With an FSA, employees can make payroll deposits into their accounts to build a cushion to pay insurance deductibles or pay for qualifying medical expenses, or other items not covered by insurance.

Deposits are made with pre-tax dollars, before any federal or state income taxes, Social Security taxes, or Medicare taxes are withheld from your paycheck. That means your FSA deposits are not included in your taxable income. In other words, it’s essentially “tax-free.”

Want to know more? Read on.

What’s an FSA and what’s so great about it?

FSAs are employer-sponsored savings accounts that allow employees to set aside money from their paychecks, before taxes, to pay for healthcare and health-related dependent care expenses.

This tax-free money establishes a revolving, self-replenishing fund from which an employee can pay insurance deductibles, copays, and other qualified medical expenses.

Qualifying FSA expenses include, but are not limited to:

• Prescription medications and most over-the-counter medications (like cough remedies)
• Medical equipment and supplies, like monitoring devices (e.g., CPAPs), canes, hearing aids, first aid, and emergency care
• Denture and orthodontic care, like adhesives, retainers, and dental treatments like fillings and crowns
• Prescription eyeglasses and contact lenses, including over-the-counter contact lens care and maintenance supplies.

FSA downsides to watch out for

Having access to tax-free money to pay healthcare bills can be great, but it’s a good practice to keep tabs on how much you’re putting into your account.

As mentioned, the IRS has announced higher contribution limits for next year (2026): $3,400, up from $3,300 in 2025.

But if you contribute more than the FSA threshold to your account ($3,400 for 2026), your deposits lose their tax advantage and will be taxed as wages at your applicable income tax rate.

The fact that FSA deposits are made through your employer’s payroll system can act as a brake of sorts on the amounts you’re contributing.

Another reason to monitor your FSA balance is that if you don’t spend all the money in your FSA by your health plan’s year-end, the balance will be forfeited to your employer. That’s pretty harsh.

• Employers may allow employees a grace period after the plan year’s end to spend the funds, or allow the employee to roll over a certain amount (up to $680 for 2026) to the following plan year.
• But an employer isn’t required to provide that relief.
• And if an employee leaves the company, the money in their FSA account stays with the employer. That's because under IRS rules, the account belongs to the employer, not the employee.

In either case, it’s in your best interest to exhaust all your FSA account funds before the plan year ends or before you leave the company.

Is an FSA right for me?

It depends. Employers may elect to offer FSAs to employees in addition to their standard benefits package, but it’s not a requirement. In addition, only employers can sponsor FSAs, so if you’re self-employed, you’re out of luck. (There are alternatives for you, but they’re governed by different rules.)

However, FSAs can be good for people with ongoing routine medical expenses — prescription and non-prescription drugs, glasses, contact lenses, and products for their maintenance, denture and orthodontic care products, and other dental treatments.

Dependent care FSA limit 2026

Employees with child or adult dependents who require care so the employee can work can open a dependent care FSA in addition to a healthcare FSA (these are separate accounts under IRS rules).

And some good news: The dependent care FSA limit is significantly increasing for 2026.

For 2026, the maximum dependent care tax-free contribution is $7,500, up from $5,000 in 2025. Eligible expenses include:

• Childcare (day care, pre- and after-school care)
• Summer camps (not overnight)
• Babysitters or nannies (work-related)
• Adult day care for a dependent parent or spouse

Not FSA-eligible? Consider an HSA

Under IRS rules, FSAs can only be sponsored by employers as part of an employee’s health benefits package, and in fact, the account belongs to the employer. So, individuals who aren’t employed are ineligible for an FSA.

But the self-employed and others aren’t left in the cold when it comes to a tax-advantaged savings account. They can open a health savings account (HSA), with all the tax benefits of an FSA and more, provided they meet a key requirement: they must be enrolled in a qualifying high-deductible health plan (HDHP).

However, HSAs come with their own contribution limits and pros and cons. For more information, see Kiplinger’s report: An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for You.

Read More

• What Medical Expenses Are Deductible?
• Hidden Costs and Tax Benefits of Health Savings Accounts
• Child Tax Credit: How Much Is It for 2025 and 2026?

Every December, people do the same rituals: They check their credit card rewards, swear they're finally going to tidy up the garage and promise they'll eat fewer cookies in January (not to mention resolve to go to the gym and get those rock-hard abs). Oh, and lose weight — maybe that goes without saying.

But there's one year-end task that matters a lot more than resolutions you probably won't keep for long, and it should take less time than you think: review your insurance.

If that sounds boring, consider this: Insurance is the thing you buy hoping you'll never need it. So if you do end up needing it, you want to be very sure it still fits your life — not the life you had three, five or 10 years ago. As you know, change is inevitable.

Let's walk through the year-end insurance check. It's simple, it's mostly free, and it can save you from nasty surprises and unnecessary heartache.

Do a quick 'life change' scan

Before you open a policy, take two minutes to ask yourself: "What changed this year?"

Common changes that should trigger a review:

• You bought or sold a car, RV, boat or e-bike
• You remodeled, added solar, built an ADU (accessory dwelling unit) or upgraded the kitchen or bathroom(s)
• You started working from home full time or launched a side business
• A child started driving, moved out or moved back in (check gray hairs)
• You got married, divorced or combined households
• You traveled more, rented out your home or made it available for renting via Airbnb or a similar service
• You adopted a dog (especially certain breeds) or added a pool/trampoline

Insurance follows risk. If your risk changed, your coverage needs to as well.

Homeowners: Confirm your coverage actually matches the rebuild cost

Most homeowners assume their dwelling limit (called Coverage A) is "whatever online searches show my house is worth." That's not how it works. Not even close.

Online sites such as Zillow show what they consider to be your home's market value. Insurance is about rebuild cost. In many areas, especially where labor and materials have spiked, such as after a large disaster, rebuild costs will be way higher than what you or anyone ever thought they would or could be.

Think of Coverage A like the foundation of your policy. If it's wrong, everything built on top of it is shaky.

Homeowners: Look hard at your deductibles

Deductibles, especially when listed separately for wind, hail or wildfire, are where you take on more risk yourself.

Two things to review:

• Your standard deductible or percentage
• Any separate percentage deductibles for other types of events

A 2% wildfire deductible on a $1 million dwelling limit is $20,000 out of pocket before the policy pays a dime. Many people don't realize that until it's too late.

If a claim happens tomorrow, could you comfortably write that check?

If not, fix it now, not during a disaster.

Homeowners: Spot the silent gaps

Policies age. So do your assumptions. Here are common year-end blind spots:

Ordinance or law coverage. If you rebuild after a loss, code upgrades can be expensive. Without enough ordinance and law coverage, you pay that yourself.

Loss of use limits. If rents jumped in your area, your additional living expense limit may be too low.

Water backup/sump pump/sewer overflow coverage. These are often add-ons. If your neighborhood floods during heavy rain, check whether you actually have this.

Coverage for jewelry, art, collectibles, firearms, wine, musical instruments. Sublimits are small. If you own expensive items, schedule them.

Your policy is full of "yes, but only up to…" statements. Find those and make sure you understand them.

Auto owners: Confirm that liability fits your current assets

Liability is the part of auto insurance that protects you when you hurt somebody else. It's also the part where most people are underinsured.

A rule of thumb: Your liability limit should at least match your net worth. If you have more to lose now than when you bought the policy, update it. You've worked hard — now protect the assets you've accumulated.

Auto liability is cheap relative to what it protects. This is not the place to pinch pennies.

Auto owners: Update usage and drivers

Insurers base your premium on who drives and how much.

Umbrella insurance: Consider this

Umbrella insurance is the extra layer above home and auto liability. It's one of the best bargains in insurance, but only if the underlying policies are set correctly.

If umbrella insurance is the roof, home and auto liability are the walls. Don't leave gaps between them.

The final step: Document everything and put it on the calendar

A review that lives in your head is a review that disappears by February.

What you can do:

• Write down what you checked and what changed
• Save current declarations pages in one folder
• Set a reminder for next December
• Email your agent a short list of updates or questions

Insurance isn't a set-it-and-forget-it prospect. It's set-it-and-review-it-regularly.

Want to learn more about insurance? Visit icgs.org.

Related Content

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• 10 Mistakes People Make After They're in a Car Accident
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• Five Reasons You Might Hate Your Insurance Company (and Why You Shouldn't)

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.

This proposed deduction would be in addition to the standard deduction, which most taxpayers currently claim.

The proposal comes on the heels of a massive 2025 Trump/GOP tax and spending bill that offers taxpayers several new deductions for car loan interest, overtime pay and tip income.

However, Hawley's proposal, which would have to clear significant political hurdles to advance in Congress, wouldn’t replace the Affordable Care Act (ACA) premium tax credits.

Those credits, which help millions of Americans afford health care premiums, have been at the heart of debate on Capitol Hill since the government shutdown.

Will there be significant changes to health care tax breaks in 2026?

No taxes on health care?

In a release about the bill, Hawley points out that “nearly 41 percent of adults in the United States have some form of debt stemming from medical expenses. In the last year alone, a recent Gallup report found that 31 million Americans borrowed money to pay for health care.”

To address that, Hawley’s bill would expand the existing medical expense deduction, which currently is available only to taxpayers who itemize and only for expenses above 7.5% of adjusted gross income.

His plan would move that deduction “above the line,” so that any taxpayer could claim up to $25,000 per person in out‑of‑pocket medical spending, including premiums they pay directly for coverage.​

The proposal, announced in early December, is framed as “no taxes on healthcare,” echoing recent GOP slogans such as “no tax on tips” and “no tax on overtime.”

What about ACA tax credits?

ACA premium tax credits lower marketplace premiums up front based on income and plan cost, and enhanced subsidies created by pandemic‑era legislation are set to expire at the end of 2025 unless Congress acts.

• Hawley’s bill doesn’t extend those ACA subsidies and doesn’t create a new ACA‑style credit.
• Instead, his proposal offers a separate federal tax deduction that would come into play at filing time, not at the time you purchase a health care plan.​

Because deductions reduce taxable income rather than premiums directly, they generally deliver less relief than a dollar‑for‑dollar subsidy, particularly for lower‑income households with little tax liability.

If enhanced ACA credits lapse, many marketplace enrollees could see substantial premium increases in 2026, regardless of Hawley’s idea. Nonitemizers would still likely be left weighing higher monthly bills against a possible year‑end tax break

Who might benefit?

Generally speaking, an above‑the‑line health deduction would skew toward taxpayers with enough income and out‑of‑pocket costs to fully use it. Think middle‑ and upper‑middle‑income households buying their own coverage without employer help.

Lower‑income consumers who currently rely on ACA subsidies, Medicaid, or employer plans with modest worker premiums might see little or no direct gain from a health care tax deduction such as Hawley’s. That's because they often don't pay enough income tax to fully benefit from a large deduction.

And ... a tax deduction wouldn't prevent coverage loss for people who can't afford the higher gross premiums that will come if enhanced ACA credits expire.​

Health care premiums: Bottom line

Key mechanics of the Hawley plan remain vague, including a major fiscal issue: How the government would offset the revenue loss from such a significant, broadly available health care tax deduction.

For now, the long and short of it is that Hawley’s bill is just a proposal.

Senate Democrats, meanwhile, continue to push for an extension of ACA subsidies rather than a deduction‑based alternative.

The health care tax debate rages on.

Read More

• What's in Trump's 2025 Tax Overhaul Bill?
• ACA Tax Credits and the Government Shutdown
• Most Overlooked Tax Deductions and Credits
• Premium Tax Credit: Are You Eligible?

Steep increases in auto insurance premiums following the COVID-19 pandemic have been a major contributor. Costs for auto repairs have swelled, too, up 15% year over year in August, according to CPI data. Tariffs of 25% on imported car parts are driving up repair costs, as are more-complex repairs for vehicles packed with advanced technology, such as sensors that assist with blind-spot monitoring or warn you when you drift out of your lane. After a crash, fixing damage to these systems can add up to 37.6% to repair costs, according to AAA.

To mitigate ballooning car ownership expenses, try making these moves.

Consider ownership costs when you choose a car

As you decide which model to buy, think beyond the purchase price. Picking a vehicle with solid fuel economy rather than a gas guzzler could save you hundreds of dollars a year. You can select vehicle models and compare their fuel economy and estimated annual fuel costs at the U.S. Department of Energy’s fueleconomy.gov (in the “Find & Compare Cars” section, click on “Compare Side-By-Side”).

Reliability ratings of car brands can help you determine the likelihood of a car needing frequent repairs. In its most recent assessment of vehicle dependability, which tracked problems in the first three years of car ownership, J.D. Power found that Lexus rated highest overall. Among mass-market brands, Buick, Mazda and Toyota topped the rankings.

With online calculators, you can assess a car’s overall ownership costs. The tool from automotive-research site Edmunds estimates a car model’s total five-year costs, including insurance, maintenance, repairs, fuel and other factors. At Kelley Blue Book, a vehicle valuation and research company, offers a tool that lets you do a side-by-side comparison of five-year costs for various models.

Manage the ongoing expenses

If you haven’t compared quotes on auto insurance policies in a while, it’s worth shopping around; you can gather quotes on sites such as Policygenius.com and TheZebra.com. Take advantage of any discounts you qualify for, such as for automatic bill payments or low annual mileage.

Stay on top of routine maintenance, such as oil changes and brake inspections, to help avoid costly repairs down the road. You may spend less at an independent garage or oil-change shop than at the dealership, according to Edmunds (although certain tasks, such as work on sophisticated electronic systems, are best performed at the dealer). Look for coupons or specials that offer discounts on maintenance services.

When you buy gas, use an app such as GasBuddy to check for the lowest prices at stations near you. Some credit cards provide extra rewards on fuel purchases. The Costco Anywhere Visa Card by Citi, available to Costco Wholesale members, offers 5% cash back on gas purchased at Costco and 4% on fuel you buy elsewhere (you’ll earn those rates on a combined $7,000 in annual fuel spending and 1% thereafter).

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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But as snowbirds know, your home is left behind and has to deal with any harsh winter conditions it encounters.

And if you return home and find damage, you might be in for another surprise: Your provider might not cover it. Because of that, you'll want to address these common insurance gaps before taking off for the winter.

Leaving your home unoccupied

Say you return home after a restful season, only to discover some minor damage from a leaky roof shingle. No worries, you call your home insurance carrier to start a claim, and they ask if someone watched the home while you were away.

How you answer that question can determine whether you're out thousands or just your deductible. Some insurance companies won't cover home damage if the homeowner isn't home for 30 days or more and doesn't assign someone to watch it under the vacancy clause.

This is why it's integral to have someone visit your home regularly while you're away. They can pick up anything that arrived that you might have forgotten, and check to ensure your home is OK.

To see if this applies to your home, contact your insurance carrier. It's also a great time to shop around to see if you're receiving the best deal. Use this Bankrate tool to compare options fast and save money:

Failing to protect your pipes

One area that winter weather impacts the most is your home's pipes. If your insurance carrier determines that your pipes burst due to you turning off your heat or because you failed to insulate them properly, you may be liable for all the damage the leaks wrought.

That is why you'll want to do the following:

• Outside: If you have any garden hoses connected, remove them, drain them and store them somewhere dry. Next, you'll want to shut off any outdoor water valves. You can find these inside your home near the pipe on the wall that goes outside.
• Insulate your pipes: You can buy foam insulation at your local hardware store, cut it to size, wrap it around the pipe and secure it with insulation tape. Doing this will keep the pipes warmer, making them less likely to burst when the temperatures dip.
• Turn off the water supply: On the day you leave, shut off the water supply entirely, unless you have someone planning to housesit for a portion of the trip. To locate the main valve, look for the point where the water pipe enters your house, typically near your water heater, basement or crawl space.
• Lower, don't turn off the heat: Set your thermostat eight to 10 degrees cooler than you normally have it while there. This keeps your home cooler without shutting off the heat entirely, which can make your pipes more susceptible to damage.

Keeping your car stored outside

If there's a vehicle you don't plan to take on your winter journey, you want to ensure it remains in an airtight garage or car capsule before leaving. The reason? Over the winter, critters of all types can find cars and use them as nests to build their families.

As cute as that sounds on the surface, they'll also chew through wires and other critical components to make room for their growing family. When you return, you may encounter lengthy repair times, particularly if you have a luxury, foreign or antique vehicle.

Additionally, some auto insurance carriers are removing animal damage from their comprehensive policies. That means you could be liable for paying for all damages incurred from these furry little critters. And some of these repair bills can be tens of thousands of dollars.

The solution? Contact your current insurance carrier to see if you have protection. And if they don't offer it, you can use this Bankrate tool to shop around for a carrier that does:

The bottom line on insurance gaps for snowbirds

Before you travel south for the winter, know there are some insurance gaps you'll need to address before leaving. Doing this ensures you protect some of your most valuable assets while also preventing you from being liable for any damages that occur while you're gone.

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“At this stage of life, most of my clients just want everything to be convenient and hassle-free,” says Adam Rex, a financial planner with Cornerstone Financial Services in Virginia Beach. Unfortunately, the vehicle market has some new headaches thanks to supply chain issues, tariffs and changes in vehicle technology.

Whether you’re planning to buy soon or exploring options for the future, here’s what to know about purchasing a car today.

1. Prepare for sticker shock

The average price of a new car just hit over $50,000, according to Kelley Blue Book. “There were steep price increases after the COVID-19 pandemic, and prices remain at an elevated level,” says Chase Gardner, data insights manager at Insurify, an online car insurance quote marketplace.

2. Consider going for a 'budget' test drive

Given the skyrocketing prices, monthly payments have also gone up. You can get a feel for your expected loan payment using a website like Calculator.net.

Consider a budget “test drive,” says Rex. “For a few months, set aside what you expect to pay on the new car and see if it’s doable.” Don’t forget about adding money for insurance, registration and maintenance. At the end of the test, you’ll have extra cash for a down payment.

It’s especially important to plan ahead if you’ve recently retired on a fixed income and have a different household budget than when you were working. The number of people struggling and missing car payments is climbing quickly for consumers of all income levels because of high prices and interest rates. Avoid getting locked into something uncomfortable.

3. Leasing simplifies things

As always, when getting a new car, the question is whether to buy or lease. When you buy, payments start higher, and you’re responsible for more repairs and maintenance. But after you pay off the loan, payments stop. Plus, you can later sell the vehicle or trade it in.

Leasing is a long-term rental, so the payments never end. However, you can regularly replace your vehicle with a new model every few years at the end of each lease, and you don’t have to repair damage from normal wear and tear.

Given the tradeoffs, Rex finds leasing to be a more convenient fit for retirees, especially if they plan to continue driving for only a few years. “When it’s done, you just hand the vehicle back to the dealer. There’s no hassle of selling,” says Rex. Just be aware of any mileage caps and restrictions if you drive a lot. For snowbirds who go between New York and Florida every winter, leasing is probably not the right fit.

4. Weigh financing versus paying out of savings

If you’re going to buy, think about whether it could make sense to pay off the entire vehicle at once using your savings.

Paying up front means you don’t have an ongoing loan payment and won’t be charged interest. On the other hand, you no longer have the money to invest. If you make a lump sum withdrawal from a pre-tax traditional Individual Retirement Account or 401(k), the entire amount will be taxable, could push you into a higher bracket and create surcharges on your Medicare premiums.

Borrowers with strong credit scores (650+) today pay between 5% and 7% for a new car loan, while subprime borrowers face double-digit interest rates. “If your investments are earning more than your quoted loan rate, financing could make sense,” says Rex, the financial planner from Virginia Beach.

5. Your loan interest could be deductible

A new provision in the One Big Beautiful Bill Act allows taxpayers to deduct up to $10,000 per year in car-loan interest from 2025 through 2028 on new, U.S.-assembled vehicles. Used car purchases and leases don’t qualify.

You can claim this tax break even if you use the standard deduction, making it more accessible than deductions that require itemizing. If you paid off your home and no longer qualify for the mortgage interest deduction, this new tax break can help make up the difference. The loan interest deduction does phase out for individuals with a modified adjusted gross income over $100,000 and for married joint filers with an MAGI over $200,000.

6. Consider comfort and convenience

When researching and test-driving, think about whether a vehicle would make your life easier and keep you safe on the road. “For most retirees, the best vehicle choice is a small SUV or midsize sedan,” says Gardner from Insurify. “They’re easy to park, have a higher seating position and offer great visibility.”

If you spent your career driving a high-powered sports car or dreamed your whole life about getting one in retirement, ask whether this is the wisest move. They’re expensive to repair and less reliable. “No one wants to worry about a car breaking down on the way to a doctor’s appointment,” says Rex.

The faster speed increases the chances of an accident, especially if your reaction time is not what it used to be. Plus, since sports cars are lower to the ground, they are harder to get in and out of.

7. New tech can keep you safe, but also create headaches

If it’s been years since you bought a car, you might be taken aback at how much the technology has changed. And often, not in a good way: distracting touchscreens instead of physical buttons, facial recognition instead of keys to start the car, and even pop-up video ads in some vehicles.

Not all innovations are a step in the wrong direction. Some have come a long way to reduce accidents, especially for tired and fatigued drivers: automatic emergency braking, blind-spot monitoring, lane-keeping assistance and backup cameras.

Still, even these safety features take getting used to. The typical 15-minute test drive might not be enough to really see if a car is a fit for your style. If you have your eye on a specific model, consider renting it for a weekend before deciding.

8. Understand car insurance costs

Car insurance rates skyrocketed after the COVID-19 pandemic, something you certainly noticed with your current bill. Even though rate hikes have slowed, premiums remain high. Keep this in mind when deciding what to buy.

Newer cars are more expensive to insure than used ones, because they have more costly parts and technology. Sports cars are also more expensive to cover, given the additional risk of a crash. You’ll enjoy an insurance discount when you start retirement, but only to a certain point.

“Drivers in their 60s enjoy the lowest average full-coverage premiums, about $155 per month,” says Gardner. “For drivers in their 70s and beyond, rates creep up as insurers factor in slower reaction times.” You can lower costs by taking a defensive driver’s course or using a pay-by-the-mile insurance policy if you aren’t on the road often.

9. Downsizing simplifies things

If you own multiple cars from when the kids were living at home, ask whether you still need more than two, or even more than one. Giving up one of your cars in retirement can lead to real savings. Each vehicle increases costs for registration, insurance and maintenance even if they aren’t being driven often. Demand for used cars is extremely high, making it a seller’s market. You may be surprised by how much you get for your old vehicles.

10. Tariffs will drive up prices even more

The $50,000 record car prices don’t reflect new tariffs, as dealers haven't fully priced those in yet.

Tariffs are highest on European models, making Japanese and American vehicles comparatively affordable. Still, prices for American models could climb too, since many rely on imported parts or are partially manufactured abroad.

While you shouldn’t rush a purchase, the current landscape creates some urgency. “Tariffs will likely increase prices by another 10% to 25%. If you’re thinking of buying a car within the next couple of years, acting sooner could make sense,” says Gardner.

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

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Sure, you may reach out directly to an insurance company or ask a friend, but at the end of all those roadways, you are left with one constant — if you want to get accurate insurance information, you look for a well-educated, licensed insurance professional.

Unfortunately, a new law in California is removing from the equation some of the required education for insurance professionals.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

This new law, AB 943, goes into effect on January 1, 2026, and removes the requirement that an individual who wishes to sit for their property and casualty insurance license must take 20 hours of pre-licensing education.

You read that right: An insurance agent-to-be or broker-to-be will no longer have to spend at least 20 full hours learning about how insurance works.

Let's think about this …

Imagine if you learned your doctor didn't have to attend medical school. Sure, they passed tests required to get their medical degree, but no actual schooling? That's probably not going to make you feel very confident in their ability to diagnose and treat that weird pain in your side.

To get even more scary with the hypotheticals: Imagine if 16-year-olds didn't have to go to driving school before getting their license. Passing tests is very different than learning how to react in certain emergency situations, such as when a pedestrian with a baby stroller is unexpectedly in a crosswalk.

Supporters of this new law say agents and brokers will get on-the-job training and learn what they need to learn then. (Yes, that's actually their argument.)

When would this ever make sense?

I would like to know in what universe it ever makes sense to lower the standards required for a professional. When is it ever to the advantage of the consumer to have their trusted professional start out with less knowledge, less training and, therefore, less ability to do their job?

Seriously, I have racked my brain on this one, and I can't think of one single reason why this is a good idea. (If you have a theory, I truly would like to hear from you — you can reach me at questions@insurancehour.com.)

Here's some context

Let me put this in a little more context for you. Previously, you needed to have 20 hours for each type of insurance license you were looking to acquire.

Mind you, exams still had to be passed, but in order to even get to that point, you had to show you had basic knowledge — and not just the ability to memorize and regurgitate what it said in your test-prep book.

That means to get a property and casualty insurance license — think selling home and auto insurance — and a life and health insurance license, you had to complete 60 hours of training and education (property and casualty used to be considered two licenses).

Add to that, all applicants have to take 12 hours of insurance code and ethics classes (that hasn't changed). Great. So we'll have less-educated, but ethical, agents and brokers now. What could go wrong?

A wide-reaching impact

This isn't just a California thing either. This is a national trend. For instance, Pennsylvania has removed the insurance pre-licensing requirement for obtaining an insurance producer license.

North Carolina has ended the longstanding requirement that aspiring insurance agents complete a 40-hour insurance course.

Some states are also creating smaller niches for insurance licenses — such as a license to sell only car insurance. That means less education, less knowledge and less for the consumer to count on.

Without basic training and education, agents may lack basic fundamentals on how insurance works. They may not know the industry terminology. And they could see obtaining a license as more of a paperwork task, rather than a process to learn about the impacts of the insurance consumers are looking to buy.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

If you're thinking this won't affect you because you don't live in California or any of those other states, it may interest you to know that each state has reciprocity for insurance licenses. So someone could get a license in California, then pay a few bucks in fees in your state to get a license there, too.

The takeaway for consumers is: buyer beware. Sadly, we can no longer assume that being licensed to sell insurance means an agent or broker has even basic knowledge of the insurance industry or its products.

That means you need to take the time to ask any insurance agent or broker you want to work with how many years of experience they have and how long they have been licensed.

You can ask them something like, "When did you get your insurance license? And what post-insurance license designations do you have?" You can find an explanation for those designations at the credit rating agency AM Best.

You can also vet the agent by going to your state's Department of Insurance website and doing a search for their license.

Want to learn more about insurance? Visit icgs.org.

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In addition to your regular premiums, you could also owe a monthly surcharge on your Medicare Part B and Part D premiums based on an income-related monthly adjustment amount (IRMAA). High earners will pay an additional Part B surcharge ranging from $81.20 to $487.00. The Part D surcharge can be as small as $14.50 and tops out at $91.00.

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

Medicare Part A deductible  

The Part A deductible for hospital admissions increases to $1,736 in 2026. That's an increase of $60, up from $1,676 in 2025. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.

There’s no limit to the number of benefit periods you can have in a year. This means you may pay the deductible more than once in a year.

For patients hospitalized for more than 60 days, the coinsurance amount in 2026 is $434 per day (up $15 from $419 in 2025) for the 61st through the 90th day of hospitalization. The coinsurance payment rises to $868 a day, up $30 from $838 in 2025, starting on the 91st day of hospitalization. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period is $217.00, up $7.50 from $209.50 in 2025.

Reminder: Part A does not cover long-term care. It also does not cover most non-medical personal expenses, such as custodial care that helps with daily activities, such as eating and bathing.

Medicare Part B monthly premium

In 2026, the standard monthly premium is $202.90, up $17.90 from $185 in 2025. That is an increase of almost 10%. The annual deductible for all Medicare Part B beneficiaries is $283 in 2026, $26 more than the 2025 deductible of $257.

Part B covers doctor visits, outpatient services, home health care, durable medical equipment and many preventive services. You usually pay 20% of the Medicare-approved amount for Part B-covered services after you meet your deductible. This amount is called your coinsurance.

High earners will pay more. The income-related monthly adjustment amount (IRMAA) is a surcharge for people with income above a certain amount that must be paid in addition to their Medicare Part B and Part D premiums. The IRMAA is calculated every year. That means if your income is higher or lower year after year, your IRMAA status can change. If the SSA determines you must pay an IRMAA, you’ll receive a notice with the new premium amount and the reason for the determination.

This surcharge shifts costs back to the beneficiary. So, if you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on income reported on your annual tax return. You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount.

In 2026, if your 2024 AGI is above $109,000 if you are single or $218,000 if you’re married and file jointly, you’ll pay an extra amount in addition to your plan premium. That surcharge ranges from $81.10 to $486.50.

Medicare Part D prescription drug plan

The average premium for a Part D standalone plan, which covers drug costs, is expected to be $34.50 in 2026, down $3.81 from $38.31 in 2025. If you have a Medicare Advantage plan that charges a Part D total premium, that cost is projected to decrease to $11.50 in 2026 from $13.32 in 2025, down $1.82.

The maximum Part D deductible is set at $615 for 2026, an increase of $25 from the 2025 deductible of $590. The cap on Part D out-of-pocket costs is $2,100, up $100 from 2025.

The cap on out-of-pocket expenses applies only to medications covered by your Part D plan and does not apply to spending on Medicare Part B drugs. Part B drugs are usually vaccinations or injections that a doctor administers, and some outpatient prescription drugs. However, some vaccines are covered at no cost, including flu shots and COVID boosters. The list of free vaccinations is updated annually.

Optional payment plan. Part D enrollees can spread out their out-of-pocket costs over the year rather than face high out-of-pocket costs in any given month. To do this, you would pay a capped monthly installment over the course of the calendar year instead of all at once at the pharmacy. Here's how that would work.

If you opt into the Medicare Prescription Payment Plan through your Part D sponsor, you won't be charged at the pharmacy; your plan is automatically notified. Instead, your plan will send you a monthly bill showing the amount owed for your prescriptions and payment instructions. Your regular monthly plan premium (if applicable) will be billed separately. You can directly opt in to the Medicare Prescription Payment Plan through your Part D plan sponsor.

IRMAA. A surcharge for high earners also applies to your Medicare Part D drug coverage. In 2026, if your 2024 AGI is above $109,000 if you are single or $218,000 if you’re married and file jointly, you’ll pay an extra amount in addition to your plan premium. That surcharge ranges from $14.50 to $91.00. You’ll be liable for this surcharge if your Medicare Advantage Plan includes Part D drug coverage

Tip: Medicare recommends beneficiaries consider getting a drug plan even if you don’t take many drugs now or your current out-of-pocket drug costs are low. If you enroll in a plan with a low monthly premium, you can avoid the late enrollment penalty. Since all plans must cover a wide range of drugs that people with Medicare take, it will come in handy if your needs change.

Medigap

Medicare doesn’t cover everything; there is a coverage gap often called the “doughnut hole.” Part B pays for 80% of doctors’ visits and other outpatient services. In addition, Medicare doesn’t cover supplemental services such as dental care, eye appointments, or hearing aids. You have two options for handling your uncovered expenses. You can purchase Medigap insurance to complement your original Medicare insurance or enroll in a Medicare Advantage plan.

Private insurers offer Medicare supplemental insurance or Medigap policies that cover deductibles and copayments. These policies are categorized by letters A through N. All plans offer the same basic benefits, no matter where you live or which insurance company you buy the policy from. Every policy that goes by the same letter must offer the same basic benefits; usually, the only difference is the cost.

Due to the phasing out of the popular Medigap Plan F, Plan G is now the plan of choice for many. The glaring difference between F and G is that Plan G does not cover the Part B deductible. Plan G also covers “excess charges” that doctors who don’t accept the Medicare-approved amount as full payment can charge you, up to 15% above the Medicare-approved amount for services and procedures. Anyone enrolled in Medicare before 2020 can still enroll in plans F and C.

If you choose a high-deductible F or G plan, you can expect to pay a deductible of $2,950 before your policy pays anything, including coinsurance, copayments, and deductibles. This is an increase of $80 over the 2025 deductible of $2,870.

Medicare Supplement Plan K and Plan L are cheaper than other Medigap policies and have an out-of-pocket limit. These two plans have lower monthly premiums since you’ll also share the coinsurance costs for your Plan K (50%) and Plan L (25%) up to your annual maximum limit.

Read What’s the Best Medigap Plan? to find out more about the 10 different Medigap plans you can choose from.

Medicare Advantage plans

A Medicare Advantage plan is an alternative to original Medicare, making Medigap coverage unnecessary. Medicare Advantage Plans are sometimes called “Part C” or “MA Plans." If you join a Medicare Advantage Plan, you’ll still have Medicare, but you’ll get your Part A and Part B coverage from your Medicare Advantage Plan. You are prohibited from buying a Medigap plan while enrolled in an MA plan.

These plans provide medical and prescription drug coverage through private insurance companies. Depending on the plan you choose, the monthly premium, in addition to the Medicare Part B, will vary. The average monthly premium will decrease to $14.00 in 2026, down $2.40 from $16.40 in 2025.

Advantage policies charge lower premiums than Medigap plans but may have higher deductibles and copayments, and your choice of providers may be more limited than with original Medicare. Some enrollees may need to find new coverage, as some major insurers have reduced the number of plans they are offering in 2026. Check your Annual Notice of Change to see if the plan reductions impact you.

Unlike original Medicare, Medicare Advantage plans have a maximum out-of-pocket limit. In 2026, your maximum expenses are $9,250 for in-network services and $13,900 for out-of-network services. This is a decrease from $9,350 and $14,000, respectively, in 2025. However, plans may set lower limits that apply only to Parts A and B and do not include Part D costs.

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The Medicare surcharge in 2026 will apply to beneficiaries with income exceeding $109,000 (for single filers and married filing separately) or $218,000 (for joint filers). For these beneficiaries, total monthly Part B premiums will range from $284.10 to $689.90. Part D surcharges will range from $14.50 to $91.00.

The IRMAA is calculated on a sliding scale with five income brackets, topping out at $500,000 for individual filing and $750,000 for married, filing jointly. These figures, except for the top bracket, are inflation-adjusted annually. For 2026, these inflation-adjusted brackets range from $109,000 to $205,000 for single tax filers and $218,000 to $410,000 for joint filers.

IRMAA calculations have a two-year lag. Whether you pay an IRMAA in a given year depends on your tax returns from two years ago.

The IRMAA applies to all Medicare and Medicare Advantage beneficiaries whose earnings are high enough to make them eligible. The IRMAA is a cliff surcharge: just $1 over the limit will trigger surcharges for both Parts B and D. Income planning in the years leading up to Medicare eligibility can help beneficiaries avoid the surcharge.

Here's a look at the IRMAA and what it might cost you in 2026.

The IRMAA for 2026 

IRMAA is a surcharge that some Medicare enrollees must pay in addition to regular Medicare Part B and Part D premiums. The surcharge is based on your Modified Adjusted Gross Income (MAGI) from two years ago. In other words, your 2026 IRMAA liability is based on your MAGI from 2024.

Medicare determines the 2026 IRMAA charge in the 4th quarter of 2025. That is why your IRMAA determination is based on 2024 filing status and income — it's the latest data point the Social Security Administration (SSA) can obtain from the IRS to determine your 2026 IRMAA liability.

The SSA determines who pays an IRMAA based on the income reported two years prior. The SSA looks at your 2024 tax returns to see if you must pay an IRMAA in 2026.

You can easily determine your 2026 Part B and Part D total premiums by adding the income-related monthly adjustment amount to the 2026 premium costs. For 2026, the Part B premium is $202.90, and the Part D stand alone premium is, on average, $46.50.

The 2026 IRMAA surcharge amounts for Part B range from $81.20 to $487.00.

The income brackets and inflation adjustments. The first four brackets of the IRMAA are indexed for inflation annually. However, the 5th bracket is currently frozen and can be indexed for inflation beginning in 2028.

The indexing is determined by how much the average CPI-U over the 12 months ending in the most recent August has increased compared to the average CPI-U for the previous 12-month period.

Couples that are liable for the IRMAA will pay a higher surcharge when filing separately. Why? The range of brackets and surcharges for married couples that file separately are narrower:

Types of income that trigger the IRMAA

The modified adjusted gross income (MAGI) used to determine IRMAA is generally calculated by taking your Adjusted Gross Income (AGI) and adding back specific types of income that were excluded from AGI. In simple terms, for most people, the MAGI for IRMAA is the sum of their Adjusted Gross Income (AGI) from their tax return plus any tax-exempt interest income.

Adjusted Gross Income (AGI): This encompasses most sources of taxable income, such as:

• Wages and salaries
• Taxable portion of Social Security benefits
• Distributions from traditional IRAs, 401(k)s, and other tax-deferred retirement accounts (including Roth conversions)
• Interest (taxable) and dividends
• Capital gains
• Pension and annuity income
• Rental and royalty income
• Business income

Tax-exempt interest income. The IRMAA-specific MAGI is primarily your:

Adjusted Gross Income (Form 1040, Line 11) + your tax-exempt interest (Form 1040, Line 2a). That tax-exempt interest includes: interest from municipal bonds, tax-exempt dividends, and interest from U.S. Savings Bonds used for qualified higher education expenses would be added back to your AGI . This is a key "add-back" that often pushes retirees over an IRMAA threshold.

Income planning the best way to avoid the IRMAA

That is a crucial area of retirement planning. The core strategy for avoiding or reducing IRMAA is to lower your Modified Adjusted Gross Income (MAGI) in the relevant year, which is typically two years before the year you pay the premium.

Here are the most robust income planning tactics to manage your MAGI and mitigate IRMAA:

• Optimize your retirement account withdrawals (The "Roth Strategy") — Since withdrawals from traditional IRAs, 401(k)s, and RMDs (Required Minimum Distributions) are generally included in MAGI, while Qualified Roth withdrawals are not, strategic use of Roth accounts is the most powerful tool you have to reduce your MAGI and limit your exposure to the IRMAA.

Here are three other ways to reduce your MAGI:

• Utilize Qualified Charitable Distributions (QCDs) to reduce the impact of RMDs.
• Manage investment income to avoid large capital gains spikes and harvest tax losses.
• Time and structure your income, by accelerating or deferring income, to limit unavoidable IRMAA liability, "take the IRMAA hit" for only one two-year period.

How to pay your IRMAA

Your monthly Medicare Part B and D IRMAA charges are deducted automatically from your Social Security check, with two exceptions: if you have opted to defer your Social Security benefits and do not receive a Social Security check, or if the amount of your Social Security check is not large enough to cover your IRMAA. In that case, you will receive a bill for the unpaid IRMAA balance from the Centers for Medicare & Medicaid Services (CMS).

IRMAA surcharges for Part B and Part D are paid separately. Part B IRMAA is automatically added to your monthly premium bill. The Part D IRMAA must be paid directly to Medicare, not your plan or employer.

It’s your responsibility to pay it even if your employer or a third party (e.g., retirement system) pays your Part D plan premiums. You’ll get a bill each month from Medicare for your Part D IRMAA, and you can pay it the same way you pay your Part B premiums.

You have three ways to pay your Medicare IRMAAs online — either through your MyMedicare account, your bank’s bill pay service or you can automate the process by using Medicare Easy Pay. I recommend using a MyMedicare account. It is safe, secure, and there is no fee to make a payment. You’ll need to know your Medicare number and your Medicare Part A start date to create your account. You can find both on your Medicare card.

Lastly, you can send your payment by mail to Medicare Premium Collection Center, PO Box 790355, St. Louis, MO 63179-0355.

Plan to avoid the IRMAA

You should be mindful of the risk of a one-time spike in income that could trigger the IRMAA, such as the proceeds from a home sale or converting your traditional IRA to a Roth IRA. To avoid this risk, be sure to properly time a Roth conversion; you can then avoid the IRMAA when you take tax-free distributions. Learn more about strategies, such as how to lower taxes on required minimum distributions that could otherwise trigger the surcharge.

If your income suddenly dropped due to a major life event or change of circumstances, you do not have to wait two years for the IRMAA to adjust. You can appeal the surcharge with SSA using Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event).

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With the new deal, Medicare will no longer only cover these drugs for diabetes or heart issues, but for obesity itself, potentially saving beneficiaries hundreds of dollars each month.

Why it matters: In the U.S., over 30% of adults age 65 or older are considered obese — having a body mass index (BMI) of 30.0 or higher — according to America's Health Rankings. The Centers for Disease Control and Prevention (CDC) estimates the prevalence of obesity among all American adults to be 40%.

Before the deal, these injectables cost $1,000 or more per month, making it difficult for many retirees to afford. Trump’s deal promises lower government pricing and copays, which is considered a game-changer for the 65 million people currently on Medicare.

With the new deal, people buying GLP-1 medications directly from the manufacturers (or through a new portal called TrumpRx) will pay an average of $350 per month to start, with the companies having committed to lowering the price to roughly $250 over the next two years.

The price of Ozempic ($1,000 per month) and Wegovy ($1,350 per month) will decrease to $350 per month when purchased through TrumpRx or directly through the manufacturers. The prices of Zepbound and Orforglipron (if approved) will fall from $1,086 per month to an average of $346 per month, per the White House.

If the FDA later approves the oral version of Wegovy, or similar GLP-1 pill-form drugs in each company's portfolio, TrumpRx will price the initial monthly dose at $150.

Medicare beneficiaries will have access to some GLP-1 drugs approved for both obesity and diabetes for a $50 copay. The manufacturers have agreed to cut the price Medicare pays to $245, to help cover the costs of increased coverage of weight-loss drugs.

The agreements also call for Novo Nordisk to commit $10 billion and Eli Lilly to commit $27 billion to boost their U.S. manufacturing, effectively securing a reprieve from potential tariffs.

Trump promoted the deal as "the biggest price cut in history," but the rollout is slow. TrumpRx is expected by December 2025, with full integration by Medicare in mid-2026.

To understand the savings to Medicare and Medicaid recipients, here's a quick comparison:

Additionally, the deal also provides reduced costs on other Eli Lilly and Novo Nordisk medicines.

For example:

• Emgality, a treatment for migraines, will cost $299 per pen, a discount of $443 off of the list price.
• Trulicity, a commonly used diabetes medicine, will cost $389 per month, a discount of $598 off of the list price.
• Widely-used insulin products, including NovoLog and Tresiba, will cost $35 per month in supply.

Key facts:

• Drugs involved: Ozempic and Wegovy, Mounjaro and Zepbound. Down the line, oral versions like Orforglipron may be included.
• Price cuts: Medicare will pay $245 per month, down from list prices of about $1,000 to $1,350. Beneficiaries pay a maximum copay of $50. Direct-to-consumer via TrumpRx or the manufacturers: $350/month now, $250 in two years, with oral starters at $149.
• Expansion of coverage: Obesity and weight loss will be included for the first time under Medicare coverage if tied to comorbidities, such as heart or kidney disease, or severe obesity. This will affect about 10% of Medicare enrollees. Medicaid states it will see the same rates.
• Rollout: TrumpRx by year-end 2025. Medicare mid-2026

What does this mean for Medicare beneficiaries?

For a Medicare beneficiary who is diabetic, obese, and living on a fixed income, the deal could mean the availability of proven GLP-1s without breaking the bank. The deal could also open doors for those with heart or kidney issues, and address obesity's $173 billion annual Medicare tab.

Besides the good news, access hinges on the plan's adoption. Will it become voluntary for Part D? And, copays, although capped, can add up over the long term. Early adopters via TrumpRx will get relief now, but most will wait until summer 2026.

Deal seeks to balance targeted relief and tariffs on big pharma

The United States has less than 5% of the world’s population, yet roughly 75% of all global pharmaceutical profits come from American taxpayers. As it stands now, Trump's GLP-1 deal is attracting both praise and skepticism, as it strikes a balance between imposing tariffs on the pharmaceutical industry and targeted relief to aid Medicare's most vulnerable.

If all goes as planned, the deal would transform access, slash monthly costs for injectables and lift the burden for low-income Medicare retirees. According to David Certner, a former AARP staff member, "This levels the playing field for seniors who've been priced out."

Will you benefit? Check eligibility at medicare.gov or trumpRx.gov.

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Large employers expect health care costs for employee coverage to rise by a median 9% in 2026, according to the Business Group on Health. “This is the highest single-year forecast in more than a decade,” says Ellen Kelsay, BGH president and CEO.

Employers plan to pass along more of the increase to employees than they have in the past few years, and some are offering new kinds of plans with restricted provider networks as another way to manage their expenses.

The sticker shock will be even more intense for people who buy insurance on the ACA marketplace. When health insurance companies filed their proposed rates for 2026 with regulators over the summer, the median premium increase from 2025 was 18% — the largest rate change insurers have requested since 2018, according to an analysis by KFF, a health care research organization.

And that’s just part of the picture for marketplace plans. If you’ve qualified for a premium subsidy to reduce costs based on your income in recent years, that may change: The enhanced premium tax credits that enlarged the subsidies starting in 2021 are set to expire at the end of 2025, unless Congress makes a last-minute change.

If they are not extended, the subsidies will shrink for people earning less than 400% of the federal poverty level; for 2026 plans, 400% of the poverty level is $62,600 for singles and $84,600 for couples in most states. People earning more than that won’t receive a subsidy.

Despite these developments, you still have solid strategies at your disposal to make smart health care decisions and manage the costs during open enrollment. Here’s what to expect when assessing your plan options this fall.

New employer-plan options

The BGH study’s 9% projected increase in health care costs is driven primarily by the rising price of pharmaceuticals, the growing popularity of obesity treatments (especially GLP-1 medications, such as Ozempic), an increase in cancer diagnoses, and higher usage of mental health services, which many employers have expanded in the past few years.

The employers who responded to the survey expect to moderate the increase to a median of 7.6% by tweaking the design of their health plans, including some changes that affect employees’ options and costs. The plans may limit or reduce coverage for GLP-1 medications and require prior authorization for more procedures and services before they provide coverage.

Employers may also pass along a larger share of the cost increase to employees than they have over the past few years, through higher premiums, deductibles and co-payments. The median estimate of employee contributions to annual premiums is rising from $2,983 to $3,251 per employee in 2026 (including both single and family coverage), and the median yearly out-of-pocket cost for employees is increasing from $1,825 to $2,224, according to the BGH study.

But a growing number of employers are also looking for alternatives to increasing deductibles, recognizing that high deductibles can cause people to avoid seeking care, leading to more expensive medical issues in the future.

More than one-third of the plans surveyed by Mercer, a human resources and employee benefits consulting firm, expect to offer a medical plan with no deductible or a low deductible, and 12% expect to offer at least one plan with no premiums for employees.

Some employers hope to reduce costs by offering plans with incentives for employees to use certain providers that offer high-quality and cost-efficient services. So you may see plans with new types of provider networks on the menu.

For example, if your plan includes a “high-performance network,” you may have lower deductibles and co-payments when you use certain providers than you do when you visit the rest of the providers in your plan’s standard network. A high-performance network is “generally like a PPO, but it’s a more curated network,” says Tracy Watts, senior partner at Mercer.

With these plans, you may be able to use out-of-network providers, but with higher costs for you, as is typical with a PPO (preferred provider organization). Another version of these high-performance network plans, called EPO (exclusive provider organization) plans, restricts coverage to in-network providers only.

As another option, some employers are offering “variable co-pay plans” that have no deductible and provide a range of co-payments that vary by provider, which the employees see up front. “The idea is you’re getting somebody to do their homework before they call the doctor,” says Watts.

You may also be able to use centers of excellence, which are hospitals that may be outside your area but specialize in certain conditions. More than half the companies surveyed by BGH plan to include centers of excellence in their networks in 2026 for bariatric surgery, musculoskeletal conditions, fertility treatments, or cancer. Centers of excellence are more commonly included in large-employer plans than those from smaller employers.

Employers and their health plans have also been beefing up navigator programs. Health care navigators can help you learn about your care options if you’re diagnosed with a medical condition and find in-network providers in your area. Navigators may let you know whether your plan offers a center of excellence for your condition or whether you may be eligible to participate in a clinical trial, says Watts. They can provide information about other programs the employer offers, too, such as employee assistance programs, which provide a growing number of in-person and online counseling options and other benefits.

Strategies for workers

Because of the increasing costs and changes to employer health insurance, it’s worth making an extra effort to review all your choices during open enrollment this year. The following steps can help.

Make the most of each spouse’s benefits. If both you and your spouse have coverage at work, compare the options. “Don’t assume that if you work for a bigger company, your family should all go on your plan,” says Watts. It may make sense to stay on your own company’s plan, but have your children on your spouse’s plan. Or you could get medical coverage through your plan, but dental and vision coverage through your spouse’s employer.

Do the math. Add up premiums plus the costs for the care and prescription drugs you and your family need regularly under the plans offered by your employers. Also check coverage if you were to get a serious diagnosis, such as cancer or a condition that requires major surgery, so you’ll understand how your medical care may be covered under each plan, says Watts. If you choose a high-deductible health insurance policy paired with a health savings account and the employer contributes money to the HSA on your behalf, subtract that amount from the potential costs.

Contribute to an HSA if you do choose a high-deductible policy. Many employers seed HSAs for employees with eligible health plans or match their contributions. To qualify for an HSA in 2026, your policy must have a deductible of at least $1,700 for single coverage or $3,400 for family coverage. You’ll be able to contribute up to $4,400 in 2026 if you have self-only coverage or $8,750 for family coverage, plus an extra $1,000 if you’re 55 or older.

Learn about new network options, which may be a way to reduce your costs. If you don’t have a strong relationship with any doctors, or if your current doctors happen to be in the network, making use of a plan that offers a preferred network could help you save money on premiums without paying a high deductible, says Watts. Find out whether the plan will cover out-of-network providers with higher cost-sharing or if it will cover only in-network providers.

Check how the plans will cover your medications, especially if you need expensive maintenance drugs. Some plans are altering their formularies, which specify whether a drug is covered and what your co-pay would be, says Watts. Even if the plan includes your drug, you may need to meet prior-authorization requirements before the insurer will cover it for you. Don’t assume your drugs will continue to be covered the way they had been in the past.

Take advantage of extra benefits. For example, employers are making their wellness programs more attractive to many employees. Employers may give you a few hundred dollars each quarter for a gym membership, for example, rather than require you to complete a complicated health assessment. Employers may also offer more mental health benefits and other programs, both in-person and remotely, such as virtual physical therapy.

Choosing a marketplace plan

If you buy insurance on the Affordable Care Act marketplace — either at HealthCare.gov or your state’s marketplace — you may see a particularly large jump in costs. The increase in premiums might not be quite as high as 18% by the time rates are finalized.

“But this gives us a really good signal of what insurers are thinking of the current state of the individual market and how health costs will change,” says Matt McGough, policy analyst in KFF’s program on the Affordable Care Act.

Final rates are available on HealthCare.gov starting the week before open enrollment begins, on November 1. Open enrollment for 2026 plans ends on January 15. (The time frame for open enrollment will be shorter, starting with 2027 plans.) Some states have different time frames.

The increases are due in part to rising health care costs, but they’re also fueled by uncertainty about what will happen to the enhanced premium tax credits.

"Last year, we saw record insurer participation,” says McGough. "Consumers had more choice than ever when it came to selecting a plan on the marketplace. But partially due to the uncertainty, a lot of insurers are pulling out because it might not be as profitable anymore."

Some insurers are worried that if the enhanced subsidies expire, some healthier people will choose not to get a marketplace plan, which could leave the pool of insured individuals sicker and more expensive for insurers to cover.

"Insurers are going to try to protect themselves from what might be a sicker group of people,” says Sara Collins, senior scholar for health care coverage and access with the Commonwealth Fund, a health care research organization. If the insured people are less healthy overall, the costs go up for everyone — even those who are free of medical conditions.

Aetna, which had sold marketplace plans in 17 states, is leaving the ACA marketplace in 2026. Two large plans in Colorado announced in late August that they would exit the individual market. But regardless of whether the insurer that provides your current plan is sticking with the marketplace, it’s a good idea to shop around.

Your options will be based on where you live and whether you qualify for a premium subsidy. It’s important to look not only at the plan’s sticker price but also at your after-subsidy premiums and potential out-of-pocket costs.

"The amount you pay depends on your income and the plan you choose,” says Cheryl Fish-Parcham, director of private coverage at Families USA, a consumer health care advocacy organization.

“Don’t assume that what another person pays is what you’re going to pay," said Fish-Parcham. Look at the plan choices, and make sure you’ve updated your income figures when shopping for a marketplace plan.”

To help estimate your premiums and possible subsidies, you can use the calculator at kff.org/interactive/subsidy-calculator. (KFF plans to update the tool for 2026 plans before open enrollment starts.)

Plans on the exchange are separated into bronze, silver, gold and platinum categories. Bronze policies generally offer the highest deductibles and lowest premiums; platinum policies provide the most robust coverage in exchange for higher premiums; and silver and gold policies fall in the middle.

Platinum plans aren’t available in most states, so you’ll likely be choosing among the other options. If you have a silver or gold plan now, you may be able to reduce your premiums by switching to a bronze-level plan — but be prepared to pay more for the deductible and cost-sharing. Make sure you understand the types of care that aren’t subject to the deductible, such as a lot of preventive care.

One important benefit to buying an ACA marketplace policy rather than going without insurance: All marketplace plans cap your maximum out-of-pocket costs for the year. In 2026, the cap will be $10,600 for individual plans and $21,200 for family plans. That limit protects you against the risk of incurring massive bills should you end up needing expensive health care.

A helpful development from the One Big Beautiful Bill Act (OBBBA), which the president signed into law in July, is that all bronze-level plans will be eligible for health savings accounts starting in the 2026 plan year.

Make the most of an HSA to build up tax-free savings, which can help you pay out-of-pocket health care costs now or in the future. Contributing to an HSA also reduces your modified adjusted gross income, which could help you qualify for a premium subsidy.

If your income is less than 250% of the federal poverty level (which will be $39,125 for singles and $52,875 for couples for 2026 plans), you can also qualify for a special subsidy that reduces your deductible and co-payments if you buy a silver-level plan, which could be a better deal for you than a bronze plan.

Understand how the network works. Is it a PPO that lets you use both in-network doctors and out-of-network doctors, but with higher co-pays, or is it an HMO that covers only in-network doctors? Find out whether your providers will continue to be in-network. Also, check the plan’s formulary to see how it will cover your medications.

Fish-Parcham recommends getting assistance from a helper or navigator in your area; you can find one through HealthCare.gov or your state marketplace. The federal government has cut back on funding to support these helpers. In case they’re stretched thin, it’s best to get started early so you have time to work with them.

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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Let me highlight five ways in which fault matters and what you can do (in some of the cases) to help ensure that you don't get canceled by your insurance company.

1. Premium payments

Whether you pay your insurance bills online or by mail or you walk through the door of your insurer's office and hand over cash (yes, some clients do this), paying your premium is your responsibility.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Even if your bank fails to send the payment you set up through them, while it may not be your fault, your insurance company will most likely hold you responsible (there could be some exceptions, though).

Same deal with your credit card. Say you have to cancel your card because you lost it or it was stolen, and then you forget to update your payment info with the insurer. If a premium payment gets kicked back because the account is no longer active, that is on you.

What you can do: Ensure all payment info is up to date when you set up the payment and check to make sure the payment was made on the date that you requested.

2. Risks to your home

If your next-door neighbor doesn't maintain their landscaping and that results in a tree hanging over your house, your insurance company will likely see that as a risk they do not want to take and non-renew you.

It may not be your fault — it is not even your tree — but if the tree could fall on your house or catch fire in a wildfire, that makes you a higher risk.

What you can do: Unfortunately, there's not much you can do here other than politely ask your neighbor to address whatever landscaping is putting your property at risk. The key word here is "politely."

3. Application mistakes

You may not be the one who completes your insurance applications. Your significant other might do it, for example. Or you may have an assistant who does it if you are a small-business owner. Maybe all you do is sign the insurance applications.

But what if that other person makes a mistake on the application? What if they list something materially wrong that would impact whether you would qualify for the insurance plan at a particular price?

Well, it doesn't matter. Your John Hancock at the bottom of the form confirms you understand and agree with everything above. The mistake isn't your fault, but you own it with your signature.

What you can do: Make sure you carefully read over any applications before you sign them.

4. Concentration risk

An aggressive insurance company writes up a ton of business in your neck of the woods. It seems like everyone on the street has insurance with the same insurer because someone at the company identified your area as a good one to insure, and life is good.

Unfortunately, that person leaves the company, and her replacement sees only one thing — a high concentration of risk in the same area.

Chances are, the new person is going to start removing some of those risks so the company is not in the position that one large loss in your area could set its claims pocketbooks on fire.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Not your fault — you didn't decide to approve all of your neighbors with the same insurance company, but you may still get a non-renewal notice.

What you can do: Not much you can do here, since you might not know that you and all of your neighbors have the same insurer.

5. Conflicting narratives after an incident

After being involved in a car accident, you might note that at least all involved are fully intact, except maybe the vehicles. Your next thought may be that this mess wasn't your fault.

Determining fault in a car accident can be a real challenge. What may seem cut-and-dried to you may not seem the same to the insurance company. If it comes down to "he said, she said, they said," what happens then?

You may be looking at a 50/50 determination of fault, and guess what? That means what happened is at least half your fault.

What you can do: The best thing you can do to be proactive here is to drive carefully.

The bottom line is, even when something seems completely out of your control, your insurer expects you to be proactive about managing the risk.

By double-checking your payment details, addressing potential hazards to your home and reading every document before signing, you can make it harder for your insurer to decide you're too risky to keep around.

Want to learn more about insurance? Visit icgs.org.

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• 10 Mistakes People Make After They're in a Car Accident
• Making Fraudulent Insurance Claims Can Land You in Jail
• What Is Insurance Good For? Let Us Count the Ways
• Five Reasons You Might Hate Your Insurance Company (and Why You Shouldn't)

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

Many brands reward loyalty with discounts, perks or special offers that make you feel valued for sticking around. It’s a relationship built on trust and the idea that long-term customers should benefit from their commitment.

But when it comes to car insurance, that loyalty can sometimes work against you. Staying with the same insurer year after year might be costing you more. Instead of rewarding your consistency, some insurance companies quietly raise your rates over time.

This practice, often called a loyalty penalty, means you could be paying higher premiums simply because you haven’t switched providers. The increases can be subtle, building year after year until you’re overpaying without realizing it.

What's the car insurance loyalty penalty?

Some car insurance providers use price optimization, a strategy that determines the highest price you’re likely to tolerate before switching companies. Insurers use data analytics and algorithms to adjust your premium based on your behavior, including how long you’ve been a customer and whether you pay on time.

If you’ve stayed with the same insurer for years, you might notice your premiums steadily creeping up. Some increases are normal, driven by factors such as the rising cost of vehicle repairs or the growing risks posed by severe weather.

According to the U.S. Bureau of Labor Statistics (PDF), car insurance rates rose 4.7% from August 2024 to August 2025. But if your premiums are climbing faster than that, you might be paying a loyalty penalty.

Before assuming loyalty is to blame, look for other reasons your rate might have increased. Buying a newer, more expensive car will raise your premium because it costs more to repair or replace. Being at fault in an accident or getting traffic tickets can also increase your rate since your insurer sees you as a higher-risk driver.

If your rates are rising beyond what’s typical and there’s no clear explanation, it might be time to shop for a new policy.

What about car insurance loyalty discounts?

You might feel as if you’re getting a great deal because your insurer offers a loyalty discount, a percentage off your premium for staying with the company over time. These discounts usually increase after you have been a customer for a few years, typically around the three-year mark.

However, a loyalty discount doesn't always mean you're saving money. In some cases, it can hide the fact that you're paying more overall.

If your insurer has gradually raised your base rate, even a discount might not offset the higher premium and you could still be overpaying for car insurance.

How to avoid the loyalty penalty

To avoid paying a penalty, make a habit of shopping around for car insurance with other companies. Try to compare rates at least every two years.

Shopping for insurance can help you find new programs, lower rates available to new customers, even new insurance companies that have entered the market. If you have kept a clean driving record or gained more experience behind the wheel, you might also qualify for lower rates.

When comparing quotes, gather estimates from at least four or five companies. Be sure the coverage types and limits are the same so you're comparing fairly. Research the reputation of each company you're considering.

This is also a good time to call your current insurer and request a policy review. Explain that you're thinking about switching and share the rates you've been quoted. Your insurer might be willing to lower your premium or find additional discounts to encourage you to stay.

Explore and compare some of today's best car insurance offers with the tool below, powered by Bankrate:

What to know before you change car insurance

While switching car insurance might help you get a lower rate, it’s important to consider a few factors before you make the switch:

• Loss of bundling discount: If you’ve bundled your car insurance with another policy, like homeowners insurance, you’ll lose that discount when you switch your car insurance to another company. Bundle discounts can be significant, so you might want to shop around for a new insurance company that offers both policy types.
• Cancellation fees: If you’re changing car insurance providers in the middle of your policy term, your old insurance company might charge you a cancellation fee. Contact your insurance company ahead of time to ask about that fee. Depending on how much you could save on insurance, it might be worth it to cancel the insurance and pay the fee. Alternatively, you could wait until your policy comes up for renewal and change providers then to avoid the cancellation fee.
• Coverage lapse: Depending on when you schedule your new policy to begin, it’s possible to create a lapse in coverage where your old policy ends before your new policy begins. Even if that lapse is just for a day, insurance companies see it as a red flag and might raise your rates. To be safe, schedule your new policy so it starts at least a day before your old policy ends. If you’re switching insurance providers in the middle of your policy, only cancel your old insurance policy once your new policy has gone into effect.

If you suspect you’re paying a loyalty penalty, taking the time to shop around for car insurance could help you get lower car insurance rates.

Even if you’re not paying a penalty, many insurance companies offer lower introductory rates to new customers, so making a change could still pay off.

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Why? Holiday gatherings bring their share of increased risks. The National Fire Protection Association reported a nearly 400% increase in house fires during Thanksgiving. Add in inclement weather, guests visiting, porch pirates and other risks, and you have a busy season for insurance companies.

As such, taking some time to peril-proof your home can make your holidays safer and memorable, without needing to call your insurance company. Here are some common hazards to look out for, along with what your home insurance covers.

If an accident happens, what does my home insurance cover?

Before exploring the perils, let's begin with what a basic home insurance policy typically covers. If your home catches on fire due to an electrical or cooking issue, your home insurance usually covers the claim once you satisfy the deductible.

The same also applies to guests who incur injury on your premises. This is under the personal liability coverage and can protect you financially from any medical or legal bills incurred from the accident.

However, you'll want to investigate your policy to ensure you have enough liability coverage. The reason? Should a guest suffer an injury in your home and the court awards a judgment higher than what your policy pays out, you would be on the hook for the rest. If you're concerned about gaps in your policy, an umbrella insurance policy can help by providing additional liability coverage to cover those extra costs.

This time of year marks a smart time to reevaluate your insurance coverage and make sure you're not overpaying. Use this Bankrate tool to shop for and compare options quickly before we move on to perils:

Holiday light decoration safety tips

Lights are an integral part of the holidays. Whether you're setting out a few strands or going all out with them, ensure that your holiday lights have the Underwriters Laboratory (UL) seal, as that indicates the product has undergone rigorous testing.

If you have lights from last year you plan to use, check the cords for signs of fraying or loose connections, since these could pose fire or electric shock risks. Also, check your circuits before installation to ensure they can handle the power demand; for modern 15-amp circuits, it's 1,440 watts worth of lights, depending on bulb type.

Furthermore, where you place your lights is of paramount importance. Tie up loose wires to prevent tripping hazards if you have children who want to play in the yard or home. And if you're using a ladder to decorate, implement the buddy system, as it ensures the ladder is in the correct position and stable before installation.

As for candles, place them on a heat-resistant surface that's at least a foot from any fire hazards. As welcoming as the glow of candlelight can be in a window, only do so if the window treatments or blinds are up and away at a safe distance. And monitor lit candles at all times, as kids and pets could easily knock them off.

Christmas trees: Location and care matter

For Christmas trees, you'll want to set them up in a low-traffic area. This prevents guests from tripping on decorations or gifts, which could result in an injury and prompt a call to your insurance company (or, well, ruin a present you worked hard to get).

Plan to have a real tree in your home this holiday season? This Old House recommends spraying it with a mold-resistant sealant to prevent mold spores from triggering allergic reactions.

If you have pets, namely cats, keep the first few lower branches of your tree undecorated unless you want them to treat your decorations like piñatas. Once knocked off the tree, these decorations create tripping hazards — or worse, if they're made out of glass. Dog owners should regularly inspect around your tree and pick up any items before they end up in your friend's tummy, necessitating a very high vet bill.

Create a holiday meal your insurance company can't feast on

Cooking is an integral part of the holiday season for many households. I spent frenzied evenings making Christmas cookies or warming up a pie as the family jostled around the table discussing matters of world importance.

It might sound overly cautious, but cooking can represent an elevated risk around the holidays. Fires from deep-fried turkeys gone wrong, as well as scalding and lacerations, top the list of common holiday injuries.

Here are a few tips to keep you and your guests safe:

• Keep small children out of the cooking zones unless carefully supervised
• Make sure flammable objects such as oven mitts, alcohol and dish towels are away from flammable areas
• Clean the floor and inspect it regularly for any tripping hazards
• Never leave your kitchen unattended while food cooks
• Keep fire extinguishers on hand

Beware of slips, falls and pirates (not the cool kind)

When the weather becomes cold, it can transform your sidewalk and driveway into an unexpected skating rink for your guests. Before guests arrive, shovel any remaining snow and treat frozen areas with traction aids, like cat litter or sand.

Speaking of the front of your home, it becomes quite busy during the holiday season. Along with guests, chances are your Amazon Prime driver or Walmart+ delivery person becomes a frequent visitor.

As they do, they attract another crowd: Porch pirates. Porch pirates thrive at this time of year, looking for easy crimes of opportunity. If your packages are stolen, your home insurance policy will cover these items. However, depending on your deductible, it might not make sense to pay $500 to replace an item worth $100.

Therefore, you'll want to secure your packages. How? You can schedule your packages to arrive at an Amazon drop-off location, use a porch lock box, or, if you're buying from Amazon, opt for the Key In-Garage Delivery, which authorizes an Amazon driver to leave your packages in your garage.

The bottom line on preparing for holiday perils

The holidays are right around the corner. As such, preparing your home now should involve being mindful of common perils to protect you and your guests.

What's more, this time of the year is the perfect time to ensure you have the right financial protection. That way, if the unthinkable happens, you have peace of mind knowing your assets are protected.

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While you might be reluctant to pay the added cost, some of these sales materials can make it sound pretty scary to drive without one. But, if you don't check the fine print and make sure to choose a reputable warranty underwriter, you could end up paying for coverage that doesn't quite live up to your expectations.

How do extended warranties work? Do you really need one? What should you consider if you are going to buy one? Get the details you need to know below.

How do extended warranties work with new cars?

When buying a new car, you might be offered an "extended" or "wrap-around" warranty. Whether it's worth it depends on what the standard warranty already included with your new car covers.

This varies by make and model, but typically a standard warranty lasts about three to five years or 36,000-60,000 miles. In terms of what they do, there are a few things to understand before signing:

• Normal wear and tear is never covered. All warranties only cover defects or damage that aren't considered normal wear and tear. So, something like worn-out brake pads will be on you to replace.
• Covered components: Some warranties might be "comprehensive" or "bumper-to-bumper," meaning all parts and systems are covered. Others might apply to specific systems like the powertrain, infotainment system or battery.
• Owner responsibilities: Often, warranties come with the condition that you keep up with routine maintenance like oil changes and tune-ups. If you fall behind, the warranty could be voided.
• Exclusions: Even if a certain system is included, some specific components of it might be excluded, or there might be certain situations in which they'll be excluded. Read through these exclusions carefully.
• Upgrades can lead to denied claims. If you take it to a shop after the fact to modify it in any way, dealerships may claim the upgrade caused the defect and deny your claim. Something as simple as swapping the tires or installing a hardwired dash cam may be enough to cause problems
• "Abnormal use" won't be covered. Even if you have a car made for off-roading, your warranty may not cover damage that happens if you actually take it off-road. In some cases, doing anything more than normal street driving could void the entire warranty.

An extended warranty, meanwhile, would work the same as your standard. The difference is it either includes things that are excluded from your standard warranty or that it extends the time that your vehicle is covered.

How do extended warranties work with used cars?

Unlike a new car, buying a used car usually doesn't come with a warranty. One exception to that is a certified pre-owned car, which is certified by the dealer to meet certain standards and will sometimes come with an extended warranty to back that up.

For the most part, used car warranties work the same way. But there are a couple of unique features that you might find:

• Waiting periods. Sometimes, used car warranties won't kick in right away. Instead, they take effect 30 to 90 days after purchase. The waiting period might instead be a mileage, like 1,000 miles.
• Preexisting conditions. Any issue that existed before the warranty was purchased is often excluded. If you bought the warranty when you bought the car, it can be hard to appeal a claim that's denied as a preexisting condition.

Is it worth it to get an extended warranty on a car?

The answer depends on your risk tolerance. When buying a new car, you already have a standard warranty included in the price, so you can at least wait until that one is near its expiration to explore your options.

For used cars, the answer is trickier because it depends on the condition and maintenance history of the car you bought. For a certified pre-owned car that came with an extended warranty, go ahead and use the warranty if you can.

If trying to get a claim approved turns out to be a huge headache, it might not be worth the money to buy another extended warranty when that one expires.

Reasons to not buy an extended warranty

Some reasons you might opt not to get the extended warranty include:

• You had bad experiences trying to get repairs covered under the original warranty that came with your car.
• You've made modifications to your car that would either void a warranty or render it pretty much useless.
• You've done the routine maintenance on the car yourself, so you don't have official records documenting its maintenance history.
• You do a lot of off-roading, hauling or other things with your car that a warranty underwriter could deem "abnormal."
• You'd just prefer to handle repairs without the stress of a claims process.

Extended warranty vs emergency fund

Depending on whether the car is used or new, an extended warranty can range from about $1,000 to $3,000 for a coverage period lasting three to five years (or a certain mileage).

Would you be better off forking over that cash for a warranty or stashing it in a savings account to pay for repairs as needed over that time frame?

The good news is you aren't stuck with one decision or the other. As mentioned, you can hold off on deciding about that extended warranty until your existing warranty is about to expire. While you're waiting, go ahead and keep the cash you'd spend on it in a savings account so it can earn interest while you weigh your options.

Mistakes to avoid when buying an extended car warranty

If you would feel more comfortable having that extended warranty, there are some important steps to take to make sure you're getting a fair price and paying for a warranty that is actually usable.

Here are some of the biggest mistakes car buyers make when buying extended warranties:

• Forgetting to negotiate the price. The price you're offered isn't set in stone. Start by offering to pay half (or even less) than the price you're initially quoted and negotiate from there.
• Not vetting the company. You'll get plenty of ads, phone calls and emails offering you an extended car warranty. But they aren't all created equal. You need to buy one from a reputable source, like your car's manufacturer, a local bank or an auto club like AAA.
• Getting pressured into buying an extended warranty right away. At the dealership, the salesman might put a lot of pressure on you to add that warranty right then. Just take your car home, do some research, and compare prices and options from multiple reputable companies. Your dealer's offer might be the best one, but you might end up scoring a better deal elsewhere.

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Why? Because of the HSAs’ so-called “triple tax advantage.” That includes pre-tax contributions, tax-free investment growth, and tax-free withdrawals for qualified medical expenses.

With such potentially significant tax advantages, opting in to an HSA might seem like an easy choice.

However, some situations may make an HSA less than ideal for you or your family, despite its tax benefits.​ Curious? Here’s more of what you need to know.

How do Health Savings Accounts work?

An HSA is a special savings account that allows you to pay for qualified medical expenses with pre-tax dollars. You can only open a health savings account if you’re enrolled in a high-deductible health plan (HDHP) — meaning you’ll pay more out of pocket before insurance kicks in.

You (and sometimes your employer) can deposit money into the account, and that money can be used tax-free for expenses like doctor visits, prescriptions, or even dental and vision care.

The balance rolls over from year to year, and you keep the account even if you change jobs or retire.

As mentioned, a main appeal is the triple tax advantage:

• HSA contributions are tax-deductible
• Growth is tax-free, and
• Withdrawals for eligible expenses are also not taxed.

However, while HSAs can be a powerful way to save on healthcare costs, they may not be the best fit for every health plan or budget. Here are some key reasons why.

‘Hidden costs’ of High-Deductible Health Plans

To qualify for an HSA, you have to have a high-deductible health plan (HDHP). That means trading lower monthly premiums for higher out-of-pocket costs. (Because HSAs pair with HDHPs, you’ll pay more out of pocket before insurance starts covering expenses.)

• If you don’t have enough saved yet, those upfront costs can be tough to manage.
• The high-deductible, higher-risk paradigm means you’ll need to cover more upfront costs before insurance kicks in, which can strain your cash flow if medical needs arise.
• You might not see enough savings to offset the higher deductible.

That structure can be challenging for people with chronic conditions, ongoing prescriptions, or families with ongoing medical needs, or those who expect high medical costs early in the year.

Studies from the National Bureau of Economic Research (NBER) note that while HSAs incentivize consumer-driven health spending, they also disproportionately affect chronically ill patients and lower-income individuals.

The Kaiser Family Foundation reports that "premiums for HSA-qualified health plans may be lower than for traditional insurance, but these plans shift more of the financial risk to individuals and families through higher deductibles."

Conversely, if you rarely have medical expenses, the potential deductions may not outweigh the higher deductible or plan limits.

And from a tax perspective, if you find yourself pulling from your HSA for regular health bills, you miss out on tax-free investment growth. As mentioned, for many, the compounding aspect is a large part of the HSA’s appeal.​

Frequent HSA withdrawals undercut long-term growth

Some people understandably end up using their HSA dollars every year just to cover doctor visits or medications. But each withdrawal means less money stays invested, which not only reduces future tax-free growth but can also undermine the “retirement account” aspect HSAs aspire to offer.

If you’re in that boat, the account can sometimes feel like more of a glorified checking account than a tax-optimized investment vehicle.​

Limited HSA contributions mean limited tax benefits

Much of the power of an HSA is realized when you can contribute a meaningful amount each year and, ideally, leave those funds invested for a significant period.

Note: The IRS sets annual contribution limits for these accounts.

Here are the 2025 and 2026 contribution limits for individuals and families, including the catch-up amount for those aged 55 and older:

HSA Contribution Limits

These limits apply to the total contributions from both individuals and employers combined. The catch-up contribution allows individuals 55 or older (not yet enrolled in Medicare) to contribute an additional $1,000 each year.

Still, if you can’t afford to contribute much because of, for example, tight household finances, other priorities, like debt repayment or just the higher out-of-pocket costs that come with a high-deductible health plan, can also effectively shrink the tax benefits of an HSA.

• That is because HSAs essentially reward those who can maximize contributions.
• The tax deduction for putting money in is only substantial if you’re actually making full or near-full contributions.

Higher earners, or those with substantial disposable income, can often reap significant tax benefits, while others may see less substantial tax breaks.

Other factors can undermine the “triple tax” HSA promise

Account fees and investment limits: Some providers require keeping a minimum cash balance or charge fees that can erode some of your gains, particularly if your HSA balance is low.​

As Kiplinger has reported, former Consumer Financial Protection Bureau (CFPB) director Rohit Chopra has said, "HSAs may appear beneficial due to tax advantages, but many consumers underestimate the hidden costs, including account fees, complexity, and the challenge of high deductibles that can hinder access to care."

Medicare eligibility and job changes: Even though the HSA remains yours even if you switch jobs, turning 65 or switching to a non-HDHP (including many employer plans) means you can’t make new HSA contributions to that account. That could hinder your future potential for tax-advantaged savings.​

Recordkeeping demands and early withdrawal penalties: Managing an HSA requires careful recordkeeping to document eligible medical expenses. Additionally, if funds are withdrawn for non-qualified purposes before age 65, the amount is taxed as ordinary income and subject to a 20% penalty. For those who may need easier access to their savings, this lack of flexibility can limit the practicality of the account’s “triple tax” advantage.

Preference for predictable costs. Some people would rather pay higher premiums each month in exchange for lower, more predictable costs when they need care. An HSA plan can feel risky if you want that stability.

Employer coverage advantages with other plan options. If your job offers another plan with low copays and strong employer coverage, that option might save you more overall than an HSA-linked plan.

Downsides of an HSA: Bottom line

An HSA can be a powerful tool, especially for those who can consistently contribute and let their savings compound over many years while covering high upfront medical costs out of pocket.

If that doesn’t fit your financial life or if frequent withdrawals, high expenses, or modest contributions are part of your reality, the tax perks of an HSA might seem minimal.

As open enrollment continues, it’s worth running the numbers on whether you’ll reap the tax benefits of an HSA will or if you’re better off (even if only temporarily) focusing on another health plan option.

Read More

• HSA Contribution Limits Are Set for 2026
• What's the Standard Deduction for 2025 and 2026?
• Three Hidden Costs of Health Savings Accounts

As I mentioned in an earlier column, I opted for original Medicare and a Medigap plan when I retired. I made this decision because with a Medicare Advantage plan, I would have been limited to using in-network doctors and other providers. Likewise, while many Medicare Advantage plans include dental care, the coverage is usually restricted to providers in their network.

In addition, Medicare Advantage plans often impose waiting periods of six months to two years before they pay for expensive procedures, such as crowns and dentures. Preventive care is usually covered immediately, but you'll typically face an annual cap on coverage — an average of $1,300, according to a 2021 survey by health-policy research organization KFF.

In my case, signing up for Medicare Advantage would have required me to switch to an in-network dentist to get coverage, something I'm reluctant to do because I've been a patient of the same practice for more than 20 years. I'm pretty sure I'm putting my dentist's children through college, but I still have most of my teeth, so I consider that a fair trade-off. (Due to bad youthful habits and some congenital issues, there are more bridges and canals in my mouth than there are in Venice).

Ways retirees can lower dental costs

For retirees like me, there are other ways to lower dental costs, although all of them have limitations. One option is a stand-alone dental insurance plan, which many major providers offer. Premiums range from $20 to $80 a month, depending on the services covered and annual caps.

But before you sign up for one of these plans, scrutinize the fine print. Most plans will cover only a portion of the cost of certain procedures, such as fillings and root canals, and limit annual payouts; in some cases, the cap is as low as $1,000. Some have waiting periods of 12 months or more before they'll cover some procedures.

And to use the coverage, you'll probably have to visit a dentist within the plan's network. When I plugged my zip code into the search engine for a well-known dental insurance plan, I discovered that there weren't any participating dentists within 30 miles of my home.

A discount plan is another possibility. These plans aren't insurance — they simply offer members a discount ranging from about 15% to 50%, depending on the dentist and procedure. If your dentist participates in one of these programs, or you don't mind switching to one who does, this could save you some money. I was offered access to a discount plan through my Medigap policy at no cost.

In other cases, participants may pay a membership fee. (You'll have to estimate whether your savings from the discount will surpass the fee.) For example, a dental practice in my neighborhood offers discounts of 20% to 30% for a one-time membership fee of $199.

Unfortunately, my dentist doesn't participate in one of these programs, either, so I'm planning to use money I accumulated in my health savings account to pay for my dental work. Although you can't contribute to an HSA after you enroll in Medicare, you can use the funds tax-free to pay for a variety of health-related out-of-pocket costs.

I'm also going to talk to my dentist about other ways to save money, such as spreading out X-rays and fluoride treatments. And I'll continue to floss. Now that I'm paying the entire tab, it's more important than ever.

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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Technically, what rental car companies are offering you is usually not insurance, but a waiver. Basically, for a fee, you can waive responsibility for damage to the rental car while you have it. The benefit of this is that, if something happens, you can just return the car and be done with it. There's no claims process and no deductible to worry about. The drawback is that these waivers can be pricey and, depending on what's in your wallet and where you're driving, probably unnecessary.

If you already have car insurance and especially if you have a credit card that covers rental car insurance, it probably isn't worth the added cost. Feeling unsure about whether you should deny that damage waiver the rental car company is offering you? Here's what you need to consider as you decide.

Your regular car insurance likely applies when driving a rental car

If you already have car insurance, your coverage likely extends to a rental car. That is, whatever you'd be covered for when driving your personal car should apply when driving a rental as well.

But, there are always exceptions and the limits may differ depending on where you're renting the car.

If you're booking a car rental soon, call your insurer and ask the following questions to find out what coverage you have and whether or not there are any gaps you might need to address before getting behind the wheel:

• Does my current coverage extend to a rental car?
• If you pay for roadside assistance or other special coverage, too, do they also extend to a rental car?

If the answer is yes to both of these questions, review your policy just to remind yourself what is included.

If your regular car insurance is a minimum coverage policy, for example, you wouldn't be covered for damages to the rental. In that case, paying for the collision damage waiver might be worth it.

If you're driving this rental car for an extended period, it might be worth getting a quote to add collision insurance to your existing policy. Those waivers can get expensive fast, so it might be cheaper to just add the coverage to your policy.

You probably aren't covered if you're driving in a foreign country

If you're renting a car in another country, your U.S. policy likely doesn't extend beyond the United States (and sometimes Canada or Mexico). In this case, you'll need to check the insurance requirements of the country you're driving in.

Since you'll also probably need to apply for an international driving permit in order to drive there, you can check into insurance requirements while you're doing that. This is also something you can ask the car rental company about.

Your credit card might also fill any gaps in coverage

Many travel credit cards offer rental car protection as a perk. This benefit kicks in after your own car insurance pays out whatever it has to pay in an accident. While credit cards vary, the protection is usually similar to the damage waiver the rental car company wants to charge you extra for.

In most cases, activating this coverage is as simple as booking the rental with the credit card that offers rental car protection. If you're in an accident, it may reimburse you for any deductible you had to pay on your own insurance and it may cover damage or theft to the car you're renting.

If you have a travel card already, read the fine print on how its rental car protection benefit works and what it covers. If you don't, consider applying for a card before you book the rental.

Rental car reimbursement coverage is different (and not usually included)

If you're wondering whether your car insurance will pay for the rental car you need because you were in a car accident, that's a different story. Unless you made sure to add something called "rental car reimbursement coverage," you're probably going to be stuck paying out of pocket for that rental.

Of course, you can still decline the damage waiver because your insurance will cover you while you're driving that rental and, if you use the right credit card, you may not even be on the hook for the deductible if you're unlucky enough to get in another accident while driving that rental car.

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As a lifelong baseball fan, I have always appreciated knowing that certain players — Hank Aaron, Cal Ripken and Joe DiMaggio, for example — held some amazing records.

But as the years have gone on, and more baseball data points get thrown around with new names, I often find myself nodding along without really knowing what all of the new sabermetrics mean.

Many of us hit a point in our lives when we've heard about topics and phrases so many times that we believe we should understand what they mean, but we don't — and we're a little embarrassed.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

This series of articles is meant to help you answer some of the many financial and/or estate planning questions that you have been too uncomfortable to ask.

The first one is a doozy: life insurance trusts.

The reason people don't ask about life insurance trusts is that the topic itself can seem daunting and can lead to three grim prospects:

• It's boring
• It's complicated
• It includes talking about dying

In this article, I'll walk you through what you need to know to determine whether you really need a life insurance trust.

First, let's refresh our baseline knowledge of irrevocable trusts.

Irrevocable trusts: The basics

A lifetime irrevocable trust is a trust that you establish during your life, and where you forfeit control over the assets inside. There are three key benefits to using an irrevocable trust as part of an estate plan:

• You minimize future estate taxes by reducing your current estate value and removing future appreciation
• You protect your heirs' inheritance from creditors
• You control when and how heirs receive their inheritance

Irrevocable life insurance trusts

Now, add in the concept of funding this trust with life insurance. An irrevocable life insurance trust (ILIT) is a trust established during your life where the trust either owns a life insurance policy on your life (the grantor) or is named as the life insurance beneficiary. In either case, the policy pays out to the trust upon death.

But why should life insurance be part of your estate plan?

Life insurance can play an important role in estate planning, fulfilling a multitude of roles, including but not limited to protecting your dependents from lost income, covering your debts and expenses after you die, creating an inheritance, or providing liquidity for estate taxes due upon death.

For those individuals looking to create an inheritance, it may be more appealing for the insurance to pay into a trust rather than directly to the beneficiary. This allows the grantor to us the hallmark benefits of a trust, as explained above.

To get these specific benefits, the life insurance policy only needs to name a trust as a beneficiary. An important point to remember here is that the trust must be established first before it is named as the beneficiary on your life insurance policy.

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However, for individuals or couples whose net worth is nearing or above the federal estate tax exemption ($15 million/taxpayer and $30 million/married couple in 2026, indexed for inflation), and who are using life insurance to either create an inheritance or offset estate taxes due, then having the trust own the life insurance policy should be considered.

Why? If you have life insurance directly at the time of your death, the entire death benefit payout will be added to your estate, which can potentially create or compound a federal estate tax bill.

If you use an ILIT to own the life insurance policy, you have transferred the value of the policy out of your estate.

For those of you living in states that still have their own estate or inheritance taxes, this could be a powerful tool to minimize that burden.

Life insurance trusts: Key takeaways

Whether you need an ILIT as part of your estate plan is largely determined by your net worth and where you live.

If you believe that a life insurance trust should be part of your estate plan, it's important to work with an experienced attorney and financial planner to guide you on the nuances of this strategy.

This article is for general information only and is not intended as an offer or solicitation for the sale of any financial product, service or other professional advice. Wilmington Trust does not provide tax, legal or accounting advice. Professional advice always requires consideration of individual circumstances.

Wilmington Trust is not responsible for any errors or omissions contained in this article.

All information is provided "as is," with no guarantee of completeness, accuracy, or timeliness, and without warranty of any kind, express or implied.

Wilmington Trust is not liable to you or anyone else for any decision made or action taken in reliance on any information in this article. Opinions are subject to change without notice.

Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corp.

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• 10 Things You Should Know About Life Insurance

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

You can also switch from original Medicare to a Medicare Advantage plan (or vice versa), and weigh your Part D prescription drug plan coverage against other options.

If you choose original Medicare (Part A and Part B), you can also buy a Medicare Supplement Insurance (Medigap) policy from a private insurance company to cover services and out-of-pocket costs not covered by original Medicare.

It's important to note that you can only buy Medigap if you have original Medicare. That means you must sign up for Medicare Part A and Part B before you can buy a Medigap policy.

Medigap Open Enrollment

According to Medicare, you have a six-month Medigap Open Enrollment period, which starts the first month you have Medicare Part B (medical insurance). During these six months, you can enroll in any Medigap policy, and you can’t be denied coverage for any pre-existing health problems.

After six months, you might not be able to buy a Medigap policy, and if you can, it could cost more. The Medigap Open Enrollment period only happens once and doesn’t repeat yearly such as Medicare Open Enrollment.

Stay tuned for live updates: Medicare Open Enrollment 2026 Live Updates: We'll Be Back on December 1 for the Final Week of Open Enrollment

What is Medigap?

Most states offer 10 different Medigap plans sold by private insurance companies. They're named A-D, F, G, and K-N, and the price is the only difference between the plans.

Medigap Plan G provides the most comprehensive coverage and continues to be the most popular plan in 2025, accounting for approximately 39% of all policyholders, according to KFF. Plan F came in second (36%).

You might also be able to buy another type of Medigap policy called Medicare SELECT, which is only available in some states. If you choose a SELECT policy, you have the right to change your mind and switch to a standard Medigap policy within 12 months.

If you live in Massachusetts, Minnesota and Wisconsin, Medigap policies are standardized differently. Medigap must follow federal and state laws meant to protect you, but illegal practices by insurance companies can happen, so do your research when shopping for a Medigap policy.

What does Medigap cover?

Medigap policies help cover out-of-pocket costs, such as co-insurance, copayments and deductibles associated with original Medicare — nationwide. Some Medigap policies might also cover foreign travel emergency care, which gives you an extra layer of well-being when you travel outside the U.S.

Note: Although plans E, H, I and J are no longer sold, they still cover foreign travel emergency care if you're enrolled in one of these plans. If you want prescription drug coverage, you can enroll in a separate Medicare drug plan (Part D).

What does Medigap not cover?

Although Medigap plans cover all or part of original Medicare’s additional fees, it doesn’t cover everything, such as long-term care, elective surgeries, hearing aids, eyeglasses, vision and dental care and private-duty nursing.

Not all plans cover Part B deductibles. It's also worth noting that Medigap plans sold after 2005 don’t include prescription drug coverage.

Pros and cons of Medigap insurance

Medigap covers items and services not covered by original Medicare and significantly extends hospital, skilled nursing and travel coverage. But there are a few disadvantages worth looking at before you sign up.

Medigap and Medicare have different Open Enrollment windows and policies

The initial enrollment period for Medicare is a seven-month window, which starts three months before your 65th birthday, the month you turn 65 and the three-month period after your birth month.

If you fail to enroll for Original Medicare during the initial enrollment period, you’ll get another chance during Medicare Open Enrollment, which happens from October 15 through December 7, 2025.

You have a six-month Medigap Open Enrollment period, which starts the first month you have Medicare Part B (medical insurance). During these six months, you can enroll in any Medigap policy, but after the six-month period, you might not be able to buy a Medigap policy, or it might cost more if you do.

The Medigap Open Enrollment period only happens once and doesn’t repeat every year such as Medicare Open Enrollment. Time is of the essence.

Still working? You can sign up for Medicare even if you’re still on your employer’s health plan.

Read: Seven Medicare Changes Coming in 2026.

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Answer: There are many ways to trim your budget, even if you think you've already cut out all the extra expenses. The key is for people to "treat their budget as if they were downsizing their home," according to Million Dollar Round Table member and personal finance expert Roy Lederman. You'll need to eliminate some items altogether and find creative ways to live comfortably with less.

I've listed some ideas below of where you could find savings in your own budget, including ballpark estimates of how much each option could save. Some strategies are more dramatic lifestyle changes (like giving up a car), while others are clever financial tweaks that can shave your expenses without you even noticing a change in your lifestyle.

Groceries: Cut $242 per month

An average four-person household in the United States wastes $56 per week on food that ends up going uneaten, according to the Environmental Protection Agency (EPA). So, eliminating that wasted food could save you about $242 per month.

Here are some tips to do that:

• Plan meals with overlapping ingredients to take advantage of sales, coupons and bulk pricing.
• If you struggle with impulse buying, use curbside pickup or make fewer (but larger) shopping trips each month.
• On days you aren't able to cook a meal as planned, store the ingredients in the freezer to buy yourself more time to use them.
• Join your grocery store's free loyalty program (if available) to get exclusive coupons and early notice about sales and deals. You can use that to guide your meal planning.

You can claw back even more out of your grocery (and gas) budget by using the right cash back credit card. My current setup includes the American Express Blue Cash Preferred card and the Costco Anywhere Visa.

The former nets me 6% back on groceries (but can't be used at Costco). The latter earns 2% on Costco purchases and 5% on Costco gas. All told, I earn about $50 every month in cash-back on gas and groceries alone for a household of two. For larger households, the savings could easily run higher.

The key to making this strategy work is sticking to a grocery budget even though you're using credit, so you can pay it off in full before you're charged interest.

Streaming: Cut $50 per month

On average, Americans spend $50 per month on streaming services. But with a little creativity, you could cut that to nearly zero without giving up streaming altogether.

Some credit cards offer generous streaming credits. You should also check your mobile carrier, internet provider and shopping memberships for offers.

For example, T-Mobile offers a free Netflix, Hulu and Apple TV+ bundle with select mobile plans. Walmart+ also offers a free subscription to Paramount+ or Peacock. You can alternate between them every couple of months to get both for free.

Another trick to save on streaming is taking advantage of seasonal subscription deals. Back in May, Peacock was offering a full year of the subscription for $24.99. At the same time, my Delta Skymiles Platinum American Express card was offering a one-time $7.99 statement credit if I used that card to pay for a Peacock subscription.

I was able to take advantage of both offers at once and am now enjoying a full year of Peacock for just $17 – a savings of $63 for the year. Black Friday is just around the corner and many streaming services offer juicy deals around that time.

Utilities: Cut $122 per month

To get to that $122 in savings, I relied on a few averages: American households spend about $143 per month on electricity (Energy Information Administration), $80 on gas (American Gas Association) and $83 on water (the EPA). Lastly, a CNET analysis estimates U.S. households spend about $78 per month on internet.

Here are some tips to lower each of those bills:

• The EPA provides easy tips that can cut your water bill by about $31 per month.
• The Department of Energy put together this guide to help homeowners cut energy bills (lectricity and gas) by about 25%. At Kiplinger, we also have this guide with 18 ways to cut your energy bills.
• You may also be able to shave up to $35 per month off your internet bill. Downgrading your speed to the next level would save about $20, and you may not even notice a difference.
• If you're renting your equipment, that typically adds about $15 per month to your bill. Buying your own costs about $100, so you'd earn that upfront investment back in less than seven months.
• Older Americans can call around their utility providers to check for senior discounts. Not every company offers them, and the age at which they kick in varies. But, if you're over 50, it's worth asking.

Debt: Cut $360 per month

The Federal Reserve is expected to continue cutting rates this year.

"With interest starting to decrease, refinancing of mortgages, student loans, along with consolidating high-interest credit card debt should become a top priority. By doing so, you can lower your monthly payments by hundreds without sacrificing your lifestyle," Lederman said.

The average U.S. household has over $151,000 in debt, according to WalletHub. That includes mortgage and credit card debt, averaging around $9,800.

Based on those numbers, refinancing your mortgage to a rate that's at least 1% lower could save about $100 per month, while consolidating your credit card debt to a lower-interest loan could save about $40 per month. In both cases, you're also potentially saving tens of thousands over the long-term by paying less interest overall.

Meanwhile, the average monthly payment on a loan for a new car is $749. Simply trading that new car in for a reliable used one could drop your payment to $529, a savings of $220 per month.

If you can downsize to just one car for your household, giving up that $749 monthly payment (and saving more on car insurance, fuel and maintenance) would add a lot of breathing room to your budget in one fell swoop.

Insurance: Cut $360 per month

Here are a few of the most effective ways to lower your home and car insurance premiums. If you're able to use all of them for both policies, you could save up to $360 per month:

• Shop around for new car and home insurance. Those who switch save $461 per year on average for car insurance. You might be able to see similar savings on home insurance.
• Raise your deductibles. For home insurance, raising your deductible from $500 to $1,000 can lower your premium by 25%. That's over $600 per year in savings, based on current average home insurance rates. You could lower car insurance costs by about $800 per year by doing the same thing.
• If you're able to follow the advice above about downsizing from two cars to one, tack on about $2,100 per year in savings to your tab.

In many cases, the strategies above are about trimming waste and making tweaks that put more cash in your pocket while minimizing the impact on your lifestyle. There are still plenty of ways to cut your monthly budget, even if you feel like you already eliminated the obvious expenses like dining out or splurging on a morning coffee.

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According to the U.S. Bureau of Labor Statistics, the average employee benefits package accounts for 29.7% of total compensation for private industry workers and 38.4% of total compensation for state and local government workers.

But when the average employee has to choose from more than a dozen benefits, it is easy to become fatigued while working through the open enrollment process. The steps that follow will help keep you on track.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

1. Review your current benefits

Start by evaluating your existing benefits. Consider what worked well in the past year and what didn't.

Look at your health care usage, out-of-pocket costs and any changes in your circumstances — such as marriage, the birth of a child or new health needs — that may influence your choices. Try to judge how much the upcoming year's expenses may look like this year's.

A tool that may help is "start, stop, continue." Try to decide what benefits were missing this year that you would like to start in the new year, what benefits were not used that you might stop and what benefits were helpful that you want to continue.

This exercise can help you group your benefits by category.

2. Attend informational sessions and read materials

Keep an eye out for emails and other communications that offer enrollment support. Your employer offers these resources because they want you to get the most out of your benefits.

Use your human resource team to help you manage your decision-making. Consider talking to HR with your partner, if applicable, to help your family get the most out of your benefits.

3. Compare plans carefully

When selecting, compare plan premiums, deductibles, copayments, coverage networks and prescription drug benefits. Use available online tools or calculators to estimate your annual costs based on anticipated health-care needs.

Try not to get overwhelmed. Start by thinking about how well this year's plan served you and your family. The complexity of plan comparisons makes relying on your HR team especially important.

Start by telling them what you liked and did not like about this year's plan.

4. Consider flexible spending and health savings accounts

Flexible spending accounts (FSAs) and health savings accounts (HSAs) offer tax advantages for medical and dependent care expenses. Review contribution limits and eligible expenses for each account and decide how much you should set aside for the coming year.

Remember that FSAs typically have a "use it or lose it" rule, so plan your contributions carefully.

And don't let the acronyms confuse you. Perhaps think of your FSA as your "fast" account that generally has to be spent in the year it is funded and think of your HSA as your potential "hold" account which can be saved, if not needed, year-over-year and even invested subject to certain conditions.

5. Evaluate supplemental benefits

Beyond core health insurance, many employers provide added benefits such as life insurance, disability coverage, legal assistance, and wellness programs. Assess your need for these supplemental benefits and consider increasing coverage to suit your needs.

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Benefits you have to pay for are a bit like subscriptions for services, such as streaming. Individually they may not seem expensive, but when combined they can be expensive.

6. Plan for retirement

Open enrollment is a great time to review your retirement savings strategy. Check your contribution rates to your workplace savings plan if you have one.

A best practice to consider is to at least contribute enough to get the maximum company match. Another is to increase your contributions steadily to at least 10%.

Other questions to consider include whether to use a pre-tax contribution or a Roth contribution, if offered.

The former allows money to be contributed pretax and comes out as taxable income when withdrawn, while the Roth is made up of after-tax contributions and comes out as tax-free when withdrawn, subject to certain conditions.

Although company contributions will most likely be taxable when withdrawn, having tax-free Roth dollars in retirement may still be beneficial.

7. Understand deadlines and take action

Be aware of open enrollment start and end dates, and submit your selections before the deadline. Late submissions may result in missed coverage or defaulting to less optimal plans.

Because benefits decisions may impact your take home pay it is best to complete the forms with your partner. Completing the process early and sleeping on your decisions before final submission is another good idea.

8. Seek advice if needed

If you're unsure about which options are best for you and your family, consider consulting with benefits specialists or financial advisors. They can help you understand complex plan terms and make choices that align with your goals.

This is particularly true if you have special circumstances, such as a family member with a chronic condition.

A final note on AI

Open enrollment season is your annual opportunity to tailor your benefits to meet your evolving needs. By reviewing your current coverage, attending informational sessions, comparing options and acting early, you can ensure you're maximizing the value of your employee benefits.

You could also try using AI for guidance, whether by uploading plan documents to a chatbot and asking it to summarize them, or simply by asking it questions. AI isn't foolproof, however, so be sure to verify any information you've been given with your HR team.

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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.

Military life comes with plenty of challenges: frequent duty-station relocations, irregular work schedules and overseas deployments, to name a few that we’ve been through. But servicemembers also have access to some significant financial benefits. In recognition of Veterans Day this November, I’m sharing below a few that are impactful for my family.

1. Housing allowance

One helpful perk is a tax-free subsidy, known as the basic allowance for housing, that covers all or part of your monthly rent or mortgage payment if you don’t live in government-provided housing on a military base. The amount you receive depends on the location of your duty station, your rank and whether you have dependents. You can use the BAH calculator to look up the value of your subsidy based on those factors.

2. Free college

The Post-9/11 GI Bill covers the full cost of in-state tuition and fees at public colleges for up to 36 months (four academic years). Or, if you go to a private or foreign college, you get up to a certain amount per year; for the current academic year, the rate is $29,921. The Post-9/11 GI Bill also provides money for housing, books and supplies, and tutors, among other expenses. Those who served on active duty for at least 36 months or meet certain other requirements are eligible for the full GI Bill benefit.

One of the best features is that if you’ve served for at least six years and commit to four more, you can transfer your benefits to your spouse or children. Tom has done that, splitting his benefits so that our two young sons will someday be able to use them for their educational expenses.

3. Retirement security

Military members can use the Thrift Savings Plan, a tax-advantaged retirement plan that’s similar to a 401(k). The TSP has low fees, with the expense ratio on its funds recently ranging from 0.036% to 0.051%. Under the military’s blended retirement system (BRS), which went into effect in 2018, servicemembers get an automatic TSP contribution from the government equaling 1% of their basic pay, plus a matching contribution of up to an additional 4% of pay after you’ve served for two years.

Pensions have become rare in the private sector. But military members who complete at least 20 years of active-duty service are eligible for a lifetime pension, and the payments start when they exit the military. If you retire at the 20-year mark, the government calculates the average of your highest 36 months of basic pay, and under the BRS, you receive a pension equal to 40% of that amount. For each year you serve beyond 20, you get an additional 2%. (Servicemembers who joined before 2018 and did not opt in to the BRS are eligible for a 50% pension when they reach 20 years of service, with 2.5% added on for each year past 20 — but they don’t get government contributions to the TSP.)

4. Low-cost life insurance

Servicemembers’ Group Life Insurance provides coverage at a low rate regardless of the servicemember’s age or health. To get the maximum $500,000 in coverage, servicemembers pay $26 a month in premiums. Spouses can also get coverage of up to $100,000 through Family SGLI; rates vary by age. A spouse between ages 35 and 39 can get $100,000 in coverage for $4.70 a month.

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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Answer: Many lenders require you to maintain full coverage for the life of your car loan. Once you've paid it off, you're free to choose the coverage you want for your car – as long as you meet your state's minimum coverage requirements.

Still, with few exceptions, it's probably a good idea to keep full coverage even though it's no longer required.

Here's what you can do to save on car insurance after paying off your car and why downgrading from full coverage probably isn't worth it.

You can drop gap insurance now

Gap insurance is an important type of coverage to have while you're still making loan payments. If your car was totaled while you still owed on that loan, gap insurance would pay off the balance so you don't have to keep making payments on a car you no longer have.

However, once your car is paid off, there's no reason to pay for gap insurance. Call your insurer, and drop this coverage right after you make that final payment on your car loan. This will shave a few bucks off of your premiums.

You probably shouldn't drop comprehensive and collision insurance

The most dramatic savings you'd get are from downgrading your car insurance to just the minimum coverage required by your state. In general, this means dropping comprehensive and collision coverage.

Comprehensive coverage pays for damages or losses that happen when you're not driving. For example, if your car was stolen or a tree fell on it, this is the coverage you'd need if you wanted your insurance company to pay for that.

Collision coverage pays for damages to your car in three main types of accidents:

• Collisions with other vehicles in which you're found at fault. Your liability coverage pays for the other person's damages. Collision coverage would pay for damages to your car.
• Single-vehicle accidents, such as hitting a telephone pole or guardrail.
• Collisions that happen while your car is parked, such as a hit-and-run.

While both types of car insurance are optional, skipping this coverage means you'd be paying out of pocket to repair your car or buy a new one in all these situations.

Even if you have a healthy emergency fund, it often makes more financial sense to have insurance pay for these risks so that you can preserve that fund for other kinds of emergencies like a job loss, major home repairs or unexpected medical bills.

Your newly paid off car is likely worth too much to risk dropping full coverage

At a certain point, most cars will eventually depreciate enough that the current market value is only a few thousand dollars. At that point, you can safely drop to minimum coverage car insurance because full coverage wouldn't pay you much anyway. Your newly paid off car probably isn't old enough for that just yet.

Here's some math to understand why (and how much longer you might have to wait for downgrading insurance to make sense). According to Kelley Blue Book, new cars lose about 30% of their value in the first two years after driving off the lot. After that initial drop off, they depreciate at a slower rate of around 8% to 12% per year.

Meanwhile, the average car loan term is about 68 months, or about five and a half years. If you bought a new car, then it likely lost about 60% of its value from the date you bought it to the date you paid off your loan.

This year, the average amount paid for a new car hit $50,000. You might have paid a bit less than that five and a half years ago. Using that amount as a ballpark figure, your car's current market value is likely around $20,000.

If you bought a used car, that initial 30% dip already happened before you got it. But it still depreciated 8% to 12% per year in the five and a half years that you were paying off the loan. According to Kelley Blue Book, you might have paid around $25,000 for it, meaning it would be worth around $14,000 by the time you paid it off.

Based on current average car insurance rates, dropping to minimum coverage would save you about $1,800 per year. Even with that used car, it would take nearly eight years of premium savings to make up that $14,000 worth of coverage you're giving up.

That's nearly eight years of being vulnerable to the risk of car theft, weather-related damage, hit-and-runs and other problems that aren't included in minimum coverage policies. With a new car, it'd be nearly 14 years.

The choice comes down to your risk tolerance

Downgrading your car insurance ultimately depends on your personal risk tolerance. If you have the cash on hand to pay for a new car if this one is damaged beyond repair and you're comfortable with the possibility of that happening, pocket those premium savings by dropping to minimum coverage.

However, if suddenly needing to fork over thousands to buy a car would wipe out your emergency fund or otherwise be a financial strain, it's better to keep full coverage for now.

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On March 15, Congress extended the flood insurance funding through September 30. As we are now well past that date, the program has been frozen. So what does this mean?

The National Flood Insurance Program (NFIP) covers between 4.7 million and 5 million properties across the United States. As of this writing, if you have a paid-in-full NFIP policy, then if you file a claim, you should have your claim covered.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

But if you're looking to buy a new policy — for example, because you bought a house — you're out of luck. If you're looking to increase your coverage, you're out of luck again. If your policy has lapsed and you want to get it back, you're still out of luck.

NFIP cannot write new policies, increase coverage or reinstate any existing policy. If your policy is coming up for renewal, you may be out of luck there, too, as NFIP isn't issuing renewals either.

Your home sale might not go through

As crazy as this sounds, the impact is far greater. Real estate sales are being heavily impacted since estimates suggest that about 1,300 home sales per day may be lost due to lenders requiring a home to have a flood insurance policy.

Remember, a flood insurance policy effectively helps to protect a bank's collateral, namely the property, in the event of flood damage. So if you think a bank will lend you money if it can't protect what it is lending for, you're sorely mistaken.

So what's a property owner to do?

If you haven't already shopped around for your flood insurance, then now is definitely the time. The federal government is not the only one offering flood insurance.

Flood insurance is offered by many privately owned insurance companies. The prices can be dramatically different than what the NFIP offers, either better or worse.

Coverage will differ as well, since a private insurance company can offer more choices than the federally mandated policy does.

You might want to check your homeowners policy

It is also worth mentioning that flood insurance covers very different loss types than your homeowners, condo owners or renters policy does. While many of those policies will cover water damage, they will not cover flood damage.

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To be more precise, damage to a home caused by flooding is typically specifically excluded from a homeowners policy. You are reading that correctly — flood damage is not the same as water damage, and flood damage is excluded from most homeowners policies.

That means, among other things, a homeowner whose home has rising water damage will need a flood insurance policy in place to cover any damage.

Additionally, you may say to yourself, "Self, you don't need a flood insurance policy because it doesn't flood here."

If this sounds like you, check your homeowners insurance policy language, and you may likely find a cornucopia of detailed explanations for what is and what isn't considered flood damage.

You may be surprised to find that if the water isn't coming in from the roof or a broken pipe, for the most part, you may need a flood insurance policy to have the protection you think you already have.

What you can do

Contact a local insurance broker and ask them to see how much a flood insurance policy costs compared to a private insurance company.

Want to learn more about insurance? Visit icgs.org.

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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.

Last week, some employees of the Bureau of Labor Statistics were recalled to complete the September CPI report. This report contained data that was essential to computing the 2026 Social Security COLA. That report was released on October 24, nine days after its scheduled release date of October 15.

Addressing the operational issues

The decision to bring back the furloughed workers comes at a crucial juncture. The Medicare Open Enrollment period that runs from October 15 – December 7 is already underway, and the ACA Marketplace Open Enrollment will begin soon on November 1 and run until January 15. Together, these periods represent a vital window during which millions of Americans enroll or change their health coverage for the coming year. Losing thousands of workers during this period could undermine beneficiaries' ability to find and enroll in the best health care plan for their needs and budget.

A CMS spokesperson told the Federal News Network that the recall was necessary "to best serve the American people amid the Medicare and Marketplace open enrollment seasons."

The recall highlights the vast responsibilities of CMS, which provides health coverage for over 160 million Americans through its programs: Medicare, Medicaid, and the ACA Marketplaces. Without sufficient staffing, even mandatory federal programs, which are largely protected from a shutdown, such as Medicare, can face administrative issues and staffing shortfalls that directly impact beneficiaries.

Funding the furlough fix

An interesting aspect of the recall is the funding mechanism used to pay the employees. To avoid violating government shutdown rules, CMS announced that the returning employees will be paid through user fees collected from sharing data with researchers, a funding stream separate from the lapsed congressional appropriations, according to Reuters.

While this solution ensures staff are paid and operations can continue for the time being, it is temporary, and the duration of the recall remains unknown.

With the cost of next year's health plans still unknown for many, the increased staffing at the CMS provides some assurance that the enrollment process itself will not be interrupted or impeded by the current political stalemate.

The CMS staff recall shows that the agency’s mission is critical — and the deadlines too immovable — to be subject to ordinary shutdown procedures. It is an information lifeline extended to the millions of Americans who depend on a functioning enrollment system to secure their health coverage.

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You might already know that raising your deductible is a quick way to lower your premium. Raising it from $500 to $1,000 can drop your rate by as much as 25%. Raising it even more than that could, likewise, lower your premium even more.

How high is too high? How low is too low?

The 1% deductible rule is meant to be a shorthand for finding the right balance. It might not make sense for every homeowner, but it's still a good starting point to find an amount that you're comfortable paying if you have to, yet is still high enough to keep your premiums under control.

What is the 1% deductible rule in home insurance?

On a standard home insurance policy, you'll usually see a couple of different deductibles. For example, you might have one that applies only to hurricane insurance claims and another that applies to all other claims. Sometimes these are already listed as a percentage (usually 1% or 2%, but sometimes as high as 10%).

Even when they're listed as a flat cash amount, some experts recommend setting your deductible to 1% of the construction cost of your home. That's not the market value of your home, but the actual cost to rebuild it from the ground up.

If you pull up your policy paperwork, the insurer will typically list its estimate of that cost as "replacement value" or "replacement cost."

If the replacement cost of your home is, say, $300,000, following the 1% deductible rule would mean setting your deductible at $3,000. If yours is currently set at, say, $1,000, following this rule could triple your deductible, which could potentially bring down your premium quite a bit.

To see how much of a difference it would make, use our comparison tool, powered by Bankrate, to see how much a policy would cost if you set the deductible to 1% of the replacement cost of your home:

Is the 1% deductible rule a practical option for you?

The purpose of this rule is to give homeowners an easy way to strike a balance between saving on premiums while still having enough coverage to protect them from a major loss. Does the rule still do that at a time when construction costs are soaring?

It depends on your budget. A higher deductible could dramatically lower your premium. The tradeoff is only worth it if you could comfortably cover the amount when disaster strikes. That means you probably don't want to set it higher than your emergency fund, and it should be an amount that you could replenish within a few months.

Depending on where you live, that comfortable amount might be less than 1% of the replacement cost of your home. If you can afford to raise your deductible even a bit closer to that 1% target, you still might see some savings.

Not using your insurance is another benefit of the 1% rule

One of the most annoying things about insurance is that it feels like a service you have to pay for, but you'll get punished for actually using it. That's because in many states, filing a claim can cause your home insurance costs to surge as you now have a claim history.

Your goal as a homeowner is to avoid filing claims for smaller issues where the payout wouldn't be worth the price hike. Bumping that deductible to 1% of your home's replacement cost can result in immediate savings now and add further incentive to avoid filing claims for those smaller repairs.

While it's not fun to pay for something you have to avoid using, following this rule at least allows you to pay a little less while still having that peace of mind that you're covered for those more expensive damages.

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I also like them because you can assign temporary codes for occasional visitors. This ensures that I don't have to make duplicate keys (which could become lost, most likely by me) and end up in the hands of someone I don't want.

As with any security equipment, vulnerabilities can arise. So, I'm going to show you some ways to protect your home from keyless break-ins.

Find the right smart lock for your home

If you already have a smart lock, we’ll get to a few tips below to help keep it secure. But if you’re shopping for one, it’s worth choosing a model that fits your door and works well with your smart home setup.

Some locks are built for Apple HomeKit, while others pair best with Google Home or Alexa. Look for models with strong app integration, reliable remote access and easy installation, especially if you want to control everything from your phone or smartwatch.

Here are a few lock options based on expert insights from Tom’s Guide.

Make your home less attractive to thieves

First, it's important to understand that smart locks have some software vulnerabilities. However, a thief would need technical know-how to exploit these weaknesses. Most home burglaries are crimes of opportunity committed by amateurs.

So, if someone tries to break into your home, it's probably because it looks easy to get in and you have items that can be quickly stolen. While smart locks are a good step toward keeping your door secure, you should also implement other security measures.

Installing security cameras around entry points signals to thieves that someone is watching. Automatic lights are also essential, especially during this time of year when daylight is limited, so they can't hide in the shadows.

Doing these things could qualify you for a discount on your home insurance policy. Contact your provider to see which equipment, if any, qualifies. And if you're looking to lower insurance costs from an existing carrier, use this Bankrate tool to find a new policy fast:

Secure your digital life

Generally, we're not great at passwords. We set ones we'll remember since life throws so much at us, then use them for everything.

However, if a thief knows you pretty well, they can accurately guess your password or use hacking techniques to find it. Once they're into your Wi-Fi network, it makes it easier for them to access any devices you have connected to it, such as your smart lock. From there, they can unlock and lock your door with ease, which is not optimal.

This is why it's important to pay attention to software updates on your router, cell phone and any other device connected to your home's network. Before installing your smart lock, check for updates since it might not have the latest software updates. On top of this, use strong, unique passwords for all things digital that are difficult to crack.

This is why I like password managers. They create strong, random passwords and store them for you, so you don't have to remember them all.

A few other tips to keep you protected include:

• Disable temporary door codes once you no longer use them; this prevents someone from continuing to have access when they no longer need it
• Use multi-factor authentication, particularly biometrics
• Have a separate connection for your home's security equipment apart from your personal devices
• Use Z-Wave devices as they connect through a mesh network, not Wi-Fi

Ultimately, thieves are opportunists, looking for an easy score. As such, you likely won't have to worry about your average criminal trying to hack your smart lock.

That said, there are some smooth criminals out there with digital skills. Using these tips and installing the right security equipment can make it less desirable for thieves of all skill levels, keeping you safe and protecting your most valuable assets.

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For those who drive to work, this means considerably less wear on your car from sitting in traffic day in and day out.

Does that mean you can cut your insurance bills? Yes, cutting your daily commute can be leveraged to trim your premium. The difference probably isn't as much as you're hoping for — and there are more meaningful changes you can make as you retire that will net better savings.

If you're in your 50s or 60s, the good news is you're already likely paying some of the lowest rates you'll ever pay. Drivers in this age range are considered some of the least risky to insure by providers. Once you hit 75, premiums start climbing, as older drivers are considered higher risk.

That means decreasing your annual mileage is unlikely to make that much of a difference to what you're paying. It also means you don't need to make any dramatic changes to your coverage just yet if you're not ready.

If you want to see a meaningful drop in rates, here are some changes you can make and how much you can expect to save from each one. Make the changes now or keep them in your back pocket for when your car insurance rates start surging in your 70s.

Save $80 for low annual mileage

Cutting your commute could be enough to put you in the "low mileage" club.

Insurers vary on what they consider low mileage and how much they discount premiums for those who drive less. On average, you can expect your policy to drop by about 3%. Based on the current national average car insurance rate of $2,671 per year for full coverage, that translates to about $80.

To get those savings, call your insurance provider and ask how much of a discount you'd qualify for and what you need to do to get the change in your driving habits reflected on your policy.

If your insurance is up for renewal soon anyway, use this opportunity to shop for a new policy, and make sure to report your new annual mileage now that you're no longer commuting.

To find out how much you'd save by switching car insurance now that your annual mileage is lower, use our car insurance comparison tool, powered by Bankrate:

Consider switching to a pay-per-mile policy

If cutting out your commute means you'll rarely be driving at all, you might be a good candidate for pay-per-mile car insurance. These policies usually charge a low base premium, then tack on additional premiums at a fixed rate per mile.

Since rates vary by provider and the amount you pay will change each month based on how much you drive, it's hard to estimate how much you'd save (or if you'd save at all) by switching to pay-per-mile car insurance. If you know you'll be relying on other modes of transport like walking, biking or using public transport for most of your daily needs, it's worth getting quotes.

One important caveat here is that the insurance company might require you to install a device in your car or download an app to track your mileage. If they do, read through the privacy policies thoroughly to see what other data the company might be gathering about you, how it will use it and with who else the data will be shared.

The savings might not be worth the risk of a data breach or the deluge of marketing calls and emails you end up dealing with by handing over this kind of personal information.

Save $2,100 by getting rid of a car

If you're in a two-car household, consider getting rid of one car. Now that you're no longer commuting every day, it might be easier for you and your spouse to get by on just one vehicle, and the savings can definitely make it worth your while.

Assuming you have a multi-car policy — which usually comes with a roughly 20% discount on insuring the second car — you could save an average of $2,100 per year by ditching one of your cars. That's based on the same $2,671 average calculated by Bankrate.

You should be able to log in to your account and see a breakdown of exactly how much each car on your policy costs to insure. If that info isn't available in the online portal, call your insurer to ask how much each car on your policy costs.

If you're getting rid of a car, you can save even more by getting rid of whichever car model costs the most to insure. If you're choosing between a Subaru and a Tesla, for example, ditching the Tesla will net you the most savings.

That doesn't mean you have to give up your dream car to save money, though. If you have a luxury or classic car you love, keep it (just remember to have the best insurance for luxury or exotic cars). Going from two cars to one on your insurance will still result in notable savings, even if the car you keep is the more expensive of the two.

Save $1,400 by downgrading one car to minimum coverage

If you're not ready to completely give up a car in retirement, you can still save thousands by opting to downgrade coverage on one of your vehicles to the minimum required by your state — if you're willing to accept the risks and possible higher costs in case of incidents.

A minimum coverage policy is about $1,800 cheaper than full coverage, according to Bankrate. If you're on a multicar policy, getting that 20% discount would translate to about $1,400 in savings by dropping to minimum coverage on just one of your cars.

If you go this route, make sure you're dropping coverage on your least valuable car. Minimum coverage typically means you're dropping collision and comprehensive coverage, so you're on the hook for repair bills if you're at fault in an accident. It's better to be on the hook for the car that will be the cheapest to repair.

Another option, if you're not ready to completely drop full coverage, is to lower the coverage amounts. If you're driving less, you're also less likely to be involved in a serious accident. You could drop the coverage amounts on your policy without exposing yourself to much more risk. (If, however, you're swapping commutes for long road trips, this would be risky.)

Be wary of decreasing your liability coverage, though. Liability coverage also shields your assets in the event the other driver sues you after an accident. As a retiree, that means your hard-earned retirement savings could be on the line if your policy doesn't provide enough coverage to pay for the lawsuit.

Save $800 by raising your deductible

Raising your deductible is another good way to find real savings on your car insurance. A full coverage policy with deductibles of $100 for comprehensive and $500 for collision insurance costs $3,041 on average.

If you raised those deductibles to $1,500 each, your premium would drop to an average of $2,205. That's about $800 saved without giving up coverage.

As your risk decreases, you can basically treat your car insurance as a "worst-case-scenario" tool. That is, max out your deductible knowing that you're only going to file a claim on your collision or comprehensive coverage if the damage is severe enough that you're pretty sure your car will get totaled.

Retirement is a great time to save on car insurance

While cutting out your commute might not impact your car insurance rates as much as you thought, there are lots of opportunities to slash your premiums now that you're retired.

Many of the strategies above can also bring other savings, too. Driving less means you'll save on gas, and if you get rid of a car, you'll save even more.

You can toss all those savings into a one-year CD and treat yourself to a vacation or shopping spree every year, paid for by your monthly savings from paying less for car insurance, gas and car maintenance.

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Turns out, the answer to that question can be as complex at times as answering the question, What's the meaning of life?

OK, maybe that isn't a fair comparison, but still. So let's talk about it.

With an insurance policy, it starts out easy. You call an insurance agent or broker, or even visit them, or you talk with an insurance company directly and get the answers to your questions. Everything is peaches and cream.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Then you purchase the policy, and things are still pretty clean. You get a bill, you pay the bill. Rinse, repeat. This can go on for years. You're fulfilling, at least in part, your part of the insurance contract, the agreement between you and the insurance company.

You've done your part

You've already fulfilled other obligations for your part of the arrangement, such as filling out and signing an application, being honest with your answers and working with the company in good faith, the best you can. You've done it all.

Then something happens. That fateful day comes, and you have a loss. For simplicity's sake, let's use an auto accident as an example, since most of us, sadly, are familiar with car accidents.

Say you're involved in an accident — that luckily is not bad — and a few hours later, you file the claim with your insurance company on the phone or online.

Now they just cut the check, right? Just like you were writing checks, right? Well, not exactly.

What the insurance company has to do

While you've done your part in this scenario, which is actually pretty simple, what the insurance company has to do is infinitely more complicated.

First, they need to verify you have a policy with them. Then they need to check to see if the accident actually happened. (Yes, this is a thing.) Then they need to get the facts about the accident from all parties involved.

This means they want to talk to your passengers as well as the other driver and their passengers. There may also be the need to speak with eye witnesses to get a clearer picture of what actually transpired. Who was at fault for this accident?

We want to be sure that the accident is investigated as thoroughly as possible, since the other driver will rarely fall on their sword and say, "Yeah, sorry, mate. My bad."

What else they have to do

While this is happening, the insurance company also has to deal with the costs to repair the involved vehicles. That means they have to get eyes on them. Perhaps they'll ask you and the other driver to upload photos on an app, or maybe a claims adjuster or a body shop takes a look at the actual cars.

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Guess what else? The other driver says he was injured and can't work, so he wants your insurance company to pay him for pain and suffering. That's going to mean, possibly, competing opinions from doctors.

There is more, but I think you get the idea. The insurance carrier has a boatload of stuff they need to deal with that we, as consumers, don't. That's literally what we pay them for. And they will do it.

Unfortunately, this stuff takes time — sometimes much longer than we would like it to. But we need them to do all of this — it is their job and their contractual obligation.

Do we wish they could write us a check as fast as we write them? Yes. Is it possible to be fast about it when they have a lot of details to weed through? Sadly, no.

Want to learn more about insurance? Visit KarlSusman.com.

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

The good news is that flying with your pet is relatively safe. Among all major airlines required to report animal losses, injuries or deaths to the Department of Transportation, there were just 13 incidents in 2024. With a total of 161,335 animals transported, that's a less than 0.01% chance of something going wrong when traveling with pets.

While the odds of something bad happening are low, when things do go wrong, they tend to go very wrong. Of those 13 reported incidents in 2024, 10 of them involved the death of an animal. So, it's worth doing whatever you can as a pet owner to keep your pet safe on their next flight. Here are the most important steps you can take, both before the flight and the day of, to protect your pet.

What to do before the day of the flight

Make sure you pet is fit to fly

Flying can be stressful for any animal. But it's even more dangerous for pets that are very old, very young or who have preexisting health conditions. If you're unsure, call your vet to get their opinion on whether or not it's safe for your dog or cat to fly.

If the answer is no, consider taking a road trip with your pet instead. While the journey might be longer, you'll have much more control over the environment and stressors your pet is exposed to.

Check your destination's requirements for pets

Whether flying to a different state or a different country, you need to know the local regulations regarding importing animals. That might mean extra documentation from your vet, getting certain vaccines or even adhering to quarantine requirements once you land.

Whatever the requirements might be, you need to know these well in advance so you can prepare or adjust your travel plans accordingly.

Call the airline in advance

Since airline policies regarding pet travel can vary so widely, it's important to call the airline well in advance and before booking to get the specific policies you'll need to follow. Many airlines restrict the number of animals that can travel in the cabin, so the earlier you call (and book), the more likely you are to get the flight you want.

When you call, ask about any breed or size restrictions, additional carrier requirements and what documentation, if any, the airline requires. Most will require a health certificate from a vet confirming the pet is fit to fly.

The International Air Transport Association (IATA), an airline trade association, also recommends calling again 48 hours before departure to reconfirm these details. This just ensures that no mistakes or oversights were made and, if any were, they can be corrected before you show up at the airport.

Choose cabin over cargo if you can

Between flying in the cabin or in cargo, the cabin has a better track record. All 13 deaths and injuries reported last year involved pets traveling in the cargo hold. (That's not to say cargo is a death sentence, though. Again, out of more than 160,000 animals transported, just 13 suffered any incident at all.)

But if you have the option, keeping your furry friend with you in the cabin is the way to go. This can also make an already stressful ordeal that much less scary for your pet as their favorite human will be by their side the entire way.

For larger animals, this isn't possible as most airlines have size restrictions. If your pet has to be stowed in cargo, here are some tips from the IATA to minimize the stress and risks air travel poses:

• Book your flight on a weekday, as this is when airlines and airports are fully staffed, so the transport process will be smoother.
• Book your flight early in the day to minimize the risk of delays.
• Avoid air travel in the summer if you can to minimize the risk of heat-related illnesses in pets.
• Go for a walk or play with your pet to exercise them before leaving for the airport and, if possible, again before checking in.
• Remove collars, vests or harnesses before putting your pet in the carrier.
• Place an unwashed shirt of yours, a favorite blanket or another familiar item with your scent on it inside the carrier to help soothe your pet.
• Check in earlier than usual so the carrier can be put in a quiet area where your pet can relax before the flight.

Get an IATA-compliant carrier

When shopping for carriers or crates, you might see some that are labeled "airline approved" or "TSA approved." This is usually pretty meaningless marketing.

For one, the TSA has no pet carrier standards as it's not involved in transporting animals. For another, while airlines may have their own policies regarding animal transport, these would be unique to each airline, so there would be no universal "airline-approved" design.

Instead, it's the International Air Transport Association (IATA) that sets the safety standards for carriers used in air travel, both in the cabin and cargo hold.

You can find the detailed guidelines on the IATA website, but here's a quick summary of what a compliant in-cargo carrier looks like:

• Only rigid (hard-sided) carriers are allowed.
• The carrier must be big enough for the animal to stand up, sit or turn around while standing.
• The side walls must be solid, but with ventilation on at least 16% of the surface area on all four sides.
• The size of ventilation openings should be paw and nose-proof.
• There should be spacer bars on the back and sides of the container to prevent other baggage or cargo from blocking the ventilation openings.
• Absorbent bedding should be placed in the carrier.
• Open food and water containers should be attached to the crate and able to be refilled from the outside without opening the crate.
• The animal's name should be written on the outside of the carrier.
• There are additional guidelines depending on the type and construction of the carrier.

For in-cabin carriers, the guidelines are similar except that the carrier doesn't have to be rigid and doesn't need spacer bars. It also doesn't need attached food and water containers.

Acclimate your pet to the new carrier

If possible, get that IATA-compliant carrier months ahead of your flight. Keep it out and open with a favorite blanket or bed inside so your dog or cat can get used to it.

Come departure day, everything else about your pet's surroundings will be unfamiliar and overstimulating. So, you want this carrier to feel like a safe, familiar space.

Get pet insurance

Emergency vet visits during your trip can easily wipe out your travel budget (and even your emergency fund). If you don't already have it, it's a good idea to get pet insurance before you fly to minimize that risk.

Make sure to get your coverage lined up early, though. Many policies have a waiting period before they kick in. This can be anywhere from one day to one month, depending on the provider. Check the waiting period before signing up to make sure the policy you're getting will be fully active before the day of your flight.

What to do on the day of your flight

Don't sedate your pet unless your vet recommends it

While a sedative or anti-anxiety medication might seem like a surefire way to keep your pet calm and relaxed during the flight, the IATA actually advises against it. Most sedatives come with side effects that can impact your pet's ability to manage the stresses of flying.

For example, tranquilizers can lower blood pressure. But high altitudes also lower blood pressure. When these two effects are combined, it can be fatal.

If your vet thinks the benefits of sedatives outweigh these risks, make sure to keep a record of the drug name, dosage and exact time of administration on hand. If emergency vet care is needed at any stage of the journey, you want this information on hand to help diagnose issues and decide the best treatment.

Food and water

According to the IATA, you want to keep your pet fed, but not overly full. The agency recommends feeding smaller amounts the day before in preparation.

On the day of, feed your pet a light meal two hours before departure time. Then, right before you load your pet in the carrier, provide them with some water.

For travel times under 12 hours, additional feeding usually isn't required, according to the IATA. But keeping food handy in case of delays is a good idea. If feeding during travel time, keep meals smaller than usual.

Exercise

Tiring your pet out can help keep them calm and relaxed while traveling. Take your pet on a long walk or engage in a vigorous play session shortly before leaving for the airport.

Then, if it's safe to do so at the airport, take them out of their carrier again for another walk or play session right before checking in (if they're flying cargo) or boarding (if they're flying in the cabin). Some airports have areas for you to do this.

When to check in

The IATA recommendation is to check in as early as possible for animals flying in cargo or as late as possible for animals flying in the cabin with you. In the latter case, you're trying to minimize the time spent in the unfamiliar and overstimulating environment.

But you don't want to risk missing your flight. So, do some planning in advance to figure out the ideal check in time that ensures you'll get to your gate on time but minimizes the amount of time your pet spends at the airport.

Get through TSA

When going through security, TSA will need you to remove your pet from the carrier so that the carrier can go through the X-ray machine. Make sure your pet has their harness on and be ready to leash them so they can't bolt after they're removed from the carrier.

If you're flying with a cat who isn't already harness-trained, it's a good idea to get them used to wearing one a few months ahead of traveling.

The TSA recommends carrying your pet throughout the screening process rather than letting them walk. After getting through the screening, the agency also recommends taking the carrier and your pet away from the crowded security area and loading them back into the carrier in a quieter area.

Talk to the flight crew before takeoff

Ask the crew while boarding what their procedures are for handling pets in an emergency. Since pets usually aren't mentioned in the normal safety announcement and are kind of an afterthought when it comes to flight emergencies, this is a good time to get on the same page.

Specifically, you want to ask about what to do in the event of turbulence or an evacuation. You also want to ask for a spare oxygen mask if available. Airplanes are equipped with extra masks, normally intended for babies sitting on your lap. But the crew may be able to give you one to use for your pet.

Since these are designed for human faces, it may take some trial and error to get it on and you may end up just needing to hold it against their face. Just make sure it's not pressed against their nose, which could end up blocking their ability to inhale. Because of this, you should definitely make sure to follow the "put your own mask on first" rule you hear in every flight safety announcement.

Keep your pet in the carrier

The safest place for your pet during the flight is inside their carrier. You can place it on your lap or the seat beside you (provided it's empty), but you generally want to keep them contained.

If there's any turbulence, they need to be inside their carrier under the seat so they aren't thrown around the cabin. This will be easier to do if they're already in their carrier.

For the same reason, keep toys or food bowls stored outside of the carrier when not in use. During turbulence, these loose items might get thrown around and hurt your pet.

Know what to do in an evacuation

In the event of an evacuation, you usually can't bring any luggage with you, pet carriers included. So, you'll probably need to remove them from the carrier and hold them in your arms as you deplane.

If your pet is prone to becoming spooked, it might be safer to keep them in their carrier rather than risk them bolting inside the aircraft. But, this might be in defiance of the airline policy. As the pet owner, you'll need to decide the safest course of action for your pet.

Related content

• What Pet Insurance Does and Doesn’t Cover
• Is Pet Insurance Worth It?
• How to Find Affordable Pet Insurance
• How Does Pet Insurance Work?

We've come to the fourth and final installment of our deep dive into the top 20 most common financial myths.

Throughout this series, we've examined a wide variety of topics, from stock and bond performance to retirement readiness, life insurance, Social Security, income taxes and more.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Here are myths 16-20, along with the facts:

16. Social Security and Medicare are 'entitlements' funded by the government (i.e. taxpayers)

Most people think of an entitlement as something they get for free, regardless of whether they work for a living.

But American workers pay into Social Security and Medicare their entire working lives (if you're self-employed, you're paying twice as much), so these programs aren't freebies.

However, it's important to remember that Social Security isn't an income replacement. Those on the lower end of the spectrum might receive about 65% to 80% of their earned income.

Higher-income earners will get a lot less, as a percentage, since Social Security benefits plateau at $61,000 per year for 2025.

Ultimately, Social Security and Medicare are crucial benefits but should ideally work alongside your other investments (company-sponsored 401(k), individual retirement account and self-directed accounts) to provide you with income in retirement.

17. Since life insurance payouts are income tax-free to my heirs, I won't owe estate taxes on these payouts

When someone with life insurance dies, their beneficiaries receive the policy's face value as a tax-free benefit.

But when their spouse or child prepares the decedent's final tax return, the estate might owe state or federal estate taxes, depending on how large the estate is.

While life insurance comes to you income tax-free, remember there are different types of taxes, and the decedent's estate could still be taxed.

If you're wealthy, you should consider taking extra steps to protect your estate. You can do this by transferring your life insurance policy into an irrevocable life insurance trust (ILIT), in which your beneficiaries, not the decedent, own the trust, so life insurance proceeds are not part of the decedent's taxable estate.

Another similar option for married couples is to open a spousal lifetime asset trust (SLAT), which allows the decedent's spouse to live off the income produced by the trust while the asset itself remains in the SLAT and is exempt from estate tax liabilities.

18. Reverse mortgages are 'bad' and make no financial sense for homeowners

As a financial planner, I reject the notion that any one financial strategy is inherently "good" or "bad." I consider each client's specific situation and recommend a plan that is right for them.

While reverse mortgages have gotten a bad rap for years, they can be an effective tool for a specific type of client: people who are income-poor but asset-rich.

Rules and regulations around reverse mortgages and, specifically, HECMs (home equity conversion mortgages) have been updated to protect against most of the problems incurred by consumers decades ago.

Several years ago, I worked with a retired woman who lived in a fully paid off house in a wealthy neighborhood, but had no income outside of Social Security.

She needed additional income, wanted to stay in her home, was estranged from her children and planned to leave her estate to charity. This could be a perfect scenario for taking out a reverse mortgage.

When you obtain a reverse mortgage, you're converting home equity into an income stream. The bank or mortgage provider determines the maximum size of your loan based on age, interest rate and equity.

Unfortunately, in a high-interest rate environment, you can burn through your equity quickly, so borrowers should think carefully about the potential impact it can have on beneficiaries.

Typically, clients have other assets to sell or borrow against for income, so reverse mortgages aren't something I normally recommend, though they can be very effective when used strategically.

19. Since I raised our children and never paid into Social Security, I won't be eligible for Social Security benefits

If you're a nonworking spouse, you can access up to 50% of your working spouse's Social Security benefit while they are alive, meaning that, for example, a woman whose husband qualifies for $4,000 in benefits will qualify for up to $2,000 of her own benefits.

In a case in which the husband dies first, she would then qualify for the survivor benefit at the higher amount, $4,000.

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Additionally, a divorced spouse can qualify for a portion of their former spouse's benefit if they were married for 10-plus years and haven't subsequently remarried.

Your spousal benefit won't impact your ex-spouse's own benefit; they won't even know you're receiving it.

20. Responsible financial planning dictates that individuals should carry life insurance throughout their lifetimes

People often think they need to carry life insurance throughout their lives, but that's wrong. As a financial planner, I look at life insurance primarily as a replacement for income when someone is in their working years and has others who depend on their salary (e.g., spouse, children).

If a couple has had a successful working life, made money and invested it smartly, there might be no need for life insurance, because there is no income to protect after they retire.

There are other reasons to carry life insurance. Wealthy people who own businesses or real estate often take out life insurance for liquidity at their passing.

For example, I used to work with a farmer in the Midwest who owned 1,000 acres of farmland valued at about $10 million; he had no other assets.

By taking out life insurance, he can provide his family with cash to pay any taxes owed on his estate, avoiding a potential fire sale and allowing his heirs to (potentially) continue farming the family's land.

Beyond estate taxes, some people take out policies for philanthropic pursuits, to leave a legacy or establish a scholarship or foundation, but it's unnecessary to do so from a pure income-replacement standpoint.

Knowledge is power. Now that we've gone through the full list of 20 financial myths, you can set the record straight when a friend or relative makes a simplistic or incorrect statement such as "Social Security is going bankrupt," or "investing in the S&P 500 means you're broadly diversified."

Financial planning is complex and not conducive to black-and-white answers. That's why it's important to speak with a knowledgeable professional who can guide you through the process and devise strategies that are right for you, your family and your unique circumstances.

Related Content

• Eight Biggest Financial Planning Myths: How Many Do You Believe?
• Five Retirement Myths vs the Reality
• Should I Get a Reverse Mortgage? Six Questions to Ask First
• Ignoring Your Old 401(k) Could Be a $130,000 Mistake
• IRA vs Roth vs 401(k): Which Do You Pick?

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.

Before you click next because you think you don't live in an area prone to earthquakes, let me just point out that, according to the USGS, states including California, Nevada, Alaska, Utah, New Jersey, Texas, Oklahoma, Washington, Tennessee and Idaho have had an earthquake of 3.0 or higher on the Richter scale in the past five years. So keep that in mind.

One other thing to keep in mind: Areas prone to earthquakes have building codes that take that into consideration, so you have some basic protection in the event of seismic activity. Areas that are not prone to earthquakes do not, so it is on you and only you to prepare as best you can.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

I'm going to break earthquake preparedness into three important parts:

• Before an earthquake
• During an earthquake
• After an earthquake

What to do before an earthquake happens

Make a plan for what you will do if/when an earthquake strikes. You can get great ideas and step-by-step lists of what you need to do to prepare at Ready.gov.

You should consider everything from how you will receive an alert about an earthquake to what your shelter and evacuation plans are to your communication plan and more.

Have an emergency supply kit ready to go. Ready.gov offers help on that, too.

Think about what it means to drop, cover and hold on, which is what you'll want to do during an earthquake.

What to do during an earthquake

If you are inside, stay there. As mentioned before, you need to protect yourself — drop, cover and hold on — because a lot of stuff will go flying, literally. Get under a heavy desk or table and stay clear of windows and other breakables.

If you are in bed, turn facedown and cover your head with a pillow, at a minimum.

If you are driving, pull over if it is safe to do so and put the car in park.

If you are outside, move away from buildings, large panes of glass and power lines.

What to do after an earthquake

Take a moment to catch your breath.

Be prepared for more shaking, since earthquakes are followed by smaller earthquakes called aftershocks.

If you think it is safe, exit a damaged building. Be on the lookout to avoid broken glass and other debris.

If you are trapped, immediately try texting someone on your phone — cell phone lines will quickly get jammed, so the sooner you do this, the better. Then shout for help and bang on a wall.

If you are near a large body of water, think about getting to higher ground quickly in case of a tsunami.

If you've been through an earthquake before, you know how scary they truly are. They come out of the blue. They are loud, shocking and truly will catch you off guard.

The best thing you can do to prepare is to make a plan so you're not fumbling around in the aftermath, wondering what to do.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Check with your local emergency alert organizations to find out what your options are for receiving alerts.

While it's not possible at this time to get a lot of notice, even a few seconds can be enough to stop you from getting on an elevator or getting off a bridge.

About earthquake insurance

You can buy insurance coverage to protect your stuff in the event of an earthquake. Cost varies greatly; don't listen to what you hear on the street.

The price for your location could be a fraction of what your buddy says he is paying. The less frequent earthquakes are where you are, the lower the cost will be.

If you live near a fault line, you're obviously going to pay more.

You can't stop an earthquake, but being prepared and educated about what to do when one strikes can help you cope more efficiently if the time comes.

Want to learn more about insurance? Visit KarlSusman.com.

Related Content

• Is Your Home Disaster-Ready? An Insurance Expert's Guide to Preparing for Storms and Fires
• How to Balance Your Insurance Expectations vs the Reality
• How to Prepare For a Hurricane and Other Natural Disasters
• How to Protect Your Home from Natural Disasters with the Right Insurance
• 14 Must-Have Items for Your Home Emergency Kit

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.

Answer: You may reach a point when you’re ready to retire and embrace that next phase of life. And if you’re confident in the amount of savings you have, there shouldn’t be much stopping you.

But what if you have adult kids who rely on you for health insurance?

It's a common scenario. The Kaiser Family Foundation found that as of October 2024, 72% of young adults aged 18 to 25 were covered as dependents on a family member's health insurance plan.

Meanwhile, in 2020, the U.S. Census Bureau reported that Americans ages 19 to 34 had the highest uninsured rate of any age group in the U.S. Moreover, 26-year-olds specifically had the highest uninsured rate in the nation.

There’s a very easy explanation for that. The Affordable Care Act allows children to remain on their parents’ health plans until age 26. And while some states allow children to stay on a parent’s health plan until age 30, depending on circumstances, that’s not guaranteed to be an option.

If you have young adult children under 26 who are on your current health insurance plan, you may feel compelled to delay your retirement so they can keep that coverage a bit longer. But that’s not necessarily fair to you. It’s important to strike a balance between helping your kids retain insurance coverage and pursuing your own dreams after a lifetime of hard work.

A potentially slippery slope

It’s noble to want to provide health coverage for your young adult kids. But Adam Spiegelman, CFP and Wealth Advisor at Spiegelman Wealth Management, says there’s a danger in doing so. What starts out as working longer to set your grown kids up with health insurance could evolve into many years of extending financial support rather than focusing on your own needs and encouraging your children to become more financially independent.

In situations like these, he says, “Support tends to expand and never really end – phones, tuition, weddings, even mortgages.”

In Spiegelman’s experience, what starts out as financial support for grown children who are new to the workforce often evolves into supporting children well into their 40s or 50s.

“That may not be healthy for anyone,” he insists.

A recent Savings.com report finds that half of parents with adult children provide regular financial support. The average amount of support given? A whopping $1,474 per month.

This isn’t to say that working a couple of extra years to allow your grown children to stay on your health insurance plan will result in having to support them for decades. But before pushing yourself to plug away at a job for longer than you’re interested in, Spiegelman suggests hitting pause so you can thoroughly evaluate your goals.

“Are you continuing to work purely to provide health insurance, or does staying employed serve other purposes for your retirement readiness or family dynamic?” Spiegelman says.

If there’s a benefit to you in extending your career, like boosting savings or being able to delay Social Security benefits, then that may be a reason to do it. Otherwise, Spiegelman says, “First, plan your own retirement. Maybe even be a little ‘selfish’ there.”

Other paths toward health coverage

Another reason not to automatically delay your retirement for the express purpose of hooking your grown kids up with health insurance? There may be another path toward coverage.

“For many 20-somethings, lower-cost HMOs can be very affordable and sometimes better than staying on a parent plan,” Spiegelman explains.

Depending on their income, your children may qualify for an ACA plan subsidy, making it more manageable. (Note, however, that Congress is divided over whether these subsidies should be extended in 2026, which could more than double ACA premiums.) Or even without a subsidy, they may find that they can swing the cost of a bronze plan, which is the lowest tier available for ACA plans.

Bronze plans typically come with low premiums but higher out-of-pocket costs. They can be suitable for young, healthy enrollees who expect to use their insurance minimally and mostly need protection from catastrophic or emergency care.

Medicaid may also be an option, depending on your children’s income.

Michael LaCivita, CFP at Domain Money, says that if your grown children don’t qualify for Medicaid and can’t afford health insurance premiums on their own, there’s another way to help.

“You may not have to change your retirement date to help your kids with healthcare coverage,” he says. “If your budget allows it, one option is to give your child the premium you pay as an employee to keep them on the health insurance plan. Your children can use this toward their individual coverage. It may not cover all of the premium your child or children may pay to have their own health insurance policy, but it helps.”

It’s okay to put your own needs first

Even if you can’t afford to help your grown kids cover the cost of health insurance, if you’re ready to retire and have saved well to reach that point, then it’s not fair to you to delay your own plans. In fact, being kicked off of your health plan could be the push your children need to find jobs that provide employer-subsidized insurance, or rethink their spending in a manner that makes an ACA plan more affordable.

This isn’t to say that you shouldn’t do it nicely. Aim to give your kids a few months of notice so they can start crunching numbers and preparing.

But as Spiegelman says, “Protect your own mental health, lifestyle, and retirement goals first — because time is finite.”

Read More

• I'm 68 and Health Issues Forced Me to Retire. Should I Claim Social Security or Use My Savings Until I'm 70?
• The '120 Minus You' Rule of Retirement
• Need a Reason to Retire Early? Consider These Eye-Opening Stats
• I'm 60 With $2.8 Million Saved. I'm Tired of Working, But Need Health Insurance Until Medicare Kicks In.

Government shutdowns aren’t new to Washington. Since the late 1970s, there have been 20 funding gaps. Some lasted only a few hours, while others have lasted several weeks. Initially, the longest was during President Donald Trump’s first term, when a border wall funding standoff lasted 35 days. But the 2025 shutdown moved into the spot for the longest in U.S. history.

The standoff behind the scenes notably centered on taxes and health care.

Specifically, Congress has been battling over the extension of premium tax credits that help millions afford health insurance. (Reversing billions in Medicaid cuts that Trump and the GOP pushed through in their 2025 tax and spending bill are also at issue.)

So, the sheer scale of this year’s tax and health care concerns — potentially impacting nearly one in 14 Americans — adds an unusual twist to the recent shutdown. Here’s more to know.

ACA Premium Tax Credits in the health care debate

At the heart of the 2025 government shutdown impasse was a widely used tax credit that subsidizes premiums for Affordable Care Act (ACA) marketplace insurance.

• Congress originally expanded these premium tax credits during the pandemic in 2021 and later extended them through the end of 2025.
• They substantially lower health insurance costs for more than 24 million people in the U.S., or roughly 7% of the population.
• Data show the tax credits have helped make coverage more affordable for a range of people, including the self-employed, small business owners, and those who lack access to employer or other coverage.

Congressional Democrats made it clear they would not approve a temporary spending bill unless Republicans also agreed to extend these enhanced credits and reverse scheduled Medicaid cuts.

At the time, Minority Leader of the U.S. House of Representatives Hakeem Jeffries (D-N.Y.) told reporters the following regarding rising health care premiums and the shutdown stalemate.

“In just days, tens of millions of Americans will see their health care costs rise sharply because of the failure to extend Affordable Care Act tax credits. It’s happening at a time when the cost of living is already too high.”

While some Republicans have acknowledged the popularity of the tax credits, many rejected the notion of tying any extension of them and/or any rollback of Medicaid cuts to a stopgap funding deal.

Vice President JD Vance said in a Fox News interview, “I will go to the Capitol right now to discuss premium support for the Affordable Care Act with Chuck Schumer and Senate Democrats, but only after they have reopened the government.”

In a surprising move, Rep. Marjorie Taylor Greene (R-Ga.), a staunch supporter of the Trump party line on most political issues, noted that her own adult children's insurance premiums would double, along with those of many families in her district, but still described health insurance as "a scam."

Medicaid cuts are also part of the shutdown battle

As Kiplinger has reported, scheduled Medicaid cuts ushered in by the GOP megabill signed into law by Trump on July 4, 2025, risk curtailing coverage and access for millions of low-income families, increasing the uninsured rate, and shifting costs onto hospitals and local governments. Many rural hospitals could be forced to close.

Many Democrats insist that both protections — the ACA credits and broader Medicaid funding — remain in place.

The GOP megabill, nicknamed the “big, beautiful bill,” includes a cut of approximately 15% to Medicaid spending, totaling nearly $1 trillion over the next ten years. According to the nonpartisan Congressional Budget Office (CBO), these cuts could result in approximately 7.8 million people losing Medicaid coverage by 2034.

Health care for undocumented immigrants?

The President and some Republican lawmakers have claimed that Democrats want to provide health care to illegal immigrants.

It’s important to note that individuals in the U.S. illegally aren’t eligible for insurance coverage provided through the Medicare program or the ACA exchange.

Current policy only allows Medicaid and ACA subsidies for U.S. citizens, lawful permanent residents (green card holders), and certain immigrants with lawful presence status.

Note: Hospitals receive Medicaid reimbursements for emergency services they provide to undocumented immigrants; however, this expenditure is a small fraction of their overall spending and does not constitute “free healthcare” coverage.

Health insurance: What happens if ACA tax credits expire?

According to the Kaiser Family Foundation (KFF), ACA plan premiums could increase by an average of 114% if Congress allows the credits to expire. That could mean a jump from $888 this year to nearly $1,904 per year for a typical beneficiary.

• Some enrollment experts warn that more than 4 million people could leave the marketplace entirely, overwhelmed by the cost.
• The expiration would hit middle-income households that were newly eligible for the enhanced credits the hardest. Many would lose all subsidy support overnight if Congress doesn’t act before Dec. 31, 2025.
• KFF reports that ACA marketplace insurers, anticipating coverage lapses, are already raising their proposed 2026 rates, with some reportedly increasing by as much as 18%.

Medicaid, meanwhile, faces its own set of cascading effects if the cuts take effect.

Past state-level rollbacks have shown that reduced federal Medicaid funding often leads states to restrict eligibility, cut provider payments, or both. So, fewer people are being covered and a greater strain is being placed on emergency care systems.

For more information, see: How Five States Are Worse Off After SNAP, Medicaid Cuts.

Government shutdown update: What's at stake?

As open enrollment for ACA began in November, some insurers and policyholders alike have been in limbo, unsure what premiums or coverage rules will look like. Some Medicaid participants wonder if new cuts could force them off coverage or reduce their access to care in the coming year.

As the government shutdown stretched on, President Donald Trump issued stark warnings about potential layoffs of federal workers. On social media, he framed the shutdown as what he called an “unprecedented opportunity” to cut federal programs aligned with Democratic priorities.

In an interview reportedly taped with One America News, as reported by PBS, Trump added, “There could be firings, and that would be their responsibility. There might also be other actions. We could eliminate projects they favor, and those would be permanently cut.”

Update: The government shutdown ended without an extension of ACA premium tax credit subsidies. A vote on the matter could take place in the Senate in December.

Related

• What to Know About Medicaid Cuts: Is Your Local Hospital Closing Soon?
• New Tax Rules: Income the IRS Won't Touch in 2025
• Premium Tax Credit: Are You Eligible?

Just as noteworthy as the new rules are those that extend provisions from the 2017 Tax Cuts and Jobs Act (TCJA). The OBBBA makes permanent the reductions in federal income tax rates that the TCJA implemented. (Otherwise, those tax rates would have expired on December 31.)

In addition, the OBBBA increases the federal estate tax exemption from $13.99 million per person in 2025 to $15 million per person, or $30 million for a married couple, in 2026. It will be adjusted annually for inflation.

Without congressional action, the exemption would have dropped to about $7 million after 2025. Because of the exemption’s size, the vast majority of taxpayers don’t need to worry about paying federal estate taxes.

You may want to schedule an appointment with your financial planner or tax preparer to discuss how the bill will affect your 2025 tax liability.

“You’ve got to run the numbers, because there’s so much that’s changing,” says Tim Steffen, director of advanced planning at Baird.

To get you started, we have guidance here on how to get the most from some of the significant provisions in the OBBBA.

A BONUS DEDUCTION FOR OLDER ADULTS

Starting with the 2025 tax year, taxpayers who are 65 or older will be eligible for an additional standard deduction of $6,000. The bonus deduction, which is scheduled to expire at the end of 2028, comes on top of an existing extra standard deduction of $2,000 for single filers who are 65 or older or, for married couples who file jointly, $1,600 for each spouse who is 65 or older.

The expanded deduction means a single taxpayer who is 65 or older will be able to deduct up to $23,750 from taxable income, while a married couple who file jointly will qualify for a deduction of up to $46,700, assuming both are 65 or older.

That can translate to significant savings for older taxpayers. For example, an older married couple in the 22% tax bracket (for 2025, that includes income of $96,951 to $206,700) could see tax savings of $2,640 a year, says Marilou Davido, a certified financial planner in Milwaukee.

Older taxpayers in lower tax brackets could save $600 to $1,200 a year, she says.

The legislation won’t eliminate taxes on Social Security benefits. But because the taxability of benefits is based on a calculation involving your adjusted gross income, the OBBBA will reduce the number of beneficiaries who pay the taxes from 36% to 12%, according to the White House Council of Economic Advisers.

Now for the caveats: The bonus standard deduction will affect only eligible taxpayers whose income exceeds the amount of the deduction, so low-income people won’t benefit from this tax break.

At the other end of the spectrum, higher-income taxpayers could see the amount of the bonus deduction reduced or eliminated altogether.

The deduction starts to phase out for couples with modified adjusted gross income of more than $150,000 ($75,000 for single filers) and is fully phased out at MAGI of $250,000 ($175,000 for singles). Your modified adjusted gross income is your adjusted gross income with certain deductions added back.

The higher standard deduction won’t shield Medicare beneficiaries who pay a surcharge, known as the income-related monthly adjustment amount (IRMAA), on their Part B and Part D premiums. The surcharge is based on a version of your MAGI that’s specific to Medicare and is calculated before the standard deduction applies.

Taxpayers whose MAGI is close to surpassing the eligibility threshold for the bonus standard deduction should consider avoiding moves that could reduce this tax break’s value.

For example, converting funds in a traditional IRA to a Roth IRA could reduce or eliminate the bonus deduction by increasing your MAGI, says Davido.

If you want to convert to a Roth, consider spreading out the conversions over several years to keep your MAGI below the threshold, she says.

One argument in favor of doing a Roth conversion is that it protects your nest egg from future tax increases, because Roth withdrawals are tax-free as long as you’re 59½ or older and have owned the Roth for at least five years.

But now that the OBBBA has extended current tax rates, individuals can spread out conversions without fear of a tax increase, at least under the current presidential administration, Davido says.

Timing matters, too: Converting to a Roth before age 65 would avoid the potential loss of the bonus deduction.

Capital gains distributions and withdrawals from traditional IRAs will also increase your MAGI. But there are steps you can take to offset that income and preserve the bonus deduction.

If you’re still working, increasing pretax contributions to 401(k) plans and health savings accounts (HSAs), for example, will reduce your MAGI.

Individuals who are 70½ or older can reduce their MAGI by making qualified charitable distributions from their IRAs, says Todd Calamita, a CFP in Charlotte, N.C.

In 2025, taxpayers can make QCDs of up to $108,000 from their IRAs to qualifying charities. If you’re 73 or older, a QCD will also count toward your required minimum distribution (RMD). A QCD isn’t deductible, but it’s excluded from taxable income.

Davido recommends working with your tax preparer or financial planner before year-end to adjust income-tax withholding and estimated tax payments for 2026. The bonus standard deduction could enable you to reduce the amount of tax withheld from your Social Security benefits and IRA withdrawals; you may also be able to lower your quarterly estimated tax payments.

A BIGGER BREAK FOR HOMEOWNERS

The OBBBA contains a valuable tax break for homeowners who live in high-tax states, and like the bonus standard deduction, the change could affect your 2025 tax bill.

Starting in 2025, those who itemize will be able to deduct up to $40,000 in state and local taxes (SALT), up from a cap of $10,000. The cap will increase by one percentage point each year through 2029, then return to $10,000 in 2030.

The SALT deduction includes state income, property and sales taxes; it’s often most useful for property taxes, which have soared as home values have risen in recent years. The primary beneficiaries will be homeowners in states with high property taxes, such as New Jersey and New York.

The cap is gradually reduced for those with MAGI above $500,000 ($250,000 for a married individual filing separately), and taxpayers with MAGI of $600,000 or more will be limited to deducting $10,000 on their tax returns.

Consequently, homeowners who are eligible for the higher cap need to be even more mindful of their 2025 MAGI, says Robert Keebler, a CFP with Keebler and Associates in Green Bay, Wis. This phaseout is potentially more costly than the phaseout for the bonus standard deduction, he says.

Keebler offers this example: Suppose you’re married, file jointly and have a MAGI of $500,000. Your itemized deductions include $40,000 in state and local taxes. If you convert $100,000 from a traditional IRA or 401(k) to a Roth, your gross income rises to $600,000, and your state and local tax deduction is reduced to $10,000. While your gross income went up by $100,000, your taxable income rose by $130,000.

At a 35% marginal rate, your effective rate on the conversion is 45.5%.

As is the case with older taxpayers, homeowners who are eligible for the higher SALT cap should consider spreading out Roth conversions and taking other steps to keep their MAGI below the thresholds.

Homeowners in high-tax states may get even more out of the higher cap by bunching their itemized deductions.

For example, if you paid your 2025 property taxes earlier this year and receive a bill for 2026 in December, pay it before December 31 so you can deduct both payments on your 2025 tax return, Davido says.

Using the bunching strategy, you would claim the standard deduction in 2026 and make two property tax payments in 2027 so you can itemize in that year.

Bunching your charitable contributions is also an effective way to increase your itemized deductions and lower your tax bill.

A donor-advised fund is a useful tool for this strategy. These funds, offered by major financial institutions, allow you to make a large contribution, deduct the donation on the current year’s tax return, and decide later which charities you want to support.

However, there are other provisions in OBBBA that could reduce the effectiveness of this strategy, which we’ll discuss below.

NEW STRATEGIES FOR CHARITABLE CONTRIBUTIONS

As you consider your year-end charitable contributions, it’s important to understand new tax breaks for givers — along with new limits on how much some donors will be allowed to deduct.

Starting in 2026, taxpayers who don’t itemize can deduct up to $1,000 in charitable contributions, or up to $2,000 for married couples who file jointly. Donations to donor-advised funds and private foundations aren’t eligible for this new deduction.

If you don’t itemize and want to take advantage of this tax break, consider making the charitable contributions you’d ordinarily make by the end of this year in January 2026 instead.

Meanwhile, taxpayers who itemize on their tax returns and deduct charitable contributions will be subject to a new limit on the amount they can deduct. The maximum amount of cash gifts donors can deduct will remain at 60% of AGI.

However, starting in 2026, the deduction will be limited to the amount of charitable contributions that exceed 0.5% of adjusted gross income, Steffen says.

For example, a married couple with AGI of $100,000 who donate $700 to charity will be permitted to deduct only $200.

To avoid that new floor, itemizers may want to make their 2026 contributions in 2025, keeping in mind how that will affect other aspects of their tax bill.

Taxpayers in the top tax bracket (for 2025, that includes income higher than $626,350 for singles or $751,600 for joint filers) may also want to accelerate charitable contributions into 2025 because of a cap on all itemized deductions those taxpayers can claim.

Starting in 2026, the amount of itemized deductions taxpayers in the 37% tax bracket can claim will be limited to 35% of their taxable income.

MORE BENEFITS FOR HEALTH SAVINGS ACCOUNTS

A health savings account can be a valuable tool to set aside money for both current and future health care expenses. An HSA provides a triple tax break: Your contributions are tax-deductible (or pretax if made through your employer), the money grows tax-deferred, and you can use it tax-free for eligible medical expenses in any year.

After you turn 65, you can also withdraw money tax-free from the HSA for Medicare premiums, in addition to other out-of-pocket health care costs.

The new law has three HSA-related provisions. Starting on January 1, 2026, you can withdraw up to $150 per month ($300 for couples) from an HSA tax-free to pay monthly or annual fees for direct primary care arrangements (also known as concierge medicine), in which doctors provide services in exchange for a membership fee.

The law also clarifies that enrolling in a direct primary care arrangement does not disqualify someone from being able to contribute to an HSA if they also have an eligible high-deductible health policy.

Not all concierge practices qualify under the new law as direct primary care arrangements — there are limits to the types of services they can provide beyond primary care.

Additionally, the law permanently exempts telehealth services from the HSA-qualified plan deductible. Most medical care, except for some preventive care, must be subject to the deductible for a health insurance policy to be HSA-qualified.

During the COVID pandemic, you could receive some telehealth services without first paying the plan’s deductible — typically with a $5 or $10 co-payment — but that rule expired at the end of 2024. The OBBBA permanently exempts telehealth from the deductible requirements, retroactive to January 1, 2025.

Finally, bronze plans and catastrophic plans sold on the Affordable Care Act insurance marketplace will automatically be HSA-qualified, starting with the 2026 plan year.

Using an HSA-eligible bronze plan and making tax-free withdrawals from your HSA to pay for direct primary care could be a win-win, says Roy Ramthun, founder and president of HSA Consulting Services LLC in Silver Spring, Md.

You can sign up for direct primary care for your regular doctor’s visits but have a high-deductible bronze plan as a backstop if you end up needing expensive medical care. You’ll be eligible to contribute to an HSA, and you can also use HSA money tax-free to pay the monthly direct primary care fees.

Notably, the version of the OBBBA that originally passed the House of Representatives would have allowed people who sign up for Medicare Part A to contribute to an HSA. But that provision wasn’t included in the final law, so the current rules still stand: You can make HSA contributions only if you haven’t enrolled in either Medicare Part A or Part B.

If you or your spouse is still working and you have health insurance from an employer with 20 or more employees, you can delay signing up for Part A and Part B. But you must enroll within eight months of losing that coverage; otherwise, you could face a lifetime late-enrollment penalty for Part B.

If you sign up for Part A after you turn 65, that coverage takes effect up to six months retroactively. Keep that time frame in mind when calculating your HSA contribution.

CHANGES TO THE HEALTH INSURANCE MARKETPLACE

Several administrative changes are coming to Affordable Care Act marketplace coverage because of provisions in the OBBBA, as well as new rules from the Centers for Medicare & Medicaid Services.

The open-enrollment period to sign up for a marketplace plan will be shorter. Next year, open enrollment for the federal marketplace (HealthCare.gov) will run from November 1, 2026, to December 15, 2026. States that operate their own marketplaces won’t be allowed to extend open enrollment past December 31. Currently, open enrollment goes to January 15, and even longer in some states.

Before you enroll in a marketplace plan, you’ll need to provide evidence of income eligibility for tax credits for your premiums. (Currently, you have 90 days after you enroll to submit the information.)

If your income increases after you enroll and you don’t update your information with the marketplace, you may have to pay back the extra subsidy when you file your income tax return.

Under the previous rules, there were limits to how much you have to pay back if you underestimate your income.

Enhanced subsidies are scheduled to expire

Perhaps the most consequential outcome for ACA plan enrollees is that the OBBBA didn’t extend enhanced premium subsidies for marketplace coverage. The enhanced subsidies are set to expire at the end of 2025, and Congress probably won’t pass additional legislation to extend them.

So the size of the subsidies and the income levels to qualify are likely to shrink significantly on January 1, 2026. People who earn more than 400% of the federal poverty level will no longer be eligible for any subsidies after 2025. For 2026 marketplace plans, 400% of the poverty level is $62,600 for singles and $84,600 for couples.

If you have individual health insurance from the ACA marketplace and you plan to do Roth conversions, you may want to convert more money before the end of 2025 than in 2026, when the extra income may make you ineligible for the subsidy.

“For a retired client, we’ve been able to do about $100,000 of Roth conversions yearly with the enhanced premium tax credits,” says Mark Whitaker, a CFP and founder of Retirement Advice LLC, a fee-only financial planning firm in Provo, Utah.

“Going forward, to hit their ACA subsidy levels, they will only be able to do about $60,000 of Roth conversions a year.”

But be sure to consider other variables, too, such as your tax rate and other income cut-offs. (For more, see the section above on the bonus deduction for older people.)

UPDATES FOR FAMILIES

If you have kids at home, you may benefit from multiple provisions in the OBBBA.

More-generous tax credits for parents

The OBBBA permanently extends the child tax credit and increases it to $2,200 per child, up from $2,000. The credit phases out for singles with modified adjusted gross income of $200,000 or more and married couples who file jointly with MAGI of $400,000 or more.

The OBBBA also makes permanent a separate credit of up to $500 for families with other dependents, such as parents or adult relatives.

The adoption tax credit is more valuable, too. If you adopted a child this year, you can claim a credit for up to $17,280 in eligible expenses. Here’s what’s new: $5,000 of the tax credit will be refundable.

In other words, taxpayers with tax liability of less than $5,000 can still claim that portion of the credit, which means some of that amount could be returned to parents as a refund.

Starting in 2026, the maximum tax credit parents can claim for child and dependent care expenses, such as the cost of day care or a nanny, will increase to 50% of as much as $3,000 in expenses for one dependent and 50% of as much as $6,000 for two or more dependents (both up from 35%).

The credit decreases based on adjusted gross income to as little as 20% of expenses, but OBBBA increased the income thresholds. For married couples with AGI between $150,000 and $210,000, the credit ranges from 35% to 20%. Couples with AGI of $210,000 or more are eligible for a credit of 20% of expenses.

Expanded uses for 529s

Originally designed as a tax-advantaged way to save for college, 529 plans have been expanded over the past several years to permit tax-free withdrawals for certain non-college expenses, too. The OBBBA extends these uses even further.

“The new rules allow up to $20,000 per year to be used for elementary and secondary school tuition, course materials, tutoring, fees for standardized tests, and more,” says Robert Farrington, founder of the website The College Investor.

Previously, tax-free withdrawals of 529 money for K-12 students were limited to tuition, up to $10,000 annually.

The legislation also permits tax-free 529 withdrawals for certain other expenses, such as non-degree credential programs for plumbing, electrical, HVAC and some other trades; certification and licensing expenses; and continuing education required to maintain those licenses.

That means beneficiaries who don’t go to college will have additional ways to benefit from tax-advantaged 529s.

The law permanently allows rollovers from 529 plans to ABLE accounts, where the money can continue to grow tax-deferred for people with disabilities who may not go to college.

Most of the changes related to 529 distributions took effect as soon as the law was signed on July 4, although the increased, $20,000 annual limit for K-12 expenses doesn’t apply until the 2026 tax year.

Keep in mind that not all states have altered their rules to follow the federal expansion. “For example, California doesn’t allow 529 plans to be used for elementary or secondary school expenses,” says Farrington.

Trump accounts for kids

The OBBBA introduces a new investment account — known as a Trump account — for kids younger than 18, and the government will seed the account with $1,000 for children born between January 1, 2025, and December 31, 2028.

Parents and others can contribute up to $5,000 a year to the account until the child turns 18. Contributions are invested in a fund that tracks a broad U.S. stock index, and they grow tax-deferred.

You may have better options for your child’s long-term savings. Annual contributions are not tax-deductible, and earnings are taxed at the beneficiary’s income tax rates when withdrawn.

Unless the money is used for certain expenses, such as education or up to $10,000 for a first-time home purchase, you’ll have to pay a 10% early-withdrawal penalty before age 59½.

“The only advantage of Trump accounts is the $1,000 birthday gift for newborn children. Families should, of course, accept the free money,” says Mark Kantrowitz, a college-savings expert and author of How to Appeal for More Financial Aid.

But for your child’s future college expenses, you’re better off contributing to a 529 plan, because withdrawals for qualified educational expenses are tax-free.

LAST CHANCE TO CLAIM TAX CREDITS FOR THESE ENERGY-SAVING MOVES

The OBBBA speeds up the deadlines to take advantage of certain tax credits related to saving energy.

The Energy Efficient Home Improvement Credit, which provides a 30% tax credit toward the cost of energy-efficient windows, home energy audits, heat pumps and other energy-saving home improvements, was previously scheduled to phase out in 2033. (The law imposed annual limits for certain projects, such as $600 for exterior windows and skylights.)

But now, the credit expires at the end of 2025. The Residential Clean Energy Credit, which provides a tax credit of up to 30% for more-ambitious projects, such as solar electric panels and solar water heaters, will also expire on December 31. The equipment must be installed and operational by year-end to qualify for the credit.

Additionally, the $7,500 EV tax credit to buy or lease qualified electric vehicles, along with the $4,000 credit for eligible used EVs, ends September 30, 2025.

At the same time, however, the OBBBA provides a new tax break for car buyers: a deduction of up to $10,000 in interest on loans for cars purchased between 2025 and 2028.

You don’t have to itemize to claim this deduction, but it’s available only for loans taken out to buy new cars assembled in the U.S., which rules out many popular models. The deduction phases out for individuals earning more than $100,000 or married couples making more than $200,000.

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 is an entirely logical and reasonable reason for this, and after reading this article, you will understand and — dare I say — agree it has to happen.

At their core, insurance policies work because some people have claims, and some people do not. The insurance companies make money on the policies that do not have claims.

That is an incredible oversimplification, but you see where we start from here. For insurance policies to work, an insurer has to collect more in premiums than it pays out in claims. In general, that's the entire ballgame.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Without sounding old, in the past we have seen a relatively — and that is Relatively with a capital R — steady pace for weather-related claims. That means that, with some level of accuracy, we used to have the ability to predict claims that were caused by Mother Nature. It was possible to have an idea of what was going to happen.

How things have changed

Prices that insurers charged, in part, had these predictions worked into them so that there was enough money to be there to pay for the expected claims.

But two things have changed:

• The level of predictability has dropped. Weather events are happening a lot more often than predicted.
• Weather events today are costing upwards of 400% of what they used to cost.

Don't take my word for it. Let me show you some numbers:

• In 1992, there was one major event. Hurricane Andrew cost about $60 billion.
• In 2005, there was one major event. Hurricane Katrina cost about $201 billion.

That's two major events spread out over several years. But look at these stats for catastrophic events:

• 2017 (three in one year): Hurricane Irma ($64 billion), Hurricane Harvey ($160 billion), Hurricane Maria ($115 billion)
• 2021: Hurricane Ida ($84 billion)
• 2022: Hurricane Ian ($111 billion)
• 2024: Hurricane Helene ($78 billion)
• 2025: California wildfires ($275 billion)

What you can see is a clear trend — more claims, more often, and larger payouts.

You might be saying, "Wait just a minute. I don't live in a hurricane or wildfire area. Why are my premiums soaring?" Let's address that.

For one thing, wildfires aren't happening just in California anymore. Check this out:

• 2023: Maui wildfire ($5.5 billion)
• 2024: Smokehouse Creek Fire in Texas and Oklahoma ($1 billion)
• 2025: Dragon Bravo Fire in Arizona ($124 million)

This is all unprecedented

Wildfires are everywhere. Even in Colorado, record wildfires have led to the creation of a state-backed Colorado FAIR Plan, which is an insurer of last resort for homes in wildfire-prone areas. Colorado!

And we've had these storms:

• 2021: Winter freeze in Texas ($195 billion)
• 2022: North American storm complex ($2.2 billion)
• 2022 Midwest derecho ($1.3 billion)
• 2025: Tornado and severe storm outbreak ($10 billion)

And severe weather continues to happen.

Let me state for the record again that this is not the way things used to be. This is not what has been considered normal, standard or predictable. This is unprecedented in both the damage caused, lives lost and disrupted and high insurance claim payouts. It's the trifecta of bad, bad, bad.

So you can see clearly, in black and white, that weather events across this entire country are increasing, slamming us all.

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The insurance companies we pay our premiums to are also seeing this. They are, if you can personify an insurance company, scared to the bone.

When insurers have consistent and frequent claims of this magnitude, there is only one significant way to ensure that they have sufficient money to pay their customers' claims, and that is to increase the premiums they charge.

What you can do

What can we as consumers do about it? In a word: prepare.

Prepare by taking as many mitigation actions as you can. Regardless of the type of event, an ounce of prevention can, and will, go a long way.

Prepare by planning for your insurance premiums to increase.

Prepare by educating yourself on different types of insurance coverage — and be sure you have what you need, nothing more and nothing less.

Prepare by shopping for a competitive insurance product that is not cheap — since cheap is cheap — but is competitive and does what you expect it to do.

Remember, if you think having insurance is expensive, see what it costs to have a loss without it.

Want to learn more about insurance? Visit KarlSusman.com.

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

As of 2023, raising a child from birth to the age of 18 could cost an average of $331,933, according to Northwestern Mutual.

Between child care, housing costs and saving for college tuition, it's easy to feel like you're constantly playing catch-up. As a financial planner and a parent, I know firsthand how overwhelming it can be to juggle it all.

The good news is you don't need to make millions or have a crystal ball to create stability. A few smart financial habits can help make a world of difference. This article contains five important financial tips that every young family should know.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

1. Build a strong emergency fund

Life with kids is full of surprises — some sweet, others not so much. That late-night trip to urgent care, the school laptop that suddenly breaks or the daycare that raises fees without warning … these are the moments when an emergency fund can help keep you afloat.

Aim to save three to six months of essential expenses in a separate emergency account. Think of it as your family's financial airbag. You hope you never need it, but you'll be grateful it's there.

A high-yield savings account is ideal because it's accessible when life happens, yet tucked away from everyday spending needs.

2. Create (and stick to) a family budget

Budgets are just a map of where your money is going and whether it's taking you in the right direction. Begin by tracking your income and expenses, then categorize them into essentials (such as housing, food, child care and utilities) and non-essentials (like streaming subscriptions, eating out and luxury items).

When you see where your money is going, it's easier to cut back in some areas and redirect those dollars to bigger goals. A budget isn't about deprivation. It's about aligning spending with what truly matters to you and your family.

Apps like YNAB, Quicken Simplifi or Monarch make budgeting more user-friendly and less spreadsheet-intensive, although I'm a spreadsheet enthusiast myself.

3. Get the right insurance in place

Insurance may not be exciting, but it can be your family's safety net. Without it, a single event could possibly derail years of progress. At a minimum, young families should prioritize:

• Health insurance to shield against medical costs
• Life insurance to provide for loved ones if something happens to you or your partner
• Homeowners or renters' insurance to protect your home and belongings
• Auto insurance to protect against costly accidents or liability on the road
• Umbrella insurance to cover liabilities above and beyond what your home and auto insurance don't cover

Depending on your situation, there are different kinds of life insurance you can choose from. For young families on a budget, term life insurance is generally a more suitable option over whole life insurance. It's simpler, cheaper and gives you the coverage you need without locking you into an expensive product.

4. Start saving for education early

College may feel light-years away when you're still paying for diapers, but time is your biggest ally. A 529 college savings plan allows your money to grow tax-free when used for qualified education expenses.

Even small monthly contributions can compound into something meaningful by the time your child heads off to campus.

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I encourage grandparents and relatives to make gifts directly to a child's 529 plan during birthdays or holidays. The gift of education lasts longer than a toy your kids will eventually grow out of.

Thanks to the SECURE 2.0 Act, if your 529 account has been open for at least 15 years, up to $35,000 can be rolled over into a Roth IRA. Just one more reason to start early.

5. Invest in your retirement

When you're juggling child care and household expenses, it's tempting to postpone retirement savings. But here's the hard truth: You can borrow for college, but you can't borrow for retirement.

If your employer offers a 401(k), contribute at least enough to capture the full company match, as this essentially amounts to free money. From there, aim to save 15% to 20% of your gross income toward retirement.

If a 401(k) isn't available, look into an IRA or Roth IRA for tax-advantaged growth. Your future self and adult future children will thank you.

Wrapping it all together

There's no perfect playbook for family finances, but these five strategies create a strong foundation. Start with the basics: An emergency cushion, a thoughtful budget, the right protections, and consistent saving for both education and retirement.

And don't forget the bigger picture. Financial planning isn't only about building security. It's also about giving your family the freedom to enjoy the moments that matter most.

The kids are little only once, so while you're building good money habits, make sure you leave room for fun along the way.

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• Financial Pitfalls to Avoid in Your 30s, 40s and 50s

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.

This happened to Ken Huening, CEO of CoverSeal, on two occasions. "My BMW i8 was eaten twice. I tried dryer sheets, rodent traps, and other solutions, but none of them worked." On one of these occasions, it cost $18,000 to repair his vehicle.

And if you don't have the right insurance coverage, you could be on the hook for this bill. That's why, with Ken's help, we'll cover some tips to help you protect your vehicle from a rodent harvest. I'll also include insurance tips to ensure you have the financial protection you need.

Why do rodents use vehicles?

"Rodents use vehicles to hide from predators," remarks Huening. Once they find a safe hiding spot, they use it to eat, have babies and leave droppings. These droppings are scent breadcrumbs they'll use to return to the scene of the crime.

As rodents develop, so do their teeth. And they need to gnaw on something to keep their teeth from becoming too big, or else they won't be able to eat.

Since many rodents house themselves in battery or engine compartments, it's only natural that they find wires to chew on. They'll also chew on wires and other components to make way for their family members, which sounds cute on the surface, until you receive the repair bill.

"The average cost of a rodent repair bill is $2,500," Huening added. However, if you have a foreign or luxury vehicle, components are harder to replace, meaning you could easily add another zero to that repair bill.

Moreover, it can take months to complete the repair process. In some cases, that can extend to a year if parts are difficult to find.

Therefore, if you plan to travel this winter, knowing how to protect your vehicle is essential.

Rodent-proof your ride. Here's how.

Fortunately, with a few preventative measures, you can lower the risk of costly damage and keep your car safe while you’re away.

Best practices for storing your car inside

If you plan to park your vehicle indoors, Ken has a few tips to help. "The first of which is to pop your hood some. Rodents don't like being exposed for fear of being found by predators, so popping your hood can prevent them from using it as a nest."

The second tip is to seal your garage door. Doing so creates a barrier that doesn't allow rodents to enter in the first place. How do you seal it? You can use foam weather stripping to seal any cracks or holes.

It's also vital not to store any food in your garage, as that's like a neon welcome sign to usher them in.

Best practices for storing your car outside

Meanwhile, if you plan to store your vehicle outdoors, location is paramount. "You don't want to park your vehicle near a food tree because what happens is animals forage for food, then take it somewhere safe to eat. And if your vehicle is nearby, it creates the perfect nest for them," added Ken.

Other places to refrain from parking your vehicle include sewer drains or near downspouts, which are rodent superhighways. Similar to indoors, you can pop the hood to keep rodents out, but then the weather becomes another concern. Therefore, the smartest approach is to keep your vehicle away from areas where animals gather.

You can also use a car capsule. These are like a snowglobe for your car that'll protect it from any intrusions.

Lastly, you can also consider a car cover. Reputable car covers provide 360-degree protection with a weighted bottom to ensure it stays on your vehicle, whether you're gone one day or one year. They prevent pest intrusions to keep your car in showroom quality upon your return.

This is important too because rodent damage can impact another aspect of your finances.

Add another barrier of protection with the right car insurance policy

Rodent damage has become a billion-dollar problem for the insurance industry. Ken remarked, "Insurance companies are modifying their comprehensive policies away from covering vehicle damage from animals."

It means it's vital to check with your insurance carrier to ensure your comprehensive coverage includes animal damage. If it doesn't, then you'll want to shop around with other carriers.

You can do so quickly using the tool below, powered by Bankrate:

Another consideration is your deductible. Your deductible is the amount you must pay before your insurance carrier satisfies its portion of the claim. You want to strike a balance between maintaining affordable premiums and being able to pay out-of-pocket to settle your deductible.

Ultimately, rodent damage can happen to your vehicle whether you're traveling somewhere warm for the winter or just leaving it outside. Ken's Bentley incurred damage from rats within a day. Therefore, it's vital to consider the location where you park your vehicle and buy a proper cover or capsule to keep it protected.

What's more, make sure to examine your insurance policy, as some carriers are discontinuing coverage due to animal damage. Doing these things ahead of time can keep your vehicle safe and give you peace of mind when you travel over the winter.

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The 2025 Medicare Trustees Report projects a steady increase in Medicare Part B premiums and IRMAA surcharges over the next nine years. The projections are based on expected rises in healthcare costs, particularly for outpatient hospital services and physician-administered drugs. It's crucial for retirees and those approaching retirement to understand these projections for proper financial planning.

It's essential to note that these projections are subject to change, and the official figures may vary. The Centers for Medicare and Medicaid Services (CMS) will release the official numbers this fall.

Projected Medicare Part B premiums

The projections in the 2025 report show a significant increase compared to last year's report. The largest year-over-year jump is expected between 2025 and 2026, with a projected increase of $21.50, setting the 2026 Part B premium at $206.50, up from $185.00. The 2024 report projected a 1% increase from 2025 to 2026, with premiums rising to $186.90, only $1.90 more.

The report estimates that the standard monthly premium for Medicare Part B will potentially reach almost $350 by 2034. If the estimates are accurate, the Part B premium is expected to increase by 188% by 2034.

Here is a table with the projected standard monthly premiums:

Projected Medicare Part B IRMMA surcharges

The IRMAA is a monthly surcharge added to the standard Part B premium. The SSA uses the most recent complete federal tax return data that the IRS provides to assess your liability for the IRMAA, generally, two years prior. For 2026, the SSA will look at your 2024 tax return to calculate the surcharge you owe, if any.

These surcharges, which affect high-income beneficiaries, are expected to grow significantly over the next nine years.

Essentially, those who pay the IRMAA are paying a greater share of their actual Medicare Part B and D premiums. As it stands, the government pays a substantial portion — about 75% — of the Part B premium for most beneficiaries who pay, on average, the remaining 25%. For 2024, premiums from Parts B and D covered 23% of Medicare program costs, according to the 2025 Trustees' Report.

If you are a higher-income beneficiary, you will pay a larger percentage of the total cost of Part B based on the income reported on your annual tax return. You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on your income and subsequent surcharge amount. For 2025, the IRMAA Part B surcharge ranged from $74.00 to $443.90 per month, or $888 to $5,326.80 annually, on top of the base premium of $185.00.

For 2026, the standard Part B premium is projected to be $206.50, and monthly Part B surcharges will range from $82.60 to $495.60.

Here is a table with the projected Part B IRMAA surcharges:

Other factors that contribute to IRMMA surcharges

As I explained above, the IRMAA surcharge shifts responsibility for a greater portion of Part B premiums from the Medicare trust fund directly to high earners. However, politics also plays a role in determining how many people pay the IRMAA by adjusting thresholds, freezing inflation adjustments and changing methodologies.

Effective in 2018, the Medicare Access and CHIP Reauthorization Act of 2015 lowered certain income thresholds used to determine the IRMAA amounts that beneficiaries must pay, resulting in a greater number of beneficiaries paying the higher amounts. Moreover, beginning in 2020, the legislation adjusted the methodology used to index the thresholds, and accordingly, more beneficiaries will be subject to the income-related premiums.

Lastly, the Bipartisan Budget Act of 2018 established an additional premium level that took effect in 2019 for individuals with incomes at or above $500,000 (and couples with incomes at or above $750,000), who pay a premium covering 85% of the average program cost. These thresholds will not be indexed until 2028 at the earliest.

Editor’s note: This story has been updated to reflect the amounts at which the 2025 IRMAA surcharge starts.

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Here's what Medicare beneficiaries need to know about getting the COVID-19 vaccine this fall.

Does Medicare cover COVID-19 vaccinations?

Medicare's coverage of the COVID-19 vaccine falls under Medicare Part B, which also covers other preventive vaccines like the flu and pneumonia shots. This means you should not have to pay a copay, deductible, or any other out-of-pocket costs for the vaccine itself or for its administration, as long as the provider accepts Medicare assignment.

This coverage applies whether you have original Medicare or a Medicare Advantage Plan (MA). MA plans must, at a minimum, cover everything Medicare covers. If your Medicare Part B plan covers the COVID-19 vaccine, then your MA plan also has to cover it. However, if you have a Medicare Advantage plan, you may need to go to a pharmacy or provider that is in your plan's network.

The biggest source of confusion and barrier to Medicare beneficiaries getting their COVID-19 vaccine covered by Medicare is the CDC's failure to formally adopt the FDA's 2025-26 COVID-19 vaccine recommendations.

The Advisory Committee on Immunization Practices (ACIP), a CDC panel comprised of experts, has yet to vote on the updated recommendations and give them its stamp of approval.

In June, HHS Secretary Kennedy removed all 17 members of the panel, stating in a press release, “A clean sweep is necessary to reestablish public confidence in vaccine science” and "ACIP's new members will prioritize public health and evidence-based medicine."

Why some people are being denied coverage

Despite Medicare's policy of covering the vaccine, some Medicare participants are being improperly denied coverage for the new COVID-19 vaccine at pharmacies. This is partly due to a splintered regulatory environment, creating confusion for both patients and pharmacists.

The CDC's Advisory Committee on Immunization Practices (ACIP) met on June 25. Despite the notice regarding the meeting posted to the Federal Register on June 9, including recommendation votes for COVID-19 vaccines under 'Matters to be Considered,' the vote did not take place. They did, however, approve recommendations for the RSV and seasonal influenza vaccines.

FDA approval vs. CDC recommendation. The new COVID-19 vaccine has received approval from the U.S. Food and Drug Administration(FDA) for specific groups, including those 65 and older and those with certain underlying health conditions that increase their risk of severe COVID-19. FDA approval alone doesn't guarantee access to the vaccine.

In 18 states and Washington, D.C., pharmacists are only permitted to administer a vaccine if it has also been recommended by the CDC's Advisory Committee on Immunization Practices (ACIP), said Brigid Groves, the American Pharmacists Association’s Vice President of Professional Affairs, as reported by Politifact.

The lack of official recommendations has created a "regulatory patchwork" where some pharmacies are holding off on administering the vaccine to anyone, or are only offering it with a doctor's prescription.

Here are the key reasons for these denials:

• State-specific regulations: A number of states have laws or regulations that prevent pharmacists from giving vaccines that aren't on the ACIP's recommended list, even if the FDA has already authorized them. This means that a person could be eligible for the vaccine under the FDA's criteria, but the pharmacy is legally unable to administer it until the ACIP recommendation comes through.
  • Those states are: Colorado, Connecticut, Georgia, Iowa, Kentucky, Maine, Maryland, Massachusetts, Montana, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, South Carolina, Virginia and West Virginia.
• The shift to a commercial market post-pandemic: COVID-19 vaccines transitioned to the commercial market after Secretary Kennedy declared in August that the public health emergency was over. While Medicare continues to cover the vaccine series and boosters, the process for billing and reimbursement has changed. Some pharmacies may be facing administrative hurdles or are confused about the new billing codes, leading them to deny coverage to avoid issues.

What happens if you are denied coverage

According to Newsweek, some Medicare beneficiaries who were denied coverage for the COVID-19 vaccine were told to pay out of pocket, with costs exceeding $200.

For instance, a woman in California was initially denied coverage because the vaccine "wasn't in the Medicare system." She chose to pay $225 out of pocket for the shot. In a similar case, a couple in Texas encountered the same denial but was able to get their shots after Medicare updated its system.

If you have Medicare and meet the FDA's criteria, a denial for a covered vaccine is improper. The FDA has approved the COVID-19 vaccine for people 65 and older.

If you have trouble getting your vaccine, first confirm your eligibility based on the FDA's criteria, then contact Medicare directly at 1-800-MEDICARE for help.

Call your pharmacy before you go. With all of the confusion over FDA vs CDC approval and the need to update computer systems to properly process vaccine authorizations at pharmacy counters, it's worth a phone call to your local pharmacy before you head out.

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What often gets overlooked is the value life insurance can create while you're still living.

Whether helping fund a child's education, start a new business or reinforce retirement plans, life insurance has the potential to do far more, thanks to what are known as living benefits.

If this concept is new to you, you're not alone. A recent study from Prudential Financial revealed that while many Americans consider life insurance essential to their financial strategy, few understand the full scope of its living benefits.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Notably, nearly 75% of respondents said they were unfamiliar with how life insurance can be used to build generational wealth.

That gap in understanding presents a timely opportunity, especially during Life Insurance Awareness Month, to change perceptions so that life insurance is viewed as an asset that supports long-term financial goals.

What are living benefits?

Living benefits are features built into certain life insurance policies that allow you to access funds or policy value while you're still alive.

In the right circumstances, they can serve as a flexible resource to help navigate major financial decisions or unexpected challenges.

Let's take a closer look at how they work:

Cash-value accumulation. Permanent policies such as variable universal life insurance can gradually build cash value, which can be borrowed against or withdrawn, often functioning like a low-interest loan without the hassle of going to a bank.

Add-on benefits. Life insurance isn't one-size-fits-all, and that's where riders come in. These optional add-ons let you customize your coverage to fit your lifestyle. Whether it's accessing funds early during illness or pausing payments during hardship, riders give you flexibility when it matters most.

Tax advantages. The cash value grows on a tax-deferred basis. In many cases, if you withdraw only what you've paid in premiums, those funds can be generally accessed tax-free.

Wealth transfer. Life insurance can also be used to pass assets on efficiently from one generation to another. With proper planning, it can help reduce tax burdens for your beneficiaries.

Two paths to living benefits

Understanding the types of life insurance is essential to unlocking living benefits:

Permanent life insurance policies, including variable universal life, provide coverage for your entire life, as long as premiums are paid. Over time, they build cash value that you can use for major expenses such as retirement, medical needs, even business investments.

Think of it like buying a home; it's more expensive at the start, but it builds real value over time.

Term life insurance policies offer coverage for a set number of years, often 10, 20 or 30. They're generally more affordable but don't accumulate cash value.

However, many term policies include features such as accelerated death benefits, which allow you to access a portion of the death benefit if you are diagnosed with a serious illness.

In many ways, term life is more like renting; it's cost-effective and simple, but with no equity unless you use it during the coverage period.

Key considerations with living benefits

If you're considering a life insurance policy that includes living benefits, take the time to align the policy with your financial goals and needs.

Here are a few practical ways to evaluate your options:

Start with your goals. Before comparing policies, think about what you want this insurance to do.

• Are you looking for lifelong coverage or just for a specific stage of life?
• Will the living benefits be used for retirement income or unexpected medical costs?

The clearer you are about your goals, the easier it is to choose the right policy.

Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth (soon to be called Adviser Intel), our free, twice-weekly newsletter.

Ask about riders. The right rider can make a good policy even more valuable.

For example, Prudential has a rider that allows consumers to access their death benefits early if they're diagnosed with a chronic or terminal illness. It allows individuals to manage real-life challenges with financial confidence.

A long-term care rider can help cover extended care needs later in life.

Understand the costs. Look closely at any fees for accessing the cash value, penalties for early withdrawals and other administrative charges.

A policy that seems affordable upfront might have hidden costs that affect its value over time.

Evaluate flexibility over time. Your financial needs will evolve, and your policy should be able to keep up.

Make sure the policy you choose offers options to adjust premiums, access funds or add coverage as needed.

The role of financial professionals in supporting you

Another recent study by Prudential found that many Americans feel overwhelmed when trying to understand their life insurance policies. Common sentiments include:

• "How do I make sure I don't use up my policy too soon?"
• "What does this mean for the final payout?"
• "Wait, life insurance can help with other expenses?"
• "I get lost in the jargon. One explanation contradicts the next."

A financial adviser can serve as both a guide and educator, helping to demystify these complexities and inform your decisions. Consider asking:

How does the cash value work, and when can it be accessed? Understanding the mechanics and timing of cash value access is critical to long-term planning.

Will using living benefits reduce the death benefit? In some cases, accessing funds now could reduce the amount available to beneficiaries later. In others, it might not.

How does this policy integrate with your broader financial strategy? Life insurance should be an active component of your financial plan, supporting your goals such as preparing for retirement and passing on wealth from one generation to another.

Life insurance is not just about protecting your family after you are gone. When designed and used effectively, life insurance can be an essential part of your financial strategy.

You need to be proactive and make your policy work just as hard for you as you do for your loved ones.

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

But planning your first overseas journey can seem intimidating. From logistics and setting a budget to choosing an itinerary that matches your interests, traveling at this stage of life has its own set of considerations and challenges, as well as enriching experiences.

The chance for life-changing adventures abroad likely led 70% of adults 50-plus to plan trips in 2025, up from 65% in 2024, according to The AARP 2025 Travel Trends survey. AARP also discovered greater enthusiasm for international travel, with 44% of planners eyeing a trip outside the United States.

When it comes to mapping out the details of your trip, consider health and accessibility needs, all necessary documents, destinations, budget concerns, packing and more to keep things stress-free. Then, follow these steps to ensure your trip is not only memorable, but tailored to your needs as a globe-trotting retiree.

Set a realistic budget

International travel can be affordable, but it can also cost a small fortune. Careful planning and taking advantage of deals can help ensure costs stay within your budget.

Book early and use sites like Skyscanner or Google Flights to find the best deals on flights, and consider booking early or in the off-season for the best deals. Consider hotels, an Airbnb, or senior-friendly resorts. Look for discounts through AARP or senior travel groups.

If you’re budget is tight, consider a hostel. You’ll likely share a bathroom and shower, but the price is significantly less than at a hotel.

Don’t forget to research costs for meals, transportation and activities. For example, a dinner out in Paris might cost $20 to $50. In Bangkok, it might cost $5 to $15.

Save up and set aside a contingency fund of about 10% to 15% of your budget for unexpected costs. And one often overlooked essential is trip insurance, which typically covers medical emergencies, trip cancellations and preexisting conditions.

Choose your destination wisely

Start by picking a destination that matches your interests, budget and comfort level. Do you like history, nature and discovering new cultures? Italy and Greece offer ancient ruins, Spain and New Zealand flaunt stunning landscapes, Malta and Fiji are known for lush beaches, while France and Japan have world-class big cities and beautiful smaller towns alike.

Since this is your first trip abroad, you may want to plan a shorter trip to test the waters, then opt for a more extended trip when you feel more comfortable.

Check weather patterns to avoid extreme heat or monsoon seasons. Look for destinations with senior-friendly infrastructure, like walkable cities or accessible public transport. And, balance the best results for the money spent. For example, Southeast Asia is often affordable, while Western Europe can be pricier.

Plan your itinerary

Create a flexible itinerary that balances adventure with rest and relaxation. Pace yourself and avoid over-complicating your schedule. Plan one to two major activities per day, like a visit to a museum in the morning and an afternoon café stop.

If you prefer to reach your destination via the ocean, cruises can be ideal for retirees, offering all-inclusive experiences with accessible ports. For example, a Mediterranean cruise might visit ports such as Athens, Barcelona and Rome, and take minimal planning on your part. Or, book a guided tour or join a small group for cultural immersion, like an Italian cooking class in Tuscany or a tour of the beautiful Tenryu-ji Temple in Kyoto.

When the day is done, schedule downtime to recharge, especially during long trips. Use apps like TripIt to organize your plans and keep documents organized.

Prioritize accommodations

Prioritize comfort and convenience when booking accommodations. Hotels with elevators or accessibility aids can make life easier and safer. Choosing a vacation rental property can be a great option as a home away from home, but be sure to double-check listings for related costs and details.

If you’re eyeing a group tour, which is popular with retirees for the social interaction, companies like Road Scholar or Overseas Adventure Travel design trips with retirees in mind, mixing a relaxing pace with popular cultural stops. Their all-in-one packages typically cover all meals, guides and transportation, so you’re not sweating the small stuff.

Consider all travel logistics

First, check your passport. To travel abroad, you typically need a valid passport, which must be issued at least six months before you arrive in some countries. If it’s expired or nearing the expiration date, renew it now to avoid last-minute problems.

Next, research visa requirements for your destination. Some places, such as the Schengen Area in Europe, allow U.S. citizens to stay up to 90 days visa-free, but others, like India or Vietnam, may require you to apply for a visa weeks in advance. Websites like travel.state.gov are a goldmine for this information.

Don't overpack, focusing on comfortable clothing and shoes and include essentials like medications. Arrange a local SIM card or international phone plan from your cell phone provider for emergencies and navigation.

Check airline options

Flights can be pricey if you don’t plan right. Look for airlines, like Delta and United, that offer senior-friendly perks, like flexible seating or early boarding. Tools like Google Flights or Kayak can help you get deals on mid-week flights that can often be cheaper. If mobility’s an issue, request airport assistance when booking, as most airports provide wheelchairs, airport buggies or have personnel on hand to assist you at no cost.

Book your travel through a reputable agent and check cancellation policies. Consider senior discounts and off-season deals. It’s also advisable to keep digital copies of your passport, insurance and itinerary — just in case.

Pack light and smart

Finally, pack light and smart. A carry-on with wheels can be your best friend at the end of a long day. Download apps like Google Translate to help with a foreign language or use XE Currency to quickly convert your money.

You can expect international trips to range from around $2,000 to $10,000 for 7 to 14 days, depending on your destination, trip details and preferences, according to The Motley Fool's 2025 vacation cost analysis.

Cruises or guided tours can cost even more. Check out deals on sites like Travelzoo, and consider traveling off-season for better prices and fewer crowds. After all, you’re retired with a flexible schedule. Oh, and toss in a power adapter for international outlets and for all your tablets, computers and phones.

Have fun and relax

Your first international trip after retirement is a chance to explore, relax and create lasting memories. Start small if you’re nervous and expand to more sizable destinations as you become comfortable. When you land, engage with the locals, savor new cuisines and take photos to capture the moments. With careful planning, your one-of-a-kind journey can be rewarding and totally worth all the planning.

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But while shedding a mortgage payment could free up room in your budget as a retiree, that doesn't mean you won't have other homeowner expenses to deal with, like property taxes, maintenance and insurance.

The problem is that even with a paid-off home, your costs of ownership could rise in retirement, causing financial stress and making it difficult to keep up. It's important to understand the costs of continuing to own a house — and to take steps to protect yourself financially when possible.

Don't assume you can't fight your property taxes

In August, the Federal Housing House Price Index measured a 2.9% increase in U.S. home values on a year-over-year basis. When home values rise, property tax bills tend to follow suit, which can be a huge problem for retirees on a budget.

That's why Colton Pace, co-founder and CEO at Ownwell, a property tax appeal service, says older homeowners need to be informed about property tax relief programs.

"In most states, seniors 60 or 65 and older can lower their property taxes through homestead exemptions and property tax freeze programs," he says.

"For example, in Texas, homeowners can combine a general homestead exemption with a senior exemption and a tax ceiling that freezes school district taxes once they reach 65," Pace continues. "Florida, another popular state for seniors and retirees, offers a similar setup."

If you're older, it pays to check with your state's Department of Revenue or Division of Taxation to see what programs you might qualify for. Your local tax assessor may also have that information.

And remember, even if you don't qualify for a property tax freeze, you can always appeal your property taxes on the basis that your home assessment is too high.

Pace also points out that recent changes to the SALT (state and local tax) deduction could spell relief for some homeowners in high-tax states.

"Under the One Big Beautiful Bill Act, the SALT deduction cap was temporarily raised through 2029 to $40,000," Pace explains. The previous limit was $10,000.

However, he warns, "You can only deduct property taxes if you itemize deductions on your federal tax return." There are also income limits associated with this new rule, though they're quite high.

Homeowners in states that include Connecticut, New York, New Jersey, Massachusetts and California may benefit the most from this change, according to the Bipartisan Policy Center.

Keep shopping for homeowners insurance

Homeowners insurance can be a huge expense for older homeowners – especially when home insurance costs keep going up. Bankrate reports that the average U.S. homeowners policy costs $2,408 per year for a $300,000 dwelling limit.

If you live in a state where homeowners insurance costs keep rising (like Florida, where natural disasters are all too common), or if your personal costs keep going up for some reason, it's important to shop around for a policy every year. You may be eligible for a discount based on your age or other factors.

Budget carefully for maintenance

Although property tax and insurance costs can rise from year to year, on a 12-month basis, they're usually locked in, making it easier to budget as a retiree. It's maintenance and repairs that often push older homeowners to their breaking point.

State Farm says a good rule of thumb is to set aside 1% to 4% of your home's value for maintenance each year. But as your home value rises, that requires you to continuously increase your budget.

That, however, may not be a bad thing, since homes tend to need more work as they get older. And if your home is older already, you may need to start with the upper end of that 1% to 4% range.

If you want to make sure you'll be able to afford to stay in your home long-term, you may want to create an emergency fund for home repairs and maintenance specifically. Generally speaking, it's a good idea for retirees to hold enough cash to cover one to two years of bills in case there's a market event that sends portfolio values plummeting. Having dedicated funds for home-related costs takes some of the pressure off.

As Pace says, "All homes require upkeep, ranging from affordable fixes like deep cleaning to more expensive jobs like roof or foundation repairs. Ignoring urgent needs can lead to hazards and bigger bills down the road."

Pace says you may also want to be careful when making home upgrades – something you may be inclined to do as a retiree if you'll be spending more time at home.

"Adding a room or installing a pool will likely increase your home's assessed value and raise your property taxes, which can further deplete your retirement savings," he explains.

It's a matter of priorities

As a retiree who owns a home, it's best to expect that your costs will rise continuously from year to year. There are steps you can take to mitigate that, like looking into property tax programs, shopping for homeowners insurance annually, and having separate funds for maintenance and repairs.

But at the end of the day, if your home-related expenses are eating too heavily into your budget, there may come a point when downsizing makes sense.

Ultimately, you'll need to ask yourself what takes priority – flexibility in your budget, or staying put. There's no right or wrong answer, but it pays to consider a move if the stress of keeping up with your home outweighs the benefits of living in it.

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Answer: In many cases, buying a car after your current car is declared a total loss is the easier, safer and more financially sound option. But there are definitely scenarios where keeping your totaled car makes sense. It's not easy to find information out there about when and why you might be better off keeping a car after it's been declared a total loss.

So, let's break down the pros and cons of each option and some of the math you can do to figure out what your best move is after getting in an accident and having a car insurance company declare your car a total loss.

What happens when a car is totaled?

After a car accident, the insurance company will assess the damage and calculate an estimated repair cost. At the same time, it will determine the fair market value of your car immediately before the crash — essentially, what it would have sold for based on its mileage and condition.

If the estimated repair costs exceed the fair market value or, in some cases, exceed 75% of the fair market value, the insurance company will declare your car a total loss. Instead of paying for the repairs, then, the insurer will pay that estimated fair market value.

If the car is fully paid off, you'll get a check for that fair market value minus your car insurance deductible and the insurance company will keep the car.

If you're still making payments on it, your loan provider will get that check and, if there's anything left after applying it to your loan balance, you'll get the leftover – and the insurance company keeps the car.

If you have gap insurance, that coverage will pay off the remaining balance of the loan, allowing you to get the full payout from the insurance company.

If you want to keep your car after it’s declared a total loss, you’ll need to notify the insurance company and, if applicable, your lender. Once the loan is paid off, you typically have the option to keep the vehicle.

However, the insurer will deduct the salvage value — the estimated amount the car could bring at a salvage yard — from your payout.

Can you keep your car after it's been totaled?

If you own the car or are able to pay off the loan with the insurance payout, you can probably keep the car after the insurance company declares it a total loss. But, just because you can doesn't mean you necessarily should. The first thing to consider is that your car will likely be given a salvage title.

A salvage title is a way of disclosing to any future buyers that this car has been in a severe enough accident to have been declared a total loss. The laws around when they are issued and what restrictions they come with vary by state, but generally, you will need to have the car inspected and deemed roadworthy before you can drive it again.

In some states, getting it repaired and deemed roadworthy again will result in your salvage title becoming a "rebuilt title" or a "rebuilt salvage title." This means that it had been declared a total loss, but has since been repaired and is now legal to drive.

For car insurance purposes, getting coverage with a salvage or rebuilt title is tricky. Many insurers will only offer the minimum amount of coverage required by your state. Others may refuse to insure it altogether.

In some cases, you might be able to get full coverage on a rebuilt title. But note that the "fair market value" is pretty low once it's been declared a total loss, so it might make more sense to drop to minimum coverage car insurance anyway.

That lower fair market value will also matter when it comes time to resell. Many dealerships won't accept a car with a salvage or rebuilt title for trade-in so you'll likely have to do a private sale.

When you do, don't expect much. It's risky to buy a car that's been declared a total loss because the next buyer doesn't know how thoroughly it was repaired, and they'll also face the same issues with getting car insurance you face now.

Despite the serious drawbacks to driving a totaled car, there are some benefits:

• In some cases, the cost of repairs can be substantially less than the cost of a new or reliable used car, especially as the recent auto tariffs drive up car prices.
• While you may only be able to get minimum car insurance coverage on your car after it was declared a total loss, that minimal coverage can cost less, resulting in thousands of dollars saved per year depending on a variety of factors. Between the savings on insurance premiums and the savings on putting off buying a new car, you'd be able to put away a good nest egg over the next few years to put toward your next car when you are ready to upgrade.
• If the alternative is buying a used car, you might have greater peace of mind putting that insurance payout toward repairs instead. Since you already own this car, you know its history and you can make sure that the repairs done to it now are done properly and thoroughly.

These are all important factors to consider when deciding whether or not it's worth keeping your totaled car.

When does keeping a totaled car make sense?

For all the issues discussed above, buying a new (or reliable used) car is often less complicated and less risky than repairing your totaled car to keep driving it. Still, there are a few exceptions that might make it worth keeping this car (though not necessarily to keep driving it):

• You have an older car with a low fair market value. If the fair market value is so low that even minor cosmetic damage (like a fender bender) could be enough to declare it a total loss, it might still be roadworthy. In that scenario, taking the payout and then repairing it will almost definitely be cheaper than buying something new or even used.
• It's a vintage or rare model that you can restore (or sell for parts). If you're a car enthusiast, having that classic car totaled is a painful loss. But taking the cash and keeping the car is probably the best option here. Depending on the severity of the damage, you can either restore this car or use the undamaged parts to restore a similar model.
• You want to donate it to charity as a tax write-off. Of course, you won't get as much of a tax deduction as you would donating a car that wasn't totaled, but this can add to the cash payout you got from your insurer.

How to decide whether to keep your totaled car or buy a new one

Assuming you're deciding between buying a car or repairing this totaled car to drive it, here are some tips to help you decide:

Compare the cost of repairs with the cost of buying.

Do a little online shopping for new or used cars that you would actually want to buy. If you know your car is going to be declared a total loss, you know roughly what the repair costs are.

They're at or near the fair market value of your car. If you haven't heard back from insurance yet, you can use Kelley Blue Book or Carfax to estimate your fair market value.

If the cost of the car you'd be willing to buy is substantially higher than repairing the one you have, you might opt to do the repairs.

According to Kelley Blue Book, the average cost of a new car is $48,841, while a used car averages $25,527.

Depending on how badly damaged your car was, it's possible that the cost of even fairly substantial repairs will still work out to less than the cost of buying a reliable car. That's especially true for more expensive makes and models.

Use the tool below to compare some of today's best auto insurance offers, powered by Bankrate:

Factor in your time horizon

Along with the dollar for dollar comparison of buying versus repairing, consider your time horizon. How much longer were you planning to drive that car before it was totaled?

If you were going to trade it in within the next year or two anyway, you might be better off putting the insurance payout toward a new car now. The resale value of your car after a total loss is going to be a lot lower than its fair market value before the accident. So, repairing it now and selling it in a year or two will result in a net loss.

However, if you were still planning to get many more years out of this car, repairing it might make sense if the repair costs are lower than what you'd spend on replacing it.

The bottom line: Should you keep it or move on?

For a lot of drivers, buying a car after a total loss is the easier and more financially sound option.

But if your car is older, rare or holds sentimental value for you, keeping it may be a good option. Just make sure you do the math and understand your state's requirements for driving a car with a salvage title.

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But even those who have a health plan could find themselves struggling to pay bills.

According to a 2023 study from health care advocacy organization The Commonwealth Fund, 30% of adults with employer coverage were paying off debt from medical or dental care, as were 33% of those with Medicare, 33% of those with an individual or Affordable Care Act marketplace plan, and 21% with Medicaid.

Cutbacks to Medicaid funding in the One Big Beautiful Bill Act, which became law over the summer, have raised concerns that more people will find themselves immersed in medical debt.

“It’s such a common burden because of the complexity and lack of affordability in our health care system, even if you have insurance,” says Ruth Landé, vice president of provider relations at Undue Medical Debt, a nonprofit organization working to alleviate the burden of medical debt.

If you rack up big bills while you’re still subject to your health plan’s annual deductible, you might be on the hook for thousands of dollars before your insurance coverage starts — especially if you have a high-deductible plan.

Even after insurance kicks in, the out-of-pocket costs for co-payments, co-insurance, or charges for out-of-network care can stack up.

Hospital stays and surgeries or serious illnesses that require inpatient care, such as appendicitis or a heart attack, often have hefty costs for patients. Bills for room charges, surgeons, anesthesia, or imaging can quickly accumulate.

Emergency room visits are also a driver of medical debt, although thanks to the federal No Surprises Act, patients can’t be billed more than the in-network rate for emergency care, even at an out-of-network hospital or if some of the providers are in network and some are out of network.

Treatment for chronic illness is another common culprit. Conditions such as diabetes, cancer, heart disease, asthma and autoimmune disorders require regular care, tests and medications, and ongoing expenses for treatments such as insulin, chemotherapy and dialysis can add up.

Insurance plans might cover only certain treatments, medications or specialists. Some newer or specialized drugs or therapies might be only partially covered — or receive no coverage at all — and the specialists you prefer to visit might not participate in your insurer’s network, resulting in substantial out-of-pocket expenses for you.

Costly medical bills might feel insurmountable, but the worst move you can make is to ignore them or forgo care that you need out of fear of going into debt.

According to the Commonwealth survey, nearly two in five working-age adults had delayed or skipped needed health care or a prescription drug in the past year because they couldn’t afford it. If you’ve received a medical bill that you can’t pay, or if you’re already in debt, you can take action to get some relief.

Confirm that the charges are accurate

Make sure that you truly owe the charges you’re being asked to pay. Review copies of your bills, explanations of benefits (EOBs) and other communication from your insurance company and health care providers as soon as you get them.

Insurance companies typically send EOBs in the mail, but you can also usually find them by logging in to your account on the insurer’s online portal. If you can’t locate an EOB for a medical service you received, call your health care provider to be sure it has your insurance information and that it billed the insurance company.

Look for problems such as duplicate charges, charges for services you didn’t receive, incorrect information about you and any medical conditions you might have, and billing for an out-of-network provider when you visited an in-network one.

If you notice that your insurance company paid for a service you didn’t receive, you should point that out, too; even though you might not owe any money, incorrect billing can still be a problem for you because it could cause denials of future claims if the insurance company thinks you already had certain treatments.

Keep in mind that if you get a bill long after you received a medical service, it might be because of ongoing disputes between health care providers and insurance companies, says Landé.

Reach out to the provider or insurance company as soon as possible if anything looks out of place or you don’t understand your charges — and consider doing so by e-mail to keep a paper trail. If your insurance company is denying coverage that you believe you deserve, you can appeal it.

If your health care provider or insurance company fails to resolve inaccurate bills, you can file a complaint with your state’s department of health (find its website at www.usa.gov/state-health), its department of insurance (https://content.naic.org/state-insurance-departments) or, sometimes, its attorney general (www.naag.org/find-my-ag).

These entities can review your complaint, and they might contact the provider or insurer to investigate, though the extent to which they take action to help you will vary by state.

For example, the Illinois Department of Insurance reviews complaints about insurance billing and can take corrective action if necessary, as does the New York State Attorney General’s Health Care Bureau.

Create a payment plan

Once you establish that you’re responsible for a bill, the next step is to figure out a plan to pay it. If you can’t afford it up front, make that clear to the health care provider.

“Providers often just don’t know the economic circumstances of folks. But if they do, they can classify your care as charitable care or offer financial assistance,” says Landé.

Even if you have health insurance, you might qualify for assistance. They might forgive a portion of your bill or, in some cases, the entire amount. Most providers also allow patients to set up zero-interest payment plans.

If you need some extra guidance, consider reaching out to a nonprofit organization such as Dollar For, which offers free help navigating medical financial-assistance applications.

Although it might be tempting to pay a medical bill with a credit card — especially if the bill is unexpectedly large and you don’t have money readily available to pay it — avoid doing so at all costs, says Landé.

If you carry a balance from month to month on your card, you’ll likely pay interest on that debt at a steep rate — an average of 20%, according to Bankrate.

Manage a debt in collection

If you don’t work out a plan to pay a medical bill, the provider might eventually turn the debt over to a collection agency. In some cases, a collection agency might track you down and legally require you to pay under the threat of being sued. Sometimes debt collectors also threaten wage garnishment, meaning your employer could withhold some of your pay to cover the debt.

If you have a medical debt in collection, pay only what you can afford. Don't stop taking medications, visiting your doctor, or paying for housing and utilities. A good general rule is to spend no more than 3% to 6% of your gross income on out-of-pocket medical bills, says Landé.

Debt-collection agencies can work with you to create a payment plan. You might also want to get help from a credit counselor. To connect with one, go to the website of the National Foundation for Credit Counseling.

If a debt-collection lawsuit is filed against you, respond either personally or through an attorney by the date specified in the court papers.

To preserve your rights and the chance to fight a court order, respond promptly. Consider enlisting the help of a legal aid organization such as the Legal Aid Justice Center.

Know your rights

Your state could offer legal protections when it comes to the collection of medical debt. Many states restrict health care providers’ ability to sue patients for their medical debt, often by regulating whether or how they can send debt to collection agencies.

On the federal level, the Fair Debt Collection Practices Act bans debt collectors from using abusive, unfair or deceptive methods.

In recent years, both policymakers and the credit industry have made efforts to lessen the impact that medical debt has on your credit.

Some states (California, Colorado, Connecticut, Illinois, Maryland, Minnesota, New Jersey, New York, Rhode Island, Vermont, Virginia and Washington) have laws in place that prevent or restrict the reporting of the debt to the credit-reporting companies (Equifax, Experian and TransUnion).

In January, under the Biden administration, the Consumer Financial Protection Bureau finalized a rule that banned the inclusion of medical debts on credit reports and prevented lenders from using medical information in credit decisions.

The rule was supposed to go into effect in March. But under the Trump administration, the CFPB no longer supports the rule, and it faces legal challenges from credit-industry groups.

Still, the credit-reporting companies have made policy changes that limit how medical debt might appear on credit reports. Credit reports no longer list medical debts that have been paid, unpaid medical debt that is less than a year old, or medical collections of less than $500.

Major credit-scoring models have altered their formulas to lessen medical debt’s negative effects on the scores. Unpaid medical debt has a smaller impact on FICO scores than other unpaid debt, for example. (Note that if you paid a medical bill with your credit card, that debt is typically not classified as medical debt.)

Make a plan now to avoid debt later

If you have solid health insurance, you can make moves to help you avoid falling into debt in the first place. Preventive care, such as regular check-ups, can ward off expensive health issues. Most health insurance plans must cover certain preventive-care services at no cost.

“Take advantage of your annual wellness visit or annual physical and get to know your preventive benefits,” says Tatiana Fassieux, education and training specialist for California Health Advocates.

Get to know your family history, too, says Fassieux. Even if you’re healthy now, being aware of whether certain medical conditions run in your family may help you assess your risk for future needed care, she says. The U.S. Surgeon General’s “My Family Health Portrait” tool can help you gather information about your family health history and learn about your risks.

If you anticipate that your health care needs might increase in the coming years, consider how your insurance plan would cover you. Compare premiums and deductibles to find the balance of monthly costs and maximum out-of-pocket expenses that will work for your budget.

If you expect to use health care services frequently, you may want to steer clear of a high-deductible health plan unless you have enough money in savings to fully cover the deductible. HDHPs have been associated with statistically significant lower use of evidence-based clinic visits, laboratory tests and prescription drugs for individuals with chronic illnesses, according to a recent study by the Journal of the American Medical Association.

For planned medical services, you should familiarize yourself with the up-front costs — and that starts with knowing the ins and outs of your insurance coverage. Before you receive a treatment, verify that all the providers involved are in-network under your plan. It’s not uncommon for one provider, such as your primary care doctor or surgeon, to be in-network, while others, such as the anesthesiologist or radiologist, are not.

Reviewing coverage in advance with a provider who will be on your care team may help you avoid unexpected costs.

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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Answer: By age 60, you may be at the point where you’re unhappy at your job and can’t take the grind any longer. If you have a large pile of savings, you may be perfectly positioned to make an early workforce exit.

There’s just one problem. Unless you have a spouse who’s still working with a company health insurance plan you can hop onto, you’re going to have to pay for coverage yourself until you become eligible for Medicare. Generally, that doesn’t happen until you turn 65. Having to pay for health insurance could whittle an otherwise generous nest egg down too quickly for comfort. That doesn’t mean you don’t have options, though.

Know what it will cost to pay for health insurance

It may be that if your portfolio is generating a nice amount of income and your living costs are fairly low, you can afford the expense of health insurance premiums for a five-year period with $2.8 million in savings. But it’s important to know what you’re getting into, says Scott Sturgeon, CFP and Founder/Senior Wealth Advisor at Oread Wealth Partners.

“A person retiring at 60 essentially enters a 'health care desert' where they have to go out and find some sort of coverage on their own,” he says. “When I run projections for a client in this situation, I would probably budget at least $1,000 per month, per person in health insurance premiums as part of their cash flow plan.”

Of course, Sturgeon cautions, the cost of health insurance can vary based on your needs and your market. But that’s a starting point he likes to work with.

However, there’s another option, says Sturgeon. Whether it’s more cost-effective, though, depends on the circumstances.

“If they can hold out a couple of years, COBRA may also be an option where they maintain the current health care plan they have through work but have to pay the premiums themselves,” he says. “That can get pricey, so it's something that needs to be reviewed carefully.”

Gil Baumgarten, Founder and CEO at Segment Wealth Management, agrees that COBRA could be an option but warns that it typically has an 18-month limit. Even if you’re willing to cover the cost, it won’t bridge a five-year gap until Medicare kicks in. And he says that based on his experience, “A 60-year-old couple should expect to pay $15,000 or more per year for coverage.”

Consider a health insurance co-op

Given the high cost of health insurance, Baumgarten says people retiring before becoming eligible for Medicare could consider another option — a health insurance co-op. This option, he says, can result in big savings.

“There are several that are faith-based for whatever religion might apply,” Baumgarten explains. “Christian Health Ministries and Christian Healthcare Plan offer practicing Christians an expense-sharing co-op that is significantly less expensive than traditional insurance. United Refuah HealthShare offers similar resources for Jewish affiliations, also at greatly reduced cost as compared to traditional insurance.”

This option, however, may not be available in all markets. And you may not receive the same level of coverage as through a traditional insurance plan.

A scenario worth planning for in advance

Some people don’t realize they want to retire ahead of Medicare eligibility until they reach a certain point in their careers when they can’t take it anymore. That’s why Sturgeon thinks younger workers should anticipate wanting to retire well before 65 — and plan accordingly.

In this situation, he says, “If we could rewind 10 or 20 years, the ideal strategy I would suggest is using a high deductible health care plan, maxing out their health savings account, paying out of pocket for any deductibles, and investing the HSA funds.”

As Sturgeon explains, someone with a lofty HSA balance could dip into those dedicated funds, enroll in an ACA plan with a fairly high deductible at 60, and then use HSA funds to pay those expenses until Medicare becomes available.

Of course, it’s also possible to dip into your general savings to cover health care costs as they arise. The question, though, is whether you can afford to.

With $2.8 million in savings, you have some wiggle room to dip into your savings to cover health care costs. But a better bet would be to try to limit health care withdrawals until Medicare kicks in.

To this end, working part-time is something to consider, as it could allow you to secure health coverage through an employer, even if the coverage itself isn’t that great. At the very least, you may not have to bear the cost of premiums on your own.

Going without health insurance isn't an option

If you’re fairly healthy at age 60 and don’t want to see your hard-earned savings dwindle, you may be tempted to forgo health insurance completely and hope for the best until Medicare becomes available to you. But that, cautions Baumgarten, is a big mistake.

“Going without insurance at that age can also completely wreck your finances with a major health event,” he warns.

If you’re truly done working, period, at 60, your best bet may be to budget carefully and live a bit more frugally while paying for health insurance through age 65. Once Medicare kicks in, you may be able to boost your spending in other areas.

Also keep in mind that come age 67, you’ll be eligible for your monthly Social Security benefits without a reduction. That, combined with distributions from your remaining savings, could make for a reasonably comfortable retirement lifestyle, even if your nest egg was tapped substantially during the five-year period when you were covering your health insurance costs.

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If you're a college student or a retiree wanting to get out of the house more, you might consider it as a viable option. While it can be for many, there are some things you should consider before taking the plunge.

For starters, you'll need to use your vehicle for rides and deliveries. Over time, the wear and tear from the miles can reduce your earnings further with oil changes, ample trips to the gas station, tire and brake replacements and other repairs eating into your bottom line.

However, there's an even more critical element that relates to your car insurance.

The startling truth about insurance and ridesharing

Being a rideshare driver means you're driving more miles, putting you at risk for more accidents.

A University of Illinois at Chicago study found that one in three rideshare drivers had been involved in an accident. Depending on when the accident happens, it can make a huge difference in your financial protection.

Say you're starting work for the day and driving around awaiting your first rider. As you move around the neighborhood, a car pulls out suddenly in front of you, and even with quick reflexes, you're unable to stop in time, slamming into the vehicle.

The other driver has injuries and significant damage. Your vehicle has seen better days. Then you're surprised to find you're on the hook for damages to your car because your regular policy doesn't cover ridesharing.

Why? Because your regular policy is for personal use only, not commercial, which is what you would be using it for if you drove for Uber or Lyft.

While both provide limited liability coverage during this time, it's for other drivers. If your vehicle becomes damaged or you incur any injuries resulting from an accident, you could be on the hook for these costs if you haven't notified your insurance that you intend to use your covered vehicle for ridesharing purposes.

That means you could be without a car if you can't afford repairs, and if you're hurt, you could incur significant medical debt.

Thankfully, you can add rideshare coverage to your existing auto insurance policy. The best way to save money on insurance is to shop around. Use the tool below to explore some of today's best car insurance offer, powered by Bankrate:

How much does ridesharing insurance cost?

Insurify has a tool that lets you compare rideshare insurance costs in your area. They pool quotes from top providers, such as Allstate and Progressive, to help you see how much you'll pay. Keep in mind your costs vary based on where you live, what you drive and your driving history.

It’s important to note that this extra coverage is only needed during the period when you’re logged into a rideshare app but haven’t yet accepted a trip.

Once you accept a ride request, companies such as Uber and Lyft provide more comprehensive coverage that extends to you, your vehicle and other motorists if an accident occurs.

What does ridesharing insurance cover?

Adding rideshare insurance is integral to protecting your finances. Here are some of the coverages it includes:

• Liability coverage: Covers damage and injuries that another party incurs resulting from an accident.
• Comprehensive and collision coverage: Covers you financially if your vehicle incurs damage from an accident, weather or theft.
• Uninsured/underinsured motorist protection: If a driver hits you and doesn't have insurance or their coverage is inadequate, this bridges the gap to ensure you receive the financial assistance you need.
• Deductible reimbursement: It's an optional policy that covers the difference between the ridesharing's deductible (often around $2,500) and your policy's deductible to lower your out-of-pocket costs. What is a deductible in car insurance? It's the amount you must pay before your carrier pays its share of the claim.
• Additional coverage: You can also add on coverage for roadside assistance, rental car reimbursement and more.

A driver's checklist before doing ridesharing

Before signing up, read the qualifications of the provider to ensure you qualify. This is particularly the case for college students, as Uber requires a year of driving experience before being approved.

Once you qualify, reach out to your insurance carrier. Many of the top carriers allow you to change coverage in their app, or you can call to request ridesharing coverage. Ask them what their policy covers and any additional coverages you might want to consider.

Ultimately, while it's an extra step, securing coverage for ridesharing is integral. It bridges the gap between the lapses in coverage for when you're awaiting work and when you're working.

This will protect you financially from having to pay significantly out-of-pocket to repair or replace your vehicle and any other bills that arise.

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As their retirement has drawn closer, though, another concern has come into play: The rise of extreme weather events across the U.S. “Climate has become an extra cloud looming over our plans,” says Kathy.

Being able to afford the coastal home of their dreams, with the requisite insurance coverage, is one question. But what if their new home was hit by a catastrophic storm? What if they were unable to use vital medical equipment or access medication they might need in the future? “The idea of putting our assets into a property that could then be destroyed by a flood — that would put a serious dent in our retirement,” says Chris. “And the health risks we’d face being older are also scary.”

Climate has always played a role in retirees’ plans, but typically in happier ways. It used to be that retirees could envision a certain quality of life in the warmth of the desert, deep in the woods or on the banks of a river.

The word climate has taken on a darker tinge. People may debate the science of global warming, but there’s no disputing that the number and severity of natural disasters continues to rise. Even locations that weren’t subject to hurricanes, floods, fires or extreme heat have become host to catastrophic events. And putting aside the dangers everyone is facing, studies now show that older adults are more at risk from these events than previously understood.

“Recent research has found that older adults are more vulnerable and experience more casualties after natural disasters compared to other age groups,” says Jennifer Pipa, vice president of disaster programs for the American Red Cross. Because older people tend to suffer cognitive and physical declines, as well as other chronic conditions, the need to help them prepare is even more critical, she notes.

The challenge for today’s retirees — and those headed toward retirement — is how to revisit certain assumptions and fortify long-term plans. While it’s impossible to predict where the next “thousand-year storm” will strike, understanding the relevant risk factors is essential, no matter where you live.

A new focus on resilience

Look no further than less than a year ago, when hurricanes Helene (in September) and Milton (October) plowed through the Southeast. The damage in Asheville, N.C., alone was devastating, partly because no one saw it coming to a place that was thought safe from extreme weather events. Record rainfall triggered flooding, mudslides and infrastructure damage on an epic scale — an estimated $60 billion and counting — and all in an area long cherished as an ideal destination for retirees.

“It’s definitely a paradox that Asheville has been marketed as a climate haven for so many years,” says Grace Barron-Martinez, a real estate agent with the Town and Mountain agency there. “People have flocked here to retire, believing it was safe. But as we’re seeing now, there isn’t any place that’s truly safe from these impacts.”

One way scientists are measuring the scale of these calamities is by the amount of damage they cause. Hence, the phrase “billion-dollar disaster” has entered the nomenclature. From 2020 to 2024, the U.S. suffered 23 billion-dollar disasters per year, on average, according to the NOAA National Centers for Environmental Information. There were 27 such events with losses over $1 billion in 2024 alone.

Compare that to the 1980s, when there were only about three events per year that exceeded $1 billion in damage, adjusted for inflation.

“If you look at a storm like Hurricane Helene and the utter devastation it caused, it's clear that our society isn't well adapted to the climate we currently have,” says Kristina Dahl, vice president for science at Climate Central, a scientific research organization that describes itself as a “policy-neutral nonprofit.” “I think there's a lot that we can do to improve the resilience of our communities given the types of extreme weather we’re seeing now.”

Physical vulnerabilities of being older

For retirees, preparing to recover from or avoid disasters should include more than housing and geographic considerations. One key factor is the scale of the over-65 population: In 2022, there were some 58 million people over age 65. That’s projected to grow to more than 78 million 15 years from now.

That is adding to the population density in retirement-friendly areas. And because many of those regions are more susceptible to natural disasters, this puts many older people directly in harm’s way.

Because they’re more likely to have mobility issues, chronic health conditions and to take medications, older people suffer more when disaster hits. Aging bodies also are more affected by dangerous weather. In extreme heat, for example, people over 60 are generally less able to regulate their own body temperature by sweating, which strains the cardiovascular system. Consequently, studies show, more than 80% of heat-related fatalities involve people over age 60.

During a fatal storm or other extreme conditions, risk factors for older adults can multiply. The inability to charge hearing aids can mean missing important alerts. Needing a walker or CPAP machine can hinder someone’s escape. In the Lahaina, Hawaii, wildfires of 2023, two-thirds of the fatalities were 60 and older. During the January wildfires in Los Angeles, all but two of the 30 people who died were over 60 or disabled; the average age was 77. Earlier this summer, a 10-day heatwave in Europe caused an estimated 2,300 deaths, with more than 80% estimated to be among those 65 and older.

Retirees moving to high-risk locations

Unfortunately, a corresponding factor has emerged that’s equally dire for retirees. Fires, floods, tornadoes and periods of extreme heat are not only happening more frequently — they tend to occur (and recur) in the regions where many older Americans live. The majority of counties in the state of Florida, for example, are considered very high or relatively high risk according to FEMA. And Florida’s population includes more than 4.7 million people over age 65.

Worse, despite the increase in natural disasters, signs are that retirees are not taking heed. Call it a triumph of hope over experience, or denial — some at-risk regions are seeing more retirees moving in, not out. For example, five states that are high-risk regions — Florida, Arizona, South Carolina, Texas and North Carolina — also saw the biggest net gain of people over 60 in 2023.

This data dovetails with what realtor Grace Barron-Martinez is seeing in Asheville. Despite the billions worth of damage wrought by last year’s hurricane, “Demand is still pretty strong,” she says. “What I’m seeing more is people paying closer attention to properties themselves. Like, the position of trees, drainage issues or how close the house is to a pond or a creek.”

Rather than viewing Asheville as risky, she says, retirees seem to be taking what happened in 2024 as a fluke, unlikely to recur soon. Or perhaps they’re willing to take on some risks in the name of a better quality of life.

“One of the first clients I met with after the hurricane was a couple looking to relocate from New Orleans,” Barron-Martinez says. “But they’d survived Katrina, so they weren’t particularly fazed.”

Why retirees may be more vulnerable

On top of these physical risk factors, there can be financial repercussions for living in a more vulnerable region. David Flegal, a financial adviser in Cleveland, notes that the cost-benefit analysis of moving into a desirable retirement area — often someplace warmer or coastal — is more complicated now. The demand for homes in these areas, particularly in today’s tight market, is driving up prices — and insurance rates have spiked in some areas as a result.

An analysis by the National Bureau of Economic Research found that homeowners’ insurance premiums rose by 30% from 2020 to 2023 (that’s 13% adjusted for inflation). “This growth is associated with a stronger relationship between premiums and local disaster risk,” the report says. Meanwhile, many insurance companies across the country have stopped renewing policies on homes they deem too risky. A 2024 investigation by the Senate Budget Committee found that the number of non-renewals tripled in some 200 counties.

Flegal has a client who bought a home in Tampa for about $600,000 some years ago. It’s now worth nearly $1.5 million, and the cost of fully insuring the home is now prohibitive. Moving would be painful. “They like where they live, and it feels like home,” Flegal says.

They’d also take a financial hit. Even with the additional cash from the sale of their current property, finding another home could be challenging. Then there’s the tax on the gain from the sale: a likely 15% in long-term capital gains. Flegal notes that the capital gains exclusion for married couples on the sale of a primary residence is $500,000. In this case, even the $500,000 exclusion could leave his client with a $400,000 taxable gain.

The bottom line? “For now, he’s now living in a partially insured home on the Gulf Coast,” Flegal says.

A walk on the financial side

Practically speaking, is it worth factoring in climate- or weather-related risks as part of your retirement? After all, every retiree faces plenty of potential hiccups in the road ahead. Risks include prolonged or chronic illness, losing a spouse through death or divorce, an adult child or grandchild needing financial assistance, and outliving your assets. Not everything can be a line item in the budget.

Jen Mulder, the founder of Pathway Financial Services in Los Angeles, maintains that climate risks need to be part of a long-term financial plan. Thanks to the wildfires that ravaged Southern California last January, clients are more receptive to that conversation. “The wildfires were a wakeup call for a lot of people,” she says.

Still, Mulder says some clients are surprised when she tries to connect the dots to the financial side of their plan. “People don’t realize that certain factors could change — like taxes or inflation — because of these events. Businesses themselves may have more costs, or even liability issues that could impact returns.”

The resilient retiree

Lisa Hillegas, 62, is among those who want to cultivate resilience. In that sense, she’s emblematic of the next generation of retirees who are well aware of the increase in natural disasters and are factoring in those risks.

A lawyer in Ukiah, Calif., Hillegas and her husband moved into the house they hoped would be their forever home in late 2019, just before the pandemic. “We knew there was a fire danger up here,” she says, but they weren’t prepared to be affected by fires hundreds of miles away from their home just two hours north of San Francisco. The record-breaking wildfires in 2020 and 2021 burned millions of acres, generating so much smoke it made life unbearable. Going outside was impossible, and indoors wasn’t much better, Hillegas recalls. “We had air filters in every room. My husband was walking around with one of those filtration masks inside the house. It went on for weeks.”

Not only were all their outdoor activities off limits, Hillegas became deeply worried about the health risks of inhaling toxic pollutants. From her days practicing environmental law, Hillegas was sensitive to the risks of being exposed to chemicals. “With a wildfire, you just don’t know what’s burning — it’s not just trees, it’s appliances, cars, furniture. You're inhaling particles as well as smoke, and we don’t really know what the long-term health impacts are.”

Hillegas and her husband have reluctantly decided to leave California, and they’re now weighing a number of personal, health, climate and financial issues. They’ve considered Maine and Rhode Island — where they have friends or family — but that would put them on the opposite coast from their kids and her husband’s parents.

Making these choices — weighing the cost of living as well as quality of life — has never been an easy calculus. But the threat of natural disasters adds a new layer of complexity. “I consider myself a pragmatist,” Hillegas says. “I want to give myself the best shot at a long and satisfying retirement with my husband. Living in a place where we can’t breathe the air safely for weeks at a time is not the environment I want to grow old in.”

“Now we’re in the process of exploring Portland, Ore.,” she says. “It feels more palatable, because we’re still on the West Coast, and it’s a good city for aging in place.” But, she’s quick to point out, Portland has suffered episodes of extreme heat, as well as wildfires in 2020, albeit far less severe than in California. “All we can do is control what we can. There’s nowhere that’s 100% safe.”

Can you disaster-proof your financial plan?

Gaming out scenarios to come up with different portfolio projections is standard practice in the field of financial planning. Jen Mulder of Pathway Financial Services in Los Angeles has a few additions to that process that she uses to help clients consider the possible impact of different climate- and weather-related events.

Rethink the numbers. If the number of “billion-dollar disasters” continues at its current pace, governments and large companies could be contending with higher costs and bigger outlays. It’s worth running projections that factor in potentially lower returns as well as higher rates of inflation, Mulder says. “Depending on the outcomes, you may want to save more or think about working longer. The point is to give yourself options.”

Consider a Roth conversion. Could tax rates increase, given the burden on the government to help states recover from storms and other events? It’s hard to predict, “but if you believe you could be paying higher taxes down the road, it might be worth doing a Roth conversion on some of your tax-deferred assets now,” Mulder says.

Obviously, doing a rollover from a tax-deferred account like an IRA or 401(k) into a Roth account means you’ll owe tax on that amount at your current rate. But because there are no restrictions on the number of Roth conversions you can do (and no income cap when using this strategy, either), you could roll over a series of smaller amounts over a few years, pay less in tax — and enjoy tax-free withdrawals (once you’ve had the assets in the account for at least five years).

Invest in social capital. Given how vulnerable older people are in any kind of crisis, but especially in a deadly storm or fast-moving wildfire, knowing your neighbors could provide a critical lifeline, Mulder says. While this is true for many retirees, those who relocate need to be proactive about nurturing their social networks: “Let friends and neighbors know if you have hearing issues and might not hear an alarm or warning, or if you have mobility issues and need help getting out of your house.”

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

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Answer: The 10-year mark is a good time to reevaluate your car insurance needs, but there's more to making coverage decisions than your car's age alone. According to Bankrate, the national average cost of full coverage car insurance is $2,679 while minimum coverage averages just $808.

Dropping your coverage has the potential to lower your insurance premiums by around $1,800. Whether that $1,800 per year in savings is worth the increased risk you face by not having comprehensive or collision coverage will depend on a lot of factors. Here's what you need to think about before you decide.

Find out how much you, personally, would save by switching to minimum coverage

At a certain point, the premiums you're paying for full coverage aren't worth the payout you'd get if your car was totaled. The first step to figuring out if you've reached that point is figuring out the dollar amount you'd save on premiums each year.

As mentioned earlier, you could be looking at around $1,800 per year in savings based on national averages. But it's a good idea to check with your insurer to get a more precise estimate.

Each state has its own minimum coverage requirements and the insurance rates you pay depend on so many different factors that your premiums could be significantly higher or lower than the national average mentioned above.

In some cases, you can use your insurer's online portal to get instant estimates on your premiums based on different coverage scenarios. If your insurance provider doesn't offer that, call them up and ask how much your premium would be if you reduced coverage to the minimum requirements in your state.

Once you have that number, you know how much you would actually save by switching car insurance. The next step is to figure out how much financial risk you're exposing yourself to by dropping coverage. That part isn't quite as straightforward.

How much can you expect your car insurance to pay?

To decide if full coverage is worth its weight in premiums, you need to estimate the maximum payout you could possibly receive if your car was damaged by something covered in the comprehensive or collision coverage you're thinking about dropping. To do that, answer the following questions:

• What is the current fair market value of your car? This is roughly the amount your insurer would pay if your car is totaled. In other words, it's the most you could ever expect to get paid after an accident. You can use tools from sites like Carfax or Kelley Blue Book (KBB) to get an estimate.
• How much do common repairs cost for your car? In the 10 years you've owned your car, you've probably had to make some repairs to it. Dig through your records and note the amount you paid for different repairs. Note that tariffs are raising the cost of car repairs as well so plan for those same repairs to cost a little more in the future. You should also look up estimates for other common types of damage you'd need to get repaired after a car accident. That includes body work like repainting, patching up dents or scratches or replacing broken fenders and headlights. It also includes internal repairs like fixing leaks and damaged engine components.
• How many years of saved premiums would it take to reach that maximum payout? If you don't want to do the research on the cost of repairs, another way of thinking about the value of full coverage is how long it would take you to save up the maximum payout yourself. Let's say your current fair market value is about $10,000. At an average of $1,800 per year in saved premiums, it would take you over five years to save up that $10,000 yourself. If the estimated value is only about $5,000, however, you'd have that cash saved in under three years.

Based on those estimates, how quickly would the cost of repairs outweigh the fair market value of your car? Remember, your insurer will total your car if the cost of repairs after an accident are more than the fair market value of your car.

If fixing a headlight or replacing a radiator would be enough to put your repair costs over that value, your "full coverage" car insurance isn't really providing much coverage. But if the fair market value is still high enough that the repair cost from minor accidents wouldn't risk your car being totaled, full coverage is still providing some value.

How much longer do you plan to keep this car?

The next factor to consider is how many more years you plan to drive this car and what your plan is when it comes to buying the next one.

If you're planning to drive this 10-year old car into the ground, you may well have another 10 years of driving left on it – but you probably aren't expecting a huge payout or trade-in value when it comes time to get a new (or new-to-you) ride.

In that scenario, dropping to minimum coverage now and stashing that $1,800 or so per year of saved premiums into a high-yield savings account or CD account would give you a nice nest egg to put toward your next car when you finally do need to retire old reliable.

If your car is damaged in an at-fault accident before you're ready to trade it in, you can use those savings to cover the repairs out of pocket and still have time left to rebuild your savings for your next car.

If you're planning to upgrade in the next couple of years, you might be hoping for a decent sale price or trade-in value to put toward your next car. In that case, keeping full coverage probably makes more sense.

The $1,800 or so per year you'd save won't build up fast enough in a year or two to make up for the risk of your car being totaled and leaving you with no cash on hand to put a down payment on something new.

Situations when you should never drop to minimum car insurance

While there are some scenarios where the saved premiums are worth more than the value you're getting out of full coverage car insurance, there are a few situations where it's never worth the risk:

• You're leasing the car. Leasing agents typically require full coverage as part of the terms of the lease.
• You're still paying off the car loan. Full coverage is sometimes required by lenders. Even if it isn't, if you're still paying off this car, your financial risk in an at-fault accident is high. If your car is damaged beyond repair, you could be left paying off a loan for a car that is now sitting in a junkyard while also taking out a new loan for a new car.
• You have a luxury or exotic car. If you're driving your dream car, you really don't want to risk being underinsured. The specialty repairs are more costly and replacing that car in an accident isn't always as straightforward as heading to your local dealership. Even the higher rates of specialty coverage needed for this car are still likely low enough to be worth the peace of mind that you'll be paid the full cash value of your specialty vehicle if anything were to happen.

Deciding if minimum coverage is right for you

The right time to reduce your coverage to the minimum car insurance required by your state might be today or it might be never. The answer depends on how much you're paying, how much your insurance would pay you in a covered accident and how much risk you're willing to expose yourself to for the remaining years you plan to drive this car.

With that said, if you drive a car long enough – and it isn't a rare or specialty model – you will probably reach a point where the maximum payout you can expect from a full coverage policy isn't worth the thousands per year in extra premiums you're paying for that coverage.

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