Most people have at least a little familiarity with annuities, which are attracting more attention.

Sales set a record for the first half of the year: $223.0 billion in total, up 3% from the same period last year and a record, according to LIMRA, an industry research group.

More people are concluding annuities are right for them. That doesn't mean an annuity is right for you. Different types of annuities do very different things. One type might fit your needs precisely, while another might not at all.

The best plan is to learn about annuities, decide if any might be right for you, then home in on which would be optimal.

Here are four key considerations.

1. Your age

Nonqualified annuities are funded with after-tax money. They're not held in an IRA, Roth IRA or other qualified retirement account.

These annuities offer one of the few ways to get powerful tax advantages with nonqualified savings. As long as you don't withdraw any interest or earnings from the annuity, you won't be taxed on it.

With tax deferral, your money can grow faster. With an IRA or 401(k), you must start taking distributions, knowns as RMDs, by age 73. With nonqualified annuities, there's no age requirement. You can let your money compound without taxes as long as you like.

Sound like a great deal? Sure. It's such a great deal, the government puts restrictions on it. Any withdrawals of annuity earnings before age 59½ are taxed and penalized.

With a few exceptions (such as for permanent, total disability), there's a 10% IRS penalty on withdrawals, along with regular income tax.

All accumulated interest must be withdrawn first before you can take out tax-free return of principal, according to IRS rules.

Because of that penalty, most annuities are bought by people who are in their 50s or older because they're already exempt from the penalty or soon will be. Age is an important consideration.

2. How much you have in savings and investments

With few exceptions, annuities aren't completely liquid. Those designed to build up your savings (deferred annuities), you'll pay a penalty to the issuing insurance company if you make an excessive withdrawal or cancel your policy during the penalty period.

With almost all income annuities, once the free-look period is past, you're committed and can't get your principal back. You're locked into a contract.

If you're considering an annuity, it's important to figure out how much access to your money you might need.

If your savings are minimal and you have a lot of credit card debt, you probably can't afford to lock up money in an annuity. You'll need unhindered access to your funds when expenses come up.

There's no magic number for the amount of savings you need to make a nonqualified annuity feasible, but you don't have to be wealthy. It depends a lot on your circumstances.

Can an annuity be a good idea if you have $250,000 total in savings and investments? You can probably move some of that safely into one or more annuities.

But people with less in savings can safely put money into an annuity. For instance, if you're retired and have a good stream of income from a pension, Social Security and perhaps other sources, you might be able to safely sock away some money in an annuity.

3. Your asset allocation

Annuities of all types (except variable annuities) are designed to reduce risk because they come with guarantees. Income annuities guarantee payments for either a set period or life. Fixed deferred annuities come in various flavors, but (except variable annuities) guarantee your principal.

If you're heavily invested in stocks and can afford to tie up some money in an annuity, it would make sense to use a fixed or income annuity to lower your risk and give you peace of mind.

4. Income generation

If you're retired or semiretired, or about to be, you might need to generate income, especially if you want to delay taking Social Security benefits to maximize your payout.

An immediate income annuity can be a great answer. Most people choose the lifetime option. This lets you create your own lifetime private pension and helps assure you'll never run out of money. It's "longevity insurance."

I'm a big advocate of income annuities, but I know they don't appeal to some people because you're signing over your money to an insurer in exchange for a stream of guaranteed income.

Those folks might want to use a fixed-rate annuity — a multi-year guarantee annuity or MYGA — instead to generate income.

A MYGA is a CD-like vehicle that provides a set rate for a set period, and rates are typically higher than bank CD rates for the same term. For instance, as of November 2025, you can get up to 6.30% on a five, six or seven-year MYGA. Most MYGAs allow penalty-free withdrawals of interest.

If you put $100,000 into a 10-year contract earning 5.75% with that feature, you'll receive $5,750 a year for the next 10 years. If you withdraw all the interest each year, you'll still get your $100,000 principal back at the end of year 10.

Flexibility is a big advantage. Let's say during years one to five, you need to take out all the interest.

In year six, you start receiving Social Security payments and no longer need the income. You can let the interest compound tax-deferred in the annuity for the remaining five years. After five years, the principal will have grown to $132,252.

Determining if an annuity might be right for you takes some thought and planning. Consider your situation in total, and if an annuity can help you meet your goals, act now.

Ken Nuss is the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed, and lifetime income annuities. Ken is a nationally recognized annuity expert and widely published author. A free rate comparison service with interest rates from dozens of insurers is available at www.annuityadvantage.com or by calling (800) 239-0356. The firm also offers an income- annuity quoting service. There are no fees or charges for the firm's services; 100% of the client's money goes to work for them in their annuity.

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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.

Retirees have long expressed their frustration that a portion of the Social Security benefits they've spent a lifetime earning could be subject to federal income taxes. And for years, those concerns have sparked debate across the political spectrum.

During his 2024 campaign, President Trump proposed exempting Social Security from federal income tax. And in recent months, lawmakers in Congress (both Republicans and Democrats) introduced legislation with that same goal in mind.

So far, however, the tax on benefits — which is based on a person's filing status and income — remains in place.

But thanks to the One Big Beautiful Bill Act (OBBBA), which passed in July, many older Americans can still count on a hefty tax break, at least for the next four years.

The new law temporarily provides a "bonus" deduction of up to $6,000 each year, from 2025 through 2028, for taxpayers 65 and older. (That's $12,000 for married-filing-jointly couples if both spouses are 65-plus.) This is on top of the annual additional standard deduction that these older taxpayers are already allowed.

But unlike the existing additional standard deduction, you can take the new bonus deduction even if you choose to itemize on your tax return.

There are income limits: The value of the bonus deduction begins to phase out at a modified adjusted gross income (MAGI) of $75,000 for single filers and $150,000 for those who are married and filing jointly.

And it phases out entirely if you have a MAGI above $175,000 as a single filer, or above $250,000 for those married and filing jointly. (It is not available at all to those whose tax status is married filing separately.)

Benefits of the new tax break

For many middle-income individuals and couples, this will make a significant difference at tax time. Most will be able to escape, or at least reduce, the taxation of their Social Security benefits.

And because the bonus deduction isn't tied specifically to Social Security, others will get a break, as well. For example, lower-income retirees, who generally don't owe taxes on their Social Security benefits, can also take advantage of the bonus deduction.

So can older adults who have decided to delay filing for their Social Security payments as long as possible in order to keep growing their monthly payment.

The reform recognizes the financial pressures retirees face today, from rising health care costs to housing instability, and aims to provide a buffer against these challenges.

And if supporters of the new law are correct, the tax relief will also have a positive impact on the overall economy — both locally and nationally — as retirees will have more money to spend on goods and services.

Here's how the bonus deduction for older people works

The new deduction is referred to as a "bonus" because it can be layered on top of the standard deduction you take for your filing status, or on top of your itemized deductions, and the additional deduction that older adults already receive.

Here are some basic examples of what that could look like, based on 2025 deduction amounts, for taxpayers who are eligible for the full bonus deduction.

An eligible single filer, age 65-plus, could receive: $15,750 standard deduction + $2,000 annual additional deduction + $6,000 new bonus deduction = $23,750

An eligible married couple filing jointly, both 65-plus, could receive: $31,500 standard deduction + $3,200 annual additional deduction ($1,600 each) + $12,000 new bonus deduction ($6,000 each) = $46,700

Make the most of your bonus with proactive planning

How can you optimize the bonus deduction for the next four years — and into the future if it's made permanent?

If you're hoping to avoid paying taxes on Social Security, the bonus deduction alone may be enough to keep you under IRS thresholds for your filing status. If you're single and your combined income is between $25,000 and $34,000 — or between $32,000 and $44,000 if you're married filing jointly — 50% of benefits may be taxable.

If your combined income is over those limits, 85% of your benefits may be taxable. Though the bonus deduction won't exempt everyone, it's expected to deliver welcome relief for many retirees.

And with proactive planning, there may be other ways to benefit from the bonus deduction. You might find the time is finally right to do that Roth conversion, for example.

Or, if you had high medical bills or made a substantial gift to charity, you may want to look at itemizing this year.

You can also use the deduction to offset the taxes on required minimum distributions (RMDs).

Your financial adviser and/or tax professional can help you evaluate a variety of strategies that might suit your needs. But don't delay: The clock is already ticking on this opportunity to pay less to Uncle Sam and keep more money in your pocket.

For many older Americans, that's more important than ever.

The passage of the OBBBA represents more than a tax cut; it's also the recognition of this generation's contribution to the nation's economy and an assurance that retirement shouldn't come with new financial burdens.

And I expect, as its implementation continues, that the long-term effects of this innovative law could play a crucial role in shaping retirement policy for generations to come.

Kim Franke-Folstad contributed to this article.

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

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• Your Golden Years Just Got a Tax Break, But There's a Catch

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

"I got hurt on the job — in my first few minutes, actually — and can't find a lawyer anywhere to take my case." That was how my conversation began with 17-year-old "Beau," who was calling from Charleston, S.C.

"Well, Beau, what kind of job do you have, and how were you injured?"

"Mr. Beaver, you will figure it out sooner or later, so I might as well be upfront. This was to be a weekend job as a porch pirate, working for a guy who runs a crew. A box I picked up exploded, spraying pink glitter everywhere — like what would happen in a gender reveal — and then a loud alarm sounded.

"In my hurry to get away, I tripped over a sprinkler head on the front lawn, fell and fractured my right wrist.

"I want to file a workers' compensation claim and also sue the homeowner who rigged this booby-trapped package, but when I try to speak with an attorney, everyone laughs at me."

I thought, "Yeah, I would, too!" But why would a porch pirate, also known as a thief, from the South be calling me?

Morally satisfying, entertaining videos

We've all seen — on the news and other websites — videos of a porch pirate swiping a package and walking away with a look of great satisfaction on their face, and then BOOM! The package explodes, covering the thief in brightly colored powdered dye or glitter. Next, we hear the creep swearing loudly.

There are hundreds of these videos that are morally satisfying, especially to anyone who has been the victim of a porch pirate.

Unfortunately, many are AI-generated, but everyone I've spoken to enjoys watching the instant karma that's delivered.

Now, going into business as a porch pirate requires only two things: a vehicle and being morally bankrupt. But what if you don't have reliable transportation that enables a quick getaway and still have dreams of financial independence through theft?

You go to work for someone who has both.

As Beau explained, "I met a guy who hires people to steal packages. The process was very smooth, very professional." This is how Beau described it:

The "employer" had one vehicle follow actual delivery drivers and report the addresses where parcels were delivered.

Wearing high-visibility safety vests, Beau and his cohorts were driven to those addresses, where they placed a business card for a tree trimming company on the porch near the recently delivered package, took a photo of it to make the process appear legit, then they would grab the package and leave. (The boss wanted a photo to keep all the Beaus from ripping him off.)

Not only did Beau share a photo of this event, he had an actual video — from walking up to the porch to when he fell.

"This was my first house," he said. "I was nervous, and instead of selecting the photo option on my phone, I accidentally pushed the button for video." (He also mistakenly picked up a package that had already been sitting on the porch, not the one that had just been delivered.)

He played it for me. I almost fell out of my chair, laughing.

Why was this South Carolina teen reaching out to a lawyer in California?

Beau explained that he did not tell his father what "the job" was, only that he fell and needed to speak with an attorney.

"My dad reads your Kiplinger column, and you interviewed a lawyer there some time ago, so we thought you might be able to put us in touch with someone."

Even if I could, I would not.

Could a homeowner actually be held liable in this case?

Every law student in America can tell you about the 1971 Iowa Supreme Court case Katko v. Briney.

The Brineys owned an unoccupied farmhouse that had been repeatedly vandalized and burglarized. They set up a loaded shotgun trap in a bedroom, set to fire when the door was opened, aimed to hit an intruder in the legs. No warning signs were posted.

Katko broke into the house to steal antique bottles and jars and was severely injured when he triggered the trap.

After pleading guilty, he sued the Brineys for actual and punitive damages and was awarded $30,000. The Brineys had to sell much of their farm to satisfy the judgment.

I remember to this day the outrage of students in Professor Ogren's torts class at Loyola Law School in Los Angeles. How could any lawyer help to reward this thief? How could a state Supreme Court validate the judgment?

This case is still precedent for the proposition that courts do not approve of potentially deadly booby traps, placing human safety over the value of property.

The law generally permits the use of deadly force only when a person is present and faces an imminent threat of death or serious bodily harm. Booby traps, by definition, operate when the owner is likely not present, removing the possibility of a human judgment call on the necessity of force.

Clearly, our genius Beau tripped over a sprinkler head — which was not part of the booby trap — and the glitter did not cause injury. Juries and judges would think, "The kid got what he deserved" — and that is why no lawyer playing with a full deck would take his case.

Has any homeowner been prosecuted or sued for an exploding "bait" package of glitter or dye? I could find no cases, anywhere, over the past several years.

That said, it isn't recommended that you booby-trap your packages.

My advice to Beau

I thanked Beau for his call, telling him that he was far luckier than he realized.

"You were about to embark on a path that could lead to state prison. Think of the fractured wrist as the luckiest break of your life. Get an education, or a trade, steer clear of creeps who dangle quick-money schemes before your eyes. Also, tell your family the truth and about our conversation."

He promised to do so. I think he will.

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

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

As a financial professional, you build your business on trust. Clients seek guidance on their most important life decisions, and that relationship is founded on more than just numbers. It's about connection.

What if you could deepen that connection, expand your reach and strengthen your team while making a tangible difference in your community?

Strategic community engagement offers a powerful way to do that. It's about aligning your firm's values with meaningful action.

The benefits go far beyond a simple tax deduction. When done right, giving back can boost brand recognition, drive referrals and foster a company culture that top talent wants to be a part of.

Let's explore how real advisers are turning community spirit into business growth.

Build your brand by building your community

In a crowded marketplace, a strong brand helps you stand out. Community involvement is an authentic way to show your firm's values.

Instead of just telling people about your causes, demonstrate them through action, creating a reputation that marketing dollars can't buy.

Just ask Rob Russell of Russell Total Wealth and Wellness. His Dayton, Ohio, firm decided to move beyond sporadic donations and focus its philanthropic efforts on four core pillars:

• Supporting military veterans and first responders
• Mentoring local youth
• Improving community health care
• Boosting Dayton's business reputation

By becoming a lead sponsor for such organizations as Big Brothers Big Sisters, the Russell name became highly visible at local events.

This strategic approach didn't just feel good; it helped elevate the firm's profile and showed the community who they were.

Turn authentic connections into client relationships

Many advisers find their best clients through referrals, which are built on trust. Community engagement is a natural way to build that trust on a wider scale.

When potential clients see you and your team volunteering or passionately supporting a local cause, they see you as more than just an adviser. They see you as a neighbor.

This is exactly what the team at Russell Total Wealth and Wellness experienced. The firm's deep community involvement led to referrals, including a client who likely would have never attended a traditional seminar. These clients were drawn to the firm's genuine commitment to the community.

David Brooks of Retire SMART found a similar path to connection, with a different method. His calls strategy involves re-engaging past prospects with timely, relevant information.

By reaching out with a thoughtful message tied to current events, he turns a cold lead into a warm conversation.

This approach, focused on personal connections, helped bring in a substantial number of assets in a single year. It proves that focusing on people first pays off.

Strengthen your culture and engage your team

A strong company culture is essential for attracting and retaining great employees. People want to work for a company with a purpose beyond the bottom line.

Involving your team in community initiatives can increase morale, foster teamwork and create a shared sense of pride.

Chad Slagle of Slagle Financial saw his employees become more engaged — and more grateful to work for a company with heart — by shifting to a service-oriented mission. Spurred to action by the death of a local police officer who left behind a wife and daughter, Chad founded Teaming Up for Good, his firm's philanthropic wing.

The initiative, which supports first responders, the military and children, gave his team a powerful cause to rally around. It transformed their workplace into a community of people making a difference together.

Create a legacy of lasting impact

While the business benefits are clear, the most profound outcome of community engagement is the positive change you create. By addressing local needs, you can help build a legacy that lasts.

Slagle's support for the Tyler Timmins Memorial Foundation, created in honor of the fallen officer, shows how a firm can help heal and strengthen its community in a time of need.

Similarly, Josh Bradley of Capital City Financial Partners hosted educational events with FBI agents to teach clients about elder fraud and cybersecurity. By providing this vital service, his firm became a trusted advocate for its community's most vulnerable members.

Actionable steps to get started

Ready to harness the power of giving? Here's how you can start:

Define your mission. Identify causes that align with your firm's values and resonate with your team. What are you passionate about?

Plan with purpose. Start small. You don't need a massive budget to make a difference. Choose one or two initiatives, and do them well.

Involve your team. Ask your employees what causes they value. Giving them a voice will increase buy-in and engagement.

Partner for impact: Collaborate with local nonprofits or community organizations. They have the expertise and infrastructure to help you make a real impact.

Share your story. Let your clients and community know what you're doing. Share updates in your newsletter, on social media or at client events. This inspires others and reinforces your brand's commitment.

Ultimately, integrating community engagement into your business model is a win-win. You'll build a stronger business, a more engaged team and a better community. It's a powerful reminder that doing good truly is good for business.

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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 2020s have been a transformative time for advisers. After the COVID-19 pandemic, recent years introduced an unprecedented explosion of new products, platforms, changing demographics and rising expectations from time-constrained, tech-savvy clients.

Despite these transformations, the core of successful financial advising remains unchanged: the human touch.

In my daily interactions with advisers, the overwhelming viewpoint is: In 2026 and beyond, advisers must harness the power of technology to enhance the personal, authentic connections that are the cornerstone of their role.

Advising — it runs in the family

As shown by our research, the financial advisory industry is no longer simply managing investments; it provides comprehensive financial guidance and support.

However, who receives that support and what they expect from their adviser is changing rapidly.

We're in the beginning stages of the biggest wealth transfer ever. This means new clients who differ widely from their parents and spouses in terms of risk tolerance and communication preferences.

Inheritors might not settle for simply working with their spouses' or parents' advisers. They might look elsewhere to assess their options, and a key differentiator is empathy.

This is a significant opportunity for advisers. They must:

• Adapt their human touch to better serve a younger and more diverse clientele
• Develop skills to understand and address the unique financial needs and concerns of these clients, ensuring that they feel supported and heard

We're already seeing advisers adjust their practices to account for future transitions through family-based planning. Engaging with an entire family to workshop solutions ensures all members approve of the financial strategy, building trust and fostering long-term relationships.

The most successful advisers in 2026 will be those who prioritize coaching and planning with families over transactional services to counteract the increasing complexity of clients' financial lives and the need for personalized, holistic advice.

Humans lead, and technology must follow

Technology remains a fundamental enabler of success for advisers, and the pace of change is accelerating. Great advisers use sophisticated tools to manage portfolios, account transitions and tax-loss harvesting.

As advisers have updated their practices to account for increased demand for personalized counsel, technology will evolve alongside them.

Generative AI is a prime example. Advisers can use generative AI to take notes and recap calls, allowing them to worry less about capturing next steps and instead focus on building rapport with clients.

They can also use generative AI to summarize market trends and advice quickly based on the acumen level of clients and how they like to receive information. In both cases, advancements in technology help advisers focus on the human side of advising.

Extreme investment product proliferation has led to an overwhelming number of options for advisers and their clients, and has indirectly influenced the subsequent rise of separately managed accounts (SMAs).

While SMAs allow clients to receive tailored solutions, it complicates an adviser's bird's-eye view of their entire portfolios.

As more funds become available and clients increasingly expect personalized and flexible support, advisers should leverage AI to examine which will be true value-adds.

For example, advisers should analyze what they're purchasing to confirm products are "true to label" and without "hidden" drawbacks, such as having a high expense ratio relative to the peer group average.

Though all investing is subject to risk, this extra analysis can help advisers feel confident they're giving their clients the best chance for investment success.

Advisers can also leverage tools and support from such asset managers as Vanguard to oversee ongoing portfolio management. Asset managers can help advisers achieve scalability with portfolio construction tools that can run on-demand diagnostics of portfolio risk and return drivers to create custom reports and action plans for clients.

By using AI and other tools to weed through new offerings and develop scalable solutions, advisers can more quickly make decisions, allowing them to spend more time on strategic planning, relationship management and prospecting, and less on administrative tasks.

The talent shortage is a 'right now' problem

McKinsey estimates that, by 2034, the financial services industry will face a shortage of about 100,000 advisers. As with the generational wealth transfer, this is a "right now" situation.

To account for and address shortages, firms, banks and home offices alike must rethink their practice management — both from a talent and a tool standpoint.

For example, we work with advisers who are experimenting with teaming to maximize resources and embrace efficiencies, while other advisers lean on diversified, managed model portfolios to free up time to take on new clients.

To attract and retain top talent, institutions must provide autonomy to advisers where possible. In this era of rapid innovation, it will be important to offer the freedom to choose from a broader universe of products.

Scalable, portfolio-based solutions can help advisers make their role more manageable and appealing.

Institutions can also offer training programs that focus on both technical skills and soft skills, such as communication and empathy, to help advisers connect with new prospects and existing clients.

The reality is that, even in the face of a talent shortage, expectations and demand aren't slowing down. The good news is that neither will the evolution of technology. By leaning into technology to streamline tasks and evolving practice management, advisers can stay ahead.

Conclusion

Next year will be defined by the seamless integration of innovative technology and the irreplaceable human touch.

By leveraging new technology to better provide coaching and planning and address the talent shortage, advisers can thrive in an increasingly competitive market.

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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.

Today's clients no longer want piecemeal financial help. They want a family office experience, even if they're not ultra-wealthy.

That means receiving investment guidance, tax filing and planning and estate planning all in one place. The old model of an adviser building a 60/40 portfolio or a CPA filing a return once a year no longer meets expectations.

Clients increasingly expect integrated investment, tax and estate planning support as part of holistic wealth management.

The technology options of the past — single-purpose, siloed solutions — do not deliver on this need. Tax software that doesn't integrate with financial plans or estate planning tools that operate in isolation only add friction and duplication of work.

Investments in tech and talent

Forward-thinking wealth management firms are investing in talent and technology to meet these demands. At the same time, CPAs are reshaping their roles by becoming financial advisers, affiliating tightly with advisers or being acquired outright.

While the largest CPA-affiliated wealth firms now oversee hundreds of billions in assets under management (AUM), the more telling trend is the rapid growth of integrated advisory models in which tax and wealth services are converging to meet client demand for year-round guidance.

Estate planning is evolving in the same way. Once a service reserved for ultra-high-net-worth families, estate planning access has been democratized by platforms such as Trust & Will, Vanilla and Wealth.com, which are using technology to rapidly build and update planning frameworks and documents.

Advisers understand the stakes: If clients need to go elsewhere for estate planning, the entire relationship is at risk.

With trillions set to transfer between generations over the coming decades, firms that integrate estate planning will be positioned to retain both assets and trust.

What advisers can do to keep up

For advisers, this shift means rethinking what "comprehensive" really looks like.

It's no longer enough to simply add services; data integration between these offerings is required to deliver truly holistic guidance.

Advisory firms need to start by mapping where their clients' financial, tax and estate data currently reside and then identify and address the friction points between systems and providers.

Building integrations between technology solutions enables important data sharing between tools and teams by allowing information to flow seamlessly between investment, tax and estate planning systems.

In fact, many advisers are embedding tax and estate planning platforms directly into onboarding workflows and client portals so that they become part of ongoing financial advisory conversations.

Even firms not equipped to hire in-house tax professionals and estate planners can integrate with these solutions to deliver tax and estate services that feel frictionless to clients.

Tech requirements

To truly deliver on the family office model, the adviser technology stack of the future must:

• Enable seamless data flow between financial plans, tax returns and estate documents
• Facilitate collaboration between clients, financial advisers, tax professionals and estate planners in one integrated environment
• Provide proactive insights, using automation and AI, to anticipate client needs and optimize decisions in real time

The most innovative firms have already recognized this shift and are moving quickly to make it real.

They are investing in building technology infrastructure that allows shared data without sacrificing privacy and building teams in which tax, legal and financial professionals work in coordination with one another.

Indeed, as technology and talent continue to converge, the family office experience will no longer be a privilege of the ultra-wealthy; it will become the new standard for comprehensive wealth management.

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

"Do you think I should put some money in bitcoin or crypto?" That's a question I get a lot as a financial planner.

These cryptocurrency conversations tend to swing between two poles.

On one end, you have the "bitcoin is going to zero" crowd that will never believe in deregulated finance, the blockchain or bitcoin itself.

On the other, the "bitcoin replaces every asset" crowd that believe the entire future is built on the blockchain, the U.S. dollar is going away, and cryptocurrencies will replace it all.

Both are emotionally interesting and analytically useless.

My position, as always, is simpler. Treat bitcoin like any other asset class. Look at the data. Evaluate risk. Study correlations. Understand where it fits in a portfolio and where it absolutely does not.

A look at historical data

With that lens, I decided to revisit my analysis from 2020, Implications of Adding Bitcoin (Crypto Currencies) to Traditional Portfolios, and look at bitcoin's (potential) role in a portfolio. I pulled historical price data on bitcoin, the S&P 500 and the Magnificent 7 — Apple (AAPL), Alphabet (GOOG; GOOGL), Microsoft (MSFT), Amazon.com (AMZN), Meta Platforms (META), Tesla (TSLA) and Nvidia (NVDA).

The numbers tell a much more reasonable story than the headlines.

1. Bitcoin's recent performance looks different than people think

The first thing everyone wants to know is who "won." On pure returns, bitcoin has outperformed almost everything over longer periods. This is true. It's also incomplete.

The story is really two parts — bitcoin pre-2018 and bitcoin post-2018.

For the purposes of this analysis, I am looking only at bitcoin post-2018, since its 1,000%+ returns pre-2018 are easy enough to interpret. The question now is: Would you still invest new money today?

Below is a look at annual returns across bitcoin, each Mag 7 component and the S&P 500 since 2018.

I compare bitcoin directly to the Mag 7 because, like crypto, these companies represent high-growth, high-volatility, future-oriented assets that dominate both narrative and performance cycles. If an investor is choosing "the next big thing," these are the most realistic substitutes.

Source: Koyfin. As of 11/19/2025

A few things jump out from this dataset:

• Bitcoin has delivered several years of triple-digit returns
• Bitcoin has also had multiple calendar years where it fell more than 50%
• The Mag 7, despite massive recent dominance, still look orderly compared to bitcoin's volatility
• The S&P 500 remains the steady compounder it has always been

So, yes, bitcoin's long-term return profile is exceptional. But when compared with the Mag 7, those exceptional returns come with extreme volatility, and since 2018, it actually underperforms many of the Mag 7.

The level of volatility relative to return would suggest that the risk premium, or excess return an investor can expect to earn from investing in bitcoin, is not justified. Simply put: Return alone doesn't settle the question.

2. Drawdowns: The part most people ignore

If someone tells you only the return, and not the drawdown, they're leaving out the part that determines whether investors actually stick with an asset.

Bitcoin's drawdowns are not just large — they are violent.

Even mega-cap growth stocks, which are hardly low-risk, don't draw down as much as bitcoin has experienced. Nvidia, Meta and Tesla have had large drops, but bitcoin has had periods where it lost more than 80% of its value.

This isn't just an academic point. A portfolio allocation works only if an investor can stay invested. Most people will not hold through an 80% decline, no matter what narrative they believe.

And more importantly, the return (as shown above) has not rewarded investors for holding bitcoin the same way it has for Nvidia, Tesla or even Apple.

In practice, the biggest risk to bitcoin holders isn't the asset itself — it's the behavioral failure it induces.

3. Correlations: The case for diversification is more nuanced than people think

One of the strongest arguments in favor of bitcoin is its historically low correlation to stocks. That was true in the early years. It's less true today.

Using rolling three-month correlations, the relationship between bitcoin and the rest of the market looks very different depending on the period.

A few insights explain most of bitcoin's behavior:

• Bitcoin increasingly trades like a risk-on asset, not a diversifier
• Correlations rise during periods of market stress, the exact moments investors want diversification to work
• Since 2018, bitcoin has not behaved like "digital gold." Specifically, whereas gold has a low correlation to the broader market and lower volatility, bitcoin is the oppositive
• Correlations remain unstable across cycles, making forecasting its performance in the future difficult, especially as a risk diversifier

The bottom line: Based on behavior and the way it moves with the broader stock market (e.g. S&P 500), bitcoin is not your portfolio's insurance policy. It is more like high-beta tech with a different marketing department.

4. So, should bitcoin be in a portfolio?

This is the part where investors expect a binary answer. In my view, it's not that simple.

I suggest investors think about bitcoin the same way you think about private investments, early venture or any asymmetric risk asset — sizing matters more than prediction.

Regarding the specific role of bitcoin in a portfolio, here's how we think about it at Defiant Capital Group (as always, this is highly client-specific and it's not right for all clients):

Potential benefits

Asymmetric upside. The upside tail is real and historically has been meaningful.

Low long-term correlation. Even imperfect diversification can help when position sizes are small.

Rebalancing optionality. Volatility creates opportunities if the investor is disciplined.

Institutional adoption. ETFs and custodial improvements make the asset more investable. As more institutions hold bitcoin and other cryptocurrencies, there is an increasingly stronger and more stable market for it.

Risks that matter

Extreme drawdowns. The path is often worse than the result.

Regime-dependent correlation. Works until it doesn't.

Speculative flows. Narrative changes drive returns as much as fundamentals.

Behavioral strain. The average investor massively underperforms the asset because they enter and exit at the wrong times.

And for entrepreneurs, who are the bulk of our client base, bitcoin has to be viewed through an even narrower lens.

If most of your wealth already lives in a single business, you don't need more convexity or more volatility. You need stability, planning and liquidity alignment.

Bitcoin had an incredible rally up to 2017/2018, but since then, the performance has looked more like a high-tech stock. Yes, it can still massively outperform the broader market, but at significantly higher risk.

In our view, bitcoin can play a role in a diversified portfolio, but usually a very small one.

5. A practical allocation framework for bitcoin and crypto

Going straight to the point, here's the general framework we use with clients:

1. Keep it small. We view investing in bitcoin or other cryptocurrencies like a risky stock investment — there's high concentration, high risk and the ability for loss. Invest only what you are willing to completely lose.

For most investors, that's a 1% to 2% investment, which is typically enough to capture the upside without exposing the portfolio to catastrophic drawdowns.

The larger the allocation, the larger the required discipline of the investor.

2. Rebalance regularly. Volatility is only useful if harvested. Without rebalancing, the allocation drifts into a behavioral problem.

3. Match the sizing to the investor's real risk budget. Look at an investment in bitcoin relative to your existing portfolio and other income streams. Make your allocation in the context of both income and portfolio investments.

4. Understand how bitcoin actually behaves. In our view, bitcoin is no longer a portfolio hedge — its correlation to equity markets is too high, its volatility is closer to that of a mega-cap tech company, and its drawdowns are significantly higher than the broader stock market.

Since 2018, bitcoin has not performed like gold, an inflation hedge or even provided downside protection.

The data simply doesn't support that story.

6. The bottom line

Bitcoin's long-term returns are undeniable. So are its drawdowns. So is its volatility. So is its inconsistent correlation profile.

The most productive way to think about crypto is not as a replacement for traditional assets and not as a guaranteed moonshot. It is an asset with a unique return distribution that can fit into a portfolio if treated with discipline, structure and humility.

At Defiant Capital Group, we don't dismiss bitcoin. But we don't romanticize it either. Like anything else in a portfolio, it has to earn its place.

And the way it earns that place is not through prediction, but through design — the same principle that guides everything we build for clients.

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

If you're a federal employee, understanding how to optimize your many benefits before transitioning to retirement is critical to achieving long-term success.

Yet, finding clear and trustworthy guidance that's specific to government workers, and the programs for which you're eligible, can be challenging.

Interpreting the myriad regulations that govern federal benefits has always been difficult, particularly when it comes to retirement. It can be tough to stay up to date with regulations that are subject to change at any time.

Getting timely answers can be a struggle

Since there isn't a single agency in charge of everything and everyone, it can take time to track down valid answers that pertain to your individual circumstances. (Time you likely don't have if you're still working.)

As a financial adviser who frequently consults with government workers, I can appreciate the struggle. Creating plans that optimize their unique benefits has become an important part of my practice.

Many variables can affect a federal employee's future, so it's no wonder clients and prospective clients often come in with a long list of questions when we meet.

There are two topics that come up repeatedly that I think are especially critical. The questions I hear most often are:

1. Should I roll over my Thrift Savings Plan (TSP) in retirement or stick with the plan I have?

The TSP is similar to the tax-advantaged 401(k) plans available in the private sector — and it can be a great plan when you're still working.

It makes investing easy with automatic enrollment, matching agency contributions, catch-up contributions starting at age 50, a Roth option and more.

But once you reach retirement, the TSP can lose some of its luster.

For one thing, the plan doesn't offer as many investment options as you'll find within a traditional or Roth IRA. It has only five funds to choose from (C, S, I, L and G).

Some investments that are popular with retirees can't be purchased through a TSP. These include certificates of deposit (CDs), annuity safe-growth accounts and assets such as real estate. This can make diversifying your risk in retirement more difficult.

There's also the question of the taxes with which TSP account holders will eventually have to deal. Just as with a 401(k), withdrawals from a traditional TSP are generally taxed as ordinary income. This includes contributions made with pre-tax dollars, agency contributions and earnings.

If you've stashed a sizable chunk of your savings in a TSP (unless it's a Roth option), you could be setting yourself up for burdensome tax bills in retirement.

If you're comfortable with the structure of the TSP, you might decide to stick with the plan. But rolling over your TSP to a traditional and/or Roth IRA is worth considering if you're looking for more flexibility in retirement.

A financial adviser can help you consider all the options available, run projections to determine whether a rollover makes sense for you, explain the various withdrawal choices if you stay with the TSP and assist you in making the appropriate moves when the time is right.

2. Should I choose the survivor benefit so my spouse can still receive pension payments if I die first?

When determining what portion of your pension, if any, your spouse will receive upon your death, you have three basic options.

You can choose for your surviving spouse to receive 50% of your pension for the rest of their life, no matter how long that might be. This security comes at a cost: If you make this election, your ongoing monthly pension payments will be reduced by 10%.

That can add up to a hefty sum over the years. (If your spouse dies first, your benefit will be restored to the full amount — but you won't get back the money you lost.)

You can opt for a reduced survivor benefit of 25%. This choice will cost 5% of your ongoing pension payments, which is a smaller, more manageable bite.

It still requires some math to determine if it's the right move. (Your benefit will go back to the full amount if you're the surviving spouse, but the money you gave up in exchange for the survivor benefit will be gone.)

You can go with the self-only option. The payments you receive while you're alive won't be reduced, but your spouse won't receive any payments if you pass first. They'll also lose the health insurance coverage you had under the Federal Employees Health Benefits (FEHB) program, which would remain in place if you chose a survivor benefit.

How might they feel about losing you, the reliable income from your pension and FEHB coverage all at once? That's something you'll have to discuss. If you go for this option or the reduced (25%) survivor benefit, your spouse will have to sign a notarized document agreeing to the choice.

As with any financial decision, there are multiple strategies to consider and numbers to run when making this important call.

Consulting with a financial adviser who understands the nuances of the Federal Employee Retirement System (FERS) can help clarify the trade-offs.

For many couples, we've found life insurance can be used to replace both the lost pension and cover the cost of health insurance if a surviving spouse hasn't yet qualified for Medicare.

Life insurance offers other benefits, as well. The beneficiary of the life insurance policy (often the surviving spouse) receives the money tax-free. Life insurance policies can also include long-term care options in which the death benefit can be used to pay for future care, instead.

Asking for help

I often compare getting useful FERS information from the government to trying to break into one of those confounding plastic "clamshell" packages. It's far more difficult and frustrating than it should be.

The U.S. Office of Personnel Management (OPM) has an extensive FAQ section on its website that can give you a good start.

But when you're ready to begin making the decisions that will impact the retirement you've worked so hard for, I recommend talking to an experienced professional who can help you make the most of the benefits you've earned.

Kim Franke-Folstad contributed to this article.

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

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• To Retire, Mind Your P's: Purpose, Planning and Procrastination

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.

After the early steps taken to lower rates from the Fed and historically low spreads in many sectors of public credit, traditional fixed income yields are near the lows of the last few years, prompting advisers to turn to private credit as they look for more durable income solutions.

Asset-based and real estate lending, in particular, offer a timely entry point, providing elevated yields, short to intermediate durations and strong collateral backing.

Over the next 12 to 24 months, these strategies offer a window of opportunity to access income streams supported by structural protections while helping to fill financing gaps left by banks and other traditional lenders.

For income-oriented portfolios, they offer a compelling way to add both resilience and long-term value.

A tangible and timely opportunity

Real estate bridge lending is one area where the opportunity is both tangible and timely. For example, a first-lien loan on an industrial property in a key southeastern U.S. market was recently secured by a 10-acre site with shipping and logistics infrastructure, generating strong in-place cash flow and supported by long-term demand.

The loan carried a conservative loan-to-value ratio and was structured with a fixed-rate coupon and regular interest payments over a short duration.

These types of short-term, income-generating loans, typically backed by income-producing assets, can offer attractive yields, downside protection and the flexibility to recycle capital quickly.

For high-net-worth or income-focused clients, they offer a way to diversify and enhance portfolio durability.

Downside protection and attractive yields

Asset-based lending (ABL) presents a similarly compelling case. Demand from small and midsize businesses remains strong, especially for working capital, equipment purchases and inventory financing.

These loans are typically secured by tangible assets, offering meaningful downside protection and attractive yields.

The ABL market spans a wide range of sectors, including examples such as transportation, equipment leasing and structured risk transfers (SRTs), just to name a few — each with distinct risk-return profiles.

Transactions in these spaces can offer meaningful diversification across borrowers and sectors, which is especially attractive for clients seeking steady income with strong risk reward.

Together, these areas highlight a key point: In private credit, return is driven not only by yield, but by structure.

Both ABL and real estate lending are backed by tangible assets and offer protections that can help mitigate downside risk.

For clients who are wary of duration risk in traditional fixed income or are looking to reduce exposure to public market volatility, these strategies provide targeted, income-producing alternatives.

A rich set of opportunities

This is especially relevant today. Even as interest rates begin to ease, tighter credit conditions and stricter bank capital requirements have limited the flow of traditional financing, including in sectors vital to economic growth like real estate and small business finance.

The securitization market also remains constrained, making it harder for certain borrowers to access capital.

As a result, private credit managers with origination capabilities and structuring expertise are stepping into the gap, creating a rich set of opportunities for investors who are prepared to act.

For advisers, the key is to look beyond traditional corporate direct lending and consider the full spectrum of private credit.

That means identifying managers with access to differentiated deal flow and the ability to source and structure investments in sectors where capital is both scarce and valuable.

When grounded in discipline and strong underwriting, asset-based and real estate lending, in particular, can help advisers construct income portfolios that are more resilient to today's risks and more responsive to tomorrow's opportunities.

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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.

RMDs are like colon cancer screenings: You thought they were only for older folks, and ignoring them now could lead to bigger problems down the road.

When you get to the current RMD age of 73 (updated in the SECURE 2.0 Act) and you're forced to take money from your traditional accounts, you're not just paying taxes on that specific RMD dollar amount.

• Your RMD amount likely makes more of your Social Security taxable
• Your RMD amount could force you to pay extra for Medicare through the income-related monthly adjustment amount (IRMAA)
• Your RMD amount could make you lose out on deductions such as the enhanced deduction for older people and the medical expense deduction
• And you could pay an extra 25% tax penalty on RMDs you don't take out on time

Here are the five biggest mistakes I see retirees make with their RMDs. Learn from these mistakes so that you can plan your RMDs ahead of time and hopefully lower their tax bite.

Mistake No. 1: Waiting until age 73 to create a plan

One of the most consistent concerns I hear from retirees is, "How bad am I going to get killed on taxes when my RMDs start?"

They have projected out their future RMD amount of $10,000, $25,000, even $100,000 in future taxable income, and they're concerned about the tax cost.

But then they stop there. They see the problem, but they figure they can't do anything about it.

Thankfully, you can. Go beyond just projecting your RMD amount, but also project your future tax brackets. Then find the tax years between now and 73 when your taxes are likely to be lowest; this is often before you start Social Security.

Then, during those lower projected tax years, do a Roth conversion at that lower tax rate, so that your future RMD is lower and the Roth money can grow tax-free.

Mistake No. 2: Failing to make use of qualified charitable distributions (QCDs)

A retired pastor came to my office for a new client meeting. He brought in his investment statements, and tax return, and he explained that he had roughly a $12,000 RMD each year and that he gave it all away.

I reviewed his tax return and saw the RMD listed as taxable income, and I saw that he wasn't itemizing his deductions — he was paying more taxes than he should have!

I asked the pastor how he took out his RMD each year to give to charity, and he said, "I want to follow the rules, so I take out my RMD as soon as I can each year and put it in the bank. Then at the end of the year, I write out checks to my church and favorite charities."

I showed him that he could do a qualified charitable distribution (QCD) instead, sending the money from the IRA directly to the charities.

I calculated that using the QCD rules on the $12,000 QCD amount to be $2,263 in income tax savings.

And here's a next-level QCD move: You can start doing QCDs at age 70½, even though RMDs don't start until 73 currently. It just might lower this year's taxes, and it will definitely lower your future RMD amounts.

Mistake No. 3: Doing the wrong tax withholding

I just met a retiree who had his first RMD distribution last year. He and his wife make $36,000 from Social Security and $36,000 from his pension.

They don't need their IRA money, which is why they hadn't taken anything out until their first RMD, which came to $40,000.

His investment company sent him the $40,000 at the end of last year, doing the 10% mandatory federal withholding and no state tax withholding because it wasn't required.

It turned out the taxes on his RMD were $6,400 for federal, not the $4,000 that was withheld, and $2,000 for state — and there was nothing withheld for that.

He had to write out two big checks, and he owed even more because of underpayment penalties.

Before you take out your RMD, do a tax projection to get the withholding right — the standard 10% is almost never the right amount.

Mistake No. 4: Not realizing how your RMD income affects the rest of your tax return

You would think that paying taxes on your RMDs is simple. If you're in the 12% tax bracket, and you take out $10,000, then you just pay $1,200 in extra taxes, right? If only it were that simple.

When you take money from your traditional IRA, especially for the first time with your RMD, you're often surprised at how much it affects the rest of your tax return.

The amount of your Social Security that is taxable is based on how much other income you have. When you have more other income from your IRA, your taxable Social Security amount goes up.

That RMD amount could push you into the next tax bracket. The IRS doesn't hand you a card saying, "You're in the 12% tax bracket forever." When your RMDs start, your income goes up, and often your tax bracket goes higher.

Or perhaps that extra income means that you get less medical deductions or less of the enhanced deduction for older people.

I often see RMDs push retirees over the edge so that they are paying extra for Medicare because of the IRMAA. You can read about those IRMAA tax brackets in the Kiplinger article Medicare Premiums 2025: IRMAA Brackets and Surcharges for Parts B and D. And you can see the 2026 brackets in this Kiplinger article.

When it comes to the U.S. tax code, more RMD income often means more other income and fewer deductions, and then you pay more in taxes than you expected.

Before you take your first RMD, make sure you understand how the new taxable income affects the rest of your income and deductions.

Mistake No. 5: Forgetting that the M in RMD means 'minimum,' not 'maximum'

All these tax mistakes add up to a lot of big surprises when you hit RMD age. Perhaps you've resolved to reduce the tax pain by sticking to just the minimum amount for your RMD. But you don't have to restrict your distribution to the minimum.

Often, the solution to your future RMD tax problems is to bite the bullet this year and do a Roth conversion at a tax rate that you're comfortable with so that your future RMDs are lower.

Also, remember that just because you're required to do RMDs at age 73 doesn't mean you can't take out money earlier. The minimum age to withdraw from your IRA without a penalty is 59½, which means you could have 13-plus years to plan for the likely RMD tax pain.

Lower your retirement taxes by creating your RMD strategy today

RMDs might seem like an annoying part of the tax code, but when it comes to retirement taxes, RMDs affect the rest of your retirement:

• Your tax bracket
• Your Social Security taxation
• Your Medicare premiums
• Your investment strategy
• Your charitable giving

The time to start planning for your RMDs is not the year you turn 73, but even before you retire. In your retirement planning, focus not just on your investment growth, but on how that growth will affect your future tax situation.

That's why I put tax planning as step three in my book, Retire Today: Create Your Retirement Master Plan in 5 Simple Steps, even before your investment planning (step four).

A tax-smart retirement gets you ready for your RMDs well ahead of time and works to minimize their tax impact even when you get to RMD age.

Related Content

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• I'm a Financial Planner: This Is How You Can Get Started With RMDs
• Required Minimum Distributions (RMDs): Rules, Deadlines, and Important Changes to Know
• Stressing About RMDs? Two Ways to Reduce or Even Eliminate Them
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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.

I still remember a turning point early in my career. I was working at a financial firm that had a strict minimum asset requirement for clients. One day, I met with a couple who had about $250,000 to invest, which was below our firm's threshold.

I knew we could make a meaningful difference in their retirement plan. But when I brought it up with the firm's owner, his response was short and final: "That's too bad, but they don't meet the minimum. We have to move on."

That moment stuck with me. Turning someone away — not because we couldn't help, but because they weren't "wealthy enough" — felt wrong.

I argued that people with limited assets needed our help more than those with higher asset levels. It was clear that if I ever had my own firm, I would do things differently.

Fast-forward to today, and I'm a financial adviser and managing partner of a firm I co-founded called Reverent Asset Management. The name "Reverent" comes from the Latin word for respect, and that concept is at the heart of everything we do.

Respect is not just a branding choice; it's our guiding principle.

Regardless of income, people need to understand how to get the most out of their dollars. In the United States, many people approach or reach retirement without accumulating the amount of retirement savings they would prefer.

For example, as recently as 2022, the median retirement savings for those ages 55 to 64 was $185,000, according to the Federal Reserve.

For ages 65 to 74, it was $200,000. And remember, that's the median, so half of the people in those age groups have less than those amounts. In some cases, much less.

When I'm working with clients, there are principles that guide my approach. These principles also translate into ways in which you can plan for your retirement regardless of how much your portfolio holds.

Principle No. 1: Respect every plan, no matter its balance

Whether you have $10 million or $10,000, it's important for you to understand how to help protect yourself and grow your money. Wealth does not determine worth.

Money can be an emotional and sensitive topic, and people should never feel embarrassed about asking basic questions or discussing modest portfolios. Asking questions and seeking help isn't a sign of weakness; it's a smart move.

If you're preparing for retirement, start with the basics:

• Tally your monthly income in retirement from all sources (Social Security, pensions, savings and part-time work).
• Estimate your monthly expenses.
• Compare the two. If there's a gap, look for solutions: reduce spending, delay retirement or explore additional income options.

Everyone has goals, and everyone deserves a plan.

Principle No. 2: Educate yourself

My 25 years of experience in the financial services industry have taught me that when people truly understand why a strategy makes sense, decisions become clear and comfortable — and they feel more confident making them.

Educate yourself as much as possible about retirement and financial topics. Fortunately, ample books, magazine articles, webinars, podcasts and other sources are easily available.

Just make sure you are getting the information from credible sources. If you have the opportunity, attend workshops or other events that financial professionals offer in your community.

My firm regularly holds free workshops and seminars on retirement planning because we want our community to learn, not just hear a sales spiel.

During individual meetings, we use plain language and whiteboards to break down concepts. We encourage questions. The more you know, the more empowered you are to make confident choices.

An educational approach also means a slower, more thoughtful planning process. By educating first, we let the plan's value speak for itself.

Principle No. 3: Honesty and transparency are crucial

As an investment adviser representative, I am committed to putting clients' interests first when providing investment advisory services. Some industry slogans sound good in ads but tell you nothing about what actually happens.

I start by understanding your goals, then show you, in writing, how I'm paid and whether lower-cost options meet those goals just as well.

For example, many advisers charge fees based on assets under management (AUM), which means they earn more if a client's investments increase in value.

While there is nothing wrong with that in principle, it makes sense to ask how those fees influence the level of risk chosen and whether that risk matches your goals.

With any investment, you will want to know what fees are associated with it. Ask about and factor those in as you determine whether a particular product or portfolio is right for you. Will that investment provide the return you expect and/or need to achieve your financial goals?

Advice you can rely on is built on trust, and trust is built on honesty and transparency.

Principle No. 4: Plan for distribution, not just accumulation

People spend decades building their nest egg, but they may not be prepared for the "distribution phase," when it's time to turn those savings into reliable income.

And while many financial advisers are great at helping clients grow wealth during the accumulation phase, retirement is a whole new ballgame. This is the distribution phase.

It's one of the most important (and often overlooked) parts of retirement planning, when you start drawing down those savings to create an income stream for life.

Why is distribution planning so key? Because once you retire, mistakes can be magnified. You no longer have a paycheck to cover errors or market downturns.

Taking too much risk or withdrawing funds in an inefficient way can quickly derail a retirement plan.

The No. 1 fear I hear from retirees is running out of money. That's why at my firm we create detailed, personalized income plans as part of the financial planning process.

We look at all income sources — Social Security, pensions, investment accounts — and determine the optimal order and amount to withdraw from various accounts. The goal is simple: Make your money last.

Some of that goes back to education. The better you understand how all the pieces of a financial plan work together, the better you can make decisions that are right for your situation.

Whether you're a schoolteacher with a modest 401(k) or a business owner with a multimillion-dollar portfolio, the most important factor in your financial plan is you — your values, goals and life circumstances.

Work with someone who respects that. Choose an adviser who listens, educates and puts your interests first.

When we focus on helping people, not just managing money, we create clarity and confidence for the road ahead.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way. Ezra Byer contributed to this article. Ezra Byer is not affiliated with Reverent Asset Management, LLC or AEWM. 3402624 - 10/25

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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.

Tax season might feel far off, but the IRS has already set the stage for 2026 — and there are some updates worth paying attention to, especially if you're retired or nearing retirement.

Inflation adjustments are raising income thresholds, standard deductions and the extra deduction for adults age 65 and older.

Thanks to a recently passed tax bill, there's also a new limited-time bonus deduction designed specifically for older taxpayers.

Let's break down what's changing, what's new and how it might affect your bottom line in 2026 and beyond.

A little extra for retirees: A bigger additional standard deduction

If you're 65 or older, you get a little more breathing room in your tax return this year. The IRS bumped up the additional standard deduction for 2026:

• Single filers and heads of household (age 65-plus): $2,050 (up from $2,000 in 2025)
• Married couples (65-plus): $1,650 per qualifying spouse (up from $1,600)

If both partners qualify, that's a $100 total increase. It's not life-changing, but enough to slightly reduce your taxable income — and that's always a win.

For those who are both 65-plus and blind, that amount doubles:

• Singles/heads of household: $4,100
• Married, filing jointly: $3,300 per qualifying spouse

This "double bump" is meant to help taxpayers with additional challenges offset a bit more of their income.

Standard deduction amounts are also on the rise

Most Americans take the standard deduction instead of itemizing, and that number is getting a lift for 2026. The new amounts you'll use when filing in early 2027:

With nearly 90% of taxpayers claiming the standard deduction, these adjustments will put a little more money back into most pockets.

The headliner: A temporary $6,000 'bonus deduction' for older people

The biggest new development for retirees is a fresh, temporary deduction created by the GOP's 2025 tax package — a four-year perk for those age 65 and older.

Here's the highlight reel:

• Worth: Up to $6,000 per taxpayer
• Available: 2025 through 2028
• Income limits: Phases out starting at $75,000 (single) and $150,000 (joint)
• Eligibility: You can take it whether you itemize or claim the standard deduction

Even if you already claim deductions for mortgage interest, medical expenses or charitable giving, you can still tack on this additional benefit. Think of it as a short-term tax break designed to ease the burden on older Americans during a high-inflation period.

How these changes could affect you

Whether these updates have a big impact on you depends on your personal financial picture — but for many retirees, even small adjustments can matter.

Here's how to make the most of them:

Stay strategic about income timing. Adjust when and how you withdraw from IRAs, pensions or brokerage accounts to remain in the most efficient tax bracket.

Double-check your filing strategy. Standard vs itemized deductions can look very different with these new thresholds.

Ask about the bonus deduction early. Because it's temporary, you'll want to plan to make the most of it over the next few years.

The takeaway

Updates for 2026 aren't dramatic, but they're still worth knowing — especially if you're managing income from multiple sources in retirement.

A little planning now can help you take advantage of every available tax break, and that means keeping more of your money where it belongs: in your pocket.

If you're not sure how these changes fit into your broader retirement plan, now's the time to talk with a financial or tax adviser who can run the numbers and help you strategize before the next tax season rolls around.

Smart planning today means fewer surprises — and maybe a few extra dinners at your favorite local spot tomorrow.

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

Related Content

• New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Age 65-Plus
• Five Ways to Cash In on the $6,000 'Senior Bonus' Deduction
• The Extra Standard Deduction for People Age 65 and Older
• New 2026 Income Tax Brackets Are Set: Will Your Rate Change?
• 2025-2026 Tax Brackets and Federal Income Tax Rates

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.

Taxes are a worry for most retirees, even as they put their working years behind them and ease into what should be a more relaxing time.

Taxpayers were expecting to face even more worries at the end of this year, when the Tax Cuts and Jobs Act of 2017 was set to expire.

Fortunately, many of the act's provisions became permanent when Congress passed and the president signed the One Big Beautiful Bill (OBBB).

But the new law has done more than that. It also includes tax changes that are especially amenable to many retirees and near retirees.

However, they aren't all going to last, so it may be wise to take advantage sooner rather than later.

The 65-and-older advantage

One of those changes is that many taxpayers age 65 and older can qualify for an extra $6,000 standard deduction. This not only lowers your tax bill but could also reduce your taxable income enough to avoid taxes on your Social Security benefits.

Yes, up to 85% of your Social Security benefits can be taxed, depending on your income.

If couples filing jointly are both at least 65, they can each qualify for the extra deduction, making it a total of $12,000.

But there are income restrictions on who qualifies. The deduction phases out for taxpayers with modified adjusted gross income over $75,000 (or $150,000 for joint filers).

The deduction also won't be around forever; it lasts only through 2028.

Higher deductions for state and local taxes

Some federal income taxpayers may also be able to take advantage of a higher deduction for what they pay in state and local taxes, the so-called SALT deduction, at least until 2029, when this law expires.

The cap on how much you can deduct has been raised from $10,000 to $40,000, but once again, there are income limits.

In this case, the new cap applies to incomes under $500,000 for those filing jointly, or under $250,000 for individuals or married couples filing separately.

For those whose taxable income is over $500,000, the cap is gradually reduced until it reaches the previous level of $10,000.

This new cap could change whether you decide to itemize your deductions rather than take the standard deduction.

Good opportunity for Roth conversions

In addition to taking advantage of the tax changes, there are other steps to consider during this limited period when your tax liability could be lower.

For example, this would be a great time to consider a Roth conversion if you have been saving money for retirement in a traditional IRA, 401(k) or other tax-deferred accounts.

Those accounts are great for saving money, and you do have immediate tax advantages with them since your yearly contributions aren't taxed.

The downside is that when you retire and start spending the money you saved, your withdrawals are taxed.

Plus, once you reach age 73 (age 75 for those born in 1960 or later), required minimum distributions (RMDs) kick in, forcing you to withdraw a certain percentage each year whether you want to or not.

Roth accounts, on the other hand, grow tax-free, aren't taxed when you make withdrawals and don't have RMDs. You do, however, pay taxes when you make a conversion from a traditional account to a Roth.

But that's one reason these next few years may be a good time to move some of your money to a Roth.

You have some wiggle room in your tax bill, thanks to tax provisions such as the extra deduction for those 65 and older, and you can also take advantage of the higher SALT cap.

Pay less, keep more for yourself

One criticism of the OBBB is that lower taxes could increase the federal deficit and add to the country's growing debt. At some point in the future, that debt will need to be addressed — possibly through higher taxes.

In the meantime, consult with a financial professional to make sure you are getting the most out of the tax advantages currently available to you.

An adviser can review your individual situation, analyze your income sources and any available deductions or financial moves, and help you craft a plan that works best for you.

Yes, taxes are a concern even in retirement. But good planning and an awareness of changes that apply to you can allow you to give Uncle Sam less money and keep more for yourself.

Ronnie Blair contributed to this article.

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

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• I'm a Financial Adviser: The OBBB Is a Reminder for Older People to Have a Long-Term Plan
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• ​​What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's Guide
• Your Golden Years Just Got a Tax Break, But There's a Catch

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

For many people, charitable giving feels like something to focus on later in life, after retirement, when there's more time to reflect and plan.

But from a financial standpoint, the most powerful time to give is often while you're still earning.

That may sound counterintuitive. After all, retirement is when you finally have clarity about what you can afford to give away.

But the truth is, charitable gifts made during your peak earning years can have a bigger financial impact — both for you and for the organizations you support.

1. Tax advantages today, generosity in the future

Here's an example to better illustrate: Deductions are most valuable when your income, and therefore your tax bracket, is at its highest. A $10,000 donation can feel very different depending on when it's made.

If you're in the 35% tax bracket, that gift could save you $3,500 in taxes. Make the same contribution after you've retired and dropped into a 22% bracket, and the tax savings fall to $2,200.

The charitable impact is the same, but the benefit to you is nearly 60% greater during your earning years.

That doesn't mean you have to give away a large sum all at once. One of the best tools for bridging today's tax advantages with tomorrow's generosity is a donor-advised fund (DAF).

These funds allow you to make a sizable, tax-deductible contribution in a high-income year, but decide later how and when to distribute the money to the charities you care about.

It's like setting aside cash in your "charitable account." You lock in the deduction now, but retain the flexibility to give gradually, even long after you've retired.

This approach can be especially useful if you're expecting a one-time jump in income, such as selling a business, receiving a bonus or exercising stock options.

You can offset some of that taxable income by funding a donor-advised account in the same year.

2. High interest rates can work in your favor

Today's higher interest rate environment has also made certain charitable strategies more appealing than they've been in years. Vehicles like charitable remainder trusts or charitable gift annuities can provide reliable income streams for you or your loved ones while ultimately benefiting the causes you support.

With rates up, those income streams are often higher, a welcome development for anyone seeking both generosity and financial security.

3. You'll make an impact now

The bigger picture here is that giving shouldn't be an afterthought or something reserved for the end of your career.

It can be a living, active part of your financial plan, and a way to align your wealth with your values while you're still building both.

The key is understanding what you need to support your lifestyle and what constitutes excess net worth that could be put to work for others.

When giving is integrated into your broader plan, it not only helps you make the most of your resources but also adds purpose to your financial life.

You don't have to wait for retirement to make an impact. You can start now. Often, that's when your generosity goes the farthest.

Related Content

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• How to Choose the Best Charities to Donate To
• Five Ways to Adapt Your Charitable Giving Strategy in a Changing World: An Expert Guide
• Like Getting Healthy, Getting Wealthy Requires Good Habits

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

If you've ever delayed or avoided checking on your finances because you're afraid of what you'll find, you aren't alone.

A new survey conducted by Wealth Enhancement in partnership with Wakefield Research found that nearly half (44%) of U.S. adults have purposely avoided checking a financial account in the past year due to stress or fear — and younger generations, specifically Gen Z, are particularly susceptible to this.

Psychologists refer to this phenomenon as an avoidant response. When your finances are a source of stress and anxiety, it can often feel better in the moment to avoid them rather than face them head-on.

But avoiding a problem rarely makes it go away; it can lead to even greater setbacks. In the case of personal finances, this can result in a deeper financial hole, leading to increased stress. This perfectly normal stress response can escalate into a cycle that's difficult to break.

For most people, money is emotional

The latest research underscores the notion that money is inherently emotional. Most people (59%, according to the survey), report experiencing difficult emotions, such as anxiety (45%) or frustration (40%).

For many, these negative emotions and stress trace back to very real and rational fears. Daily living expenses and housing costs are two of the biggest financial stressors, and more than half of U.S. adults identify with them — 55% and 42% respectively.

Other common stressors include medical expenses (26%), credit card debt (26%) and retirement planning (18%).

However, money doesn't bring up negative emotions for everyone. Many people also report feeling hope (49%) or pride (22%) when they think about their financial situation.

As challenging as it can be to deal with our emotions around money, the first important step is to confront them and to identify when beliefs are driving them.

Even small changes in your beliefs around money (and your aptitude with it) can help you gain confidence and take action to positively affect your financial situation.

Talking about money helps more than you think

One of the best ways to approach money fears is to discuss them with people you trust.

More than half of those surveyed report being somewhat or very comfortable talking about financial stress. Most often, people turn to a family member (49%), a significant other (38%) and friends (37%) to discuss their financial worries.

Meeting with a financial adviser can also help individuals feel more confident and empowered in their financial lives.

However, this option remains largely untapped; only about one-third of survey respondents said they had met with a financial adviser in the past year. Of those who did, 88% reported feeling less stress afterward.

An adviser can help to give a clear picture of where an individual stands and help take those initial steps that we might not be ready to do on our own. Accountability and regular check-ins can also help us make progress in improving our financial situation.

Turning financial fear into action

Financial stress can take a toll, but avoiding the problem isn't the answer. Even small, manageable changes can improve your situation over time.

Start with something very small, such as reviewing your budget once a week, setting up a regular money conversation with your spouse or seeking the assistance of a professional.

Not only will this give you more awareness of what's going on with your finances, but minor shifts can be empowering.

Survey respondents reported that changes in their financial habits, such as more careful budgeting, keeping an emergency fund, saving for big purchases and cutting back on impulse purchases, would help reduce stress.

But often, turning intention into action is a big step on its own.

Change isn't immediate, and it isn't linear. It's normal for change to take time and sometimes feel a little uncomfortable at first.

Being consistent can help these changes become part of a normal routine and make a tangible impact on our finances with time.

It's also possible to face financial setbacks along the way. Don't let obstacles hinder progress in improving your financial situation. The goal is persistence, not perfection.

Finally, turn those small, short-term changes into regular habits. Make it a point to monitor them regularly.

Revisiting your financial plan — especially one you've crafted with the help of a financial adviser — during times of financial stress can alleviate negative emotions and help you focus on what you can control: Your next step in pursuing your financial goals.

This article is for general information only and not intended to provide specific advice or recommendations for any individual.

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• Why the Ultra-Rich Still Lose Sleep Over Money
• Tariffs, Inflation, Uncertainty, Oh My: How to Feel Less Stressed About Finances Now

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

It's not too late to do some clever tax planning for 2025 that will save money on your taxes — but if you wait until January, it will be too late.

When it comes to taxes, the best opportunities come from proactive planning throughout the year, rather than waiting until it's over.

For example, most families who have been saving and investing for some time will generate significant capital gains each year. Long-term capital gains rates can be as high as 20%, while short-term rates can be as high as 37%, depending on your income bracket.

An additional 3.8% tax, the net investment income tax (NIIT), applies to investors above certain income limits. For many, this tax bill can be considerable.

How to employ tax-loss harvesting

These gains can be offset with tax-loss harvesting strategies, which involve strategically selling securities at a loss, creating an offset to that year's capital gains, then replacing them with similar assets.

If the new assets perform similarly to the old ones, your portfolio ends up in a similar place, but through the strategic sale, you now have losses to offset potential gains, resulting in lower taxes. (There is nuance involved, such as complying with wash-sale rules, which should be navigated carefully to maximize the benefit.)

Most tax-loss harvesting is effective when it's opportunistic throughout the year. By January, it's too late to even think about it for the previous year.

If you wait until the end of the year, you might find a few assets in your portfolio that are down, but you'd likely find the most opportunities if you use tax-loss harvesting throughout the year.

Consider the market so far in 2025.

In April, the S&P 500 was briefly down as much as 20%, and a wide range of assets could have been opportunistically sold. But you had to be thinking about it throughout the year to be in a position to take advantage.

If you started thinking about tax losses now, you haven't completely missed opportunities for 2025, but you might have missed the best opportunity of the year.

Maximize your charitable contributions

For investors considering their charitable giving strategies, another opportunity for year-round tax planning is available.

If you have securities that have appreciated in value, you can donate them to a charity at their current fair market value (if they have been held for over a year).

Neither you nor the charity owes capital gains tax on the gift.

A moment of market upswing, which could occur at any point during the year, maximizes both the tax benefit to you and the funds available to your charitable cause.

Now is a good moment for this one.

Consider potential Roth conversions

A third tax-saving strategy to triangulate with your year-round planning would be Roth conversions.

If the deductions from tax-loss harvesting and strategic charitable donations pushed you into a lower tax bracket, you could use this opportunity to convert taxable retirement accounts into after-tax Roth accounts.

The big takeaway here is that there are still opportunities in the final months of 2025 to implement a valuable tax strategy, such as our tax-loss harvesting example above.

There could be even bigger opportunities if you make 2026 the year that you begin year-round tax planning.

Estate planning at the end of the year

In addition to tax strategies within your portfolio, the final months of the year are a valuable window for estate planning.

The annual gift tax limit is $19,000 for an individual and $38,000 for a couple in 2025. No taxes are owed, but the gift opportunity is use-it-or-lose-it.

Some families use the end of the year to take advantage of income-shifting. A family member in a higher tax bracket uses the gift tax limits to donate assets to a family member, perhaps a young adult child, in a much lower tax bracket. Future income from that asset is taxed at the lower rate.

The key takeaway is that if your finances have even a little bit of complexity — capital gains, charitable goals, pretax retirement accounts — there are significant opportunities for tax savings.

As the complexity of your finances grows, so do the opportunities.

For many investors, a key stumbling block is the difficulty of coordinating these strategies among different professionals, a wealth adviser, a tax accountant and an estate planning attorney. That's one reason it often falls by the wayside until it's too late.

Some opportunities fade throughout the year, and most savings opportunities are completely gone by the time the tax-filing deadlines roll around.

Your taxes shouldn't be an exercise in digging up historical documents, but an exercise in active savings. There are still opportunities in 2025 taxes, and even more for 2026.

Related Content

• Year-End Retirement Tax Planning Actions if You Have $1 Million or More
• Trump's 2025 Tax Bill: What's Changing and How It Affects Your Taxes
• Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial Planner
• New Tax Rules: Income the IRS Won't Touch in 2025
• Capital Gains Tax Rates 2025 and 2026: What You Need to Know

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 people choose to make philanthropy a priority in retirement, using their resources to bless others and fund a charitable legacy.

Years of hard work and saving provide them with an opportunity to give back in a meaningful way.

But here's the challenge: Without a proactive tax plan, retirees often pay far more to the IRS than they have to, which can limit the amount that reaches the causes they care about most.

Being more intentional about the timing and structure of your charitable contributions can allow you to minimize your tax liability and maximize the impact of your gifts.

Here are four practical strategies that can help make your giving more tax-efficient.

1. Turn your RMD into a tax-free gift

Once you turn 73, you must make required minimum distributions (RMDs) every year from your tax-deferred accounts. These withdrawals are taxed as ordinary income, and they can easily nudge you into a higher tax bracket.

That could trigger a tax on up to 85% of your Social Security benefits and potentially raise the cost of your Medicare premiums.

For those who are charitably inclined, a qualified charitable donation (QCD) can be one of the simplest solutions. If you're 70½ or older, QCDs allow you to make tax-free donations directly from your IRA to a qualified charity.

The donation can satisfy all or a portion of your RMD and isn't reported as taxable income on your tax return. Your charity receives the full distribution, and the IRS gets nothing.

You can make a QCD from any tax-deferred IRA account, such as a traditional IRA, inherited IRA, or a SIMPLE IRA or SEP IRA that you're no longer contributing to. (You cannot use a 401(k) or similar workplace plan.)

In 2025, you can donate up to $108,000, and if you're married, each spouse can donate up to his or her individual annual limit. Just be sure the QCD goes directly from your custodian to the charity. The IRS says the funds can't touch your bank account.

2. Give appreciated stock, not cash

If you own stocks, mutual funds or exchange-traded funds (ETFs) that you've held for more than a year, you may find it makes sense to donate those investments directly to your church or a charity instead of selling them and giving cash.

Here's why: When you sell securities that have appreciated in value over time, the gains are subject to capital gains taxes. Depending on where you live, you also could owe state taxes on the gain.

But if you donate those investments directly to a qualified charity, you won't pay capital gains tax. Instead, you'll get a tax deduction for the full fair market value of the securities at the time of the transfer (if you itemize).

The tax deduction limit is up to 30% of your adjusted gross income, but you can carry over any excess for up to five years.

Meanwhile, the charity can sell the positions and pay zero taxes on the capital gains. If your church or nonprofit doesn't have a brokerage account, many custodians or local community foundations can help facilitate the transfer.

3. Name a charity as a beneficiary of your IRA or 401(k)

If you have more money saved in your 401(k) or traditional IRA than you expect to spend in retirement, you may be planning to designate your child or another loved one as the account's beneficiary when you pass.

But for many people, leaving the account to a favorite charity, or charities, can be a more tax-efficient option.

That's because when a qualified charitable organization receives a distribution from a traditional IRA, it doesn't have to pay income tax on the funds. This is a notable advantage compared to a child or other non-spousal beneficiary, who would have to pay ordinary income tax each year on any withdrawals from the account.

In most cases, family members are now required to take distributions from pretax accounts within 10 years, which could push your beneficiary into a higher tax bracket (especially if they're in their peak earning years).

In other words, leaving $200,000 to a specific charity through a traditional IRA would provide the charity with $200,000 to use.

But if that $200,000 IRA were to go to a non-spousal beneficiary, the taxes owed would likely eat up a good-sized chunk of that generous gift.

Your loved ones would probably be happier to receive a tax-free life insurance payout, a Roth IRA or another tax-smart option.

4. Make a difference with a donor-advised fund

Donor-advised funds (DAFs) have gained popularity since the Tax Cuts and Jobs Act (TCJA) changed the rules for writing off charitable contributions starting in 2018.

With a DAF, you can bundle or "bunch" several years' worth of donations into one large contribution (in cash or assets) to meet the TCJA threshold for itemizing charitable deductions in that year.

Instead of going directly to a charity in one lump sum, your donation is then invested by the DAF's sponsoring organization. And once it's invested, the donation can continue to grow tax-free until it is paid out, also tax-free, to qualifying causes over time.

Though you'll no longer have a legal right to the money in the DAF, you will have "advisory" privileges, which means you can help plan when and to whom you wish to make grants.

A DAF is relatively easy and inexpensive to set up — and it's a tax-smart way to follow through on your gifting goals.

Faithful giving, wise stewardship

I don't know many people who would say that getting a tax deduction is their top motivation for charitable giving. For most folks, it's more about their value system or part of their faith journey.

Still, tax efficiency can be an important consideration for many donors. The right strategy can help you be a better steward and allow you to give cheerfully, knowing you're making the maximum impact with your money.

An experienced financial adviser can walk you through the pros and cons — and the sometimes complex IRS rules — for these and other gifting options. Don't hesitate to ask for help so you can find the best fit for your family's giving goals.

Kim Franke-Folstad contributed to this article.

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

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• Maximize Charitable Giving Tax Savings and Give All Year

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

Every 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.

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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.

I swore I would never write another column specific to one piece of legislation because of its short shelf life in the ever-changing political landscape. However …

There were enough changes in the planning strategies stemming from the One Big Beautiful Bill (expect a cosmetic name change before the midterms) that I thought it would be a disservice to leave my followers in the dark.

We've done our year-end reviews early because most custodians have to execute transactions before the IRS deadline of December 31. Much of this work requires calculations that take some time.

Here are the strategies our clients with $2 million to $10 million are looking at by the end of the year:

1. Different Roth conversion calculations and considerations

I've equated a Roth conversion calculation to walking across a busy street. Look left for income tax rates, look right for capital gains thresholds. Look both ways for electric scooters. In this analogy, Medicare IRMAA brackets.

Now there's a fourth threat: phaseouts on a few of the tax breaks created by OBBB.

The two that we saw come up multiple times in our reviews were the enhanced senior deduction phaseout and the SALT (state and local taxes) cap expansion phaseout. The enhanced senior deduction adds a $12,000 deduction for a married couple, if both are at least age 65.

However, that additional deduction starts to phase out at $150,000 of income. It disappears at $250,000 of income.

A Roth conversion might cost more than the marginal rate if we accidentally breach this threshold. That doesn't mean it's not worth doing.

You might wonder why I attached an asset level of $2 million to $10 million. Many of our clients fall within this range, and portfolios of this size, depending on where the money is held, can make some of these thresholds easy to hit.

Next one on our list is the temporary SALT cap increase. It increases the cap on the deduction for SALT to $40,000 retroactively to the beginning of 2025 through 2029.

However, a phaseout of that deduction starts at $500,000 of income and reverts to $10,000 at $600,000 of income (joint). A Roth conversion might cost more if we cross the line.

These new rules have made calculations more difficult because of the nuanced rules and sheer number of landmines.

We rely on tax-planning software to load a prior year's return, change the tax year to 2025 and see the impact of the new rules.

2. Charitable bunching

Bunching became popular with the advent of the Tax Cuts and Jobs Act (TCJA) in 2018. Because of the SALT cap of $10,000 and higher standard deductions, a much smaller percentage of wealthy taxpayers itemize deductions.

We would often "bunch" or "stack" deductions in one year to get over the standard deduction hurdle. The taxpayer would make several years of charitable gifts in one year, often using a donor-advised fund (DAF). Our clients would then go back to the standard deduction in subsequent years.

This is not a new strategy, but it has become more important because more people will itemize under the expanded SALT cap and because there is a 0.5% floor on charitable giving starting in 2026.

Think of that floor like the floor on medical expenses. If a client has $100,000 in adjusted gross income (AGI) and wants to give $4,000, only $3,500 of it would be deductible on Schedule A, because of that floor.

This makes the charitable bunching strategy even more important, as the higher you go with the gift, the more inconsequential that hurdle becomes.

If you're close to the standard deduction threshold, this strategy will become even more beneficial if you revert to the standard deduction in 2026. Starting in 2026, there is an additional $2,000 (joint) charitable deduction available for those who take the standard deduction.

We rely on financial planning software to look forward several years and try to figure out if our clients should be itemizing or taking the standard deduction. Unlike the tax software I referenced, we make a free version of this software.

3. Energy projects

We had several clients scrambling to make the electric car credit deadline of September 30. However, there are credits still available for projects completed by December 31.

These credits have fairly low caps, so you should do one of these projects only if you were otherwise already considering it. The energy-efficient home improvement credit is outlined under IRS Section 25C.

This credit allows you to deduct a certain percentage of materials costs for such things as energy-efficient windows, air conditioning units, etc.

As I think of all these caps, phaseouts and rules, I'm picturing a stack of dominos that my 3-year-old lines up on the living room floor. Accidentally knock one over, and the whole line goes down.

Perhaps that's extreme, but it's now even more important to make sure you don't ruin your strategy by inadvertently pushing over one domino.

Related Content

• 3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025
• Three Strategies to Take Advantage of OBBB Changes, From a Financial Planning Pro
• Thanks to the OBBB, Now Could Be the Best Tax-Planning Window We've Had: 12 Things You Should Know
• Four Times You Need a Second Opinion on Your Financial Plan
• Six Financial Actions to Take the Year Before You Retire, From a Financial Planner

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

If you were to type into a search engine, "Should I talk about politics with my financial adviser?" you would find a long list of articles by advisers, and for advisers, about how best to avoid politics when discussing financial plans with clients.

I vehemently disagree with the notion that political conversations between financial advisers and clients should be sidestepped.

In fact, I would go so far as to say it is impossible for an adviser to fulfill their fiduciary duty — a legal obligation to act in your best interest — without fully knowing you as a whole person, including your political orientation.

A sound financial plan should be shaped by who you are, what you care about and the kind of world you want your money to help build. So, yes, you should get political with your adviser.

Here are three reasons why it's so important for you to do so.

1. Financial planning is deeply personal

Money isn't just about the numbers. And your financial plan isn't a spreadsheet — it's a reflection of your life: your goals, your fears, your family and your sense of purpose.

Everyone deserves the opportunity to show up as their full selves in all aspects of their lives — and that includes meetings with your financial adviser.

If your adviser brushes off this conversation, it is a red flag. You deserve a space where you can speak openly about what matters to you; whether that's climate change, income inequality, reproductive rights or local community investment.

An adviser who invites those conversations will help you create a financial strategy that feels authentic and aligned, instead of one that leaves you second-guessing whether you're compromising your values for returns.

2. Every dollar we spend has a political impact

Whether we like it or not, money is political. Every dollar you earn, invest, donate or spend influences the economy, industries and political policies in ways that either reflect your values or contradict them.

These choices aren't just abstract. They have real-world consequences for the communities we live in and the planet we want to have around for future generations.

A thoughtful financial adviser should help you understand not just where your money is going — specifically, what companies you're investing in — but also what type of direct impact those companies are having on people and the planet.

Here are some prompts you can use to initiate these conversations:

• What specific industries am I invested in, and how do they derive their profits?
• How do the companies I'm invested in stack up in terms of environmental, social, and governance (ESG) metrics, and what sources of data are you using to determine that?
• How do the companies I'm invested in contribute or detract from the United Nations' Sustainable Development Goals (SDGs)?

3. Sacrificing financial returns for ethical alignment is an outdated misconception

Some financial professionals still believe that investing in a way that prioritizes a client's values by excluding certain industries, or using ESG metrics, means sacrificing returns. That is simply not true.

In fact, companies focused on addressing the world's most urgent challenges by prioritizing people, planet and integrity are better positioned to benefit from rising consumer demand as climate change, geopolitical instability, population growth and resource scarcity intensify.

Furthermore, according to a 2025 report by Morgan Stanley, nearly 80% of global investors stated they are likely to choose a financial adviser based on sustainable investment offerings.

This reflects a broader shift toward aligning financial goals with personal values, proving that impact investing is not just a trend, but a lasting shift in how people view wealth.

A skilled, values-aligned adviser can help you invest in companies whose businesses yield both profit and purpose. It's not about choosing between doing well and doing good. It's about doing both.

Finding the right fit

It is completely appropriate to ask your financial adviser if your investments are aligned with specific values that are important to you.

If you get pushback or are sidestepped by phrases like, "You should ignore politics completely when investing," or "I can put you in an ESG mutual fund," with no further discussion about how those funds align specifically with certain issues or themes, you may want to consider whether this adviser is the right fit for you.

Do not be discouraged. There are financial advisers who are not only open to these conversations but who see them as essential to good financial planning.

You can start your search at valuesadviser.org, a directory of professionals who understand that your portfolio reflects your principles and vision for the future.

Money is powerful. When you bring your whole self — your values, your politics and your purpose — to the conversation, you give that power direction. And a good financial adviser should be right there with you, helping to turn that direction into a plan that truly fits who you are.

At the end of the day, sharing your political views with your financial adviser isn't risky. It's responsible.

Related Content

• Could Political Arguments Ruin Your Estate Plan?
• What Is ESG Investing and Is It Right for You?
• Scared About Climate Change? Change the Way You Invest
• Two Don'ts and Four Dos During Trump's Trade War
• I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your Dollars

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

When Americans move abroad, their financial lives become significantly more complex. From navigating foreign tax systems to understanding how U.S. retirement accounts are treated overseas, the stakes rise even as the margin for error narrows.

That's why choosing the right cross-border financial planner is so important. High-earning and high-net-worth U.S. taxpayers must find someone who understands the full scope of cross-border financial planning and is committed to a long-term relationship.

A brief review: Types of financial planners

When we talk about different "types" of financial planners, they can be differentiated across three spectrums:

For Americans living in the U.S., these distinctions help guide their choice of professional financial planning service. But for those moving abroad, the meaning of these categories takes on new importance.

Why cross-border planning changes everything

Let's say you're working with a U.S.-based investment manager who doesn't offer planning services. That might work fine while you're stateside; many people feel more comfortable steering their own financial planning ship and personally checking that their compass is pointing due north.

But moving abroad without the support of cross-border expertise to guide the revision and implementation of your financial planning framework can lead to costly mistakes.

Take France, for example. It's often considered one of the "easier" Western European countries for Americans to retire to, thanks to a favorable tax treaty and a relatively straightforward long-stay visitor visa.

But even there, there are common tripwires. One of the most overlooked is the cotisation subsidiaire maladie, more commonly known as the PUMa tax.

The PUMa tax was introduced to help fund France's universal health care system and applies to residents who receive significant passive income, such as dividends, rental income or investment gains, but have little or no earned income.
Here's how it works:

• If your earned income is below 20% of the French social security threshold (PASS), which is €9,273.60 in 2024 (the most recent tax year), and
• Your passive income exceeds 50% of the PASS, or €23,184 in 2024, then
• You may be subject to a 6.5% tax on the portion of your passive income above that threshold.

This tax does not apply if you receive replacement income such as pensions, disability payments or unemployment benefits.

It also doesn't apply if your spouse or civil partnership (PACS) partner earns above the threshold or receives qualifying replacement income.

The formula used to calculate the tax is nuanced, adjusting the rate based on how much earned income you have.

For example, Jean and Marie, both U.S. citizens, move to France and become French tax residents. They draw no earned income in France (well below the €9,273 threshold for 2024) and instead live off €120,000 of U.S. investment dividends.

Because their passive income easily exceeds the €23,184 "50% of PASS" threshold for 2024 and their earned income is minimal, they could face about €6,375 in tax (6.5% of the amount above €23,184) — a surprise many couples who retire abroad don't budget for.

This example illustrates a broader point: Even in jurisdictions considered expat-friendly, the financial landscape requires U.S. financial planners to have a certain familiarity with the local system in order to offer the highest-quality service.

Without a planner who understands both U.S. and local systems, you may be exposed to unexpected liabilities that at best are vaguely annoying, but at worst could derail your retirement plans.

The value of holistic financial planning for expats

When you take a holistic approach to cross-border financial planning, you're able to integrate the following when building a cross-border financial plan:

• Thoughtful relationship-building time in the initial meetings
• Tax planning across jurisdictions, i.e., cross-border tax planning
• Visa and immigration considerations
• Estate planning under foreign laws
• Currency and banking logistics
• Retirement account treatment abroad

A holistic approach ultimately allows the planner to structure the client's portfolio in a way that avoids triggering unexpected taxes or compliance issues.

And, depending on where your cross-border planner is based, they may be equipped to help you navigate the cultural and bureaucratic differences that come with living in another country.

Common pitfalls

1. Continuing with a U.S.-based planner without cross-border experience

Americans understandably want to maintain their existing financial planning relationships when they move abroad.

But, as Arielle Tucker, CFP® and founder of Connected Financial Planning, notes, "Unless your planner has experience with cross-border clients, and ideally specializes in your destination country, they may not be equipped to serve you effectively."

2. Working with EU advisory firms

On the other hand, some expats choose to work with a foreign firm, thinking that working with a local firm in their adopted country is a logical or even savvy financial move. However, this can present challenges.

"Foreign firms typically have higher fees and transaction costs than the U.S., and foreign mutual funds and ETFs are considered PFICs (Passive Foreign Investment Companies for American investors," says Ricardo Jesus, financial adviser at Liberty Atlantic Advisors (also an Adviser Intel contributor).

"This causes additional reporting and tax complications. Plus, client service expectations differ radically between the U.S. and Europe. As an example, execution timelines are often much slower."

Final thoughts

Candidly, moving abroad can feel like you've turned your life upside down and changed the operating language. So, it's completely understandable to seek familiarity among the chaos.

But, speaking as someone who has moved to different countries nearly half a dozen times, I can attest that prioritizing familiarity can come at the expense of long-term stability, particularly when we're talking about financial planning.

Moving abroad is a major life change, and your financial plan needs to reflect that. That said, it doesn't need to be an overwhelmingly frightening change.

Working with a cross-border planner or firm that takes a holistic approach outsources the challenging task of finding the optimal financial through-line in your life abroad, allowing you to be fully present in the new day-to-day of living your life abroad.

Related Content

• I'm a Cross-Border Financial Adviser: 5 Things I Wish Americans Knew About Taxes Before Moving to Portugal
• How to Manage Retirement Savings When Living Abroad
• Where to Retire: Living in the Dominican Republic
• Want to Move to Portugal? What to Consider Financially
• The Pros and Cons of Retiring Abroad

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

If you're a high-income investor, your brokerage account could be quietly working against you.

Mutual funds, long considered a cornerstone of diversified investing, can trigger surprise tax bills that eat away at returns. The reason lies not in your investment performance, but in the structure of the funds themselves.

The problem: A tax bill you can't control

When you own a mutual fund, your money is pooled with the funds of thousands of other investors. The fund manager actively buys and sells stocks or bonds within that pool. When appreciated securities are sold, those gains must be distributed to shareholders each year under federal law.

That sounds straightforward until you realize two major drawbacks:

No control over timing. The manager's sales decisions are driven by portfolio strategy and redemptions, not your personal tax situation. You can end up realizing gains even when you didn't sell anything.

"Phantom" gains. You can owe taxes even if your fund's value drops. If the manager sells appreciated holdings to meet redemptions, those gains are still passed to remaining investors.

In short, you're paying for someone else's selling decisions and possibly paying taxes on income you never pocketed.

A painful lesson from 2022

This dynamic became painfully clear in 2022, when the S&P 500 fell nearly 20%. Many investors saw their portfolios lose value, yet still received capital-gain distributions.

Actively managed funds had to sell appreciated positions to meet investor withdrawals during the downturn.

Consider the Growth Fund of America (AGTHX). It lost roughly 25% in 2022 but still distributed $3.71 per share in long-term capital gains that December.

Investors were hit twice: a shrinking portfolio and a tax bill on "phantom" gains.

The triple drag: Loads, taxes and fees

Let's break down the hidden costs with a real-world example from The Growth Fund of America®.

• Front-end load. Class A shares charge up to 5.75%. A $100,000 investment could lose $5,750 before the money even hits the market.
• Tax drag. In December 2024, the fund distributed $1.15 per share in dividends and $6.38 in long-term capital gains. For a high-income taxpayer, that could mean roughly $1,900 in federal taxes, according to IRS Publication 550 and Topic No. 559 (net investment income tax).
• Expense ratio. The annual 0.61% fee equals $610 on $100,000.

Combined, the first-year headwind can be staggering. Add the $1,900 tax and $610 fee to the $5,750 sales charge, and your $100,000 investment effectively starts 8.25% behind.

Smarter, tax-efficient alternatives

High-income investors don't have to accept this structural disadvantage. More efficient tools can help reduce taxable drag and improve after-tax returns.

Exchange-traded funds (ETFs). ETFs generally avoid distributing capital gains because of their in-kind redemption mechanism. That structure allows managers to swap appreciated securities out of the fund without triggering taxable events.

Combined with typically lower expense ratios, ETFs are often the better choice for taxable accounts.

Separately managed accounts (SMAs). An SMA gives you direct ownership of the underlying securities. That ownership allows for individualized tax-loss harvesting, which can offset gains elsewhere in your portfolio.

For investors with significant assets and complex tax situations, this added flexibility can be valuable.

Direct indexing. Direct indexing takes tax efficiency a step further. Instead of buying a single fund, you hold the actual stocks of an index. Your adviser or manager can harvest losses from specific positions while keeping overall exposure aligned with the benchmark.

This granular control can meaningfully reduce taxable income over time.

The bigger idea: Asset location matters

Tax efficiency isn't just about what you own, it's about where you own it. Growth-oriented or high-turnover funds belong in tax-advantaged accounts, such as IRAs or 401(k)s.

Your taxable brokerage account should be designed with low-turnover, tax-efficient investments.

This concept, known as asset location, can make a measurable difference. Studies consistently show that thoughtful asset location can boost after-tax returns by 0.5% to 1% per year, a compounding advantage that grows over decades.

The bottom line

If your taxable accounts are filled with actively managed mutual funds, you might be losing money to taxes you can't control. ETFs, SMAs and direct indexing can give you back that control while improving efficiency.

Your portfolio isn't just a collection of investments; it's a financial ecosystem that must work together across account types. By being intentional about structure and location, you can stop the silent erosion and keep more of what you earn working toward your future.

Josh Taffer is a Founding Partner and Wealth Advisor of Journey Wealth Strategies and is an investment adviser representative of Signal Advisors Wealth, LLC ("Signal Wealth"), a Registered Investment Adviser with the U.S. Securities & Exchange Commission.

Related Content

• Capital Gains Taxes Trap: How to Avoid Mutual Fund Tax Bombs
• Which Capital Gains Are Taxable and How to Calculate Your Tax
• To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's Steps
• The Easiest Asset Allocation Rule
• Five Tax Strategies to Preserve Your Retirement Savings

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

Editor's note: This is the final article in a three-part series about the three stages of divorce. Part one is I'm a Financial Adviser Who's Been Through Divorce: This is How I Break It Down for Clients. Part two is A Financial Adviser's Guide to Divorce Negotiations: Civil – or Not.

As we enter the final stage of your divorce journey, you can take a deep breath — the hardest part is now in the rearview.

You've gathered all the paperwork, chosen the proper legal path and come to an agreement with your former spouse on custody/support and how to divide assets and debts.

For this last stage — finalization — we take you through the loose ends that you'll need to tie up before closing the book on the divorce and beginning this next, best chapter of your life.

Stage Three: The Finalization

The ink is dry on your divorce decree. You're now single. Congratulations. After popping the cork on your well-deserved glass of champagne, you'll need to tackle some administrative business. Let's get started:

1. Update account ownership and beneficiaries

You and your spouse might have parted ways, but is that reflected in your financial matters? After finalizing your divorce, you should update ownership and beneficiaries on all accounts — including retirement accounts, traditional investment accounts, insurance, estate plans, etc.

If you're now the sole owner of your home, you'll need to update the deed to reflect the change. The same goes for the title to your car. It's also a good idea to change all the passwords to ensure that your finances are private.

Be vigilant: If something happens to you, do you want your former spouse to have control?

2. Implement the settlement

In stage two, you and your spouse determined how to split debts and assets. Now, you'll need to put those plans into action — transferring property, refinancing loans and rolling over retirement funds.

Unfortunately, this division could take time, so stay on top of your financial adviser. If you have workplace retirement accounts or pensions to divide, you'll need to prepare a QDRO (qualified domestic relations order), which is a court order determining how those retirement assets should be split.

This could be a detailed calculation, if pensions are involved, so you might consider hiring an outside party to help, although your attorney or Certified Divorce Financial Analyst can handle, as well.

Once the retirement assets are split, there is a little-known QDRO rule that allows the recipient to take a one-time penalty-free distribution if certain conditions are met (you'll still need to pay taxes, though).

3. Consider insurance options

If you were previously on your spouse's health insurance, you'll need to get your own policy. COBRA is an option, but it is expensive, so you should consider alternatives such as the Affordable Care Act.

Beyond health insurance, think about obtaining other types of insurance, including life insurance, long-term care and disability.

If you can't obtain insurance through your work, talk to an insurance broker you trust.

4. Create a new financial plan

As you begin life as a single person, you'll need to adjust and reassess your financial goals. This is a good time to sit down with a financial adviser to create a budget, develop a plan for retirement and begin building an emergency fund.

Unfortunately, many women tend to be overly conservative with their investments, and they miss out on the gains.

Rest assured, you can be more aggressive without gambling on your future.

Creditworthiness might also be an issue. If you're establishing credit in your own name for the first time, you might need to get creative.

When I was married, I only had joint credit cards. After my divorce, the only card I could qualify for was at Express (the clothing store), so I would buy a couple of items, then quickly pay them off.

This helped me to establish a credit history, and a short time later, I was approved for additional cards.

5. Update estate and legal plans

Is your will/trust updated? Do you need a new power of attorney or health care directive? You'll want to update all your estate and legal documents.

Lastly, life is not stagnant. If something comes up after your divorce decree is finalized, don't be afraid to revisit the agreement. Nothing is set in stone.

If you encounter an unexpected expense for the children, or if you or your former spouse's work situation drastically changes, you can file to have the original agreement amended.

Divorce isn't just an ending. It's a new beginning. Now that your divorce is over and all your accounts and documents are current, it's time to take all that challenge and hardship and turn it into something positive by building a life on your own terms.

I'll be here cheering you on.

Related Content

• You're Divorced, But the Work Isn't Over: A Guide to Five Financial Tasks to Do ASAP
• Considering Divorce? Beware of Retirement Account Breakups
• How Retirement Plans Are Divided in Divorce
• Don't Let Health Care Costs Wreck Your Retirement: Here's How

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

This stretch coincides with year-end holidays and tax planning and is accompanied by an increased focus on charitable activities.

During this time, nonprofits are ramping up requests with annual appeals and year-end campaigns, while donors are making charitable giving part of their annual holiday traditions and tax strategies.

Each year brings unique conditions that impact giving approaches. This year, the passage of the One Big Beautiful Bill (OBBB) and interest rate cuts drove many of the conversations donors had with their advisers as they planned their year-end giving and tax impacts.

In the wake of the legislation, many donors are now seeking to front-load contributions this year before tax changes take effect in 2026, including the new 0.5% floor on charitable contributions for taxpayers who itemize.

Considerations like these are part of smart philanthropic giving and tax planning. Yet, as year-end approaches, it's important to think beyond giving season when it comes to charitable giving and its implications, for donors' financial portfolios and for the nonprofits receiving funds.

Year-end giving for year-round impact

Charities understand — and often drive — the push for year-end giving, particularly in late November and throughout December.

In fact, nearly one-third of annual giving occurs in December, with 10% taking place in the last three days of the year.

But budgeting for expected giving only goes so far, and nonprofits need support throughout the year.

What's more, many charities support causes and engage in work that is, by definition, unpredictable. Occurrences from natural disasters to shifting regulations can create a significant and unexpected need for support outside of the traditional giving period.

Many donors want the opportunity to support these needs and unexpected giving opportunities. Often, this unexpected giving is in addition to gifts planned throughout the year.

The good news is that donors can leverage several tools to help sustain the work of the nonprofits and causes they support throughout the year.

Here's a closer look at some of the ways donors can increase the impact of their donations all year long while still achieving the tax benefits of year-end giving.

Separate contributions and grantmaking

One of the most effective ways to combine year-end giving with year-round impact is leveraging the right giving tools.

A donor-advised fund (DAF) is one such tool that allows investors to contribute when it makes the most sense for their portfolios while ensuring their contributions can be used to support charities throughout the year.

When contributing to a DAF, individuals receive an immediate deduction and can recommend grants to nonprofits at any time.

In the context of year-end tax planning, these contributions are a vital mechanism that can lower taxable income and, in many cases, reduce overall tax liability when a donor's full financial picture for the year comes into view.

Additional contributions and grantmaking recommendations can happen when they make the most sense, and funds in a DAF — which are earmarked for charity — can be invested and grow tax-free over time.

This growth, combined with traditionally lower fees and the power to separate gifting and granting, means donors can significantly increase their charitable impact with the right DAF partner.

Prioritize recurring giving

Like any business, nonprofits crave stability and predictability when it comes to resources and financial commitments. Recurring grants are a crucial way that donors can support a nonprofit year-round and provide that predictability of funding.

In fact, 3 in 4 charities prefer repeated gifts over a one-time gift for the same amount, according to Vanguard Charitable's recent Why Giving Matters report.

At the same time, donors who utilize recurring grants tend to give more over time.

Over a five-year period, a typical recurring donor's most recent grant will be 40% greater than their first, and the total recurring grant amount will increase by 8% each year on average, the report shows.

Recurring grants help close the gap for year-round impact and provide stability when traditional fundraising efforts tend to slow.

Tap into recoverable grants

Recoverable grants offer another way for donors to support nonprofits as needs and resources fluctuate.

Recoverable grants provide grantees with the immediate, flexible and high-impact backing they need, when they need it.

It's different from a traditional grant in that the funds may be recovered (sometimes even beyond the initial granted capital) by the DAF and used to recommend additional grants to other nonprofits.

A recoverable grant can be a powerful year-round giving tool that allows nonprofits to navigate funding gaps or capitalize on unique opportunities to expand or scale their impact.

Give without restrictions

Giving with few limitations on how the funds will be used is another way to empower nonprofits to maximize their impact outside of giving season.

Nonprofits consistently identify unrestricted giving as a top priority in helping to alleviate more pressing needs. This approach enables organizations to allocate funding where it's most needed to help fulfill their mission, which can include channeling donations directly to programming, hiring, fundraising events and more.

Each of these gifting strategies reflects a vote of confidence in the nonprofit's long-term vision and its ability to reach its goals.

With the right approach, donors can achieve the tax benefits associated with their charitable giving while ensuring maximum philanthropic impact throughout the year and beyond.

Related Content

• I'm a Financial Planner: Here's How to Make the Most of Your Charitable Giving on a Budget
• I'm a Wealth Adviser: Here's How to Maximize Your Generosity Before the OBBB's 2026 Cap Kicks In
• Charitable Contributions: Five Frequently Asked Questions
• A Donor-Advised Fund Can Give Your Charitable Giving a Boost
• Donating Complex Assets Doesn't Have to Be Complicated

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.

Here's another saying for you: "What begins in California could spread throughout the country."

Today's story will be of special interest to personal injury (PI) lawyers who run settlement mills and plaster billboards near airports, on buses and buy TV ads that proclaim something along the lines of, "Hire me! I get millions of dollars for my clients!"

It will also be of serious interest to anyone thinking about hiring one of these law firms.

Often, attorneys in these ads say, "I care. Call me." But good luck getting them on the phone to talk to you — ever!

State bars across the country apply terms such as "misrepresentation," "dishonest" and "false advertising" to ads that promise direct attorney access ("call me") when clients are able to reach only non-legal staff or automated systems.

These settlement mills routinely deliver cookie-cutter, one-size-fits-no-one, substandard legal representation, not to mention those who engage in fraud.

But now they're being taken on, and their efforts are aimed directly at the lawyers' bottom lines via legislation that should give crooked PI attorneys nightmares.

Uber fights back

Uber has filed civil RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuits in federal courts against several personal injury law firms and affiliated medical providers in California, New York and Florida.

I discussed these suits with a friend of this column, Southern California attorney Shawn Steel, who represents personal injury victims and has taught ethics and jurisprudence courses to doctors-in-training at Cleveland Chiropractic College since 1991.

The basis of Uber's allegations, according to Steel: Uber alleges a conspiracy to artificially increase claim values by creating evidence of injury, staging accidents and fabricating damage. Clients are steered to medical providers who perform or recommend unnecessary procedures to run up treatment bills.

The lawsuit takes the business model of personal injury mills head on. Uber is especially vulnerable to these schemes because it is required by some states to have insurance policies with much higher limits than those of individual drivers — even taxi cabs.

"The more insurance available, the greater the claim value if you've got the medicals," Steel underscores.

However, it must be noted that Uber customers in California and other places that have high insurance limits are the ones bearing the burden of higher insurance premiums because they're charged higher fares.

"Uber is using the RICO statute," Steel notes, "which is aimed at prosecuting organizations engaged in a pattern of racketeering activity, and if successful, this could establish a precedent for corporations to fight back against what they allege — and can prove — is fraudulent activity."

A ballot measure to protect consumers

In October, Uber filed a proposed California ballot initiative, called the Protecting Automobile Accident Victims from Attorney Self-Dealing Act, aimed at protecting consumers from what it claims are predatory practices by some personal injury lawyers.

If this measure gets on the ballot in November 2026 and passes, it will be a tsunami for PI mills and medical providers who have relied on an endless stream of attorney liens on settlements to pay their inflated bills.

There is real, palpable fear of similar initiatives spreading throughout the country, hitting personal injury lawyers in the pocketbook.

Supporting documentation for the ballot initiative notes that it would ensure victims keep at least 75% of a settlement or judgment by restricting arrangements between attorneys and health care providers and eliminating financial incentives for attorneys to inflate medical expenses.

Attorneys would also be prohibited from receiving kickbacks from or paying kickbacks to medical providers who refer their patients.

No more 'I charge what the market will bear'

The initiative would tie recoverable medical expense damages to standardized rates.

Medical costs would be based on Medicare or a national database rather than the actual bills from lien-based providers. This would eliminate situations where accident victims are sent to doctors who are comfortable with charging hugely increased rates because their friend, the attorney, ensures payment with settlement liens.

So, if this initiative passes, excessive medical charges would not be fully recoverable regardless of what providers bill.

Criticism from consumer advocates

As would be expected, personal injury attorneys are gearing up for a huge battle in the media.

Consumer Attorneys of California (COAC) calls the initiative misleading, saying it undermines accident victims' ability to secure strong legal representation. It also argues:

• That the limit on fees discourages attorneys from taking complex cases, leaving victims underrepresented
• That the case is nothing more than a corporate liability shield, not consumer protection

What this means for consumers

Regardless of whether the initiative becomes law, if you need an attorney after being involved in an auto accident, your best way of finding a reputable one is the tried-and-true referral from friends, family or other lawyers.

Read online reviews on sites like Google, Avvo, Martindale-Hubbell and Yelp. Pay more attention to the two- and one-star reviews — the details in the negative reviews are more important for you to know than the glowing praise.

Be sure the lawyer has a local office, not just a phone number. You might want to even go there to make sure it exists.

Most important of all, over the phone or with a paralegal or the law firm's investigator who comes to your home and interviews you about the accident, say, "I expect to deal with and speak to (the name of the attorney) and meet with them in person." Write this on the retainer agreement. Then, if it does not happen, you will have strong grounds to fire that law firm.

If you are dealing with a settlement mill, those requests will be refused.

If anyone gives you any trouble, call me. You can reach me at (661) 323-7911, or send me an e-mail at Lagombeaver1@gmail.com.

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

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

This was 20 years ago, well before the Affordable Care Act mandated that those tests be covered. My mom wanted to pay for it so we might have a clue about my own risk level, but I didn't want her to spend $10,000 or more.

I was in my late 20s then. If her tests came back positive, I would need to be tested, too. At an additional $5,000, that felt financially out of reach, so we decided to forgo genetic testing.

Still, her diagnosis forced me to think differently about my health, and I tried to work proactively with my doctors. Rather than standard mammograms, my doctors recommended annual MRIs, since mammograms are not as effective for young women with dense breast tissue.

But insurance didn't see it that way. They labeled the screenings "medically unnecessary" and flat-out refused to cover them, even with a direct family history of cancer.

The pink tax is alive and well

Across the board, women like my mom and me pay more for health care. According to the World Economic Forum, the average American woman spends 18% more on health expenses than a man. It's part of a broader pattern you may know as the "pink tax."

We've all seen it: higher prices on shampoo, razors, dry cleaning and clothing. In health care, the pink tax shows up in our medical bills.

Excluding pregnancy (don't get me started on that), women pay an average of $266 more per year than men. That may not sound like a lot, but it adds up.

Over time, nearly every major health expense we face is tied to gender: contraception, fertility treatments, pregnancy and childbirth, menopause, osteoporosis, dementia, autoimmune conditions, cancers of the breast, ovaries, cervix and uterus, and the list goes on and on.

And, when we're not paying for our own care, we're often the ones providing it.

Women are far more likely to become unpaid caregivers for aging parents, ill spouses or children with medical needs. That caregiving comes at a steep cost: lost wages, foregone promotions and reduced retirement savings.

It's an invisible tax that slowly eats away at our long-term financial security.

Where the gap hurts most

The health care system's biggest blind spots often align with uniquely female health concerns. Take reproductive care.

The cost of contraceptives still falls mostly on women. While the ACA improved coverage, regulatory changes around abortion, contraceptives and fertility treatments are creating new financial hurdles.

When I was considering fertility treatments to conceive my daughter, the cost wasn't covered in Nebraska, where I lived at the time. Each cycle of in vitro fertilization costs about $12,000, and most couples need several rounds before they conceive.

Today, IVF is covered only by health insurance in a small handful of states.

Then there's menopause. Every woman goes through it, but comprehensive menopause care remains largely absent from standard insurance coverage. Only 26% of plans cover menopause-related prescriptions in full, according to GoodRx.

Hormone replacement therapy is often treated as optional, even though it's seen as the gold standard for treating severe symptoms. Without coverage, women must choose between suffering or shouldering the cost themselves.

And it doesn't stop there. Because of their genetic structure, women are more likely to be diagnosed with autoimmune diseases like lupus, colitis and multiple sclerosis. They're more likely to take medical leave for a disability during their working years.

And they suffer from Alzheimer's at twice the rate of men. The Alzheimer's Association estimates the lifetime cost of care for someone living with dementia to be $405,262. That information is staggering.

Take control of your health care

These health care disparities aren't going away anytime soon. It's up to each of us to find ways to protect our physical and financial well-being. Here are a few places to start.

Use your workplace benefits

If you're employed, start with your health insurance policy. During open enrollment, review your options — especially if you expect higher medical expenses in the coming year. Choose the most comprehensive plan you can afford, even if the monthly premium is higher. It may save you far more in out-of-pocket costs down the road.

Next, explore additional benefits your employer might offer, such as:

• Voluntary supplemental health plans for critical illness or hospital stays
• Mental health services to connect with a therapist
• Caregiving support or employee assistance programs
• Menopause-specific resources (increasingly offered by large employers)

Don't be shy about asking HR what's available. These programs are there for you. Use them.

Maximize HSAs and FSAs

Health savings accounts (HSAs) and flexible spending accounts (FSAs) can help offset costs. HSAs, for example, offer a triple tax advantage: Contributions go in tax-free, grow tax-free and can be withdrawn tax-free for qualified medical expenses.

You must pair an HSA with a high-deductible health insurance plan, but you can roll funds over indefinitely, even into retirement.

FSAs, meanwhile, must be used in the year you contribute to them (although you may be able to carry over a small balance year-to-year depending on your employer's plan).

If you expect high medical bills, say, for fertility treatments, max out your FSA so you can pay for treatment with pre-tax dollars.

Protect your income

Don't overlook disability insurance. If your employer offers group coverage, consider using it. Short-term disability usually starts within a few weeks and lasts a few months. Long-term coverage typically kicks in after 90 days and can replace around 60% of your salary for up to a few years.

If possible, consider an individual policy to supplement what your employer provides. It's not cheap, but it can be a lifesaver when you need it most.

Get professional help

A financial adviser can be a great resource for helping you budget for high-cost years and help you analyze your insurance plan. Don't have an adviser? Start by searching for a CERTIFIED FINANCIAL PLANNER® (CFP®) professional through the CFP Board's professional directory, which allows you to filter by location, specialization and fee structure.

If you can't afford an adviser, you can find a pro bono adviser through the Foundation for Financial Planning, which can pair you with a volunteer financial planner for free if you qualify based on income and other circumstances.

Hard-won progress, but still fighting

A year ago, my mom's cancer returned. She's fighting it with everything she has. Now that my family history has become impossible to ignore and changes by the ACA have taken effect, genetic testing is covered for her, but still not for me.

However, my insurance company finally treats my case as high risk. For the first time in 18 years, insurance approved an MRI.

The irony isn't lost on me: Eighteen years of paying out of pocket for the screening that would actually benefit my health, while insurance covered the less effective option.

The pink tax on health care is real. But with dogged planning and advocacy, we can minimize its sting on our financial and physical well-being. Persistence and advocacy can eventually lead to better coverage.

The key is never to accept "no" when it comes to our health.

We shouldn't have to fight this hard for care that fits our bodies. But until we don't have to, we need to plan and speak up.

Our lives depend on it.

Related Content

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• Don't Let Menopause Derail Your Career
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• Don't Let Health Care Costs Wreck Your Retirement: Here's How
• Six Steps to Being Empowered and On Track: An Expert Financial Guide for Women

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.

Whether it's fatigue due to the ongoing political maelstrom, lifestyle aspirations or a desire to invest in euros, the motivations are understandable. But the financial implications of moving from the U.S. to Portugal are often misunderstood.

As a cross-border financial adviser who's lived and worked in both the U.S. and Portugal, I've seen firsthand how complex this transition can be.

Here are five things I wish every American knew before moving to Portugal.

1. Even if you're living in Portugal, you're still a U.S. taxpayer

Fortunately, this one is becoming an increasingly "obvious" fact to point out thanks to the increase in resources available to Americans researching a move abroad.

That said, it's always worth noting because there are still plenty of Americans who assume that once they leave the U.S., they leave their tax obligations behind, which isn't the case.

Unlike nearly every other country in the world, the U.S. applies a citizenship-based taxation model, meaning that U.S. expats are subject to tax on worldwide income, regardless of where they live.

U.S. expat tax provisions do offer some relief. While the foreign earned income exclusion (FEIE) is often touted as a tax-saving strategy, it's most beneficial in countries with lower tax rates than the U.S.

Since Portugal ended its non-habitual residence (NHR) scheme, Portuguese tax rates easily exceed those in the U.S., often making the Foreign Tax Credit (FTC) a more strategic choice.

Navigating which to use — FEIE or FTC — requires careful planning and often depends on your residency status, income type and long-term goals.

Also, don't confuse the FEIE threshold or standard deduction with exemption from U.S. tax filing. Filing can unlock benefits like credits and deductions, and it's essential for maintaining compliance, especially if you may return to the U.S. or inherit assets.

2. Beware of costly missteps involving foreign funds and PFICs

One of the most common — and costly — mistakes Americans make after moving to Portugal is investing in local mutual funds or ETFs.

These are often classified as Passive Foreign Investment Companies (PFICs) under U.S. tax law, which subjects them to punitive taxation and complex reporting requirements.

It takes practice to reframe the assumption that all ETFs and mutual funds are good for your portfolio. In this case, foreign ones can be financially unhealthy.

The IRS treats PFICs harshly, and the paperwork alone can be overwhelming.

If you're planning to move to Portugal with U.S.-based investments, consulting a cross-border adviser is essential, particularly where significant wealth management is concerned, and ongoing financial planning that takes into account your new cross-border context may be required.

3. Investing in euros isn't necessarily the best money move

Many Americans want to invest in euros to diversify or hedge against the dollar. And this is a perfectly understandable instinct given the economic volatility the U.S. has experienced (and wrought at a global scale) this year.

But it's not as simple as opening a Portuguese brokerage account. You'll need a U.S. address to buy U.S. mutual funds, and European platforms often come with higher fees and limited transparency.

While savings account rates in Portugal hover around 1.6% for standard retail deposits, even Portugal's best term-deposit or niche offers (typically less than 3.0% for one-year terms) still fall well short of top U.S. high-yield accounts, many of which exceed 4.0% APY.

In short, yes, Portugal offers stable and safe options, but there's nothing that truly rivals the highest U.S. yields.

Moreover, client service in Portugal is markedly different compared to what Americans are used to. Bureaucracy and red tape can slow down even basic transactions.

There's also a saturation of services targeting Americans, many of which assume Americans are wealthy enough to absorb financial losses — I know firsthand this is not necessarily the case.

This misunderstanding does a disservice to the growing number of middle-class Americans moving abroad for affordability and quality of life.

4. Portugal's tax landscape is rapidly shifting

Portugal's popular NHR regime has officially ended.

In its place is the Tax Incentive for Scientific Research and Innovation (Incentivo Fiscal à Investigação Científica e Inovação (IFICI), which offers limited benefits and applies only to specific professional categories.

As a result, many Americans are reconsidering Portugal in favor of countries like France and Italy, where long-term planning is more straightforward.

If you're still set on Portugal, proactive planning is more important than ever.

5. U.S. investments can be a stabilizing anchor

Political instability is a common reason Americans cite for leaving the U.S. But while emotions may drive the move, the factors that shape the decisions you make about your portfolio should be grounded in data.

Historically, the U.S. stock market has delivered strong annualized returns, even through periods of volatility. European markets have shown more variability in recent years, especially in southern economies.

Maintaining U.S.-based investments can provide regulatory clarity, familiar structures and a stabilizing anchor in uncertain times.

Conclusion

Moving to Portugal can be a beautiful life change. But financially, it's not a clean break for Americans, as much as they may be moving for the mental relief of living somewhere new and foreign.

As someone who's lived and invested in both countries, I recommend maintaining your money in the U.S. and building a cross-border strategy that can encompass the scope of your financial goals — not just your geography.

Related Content

• How to Manage Retirement Savings When Living Abroad
• Where to Retire: Living in the Dominican Republic
• Want to Move to Portugal? What to Consider Financially
• The Pros and Cons of Retiring Abroad
• Want to Retire Abroad? Five Things to Know About Your Money

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

We work with families who have $1 million or more saved — we call them Midwestern Millionaires. They're the kind of people who pack their lunch, pay off their home and try to do things the right way.

For those who have spent decades saving, serving and doing the right thing, sending painful amounts of money to Uncle Sam to pay taxes can feel downright unfair.

When you have a high income and a high net worth in retirement, then taxes will likely be your greatest expense.

Tax avoidance, not evasion

I get it. One of our clients, Jeannie, looked me straight in the eye during our first meeting and said, "Joe, there's one thing you need to know about me — I hate taxes." That moment inspired my bestselling book I Hate Taxes (request a free copy here).

And, honestly, she's right. You shouldn't feel bad about wanting to keep as much as you can of what you earned through all your years of hard work.

Let's be clear: I'm not talking about breaking the rules. I'm talking about using them to your advantage.

As Judge Learned Hand famously said, "Anyone may arrange his affairs so that his taxes shall be as low as possible ... There is nothing sinister in so arranging affairs as to keep taxes as low as possible."

That is exactly what smart tax planning is about: paying your fair share, but not a penny more — and not tipping Uncle Sam.

The IRS has a plan for you. Do you have a plan for you?

Here is the truth most retirees don't realize: You already have a tax plan — it's set out for you by the IRS.

If you don't take control of how and when you pay taxes, the government will happily make that decision for you by imposing required minimum distributions (RMDs).

Creating your own retirement tax plan now can allow you to decide when and how much to pay in taxes.

Plus, you can structure your retirement income so more goes into your pocket and less goes into Uncle Sam's.

Taxes are on sale — for now

Current tax rates are among the lowest in U.S. history. The top tax rate today is 37%. In the 1980s, it was 70%. And in the 1940s, the highest tax rate was 94%!

When clients ask me, "Joe, when's the best time to plan for taxes?" my answer is simple: right now.

If taxes were going to double over the next 10 years, would you do something today? Of course. And with our national debt now over $38 trillion, that future isn't hard to imagine.

That's why I say taxes are currently on sale, and like most sales, this one may not last forever.

When you shop at the grocery store, you check prices before putting items in your cart. But with tax-deferred accounts, most Americans are shopping blind.

Every time you add money to your 401(k) or traditional IRA, you're agreeing to pay taxes later, but you don't know how much "later" will cost.

Would you invest in something if you didn't know the price? Of course not, and that's why understanding your future tax liability is so crucial.

Now, as I always say, the tax code is written in pencil, which is why we must proactively plan for what we call tax diversification.

Three tax buckets

We teach our clients to think of their savings as being in three buckets:

• Taxable bucket. Checking, savings, brokerage accounts
• Tax-deferred bucket (Uncle Sam is the joint owner of this one). 401(k)s, IRAs, TSPs, 457s, 403(b)s
• Tax-free bucket. Roth IRAs, Roth 401(k)s, HSAs

Here is the goal: to move money from the "tax later" category to "tax never." I always ask, if we had a magic wand, which bucket would we want our money in? The tax-free one, of course.

Unfortunately, most people have the majority of their wealth in tax-deferred investments. So, typically, what they do is contribute to a Roth from their taxable bucket.

Or they look at doing Roth conversions by moving a portion of their tax-deferred bucket to the tax-free bucket and paying taxes now while they are lower.

You can't take it with you

You've worked hard, you've saved, you've done everything right … Now it is time to ask yourself, What is all of this for?

I tell people all the time that there will be no U-Haul hitched to your hearse. You can spend your money, give it to your family, give it to charity … or give it to Uncle Sam.

If your retirement plan is structured properly, you can live comfortably, give generously and still leave a lasting legacy without giving the IRS a tip on your way out.

Smart tax planning

The IRS is very good at making taxes complex, but your strategy doesn't have to be.

With tactical and intentional planning strategies — using Roth conversions, charitable giving, income diversification and more — you can cut your tax bill, strengthen your retirement and put more of your money toward what truly matters.

At Peak Retirement Planning, we believe that every dollar you save in taxes is another dollar that can serve your family, your community and your legacy.

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• Thanks to the OBBB, Now Could Be the Best Tax-Planning Window We've Had: 12 Things You Should Know

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.

While this advice is well-intended and generally useful, it turns out that following this advice blindly can sometimes make things worse than if you had done nothing at all.

Let's start with that last point about avoiding probate. Many people have heard horror stories about probate, and consequently they want to do everything they can to enable their estates to avoid it.

There are multiple ways to try to accomplish this, from establishing trusts to setting up payable-on-death (aka transfer-on-death) accounts and more.

Small estates already protected

Before bothering with any of these avoidance maneuvers, however, you should be aware that "small" estates don't need to go through probate in the first place.

Almost every state has laws that allow certain estates to bypass or at least greatly simplify probate … and the definition of "small" can be quite generous.

For example, California estates worth less than $208,850 in 2025 don't have to go through court at all (and assets like vehicles and IRAs with named beneficiaries don't even count against this limit). You can visit EstateExec.com for details by state.

Overdoing automatic transfers

If an estate doesn't qualify as "small," some people attempt to bypass probate by putting everything into assets that transfer automatically on death … but overdoing this process can leave a real mess for the survivors.

For example, if everything automatically transfers, what will be left to pay your final bills (medical, credit cards, funeral expenses and more)?

Automatically transferring everything will effectively make your estate insolvent, enabling your creditors to sue the recipients of your transfers, and leaving a real headache for the person responsible for finalizing your affairs.

One approach to handling this is to leave some of the money in accounts that don't automatically transfer … but if you leave too much, then probate will be triggered anyway.

Be careful here: While California's limit is over $200,000, South Carolina's equivalent limit is only $25,000.

Another thing to consider is that assets change in value over time, so while you may equitably set things up so one child gets a bank account that's payable on death and another gets your stock portfolio, by the time you eventually pass away, those could be at very different values.

This could result in unwanted discrepancies between the amount each person inherits.

If there are only a couple of heirs, you could list them at their desired percentages for every account, but if you have more people you want to inherit, or there are specific bequests involved, it can get a little messy.

Trust mistakes

Rather than using payable-on-death or transfer-on-death accounts, some people try to avoid probate by way of a trust.

One common misunderstanding involves a "testamentary trust," in which the will establishes a trust upon the decedent's death.

While there may be valid reasons to set up such a trust (for example, to provide for the care of a minor), you should be aware that these trusts are officially funded with assets after those assets have gone through probate … and thus don't avoid probate at all.

Another area of misunderstanding that can lead to costly mistakes concerns cost basis. When you sell an asset, you typically owe taxes on any gains you make if the selling price exceeds the original cost of the item.

So if you bought a house for $250,000 and sell it for $600,000, you will owe taxes on the $350,000 gain.

However, the U.S. tax code gives heirs a break on this tax: Many assets enjoy an automatic step-up in cost basis upon death, so if your mother bought the house, and it was worth $600,000 at the time of her death, the house would be assigned a new cost basis of $600,000.

You could turn around and sell the house for $600,000 with no taxes owed!

Unless the house had been placed in an irrevocable trust … in which case there would be no automatic cost basis step-up, and thus taxes would be due on the full $350,000 gain.

You can see how things would likely have been much better for their heirs if nothing at all had been done, and they had simply inherited the house according to normal probate processes.

Revocable trusts do generally benefit from a cost basis step-up at the time of death, and can be quite helpful — but they have their own gotchas, and in any case, you'll want to be sure that some provision has been made to pay your debts at the time of death (even if they're just your latest credit card charges), along with sufficient funds to keep everything maintained while your estate is settled and everything resolved.

The will

Of course, if you put everything (or almost everything) into assets that bypass probate, then your will won't really matter, because the will only affects things that don't automatically transfer (i.e., things subject to probate). Maybe that's OK, but it's something to take into consideration.

If not, everything will bypass probate, then a will can be quite important, especially if you have strong ideas about what you want done with your estate upon your death.

Perhaps you want to make a large charitable donation, perhaps you have certain belongings you wish to go to certain people, or perhaps you simply want to ensure that a friend or distant relative inherits a share of your estate (or that a close relation doesn't!).

However, if you're not careful, you can end up with a flawed will that can be challenged and overturned in court. Without very careful wording, for example, it can be difficult to "cut someone out of your will."

For example, many states have laws that protect a surviving spouse from such situations, and upon request from such a spouse, the court will simply overrule your will. In another example, a child of a Louisiana decedent is usually entitled to a significant portion of the estate, regardless of almost anything the will may say.

For these reasons, if you intend to do anything "unusual" in your will, it makes sense to have an experienced lawyer help you draft it. And then be sure an interested party will have access to the will upon your death … it doesn't do any good to have a will if no one can find it when the time comes.

Intestate estates

On the other hand, if you're not going to do anything unusual in your will, you may wonder why you should even bother in the first place.

After all, every state has laws that require your estate to go to your closest relations (i.e., spouse, children, etc.) if there is no will, and no one should feel slighted if the estate goes to the "normal" distribution percentages.

In fact, settling an estate can be even easier without a will. If there is no will, no one needs to prove that the signature on the will was yours, and that you were in your sound mind and not under duress when you signed it.

If there is no will, distributions can be made directly to the "heirs-at-law" (your closest relations as defined by law), but if there is a will, the heirs-at-law must be officially notified so they have a chance to contest the will. And so on.

Lawyers generally cringe when they hear someone saying that settling an estate can be easier without a will, because it's just accepted wisdom that everyone should have a will.

We're certainly not recommending that you avoid writing a will. If you care about the outcome, it's probably a good thing to do.

We're just pointing out that, like everything in life, there are pros and cons, and you should decide what's best for you … and that for better or worse, the majority of people opt not to bother in the end.

Estate planning vs estate settlement

While all aspects of estate planning are optional, estate settlement (the process of winding up the decedent's affairs) is mandatory.

And no matter what plans have been made, there are still myriad things that must be done after the death, even if everything has been set to transfer "automatically" (for example, various federal and local agencies must be notified, the residence must be cleaned out, debts resolved and more).

If your goal is to make things easy on your surviving family, one other thing to consider is estate settlement preparation, which doesn't involve legal documents or anything formal: just pulling together some basic information like a list of major assets, the location of keys, how to contact the heirs, etc.

Although often overlooked, settlement preparation is probably the easiest aspect of estate planning. Even something as simple as a list of financial accounts can transform the settlement process from a complex investigation into a straightforward task.

You can just list things in a basic spreadsheet, you can use a purpose-built product like The NokBox, or you can even use something like EstateExec, which will also automatically guide your executor through the settlement when the time comes. (Note: I am the founder and CEO of EstateExec.)

Summary

Traditional estate planning can be helpful, especially for larger estates, but it can also backfire, so if you are going to engage in it, it is best to get advice and help from an experienced professional.

And if the estate is on the smaller side, one of the most important things you can do is to ensure your executor will have some basic information about your estate when the time comes.

Related Content

• Simple Ways to Make Your Executor's Job Less of a Pain
• Probate: The Terrible, Horrible, No Good, Very Bad Side of Estate Planning
• Protect Your Family's Future: Avoid These 12 Common Estate Planning Mistakes
• An Expert's Guide to the Estate Planning Documents Everyone Needs
• Estate Planning Checklist: 13 Smart Moves

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

We wanted our kids to grow up confident, capable and ready to conquer the world. Instead, we bubble-wrapped them, praised their every burp, then wondered why they graduated college expecting their boss to give them a participation trophy, maybe even nap time.

The American Dream turned into the American Dread

We imposed the concept of the American Dream on our kids, even though it didn't pan out for us.

• Go to college
• Do internships
• Catapult into a job
• Remain loyal
• Work long hours
• Put in your time
• Pay your dues
• Get married
• Have babies
• Retire

… repeat.

Not so fast — the world changed. Education prices skyrocketed, home costs went out of reach, divorce rates hit 50%, and people got laid off. You know the end of the story: The American Dream died.

The overprotection pandemic

Our generation fought hard so our kids wouldn't have to struggle the way we did. But in doing so, we robbed them of resilience.

We filled out their college applications, called their professors and intervened with their managers. We became helicopter parents, then drone parents — silent, hovering.

By the time they entered the workforce, some were shocked to discover that not everyone thought they were amazing.

The first bad performance review felt like a hate crime. The phrase "constructive criticism" triggered calls to HR.

We made 'work' a four-letter word

Remember when a job was something you earned, not something that came with a sign-on bonus and emotional-support snacks? Some parents gave their kids allowances, not for chores, but for existing. We told them to "follow their passion," as if passion alone paid the rent.

No wonder they have existential crises when the espresso machine breaks at work.

PapersOwl found that Gen Zers have responded to their unhappiness in the workplace in interesting ways. One way some 7% of Gen Zers surveyed admitted to was via revenge quitting, which is quitting out of retaliation for being frustrated, upset and unheard.

Another new term is quiet cracking. It's burnout that develops slowly and simmers. Workers are physically there, but mentally, they've checked out.

The message? Gen Z perceives that there are toxic workplaces that they don't want to endure. Did we ill prepare them for what we would call the real world?

White collar vs blue collar: The great hard work divide

Once upon a time, hard work had a universal meaning: show up, give it your best and keep showing up. Today, it depends on which collar you're wearing.

For white-collar workers, hard work has become more about optics than output. It's the performance of productivity — being online, on camera and on the brink of burnout.

The modern corporate warrior measures success in unread emails, color-coded calendars and caffeine intake.

White-collar exhaustion is mental — the slow bleed of PowerPoints, politics and performative passion projects. It's not about sweat; it's about sweating appearances.

For blue-collar workers, hard work still means showing up early, staying late and producing something real: A truck gets loaded, a roof gets repaired, a customer gets served. Their pride comes from tangible results, not virtual visibility.

When blue-collar workers hear a white-collar worker complain about emotional exhaustion from too many Slack messages, it's hard not to roll their eyes. But all is not rosy with blue-collar workers either.

I spoke with Silvija Martincevic, CEO of Deputy, a workforce management platform for hourly work. The platform released a nationwide snapshot of how U.S. shift workers feel and why that matters.

"Our 2025 Shift Pulse Report shows sentiment slipping among shift workers, with 67% of workers indicating they are planning to change jobs in the next six months.

"Flexibility, clear communication and meaningful recognition aren't just nice-to-haves, they're essential to keeping employees engaged and reducing turnover."

Martincevic added, "Disengagement doesn't happen overnight; it builds quietly through burnout, unpredictable schedules and a lack of recognition. Gen Z is simply more vocal about not accepting that status quo."

White becomes blue

There is also an interesting trend that Resume Builder pointed out, that four in 10 Gen Z adults are moving away from white-collar jobs and pursuing blue-collar or skilled trade jobs, such as plumbing, welding or electrical work, including more than a third who hold a bachelor's degree.

They cite the chief motivation for this is to avoid student debt. This also reduces the risk of being replaced by AI.

Martincevic echoed this: "White-collar job insecurity and AI disruption fears are driving Gen Z toward trades and frontline careers, which they believe are safer from these threats.

Tech-savvy and pragmatic, they know AI can design a system, but it's the human touch that still truly matters in frontline blue-collar careers."

FlexJobs noted in its Work Shift Pulse Report that 85% of professionals today have said that their career expectations have shifted since graduation, and 62% are ready to make the shift from white-collar to blue-collar jobs if they're offered better pay and more stability.

The great cultural disconnect

We told our kids to chase balance but forgot to teach boundaries. Maintaining a work ethic became optional. Deadlines became guidelines. Being late was self-care.

Employers now face entry-level hires who expect mentorship, mission statements and mindfulness breaks before noon. The problem isn't laziness — it's that we raised them for a world in which effort was optional and validation was guaranteed.

Reality Check 101

Here's the truth:

• Work is work. It's not always fun. That's why they pay you.
• Failure isn't fatal. It's tuition for life.
• Grit beats genius. Every. Single. Time.
• Respect is earned. Not by demanding it, but by delivering results.

The new collar: The future doesn't care what color your shirt is

Here's the twist no one saw coming: Robots don't care whether your collar is white or blue. They just care if you're useful.

AI doesn't get tired, doesn't call in sick and definitely doesn't ask for a raise. It's already rewriting the rules — automating the physical grind of blue-collar jobs and the repetitive tasks of white-collar work.

The next generation isn't competing against each other anymore; they're competing against efficiency itself.

Yet, this is the best news of all — because what machines still can't do (yet) is care, create or connect. The future of work won't belong to those who can out-code or out-lift the machines, but to those who can out-think, out-adapt and out-human them.

Maybe the next version of hard work isn't about punching a clock or padding a résumé. It's about showing up with curiosity, courage and a willingness to learn — skills that will never go out of style.

If we can teach that to our kids — not entitlement, not exhaustion, but engagement — maybe we'll finally get it right.

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• How a Financial Adviser Can Help You Sleep at Night

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

If you're a high earner or affluent professional, you might feel a profound sense of whiplash. You've done everything right — you maximized your retirement savings, paid down your mortgage and watched your portfolio grow.

Yet, the threat of a "jobpocalypse" can still feel unsettling.

The good news is that this anxiety is a signal to act, not panic. Your goal now isn't just to grow your money; it's to use that wealth to buy yourself optionality — the freedom to choose your next move, negotiate from strength or take the time you need to find the right next opportunity without financial stress.

A key lesson from this new era of job volatility is simple: Liquidity is your ultimate defense, and optionality is the ultimate luxury.

The 18-month rule: Your career gap insurance

For years, standard financial advice suggested keeping three to six months of expenses in an emergency fund. For high earners, that advice is woefully inadequate.

Think about it: Replacing a six-figure salary requires a specialized job search that takes time. Networking, interviews and due diligence can easily stretch beyond a year. That's why you need to upgrade your financial defenses.

The new gold standard for affluent families is the 18-month rule of fixed expenses.

This rule dictates setting aside 18 months of your non-negotiable costs — the expenses that keep the lights on and the family running smoothly.

What goes in your 18-month safety net?

• Housing. Mortgage or rent payments, property taxes, HOA fees
• Debt service. Car payments, student loan minimums, etc.
• Insurance. Health, life, auto and home premiums
• Non-negotiable family costs. Essential groceries, utilities and fixed costs like private tuition or necessary childcare

You should keep this capital in highly liquid, low-risk accounts — think high-yield savings accounts, money market funds or short-term Treasury ETFs.

This money is your career gap insurance, providing you with the peace of mind that you will not have to liquidate growth assets — like your stock portfolio — at a loss just to cover the rent.

Creating the financial eject button

Beyond holding cash, strategic planning requires creating immediate, low-cost access to capital that doesn't force you to sell your investments. We call this the financial eject button.

While we generally advise paying off high-interest consumer debt, not all debt is bad. Low-interest, tax-deductible debt, like your primary mortgage, is often efficient to carry.

However, the real strategic move is setting up a contingent source of liquidity while you are still employed and highly creditworthy.

• Home equity line of credit (HELOC). If you have significant equity in your primary residence, a HELOC offers a flexible line of credit secured by your home. It's inexpensive to establish and costs you money only if you actually draw on it.
• Pledged asset line (PAL). Offered by most brokerages, a PAL allows you to borrow against the value of your non-retirement investment portfolio.

The value of these facilities is simple: They are preapproved, ready to deploy and can provide immediate, non-taxable cash flow if your income stops.

Establishing these resources now ensures that you avoid the worst-case scenario: being forced to sell good, long-term investments into a declining or turbulent market just to cover an unexpected expense.

Your career is an asset: Reinvest in it

Just as you audit your investments, you must audit your career. With artificial intelligence rapidly transforming how work gets done, the durability of even highly compensated specialized roles is questionable.

You must treat your professional standing as a primary wealth-generating asset that requires continuous strategic reinvestment.

Ask yourself: Are your specialized skills complementary to AI or easily replaceable by it?

Make the "résumé refresh" a low-effort, year-round discipline. This means:

• Networking. Make time for one meaningful professional conversation per month.
• Upskilling. Identify new certifications or adjacent skills that make you adaptable.
• Auditing. Periodically update your résumé, even if you're happy in your role.

Finally, remember that the true measure of your wealth is not your net worth, but your well-being. Your financial strength should empower you to trade a small amount of income for a dramatically increased balance and fulfillment.

The true value of your wealth plan is the confidence it grants you to say, "No, thank you" to a toxic environment or an unsustainable work pace.

By adopting the 18-month rule, establishing your financial eject button and continuously investing in your own adaptability, you move beyond merely surviving market changes.

You achieve the financial fortitude necessary to navigate whatever comes next — and do so entirely on your own terms.

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• Six Ways High-Income Earners Can Optimize Their Tax Strategy
• Will My Children Inherit Too Much?

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.

According to a survey from ecommerce marketing company Omnisend, Americans are expected to spend nearly $80 billion on Black Friday today and Cyber Monday.

That's a $20 billion increase from last year. But with tens of thousands of job layoffs, mounting credit card debt and lingering inflation, how are Americans affording this?

At first glance, it may seem like this is a positive boost in consumer confidence, but what's really happening is financial denial and retail therapy.

Pressure to shop proliferates

In today's climate, there's so much pressure to buy. Advertisements are virtually everywhere, and they only get worse during the holiday season when retailers promise big deals and savings.

Add online shopping with near-instant delivery and buy now, pay later options and the budget feels limitless. Especially if you're shopping for young children. But is that material item worth clocking in extra hours at work or taking on more debt than you can afford?

The obvious answer is no, but it's not that simple. During a time when inflation is eroding people's purchasing power, there's a lot of guilt associated with paying full price. Retailers know this, and they sometimes use it to their advantage.

Some may artificially inflate the original price of an item to make it appear as if you're getting a deal. They may even add an expiration date to create urgency.

Under these conditions, you're more likely to buy on impulse under the guise that you're saving money when that may not be the case.

Tools like CamelCamelCamel and Honey allow you to check an item's price history.

It's also a good idea to shop around. If you notice multiple retailers are discounting the same product, the sale is likely legit.

However, if you see an item being advertised for 50% to 75% off for one day only, it may be advantageous to skip it — especially if it's from an unknown brand.

Consider some financial literacy

So why is this important? Holidays can be a stressful time for parents who are trying to provide the best Christmas for their children, and the pressure to get every item on their list can be intense — no matter how much it costs.

But if money is tight this year, breaking the bank to get a material item that may hold your child's attention for a few weeks isn't worth racking up debt for.

In fact, it may be the perfect opportunity to teach your child what this season is all about and the importance of financial literacy.

Now, I'm not suggesting parents should skip the gifts altogether, but consider having an age-appropriate conversation with your children about what's going on.

Explain that prices are higher this year and that you don't have room in the budget to get everything on their wish list.

Focus on thoughtfulness over abundance. Teach your children that gifts are meaningful because of the care and effort that are put into them, not because of the cost or the type of item.

Put together a shared gift plan

Another option is to create a shared gift plan. Sit down with your child and make a list of who they want to get small gifts for, such as siblings, friends or teachers. Give each person on the list a target budget and stick to it. This will help them understand that money is finite.

Depending on their age, you can also encourage them to use their own money to buy the gifts. Help them research where to buy things, compare prices and decide what items are "worth" the money.

By using their own money, your child learns the value of a dollar and that sometimes sacrifices have to be made. It also teaches them that money is earned — if you want something, you have to work for it.

Alternative gift options

As you're preparing for the holidays, remember the reason behind the season. Are you getting gifts simply because it is tradition? Are there other more affordable times throughout the year when you could show that person how much they mean to you?

Perhaps you could take a special trip in the summer or give yourself more time to save money by buying them something for their birthday.

If your budget is tight this season, don't let the pressures of the holidays force you to make choices you cannot afford.

Consider spending quality time with one another by creating memories and experiences, rather than focusing on material items that can easily be replaced or forgotten.

Picking up the phone to call a loved one or sending them a card goes a long way, too. Oftentimes, that's more meaningful and authentic.

There's no shame in going back to the basics this holiday season — the memories and experiences created instead are priceless.

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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.

High-net-worth donors must contend with stipulations coming into effect on January 1, 2026:

New floor on deductions for itemizers. Philanthropic donations at or below 0.5% of a filer's adjusted gross income will not provide any deductions.

Cap on deductions for top tax bracket. The deduction value of itemized charitable donations will be capped at 35% for filers in the 37% tax bracket (the highest).

New universal charitable deduction for nonitemizers. Tax filers who don't itemize their charitable deductions will be subject to a universal deduction amount — up to $1,000 for single individuals and up to $2,000 for married couples.

This universal deduction does not apply to contributions made to donor-advised funds (DAFs) or private foundations. To receive this new deduction, the gift must be made with cash; donations of appreciated securities will not trigger this new deduction.

Unused deductions are subject to new floors and caps. Charitable deductions that weren't applied to tax returns might still be carried forward to the next year's filing, but any donations carried over into 2026 or later are also subject to the above new floor and caps.

What do these new rules ultimately mean? After the New Year, smaller or routine philanthropic donations might not be able to contribute nearly as much in tax deductions — or will contribute nothing in deductions.

Further, affluent donors who make sizable donations will reap considerably less in tax advantages.

That makes year-end charitable giving and tax planning before 2025 runs out more urgent than ever. For the remainder of the year, taxpayers can consider certain strategic moves that can potentially maximize the tax deductions on charitable gifts made in 2025:

Consolidate multiyear gifts into 2025 filings. Instead of spreading multiyear philanthropic gifts over time, their full amounts should be filed for the 2025 tax year.

That way, the deductions on multiyear gifts won't be affected by the new rules going into effect on January 1.

Prefund multiyear gifts into a donor-advised fund now. Setting up a DAF before 2025 runs out to prefund charitable gifts can also ensure any potential deductions can fall under the 2025 deduction rules.

Keep an eye on adjusted gross income. Since the 0.5% deduction floor is tied to a filer's adjusted gross income, taxpayers need to keep that in mind as they plan charitable gifts going forward.

Business sales and other events which can decrease or increase adjusted gross income will also affect the deduction potential of charitable donations made in years in which that income is either lower or higher.

The window from now through December 31, 2025, grants taxpayers a crucial period for reviewing year-end charitable giving planning ahead of the OBBB's charitable deduction stipulations.

The new rules with regard to deductions will change the potential tax benefit derived from large, ongoing donations to philanthropic causes.

Planning now can help lock in deductions on multiyear gifts under the current calculations, and also potentially optimize deductions on donations made in future tax years.

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• How to Choose the Best Charities to Donate To
• Three Factors Sabotaging Your Long-Term Investment Strategy

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.

Despite many Americans struggling with finances in the midst of lingering inflation and high credit card debt, charitable giving increased 6.3% to $592.5 billion in 2024, according to Giving USA's 2025 Annual Report on Philanthropy.

You shouldn't donate to a charity simply for a tax write-off. Instead, find one that means something to you or your loved ones.

Whether it's a local shelter for homeless people or animals or an organization that's important to you, like Feeding America Wisconsin is important to me, many organizations could use your help.

While there are many ways to give, some strategies can be more impactful than others. By understanding how to maximize your charitable donations, you can make the most of your gifts while staying on budget.

Take advantage of tax benefits

You can save more on taxes if you have the right strategy for donations, which also gives you the ability to donate more. To encourage charitable giving, the IRS offers tax deductions for donations made throughout the year.

However, to claim these deductions, you need the right paperwork and have it filed correctly.

If you're seeking a tax deduction, make sure your donation falls under the IRS's definition of a charitable donation. You can donate to organizations that are registered as tax-exempt, including such places as churches and religious organizations or museums and educational groups.

But be careful — not all nonprofits are tax-exempt, so do your homework before you choose.

If you plan to make donations next year, a few changes that you need to be aware of are coming from the One Big Beautiful Bill (OBBB).

Beginning in 2026, universal deductions are changing for non-itemizers. If you're a single filer, you can deduct up to $1,000 in cash donations, and if you're married, that number goes up to $2,000.

Also starting next year, if you itemize your deductions, you're required to contribute at least 0.5% of your adjusted gross income before claiming any charitable deductions.

If you earn a higher income, the value of your charitable deduction is now capped at 35%, down from 36% in previous years. While this might seem like a slight change, this could significantly impact your donations moving forward.

Consider qualified charitable distributions

If you turned 73 this year, you have until April 2026 to begin taking your required minimum distribution (RMD). A way to meet your annual RMD is by using a qualified charitable distribution (QCD). This allows those age 70½ and older to make donations of up to $100,000 from their IRA.

When you make a distribution from your IRA, those are pre-tax dollars and can be used to meet your annual RMD. This will reduce your adjusted gross income and can go directly to charity without being taxed when you withdraw.

If you're worried you don't have enough extra funds to donate to charity this year, that's okay.

I recommend working with a financial professional. They can help you determine the best ways to maximize your donation while still staying within your budget.

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• What Not to Do When Planning Your Retirement

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

There's about to be a period in which the largest wealth transfer in history takes place, called the Great Wealth Transfer.

By 2048, an estimated $124 trillion, according to Cerulli Associates, is expected to be passed down from Boomers to younger generations.

How do you deal with assets that high when transferring them to heirs and receiving them as an heir?

It's a complex situation in which there's no cookie-cutter approach, but there are things to know about transferring wealth that could help you understand how to best position yourself to receive that money, how it could affect your financial situation and, ultimately, how to weave it into your financial plan.

How to approach the transfer of ownership of assets

The reality is that not everyone wants their children to know about their financial situation or their distribution of assets in the same way.

Many of those fears are for good reason. Studies show that 70% of families lose their wealth by the second generation, and an astonishing 90% lose it by the third generation.

A variety of factors can contribute to this, including taxes, frivolous spending and a lack of understanding of how to handle transferred assets.

For example, if you inherit an IRA, you might think you must pay all taxes on the account now instead of stretching it over 10 years, as the rules currently state.

Instead, you can apply strategies to better utilize or combine that money to allow yourself to retire earlier than you thought possible.

In some cases, an effective wealth transfer can even accelerate a retirement timeline. You might be able to strategically use some rules that enable you to liquidate assets to bridge that gap.

For example, let's say you're in a position to retire early at age 54, but you can't touch your 401(k) without penalty until age 59½, whereas if you worked until age 55, you can, thanks to the so-called Rule of 55. If you inherit assets, it could free you to avoid touching those retirement assets.

Take the funds that you're forced to take from an inheritance to bridge the gap until you get to a point where you can access retirement money.

Otherwise, you'd have had to work five more years just to be able to access what you put into a retirement plan. Here are the three steps that can help to see you and your heirs through a transfer of wealth:

Step 1: Know what you're inheriting and what buckets you receive

The first step is knowing what you're inheriting and what buckets you've received. Sometimes when people inherit money, they think they're going to have a huge tax burden.

But most of the time, if you do it strategically, you won't have a lot of taxes due at one time, based on the current rules on a stepped-up cost basis.

If you inherit a home and sell it immediately, there shouldn't be any taxes. The same is true if you inherit a stock portfolio. The tax basis will update to the date-of-death value.

Depending on the process, you can have a bucket in which assets aren't taxable but available to do such things as help you pay off your mortgage, lowering the amount of money you need monthly. This could put you in a window in which retirement is a possibility.

When it comes to retirement, you must think about your cash flow and how you fill that bucket. What's going to be available for emergencies? What kind of growth vehicle am I going to need for inflation? Depending on what you inherit, that could fill a bucket that you don't currently have today.

If it's a situation in which you feel good about your pension and Social Security income but don't have enough flexibility for emergencies, maybe those assets will bridge that gap. You could have a great situation today, but you are worried about longevity. You could position assets for long-term growth potential.

It's about trying to figure out how to weave that strategy into what you're already doing, because we tell people inherited money is a lot like lottery money.

If you don't know you're going to get it or what you plan to do with it, the money tends to disappear very quickly.

Make sure you're strategic to a point, but don't count money before you have it. I think everybody would like their parents to finish well and have enough money for long-term care and other things that could put a dent in the expected inheritance that you get, especially if you're dividing it between siblings.

Never make tactical decisions before you have money, but it's good to make strategic planning choices or have awareness so you're prepared when you do receive assets.

Step 2: Be as efficient as possible

If you want to transfer wealth as efficiently as possible, there are several actionable steps to make sure your assets are accurate and structured according to your preference.

This will ensure as many of your assets go through beneficiary designations as possible and you aren't waiting on a probate timeline, which helps reduce the risk of someone thinking they're entitled to money they aren't.

Have basic estate planning documents in place so you can end your life well, but also make sure anything that doesn't have a beneficiary's name attached to it is dealt with appropriately.

This time is also about education and having conversations with your children so they're not blindsided. Leave your heirs with a plan, not a puzzle. Determine who needs to have a voice in the conversation and who needs to have a vote in the conversation.

If you want to handle the wealth-transfer process right, communication is key with the next generation.

For example, let's say you have three siblings; two are in good financial shape, but the third has hit hard times. Logically, it would make sense to shift more of the estate in their favor.

But if there's no communication and they see the documents, they might think their parents loved that sibling more than them.

People attach a lot of psychology to money decisions, especially later in life. The more communication you have and get buy-in from the kids, the better it will be for everyone. Don't ruin your legacy through a lack of communication.

Step 3: Be strategic in your gifting

In the same way the recipient must be strategic in how they receive money, parents should be strategic in how they give or leave money.

If they're in a position in which they're financially able, they could gift funds annually while still living, passing money to their heirs that doesn't have the same restrictions or taxation.

Remember to think about the tax buckets. For example, suppose half your money is in a house and the other half is in a retirement account. You want half your money to go to charity and the other half to your kids.

In this case, you'd want to gift the house to the kids, because they would get more and the charity would get more if you gift the entire retirement account.

It might sound simple, but if you switch those, the whole estate is going to be smaller and less impactful simply because you didn't gift from the right bucket to the right places. Strategy matters.

This could make Roth conversions more valuable because inherited Roth funds are the only funds you can receive that have a tax-free life after the person who funded the Roth.

Try to use that as motivation to say, "If I know I'm never going to use that money and I want to try and maximize its impact, then maybe it makes sense for me to start paying taxes on this money for the benefit of kids or grandkids to be able to have a tax-free runway."

Some clients I work with recognize the impact of Roth conversions on their situation, but when I ask about their parents, they tell me they're 89 years old, living on Social Security and are forced to take money out every year.

Because of that, their total income is probably not a lot, especially compared with their heirs.

Could it make sense for the parents to convert so that the money the children receive will then be able to grow tax-free during their lifetime and retirement years?

It's easy to get into your upper 80s and not realize how beneficial a Roth conversion is when you're just pulling whatever the government makes you take out since required minimum distributions (RMDs) started for you almost 20 years ago.

It's about being strategic with what you want to have happen and how you can leverage the decisions that you can make today and maximize the impact.

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• You've Built Your Wealth, Now Make Sure Your Family Keeps It
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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.

Even a small step now — sharing your thoughts on aging, care or estate plans — could help prevent confusion, conflict or stress down the road.

Many people find these conversations challenging, and understandably so. They touch on mortality, money and independence.

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.

Yet, in my experience with clients, the greatest gift you can give isn't always measured in dollars; it's the clarity and peace of mind that come from a well-communicated plan.

Whether you are the matriarch or patriarch of the family, or the adult child looking to support aging parents, here is how to approach these conversations this season.

For the older generation: Stewardship and clarity

If you are the one who built or stewarded the family's wealth, you are likely focused on two main objectives: maintaining your own comfort and easing future responsibilities for your children. Clear communication supports both.

Long-term care and living wills

Talking about long-term care doesn't have to be a technical discussion about insurance policies. It can be as simple as expressing a wish: "I want to make sure my health care preferences are clear if I can't speak for myself."

From there, you can share whether you would prefer to age at home or elsewhere and confirm that your power of attorney and health directive documents are current. This isn't about giving rigid instructions — it's about ensuring your family isn't left guessing during a crisis.

Estate plans and legacy

A smooth, organized transition is one of the most meaningful legacies you can leave. You don't need to get into specific dollar figures at the dinner table. Instead, focus on the logistics:

• Where are the key documents kept?
• Who are your attorney, tax professional and wealth manager?
• What is the general structure of the plan?

If your plan involves unequal distributions, offering brief context now can spare significant tension later.

Family values and philanthropy

If discussing assets feels too heavy, try starting with values. Bringing your family into your charitable giving can be a gentle way to discuss legacy. Asking which causes matter to them turns the conversation toward shared purpose rather than inheritance.

For adult children: Curiosity and respect

Adult children often want to support their parents but fear overstepping boundaries. The key is approaching these topics with curiosity and respect, rather than demands.

Asking about preparedness

You would feel better knowing where your parents' key documents are and who to contact if something happens. Frame the question practically, not intrusively.

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Understand what key professionals are involved — the attorney, wealth manager, accountant and anyone else supporting the family. Identifying these individuals is not only part of maintaining an "orderly estate," but it also helps reduce the risk of miscommunication.

Crucially, it can help prevent your parents from becoming victims of financial fraud and hacking by ensuring there is a trusted team watching over their affairs.

Understanding the care plan

If your parents have said they want to age in place, it helps to ask what that means in practice. How do they imagine the family coordinating support?

Discussing this now keeps everyone aligned and avoids accidental misunderstandings later.

Aligning on educational support

Holidays can also be a good time to talk about help for the grandchildren's education. Asking whether they would like to contribute to 529 plans — or use another approach — keeps things coordinated and tax-efficient.

Conversation starters

If you aren't sure how to break the ice, try one of these openers.

Parents could say:

• "We're not getting any younger, and I want to make sure we're on the same page about elder care. We'd like you to be the point person for our care when we're older. Is that something you'd be open to?"
• "At some point next year, I'd like you to sit down with our wealth manager and attorney to understand what to expect when I'm gone. Can we get something on the calendar?"

Adult children could say:

• "I'm not sure how to think about planning for the children's education. Is that something you'd be willing to contribute to during your lifetime instead of leaving it up to the will?"
• "If you got hit by a bus tomorrow, where is everything saved? Do you have a doomsday file on your computer?"

Putting it all together

Not every topic will be resolved over a single holiday dinner — and that's okay. The goal is simply to begin.

By opening the door to these conversations, your family can create a shared commitment to clarity, stability and long-term well-being. That is a gift that lasts far beyond the holiday season.

Related Content

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• What Would You Like to Leave Behind? A Financial Planner's Guide to Family Wealth Discussions
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• Prepare Your Family for the Financial and Legal Aftermath of Your Death
• You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term Care

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

Others take a little more creativity and patience. Teaching them to give back definitely falls into that second category.

Generosity doesn't happen overnight. Kids learn it by watching, feeling and doing. As parents, we're constantly walking that line between wanting them to appreciate what they have and not turning every lesson into a lecture.

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.

Five simple, meaningful strategies can help your kids understand what it means to give back in ways that fit your family's real life.

1. Start with gratitude

In our house, gratitude is something we try to instill in our kids. It isn't some big "sit in a circle and reflect" moment, but more like, "What made you smile today?" or "What was the best part of your day?"

These tiny moments help kids realize how much they already have, whether it be friends, family, food or a home … things we adults sometimes take for granted. When kids start noticing the good, they naturally want to share it.

Studies, such as one by Robert Emmons, a leading expert on gratitude, show that practicing gratitude for five minutes each day can make you 25% happier.

2. Let them take the lead

Kids have big hearts and even bigger opinions. If you've ever tried picking out an outfit for your daughter, you know exactly what I mean. It helps to let them take the lead when it comes to giving.

Maybe your child wants to donate old toys, help animals or collect food for families in need. When the choice is theirs, they feel ownership, and that's when it really starts to click.

I learned this the hard way when I tried to clean out my kids' toys on my own. Let's just say it didn't go well.

But once I gave them the time and space to go through their things and imagine another child playing with those toys, everything changed. It became fun, thoughtful and surprisingly meaningful.

3. Volunteer as a family

Some of my favorite memories come from the things we've done as a family. Look for ways to make giving back a shared experience, such as baking cookies for a school fundraiser, joining a beach cleanup or volunteering at a local shelter or food bank.

Even if everyone grumbles about it at first, those are often the moments that turn into the best stories later.

I've heard families talk about their annual Turkey Trot runs. Every year, everyone complains about waking up early, yet those mornings are the ones they laugh about most.

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Kids love feeling like part of a team, and when giving back becomes a family tradition, it stops feeling like something everyone "should" do and becomes something special you want to do. It's one of those things that brings people closer together.

Studies found that 81% of parents who give reported that their children under age 18 also participated in a charitable activity in the past year.

4. Build giving into their allowance

If your kids get an allowance, make generosity part of the plan. Encourage them to budget a portion for saving, a portion for spending and a portion for giving.

For example, if they receive a weekly allowance, have them set aside a few dollars or a small percentage for a cause or organization that matters to them. It's a simple way to teach both financial responsibility and the joy that comes from helping others.

5. Involve kids in philanthropic decision-making

If giving is already part of your family's budget and your kids are a little older, invite them to be part of the process. Let them research and suggest which organizations your family might want to support.

They can explore sites such as Charity Navigator or Charity Watch to learn about different causes and how nonprofits use their funds.

You can make it fun by turning it into a friendly "pitch session," in which each child presents their favorite cause and everyone votes on where the donation goes.

If your family gives regularly, you might also explore opening a donor-advised fund (DAF), a vehicle that allows you to donate cash, appreciated securities and other assets and receive an immediate tax deduction.

The funds can be invested for tax-free growth, and you can direct grants to eligible charities.

For families giving larger amounts, a family foundation can be another great option, offering more structure and long-term involvement. Essentially, you're establishing your own private charitable organization funded with family assets and controlled by your family.

As your kids grow, they can take an active role in managing the fund or foundation.

The heart of it all

Teaching our kids about giving back isn't about big donations or perfect parenting moments. It's about raising kind humans who notice the world around them.

When our kids learn that even the smallest act of kindness matters, whether it be sharing a snack, helping a friend or donating a toy, they begin to see themselves as part of something bigger.

That's what it all comes down to: Helping them see that their actions, no matter how small, can make a real difference in someone's day and in the world around them.

Related Content

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• Nine Ways to Teach Kids Good Money Habits at Any Age
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• I'm a Financial Planner and a Parent: Here Are Five Money Habits Every Young Family Should Have

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

It's no longer an esoteric technology that interests only nerds. Now, people use the technology to write, create images, edit videos, analyze data and write code.

As AI continues to impact every industry, the personal finance industry hasn't been left behind. The AI-powered personal finance management market was valued at $1.48 billion in 2024, according to Research and Markets.

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.

It's projected to be a $1.63 billion market by the end of 2025, at a compounded annual growth rate (CAGR) of 10.1%, and a $2.37 billion market in 2029, at a CAGR of 9.8%.

From budgeting, saving and investing to robo-advising, financial coaching, credit scoring and debt management, AI continues to shape personal finance management, providing value across the globe.

Let's look at some of the applications of AI in personal finance, the challenges with adopting AI and tips for wise usage of AI.

AI and budgeting

AI-powered tools can help with:

Data aggregation and categorization. AI-powered tools such as Monarch, YNAB, PocketGuard and Mint AI, among others, can pull data from your bank accounts, credit cards and payment history to identify spending patterns and categorize transactions.

Based on this information, you can create a budget to gain better control of your finances. These apps can also use relevant information to suggest areas in which you can modify spending habits to pursue more important goals.

Automated budget creation. AI-powered tools such as Galaxy.ai and Tiller can create a personalized budget based on your income, expenses and financial goals. They'll suggest how you can better allocate your income across expenses to help achieve your goals.

Predictive forecasting. Some budgeting tools (Drivetrain and SuperAGI, among others) can use AI to forecast how your budget will change if your income changes, unexpected expenses arise or you take out a loan.

Anomaly detection. Some AI tools (such as Expenzey and Cleo) can use your past spending habits to flag unusual transactions or overspending in real time. They help prevent fraud and ensure you stay on budget.

Expenses tracking. Budgeting tools allow you to see how close you are to reaching your budget limits. Examples include Mint AI and Cleo.

Bill negotiation. Apps such as PocketGuard can identify bills that might be too high. They'll automatically negotiate with the relevant service providers to lower your expenses.

Automated bill payment. SuperAGI and Mint AI, among others, automate bill payments to a range of providers.

AI and saving

For some, the main point of budgeting is to foster saving.

AI-powered budgeting tools have features that can help. These include:

• Identifying areas to cut expenses. SuperAGI, YNAB, Tiller and PocketGuard
• Paying yourself first by automating savings. PocketGuard, Albert and Oportun
• Identifying and canceling unwanted subscriptions. Rocket Money and Subscription Stopper

AI, investing and financial planning

Some AI tools can suggest how to invest based on your financial goals, time horizon and risk tolerance.

For example, Empower provides investment recommendations based on investment goals and risk tolerance. It also offers retirement planning tools.

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Some AI-powered tools provide comprehensive financial planning that goes beyond investment management.

For example, Albert combines AI with human advisers to provide comprehensive money management.

Even robo-advisers such as Acorns and Wealthfront use AI to optimize client portfolios and automate portfolio rebalancing.

AI and financial education

Albert has a feature called Genius in which an AI tool can act as a virtual financial coach.

Large-language models (LLMs) such as ChatGPT, Perplexity and Claude, among others, can also act as a financial coach and provide a comprehensive financial education.

Most of the apps we've discussed are also built in a chatbot style, so you can ask questions and get personalized answers if they have access to your financial information.

AI, credit scoring and debt management

Some financial institutions now use AI for credit scoring. These combine traditional credit data with alternative sources such as utility bills, transaction history, income, work history and other behavioral data to evaluate creditworthiness. Examples include FICO Score XD and Zest AI.

Consumers can use platforms such as Experian Boost and Credit Karma to improve their credit scores. They use AI to analyze multiple data points to provide personalized suggestions.

Navigating the risks of AI in personal finance

Despite the benefits that AI provides, certain risks remain with its usage in general and in personal finance management in particular.

Some of the most important include:

Limits to the possibility of personalization. AI-powered apps don't have the emotional intelligence and human judgment required to offer truly personalized advice.

While it can help with the automation of repetitive tasks and the provision of information, the emotive element makes human financial advisers necessary.

Privacy concerns. To provide more valuable advice, AI-powered apps will require more personal information, including sensitive personal data. Given concerns about cybersecurity, this is a risk.

AI models can be hacked to make the information they provide reflect a particular ideology or the personal views of the attacker.

Factual mistakes. Generative AI can be factually inaccurate in many cases. They sometimes cite sources that don't exist.

What can you do about these risks?

While AI-powered apps can help, they shouldn't be a replacement for human financial advisers.

Instead, advisers should find a way to integrate AI into their activities so they can provide maximum value to their clients.

Other ways to mitigate risks:

Data-protection policies. Before using any AI-powered app, read its data-protection policies. Choose those you're confident have the policies in place to protect you.

Don't ignore reputable blogs. Look for blogs that provide information from financial experts to confirm what AI tells you.

By familiarizing yourself with reputable blogs, you become insulated from false information, because LLMs might not always be objective.

Provide AI with accurate information. The quality of what you get from AI-powered apps is proportional to the quality of the information you provide.

If you're sure a platform can protect your data, provide relevant information to provide better value.

Final thoughts

The opportunities for the use of AI in personal finance are enormous. However, given the risks, it is up to you to use AI-powered apps responsibly.

If you have a human adviser, consult them before making significant financial choices based on AI recommendation.

Related Content

• Should You Replace Your Financial Adviser with AI?
• I Tried a New AI Tool to Answer One of the Hardest Retirement Questions We All Face
• I'm a Personal Finance Expert: Here's the Truth About Using AI to Plan Your Retirement
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• For a Good Time Managing Your Money, Call on These Apps

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

That's what "Sylvia" and her mother encountered at a home decor chain store that sells bedding, kitchenware and holiday goods.

"After all of our items were rung up, my mom paid in cash, and then the cashier said, 'Would you like to round it up?' Mom said, 'Sure, no worry. There is a shortage of pennies. That's fine. We don't need them.'"

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.

"At home, we were reviewing the receipt and saw that the last entry was a 32-cent payment to St. Jude (Children's Research Hospital). Totally unexpected! We had made a charitable donation without realizing it.

"We don't object to the donation, but we feel we were misled because we weren't informed where our money would go and therefore didn't give our consent.

"I think this is something you might look into, Mr. Beaver. How widespread a practice is this?"

They were indeed misled

Sylvia is right. They were misled, and with Sylvia on the line, I confirmed it by speaking with the on-duty manager at the store, asking her, "Do you have a charity campaign for St. Jude?"

"Yes, we do."

"Do your cashiers tell customers that 'rounding up' their total means that their change goes to St. Jude? Or do they just say, 'Would you like to round it up?'"

She refused to answer but insisted that Sylvia tell her who the cashier was. "Give me the register number on the receipt."

I repeated my question, which she still didn't answer. I took her refusal as an admission that, yes, cashiers ask customers if they want to round up their total without letting them know where their money will go.

Of course, who can forget the past few years of constantly being bombarded with "Would you like to give a dollar to XYZ organization?"

But we don't hear that much anymore, because "checkout charity" has been replaced with the "round it up" verbiage.

Perfect example of impulse giving

America is a generous nation. If you look at the Charities Aid Foundation's World Giving Index, the United States ranks near the top of countries whose citizens are among the most generous on the planet.

Now, there is giving when you know where your gift is going and you want to donate, but snookering us to give even a few cents to an unidentified cause is more than not acceptable. It is generally considered illegal to solicit charitable donations without revealing the name of the charity and the purpose for which the funds are being raised.

Both federal and state laws require transparency in charitable solicitations to protect the public from fraud.

And when it happens at the checkout counter, the customer has only seconds to decide.

In any other business or commercial setting, we would say, "Wait a minute, I have some questions."

But when people waiting behind us in line are close enough to hear our conversation with the cashier, the result is pressure — you are being pressured to give your money (i.e., make a buying decision with no time to think it over) to an organization that might not have been identified.

After asking if you'd like to donate, the cashier should say, "And your donation goes to XYZ."

But that's not always so, according to the 2025 Charity Checkout Champions Report by Engage for Good and presented by Adyen, which analyzed 92 point-of-sale (POS) fundraising campaigns that raised over $275 million in 2024. The report found that only 74% of the campaigns clearly identified the benefiting charity.

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I spoke to an executive of one of the North American companies that helps businesses collect donations for charities at checkout. He asked that he and his employer not be identified because the information he shared with me is more frank than his employer would prefer. Once I promised not to share his identity, he was quick to admit:

"We show cashiers how to seize on a customer's psychologically weak moment, when their donation could be going to a group they might not approve of and would never give their money to.

"But impulse giving is huge in the charity business, and so your very presence in the checkout line lends itself to being pressured into making a split-second decision for an altruistic reason.

"Unless full disclosure is made about the recipient of the donation, this is highly unethical, but (businesses get) away with it all the time."

Findings on impulse giving

Fifty-three percent of Americans donate impulsively at the checkout counter, according to a 2024 survey conducted by researchers Lauren Dula of Binghamton University and Ruth Hansen of the University of Wisconsin-Whitewater. They found:

• Impulse giving is often driven by social pressure, emotional appeal and the ease of the transaction.
• The donation request is embedded in a moment of financial exchange, making it feel like a small, convenient act of generosity.
• Many consumers report feeling guilty or obligated when prompted, especially in face-to-face retail settings.
• Younger customers are more likely to give impulsively than older people.

What businesses should do

The executive I spoke with offered these suggestions to help retailers that adopt checkout-charity programs do everything correctly and steer clear of trouble:

1. Name and describe the charitable organization.

• The name and purpose of the charity should be clearly displayed at the checkout
• You should verify that it is recognized by the IRS as a 501(c)(3) nonprofit

2. Provide an explanation for how customers' funds will be used.

• Include administrative or processing fees
• Break down how much goes directly to the cause

3. Ensure funds are given voluntarily and that informed consent is obtained.

• Your workers should make it clear that the donation is optional
• Customers should be told that they can decline
• Your workers should not use language that invokes pressure or guilt

The executive concluded our interview with these cautionary words for retail businesses: "Checkout charity is highly effective, and at the same time, we are hearing more and more objections to the pressure to donate. My fear is this has the potential to backfire one day."

All that said, checkout charity isn't a bad thing when it's done right. According to a Charity Watch blog, checkout donations allow charities, especially smaller ones, to raise significant amounts of money from a much larger pool of donors than they could normally reach. And because the process is part of a transaction that's already being conducted, the fundraising expenses are much lower.

So the bottom line here is that shoppers should make sure that they are aware of what they're donating to before they hand over even a small donation at the checkout. Here's what you can do if you encounter a request to round up your total:

• If the cashier isn't clear about what the money will be used for, ask.
• Don't hesitate to ask further questions about the charity. Maybe it's one you'd be happy to support.
• If you're not interested or feel there isn't enough information available, simply and politely say, "No, thank you" or "Not today."

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

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The assumption that "we make too much to qualify for aid" is one of the costliest misconceptions in higher education.

In reality, billions of dollars in scholarships, grants and state workforce incentives are available — many with no income restrictions at all.

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.

The families who benefit most aren't the ones who spend hours filling out random scholarship applications, but those who approach funding strategically, much like portfolio management.

Here are four overlooked avenues of "free money":

1. Merit aid as the new recruitment tool

Colleges are increasingly using merit scholarships to attract high-performing students, regardless of their financial need.

At many universities, 22% of all undergraduates receive merit-based aid. Some private institutions and regional universities offer non-need-based aid to half or more of their full-time students as a competitive strategy to attract specific applications.

These institutional awards serve as tuition discounts, some renewable for up to four years.

Families can gain an advantage by building a list of target schools where their student's academic profile (GPA, test scores, extracurriculars) lands in the top 25% of admitted applicants.

Many institutions publish "automatic merit" charts showing thresholds for guaranteed awards.

A strong GPA and solid test performance can translate into five-figure savings per year — making merit a powerful lever even for wealthy households.

2. Skill-based scholarships in high-demand fields

Not all scholarships are based solely on grades or financial need. Many reward skills and interests that align with the future workforce. For example:

Cybersecurity and IT. The CyberCorps Scholarship for Service pays full tuition and a living stipend in exchange for federal service after graduation.

Semiconductors and engineering. Schools like the University at Albany offer scholarships funded under the CHIPS+ Act to train engineers for the microelectronics industry.

Esports and digital media. Over 300 colleges now offer esports scholarships that can stack with academic awards.

These programs focus on ability, not income, and often lead directly to internships or guaranteed job placement.

3. State 'Workforce' and 'Promise' scholarships

Nearly every state now funds "last-dollar" scholarships that cover tuition gaps after other forms of aid have been applied. Many are tied to high-demand fields such as health care, teaching and public safety.

Some examples:

• New York state's Scholarships for Academic Excellence award scholarships of $500 and $1,500 per year to students achieving academic excellence while in high school.
• The Kansas Promise Act Scholarship covers tuition for designated programs like logistics, nursing or cybersecurity if recipients work in-state for two years after graduation.
• The Maryland Workforce Shortage Grant supports majors in education, therapy, social work and other public service areas.
• The New Mexico Opportunity Scholarship covers up to 100% of tuition and required fees at public colleges for eligible residents.

These programs are structured for accountability: In exchange for service or residency commitments, students can graduate debt-free or with minimal debt.

To learn more about available scholarships and grants within your state, visit Edvisors.com to access links to scholarships and grants per state.

4. Employer tuition benefits (for students and professionals)

Employer-funded education is one of the most underused forms of "free money." Some examples:

• The Starbucks College Achievement Plan covers 100% of tuition through Arizona State University's online degree programs.
• Walmart's Live Better U program pays tuition and for books at partner schools nationwide.

Some of these opportunities are also available to dependents or part-time employees.

For professionals pursuing graduate degrees, many companies offer $5,000 to $10,000 annually in tax-advantaged tuition assistance — a benefit that can be paired with scholarships and 529 funds.

Strategic families utilize these employer programs as an asset class — layered on top of merit and grants — to minimize cash flow strain.

Integrating scholarships into a total funding strategy

For high-net-worth households, the real advantage comes from coordination — aligning scholarships, 529 plans, grants and savings into a coherent strategy.

A few high-yield moves:

• File the FAFSA anyway. Many merit and state programs require it, even if you don't qualify for need-based aid.
• Time your 529 withdrawals. If your student secures substantial merit or state aid, you can preserve 529 funds for graduate school or later years.
• Leverage credible planning tools. Resources available on Edvisors.com, where I am the chief marketing officer, help families compare college costs, explore scholarship options and understand how aid packages interact with personal savings.
• Know each college's stacking policy. Some institutions cap total aid at tuition cost; others allow overage for housing or books. Always verify in writing.

This disciplined approach transforms scholarships from a side pursuit into a core component of financial planning.

Quick wins for National Scholarship Month

Audit your college list for automatic merit. Check published grids and note eligibility thresholds.

Target workforce-aligned programs. Identify three scholarships linked to your student's intended major.

Explore employer partnerships. A part-time or summer job with an education benefit can offset thousands in tuition.

File the FAFSA before year-end. It's the single-most-efficient eligibility trigger for all types of aid.

Document your student's "skills profile." Compile achievements — coding contests, leadership roles, athletics — that strengthen competitive awards.

Bonus tips: How to negotiate a merit bump

Time it right. Wait until your student receives multiple admission offers. Colleges often have flexibility during late winter when they're finalizing enrollment numbers.

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Be specific, not emotional. Send a short, professional email to admissions that says something like, "We're grateful for the $12,000 scholarship offer. [Competing university] has offered $15,000. Is there any room for adjustment?"

Most schools will re-evaluate awards if the student fits a high-priority profile.

Confirm renewal terms. Many scholarships require maintaining a minimum GPA or credit load. Always get renewal criteria in writing to avoid surprises later.

The bottom line

"Free money" isn't about luck — it's about alignment.

By blending scholarships, state programs, employer benefits and strategic timing, even affluent families can significantly reduce college costs without sacrificing investment goals or liquidity.

In the end, the smartest move isn't chasing the biggest award — it's treating college funding with the same precision you bring to every other part of your financial life.

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

Many now include donor-advised funds (DAFs), one of the most flexible and tax-efficient charitable planning tools. DAFs allow donors to contribute assets, secure an immediate deduction, invest contributions tax-free and recommend grants over time.

Beyond their simplicity, DAFs offer advisers a powerful toolkit for navigating complex financial situations. They become especially valuable during periods of appreciated asset growth and as part of long-term wealth and estate planning.

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.

For advisers, Giving Season provides an ideal opportunity to surface these benefits and help clients approach generosity with intention and tax efficiency.

Below are three tax-smart strategies — plus several year-end considerations — that can help maximize both philanthropic impact and client financial outcomes.

1. Take tax deductions in the years when they matter most

A core benefit of a DAF is the ability to decouple when clients receive a tax deduction from when they ultimately choose the charities they want to support.

This is especially effective for individuals with fluctuating income — such as business owners, executives with equity compensation or anyone realizing a sizable gain from selling a home or business.

In high-income years, clients can "front-load" charitable contributions into a DAF and capture the full deduction immediately, even if they're not ready to commit to specific organizations.

For example, a client might contribute $100,000 in a high-income year but plan to grant only $20,000 right away.

A DAF lets them take the full deduction now, invest the remaining balance tax-free and take time to research charities that align with their values and giving philosophy.

This approach not only smooths charitable planning during complex financial years but also allows clients to make more intentional, well-researched granting decisions — without sacrificing the tax advantages of acting promptly.

2. Reduce capital gains exposure by donating appreciated assets

One of the most powerful ways clients can support charitable causes — and improve tax efficiency — is by donating long-term appreciated assets instead of cash.

By contributing long-term appreciated assets, clients capture the full appreciated value without triggering capital gains and can deduct the asset's fair market value, boosting the overall tax benefit.

Charities often lack the infrastructure to process complex asset gifts efficiently. DAFs, however, are designed to handle appreciated securities and even illiquid assets such as private company stock, cryptocurrency or real estate.

That means advisers can help clients unlock tax savings while giving nonprofits the ultimate benefit of a simple cash grant.

For clients with sizable estates or multigenerational legacy goals, DAFs can also help manage estate tax exposure. Assets contributed to a DAF are removed from the donor's taxable estate, offering a philanthropic tool that doubles as a long-term planning mechanism.

3. Use 'bunching' to maximize deductions under higher standard deduction thresholds

With today's higher standard deduction thresholds, many taxpayers no longer itemize annually. DAFs create an effective workaround through "bunching" — consolidating multiple years of charitable contributions into a single year.

For example, a client might contribute two or three years' worth of donations to their DAF in one tax year, itemize that year to capture a larger deduction and then take the standard deduction in subsequent years while continuing to make grants from the DAF.

For clients on the cusp of itemizing, this approach can generate meaningful tax savings without altering their charitable goals.

Here are some additional year-end DAF strategies advisers should consider:

Align giving with strategic goals, not just year-end deadlines. DAFs also give clients flexibility, whether through recurring grants, setting aside capital for future needs or aligning giving with long-term goals.

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Match contributions to income volatility. For clients with highly variable earnings, DAF contributions can be "dialed up" in high-income years and "dialed down" during leaner ones, smoothing tax exposure while allowing giving to remain consistent.

Incorporate legacy planning. Encouraging clients to discuss the charitable legacy they hope to leave — whether through successor advisers on a DAF or by making the DAF a beneficiary in their estate plan — can deepen relationships and strengthen multigenerational planning conversations.

The bottom line for advisers this Giving Season

As philanthropy becomes a more integral part of wealth planning, advisers have a meaningful opportunity to expand the conversation beyond generosity alone.

One of the often-underappreciated advantages of a DAF is that advisers can continue managing the assets contributed to the account, investing them for potential tax-free growth while maintaining their advisory role. This strengthens the client relationship and ensures charitable dollars can grow before being granted.

Combined with the tax efficiency, flexibility and long-term planning benefits DAFs already provide, this investment management capability positions them as a powerful tool — especially during Giving Season, when clients are looking to make an impact and optimize their year-end financial strategy.

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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 financial advisers, you're focused on delivering exceptional advice to your clients. But let's face it: Compliance can sometimes feel like a roadblock rather than a resource.

However, when approached strategically, compliance can become a powerful ally in your practice — not just a box to check.

At Advisors Excel, we've learned that the key to making compliance work for everyone lies in collaboration. While our experience at AE Wealth Management provides a useful example, the principles we've developed while working closely with our advisers can apply to any financial firm.

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.

By fostering strong partnerships with your compliance teams, you can create an environment where compliance supports your initiatives, not stifles them.

Collaboration: The foundation of compliance success

Compliance isn't just a back-office function; it's a team effort. Financial advisers and compliance professionals need to work together to help ensure that regulatory requirements are met without disrupting the adviser-client relationship.

Open communication is the cornerstone of this collaboration. Regular compliance meetings, workshops and training sessions can help keep advisers informed about policy changes and regulatory updates.

Just as importantly, compliance professionals must ensure that advisers know exactly whom to contact when they have questions or need guidance.

Compliance teams also must be open to feedback from advisers, remembering that collaboration is a two-way street. Policies that are too complex or impractical can hinder advisers' ability to serve their clients effectively.

By inviting advisers to share their concerns and suggestions, compliance teams can create policies that are effective, realistic and user-friendly.

When advisers feel heard and supported, they're more likely to embrace compliance as a partner in their success rather than a hurdle to overcome.

Transparency: Building trust through openness

Trust is the bedrock of any successful relationship, and the adviser-compliance relationship is no exception. Transparency is essential to building that trust.

At AE, we prioritize transparency by openly sharing compliance policies, regulatory updates and even audit findings with our advisers. This openness helps advisers navigate the regulatory landscape with confidence and encourages them to proactively address potential compliance issues before they escalate.

Transparency also extends to our interactions with regulatory bodies. By maintaining clear and honest communication, we demonstrate our commitment to doing things the right way.

Advisers play a critical role in this process by adhering to documented procedures and upholding the firm's reputation for integrity.

Education: Empowering advisers to excel

The phrase "knowledge is power" may seem cliché, but this axiom is especially pertinent when it comes to compliance. Advisers who understand the "why" behind compliance requirements are better equipped to meet those standards and more inclined to integrate them into their daily practices.

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That's why ongoing education is a priority. At AE, we develop training programs tailored to specific regulatory challenges advisers face. These programs help provide advisers with the knowledge and skills they need to stay compliant while focusing on what they do best: serving their clients.

When advisers feel confident in their understanding of compliance, they contribute to a culture of excellence and trust.

Moving forward together

The relationship between financial advisers and compliance teams doesn't have to be adversarial. By working together, prioritizing transparency and investing in education, we can turn compliance into a strategic advantage — one where everyone benefits.

Advisers feel supported, compliance teams thrive, and clients receive the high-quality service they deserve.

Whether you're part of a large RIA or an independent practice, these collaborative principles can help you navigate the complexities of financial regulation while building trust and driving results.

4883036 – 11/25

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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 many parents know, these moments can be fleeting once young adults are out in the world, but when they do occur, they can be a great time to check in on how things are going — including with money.

Whether your child is on break from college, in the midst of job hunting or settling into their first job, the holidays provide an ideal opportunity to have a meaningful conversation with the young adult in your life.

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.

As they begin to establish their own financial house, you can play an integral role in guiding them in the right direction, helping them build sound money habits.

But just like any conversation surrounding money, it can feel a bit awkward and tricky to navigate, especially when it's with your own adult child.

So, how can you approach this conversation in a way that feels supportive rather than stressful? It starts with listening.

Start by listening, not teaching

For many young adults who have entered the "real world," a lot of change has occurred in a short time. Maybe they have a new degree, a new apartment or a new job. All of that comes with excitement, but it also brings new stress.

As parents, our instinct is to share advice right away, especially if we've already learned a few lessons the hard way. But the most productive conversations often start with questions, not instructions.

Try asking, "How are you feeling about balancing everything now that you're on your own?" or "What's been harder about living on your own than you expected?" or "What's been the biggest surprise about managing your own money so far?"

Questions like these keep the conversation open and show respect for their independence.

You can offer guidance once they start talking, but the goal is to help them think through decisions, not to make those decisions for them.

When freedom meets cash flow

I often notice something similar between two very different groups of people: new retirees and young adults entering the workforce. Both have more freedom and more control over their time, and both tend to spend more than they expect.

Retirees fill their days with activities that cost money instead of earning it. Young adults suddenly have steady paychecks and fewer restrictions, so they may start spending quickly without realizing how fast it adds up.

Helping them pause and plan before habits form can make a big difference. If they get in the rhythm of setting money aside for certain goals early on, it becomes second nature later.

Rethinking 'needs' and 'wants'

Parents often teach kids to separate needs from wants, but for young adults, that line can feel blurry. Instead, I like to talk about goals: short-term, intermediate and long-term.

Short-term goals are the basics that happen month to month, such as rent, groceries, phone and internet bills, insurance, loan payments and yes, hobbies or entertainment. These are the recurring expenses that make up a budget.

When speaking to the young adult in your life, consider asking simple questions to open the door to this topic. For example, "How did you choose your health insurance at work?"

Many young employees pick the cheapest option because they want to keep more of their paycheck for other things. That might work fine for someone who rarely sees a doctor, but it can be a costly mistake for someone who takes regular medication or needs specialist visits.

Talking through a real example like this helps them see how financial choices connect to daily life.

Intermediate and long-term goals involve saving for the future. That includes building an emergency fund, contributing to a retirement plan and investing beyond the basics.

I often tell younger people that saving should be meaningful but manageable. They should feel the impact of what they're putting away, but not to the point where they're choosing between Netflix and Hulu each month.

If they're worried they aren't saving enough, ask whether their company offers a retirement plan match. That match can help fill a savings gap. You can also talk about how different goals call for different types of investments.

Money set aside for emergencies should stay in cash or a money market fund, while retirement savings can be invested more aggressively for long-term growth.

Keeping the conversation constructive

It's natural for parents to want to protect their kids. But once those kids become adults, the best kind of protection is guidance that builds confidence.

I learned that lesson myself. When I started working, my parents could tell I wasn't taking their advice seriously. They eventually introduced me to their financial adviser, and that conversation changed things for me.

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Talking with someone outside my family helped me see money differently. I didn't feel like I was being told what to do; I felt like I was being treated as an adult who needed to make real decisions.

It also helped me realize that my parents weren't trying to control me. They were trying to give me a head start.

Looking back, it was one of the best gifts they could have given.

Parents can take a similar approach. Offer to review your child's first benefits statement together, share how you handled saving in your early career or connect them with a financial professional you trust. Sometimes hearing the same message from someone else helps it sink in.

Turning a holiday moment into a lifelong lesson

Money conversations don't have to feel heavy or uncomfortable.

The goal isn't to critique their spending or point out mistakes. It's to help them build the confidence to manage their finances on their own and understand how today's choices shape tomorrow's options.

Once you've broken the ice, it gets easier. That first conversation can be the starting point for a more open, ongoing dialogue about money — one that evolves as your child's life does.

From first jobs to marriage to buying a home, there will be new questions and new opportunities to share guidance when they're ready for it.

So, this holiday season, find a quiet moment after dinner or while wrapping gifts and start the conversation. Ask questions, listen carefully and share just enough of your own story to help them see the bigger picture.

The time you spend talking now could be what helps them make smart, steady decisions long after they've headed back to their own lives.

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• I'm a Wealth Adviser: This Is How to Prevent Your Heirs From Frittering Away the Family Fortune
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• Three Ways to Help Your Adult Children Without Spoiling Them
• Children Can't Afford to Fly the Nest? Here's How to Help

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.

Rather than focusing on luxury or one-time donations, many are channeling their resources into lasting, purpose-driven movements that can shape communities for generations.

One powerful example is Alice L. Walton, the richest woman in the world, who recently opened her own medical school and is covering tuition for its first five graduating classes, as reported by Time magazine.

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.

Walton's $154 million investment in Bentonville, Arkansas, reimagines medical education by focusing on preventive health, holistic wellness and the principle that doctors must learn to heal themselves before they can heal others.

Her vision exemplifies how today's women of wealth are shifting from traditional philanthropy to creating sustainable systems to fund philanthropic gifts into perpetuity.

A strategic and generous model of giving

This new model of giving is not just generous, it's strategic. It's reshaping how ultra-affluent women think about wealth management and legacy.

To facilitate this movement, many are turning to family offices and multifamily offices to help them transform legacy into meaningful impact.

This CFO-type relationship enables women to focus on enabling significant change rather than managing their daily financial complexities.

Women of wealth today expect far more than traditional portfolio oversight. They seek solutions that align wealth with purpose, impact and legacy.

According to HSBC's 2025 report The Giving Shift, 60% of female respondents said financial giving is extremely or very important, prioritizing causes tied to family, health and community over status or prestige.

This values-based approach underscores how women use wealth to strengthen connections and drive measurable impact.

This evolution extends to how women choose their wealth managers.

A 2024 New York Life survey found that 48% of women feel more understood by a female adviser, up from 29% just five years earlier, and nearly half value collaborative, educational relationships.

They're not seeking transactions; they're seeking strategic partners.

How the family office model delivers

The family office model delivers this by providing detailed and timely financial analysis to address all the complexities of multigenerational wealth — tax, estate and philanthropy.

This clarity provides the time and ability for these women to pursue their passions.

Unlike traditional firms with standardized offerings, family offices are designed to be nimble to the complexity of clients' entire lives.

The timing of this shift is significant, as the Great Wealth Transfer has begun. Bank of America Institute's Women and Wealth report projected that roughly $54 trillion will pass to surviving spouses, 95% of whom are women.

Concurrently, Deloitte's Global Family Office Report provides insight that there are more than 8,000 single-family offices worldwide, up from approximately 6,000 in 2019. That figure is projected to increase by 75% or exceed 10,000 by the end of the decade.

A powerful truth

Together, these trends reveal a powerful truth: The next generation of female-led wealth is redefining stewardship. For women, that stewardship often centers on three main pillars:

• Wealth preservation and growth
• Family mission
• Next-generation education

The first priority is the security and growth of wealth throughout future generations with proper entity structure and risk management. The family's mission channels resources toward philanthropic causes that support family values and beliefs.

Family wealth counseling prepares children and grandchildren not only to inherit wealth, but to continue the stewardship in perpetuity.

Family offices help support these pillars by turning intention into an actionable plan of execution, helping to ensure a successful outcome of the long-term family strategy.

One example includes coordinating a charitable giving strategy with an income tax event in the same year. Within the Great Wealth Transfer, a significant portion of assets will come from qualified retirement plans.

Non-spouse beneficiaries of these plans are required to take mandatory annual distributions and must fully withdraw all assets within 10 years of the original account owner's passing.

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Because these distributions are taxed as ordinary income, working with a family office that understands your entire financial situation is essential. This coordination enables proactive tax bracket management and the use of charitable deductions to offset income, supporting both tax efficiency and the family's broader legacy objectives.

Documentation is critical

Another example is the structure and organization a family office provides when navigating complex, multigenerational strategies — particularly those involving estate exemptions and the transfer of assets to the second and third generations.

Many of these plans evolve over decades, making documentation vital. Tools such as our proprietary Family Legacy Book^® serve as a central record of gifting history, ownership structures and entity relationships.

This living road map ensures that if the matriarch or patriarch passes unexpectedly, the family retains a clear and current financial picture, providing continuity, confidence and peace of mind.

These examples reflect a broader movement among affluent women leveraging wealth with intentionality.

Increasingly, they recognize that family offices don't just preserve capital, they simplify complexity, saving them time and allowing them to focus on what truly matters: health, family purpose, personal passions and family legacy.

Beginning with the end in mind

For women of wealth, the takeaway is clear: Building a lasting legacy begins with the end in mind. Rather than chasing returns, they build the management around meeting their targeted objectives, incorporating investments, trusts, philanthropy and education under one coordinated strategy.

A well-run family office makes this possible, serving as the hub that turns intention into successful outcomes.

Start by defining what you want your wealth to accomplish, whether that's long-term stability, meaningful philanthropy or empowering the next generation with financial confidence. Surround yourself with professionals who listen, educate and collaborate.

True stewardship isn't about managing assets; it's about ensuring your wealth continues to advance family values and the future vision across generations.

Related Content

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• Do You Need a Family Office? Four Signs for the Very Wealthy
• How Women Can Handle Their Growing Wealth Like a Pro
• Financial Planning: Sisters Should Be Doin' It for Themselves
• Melinda French Gates Models Three Strong Lessons for Philanthropists

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.

Now you're a few years from reaching your peak earnings and retiring. When that happens, the view from the mountaintop will be satisfying and well-earned.

Then what? How will descending the mountain look and feel when, after decades of building a nice nest egg, you'll no longer be accumulating and instead will be switching gears dramatically into the drawdown/withdrawal phase of your retirement accounts?

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.

If you're not careful and thorough with your retirement planning, it can feel as hair-raising as driving down a mountain without brakes.

Many people worry about running out of money in retirement, and that concern has risen in recent years because, in general, we're living longer.

Knowing how to navigate the drawdown phase is crucial. Here are some important tips.

The bucket strategy

You'll want effective ways to access your savings in retirement so you'll have enough income to last, avoid unnecessary taxes and preserve and grow your portfolio's value.

The bucket strategy divides your savings into buckets geared to different timeframes and needs in retirement. This approach might offer several advantages for retirees:

Risk management. Retirees can reduce the impact of market volatility on their immediate income needs when they allocate assets according to when they'll be needed.

Inflation-protection strategies. The growth bucket allows for continued investment in assets with the potential to outpace inflation, preserving the purchasing power of your savings.

Flexibility. The plan can be adjusted based on changing needs, market conditions and personal circumstances.

Clarity and confidence. A structured plan can provide confidence, knowing that you have a strategy to fund each phase of retirement.

The core and liquidity bucket

This covers your essential living expenses. It can be a combination of cash, money market funds, high-yield savings accounts and a CD ladder.

It's also funded by your fixed retirement resources such as Social Security, pensions and fixed index annuities.

The liquidity bucket should include an emergency fund of at least six months of living expenses.

This bucket needs to be coordinated appropriately with required minimum distributions. This bucket covers retirement years one through three, on average.

The income bucket

This low-risk bucket is intended to generate steady income for the midterm phase of retirement, usually covering years four to seven.

It might include fixed-income investments such as bonds, annuities or dividend-paying stocks that provide a reliable stream of income while still offering some potential for growth to keep pace with inflation.

You're not dipping into this bucket early in retirement, but you need to be careful not to jeopardize this bucket with more aggressive investments that carry higher yields but also higher risk.

The growth bucket

This third bucket is focused on long-term growth and is meant to sustain you in the later stages of retirement, beyond eight years.

It's typically invested in a diversified portfolio of stocks, exchange-traded funds (ETFs), mutual funds and other growth-oriented assets.

The growth bucket often contains higher-risk/higher-yield investment strategies that will help fight inflation and fund future expenses, such as dream vacations or big-ticket items.

It is designed to weather market fluctuations. You shouldn't have to worry about being forced to sell long-term investments in the event of a market downturn if you have other buckets to pay your immediate costs.

These assets typically won't be needed for more than a decade.

Proportional withdrawals, coordinated with the bucket strategy

This involves taking funds proportionally from different accounts — taxable, tax-deferred (traditional 401(k) and IRAs) and Roth accounts — to reduce the tax impact of withdrawals. Draw from taxable and tax-deferred accounts first, then from Roths.

Roth conversions of tax-deferred accounts can be a key strategy to reduce retirement taxes. Required minimum distributions (RMDs) take effect for most people when they turn 73, but withdrawals from Roths are not subject to RMDs and are tax-free.

Those with tax-deferred accounts, however, can push themselves into a higher tax bracket in retirement if they haven't withdrawn much of their money before 73.

The proportional approach requires customization, and it makes sense to consult your tax and financial advisers.

Be wary of the 4% rule

The 4% rule is a popular retirement guideline. It suggests that retirees can withdraw 4% from their portfolios in their first year of retirement and adjust that amount for inflation in subsequent years. The goal is to make their savings last 30 years.

But the 4% rule has several important issues and limitations. Here are some:

It's outdated. The rule was derived from U.S. market data from the 20th century, which creates significant limitations when applied universally to international markets and modern economic conditions. It assumes future returns on stocks and bonds will mirror past performance.

Sequence of returns risk. Retirees are most vulnerable in the early years of retirement. If markets perform poorly early on, the portfolio might be depleted faster, even if average returns recover later. The 4% rule doesn't account well for this "bad luck" risk.

Inflation assumptions. In high or persistent inflation environments, the real value of withdrawals might not keep pace with expenses (especially health care or housing).

One-size-fits-all approach. Everyone has different risk tolerance, expenses, health/longevity expectations, income sources and retirement time horizons. The rule assumes no flexibility in spending, which is unrealistic. Most retirees adjust spending based on market conditions or personal circumstances.

It doesn't account for taxes or fees. Withdrawals might be taxed (e.g., from traditional 401(k)s or traditional IRAs), and portfolios often have management fees. These reduce the actual amount a retiree can spend, making 4% potentially too optimistic.

Considering these issues and imitations, you might want to consider more personalized strategies that account for longevity and risk management.

Generating income on top of Social Security

In retirement, from an investment standpoint, it's important to change your mindset to "preserve-plus-grow." That means balancing the protection of your assets from market volatility with generating investment growth.

The goal of preserve-plus-grow is to have a stable income stream while your portfolio keeps up with inflation or outpaces it with a core segment of your retirement portfolio.

This might be achievable with a mix of low-risk and moderate-risk investments. Having a diversified portfolio is one strategy that could help.

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To support both asset preservation and growth, consider diversifying your investments across multiple asset classes, including various types of stocks and bonds. As you progress through retirement, gradually reducing stock exposure might help manage risk.

Diversification through index funds and ETFs, including options that track the S&P 500, could help address stock volatility.

In the long term, a balanced mix of stocks and bonds can offer both growth potential and income, although results will vary based on market conditions. The percentage allocations should be adjusted for each person's needs.

Here are some investment options that might generate income in retirement:

Dividend growth stocks. These are the stocks of established companies that consistently pay and increase their dividend payouts. In an inflationary environment, these companies can often pass on higher costs to consumers.

But as their revenues grow, they can increase their dividends, potentially providing a rising income stream that helps offset inflation.

Treasury inflation-protected securities. TIPS are government bonds with principal value that rise and fall with inflation, as measured by the Consumer Price Index (CPI).

When the principal is adjusted for inflation, your semiannual interest payments also increase, as they are a fixed percentage of the adjusted principal.

However, returns from TIPS might be lower during periods of low inflation or deflation, making them most effective in higher inflation environments.

Real estate investment trusts. REITs involve companies that own income-producing real estate, which can be invested in via a mutual fund or ETF.

When inflation pushes property values higher, REITs' revenues and stock prices often rise.

But note that REITs are susceptible to interest rate changes and economic downturns. The dividend income is often taxed at a higher rate than other stock dividends.

It's important to develop a road map for your retirement drawdown years to help navigate the long ride down the mountain.

Having a comprehensive plan with an eye on tax efficiency and a preserve-and-grow approach might support lasting financial resources and contribute to a more confident retirement.

Dan Dunkin contributed to this article.

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

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• The 'Permission to Spend' Rules of Retirement Spending
• How to Be Strategic With Your Retirement Withdrawals
• Retirement Income Strategies for the Long Haul
• One Good Way to Withdraw Retirement Assets (and a Bad One)

———————————————————————————————

Investing involves risk, including the potential loss of principal. Past performance does not guarantee future results. This material is intended for informational and educational purposes only and does not constitute investment, tax, or legal advice. The strategies discussed may not be suitable for all investors. Individual results will vary, and investment decisions should be based on your unique goals, time horizon, and risk tolerance.

Dividend payments from stocks and real estate investment trusts (REITs) are not guaranteed and may be reduced or eliminated at any time.

Returns from Treasury Inflation-Protected Securities (TIPS) may be lower during periods of low inflation or deflation. REITs are sensitive to interest rate changes and economic downturns, and dividends may be taxed at a higher rate than other forms of investment income.

Diversification and asset allocation strategies do not ensure a profit or protect against loss in declining markets.

Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. You should consult a financial professional regarding your individual situation before implementing any investment strategy. AE Wealth Management does not provide tax or legal advice. Please consult with a qualified professional for such guidance. 3359115 - 10/25

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.

Charitable giving should feel just as joyful and natural — but for many households, it's also a moment when good intentions collide with inefficient habits.

The biggest habit that needs a rethink? Donating cash when there are far better options.

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 year, with markets up and many investors holding appreciated securities, writing a check could be one of the least efficient ways to support your favorite causes.

The good news: With a little planning, you can stretch your generosity and reduce your tax bill.

Why Americans give — and why it matters now

Americans are remarkably generous people.

Whether it's supporting a food pantry, helping a local family in need or giving through a workplace program, most of us want to help — especially during the holidays.

Giving truly feeds our sense of purpose: The latest Bank of America Study of Philanthropy reports that 87% of affluent donors say charitable giving brings them joy.

But with inflation still squeezing households and many nonprofits seeing higher demand this year, the way you give matters. Advisers are urging clients not just to give — but to give smart.

Donating appreciated securities: The most powerful (and overlooked) tool

For many families, the most effective giving tool is also the simplest: donating appreciated stocks, ETFs, mutual funds, even cryptocurrency — instead of cash. Yet, most people overlook it.

When you donate long-term appreciated assets (held more than a year), you get two benefits at once:

• A charitable deduction for the full market value
• Complete elimination of capital gains tax

That combination is hard to beat.

A real-life example

Say you bought $10,000 worth of a stock 15 years ago that's now worth $50,000.If you sold it, you'd owe capital gains taxes on the $40,000 of growth.

If you donate the shares directly:

• You eliminate the entire $40,000 gain from taxation
• You receive a deduction for the full $50,000
• The charity gets the whole $50,000 — not a reduced after-tax amount

Financial adviser Keith Spencer, founder of Spencer Financial Planning in Spokane, Washington, often walks clients through this exact scenario.

"If the client wants to maintain the position," he says, "they can donate the shares and immediately repurchase them. The reset cost basis may significantly reduce long-term tax liability."

This "resetting" of cost basis is a hidden gem: It starts future gains at a higher level, trimming long-term tax drag in your taxable account.

A great fit for real-world portfolios

Many households already own perfect candidates for gifting:

• Old mutual funds with large gains
• Company stock from long careers
• ETFs bought during early-pandemic dips
• Automatic dividend reinvestment shares
• A handful of big winners in an otherwise diversified account

Even donating $1,000 of appreciated securities can be more efficient than donating $1,000 of cash.

Bonus: It helps rebalance your portfolio

If one stock or sector, such as technology, has grown too large, donating appreciated shares is a painless way to trim an overweight position — without triggering capital gains.

It's the charitable equivalent of replacing that one broken string of holiday lights: a small fix that makes everything else work better.

Meet the donor-advised fund (DAF)

For many families, the easiest way to combine tax benefits, flexibility and long-term planning is a donor-advised fund.

A DAF works like a "giving account" for your charitable life — you contribute now (cash or appreciated securities), take the deduction right away, and recommend grants over time.

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The biggest DAFs are Fidelity Charitable, DAFgiving360 (formerly Schwab Charitable) and Vanguard Charitable.

According to Ted Hart, author of The DAF Revolution, here are the reasons people use DAFs:

• Flexible and strategic. Contribute now, give later and time tax deductions to high-income years.
• Simple, One contribution can support many charities; the sponsor handles verification and paperwork.
• Accessible. Many DAFs have low or no minimums, opening the door to mass-affluent donors.
• Family-friendly. A natural tool for teaching kids and grandkids about giving and values.
• Powerful tax benefits. Immediate deduction plus tax-free growth inside the account.

Who uses DAFs?

With roughly 1.5 million to 2 million accounts in the U.S., DAFs are thriving across:

• Middle-income households
• Mass-affluent families
• Workplace-giving participants
• Corporate teams
• Community and faith-based donors

David Johnston, CFP®, partner and wealth management adviser at One Point BFG Wealth Partners, and based in Flemington, New Jersey, has seen DAFs reshape how families engage with philanthropy.

"DAFs are a very powerful tool for those who want the tax deduction today but also want to control the assets over time," he says. "Some of our clients involve their family in deciding where donations go. It's a great way to teach the values of philanthropy."

Five reasons to donate stock instead of cash

1. Bigger impact, same gift. Your charity receives the full market value — not an after-tax amount.

2. Eliminate capital gains tax. Avoid taxes on appreciated assets you donate directly.

3. Increase your tax deduction. Claim the full fair-market value of the stock or fund.

4. Keep your portfolio healthy. Reduce concentrated positions without triggering taxes.

5. Pair with a DAF for maximum flexibility. Fund your DAF with appreciated shares and give over time — on your schedule.

Why this matters now

The holidays are busy. Between decorating the tree, hosting family, shopping and trying to figure out why last year's wreath looks slightly more lopsided this season, charitable giving can feel rushed.

But a little planning — especially around appreciated assets and DAFs — can turn your holiday generosity into a smarter, more meaningful gift.

The bottom line

Giving generously is part of who we are. But giving smarter helps you support more causes, involve your family in meaningful conversations and reduce your long-term tax burden.

As a retirement coach at RetireMentors, I help clients understand the meaning of money in their lives — and for many retirees, that includes finding the right nonprofits to support, volunteer with, and champion.

Just because you're retired doesn't mean you want to stop giving. Many retirees find themselves wanting to give more, to deepen their impact and to make philanthropy part of their legacy.

With a few simple strategies — such as donating appreciated securities and using a DAF — you can do exactly that.

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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.

We try to go places that leave a mark — not just on our passports, but on us.

That mindset took us recently to southern Africa — Zambia and Zimbabwe, to be exact — home to one of the world's great natural wonders, Victoria Falls.

We knew it would be beautiful. We didn't expect it to be hilarious, humbling, thrilling and terrifying, all at once.

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.

More than a waterfall

The falls themselves are staggering. Called Mosi-oa-Tunya, or "The Smoke That Thunders," by the local Kololo people, Victoria Falls is the shimmering border between Zambia and Zimbabwe.

But here's something most visitors don't know: The falls we see now are actually the eighth version.

Over millions of years, the mighty Zambezi River has been carving its way backward through layers of basalt, collapsing one cliff after another, leaving behind a zigzag of old gorges. Let's just say Earth's been remodeling for a while.

Standing on the Victoria Falls Bridge, you can almost hear the history echoing through the spray. And if you're brave enough to look down, it's unforgettable, even if you happen to be caught in a traffic jam.

Which brings me to Clive.

Clive was our Zambian driver and a part-time high school basketball coach. He was charming, funny, unflappable and totally responsible for "the Bridge Incident."

On our way back from Zimbabwe, traffic froze halfway across the one-lane bridge when a truck met a taxi head-on.

The taxi driver was not happy — his arms were windmilling, his voice was booming, and though I didn't understand the language, I'm pretty sure I could translate his intent.

Ever calm, Clive turned to us with a grin and said, "This could take a while. You should walk."

So we did. And that innocent five-minute stroll turned into a 20-minute carnival of commerce.

As we passed by the bungee jumpers and zip line, vendors swarmed like friendly bees — all smiles, compliments and pitch-perfect salesmanship.

They called me "Boss" and my wife "Sister" and somehow managed to flatter me and make me broke at the same time.

My niece emerged as the negotiation champion of the day. She bought a wooden zebra for $4 and a hair tie, down from an asking price of $20. Somewhere in Zambia, there's a vendor still explaining to his wife why he has a woman's hair tie.

Cruising with crocs and staying dryish

Our three boat rides on the Zambezi River were another highlight. The first, at sunset, came with snacks, drinks and the kind of wildlife most of us see only on National Geographic.

Crocodiles slid quietly through the water, hippos bobbed like gray blimps, and baboons jabbered in the trees.

As daylight faded, the hippos started asserting themselves, opening their jaws wider than anything should be able to. Our guide, Christpyn — who speaks six languages and fluent hippo — wisely hit the throttle and got us out of there fast.

Later, we cruised to lunch with elephants and even ran the rapids on the way back. Then came the grand finale: a trip to Livingstone Island and Angel's Pool — essentially swimming on the edge of a 105-meter drop. I wish I were exaggerating.

Angel's Pool sounds gentle, but don't be fooled. You lie on slippery rocks while water rushes past and drops 300-plus feet below.

My wife, the family thrill-seeker, thought it was "exhilarating."

I thought it was a fine time to reconsider my life choices.

Still, sipping tea afterward, I had to admit that the mix of fear and wonder is what travel is supposed to feel like.

Learning from locals

The trip wasn't just about adventure. We also visited a local school supported by our lodge, meeting Principal Bridgette and her energetic students.

The classrooms buzzed with excitement — especially when the tumbling class discovered it had an audience. Their flips got higher, their grins wider.

Outside, villagers tended a community garden — a place where families grow their own food with permission from the school.

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Later, we toured one of the nearby villages. Homes were built with sticks and clay made from termite mounds. Water came from the Zambezi, carried by hand, 500 yards each way.

We played soccer with the kids, who were mesmerized by my nephew's Apple Watch. They couldn't stop tapping it, laughing when the screen lit up.

Simple, joyful moments like that stick with you more than any photograph.

Finding purpose in the plan

Before any big trip, we review our checklists. Flights, packing, travel insurance — all the essentials. But I've learned that purpose matters just as much as preparation. You can plan logistics, but you can't plan connections.

Yes, we wanted to see Victoria Falls and cruise the Zambezi. Still, the best parts were never on the itinerary: Clive's quick humor, Christpyn's stories about growing up nearby, seeing 10 white rhinos flanked by two military personnel armed with AK-47s, feeding elephants and witnessing the power of mother nature.

That's traveling with purpose — being open to what unfolds when you slow down and pay attention.

Too often, people travel like they're collecting evidence: "See? I went there." But meaningful travel isn't about proving you were somewhere; it's about feeling like you belonged there, if only for a moment.

The real souvenir

Traveling with purpose isn't just about where you go — it's about why you go and what you take from it.

In Zambia and Zimbabwe, the history is alive, the culture is vibrant, and the natural beauty is beyond anything a camera can capture.

And when you weave that together with your own experiences — the laughter, the nerves, the victories, even the hair-tie negotiations — you don't just take a trip… You take something much deeper home with you.

Retirement is not designed to be just about money; it's what the money can do for you. To learn more, pick up my new book, Your Encore Years: The Psychology of Retirement.

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

But what if a critical component of that growth has quietly moved outside the reach of most individual investors?

The investing landscape has fundamentally changed. The most transformative companies of today are no longer using the public market to fund their growth; they are using it as a final exit.

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 shift means that by the time a company "goes public," the hyper-growth phase that once fueled public market returns may already be over.

Andreessen's research shows that there are fewer than five public tech companies expected to grow at over 30% in 2026. Meanwhile, there are hundreds of post-Series B private companies growing well in excess of 30%.

For long-term investors focused on building a nest egg, this raises a crucial question: Is your retirement portfolio missing out on the economy's primary growth engine?

The growth curve has moved

The traditional IPO used to be the starting line for public investors to get in on the ground floor of "the next big thing." Today, it's often the finish line.

Companies are staying private for an average of 12 years, raising billions of dollars across multiple funding rounds. By the time they list on the NYSE or Nasdaq, they are often mature, multibillion-dollar enterprises.

The exponential value creation — the journey from $1 billion to $50 billion — is increasingly happening in the private market.

An analysis of the 2025 tech IPO class illustrates this starkly. For a company like Circle, a leading stablecoin provider, investors who participated in its 2021 Series E round saw returns of over 780% by late 2025.

In contrast, those who bought at the IPO price on June 5, 2025, saw a respectable 285%, while those who bought after the stock began trading saw 86% over the same period.

The public market returns were worse for other tech darlings that went public this year like Figma and Klarna.

The story is clear: The vast majority of returns are being captured before the opening bell rings.

A new ecosystem of innovation

While not without risk, the private market is no longer a niche, speculative playground. It's a robust ecosystem where the economy's future is being built.

Consider the strategic alliances being formed by Big Tech. Amazon (AMZN) has invested billions in AI leader Anthropic and partnered with fintech centacorn Stripe (a "centacorn" is a private startup company valued at more than $100 billion).

Google (GOOGL) also partners with Anthropic alongside strategic partnerships with Databricks and Commonwealth Fusion Systems. Microsoft (MSFT) and Nvidia (NVDA) are deeply integrated with a host of startups, from Databricks to OpenAI.

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These tech giants aren't just placing bets; they are building their future strategy around these private companies.

This activity acts as a powerful signal, validating the technology and market position of these late-stage leaders long before they are available in a public market brokerage account.

The growth gap in your retirement plan

This changing landscape requires a new approach to the modern retirement portfolio. If your 401(k) or IRA is composed entirely of public stocks and bonds, you are structurally excluded from this entire phase of value creation.

You are essentially waiting for a company to mature and go public before you start to invest.

This is an increasingly recognized gap. In fact, recent policy developments have begun to explore how defined-contribution plans, like 401(k)s, could appropriately include private market assets.

The goal is to allow long-term savers to access the same growth drivers that pensions and large endowments have used for years.

How long-term investors can participate

Luckily for accredited investors, the private market is not as inaccessible as it once was. A "secondary market" has emerged, creating a pathway for individuals to gain exposure.

In simple terms, the secondary market allows investors to purchase shares from a company's existing, early-stage stakeholders, including founders, employees and early investors.

This provides a way to invest in established, late-stage private companies before a potential IPO or acquisition. This is often done through specialized funds or platforms like EquityZen (the company where I work) that curate and manage these investments.

Key considerations for your long-term strategy

Private market investments are not without unique risks. For any investor focused on retirement, there are a few key factors to consider.

Illiquidity. An investment in a private company is not like a public stock that you can sell tomorrow. You must be prepared to hold the investment for years, with no guarantee of when a "liquidity event" like an IPO or acquisition will happen.

This capital should be an appropriately sized, long-term portion of your portfolio that you do not need to access in the near-term. This is why the long-term investment horizon for retirement accounts is typically aligned with private market investments.

Investment risk. Not all late-stage companies become household names. While less risky than an early-stage investment, some of these companies will fail, and investments can lose value, potentially going to zero.

Valuation risk. Is the investment you're considering fairly valued? That can be tough to determine because private companies typically provide less information than what is required of public companies.

Because of this, arming yourself with resources to research pre-IPO stock becomes important.

Because of this, diversification is key. Investing in a single private company is highly speculative. A more prudent approach, much like investing in a mutual fund instead of a single stock, is to diversify across multiple private companies to spread the risk.

The new modern portfolio

The fundamental rules of saving for retirement — patience, consistency and diversification — haven't changed. But the playing field has.

A growth-seeking, diversified portfolio needs to look beyond just public assets. For long-term investors, understanding this shift is the first step toward ensuring your savings are positioned to capture growth and innovation where it increasingly occurs: the private market.

Diversification does not assure a profit or protect against market loss. Not all pre-IPO companies will go public or be acquired, and not all IPOs or acquisitions are or will become successful investments. This information is intended for reference only and does not constitute a recommendation or personal financial advice. Use of this information is at the user's discretion and risk.

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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.

Companies cutting costs and shrinking workforces have been trends across tech and biotech lately, and layoffs are hitting other industries too.

Losing your job might feel like something you can't plan for or control. But a core tenet of financial planning is to expect the unexpected.

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.

There are proactive steps you can take, as well as immediate action items to put on your list to better protect yourself in the event of a layoff, and to keep your financial plan on track.

Here's what we've been advising our clients who are dealing with a job loss.

1. Make a counteroffer on your severance package

You likely understand the power of negotiating the terms of a job offer — from pay or bonuses to benefits packages — when looking for a new job. But you can also end up in a better financial position by negotiating any potential severance packages, as well.

Just like negotiating compensation when considering a new job, you can negotiate the terms of your severance package. Such packages can include lump sum payments, equity grants and payouts of banked paid time off.

Benefits apply here, too: You could ask for support in the form of career coaching, reimbursement for training programs or placements with recruiters and other job-search specialists.

And like a job offer, your company should give you time to consider the severance package they present to you before you need to respond.

Take advantage of the time provided (while being mindful of any deadlines). Use it to consider your leverage points, which could include potential legal claims but may also be centered around the value you created as an employee.

Do any additional research to back up your counteroffers, and review company policies to make sure you understand what, if anything, your employer may owe you beyond what they initially offered.

This is an opportunity to walk away with a better deal, so don't ignore it.

2. Triage your monthly cash flow with an emergency budget

The loss of regular income is usually the biggest immediate financial impact of a layoff. To address this, you need to evaluate your cash flow and determine what can be cut from your budget immediately, vs what has to get paid no matter what.

For those no-matter-what items, this is the purpose your emergency reserves serve: a cash cushion to get you through unexpected pitfalls.

Building an emergency budget is a useful tool to keep handy and deploy when you need it. To create it, start with your existing budget or record of monthly cash flow and strip out or dramatically reduce discretionary spending. That's it! Very simple, although it's not easy to go through and choose what to eliminate.

Keep in mind that the idea here is to see what costs you can eliminate immediately to help you get through a period of unemployment. No, this is not fun. It's also temporary, and doing so will help your cash reserves last longer.

Ideally, your emergency budget is something you'd construct before a layoff. If you're worried about losing your job, this exercise can help ease some anxiety because it shows there are things within your control you can do to better your financial situation, even as you deal with a loss of income.

You know you have a backup blueprint that can guide your spending decisions while you get through a period of unemployment.

But this is also something you can do on the fly, if needed. If you need help working through it, your emergency budget should probably include:

What you have to pay for, regardless of your employment status. Think fixed costs and bills with no flexibility or ability to change, like your mortgage and utility bills.

Scaled-down line items for things you need, but also have control over how much you spend. This might be things like groceries, household shopping or even gas.

These things are more needs than wants — but you can start shopping at your local chain grocery store vs Whole Foods or be more judicious with long-distance trips.

One or two things that are extremely important to you, but don't qualify as needs. Even if you lose your income, some things that are technically "wants" vs needs are still extremely important to maintain.

This will look different for different people, but some examples might include a gym membership so you can maintain your workout routine, a monthly appointment with a therapist or a (smaller) budget for select self-care spending.

Everything else should be cut out or drastically reduced in your emergency budget. Remember, this isn't your new normal. It's just your guide to navigate through a temporary tough time.

3. Reconsider one-time purchases (for now)

On a similar note, if you're worried about a layoff or just lost your job, you need to take a second look at any upcoming one-time purchases you previously considered.

Avoid big-ticket purchases or delay as much choice spending as possible until you secure a new paying position. Hold off on any financial decisions that would insert large fixed costs into your monthly budget, as well.

Again, it's not forever. But you want to focus on what you can control to get through a potentially tight period, and pausing spending is a great way to successfully navigate a period of no or low income.

4. Know your health insurance options and apply for unemployment

COBRA may cover your health insurance needs in the event of a layoff. You may not know this until you actually receive a severance agreement/package, but you could get coverage this way for a period of time — typically 18 months.

Depending on your state, you may also be able to purchase your own private coverage on an exchange.

We're based in Massachusetts and can leverage the commonwealth's exchange. If your state does not offer this, HealthCare.gov may be a good place to start for researching other options.

We also generally recommend our clients apply for unemployment benefits as well. Again, specific terms of a layoff may affect when and how much you qualify for benefits.

5. Identify other benefit gaps

Most employed workers get health insurance through their employer, and that's typically what people think of losing when experiencing a layoff.

But your benefits package might have included other policies and types of coverage as well, like life and disability insurance or access to certain professional services.

In the event of a layoff (or ahead of a potential one if you're concerned), ask your employer if your group life and disability policies are portable — meaning, you could maintain the policy you have now even if you were laid off.

You may be able to keep the coverage; you'd just need to pay the premiums yourself, where previously your employer covered that cost.

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If your policies are not portable, you may want to speak with an independent insurance broker about private term life or long-term disability policies to cover any gaps.

This is a sound recommendation even if you feel confident in your current job security! Most employer-sponsored plans don't quite cover the full needs of higher-income earners.

6. Reach out to your financial planner

Providing a clear set of steps to take now to navigate through a challenging time is exactly what a real financial planner is made to do. Keep them in the loop and lean on their expertise.

A great planner will help make sure you understand the best steps to take, provide support and resources (including helping you sort through new job offers when those start coming in) and take care of the technical aspects of your planning so you can focus on what comes next in your career.

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• Five Financial Tips to Help You Plan for the Unexpected
• Facing a Layoff? Ask Your Employer These Questions Now
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It's easy to assume those numbers tell the whole story about energy investing. But from an oil patch operator's perspective, price is only one variable in a far more complex equation.

In reality, investor returns in oil and gas projects depend far more on engineering, geology and operating discipline than on the price of a barrel quoted in financial news.

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.

The headline number vs the real world

West Texas Intermediate (WTI) represents the benchmark price for a barrel of U.S. crude. It's useful shorthand for market sentiment, but it doesn't capture the nuances that determine how much revenue, or profit, an individual project generates.

Every well is its own business unit. Its success depends on the quality of the rock, the precision of the drilling, the efficiency of the completion and how responsibly it's managed over time.

A $90 oil environment can't rescue a poorly engineered project, just as $50 oil doesn't doom one that has been designed and operated with discipline.

Subsurface science and modern technology

Oil and gas reservoirs are anything but uniform. Even on the same lease, one well can outperform its neighbor due to differences in porosity, pressure or fluid composition.

Skilled geologists and engineers analyze seismic data, core samples and production histories to understand where hydrocarbons are most likely to flow and how to maximize recovery.

Today's most successful operators pair that subsurface science with modern technology, such as horizontal drilling, 3D seismic and multistage hydraulic fracturing, to unlock value efficiently.

The goal is not just to "hit oil," but to manage reservoirs intelligently, optimizing every dollar invested in the ground.

Operating discipline: The hidden driver of returns

Oil prices set the market backdrop, but discipline determines outcomes. The best operators manage costs relentlessly, hedge prudently and plan for conservative price scenarios.

They design wells to be economic at $50 to $60 oil, not dependent on $100 oil to make sense.

Operational consistency also matters. Timely maintenance, accurate production forecasting and careful reinvestment strategies all contribute to long-term field performance and ultimately, to investor returns built on fundamentals, not forecasts.

That's why professional operators treat each project as a business: Capital is deployed where geology supports it, risks are mitigated before drilling, and cash flow is monitored with the same rigor as any corporate balance sheet.

Beyond the barrel: Value creation in the field

For investors, this distinction between market price and project performance changes the way energy opportunities should be evaluated.

Success in oil and gas isn't simply about "betting on higher prices." It's about partnering with operators who understand how to create and capture value from the ground up.

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Returns are driven by how efficiently resources are developed, not just the prices at which those resources sell. When geology, engineering and execution align, value is created at the wellhead, regardless of the daily swings in WTI.

The bottom line

Headline oil prices influence perception, but they don't dictate investment results. Real performance comes from disciplined operations, sound technical work and strategic capital management.

That's the lesson seasoned operators know instinctively: In the oil business, you don't invest in prices, you invest in people, process and rock.

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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.