LLC)

3) Long-term leases (so you can plan your exit accordingly)

If managing an entire NNN acquisition all by yourself seems overwhelming, our private family office can help. We built out seven divisions to simplify the process of acquiring a commercial real estate property.

Related Content

• How Commercial Real Estate Investing Can Add Balance to Your Portfolio
• I'm Retired and Hate Being a Landlord. Should I Sell My Rental Property?
• A Cautionary Tale: Why Older Adults Should Think Twice About Being Landlords
• Don't Defer Retirement if You're a Landlord, Defer Taxes Instead
• Nearing Retirement and Done Being a Landlord? Here Are All of Your 1031 Options

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

Most of the conversation about Trump Accounts has focused on the beginning.

Who gets the $1,000. Whether families should contribute more. Whether a 529 plan is still the better place to save for college.

There's also been plenty of discussion about what happens at 18, when the account begins operating under traditional IRA rules. One obvious strategy is to convert some or all of it to a Roth IRA while the young adult is still in a low tax bracket.

As a financial adviser with more than 25 years of experience, I see that that's where planning gets more complicated.

An 18-year-old college student with little income might look like the perfect Roth conversion candidate. Under the kiddie tax rules, that assumption can be expensive.

What changes at 18

A Trump Account is a traditional IRA with special rules during childhood. Money generally can't come out before January 1 of the year the child turns 18. After that, it's generally treated as a traditional IRA.

Family contributions aren't deductible, so they become basis and come back tax-free. The government's $1,000 pilot contribution and qualifying employer contributions don't create basis. They're taxed as ordinary income when withdrawn, along with all the growth.

Here's a hypothetical: Ignoring the $1,000 pilot contribution for simplicity, a family that contributes $5,000 a year for 18 years and earns 7% ends up with about $170,000: $90,000 of contributions and $80,000 of growth.

Left alone until 65, it grows to roughly $4 million, nearly all of it taxable when withdrawn. That's why a Roth conversion is so appealing.

Why the kiddie tax changes the math

The kiddie tax generally applies to children under 18, to 18-year-olds whose earned income doesn't cover more than half their support and to full-time students ages 19 through 23 who don't meet that earned-income test. A taxable Roth conversion is unearned income for this purpose.

For 2026, the first $1,350 is effectively sheltered, the next $1,350 is taxed at the child's rate, and net unearned income above $2,700 is generally taxed using the parents' rate.

There's a second constraint. You can't convert only the tax-free dollars. Basis is spread pro rata, so every conversion carries the same taxable percentage as the whole balance.

Trump Accounts have an unusual twist: the IRS applies that calculation to the Trump Account separately from any other IRAs. In our example, about 47% of every dollar converted is taxable.

Here's what timing does, holding the balance constant and using 2026 federal rates.

Converting everything at 19 as a full-time dependent student. About $80,000 is taxable, and almost all of it above $2,700 is taxed at the parents' rate. For parents in the 24% bracket, the federal tax is about $18,700.

Converting over two years after graduation, on a $45,000 salary. Each year adds $40,000 of taxable income on top of the salary. The added federal tax is about $13,300.

Converting over two years once the kiddie tax no longer applies, with little other income. A young adult who is no longer a dependent gets the full $16,100 standard deduction and the 10% and 12% brackets. The federal tax is about $5,200 total.

Same account, same conversion and a difference of more than $13,000. The lesson isn't to convert at a particular age. It's to identify the right tax window.

The FAFSA problem

Because a Trump Account is a type of traditional IRA, the balance should generally fall under the FAFSA's exclusion for retirement accounts.

The conversion income is the issue. It lands on the student's tax return, the FAFSA uses tax information from two years earlier, and student available income, after applicable allowances, is assessed at 50%.

If need-based aid could be significant, model the FAFSA effect before converting, and consider avoiding large conversions in tax years that will feed into an application.

What families should do now

Keep records of every contribution. After-tax dollars are basis, and the young adult will need to document it on Form 8606. That applies to grandparents' contributions, too.

Give each account its own job. For college, the 529 is still the right tool. Qualified withdrawals are free from federal tax, and a parent-owned 529 gets favorable FAFSA treatment.

Up to $35,000 of leftover 529 money can also roll to the beneficiary's Roth IRA, subject to annual limits and other requirements, if the account has been open at least 15 years. The Trump Account is better suited to money the family doesn't expect to need for decades.

Plan the conversation, not just the conversion. Your child owns the account from the beginning, even though a responsible party manages it during childhood. By adulthood, the conversion decision is theirs. The families who get this right will be the ones who explained the plan at 16, not the ones trying to explain it at 22 while the tax return is being prepared.

The rules are still developing

Treasury and the IRS have issued guidance and proposed regulations covering the pilot contribution, account administration, employer contributions and eligible investments. But several regulatory provisions remain reserved for future guidance, and some of the regulations are still proposed rather than final.

Everything here reflects the law and guidance available as of September 18, 2026. Revisit the strategy as additional guidance arrives, and certainly before the first conversion.

The bottom line

For families who qualify, the $1,000 pilot contribution provides a free head start. But that isn't where the most important planning happens.

Treat the Trump Account as what it is: an IRA with an 18-year runway. What happens after that runway ends can have a meaningful effect on the account's after-tax value. Getting the timing right could ultimately matter more than the original $1,000.

Tax rates and limits reflect 2026 federal law as of September 18, 2026 and may change. Examples are hypothetical, assume constant 7% returns, hold balances constant where noted, exclude the $1,000 pilot contribution, and are for illustration only. They do not represent any specific investment or client. State taxes are not included. This article is educational and is not tax or legal advice. Radiant Wealth Management operates under NewEdge Advisors, LLC and is not affiliated with the U.S. Treasury or any account provider mentioned.

Related Content

• Should You Start a Trump Account for Your Child?
• How Trump Accounts Compare With 529 College Savings Plans
• I'm a Financial Planner: Trump Accounts Are a No-Brainer if You're Eligible (How to Apply)
• I'm a Financial Adviser Who's About to Have a Kid: This Is How I'll Handle Trump Accounts
• When a Long-Term Care Insurance Company Drops the Ball, What Should You Do?

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.