That day isn't the same for everyone, and if you have multiple retirement accounts, that day could differ from one account to the next. But one thing's for sure—if you've invested any of your funds in a traditional retirement plan like a 401(k) or individual retirement account (IRA), you can only wait so long before the rules will force you to start withdrawing, in the form of required minimum distributions (RMDs).

RMDs are a minimum amount that you must withdraw from certain retirement accounts each year when you reach a certain age. They're a reality for most retirees, and they can have significant consequences for your tax obligations. They also involve a lot of rules and nuances that must be followed lest you absorb hefty tax penalties.

Today, we're going to explain what RMDs are, how they work, what accounts have them, when you need to take them, how to calculate the amount each year, and more. Once you understand RMDs, you can draw up a plan to make stress-free, tax-optimized withdrawals each year.

Disclaimer: This article does not constitute individualized financial advice. The information appears for your consideration, not as a personalized recommendation. Act at your own discretion.

What Are Required Minimum Distributions (RMDs)?

A required minimum distribution (RMD) is a predetermined amount of money that the holder of certain workplace and individual retirement accounts must withdraw each year once they reach a certain age. That amount is based on a calculation using your account balance and government tables.

The money can be taken via one single withdrawal or several, as long as the amount adds up to the required total.

You can always draw more than the required minimum distribution in a year. However, doing so may increase your tax obligation, as withdrawals from traditional accounts are taxable. Also, taking more than your RMD for one year doesn't reduce your RMD obligations in future years (other than reducing the account balance used to calculate future RMDs).

How Do Required Minimum Distributions Work?

When we talk about RMDs, we frequently mention taking withdrawals from an account. That's one way to take an RMD, but in reality, there are multiple ways to do so:

• Withdraw cash from the retirement account. If you don't have enough uninvested cash in the account, you may have to sell stocks, bonds, funds, or other assets within the account to have enough cash to withdraw. (Note: Some individual and workplace plans may not only allow for automatic withdrawals, but even calculate RMDs for you.)
• Make an "in-kind" transfer of shares from your retirement account to a taxable brokerage account. This allows you to remain invested, but you will still owe taxes on the transferred securities' value, and your cost basis in any transferred securities will reset to the value at the time of the transfer.
• Purchase an income annuity. When you use assets to buy an income annuity, the lifetime income distributions from that annuity fulfill RMD obligations for those assets. (And in fact, a change created by the SECURE 2.0 Act made it so that annuity income can also offset RMDs from other accounts.)
• Purchase a qualified longevity annuity contract (QLAC). A QLAC is a deferred income annuity that lets you delay RMDs on the purchasing assets until age 85. (QLACs can also be used to lower taxes on your Social Security benefits.)
• Give to charity via a qualified charitable distribution (QCD). If you're 70½ or older, you can use qualified charitable distributions (QCDs) from an IRA to donate to charity, and you can exclude that amount from your gross income. And once you've reached your RMD age, you can use assets from a traditional IRA to satisfy RMD requirements.

Actions such as purchasing a QLAC or donating via a QCD are often also referred to as ways to reduce RMDs. While they don't technically lower the amount of RMDs you're required to make, they satisfy RMD requirements without requiring you to directly withdraw cash while also providing other benefits.

Related: How Long Will My Savings Last in Retirement? 4 Withdrawal Strategies

Which Types of Retirement Accounts Are Subject to RMDs?

Generally, tax-deferred retirement accounts are subject to RMDs. You should plan to take RMDs from the "traditional" (read: non-Roth) versions of the following accounts:

• 401(k)
• Solo 401(k) 
• 403(b)
• 457(b)
• Thrift Savings Plan (TSP)
• Individual retirement account (IRA)
• Simplified Employee Pension (SEP) IRA
• Savings Incentive Match PLan for Employees (SIMPLE) IRA
• SAlary Reduction Simplified Employee Pension (SARSEP)

Roth IRAs and designated Roth workplace accounts, such as Roth 401(k)s and Roth 403(b)s, do not have RMDs for the original account owner. 

Beneficiaries of traditional retirement accounts generally are subject to annual RMDs but must liquidate the account within 10 years of the original account holder's death. However, beneficiaries of Roth accounts generally only need to comply with the 10-year rule—they don't have annual RMDs. (Note that there are some exceptions to the beneficiary rules, and that spousal beneficiaries typically have more flexibility.)

The IRS has a table outlining RMD rules for beneficiaries, but if you want to better understand your specific situation, you should talk to a financial advisor.

Related: What Are Social Security Spousal Benefits [And How Do They Work]?

When Must You Start Taking RMDs?

RMDs must be taken each year by a specific date, called a required beginning date (RBD), once you reach a certain age. Currently, that age is 73 for most accounts, but the beginning age for RMDs will shift—anyone who turns 74 after Dec. 31, 2032, will have a beginning age of 75.

Put differently: If you were born between 1951 and 1959, your beginning age is 73. If you were born in 1960 or later, your beginning age is 75.

Here are the RBDs for people who will begin required minimum distributions at age 73:

• The first distribution in the year after you turn 73: April 1 of the following year.
• All other distributions: Dec. 31 of that year.

In other words, if you turn 73 in 2026:

• Your first RMD (for age 73) is due by April 1, 2027.
• Your second RMD (for age 74) is due that same year, by Dec. 31, 2027.
• Your third RMD (for age 75) is due by Dec. 31, 2028.

That said, if you turn 73, you're not required to wait until the following April to make distributions—any withdrawals made during the year can count toward your RMD for that year. So, sticking with the example of turning 73 in 2026 …

• You could take your first RMD (for age 73) as early as Jan. 1, 2026.
• You could take your second RMD (for age 74) as early as Jan. 1, 2027.

Whether you'd want to take RMDs earlier than the deadline is a different story. After all, every dollar you take out of your account is no longer able to grow.

If you'd be withdrawing that money anyway as necessary retirement income to pay the bills, you might benefit from withdrawing what you need throughout the year rather than taking everything out at the start of the year. And if you're only taking RMDs because you're required to, you'd want to avoid doing so until as late as possible to maximize the amount of time that money has to appreciate within the account.

Lastly, all of the above largely assumes you're not working by the time you take RMDs. RMD rules for workers are a bit different. If you're still working at age 73, you still have to take RMDs from traditional IRAs. However, most workplace plans allow you to postpone RMDs from your current workplace account until April 1 of the year after you stop working (as long as you do not own more than 5% of the business you work for). Normal RMDs generally still apply to prior workplace accounts, however.

Related: 11 Ways to Avoid Taxes on Social Security Benefits

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

What Happens If I Don't Take an RMD by the Deadline?

What happens if you blow past the RMD deadline without making the appropriate level of withdrawals?

Whatever portion of the RMD not withdrawn could be subject to an excise tax of 25%. 

You can lower this tax to 10% if you correct the RMD within two years. You would need to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with your federal tax return for the year in which you didn't take a full RMD.

You can have this penalty waived altogether if you can show that "the shortfall in distributions was due to a reasonable error and that steps are being taken to remedy the shortfall." To do so, you would attach a letter of explanation when you file Form 5329.

Related: Don't Make These Retirement Account Withdrawal Mistakes

How Do I Calculate My RMDs?

Retirement plan participants and IRA owners are in charge of withdrawing the correct amount of RMDs on time. While a retirement plan administrator or IRA custodian might calculate the RMD for you, the account holder is ultimately responsible for taking at least the minimum amount.

To calculate your required minimum distribution each year …

1. Find the balance of your tax-deferred retirement accounts as of Dec. 31 of the prior years.
2. Find your distribution period for the age you'll turn in the current year. The IRS provides this information.
   1. Most people will use the Uniform Lifetime Table (Table III).
   2. If your spouse is at least 10 years younger than you and that person is listed as the 100% primary beneficiary (so, sole beneficiary) of your account for the entire year, then you can calculate your RMD with the Joint and Last Survivor Life Expectancy Table (Table II).
3. Divide each account balance by the distribution period to find each account's RMD.

Let's look at a pair of examples:

Example 1: Adam, who is unmarried, turns 73 in October 2026. He owns a traditional IRA worth $200,000 on Dec. 31 of the prior year (2025). His first RMD is due by April 1, 2027. To figure out how much he would need to withdraw by that deadline, he would divide that balance ($200,000) by the distribution factor (26.5) on the relevant IRS table, which in this case is Table III. His RMD, due April 1, 2027, for that IRA is $7,547.17 ($200,000 / 26.5 = $7,547.17).

Example 2: Adam turns 74 in October 2027. He married Anne, who will turn 63 years old on the same day in October 2027, and is thus 11 years younger than him. Adam has named Anne the sole beneficiary to his traditional IRA. The value of his traditional IRA, to the happy surprise of a writer creating an example, was miraculously still $200,000 on Dec. 31 of the prior year (2026). His RMD for age 74 is due by Dec. 31, 2027. He divides that balance ($200,000) by the distribution factor (26.2) on Table II. His RMD, due by Dec. 31, 2027, for that IRA is $7,633.59 ($200,000 / 26.2 = $7,633.59).

By the way, if Adam decided not to make any withdrawals before April 1, 2027, when his first RMD was due, and he didn't timely correct it within two years, he would be subject to the excise of 25% on the required amount ($7,547.17) that went unwithdrawn. So, he would owe $1,886.79 ($7,547.17 * 0.25 = $1,886.79). If he did correct the mistake within two years, his excise tax would be reduced to 10%, for a total of $754.71 ($7,547.17 * 0.10 = $754.71).

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Calculating RMDs for Multiple Retirement Accounts

If you have multiple retirement accounts, you might be able to calculate your total RMD using the sum of all those account balances, then decide whether you want to withdraw from all, some, or just one of those accounts. Whether you can depends on the accounts you own:

• You generally must treat each workplace account separately. That is, you calculate your RMD for that account and withdraw from that account to satisfy the RMD.
• 403(b)s are an exception. You can calculate your RMD across all 403(b)s, then withdraw the total RMD from all, some, or even just one of your accounts.
• You can calculate your RMD across all traditional IRAs, then withdraw the total from as many or few of those accounts as you wish.

You can never calculate your RMD across different account types, however. For instance, you can't determine your RMD by aggregating the account balances of two IRAs and a 403(b).

Are RMDs Taxed?

Yes, RMDs are taxed. The withdrawn amount is taxed at the account owner's federal income tax rate. 

Fortunately, people taking RMDs are usually in a lower tax bracket than they were in during their peak working years. But it's still an expense that must be accounted for when budgeting for retirement.

Related: Am I Too Old for a Roth Conversion?

How Can I Reduce My RMDs?

You might want to reduce your RMDs for several reasons—most notably, though, reducing RMDs can help reduce your potential tax burden and keep your retirement assets growing.

You have a few RMD-reducing strategies at your disposal. 

Some actions must be taken before retirement, such as investing in RMD-free accounts like Roth IRAs. Health savings accounts also have no RMDs, so you can invest in an HSA for retirement, too.

Other actions can be done before or during retirement. For instance, you can invest in non-qualified annuities, which aren't subject to RMDs. You could also do a Roth conversion (or if you earn too much money to do so, a backdoor Roth conversion); however, Roth conversions can generate a high tax bill and can have more tradeoffs the older you are. For this reason, it's best to consult with a financial advisor before taking on a Roth conversion.

There are also the alternative methods of satisfying RMDs I mentioned above, such as purchasing a qualified longevity annuity contract or giving to charity via a qualified charitable distribution.

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Under visionary founder Jack Bogle, Vanguard created the concept of the index fund—a product that by its nature allows for lower costs. Thirty years later, expenses have plummeted lower on funds across the board—though Vanguard remains a favorite in most types of retirement plans, including the ubiquitous 401(k).

Indeed, you're likely to find a wealth of Vanguard options in your 401(k) and other retirement plans. And given that they're typically competitive on both price and performance, they should be among the first funds you look at.

I want to shine a light on the best Vanguard funds for a 401(k) plan. These funds have been selected for a number of reasons, including their size, strategy, and potential for showing up in 401(k)s, though your plan might hold all, some, or none of these. However, they've also been selected for their tax-inefficiency, as the tax-deferred nature of a 401(k) allows you to enjoy the fund's performance without the year-to-year tax consequences.

This last part also makes these funds ideal for holding in other tax-advantaged accounts, such as individual retirement accounts (IRAs) and health savings accounts (HSAs).

Editor's Note: Tabular data appearing in this article is up-to-date as of April 16, 2026.

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Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

What Should You Want in a Retirement Fund?

When you invest your retirement savings in an account like a 401(k), you'll want to keep a few things in mind.

Costs are first and foremost. Let's say you pay $5 in expenses for every $100 a mutual fund earned you. That's $5 that wouldn't grow and compound for you over time. So if all else is equal, the lower the cost, the better. But occasionally, a fund justifies its higher fees. No worries in that department: The best Vanguard retirement funds' fees typically sit near or at the bottom of their category.

Income matters, too. You probably want your retirement portfolio to produce at least some regular income—in the form of both bond interest and dividend income. Stock prices can suffer during nasty corrections and bear markets, but income-generating funds can help provide for your living expenses without forcing you to sell at an inopportune time. How much income your account should produce depends on your own circumstances. For instance, older investors tend to be more concerned with income while younger investors focus more on growth.

Don't forget taxes. A taxable account (like a standard brokerage account) is better suited to take advantage of certain tax-advantaged investments, such as municipal bonds. For tax-advantaged accounts, such as 401(k)s, some of the best investments include bond funds (where the interest income won’t be taxed) and actively managed stock funds (where the capital gains distributions from heavy trading, aka "turnover," won’t be taxed).

Diversification matters (in more than one way). You've probably heard that your portfolio should be "diversified," which means holding a variety of investments, whether that's holding multiple assets (stocks, bonds, alternative investments), but that could also mean holding, say, stocks from different countries, or stocks from different sectors. And investment funds, which can own any number of stocks, bonds, or other holdings all at once, can help you achieve that diversification. Also, every fund has its own level of built-in diversification. Some funds hold dozens of stocks while others hold thousands. Some funds invest heavily in their biggest stocks while others spread their assets out more evenly. So always consider how diversified a fund really is, as well as whether that level of diversification suits your needs.

Why Vanguard Mutual Funds?

Vanguard Group is one of the largest asset managers in the world at more than $12 trillion in assets under management (AUM) currently.

Again, one of the primary drivers of that success is Vanguard's dirt-cheap expenses. The average asset-weighted expense ratio for U.S. mutual funds and ETFs is 0.44%, or $4.40 annually for every $1,000 invested. Vanguard's average, across 400-plus funds, is a scant 0.06%, or a mere 60¢ annually per $1,000 invested. That's an astoundingly low number—one that means even when a Vanguard fund isn't the absolute cheapest in its category, it's still going to be one of your most cost-effective options.

Vanguard isn't sitting still, either. That average expense ratio was 0.08% in 2024, then declined to 0.07% in 2025 after Vanguard cut expenses on 168 share classes across 87 funds. Its drop to 0.06% occurred in early 2026 when the company announced it would slash fees on another 84 share classes across 53 funds. All told, Vanguard estimates that's $600 million in savings for investors, which the firm claims is its "largest-ever two-year combined cost reduction."

Vanguard also grew into the powerhouse mutual fund company it is today by taking care of its clients and genuinely looking after their interests. Vanguard funds really started and continue to accelerate the trend of fee compression. But it's not only the best Vanguard retirement funds that benefit. We all collectively pay less in fees and expenses and enjoy better returns because of the index revolution started and led by Vanguard's founder Jack Bogle.

The Best Vanguard Retirement Funds for Your 401(k)

With all that out of the way, let's dig into some of the best Vanguard retirement funds to hold in a 401(k) to consider diving into this year.

These Vanguard retirement funds are ordered by their Morningstar Portfolio Risk Score for the trailing 10-year period. Here are the risk levels each score range represents: 

• 0-23: Conservative
• 24-47: Moderate
• 48-78: Aggressive
• 79-99: Very Aggressive
• 100+: Extreme

Importantly, these scores are a general gauge of risk compared to all other investments. For example, a bond fund with a score of 20 might be considered a conservative strategy overall, but it could simultaneously be riskier than a number of other bond funds.

Related: 11 Best Vanguard Funds for the Everyday Investor

1. Vanguard Short-Term Treasury Index Fund Admiral Shares

• Style: Short-term U.S. Treasury bond
• Management: Index
• Assets under management: $33.4 billion*
• SEC yield: 3.8%**
• Expense ratio: 0.06%, or 60¢ per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 6 (Conservative)

No retirement asset allocation is complete without bond funds. As an asset class, bond funds play an important role in lowering volatility and providing regular income. However, bond interest is taxable at your federal income tax rate—if you're in the 37% tax bracket, then you're losing 37% of your bond interest to taxes—and because interest is the predominant source of returns on bonds, bond funds are best held in tax-advantaged accounts such as IRAs.

Between 2022 and 2024, the yield curve was inverted (inversion is when short-term rates are higher than long-term rates). That's no longer the case, but short-term bonds still offer relatively high yields for relatively low risk. Thus, it makes sense to keep a decent chunk of your overall bond exposure in short-term bond funds, such as the Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX).

Related: The 16 Best ETFs to Buy for a Prosperous 2026

VSBSX tracks the Bloomberg US Treasury 1-3 Year Bond Index—a collection of roughly 90 federal bond issues with maturities of between one and three years. U.S. Treasuries are among the best-rated bonds on the planet, meaning that the major credit-rating agencies believe bonds issued by our federal government are likelier than most to repay you fully with interest. These bonds are considered all the more secure given their short maturities—at most, these bonds will mature in just three years, which is a relatively small time for the security of those bonds to change.

One of the most critical metrics to consider when considering bond funds is duration, which is a measure of interest-rate sensitivity. As an example, a bond with a duration of two years would see its price rise by 2% if interest rates fell by 1 percentage point (or conversely, would see its price fall by 2% if interest rates rose by 1 percentage point). The actual calculation of duration is fairly complex; it's the weighted average of the bond's cash flows. But the key takeaway is that, all else equal, the longer a bond's time to maturity, the higher its duration—and thus the higher the interest-rate risk.

Related: 9 Best Vanguard Retirement Funds [Save More in 2026]

VSBSX has a very low duration of just 1.9 years. And in return, you currently receive a yield that's closer to 4% than it is to 3%. That combination of low risk and competitive income makes Vanguard Short-Term Treasury Index Fund one of the very best Vanguard retirement funds you can own in an 401(k).

This mutual fund, like many Vanguard index funds, is also available as an ETF: the Vanguard Short-Term Treasury ETF (VGSH, 0.03% expense ratio), which trades around $60 per share currently.

* Many Vanguard funds have multiple share classes, including ETFs. Listed net assets for Vanguard funds in this story refer to assets under management across all of a given fund's share classes.

** SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

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Related: Tax-Loss Harvesting: How Investors Can Cut Their Tax Bill

2. Vanguard Total Bond Market Index Fund Admiral Shares

• Style: Intermediate-term core bond
• Management: Index
• Assets under management: $387.5 billion
• SEC yield: 4.3%
• Expense ratio: 0.04%, or 40¢ per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 15 (Conservative)

While bond funds play an important role in lowering volatility and providing regular income, they don't need to be as conservative as a short-term Treasury fund.

Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX), for instance, holds longer-dated bonds but remains one of the very best Vanguard retirement funds because of its high-quality portfolio, competitive yield, and rock-bottom fees and expenses. 

A share of VBTLX plugs you into a massive portfolio of nearly 11,400 bonds. About half of assets are Treasury or agency debt backed by the U.S. government. A quarter is invested in corporate bonds, and another 20% is used to own government mortgage-backed securities (MBSes). The remaining sliver is spread across foreign bonds, commercial mortgage-backed securities (CMBSes), asset-backed securities (ABSes), and other debt.

Related: The 10 Best Vanguard Index Funds You Can Buy

Risk is higher than Vanguard's short-term government-bond fund for a number of reasons. For one, roughly a third of VBTLX's bonds aren't government- or agency-related—they're corporates and other issues with ratings that, while high, are lower than U.S. Treasury debt. Time remaining on these bonds is longer, too, with an average effective maturity of more than eight years. As a result, duration is higher—at 5.7 years, a percentage-point increase in market interest rates would theoretically send the fund 5.7% lower in the short term.

On the flip side, you're rewarded with a higher yield and more potential upside should the Fed cut rates. And with an expense ratio of just 0.04%, Vanguard Total Bond Market Index Funds is all but free to own.

Also note that VBTLX is available in ETF form as the Vanguard Total Bond Market ETF (BND). It charges 0.03% annually and goes for around $75 per share as I write this.

* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

3. Vanguard Balanced Index Fund Admiral Shares

• Style: Moderate allocation
• Management: Index
• Assets under management: $58.8 billion
• Dividend yield: 2.1%
• Expense ratio: 0.18%, or $1.80 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 40 (Moderate)

Most of the funds that you and I own, and that we talk about, are single-asset funds: stock funds, bonds funds, and so on. And we mix and match these funds to put together a whole portfolio for ourselves.

However, funds like Vanguard Balanced Index Fund Admiral Shares (VBIAX)—referred to as "balanced" or "allocation" funds—are a whole portfolio unto themselves, giving us virtually everything we need in a single product. And Vanguard Balanced Index Fund specifically is a "moderate allocation" fund that invests roughly 60% of its assets in stocks, and the other 40% in bonds.

Related: 7 Best Vanguard Dividend Funds [Low-Cost Income]

The stock "sleeve" is a massive 3,200 stocks wide. Large-cap stocks* account for the majority (70%) of assets, while mid-caps make up 20% and smalls are responsible for the remaining 10%. Top holdings are similar to what you'd get in a large-cap equity fund: Nvidia (NVDA), Apple (AAPL), Google parent Alphabet (GOOG, GOOGL). It's heavily tilted toward the technology sector, though it also has significant weights in financials, health care, communication, and industrials.

The bond portfolio is extremely broad, too, at more than 10,000 debt issues. The allocation is extremely similar to VBTLX; half of the fund's bond assets are invested in U.S. Treasuries or agency debt, 25% is in corporates, 20% is in government MBSes, and the rest is sprinkled across several debt types.

Related: Best Fidelity Retirement Funds for a 401(k) Plan

Balanced funds aren't without their weaknesses. For instance, many of the most popular such funds have little to no international exposure (in stocks and bonds alike); that's the case with VBIAX, so if you do want that exposure, you'd have to add it via additional individual securities or funds. Also, you have to want the specific balance the fund offers—a 60/40 fund, for instance, won't deviate much from that blend. So if Vanguard Balanced Index Fund Admiral Shares is too conservative (or aggressive) for you, you'd either have to find a different fund to act as your core, or augment your portfolio with additional exposure where you need it.

VBIAX has a moderate amount of turnover, plus it generates both dividend and interest income. So it's one of the best Vanguard funds for 401(k)s and other tax-advantaged accounts, but it will definitely have tax consequences in a traditional brokerage account.

* There are different ways to define "cap" levels. We're adhering to Morningstar's definition, which says the largest 70% of companies by market capitalization within a fund's "style" are large caps, the next 20% by market cap are mid-caps, and the smallest 10% by market cap are small caps.

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4. Vanguard Target Retirement Funds

• Style: Target-date
• Management: Active
• Expense ratio: 0.08%, or 80¢ per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 20-62 (Conservative to Aggressive)

The only way in which allocation funds fall short of truly being a self-contained portfolio is that their mix of assets always remains the same. That's great if that's the particular allocation you need at a given moment in your life. But one of the greatest challenges in retirement planning is getting the asset allocation right: that is, having an asset class mix that is appropriate for an investor at your age and stage of life. An ideal portfolio for a 20-year-old is likely going to be very different from that of a 40-year-old, and both those portfolios will be different from what's ideal for a 60-year-old.

This is where Vanguard Target Retirement Funds can really add value. 

Target-date funds (TDFs)—also called life-cycle funds—are basically allocation funds that change their asset allocation over time. TDFs start out invested heavily in stocks, but as they approach their target retirement date, they slowly reduce their stock exposure and replace it with bond exposure, following a glide path along the way.

Related: Best Target-Date Funds: Fidelity vs. Schwab vs. T. Rowe vs. Vanguard

The target retirement dates are intended to be estimates; they don't have to be super precise. Generally, most mutual fund families will create target-date funds in five-year increments (say, 2030, 2035, 2040, etc.).

And given the hyper-specific focus on retirement, target-date funds tend to be a mainstay of 401(k) plans.

Vanguard Target Retirement Funds hold varying blends of both U.S. and international stocks of various sizes, as well as U.S. and international bonds. Their target dates currently span from 2020 through 2070; the series also includes Vanguard Target Retirement Income Fund (VTINX), which is designed for investors who are in retirement.

This TDF lineup is unsurprisingly dirt-cheap, at just 0.08% annually, and the entire series earns a respectable Silver Medalist rating from Morningstar.

Related: How to Rebalance Your Portfolio: A Quick Guide

5. Vanguard Developed Markets Index Fund Admiral Shares

• Style: International large-cap stock
• Management: Index
• Assets under management: $282.2 billion
• Dividend yield: 2.9%
• Expense ratio: 0.05%, or $4.80 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 71 (Aggressive)

U.S. markets have long been among the most productive in the world, and if you believe in the American economy's ability to keep growing, that should remain the case. Still, America's stock markets do catch the occasional cold, and that's why most experts will tell you it's worth having at least some exposure to international stocks.

You can do that via funds such as the Vanguard Developed Markets Index Fund Admiral Shares (VTMGX).

Related: Best Schwab Retirement Funds for an IRA

VTMGX owns shares in nearly 3,900 companies from "developed markets" outside the U.S. Developed markets can best be described as mature nations that have advanced economies, well-regulated capital markets, and robust infrastructure. They don't provide the same level of growth as their counterparts, "emerging markets," but they're generally considered more stable. 

This index fund predominantly owns large-cap stocks, which make up roughly 80% of assets. Mid-caps account for another 15%, while the remainder is invested in smalls. Geographically speaking, European and Pacific nations make up the bulk of the portfolio, led by Japan (21%) and the U.K. (12%), though Canada is also well represented at 11%. Top holdings include multinationals such as Dutch semiconductor firm ASML Holding (ASML), Korean conglomerate Samsung Electronics, and British bank HSBC Holdings (HSBC).

As is common with developed-country funds, VTMGX's yield is far greater than U.S. blue-chip funds, at 3% currently. That's a high level of dividend income that, for tax purposes, is best suited to the confines of a tax-advantaged account like a 401(k).

VTMGX is also available in ETF form as the Vanguard FTSE Developed Markets ETF (VEA). It charges 0.03% and trades around $70 per share.

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Related: 13 Best Stock Screeners + Stock Scanners

6. Vanguard 500 Index Fund Admiral Shares

• Style: U.S. large-cap stock
• Management: Index
• Assets under management: $1.4 trillion
• Dividend yield: 1.2%
• Expense ratio: 0.04%, or 40¢ per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 74 (Aggressive)

If we're talking about tax consequences alone, a taxable account is much better positioned to take advantage of an index fund's tax efficiency than a tax-advantaged account. However, given that a 401(k) is often an investor's primary (and sometimes only) investing account, and given that performance is the ultimate goal, an S&P 500 index fund absolutely belongs in any 401(k).

Why? Well, the S&P 500 is hard to beat. According to S&P Dow Jones Indices, by midyear 2025, "In our largest and most closely watched comparison, 54% of actively managed large-cap U.S. equity funds underperformed the S&P 500." So, a little fewer than half of managers outdid the benchmark. The problem? Historically speaking, that's good. Over the trailing 10 years, only 14% of large-cap managers beat the S&P 500, and that drops to just 12% for the trailing 15 years.

If the pros can't beat it, we might as well join it.

Related: The 10 Best Index Funds You Can Buy for 2026

The Vanguard 500 Index Fund Admiral Shares (VFIAX), by virtue of tracking the S&P 500, holds shares of 500 large U.S. companies. But it doesn't hold them equally. The S&P 500 is "market-cap weighted," which means the larger the company, the more weight the stock has in the index (and thus the more impact it has on returns). Thus, right now, VFIAX dedicates the largest portions of its assets to companies like Nvidia (NVDA), Apple, and Microsoft, whose market caps are measured in trillions of dollars. It's also considered to be a "blend" fund, which means it has relatively even exposure to value stocks and growth stocks.

Even among index funds, S&P 500 "trackers" are particularly tax-efficient. Turnover is extremely low given that only a handful of stocks enter or leave the index in any given year. So VFIAX typically makes little to no capital gains distributions. This makes this Vanguard fund an extremely tax-efficient option for regular ol' taxable accounts. But again, if you primarily invest through your 401(k) plan, and your goal is simply to maximize performance, there's no good reason not to hold VFIAX in your 401(k). 

VFIAX is Vanguard’s oldest index strategy, and it remains one of the very best Vanguard retirement funds—for 401(k)s or wherever else you can stash it.

If for whatever reason your investment options exclude mutual funds but include ETFs, you can buy it as the Vanguard S&P 500 ETF (VOO). VOO charges 0.03% in annual expenses and trades around $635 per share currently.

Related: The 12 Best Vanguard ETFs to Buy [Build a Low-Cost Portfolio]

7. Vanguard Explorer Fund Investor Shares

• Style: U.S. small-cap growth stock
• Management: Active
• Assets under management: $19.8 billion
• Dividend yield: 0.4%
• Expense ratio: 0.44%, or $4.40 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 86 (Very Aggressive)

Retirement savers with a high risk tolerance who want to try to turbocharge their returns might consider Vanguard Explorer Fund Investor Shares (VEXPX), which invests in predominantly American small- and midsized stocks with growth potential.

The actively managed VEXPX owns about 740 stocks with an average market cap of $8 billion—well within the traditional mid-cap range ($2 billion to $10 billion), though the majority of its holdings fall into the small- ($500 million to $2 billion) and micro-cap ($500 million or less) ranges. Top holdings include the likes of optical materials specialist Coherent (COHR) and insurance software company Guidewire Software (GWRE).

Related: 5 Best Stock Recommendation Services [Stock Tips + Picks]

While larger companies also have the potential for outsized growth, smaller companies, as a group, tend to be more explosive—for better or worse. They benefit from investing's rule of large numbers (effectively, doubling your revenues from $1 million to $2 million is a lot easier than doing so from $1 billion to $2 billion). And when institutional investors become interested in these stocks, large influxes of new investment money can send their stocks skyward.

But they're riskier. Smaller firms have fewer and narrow revenue streams, meaning if a core product line struggles, it can more easily lead to stock turbulence and losses. They also have less access to capital than larger companies, so if times get tight, it's harder for them to survive.

Funds like VEXPX help defray that risk by allowing you to buy many smaller companies at once, so one stock's failure doesn't torpedo your portfolio's worth. That risk is further reduced by Explorer's management style—holdings are selected by five different investment advisors that manage independent subportfolios, allowing them to use their specialities to generate outsized returns while preventing any one manager's strategy from upending the entire fund's performance.

Turnover is elevated, too, at about 50%, but you can snuff out that liability by holding VEXPX in a 401(k) or other tax-advantaged account.

Related: iShares Target-Date ETFs: A Retirement Tool for All

8. Vanguard Growth Index Fund Admiral Shares

• Style: U.S. large-cap growth stock
• Management: Index
• Assets under management: $317.9 billion
• Dividend yield: 0.4%
• Expense ratio: 0.05%, or 50¢ per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 87 (Very aggressive)

You don't have to invest in small companies to seek out better returns, of course. Those with a healthy risk appetite can simply gravitate toward growth stocks in the large-cap space.

A growth stock is generally viewed as a company that is improving sales and profits with each passing year—typically at a faster clip than the industry average. This should, in theory, result in faster stock price appreciation as other shareholders get wise to this success and decide to buy in themselves.

Related: 8 Best Schwab Index Funds for Thrifty Investors

Like with small caps, the upside can be nice, but the train can come to a halt awfully quickly once expectations start to outpace the company's actual results, leading to an abrupt, sharp drop in share prices. If that one stock is a significant portion of your portfolio, that could mean crippling losses. But you can mitigate that risk by owning bunches of growth stocks within a mutual fund like the Vanguard Growth Index Fund Admiral Shares (VIGAX).

VIGAX tracks an index of large-cap companies that exhibit various growth traits, including better-than-average historical growth in sales and earnings, as well as better-than-average expected short- and long-term growth in earnings.

The fund holds 150 predominantly U.S. growth stocks. As should be no surprise, tech stocks such as Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT) account for the majority (51%) of assets. Communication services companies like Facebook parent Meta Platforms (META) and Google parent Alphabet (GOOGL) account for 17%, while consumer discretionary stocks, such as Amazon.com (AMZN) and Home Depot (HD), represent another 13%. The remaining assets are spread among the other eight market sectors, with many receiving less than 2% of assets.

VIGAX's ETF share class is the Vanguard Growth ETF (VUG), which costs 0.03% annually and trades around $485 per share.

Related: 10 Best Alternative Investments: Options to Consider

Learn More About These and Other Funds With Morningstar Investor

If you're buying a fund you plan on holding for years (if not forever), you want to know you're making the right selection. And Morningstar Investor can help you do that.

Morningstar Investor provides a wealth of information and comparable data points about mutual funds and ETFs—fees, risk, portfolio composition, performance, distributions, and more. Morningstar experts also provide detailed explanations and analysis of many of the funds the site covers.

With Morningstar Investor, you'll enjoy a wealth of features, including Morningstar Portfolio X-Ray®, stock and fund watchlists, news and commentary, screeners, and more. And you can try it before you buy it. Right now, Morningstar Investor is offering a free seven-day trial and a discount on your first year's subscription when you use our exclusive link.

What Is the Minimum Investment Amount on Vanguard Mutual Funds?

Vanguard funds are known for being shareholder-friendly. It blazed new trails with the index fund, and Vanguard has done more than any other investment firm to keep costs to a minimum for investors.

There is one hitch. Many of Vanguard's cheapest funds in terms of fees have initial investment minimums of around $3,000—and some can be even more.

But if you're investing through a 401(k), don't sweat it.

Funds don't have minimum investment requirements when you buy them through a 401(k) plan. When you invest in a 401(k), you decide what percentage of your total contribution you want to allocate to each fund, and every time contributions are taken from your paycheck, the appropriate amount is parceled out.

However, if you're considering investing in a Vanguard fund outside of a 401(k), note that many Vanguard index funds are also available as ETFs. Most brokers will allow you to buy as little as one share, and some even allow for fractional shares. And if you use a commission-free brokerage, you can buy those ETFs without incurring additional fees. ETF prices vary, of course, but many cost less than $100, and they rarely exceed $500 per share.

What Are Index Funds?

There are two kinds of funds: actively managed funds and index funds.

With an actively managed fund, one or more managers are in charge of selecting all of the fund's holdings. They'll likely have a specific strategy to adhere to, and they'll be tasked with beating a benchmark index, but they'll be given a lot of discretion about how to achieve that. These managers will identify opportunities, conduct research, and ultimately buy and sell a fund's stocks, bonds, commodities, and so on.

An index fund, on the other hand, is effectively run by algorithm. The fund will attempt to track an index, which is just a group of assets that are selected by a series of rules. The S&P 500 and Dow Jones Industrial Average? Those are indexes with their own selection rules. Index funds that track these indexes will generally hold the same stocks, in the same proportions, giving you equal exposure and performance (minus fees) to those indexes.

If you guessed that it's more expensive to pay a conference room full of fund managers than it is a computer that tracks an index, you'd be right. That's why actively managed funds tend to cost much more in fees than index funds.

And that's why ETFs are generally cheaper. Most (but not all) mutual funds are actively managed, while most (but not all) ETFs are index funds.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

What Types of Funds Are Available in 401(k) Plans?

Virtually every 401(k) plan is limited to mutual funds. While a handful of plans might offer exchange-traded funds (ETFs), they're typically limited to mutual funds—and a handful, at that. Rather than a self-directed account, where you have your pick of virtually the entire mutual fund universe, 401(k)s only let you invest in, say, 10, 15, or 20 mutual funds, each of which cover a specific investing style.

Would it be nice to invest in ETFs, which typically offer lower costs? Sure. But mutual funds have certain qualities more befitting a 401(k).

For one, mutual funds don't trade all day on an exchange, which discourages long-term investors from panic-selling during a particularly bad day in the market. They also allow for fractional share ownership, which is important given that 401(k) plan investors are typically allocating a fixed amount of money to their account every paycheck.

What Is a Mutual Fund?

A mutual fund is an investment company that pools money from many investors to buy stocks, bonds or other securities. The investors get the benefits of professional management and certain economies of scale. A pool of potentially millions or even billions of dollars is large enough to diversify and might have access to investments that would be impractical for an individual investor to own.

Here's an example: An investor wanting to mimic the S&P 500 Index (an index made up of 500 large, U.S.-listed companies) would generally have a hard time buying and managing a portfolio of 500 individual stocks, especially in the exact proportions of the S&P 500 Index. Another example: An investor wanting a diversified bond portfolio might have a hard time building one when individual bond issues can have minimum purchase sizes of thousands (or tens of thousands!) of dollars.

Equity funds or bond funds will generally be a far more practical solution.

To invest in a mutual fund, you'll need to open an account with the fund sponsor or open a brokerage account with a broker that has a selling agreement in place with the fund sponsor. As a general rule, most large, popular mutual funds will be available at most brokers, so if you open a traditional investment account (like an IRA or brokerage), you'll have access to most of the mutual funds you'd ever want to invest in.

Why Does a Fund's Expense Ratio Matter So Much?

Every dollar you pay in expenses is a dollar that comes directly out of your returns. So, it is absolutely in your best interests to keep your expense ratios to an absolute minimum.

The expense ratio is the percentage of your investment lost each year to management fees, trading expenses and other fund expenses. Because index funds are passively managed and don't have large staffs of portfolio managers and analysts to pay, they tend to have some of the lowest expense ratios of all mutual funds.

This matters because every dollar not lost to expenses is a dollar that is available to grow and compound. And over an investing lifetime, even a half a percent can have a huge impact. If you invest just $1,000 in a fund generating 5% per year after fees, over a 30-year horizon, it will grow to $4,116. However, if you invested $1,000 in the same fund, but it had an additional 50 basis points in fees (so it only generated 4.5% per year in returns), it would grow to only $3,584 over the same period.

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Riley Adams, CPA

Licensed CPA and Financial Advisor

Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.

Schedule Now

Investment advisory services offered through NewEdge Advisors, a registered investment advisor.

Related: The 10 Best Dividend ETFs You Can Buy Now

We love exchange-traded funds (ETFs) because they can provide one-click access to hundreds, even thousands of stocks, while charging often minuscule fees.

One way to put that low-cost diversification to work? Collecting dividends. But trying to choose from literally hundreds of income-producing funds could take up a lot more time than you have. So let us help you narrow the field—check out our list of 10 top dividend ETFs.

Related: 10 Dividend Stocks That Pay You Each and Every Month

The vast majority of American dividend stocks pay regular, reliable payouts—and they do so at a more frequent clip (quarterly) than dividend stocks in most other countries (typically every six months or year).

Still, if you’ve ever thought to yourself, “it’d sure be nice to collect these dividends more often,” you don’t have to look far. While they’re not terribly common, American exchanges boast dozens of monthly dividend stocks.

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You can't enroll in Medicare whenever you want, even after you've reached the minimum age. There are specific enrollment periods you need to adhere to. And if you enroll at the wrong time, you could have to pay a monthly penalty. Worse? Sometimes that penalty is permanent.

Today, I want to introduce you to the age-based Medicare enrollment periods. I'll explain each of the different enrollment periods, as well as list the penalties you could face if you miss them.

The information and analysis contained within this article appears for your consideration, but it does not constitute individualized financial advice. Always act at your own discretion.

Don't Miss These Age-Based Medicare Enrollment Periods

Most people become eligible for Medicare based on their age—and the age to watch for just about everyone is 65.

So, as you approach your 65th birthday, you should familiarize yourself with the following Medicare enrollment periods. More than one might apply to you.

Initial Enrollment Period (IEP)

If you plan on enrolling in Medicare, your Initial Enrollment Period (IEP) depends on your birthday. It starts three months before you turn 65 and ends three months after the month you turn 65. 

Example: If your birthday is May 12, your IEP begins Feb. 1 and ends on Aug. 31 in the year you turn 65.

It's a bit different if your birthday lands on the first of the month, though. In that situation, your IEP begins four months before you turn 65 and ends two months after the month you turn 65. 

Example: If your birthday is May 1, your IEP begins Jan. 1 and ends on July 31 in the year you turn 65.

You have the same amount of time to enroll (seven months)—the goalposts are just shifted.

Your IEP applies to all Medicare "Parts": Original Medicare (Parts A and B), Advantage (Part C), and prescription (Part D). However, if you sign up for a Part C during this time, you can drop it at any point in the next 12 months and change to Original Medicare without penalty.

If you fail to enroll for Medicare during the IEP, you'll need to sign up during a General Enrollment Period (GEP) or a Special Enrollment Period (SEP). 

Related: Original Medicare vs. Medicare Advantage: How Do These Plans Differ?

General Enrollment Period (GEP)

The General Enrollment Period (GEP) for Medicare Part A and Part B runs every year from Jan. 1 through March 31. 

When someone already has Part A and enrolls in Part B for the first time during a GEP, it triggers a two-month Special Enrollment Period (SEP) where they can enroll in Part D (prescription drug coverage).

Enrolling during a GEP often means you have to pay a late enrollment penalty, which affects your monthly premiums. For Part A, it's a temporary penalty, but it's usually a permanent penalty for Parts B and D.

Open Enrollment Period (OEP)

The Open Enrollment Period (OEP), which runs from Oct. 15 to Dec. 7 for each year, allows people to make changes to their Medicare coverage (generally involving Part C and/or Part D). Among the changes you can make:

• If you're in Medicare Advantage:
  • Switch from one Medicare Advantage plan to another
  • Switch from Medicare Advantage to Original Medicare
• If you're in Original Medicare:
  • Switch from one Part D prescription plan to another
  • Switch from Original Medicare to Medicare Advantage

Any changes made during the OEP typically take effect on Jan. 1 of the following year.

Medicare Advantage Open Enrollment Period (MA-OEP)

The Medicare Advantage Open Enrollment Period (MA-OEP) is from Jan. 1 to March 31, or within the first three months in which you get Medicare, and applies only to people who are already enrolled in Medicare Advantage.

This period is used to make changes from your existing plan, or switch to Original Medicare (and, if you want, enroll in Part D). 

Coverage begins on the first of the month after the plan receives your request.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

Special Enrollment Period (SEP)

A Special Enrollment Period (SEP) is a one-time enrollment period triggered by certain events, such as:

• Having or had health insurance through your or your spouse's employer (or a family member's employer if you have a disability and they had a large group health plan)
• Having TRICARE
• Losing Medicaid coverage
• Missing the opportunity to sign up because of inaccurate or misleading information from an employer or health plan
• Missing the opportunity to sign up because of exceptional conditions (requires contacting Social Security to ask for a SEP)
• Missing the opportunity to sign up because you (or an authorized representative, guardian, or caregiver) were impacted by a natural disaster or declared emergency
• Missing the opportunity to sign up while you were incarcerated
• Volunteering and serving in a foreign country

If you enroll during an SEP, you are usually exempt from any late-enrollment penalties. When enrollees sign up for Medicare Part A or Part B during an SEP, they typically have two months to enroll in a Part C or Part D plan. In certain situations, you may be eligible for an additional Medicare Advantage SEP. 

A few circumstances where you aren't eligible for an SEP include (but aren't limited to):

• COBRA coverage or retiree coverage ending
• Missing your sign-up window when you stopped working or lost employer-based coverage
• Having or losing Marketplace coverage
• Having End-Stage Renal Disease (ESRD) (Learn more about ESRD Medicare coverage)

If you qualify for an SEP, you only have a limited amount of time. The length varies depending on the triggering event, but it's frequently either six or 12 months. 

Were you to miss the window, you would have to wait until the next GEP and may need to pay a monthly penalty. 

Related: 14 Ways Retirees Can Reduce Their Medicare Costs

How Much Are the Late Enrollment Penalties?

While the word "penalty" is often associated with one-time fees, this isn't the case for Medicare late enrollment penalties. These penalties are added to one's monthly premium. 

How long it increases your premium and how much extra you pay depends on which Medicare Part it is and how late you were signing up. 

Importantly, because the penalties are percentages of premiums, the amount of penalty you pay could change each year as premiums change. Also, any penalties are rounded to the nearest to the nearest 10¢. So, a penalty that came out to $60.82 would be rounded down to $60.80, while a penalty that came out to $60.87 would be rounded up to $60.90.

Related: Medicare FAQs: Your Questions Answered

Part A Late Enrollment Penalty

If you don't sign up for Medicare Part A during your IEP and aren't eligible for an SEP, your penalty may be an increase of 10% to your monthly premium. 

Fortunately, this is just a temporary penalty. It lasts for twice the number of years you didn't sign up on time. For instance, if you signed up two years later, you would have to pay a 10% higher premium for four years. 

Part B Late Enrollment Penalty

If you miss your IEP for Part B and don't qualify for an SEP, your penalty may be an increase of 10% to your monthly premium for every full 12-month period you could have enrolled in Part B but didn't. 

Unfortunately, this is a permanent penalty that you typically pay for as long as you're on Medicare. For example, if you didn't sign up for Part B for two full years, your penalty would be a 20% increase to your monthly premium.

Part C Late Enrollment Penalty

Medicare Advantage (Part C) plans don't have late enrollment penalties. 

However, to enroll in Part C, you need to be enrolled in Part A and Part B and pay the applicable premiums. Therefore, it's important to pay attention to enrollment periods so you don't have to pay any Part A or Part B penalties.

Part D Late Enrollment Penalty

If you don't enroll in Part D when you initially get Medicare, or if you go 63 days or more without creditable drug coverage, a penalty will apply. 

The penalty may be an increase of 1% to your monthly premium for every month in which you were eligible but waited to join a Medicare drug plan and didn't have creditable drug coverage. 

For instance, if you waited 10 months after becoming eligible for Medicare and didn't have credible drug coverage, to enroll in Part D, you would have to pay a 10% late enrollment penalty on top of your monthly plan premium. 

The penalty is based on the "national base beneficiary premium," which changes every year. Typically, you pay this penalty for as long as you're on Medicare. 

Again, you won't be charged a Part D penalty if you have creditable drug coverage. Medicare Advantage (Part C) plans with prescription drug coverage, also known as MA-PDs, count as creditable drug coverage. Additionally, you won't be charged a penalty if you qualify for Extra Help.

Schedule Your Call With Riley

Riley Adams, CPA

Licensed CPA and Financial Advisor

Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.

Schedule Now

Investment advisory services offered through NewEdge Advisors, a registered investment advisor.

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Many real estate investments wall off participation to just accredited and other high-net-worth investors. Virtually everyone is allowed to buy shares in a REIT. You might not have enough liquid cash to buy an apartment building or hotel, but if you're reading this, you likely have the $50 or $100 it takes to buy a share of a REIT—and a REIT will typically get you exposure not to just one building, but dozens, even hundreds.

However, we can really up the ante, and diversify even further, by owning REIT exchange-traded funds (ETFs), which hold bundles of differentiated real estate stocks.

It's a tactic worth considering. Like with any other part of the market, there's risk involved in owning just one or two REITs if they're concentrated in a single industry, such as housing or offices. If that area of the real estate market suffers an outsized downturn, you could absorb deeper losses than if you owned a wider swath of real estate. REIT ETFs do just that, helping you defray single-ticker risk by plugging you into dozens of REITs across several industries.

Let's look at some of the best REIT ETFs you can buy. Each of these funds yields at least twice what the broader market does, and each of these has been given a favorable rating by one of the top independent fund research firms.

Editor's Note: Tabular data presented in this article is up-to-date as of April 15, 2026.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

What Is a REIT?

Real estate investment trusts (REITs) are a unique class of investment made up of companies that own (and sometimes operate) real estate-related assets.

REITs were created by none other than Congress, which passed this business structure into existence via the REIT Act, which itself was part of the Cigar Excise Tax Extension of 1960 that President Dwight D. Eisenhower signed into law. The goal was to make real estate more accessible to everyday investors—after all, we don't all exactly have the hundreds of thousands or millions of dollars necessary to buy apartment complexes and office buildings.

So, what does "real estate investment trust" mean? Let's break down the name:

• "Real estate": REITs must derive at least 75% of their gross income from real estate-related income, and 75% of their assets must be real estate-related assets. (I keep saying "related" because REITs don't always have to own physical properties—they can own real-estate related assets such as mortgages, too.)
• "Investment trust": These words are important to understanding REIT ownership. There are certain thresholds that set REITs apart from conventional publicly traded company stocks. For instance, they must have at least 100 shareholders, and they can have no more than 50% ownership resting in the hands of five or fewer investors.

The most important (or at least pertinent) rule you need to know about REITs is that they must pay at least 90% of their taxable income to shareholders in the form of dividends. And thanks to this mandate for income, real estate is often one of the highest-yielding stock-market sectors, if not the top source of yield. Thus, much like people enjoy the passive income of physical real estate, many stock investors own REITs for their above-average dividends.

Equity REITs vs. Mortgage REITs

The REIT universe is commonly divided into two distinct flavors: equity REITs and mortgage REITs (mREITs). 

While equity REITs and mREITs both deal in real estate, they're two very different businesses (and pretty dissimilar investments) that can sometimes have very disparate reactions to the same outside forces.

In other words: Investors should know the difference between the two.

Related: The Best REITs to Buy in 2026

Equity REITs: What You Need to Know

"Equity" is shorthand for a few things, among them "ownership," typically in a financial asset or company. You'll frequently hear "equities" used as another term for "stocks," as a company's stock represents an ownership stake in that business.

Equity REITs, then, are directly invested in real estate assets. They own or manage properties ranging from office buildings to shopping centers to apartment complexes, leasing that space and generating income from the rents.

Publicly traded equity REITs allow you to enjoy that exposure through their shares, which you can purchase through any traditional brokerage account.

Related: The 16 Best ETFs to Buy for a Prosperous 2026

Mortgage REITs: What You Need to Know

Mortgage REITs (mREITs) don't involve themselves in physical real estate. Instead, they deal in "paper" real estate (aka mortgages).

Mortgage REITs finance real estate, operating less like a traditional REIT and more like a financial firm. This is done by either originating mortgages, or buying and selling those mortgages and related mortgage-backed securities. The business also commonly involves borrowing heavily to then trade all that mortgage paper at scale. An mREIT's profits, then, tend to revolve around net interest income (NII), which is the difference between the interest revenue they generate and the financing costs on all their assets.

This fundamentally makes mortgage REITs riskier than equity REITs. After all, the 2008 financial crisis was caused in large part by financial firms borrowing heavily to invest in the debts of third parties. Particularly in the current interest-rate environment, where borrowing has become quite expensive, that's a tough spot to be in.

So, why do people buy mREITs? Well, their yields are regularly three to four times more what you'll get from the average equity REIT. Granted, these dividends might be at risk of evaporating if things go south ... but if they hold up, investors will be richly rewarded for looking beyond the conventional players on Wall Street.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

Why Invest in REITs Through ETFs?

One of the greatest benefits of any investment fund, including exchange-traded funds, is that it allows you to diversify your portfolio across a multitude of different investments. You could spend a lot of time researching numerous stocks, then pay however much it costs to buy each stock individually … or you could buy a few dozen, hundreds, or even thousands all at once by owning a single ETF.

So, if you don't want to take the time to research individual REITs, you can put your money into a REIT ETF and leave it up to the portfolio manager or the tracking index.

But real estate investment trusts' portfolios typically are made up of dozens if not hundreds of properties or thousands of mortgages. So do you really need that additional layer of diversification?

REITs usually focus on specific corners of the market: office buildings, hotels, medical facilities, and so on. Even mortgage REITs tend to specialize in certain segments of real estate assets. If you want that specific exposure, individual REITs are just fine. 

But if you prefer to collect real estate income without being tethered to merely one real estate industry, REIT ETFs provide that broad-based access.

Related: The Best Dividend Stocks: 10 Pro-Grade Income Picks for 2026

The Best REIT ETFs You Can Buy

The following funds are some of the best real estate investment trust ETFs on the market.

I've kept screening to a minimum here. All ETFs on this list have a Morningstar Medalist Rating (a forward-looking analytical view of the ETF) of either Bronze, Silver, or Gold, and at least $75 million in assets under management (AUM). I personally love to examine newer funds, but targeting more established ETFs with a certain baseline of assets reduces your risk of purchasing a fund that might eventually close.

Past that, I'm just looking for REITs that come at the sector from different angles. It's normal to see a sizable amount of overlap in REIT fund holdings—the sector itself only holds a couple hundred stocks across all market capitalizations, after all, and most are going to gravitate toward the largest components. Where the following funds differ is in their strategy and approach.

Related: 7 Best High-Yield Dividend Stocks: The Pros’ Picks for 2026

Best REIT ETF #1: State Street Real Estate Select Sector SPDR ETF

• Assets under management: $7.8 billion
• Dividend yield: 3.4%
• Expense ratio: 0.08%, or 80¢ per year on every $1,000 invested

The Bronze-rated State Street Real Estate Select Sector SPDR ETF (XLRE) isn't just a mouthful (which it is)—it's also one of the largest, cheapest, and most straightforward REIT ETFs you can buy.

State Street's Select Sector funds own only the sector stocks found within the S&P 500, which results in them owning predominantly large- and bigger mid-cap companies. XLRE, for instance, owns 31 real estate investment trusts. That's not a deep roster, but that's common for a sector strategy. You're getting some diversification, however, and you're getting it across what in theory should be the sector's most stable and resource-rich stocks.

Related: 15 Best Investment Apps and Platforms [Free + Paid]

From an industry perspective, you're owning REITs positioned in health care, retail, industrial, residential, hotels, offices, and other property types. In fact, that "other" slice—REITs that don't fall within the traditional property types, designated "specialized REITs"—accounts for a plurality of assets, at 40%.

Like the S&P 500, XLRE is market cap-weighted, which means the larger the stock, the greater the percentage of assets invested in that stock. For instance, top holdings at the moment include medical facility and senior housing REIT Welltower (WELL), logistics specialist Prologis (PLD), datacenter landlord Equinix (EQIX), and communications infrastructure play American Tower (AMT); those four stocks account for roughly a third of the fund's assets right now.

REITs are frequently the best-paying market sector, and that's evident in the Real Estate SPDR, whose 3%-plus dividend yield is nearly thrice what you're getting out of the S&P 500.

This combination of large-cap real estate exposure, yield, and low costs makes XLRE one of the best REIT ETFs you can buy right now.

Best REIT ETF #2: Vanguard Real Estate ETF

• Assets under management: $37.0 billion*
• Dividend yield: 3.9%
• Expense ratio: 0.13%, or $1.30 per year on every $1,000 invested

Vanguard Real Estate ETF (VNQ) is the 500-pound gorilla of the U.S. real estate space, boasting well more than three times the assets of the second-largest largest ETF (the Schwab US REIT ETF, not discussed here), and it's more than four times as large as XLRE.

Normally, I'd point to Vanguard's low expenses as the reason. But in this case, it's the longevity. VNQ's fees, while low compared to the entire field, are still higher than several of its closest competitors. But the fund has had a long time to build up its asset base—VNQ, which got its start in September 2004, is the ETF share class of Vanguard's Real Estate Index Fund, which has been around since May 1996.

Related: The 10 Best-Rated Dividend Aristocrats Right Now

This Silver-rated fund tracks the MSCI US Investable Market Real Estate 25/50 Index, which invests in the real estate stocks of a much wider universe and weights them by market cap.

You won't see much difference in top holdings—indeed, their top 10 equity holdings are identical, though their weights are somewhat different. However, VNQ's portfolio of 146 stocks is far wider than XLRE. It also skews smaller than XLRE (though still large overall). Right now, Vanguard Real Estate ETF has a roughly 30/45/25 blend of large-, mid-, and small-cap stocks; State Street's fund is currently 32/62/6.

The greater access to REITs outside the S&P 500 also currently helps to lift the yield, which sits at almost 4% right now.

* Vanguard fund assets are spread across multiple share classes, including mutual funds and ETFs alike. Assets listed for each fund in this story are for the ETF share class only.

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Related: The 12 Best Vanguard ETFs for 2026 [Build a Low-Cost Portfolio]

Best REIT ETF #3: Invesco S&P 500 Equal Weight Real Estate ETF

• Assets under management: $96.8 million
• Dividend yield: 2.9%
• Expense ratio: 0.40%, or $4.00 per year on every $1,000 invested

The Invesco S&P 500 Equal Weight Real Estate ETF (RSPR) holds all of the REITs in the S&P 500 Index, and that might sound mighty familiar. In fact, this REIT ETF would be a true clone of the XLRE if not for its one, significant twist: equal weighting.

Related: The 7 Best Closed-End Funds (CEFs) for 2026

Again, XLRE and VNQ distribute their assets based on the size of the company, which results in larger stocks having a greater influence over the fund's performance. That's not necessarily a bad thing. Larger companies tend to be more stable. Sometimes, those weighting systems result in still-modest allocations of 1% or 2% for even the largest stocks. And sometimes, the stocks in a sector can perform in lockstep to the point where not even perfectly even weight distribution would make a difference.

But the real estate sector is itself exposed to many different parts of the economy. And at least in the S&P 500, there is a high weighting concentration among the index's biggest stocks—again, four of the XLRE's 31 stocks (13%) account for 33% of the weight.

Invesco's Silver-rated REIT ETF evens the playing board. Every quarter, the fund "rebalances" so that all of its components share the exact same weight. Yes, the weights will change over the next few months as stocks rise and fall, but every three months, the field is brought back to level. This obviously reduces the influence of larger REITs while amplifying the effect of moves in smaller REITs. 

Related: 6 Ways to Invest in Apartment Buildings [w/Minimal Effort!]

What has this meant, practically speaking? RSPR came to life in August 2015; but XLRE's inception was in October 2015, so we don't yet have 10-year returns data to work with. But what we do know so far is a mixed bag. The traditional State Street fund has been better over the trailing three- and five-year periods. However, RSPR actually bested XLRE in 2021, 2022, and 2024, and it's slightly less volatile to boot. Invesco's fund also has a smaller current yield.

So while Invesco S&P 500 Equal Weight Real Estate ETF certainly deserves a spot among the market's best REIT ETFs, the decision to buy largely hinges on whether you want even exposure or want to let the sector's biggest dogs do the most barking.

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Best REIT ETF #4: JPMorgan BetaBuilders MSCI US REIT ETF

• Assets under management: $1.1 billion
• Dividend yield: 3.0%
• Expense ratio: 0.11%, or $1.10 per year on every $1,000 invested

The JPMorgan BetaBuilders MSCI US REIT ETF (BBRE) offers a little more access to smaller REITs than Vanguard's VNQ, and at a slightly lower cost.

The Bronze-rated BBRE tracks a custom, adjusted market cap-weighted index that emphasizes mid- and small-cap U.S. real estate equities. The 107-component fund allocates only a quarter of its assets to large-cap REITs; the biggest chunk (45%) belongs to mid-caps, and a sizable 30% is in smalls.

Related: Which Type of Real Estate Investment is Right for You? 8 to Know

The large-cap exposure still comes in big chunks; Welltower and Prologis each enjoy weights of around 10% right now. But we get a little differentiation in the top 10 holdings. Namely, Extra Space Storage (EXR) and digital and paper management facility company Iron Mountain (IRM) don't make the cut in the two cap-weighted ETFs mentioned prior, but they do in JPMorgan's ETF.

You're not getting a higher yield for the extra exposure to smaller stocks—BBRE pays less than XLRE and VNQ right now. But you are getting a better track record. JPMorgan's BetaBuilders fund has out-returned each of the aforementioned funds over the trailing three and five years. In fact, its performance ranks in the top 20% of all category funds for both periods, putting it among the market's best REIT ETFs to buy.

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Best REIT ETF #5: JPMorgan Realty Income ETF

• Assets under management: $475.5 million
• Dividend yield: 2.4%
• Expense ratio: 0.50%*, or $5.00 per year on every $1,000 invested

The final REIT ETF on this list, JPMorgan Realty Income ETF (JPRE), is the most expensive by far and offers the lowest yield at just a few basis points north of 2%.

By ratings, however, it's the best REIT ETF on this list, earning a Gold Medalist Rating from Morningstar. It's also a solid performer, and most notably, it's the only one that's run by humans.

Managers Scott Blasdell, Jason Ko, and Nick Turchetta invest in REITs across the market-cap spectrum, seeking out "superior financial strength, operating revenues and attractive growth potential." Their portfolio is tight at just 35 holdings, but it provides an even distribution of size, at 37% large caps, 37% mids, and 24% smalls. You're still getting exposure to numerous REIT types, too, including health care, apartments, industrial, retail, and others.

Related: 9 Best Fidelity ETFs for 2026 [Invest Tactically]

Many actively managed funds often share a lot of holdings in common with the index benchmarks they're tasked with beating, but with a few twists. So indeed, while you have big weights in companies such as Welltower and Prologis that feature prominently in the index funds above, you also see outsized weights in the likes of retail REITs Regency Centers (REG) and Agree Realty (ADC).

JPRE's fee, while the highest on this list, is still competitive compared to the sector, and it's buying a lot of expertise. Yes, the trio of managers cumulatively have just seven years with the fund (not much!), but they average 23 years of industry experience. 

Trailing three- and five-year returns have been plenty respectable, sitting within roughly the top third of all category funds.

* 0.71% gross expense ratio is reduced with a 21-basis-point fee waiver until at least June 30, 2026.

Related: Real Estate Syndication: What It Means and How to Invest

How Do REIT Dividends Work?

Real estate investment trusts pay dividends just like other companies—typically every quarter, though a few REITs are monthly dividend stocks.

The biggest difference between REIT dividends and other stocks' dividends is that they're "non-qualified."

Whether a stock is "qualified" or "non-qualified" is determined by the IRS tax code. I won't going deeply into the minutiae because it won't be all that helpful. Instead, as a general guide, just know that most "traditional" stocks (the Apples and Coca-Colas of the world) pay qualified dividends, while most REITs pay non-qualified dividends.

Why does this matter?

Well, qualified dividends are taxed at the lower long-term capital gains tax rate (so, 0%, 15%, or 20%, plus the 3.8% net investment income tax, where applicable). Non-qualified dividends don't meet the IRS standards for qualification and are taxed at the higher short-term capital gains tax rate (aka your regular income tax rate).

How Do REIT ETFs Pay Investors?

When you own a REIT exchange-traded fund, you own parts of shares of various REITs with different payout schedules. However, you don't get paid when those stocks pay out—you get paid based on the ETF's payout schedule.

REIT ETFs pay their investors the same way as REITs do, with deposits appearing on your brokerage statement on a regular cycle. And they typically pay every quarter.

How Else Can You Buy Real Estate?

Typically, if you want to own stock in a real estate company, you have to invest through the public markets. But real estate crowdfunding makes it possible for everyday investors to secure a stake in privately held real estate businesses.

Real estate crowdfunding sites typically allow for small investments (read just hundreds or even tens of dollars) in a wide range of businesses. The platform is usually paid through either a monthly fee or by collecting a percentage of the funds raised for the business. And generally speaking, these platforms provide high ease of use compared to many other types of real estate investments.

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Related: 15 Stocks You Can Buy and Hold Forever

As even novice investors probably know, funds—whether they're mutual funds or exchange-traded funds (ETFs)—are the simplest and easiest ways to invest in the stock market. But the best long-term stocks also offer many investors a way to stay "invested" intellectually—by following companies they believe in. They also provide investors with the potential for outperformance.

So if you're looking for a starting point for your own portfolio, look no further. Check out our list of the best long-term stocks for buy-and-hold investors.

Related: 7 Best Vanguard Dividend Funds to Buy in 2026

What's better than a smart, sound dividend income strategy? How about a smart, sound dividend income strategy with very little money coming out of your pocket?

If that sounds good to you, you need look no farther than low-cost pioneer Vanguard, which offers up a number of payout-oriented products. Find out what you need to know in our list of seven top-notch Vanguard dividend funds.

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Of course, as a tax writer, I'm also looking for a state with low income tax rates, a modest sales tax, and reasonable property taxes. But another important goal is to avoid states that tax Social Security benefits if at all possible.

The federal government is going to tax up to 85% of our Social Security benefits when we retire, but my wife and I don't want to pay state taxes on this retirement income, too. So, while we're not necessarily crossing states that tax Social Security income completely off our list of possible retirement locations, those states certainly have a strike against them.

If you're in the same boat, check out my list of states that tax Social Security benefits. It includes states that only tax part of your Social Security payments or only taxes certain residents. I'll also provide some other state tax information that might be helpful as you look for your own retirement dream home.

(Sales tax rates are provided by the Tax Foundation. Median property tax rates are based on 2023 data from the U.S. Census Bureau, which is the most recent data available.)

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Colorado Taxes on Social Security Benefits

When it comes to taxes on Social Security benefits, Colorado is a good place to retire … as long as you don’t retire early. That’s because the Centennial State’s tax on Social Security income only applies if you're 55 to 64 years old.

If you fall between those ages, you can deduct from your federal taxable income ...

• The entirety of your Social Security benefit income if your adjusted gross income (AGI) doesn't exceed $75,000 (if filing single) or $95,000 (if married filing jointly).
• Up to $20,000 of your benefit income if your AGI exceeds those thresholds.

If you’re 65 or older, there’s no Colorado tax on your benefits.

Other Colorado State Taxes

Personal Income Tax Rates—Colorado has a flat state income tax rate of 4.4%.

Income Tax on IRA and 401(k) Plan Withdrawals—If you're at least 65 years old, you can deduct up to $24,000 of 401(k) or IRA distributions that are taxed at the federal level. If you're between 55 and 64 years old, you can deduct up to $20,000.

Sales Taxes—Colorado's statewide sales tax rate is a relatively low 2.9%, but local government rates can be as high as 9.1%. As a result, according to the Tax Foundation, the average combined state and local sales tax rate in Colorado is 7.89%, which is the 16th-highest in the U.S.

Property Taxes—From a statewide perspective, property tax bills are relatively low in Colorado. The median property tax rate for the entire state is only 0.50%, which is the 10th-lowest when compared to the median rates in all 50 states and the District of Columbia.

Estate and Inheritance Taxes—If you live in Colorado, your heirs will be happy to know that there are no state estate or inheritance taxes.

Connecticut Taxes on Social Security Benefits

My wife and I used to live in Connecticut, so it makes me sad to put the state on this list. But I don't think we'll be returning to the Nutmeg State in our golden years, in part because we don't want to risk having to pay the state's tax on Social Security income. (Although, as outlined below, Connecticut is cutting income taxes on other types of retirement income starting this year.)

There is some good news for Social Security recipients: You won't have to pay the Connecticut tax on your benefits if your federal adjusted gross income for the year is below:

• $75,000 if you're single or a married person filing a separate tax return
• $100,000 if you're married filing jointly, a head-of-household filer, or a surviving spouse

However, if your income is above the applicable threshold, the state will tax 25% of either your total Social Security income for the year or your Social Security benefits subject to tax at the federal level, whichever is lower.

Other Connecticut State Taxes

Personal Income Tax Rates—Connecticut state income tax rates start at 2% and go up to 6.99%.

Income Tax on IRA and 401(k) Plan Withdrawals—For 2026, distributions from 401(k) accounts and traditional IRAs are fully exempt if your federal adjusted gross income is less than:

• $75,000 for single filers, married people filing a separate tax return, or head-of-household filers
• $100,000 for married couples filing jointly

A partial exemption (ranging from 2.5% to 85%) for IRA and 401(k) payments is available if your income is between:

• $75,000 and $99,999 for single filers, married people filing a separate tax return, or head-of-household filers
• $100,000 and $149,999 for married couples filing jointly

Sales Taxes—Connecticut imposes a 6.35% sales tax. No local sales taxes are permitted, so the combined state and local sales tax rate is 6.35%, which is the 18th-lowest in the nation.

Property Taxes—Plan for a big property tax bill if you move to Connecticut. The median property tax rate in Connecticut is 1.63%, which is the third-highest in the country.

Estate and Inheritance Taxes—Connecticut imposes a 12% estate tax, but for 2026 it only applies to estates worth $15 million or more (up from $13.99 million in 2025).

Related: Can I Retire at 60 with $500K? [YES! See Examples of How]

Minnesota Taxes on Social Security Benefits

The taxation of Social Security payments is a bit more complicated in the North Star State. That’s because there are two separate ways to calculate the Minnesota tax on your benefits. However, for many Minnesota retirees, there’s no state income tax on their Social Security income.

When calculating your Minnesota taxable income, include the amount (if any) of Social Security benefits taxed at the federal level. From that point, you can claim a tax deduction for Social Security income under one of two methods—pick the one that saves you the most money.

Under the “simplified method,” you can deduct 100% of your Social Security benefits on your Minnesota income tax return if your federal adjusted gross income is below a certain amount. However, if your federal adjusted gross income is above the applicable threshold, your deduction is phased out by 10% for each $4,000 of income over the threshold amount (10% for each $2,000 over the threshold for married taxpayers filing separate returns).

The federal adjusted gross income thresholds and phaseout ranges for the 2026 tax year are shown in the following table.

Under the “alternative method,” you can deduct Social Security benefits on your Minnesota tax return according to the following table.

For this deduction, “provisional income” is equal to modified adjusted gross income, as used for purposes of calculating federal taxes on Social Security benefits, plus one-half of the Social Security benefits taxed at the federal level for the year.

Other Minnesota State Taxes

Personal Income Tax Rates—The lowest Minnesota income tax rate is 5.35%. The highest rate is a comparatively high 9.85%.

Income Tax on IRA and 401(k) Plan Withdrawals—There are no special tax breaks under Minnesota law for withdrawals from an IRA or 401(k) account. As a result, they're taxed by Minnesota to the same extent they're taxed under federal law.

YATI Tip: While there's no special tax break for IRA or 401(k) distributions, seniors age 65 or older can claim a special deduction of up to $9,600 ($12,000 for joint filers). Income limits apply.

Sales Taxes—Minnesota sales taxes are on the high side. There's a 6.875% state tax, plus local taxes of up to 3.00%. The average combined state and local sales tax rate for Minnesota is 8.14%, which is the 15th-highest in the U.S.

Property Taxes—At 1.02%, Minnesota's median property tax rate is a little on the high end. That comes in as the 18th-highest amount among all 50 states and the District of Columbia.

Estate and Inheritance Taxes—Minnesota taxes estates valued at $3 million or more. The estate tax rates range from 13% to 16%.

Related: What Tax Bracket Are You In?

Montana Taxes on Social Security Benefits

While a house with a view near Flathead Lake sounds nice for a retirement destination, you might have to pay the Montana tax on Social Security benefits if you moved out to Big Sky country.

Before 2024, the calculation of Montana taxes on Social Security income was based on your Montana adjusted gross income, not your federal adjusted gross income. As a result, the Montana tax didn’t always match up perfectly with the federal tax.

However, starting in 2025, Montana taxpayers won’t have to calculate Montana adjusted gross income anymore. Instead, the calculation of Montana income tax will be based on your federal adjusted gross income. Since there are no adjustments to that amount for Social Security benefits, the same amount of Social Security income subject to federal tax is also subject to Montana tax for the 2026 tax year.

Other Montana State Taxes

Personal Income Tax Rates—There are only two Montana tax rates: 4.7% and 5.65%.

Income Tax on IRA and 401(k) Plan Withdrawals—Beginning with the 2025 tax year, the former deduction for pension and other retirement income (including IRA and 401(k) distributions) is repealed and replaced with a new $5,500 deduction for each Montana taxpayer who is at least 65 years old.

Sales Taxes—There's no state-level sales tax in Montana. Plus, local governments generally can't impose their own sales tax, either. However, a few tourist areas (e.g., Whitefish, Big Sky, and West Yellowstone) can impose a "resort tax" of up to 3%.

Property Taxes—Property tax bills are generally on the low side in Montana, too. The state's median property tax rate is 0.68%, which is the nation's 19th-lowest rate.

Estate and Inheritance Taxes—Montana does not collect estate or inheritance taxes.

Related: 11 Ways to Avoid Taxes on Social Security Benefits

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New Mexico Taxes on Social Security Benefits

If you’re a retiree in New Mexico, you won’t owe tax on your Social Security benefits if your adjusted gross income is:

• $150,000 or less if your filing status is married filing jointly, head of household, or qualified widow(er)
• $100,000 or less if your filing status is single
• $75,000 or less if your filing status is married filing separately

However, if you exceed the applicable income threshold, the exemption will apply as a graduated percentage of Social Security income. For tax years 2026 and 2027, the exemption is equal to 20% of your Social Security income included in AGI. This will rise 20 points every two years until the exemption becomes 100% in 2034 and 2035.

Other New Mexico State Taxes

Personal Income Tax Rates—State income tax rates in New Mexico start at 1.7% and rise to 5.9%.

Income Tax on IRA and 401(k) Plan Withdrawals—If you're at least 65 years old, you can deduct up to $8,000 of income—including IRA and 401(k) withdrawals—on your New Mexico tax return.

YATI Tip: If you're at least 100 years old, all your income is exempt from New Mexico taxes.

Sales Taxes—The state sales tax rate in New Mexico is 4.875%, but some local governments tack on an additional 4.5625%. According to the Tax Foundation, this results in an average combined state and local sales tax rate of 7.67%, which is the 17th-highest rate in the country.

Property Taxes—The median property tax rate in New Mexico is only 0.68%, which is the 18th-lowest in the country.

Estate and Inheritance Taxes—Estate planning is easier in New Mexico, since the state has no estate or inheritance tax.

Related: What Are Spousal Benefits [And How Do They Work?]

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Rhode Island Taxes on Social Security Benefits

You won't owe Rhode Island taxes on your Social Security benefits if your federal adjusted gross income is below a certain amount. The Rhode Island Department of Revenue released the 2026 income thresholds:

• $133,750 for married couples filing jointly or qualifying widow(er)s
• $107,000 for married taxpayers filing separately
• $107,000 for single and head-of-household filers

However, if you exceed the applicable income threshold, the Ocean State will tax your Social Security payments to the same extent they're taxed by the federal government.

Other Rhode Island State Taxes

Personal Income Tax Rates—The lowest tax rate in Rhode Island is 3.75%, while the highest rate is 5.99%.

Income Tax on IRA and 401(k) Plan Withdrawals—If you've reached your full retirement age (as defined by the Social Security Administration) and don't exceed certain income thresholds, you can deduct up to $20,000 of 401(k) distributions and other common forms of retirement income (but not IRA withdrawals) from your Rhode Island taxable income.

The 2026 thresholds are the same for the Social Security income deduction (i.e., $133,750, $107,000, or $107,000).

Sales Taxes—The Rhode Island sales tax is very average. There's a 7% state sales tax, but there's no local sales tax in the state. With a combined state and local rate of 7%, Rhode Island claims the 24th-highest rate in the nation (like I said, very average).

Property Taxes—Like other states in the northeast, Rhode Island has higher-than-average property tax rates. The state's median property tax rate is 1.10%, which is 15th-highest in the U.S.

Estate and Inheritance Taxes—Rhode Island imposes an estate tax. The rates run from 0.8% to 16%, but for 2026, the tax only applies to estates worth $1,838,056 or more.

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Utah Taxes on Social Security Benefits

Utah has a unique way of handling its tax on Social Security income. Instead of a tax deduction or exemption, the Beehive State uses a tax credit to reduce or eliminate the state tax on Social Security recipients. But there are income limits restricting who can claim the full tax credit, so some higher-income residents end up paying state income tax on at least some of their Social Security payments.

The full tax credit is equal to the amount of Social Security benefits taxed on the federal level multiplied by the Utah income tax rate (4.5%). However, the credit is reduced if your Utah modified adjusted gross income is above the following applicable amount:

• $45,000 for a married person filing a separate tax return
• $54,000 for single filers
• $90,000 for married couples filing jointly, head-of-household filers, and surviving spouses

Your tax credit is reduced by $0.025 for every dollar over the applicable income threshold.

Other Utah State Taxes

Personal Income Tax Rates—Utah has a flat state income tax rate of 4.5%.

Income Tax on IRA and 401(k) Plan Withdrawals—There's a very narrow tax deduction for distributions from a traditional 401(k) plan, but it only applies if, at the time the money was put into the account, the withdrawn funds were taxed by another state, the District of Columbia, or a U.S. possession. Otherwise, there are no other Utah tax breaks for IRA or 401(k) distributions.

YATI Tip: People born before 1953 qualify for a Utah tax credit of up to $450 if they don't claim either the credit for Social Security benefits or for military retirement income.

Sales Taxes—Sales taxes are a little on the high side in Utah. There's a 4.85% state sales tax, but also 1.25% in mandatory local taxes, as well as additional local taxes of up to 4.7%. According to the Tax Foundation, this results in an average combined state and local sales tax rate of 7.249%, which is the country's 20th-highest rate.

Property Taxes—Property taxes are on the low side, though. Utah's median property tax rate is only 0.48%, which is the seventh-lowest rate in the nation.

Estate and Inheritance Taxes—Another plus is that there are no estate or inheritance taxes in Utah.

Related: How to Roll Over 401(k) Accounts [Which Option Is Best?]

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Vermont Taxes on Social Security Benefits

In Vermont, the state won't tax Social Security benefits if your federal adjusted gross income is:

• $70,000 or less for married couples filing a joint tax return
• $55,000 or less for everyone else

If your income is above the applicable amount, you might qualify for a partial tax exemption if your federal adjusted gross income is between:

• $70,001 and $79,999 for joint filers
• $55,001 and $64,999 for other people

If your income exceeds the income thresholds for a partial tax break, then Vermont taxes your Social Security benefits to the same extent they're taxed under federal law.

Other Vermont State Taxes

Personal Income Tax Rates—Vermont's state income tax rates start at 3.35% and run as high as 8.75%.

Income Tax on IRA and 401(k) Plan Withdrawals—Since there are no special tax breaks for IRA or 401(k) plan distributions, withdrawals from those types of retirement accounts are taxed by Vermont to the same extent they're taxed under the federal income tax law.

Sales Taxes—Vermont sales taxes are a little below average. The state imposes a 6% tax, while local governments can add an additional tax of up to 1%. All in all, the average combined state and local sales tax rate in Vermont is 6.39%. That's the 19th-lowest rate in the country.

Property Taxes—Vermont property taxes, on the other hand, are well above the national average. At 1.44%, the state has the sixth-highest median property tax rate in the nation.

Estate and Inheritance Taxes—Vermont also taxes estates worth $5 million or more at a 16% rate.

Related: How to Maximize Social Security Spousal Benefits

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Related: When Should You Take Social Security?

Social Security is a pillar of many older Americans’ retirement income. Typically, around 90% of people age 65 and older are collecting Social Security benefits at any given time.

But while most of us will end up on Social Security, when we choose to start collecting benefits will differ from person to person. Our guide to Social Security timing may help you decide.

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Which, admittedly, it can be very challenging to know when to be frugal and when to pay up.

Today, we'll try to help you avoid at least a few instances of buyer's remorse by outlining a few products where buying the cheapest option makes the most sense. These cheap items either work just as well as their more expensive counterparts, or they're used too briefly to necessitate a higher quality.

Either way, feel liberated to save money on these items so you have more money available to use where it counts.

Don't Overspend on These Products

If you're looking for a little room in your budget and want to know where to cut costs, feel free to go cheap when it comes to these products.

We've said before that it often pays to splurge on certain items. Cheap doesn't always mean value, after all.

But in the case of the following products, cheap doesn't make much of a difference. In many cases, there's little difference in quality, and many of these items will only be used once or twice.

All listed prices current as of the original publication date. Prices may change over time.

1. Medicines 

You might get burned by cheap knock-offs of, say, designed purses or popular toys. But when it comes to medicine, generics are every bit as good as the real McCoy.

"FDA-approved generic medicines work in the same way and provide the same clinical benefit and risks as their name-brand counterparts," says the U.S. Food and Drug Administration. 

Generic versions must have the same effectiveness and quality. The government doesn't just trust generic medicines to follow those rules either. Through the FDA's Generic Drugs Program, medicines go through a thorough pre-approval review, and they must meet the same standards as name-brand drugs.

And yet, while generic and name-brand drugs are required to have the same strength and stability, they often come with vastly different price tags. 

For example, Target currently sells Claritin Non-Drowsy allergy pills with 10 mg of loratadine as the active ingredient. The cost for 70 tablets is $41.99. However, Target's Up & Up branded non-drowsy allergy relief pills, which also contain 10 mg of loratadine, cost just $8.39 for 70 pills. 

In short: You can save a lot by purchasing cheaper generic medicines without sacrificing quality.

Related: Should I Pay Off My Mortgage Before I Retire?

2. Party Supplies 

Balloons, streamers, paper plates, and other party supplies are typically used for just a few hours before they're tossed. So, considering you aren't going to reuse these items, it often makes sense to go with the most inexpensive versions.

Dollar stores tend to have cheaper options than stores that focus solely on party supplies. For example, Dollar Tree currently has 7-inch, red paper plates that cost $1.25 for a 30-pack (varies by location), which comes out to around 4¢ per plate. Comparatively, Party City has a 20-pack of 6.75-inch plates for $2.50, or a 50-pack for $4.00. Even if you get the 50-pack, that comes out to 8¢ per plate.

While it's possible the Party City plates are of a higher quality, paper plates are single-use products. Unless you know you'll need that extra heft because people will be piling on the food, feel free to cheap out and spend that money on more important aspects of the party, or gifts.

Related: Frugal vs. Cheap: What's the Difference?

3. Gift Bags + Tissue Paper

Party throwers aren't the only ones who should save money by purchasing cheap supplies—partygoers should, too. 

There's no need to buy expensive gift bags and tissue paper. While people might momentarily marvel at the cute designs, no one will remember the quality of the bags and paper.

Indeed, people can (and should) reuse gift bags and tissue paper where possible. Unfortunately, most people just throw these items away. Respondents of a 2021 poll conducted by OnePoll on behalf of Avocado Green Mattress estimate they average 43% more waste during the holiday season, which adds up to around 29 pounds per week. The bulk of this trash is wrapping paper, gift bags, and tissue paper.

Rather than spend excess money on the prettiest gift bag and most colorful tissue paper, spend a little more on the gift itself. I promise people will remember the present more than the packaging.

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4. Vitamins + Supplements

Maybe you have a known vitamin deficiency. Or maybe you just take a multivitamin every day to make sure all of your bases are covered. Either way, you might have wondered whether name-brand vitamins and supplements are superior to generics.

The answer? Not necessarily.

Pricey and cheap vitamins alike can be well-manufactured, or they can be poorly made and packed with fillers. So when you're shopping for vitamins and supplements, you should be less concerned about the brand and more concerned about the dosage. Always get the dosage recommended by your doctor (more isn't always necessarily better). Once you've found comparable products with similar dosages, 

When you're vitamin and supplement shopping, you should be less concerned about the brand and more concerned about the dosage. Always follow the dosage recommended by your doctor—more isn't necessarily better. Once you've found the proper dosage, per a doctor's instructions, you can compare your options for the best price and choose the cheapest option.

For example, let's say a medical professional instructed you to take 50 mcg (2000 IU) of D3 per day. Walgreens sells NatureMade D3 supplements in that dosage at $27.99 for 250 softgels. Alternatively, you could get the Walgreens version with the same dosage and 300 softgels for $24.99. In this situation, it makes sense to buy the cheaper version.

Related: Stop Shrinkflation! 10 Products Affected + Tips to Save Money

5. Baby Clothes

Who doesn't love to splurge on baby clothes? But if we're being real: Your baby has no idea if they're wearing Burberry (yes, Burberry baby clothes are really a thing) or thrift-store clothes. 

Baby clothing gets dirty very quickly. And it won't take long before they've outgrown it—babies often go up a clothing size around every 10 weeks. So considering what little mileage you'll get out of baby clothes, it makes much more sense to choose more affordable options. 

Your child will look just as cute no matter what the brand is. And your baby doesn't care about the name on the label. 

Save your money to invest in a higher-quality wardrobe once your kids are older, not growing so fast, and care a little more about name brands.

Related: Feeling Thrifty? How to Save Money at Thrift Stores

6. Basic School Supplies

Schools typically send back-to-school shopping lists to parents as each new academic year approaches. And school supplies aren't cheap. Data from ecommerce accelerator Pattern shows that the cost of the most common school supplies rose by 5.45% from 2022 to 2023. The popular products that rose the most were graph paper, mechanical pencils, highlighters, folders, index cards, and crayons.

Given that most school supplies are consumables, it typically makes sense to get the cheapest options. Your kindergartner doesn't need fancy Crayola crayons, which will soon break in half anyway; generic crayons will suffice. Plus, some schools pool all of the supplies, so your child won't necessarily be using the products you bought anyway.

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7. Textbooks

The older you get, the more expensive your education gets.

One expense that keeps on rising is textbooks. According to data from the Education Data Initiative, as of the 2021 to 2022 school year, the average postsecondary student paid between $628 to $1,200 annually for books and other supplies. And the average price for hard-copy textbooks fell between $100 and $150; some are much higher.

Ultimately, a textbook is a textbook—as long as you're getting the right one, it doesn't matter how much you paid for it. So shop around. Sometimes your college bookstore might have the best price. Sometimes you might do better buying online. And don't be afraid of used copies, as long as it's an acceptable edition. (Plus: Notes written in the margin can actually be useful!)

Stick with the cheapest textbooks you can get—you'll learn just as much. 

Related: 10 Cheapest Places to Buy a House

8. Frozen Vegetables

It's always smart to have some frozen vegetables on hand as a healthy meal addition, especially because they're typically more affordable than fresh veggies.

No matter the brand, vegetables are usually frozen at peak freshness. That means generic versions should be just as good as more expensive name-brand vegetables.

Rather than brand, you want to pay attention to other factors, such as whether the vegetables are organic, whether they're flash frozen (the preferable method), and whether they have any additives. For example, someone following a low-sodium diet wouldn't want frozen vegetables with sodium added. 

A few of the best vegetables to buy frozen include, but aren't limited to, green peas, corn, butternut squash, lima beans, broccoli, and cauliflower. Green peas are frozen at peak maturity so, unlike fresh peas, their quality doesn't quickly decline. Cruciferous vegetables are actually easier to prepare frozen, and this is an excellent way to get seasonal vegetables any time of the year.

While vegetables aren't the most expensive items to begin with, those savings can nonetheless add up over time. For example, at my nearest Target, you can get a 10.8-ounce bag of Birds Eye Steamfresh broccoli florets for $1.99, which is about 18¢ per ounce. Alternatively, you could spend only 99¢ on a 12-ounce bag of Good & Gather Steam-in-Bag broccoli cuts, which is around 8¢ per ounce. The Birds Eye broccoli does have a higher rating, but it's a very slight difference of 4.6 out of 5 stars versus 4.4 stars; and of course, individual tastes will vary.

Related: WealthUp’s Winningest Tech Stocks for 2025

9. Planting Seeds

If your garden plants aren't growing, don't blame cheap seeds. 

The Federal Seed Act (FSA) "requires that seed shipments between States are labeled with certain quality information necessary for seed buyers to make informed choices." This includes purity percentage, germination percentage, chemical seed treatment (if applicable), and kind of varietal identification. Seed lots are regularly tested to ensure FSA compliance.

This means you can buy the cheapest seeds for a certain species and cultivar and expect the same results as you would get with more costly seeds. 

A green thumb isn't included, though, so some gardening knowledge is still required. And hey: If you start a robust garden with cheap seeds, you might be able to reduce your grocery budget.

Related: Say Goodbye! These 10 Things Are Fading Out of Existence

10. Pregnancy Tests 

The idea of taking a cheap pregnancy test might give you pause. But all that really matters is the accuracy—and assuming you take the test correctly, home pregnancy tests are typically going to be 98% to 99% accurate, regardless of brand. 

Indeed, the tests you buy at a dollar store are going to be every bit as accurate as an expensive name-brand test. The difference in price is usually for features like faster results or an easier-to-read interface.

So if cost is a concern, you can opt for the cheapest pregnancy test without worry.

By the way: If you want to achieve that high accuracy rate, make sure not to test too soon (about two weeks past potential conception is usually good), test in the morning (your urine is more concentrated), and ensure none of your current medications are known to affect results. 

Related: The 12 Best Vanguard ETFs for a Low-Cost Portfolio

Vanguard's exchange-traded funds (ETFs) are among the most popular funds out there thanks to their low fees. But there's more appeal to their ETF lineup than low costs alone.

Vanguard ETFs are big, liquid, and tend to track well-constructed indexes, meaning you're not just paying low expenses ... you're actually getting some value out of your fees. And these Vanguard ETFs represent the best of the best.

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One possible solution? Buying in bulk. This shopping strategy can help you lock in lower food prices per unit and reduce your costs on a number of other staples—but not always. It depends on the item.

I've compiled a list of the best things to buy in bulk. Read on to learn how you can maximize your hard-earned money the next time you're at the grocery store or wholesale club.

Featured Financial Products

Buy These Items in Bulk

When you're shopping for these items, you'll want to push around two carts. That's because they're best made in bulk purchases to save money.

Importantly: Most items are often cheaper when bought in bulk, but not always. So always check to make sure the price you're getting for a bulk purchase is actually cheaper than buying in smaller amounts.

1. Canned Foods

Canned food lasts for literally years, making it a perfect candidate for bulk buying. Canned food is typically inexpensive compared to fresh versions in the first place, and it lasts nearly indefinitely. Canned goods range from vegetables and beans that you can use to round out meals, to whole meals like pastas and soups, making them a versatile pantry staple.

2. Cleaning Supplies

While cleaning supplies can lose some effectiveness over time, it's a minimal amount. For instance, unopened laundry detergent, for instance, usually has a shelf life of 12 to 18 months; unopened fabric softener usually takes two to three years to expire. So if your favorite cleaning supplies go on sale, or if they're simply cheaper in bulk, buy them in bulk!

And maybe if you buy these household items in bulk, you'll even be motivated to tackle the deep cleaning on your list. Maybe.

Related: Frugal vs. Cheap: What's the Difference?

3. Diapers + Baby Wipes

As seasoned parents know, you need far more diapers and baby wipes than you originally expected. You also know that discovering you've run out of diapers can be a disastrous situation. These products are expensive, so it's better to buy bulk packages whenever possible—not just for the savings, but also for the peace of mind.

Alternatively, you might consider signing up for a subscription service, which could save you money and will automatically deliver these items regularly to ensure you never run out.

Related: 10 Financial Gifts for Babies, Kids & Grandkids [No More Toys]

4. Toilet Paper + Paper Towels

We all remember the great toilet paper shortage of 2020—and generations of people will forever stock up on toilet paper just so it never happens again.

To be fair, you never want to suddenly discover you're out of TP. Fortunately, toilet paper (and paper towel rolls, for that matter) last a long time, making them excellent candidates for bulk purchases. This goes for other paper products, including paper plates, napkins, and parchment paper.

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5. Dry Pasta

Pasta is a meal staple in many households, and it's perfect to buy in bulk because it takes a long time to spoil—unopened boxes of pasta can last two to three years. It's a quick, easy, versatile food product that's filling and fast to make when you're hungry and don't want to make a trip to the grocery store.

Also, pasta meals make for some of the best leftovers (reheated pasta isn't just tasty, but some scientists argue it's healthier!). So rather than buying frozen food that incorporates pasta, buy pasta in bulk and use it in your meal prepping routine.

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6. Pet Food

Does your pet always seem to know when it's dinner time? Don't disappoint them by running out of pet food. Both wet and dry pet food have a long shelf life; and given that this product can be expensive, you can use the savings from buying in bulk.

Whatever you do, don't buy a new pet food in bulk—if your pets try it and they refuse to eat it, you'll be stuck with a lot of useless cans. (And if you do do this, donate it to a pet shelter.)

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

7. Toiletries

Household essentials such as deodorant, shampoo, conditioner, and toothpaste are excellent items to buy in bulk. As long as these toiletries are the ones you typically use, you know you'll end up using them all eventually.

Also, brands frequently reformulate these types of products or discontinue them, so if you have a favorite or two, it makes sense to stock up so you can keep using those products for quite a while longer.

Related: 10 Frugal Habits That Make Retirees' Lives Better

8. Menstrual Products

Unless you're planning on becoming pregnant soon, you absolutely never want to run out of menstrual products—so you might as well buy in bulk. Doing so can help you keep an emergency stash in purses, suitcases, and other strategic locations.

The "pink tax" is real, so you should save money in this department whenever possible. And they're durable—the shelf life for these products is about five years.

If you do end up with more than you need, menstrual products are a wonderful item to donate to homeless or women's shelters.

Related: 10 Senior Discounts for Restaurants + Grocery Stores

9. Dry Snacks

The expiration dates for dry snacks vary. For example, unopened potato chips usually last only one month past the expiration date, while crackers and pretzels can often last up to three months. Unpopped popcorn is usually good for up to one or two years.

So, you'll want to be selective about buying dry snacks in bulk, as some of them don't last as long as other items on this list. Still, for families, they can be worth buying in large quantities.

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10. Gift Wrap + Greeting Cards

Assuming you have sufficient storage space, you can save a significant amount of money by bulk-buying gift wrap, tissue paper, and greeting cards when they are on sale.

Here's a tip: If you stick to solid colors or non-clearly-holiday-related patterns, you can use gift wrap for any occasion throughout the year. You never know when an event might warrant a gift or card, and it's much easier to be prepared than to grab something last minute.

Related: How to Get Free Stocks for Signing Up: 10 Apps w/Free Shares

11. Trash Bags

We could all do better by the planet by producing less trash, but we still have to contain whatever we throw away. Trash bags can literally last for decades, and you regularly use these household items, so you should heavily stock up on them when they go on sale. Buying larger rolls of bags doesn't take up much extra space either. You can find bulk deals on these at standard grocery stores, wholesale clubs, and mass merchants.

Related: 60 Personal Finance Statistics You Might Not Know (But Should!)

12. Dried Beans

Beans are a staple in many people's diets and a healthy meal addition. Dried beans are considered non-perishable, though they start to lose some of their nutritional value after two to three years.

Some people prefer dried beans over canned ones because they aren't full of sodium and are usually more affordable. You can already save money buying dried beans over canned; and when you buy in bulk, you can increase your savings.

Related: How to Get Free Money Now [12 Ways to Earn Money]

13. Vitamins (Sometimes)

The "best before" date for pill-form vitamins varies, but it's usually at least two years. Since most vitamin-takers have their pills daily, it can make sense to buy your vitamins in bulk for a cheaper price. Even at a regular grocery store, it's usually easy to find what you need in larger bottles. (Plus, staring at a big ol' bottle every day might help you remember to take them.)

Chewable or gummy vitamins will have a shorter shelf life. These absorb moisture, become sticky, and tend to degrade faster. Even if these still provide nutrition, they become less appealing as time goes on, and thus, they're not a good bulk purchase. (By the way, to make these kinds of vitamins last longer, keep them stored in a cool, dry place.)

Related: 31 Millennial Spending Habits & Income Statistics to Know

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14. Batteries

Batteries have one of the most impressive shelf lives on this list, lasting anywhere between 5 to 12 years depending on the fuel (alkaline, lithium, etc.). And because they're pricey, it definitely makes sense to buy them in bulk. Besides, you never know when a device's batteries are about to die or when you'll get a new product that needs batteries, so it always makes sense to have extra batteries on hand.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

Related: 7 High-Quality, High-Yield Dividend Stocks

It’s difficult to resist the charm of high-yield dividend stocks. Their ability to generate outsized amounts of cash makes them the stuff of dreams for those living on a fixed income—as well as for any investors who simply want a little performance ballast during periods of rough stock-price returns.

But we prefer quantity and quality. For instance, our favorite high-yield dividend stocks deliver much sweeter yields than the average stock, show more signs of fundamental quality than most, and have the confidence of Wall Street's analyst community.

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No one's sneezing at 20% off lunch or a cheaper roller-coaster ride. But if we had to pick out a downside of many of these discounts, it's that they're frequently a one-off deal. They're still appreciated, but unless you're eating at a particular restaurant or staying at a certain hotel brand's properties many times a year, they might not make a notable difference in your monthly budget.

That's not the case with today's topic: senior discounts for memberships and subscriptions. Depending on the frequency, these deals could keep you saving every year, every month … even every week on store purchases, phone service, gyms, and more!

Let's talk about some of the most interesting discounted subscriptions and memberships for seniors. 

Age-Based Discounts 

The senior discounts we're going to talk about today fall into one of two categories: age-based, and AARP-membership-based.

Let's start with senior discounts that are only given out once you reach a certain age. The minimum age to be considered a senior may vary from one deal to the next.

1. HelloFresh

--Required minimum age for discount: 60

Meal kit company HelloFresh aims to make it easier for you to cook healthy meals.

HelloFresh lets users choose from among 60 recipes and more than 100 market items (a wide variety of food items including salads, sandwiches, desserts, sides, spice blends, and grocery essentials, among other things). Food is delivered straight to your door, saving you a trip to the grocery store. It's a high level of convenience that many seniors might appreciate.

The cost of your meal plan depends on the number of meals you choose and the number of servings per meal. Based on standard (non-senior) pricing, if a couple wanted three meals per week for two people, the cost would be $70.93 per week. If that same couple decided they wanted four meals per week for two people, the cost would be $90.91 per week.

Seniors age 60 and older enjoy discounted pricing, however:

--40% off your first box

--30% off your second box

--10% off all boxes after that.

You'll be asked to upload an ID to verify your age. You can pause, skip a week, or cancel your subscription at any time. 

Editor's note: HelloFresh's marketing is, ahem, aggressive. If you cancel, expect them to keep contacting you for a while to see if you'll return.

Related: How to Invest for (And in) Retirement: Strategies + Investment Options

2. Sam's Club

--Required minimum age for discount: 50

Walmart's warehouse club, Sam's Club, boasts nearly 600 locations across the U.S. and Puerto Rico, so there's a good chance there's one near you.

If you want to shop at this membership-only warehouse chain, you must choose between two member tiers:

Club ($50/year)

--Two membership cards

--Sam's Club Mastercard (optional)

--Instant store and online savings

--Member-only fuel savings

--Mobile Scan & Go

--Free curbside pickup on orders of $50 or more

--100% satisfaction guarantee

Plus ($110/year)

--Everything in the Club tier, plus …

--2% "Sam's Cash" back on purchases (can earn up to $500 annually)

--Free select same- or next-day free delivery from your local club on eligible orders over $50

--Free shipping on eligible orders over $50

--Shop up to two hours early

--$0 prescriptions on up to 10 select generic medications

--Additional savings on pet prescriptions

--40% off additional pairs of glasses after buying one pair

--50% off tire and battery installations

Seniors age 50 and older can get a stellar deal—a Club membership for just $20 per year, or a Plus membership for just $60 per year!

To sign up and receive your discounted price, you must verify your eligibility with ID.me. You also must be a new member who has not had an active membership in the past six months.

Related: 10 Products You'll Regret Buying at Sam's Club

3. YMCA

--Required minimum age for discount: Varies by location

The YMCA is a nonprofit organization with a presence in roughly 10,000 communities nationwide. 

Many people know "the Y" for their sports programs and athletics facilities, but the YMCA also provides summer day camps, a variety of development programs (including leadership, academic enrichment, and career readiness), even child care services.

Pricing for YMCA memberships varies by location, but they frequently offer senior discounts.

For example: The YMCA closest to me offers adult memberships (ages 27-59) for $53 per month. Memberships for people ages 60 and older are only $48 per month, so a roughly 9% discount. There is also a Senior +1 option that includes membership for one person aged 60-plus and another adult from the same household for just $67 per month—37% less than you'd spend by purchasing two adult memberships at full price, and 9% less than you'd spend by purchasing a family membership at a full price.

The minimum age to qualify for a senior discount varies by location as well. While senior pricing starts at 60 years old near me, I've seen it start at slightly higher ages (such as 62-plus) elsewhere. 

Verify the requirements at the YMCA you plan to join. Also inquire about whether your YMCA charges a joining fee in addition to the monthly rate.

Related: 12 Free Things for Seniors to Do

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4. America the Beautiful Pass

--Required minimum age for discount: 62

Similar to how people get an annual membership to Disney or Six Flags, it's possible to get an annual membership to America's national parks and federal recreational lands.

The America the Beautiful Pass is your ticket to a national nature immersion. These passes cover entrance fees and standard amenity (day-use) fees at lands managed by the following:

--National Park Service

--U.S. Forest Service

--U.S. Fish & Wildlife Service

--U.S. Army Corps of Engineers

--Bureau of Land Management

--Bureau of Reclamation

A standard annual pass costs $80. But there are two special deals for seniors who are at least 62 years old: 1.) Senior Annual Passes cost just $20, while 2.) Senior Lifetime Passes cost just $80.

These special passes may also provide a 50% discount on some amenity fees charged for facilities and services. Passes can be bought in person or ordered online at nps.gov.

Related: 10 Senior Discounts for Restaurants + Grocery Stores

5. T-Mobile

--Required minimum age for discount: 55

Wireless network operator T-Mobile has turned telecom's "Big Two" into the "Big Three," boasting more than 100 million postpaid customers, plus an additional 25 million prepaid customers.

I'm a T-Mobile customer, and my favorite feature is the ability to travel and still use my phone data for free. With qualifying plans, you pay no data roaming fees or hidden charges when you travel. I can attest that, when I traveled to Costa Rica and Grand Cayman Island, I had to take no action and my data worked just fine.

If you plan to spend your retirement traveling, T-Mobile's plans might be a good fit for you.

T-Mobile offers special pricing for seniors age 55 and up—specifically, $5 per month off one of several different plans. All eligible plans include at least 50GB of data; higher-tier plans include additional benefits.

Seniors must be at least 55 years old to qualify. Discounts are available only to new customers.

Related: How Much Social Security Will I Receive?

6. Anytime Fitness

--Required minimum age for discount: Varies by location

Anytime Fitness is a network of more than 5,000 gyms. In addition to enjoying 24-hour access, members can receive a free fitness consultation, personalized plan, and access to personal and group training.

Pricing varies by location, and Anytime Fitness is known for aggressively discounted sign-up deals as low as $10 per month, but the gym itself states that the average monthly membership costs around $53.

Anytime Fitness commonly offers senior discounts, but frustratingly, there is no brand-wide standard, nor anywhere online that will present location-by-location information. Instead, the gym's website says this:

"Our community is our priority and we are happy to offer student, senior and military discounts as well as insurance discounts. However, it is up to each location to opt-in to offer the discount. It's always best to check with your local club directly to learn what discounts are available near you."

In short: You might be able to go to Anytime Fitness for less as a senior, but age requirement, price, and availability could vary, so call your local gym to be sure.

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Discounts Requiring an AARP Membership

"AARP discount" is often used synonymously with "senior discount." That's because the AARP focuses on helping the needs of people ages 50 and older.

But in reality, you don't have to be a senior to become an AARP member. In fact, you don't have to be anywhere near your first white hair—AARP will let you sign up as early as age 18!

Still, given the substantial overlap between seniors and AARP members, I'm including the following AARP discounts, which require an AARP membership to lock in.

Related: 12 AARP Discounts + Benefits You Don’t Want to Miss

7. Walmart+

Walmart+ is the membership program of ubiquitous big-box store Walmart. And it comes with a lot of perks, including:

--Free delivery from your store

--Free pharmacy delivery

--Free online shipping with no order minimum

--Fuel savings of 10¢ per gallon at over 13,000 stations

--Paramount+ subscription

--Burger King savings

--Pawp membership for online pet care

--Free tire repair and road hazard warranty at Walmart Auto Care Centers

--Up to 5% Walmart Cash on certain travel expenses

--Returns from home

--Mobile Scan & Go

--Early access to deals

A standard Walmart+ membership costs $98 per year (or $12.95 per month). However, AARP members can get $40 off a Walmart+ annual plan, for a final cost of $58 per year.

Better still? This discount isn't a one-shot deal—you can enjoy the discounted rate in perpetuity. However, you must confirm your AARP membership annually, or your plan will be auto-renewed at the full rate.

Related: Walmart Lovers: Don't Make These Shopping Mistakes

8. Ancestry

Have you ever wanted to know more about your family tree? Ancestry helps people learn about their genealogy. The website claims it contains the world's largest collection of online family history records.

Would-be members can choose from one of two memberships:

--A World Explorer package provides access to all U.S. and international records on Ancestry. It's usually $39.99 monthly or 319 annually, but AARP members enjoy a reduced price of $27.99 monthly or $223 annually.

--All Access memberships, at $59.99 monthly or $479 per year, offer full membership to Ancestry as well as Newspapers.com and Fold3.com. AARP members enjoy a lower cost of either $41.99 monthly or $335 annually.

Related: 15 Senior Discounts That Will Save You Money

9. Paramount+

Ready to ditch cable and jump on the streaming services train? Paramount+ is one of the popular streaming options. There are two plans to choose between: 

--Paramount+ Essential ($7.99 per month): Access to more than 40,000 episodes and movies, certain sporting events, and select Showtime series. You can stream on up to three devices at once.

--Paramount+ With Showtime ($12.99 per month): Everything in Essential, plus no ads (except for live TV), access to all Showtime content, the ability to stream CBS live, the ability to stream in 4K UHD, Dolby Vision or HDR10, and the ability to download movies and shows.

AARP members who are new or returning subscribers can receive 10% off any Paramount+ plan. To receive the discount, you'll need to follow the prompts on the Paramount+ website to confirm you have a valid AARP membership.

Related: How to Choose a Financial Advisor

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10. Calm App Annual Subscription

Seniors who are actively looking for ways to maintain or improve their mental health might want to consider the Calm app. 

Calm helps people of any age improve their mental health through mindfulness, which it promotes via 300 sleep stories, meditations, and music.

Calm, which offers a seven-day free trial, costs $69.99 annually, though it also has a lifetime subscription available for $399.99. AARP members can 

Aging comes with both benefits and challenges. Some seniors actively look for ways to maintain or improve their mental health. The Calm app is a popular way for people of any age to improve their mental health through mindfulness. This paid app has over 300 sleep stories, meditations, and music. 

After a 7-day free trial, Calm costs $69.99 annually. However, AARP members can get a $21 discount for up to three years. To take advantage of the offer, you enter your membership number when you create the account, and the discount will be applied automatically.

Editor's note: The AARP discount does not apply to Calm for Life, Calm's $399.99 lifetime subscription.

Related: 12 Free Things for Seniors

Related: When Should You Take Social Security?

Social Security is a pillar of many older Americans’ retirement income. Typically, around 90% of people age 65 and older are collecting Social Security benefits at any given time.

But while most of us will end up on Social Security, when we choose to start collecting benefits will differ from person to person. Our guide to Social Security timing may help you decide.

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Simply being aware of where shrinkflation is happening can help you make better personal finance decisions—you'll shop smarter when you know that price isn't the only way companies are trying to squeeze you. So read on as I show you some of the biggest shrinkflation offenders of the past year or so, then discuss a few ways you can battle rising costs and shrinking products.

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What is Shrinkflation?

Shrinkflation is also referred to as “package downsizing” or the visually amusing term “grocery shrink ray.” Whatever you call it, it’s a weight on consumers’ backs, and it happens more often than we’d like to think.

Companies typically raise prices to keep their profit margins aloft amid higher raw materials prices and rising production costs. But they sometimes go the shrinkflation route because it ruffles fewer feathers while keeping sales volume aloft.

Consumers are pretty quick to notice when a brand starts raising prices. They’re less likely to see that their package of Oreos has two fewer cookies, that their ice cream cartons are a couple ounces lighter, or that their toilet paper rolls have shrunk by 25 sheets.

Case in point: The following 10 shrinkflation offenders are just a small sample of consumer products that aren’t quite as big as they used to be.

16 Shrinkflation Offenders

And now, we cover some of the worst offenders of shrinkflation. If you see any items missing from this list that you think warrant being added to the list, please sound off in the comments section.

1. Toilet Paper

Have you had to buy toilet paper more often? Chances are, a stepped-up BM schedule isn’t to blame.

Toilet paper is frequently subject to shrinkflation. For instance, Charmin’s Mega package of Ultra Soft toilet paper currently offers six rolls at 224 two-ply sheets per roll. That’s down from 244 sheets in 2022, and that’s down from 264 sheets a year or two before that. That’s roughly 15% less per roll in just a few years—and particularly for large family, a need to stock up much more often.

Worse still: The cost hasn’t even remained level. Last year, a six-pack at Target cost $7.59; as of this writing, the price had risen to $7.99. (To be fair, though, some percentage of any good’s rise in price might be attributed to the retailer.)

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2. Chips

If you like to munch on chips, you’re probably a frequent victim of shrinkflation. Almost everyone who loves the crunchy snack has opened a bag and been surprised at the meager contents. In individual bags, you might end up with just a handful.

It’s great if you want a smaller waistline, but it’s bad for budget-conscious snackers.

Frito-Lay actually confirmed the practice to Quartz in 2022, with a representative telling the site, “Inflation is hitting everyone … we just took a little bit out of the bag so we can give you the same price and you can keep enjoying your chips.”

Not that the practice did anything to dent sales. Frito-Lay’s Doritos brand was the top tortilla chip vendor in 2023, selling 1.13 billion units; Frito-Lay’s Tostitos were a (distant) No. 2 at 376 million units.

Related: 60 Personal Finance Statistics You Might Not Know (But Should!)

3. Baby Wipes

Shout-out to MousePrint.org for this discovery, which shows that no age group is immune to shrinkflation.

Take Huggies Simply Clean Fragrance-Free baby wipes, which once boasted a dozen 64-count packs (768 wipes) but dialed that number back to 11 packs, bringing the grand total down to 704 wipes—or 64 fewer wipes.

Babies themselves can’t complain about it, but parents won’t enjoy needing to stock up on wipes more often. (They also won’t enjoy the newfound irony behind the box’s “HUGE VALUE” branding.)

Related: Best Fidelity Retirement Funds for a 401(k) Plan

4. Sponges

Does it feel more challenging to keep your home clean lately? That might not fully be your fault. Some sponges have become thinner and might not be cleaning as well as they used to.

I’ve learned that one of the ways to spot shrinkflation is to pay attention to packaging redesigns. Scotch-Brite recently changed the name and packaging of some of their sponges from “Non-Scratch” to “Zero Scratch.” Scotch-Brite’s marketing claims it’s the same sponge, just with a new name.

It isn’t the exact same sponge, though—it’s thinner than it used to be. The thickness has been downgraded from 0.8 inches (20 millimeters) to 0.7 inches (17 millimeters). Based on Amazon reviews including photos of the sponges still in their packaging, it appears the change happened sometime over the past couple years.

Related: Best Schwab Retirement Funds for a 401(k) Plan

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5. Pet Food

Animals? Sadly, they can’t avoid shrinkflation, either.

Whiskas cat food is among the brands that have reduced portions while keeping the price roughly the same. Specifically, in early 2023, Whiskas pouch sizes were reduced from 100 grams (roughly 3.5 ounces) to 85 grams (roughly 3 ounces).

That could leave some cats unsatisfied, and the last thing you want to deal with is a cranky feline.

Related: Best Vanguard Retirement Funds for a 401(k) Plan

6. Gatorade

“Gatorade not only quenches your thirst better; it tastes better, too!”

Well, bad news for The Waterboy’s Coach Klein: Your sports drink has shrunk, too. Between 2021 and 2022, a standard bottle of Gatorade went from 32 ounces to just 28 ounces—without any concurrent price reduction.

A company representative told Quartz that “we redesigned the bottle, it’s more aerodynamic and it’s easier to grab,” and that the redesign made the bottles a little more expensive—though a marketing professor called shenanigans on a redesign having much financial impact.

Regardless, consumers are stuck with it. But at least they’re, um, generating less drag as they move the bottle toward their mouth?

Related: 5 Best Fidelity Retirement Funds [Low-Cost + Long-Term]

7. Coffee

Many people are practically zombies until their morning coffee caffeine jolt has kicked in. Well, watch out for “walkers,” because you’re now getting less java for your buck—which to me sounds downright dangerous.

One noteworthy culprit is the highly popular Folgers brand. Buyers used to get 25.4 ounces in a container of ground Folgers, but that has been whittled away to 22.6 ounces. (Someone should let the label designers know—the packaging still insists the container will yield 210 cups of coffee. Weak!)

Related: How to Invest in Whiskey [A Not-So-Whiskey Business?]

8. Toothpaste

Obviously, shrinkflation isn’t fun, so allow me to provide a silver lining. At some point, you might not have to worry about specifically looking for “travel-size” toiletries … because everything will already be small enough.

Take Crest 3D White toothpaste tubes, which have shrunk from 3.8 ounces to 3.3 ounces. The change is so recent that some consumers are seeing both sizes next to one another on the same shelves—for the same price. (The text on the box showing the number of ounces has shrunk as well, as if trying to make the change less obvious.)

I’ve noticed another possible sign pointing toward shrinkflation: when a product that has been around for a while suddenly has an influx of new reviews. On the Target app, this toothpaste has a number of March 2024 reviews that state “This review was collected as part of a promotion.” Most of those reviews show a clear photo of the box or tube showing the 3.3-ounce size. Because reviews and photos are sorted by most recent, someone scrolling through would assume that has always been the size—or at least has been for some time. But if you keep scrolling through photos, you can find a photo of the 3.8-ounce product as recently as September 2023.

Related: 12 Best Long-Term Stocks to Buy and Hold Forever

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9. Candy Bars

Less candy is better for your health—and that’s one of the main reasons that candymakers have given as to why they’ve shrunk their chocolate bars and other confections for many years.

Since 2017, several major candy producers—including Nestlé, Mars, and Lindt—have been both more transparent about displaying calorie counts, and about finding ways (read: smaller portions) to reduce the number of calories in their treats.

One of the more creative tactics actually came before this collective push—in 2016, Toblerone bars in the U.K. shrank from roughly 14 ounces to 12.7 ounces, but they kept the packaging the same size by enlarging the gaps in between the chocolate bar’s triangles.

2023’s big candy shrinkflation kerfuffle also came from across the pond, where Mars shrank its popular Galaxy bar from 110 grams to 100 grams.

Related: The 7 Best Dividend ETFs [Get Income + Diversify]

10. Cake Mix

In November 2023, Texas bakery owner Malina Lee was the first to bring public attention to how Betty Crocker reduced the contents of its Super Moist White boxed cake mix from 16.25 ounces to 14.25 ounces. However, the boxes kept the same instructions for items to add to the mix—and the end result was noticeable. Specifically, both the texture and the flavor of finished cakes using the mix changed.

Business Insider reached out to a Betty Crocker customer-care representative who confirmed the change and stated "keeping our products affordable" was important to the brand.

While shrinkflation in general is consumer-unfriendly, this is a particularly pernicious version in that they're not just giving you less—they're ultimately changing the end product. It's like tweaking the formula of Coke.

Related: The Pink Tax: Why Being a Woman Is So Expensive

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11. Oreos

My brother-in-law is a big fan of Oreo torte, so I made him some for his birthday in fall 2022. I went out and bought a 20-ounce package of family-sized Double Stuf Oreo Chocolate Sandwich Cookies.

Fast forward a year, and my BIL was a year older … but the Oreos had gone in reverse.

The family size pack is now just 18.71 ounces. Worse? Not only did the package get smaller, but the price went up, too. In 2022, I paid $4.39 for those Oreos at Target. Now, the smaller family-size package is priced at $5.19.

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12. Shampoo

Your shampoo bottle is getting emptier more quickly, too. One of the most drastic examples: A container of Suave shampoo collapsed from 30 ounces to 22.5 ounces, which kind of makes you want to “wash” and “rinse” but skip “repeat.”

Shampoo isn’t the only hygiene product shrinking either—soaps, makeup, lotions, and more are coming in lighter than in previous years.

Related: 20 Junk Fees We Hate Paying [And How to Avoid Them]

13. Cereal

Are families getting smaller? Because “family size” cereal boxes are.

In July 2022, a family size box of Kellogg’s Special K held 18.8 ounces. Fast-forward to today, and the innards have shrunk a bit, to 18.2 ounces. That’s not a huge change, but it’s a change in the wrong direction. (Also, heading in the other direction is price; the box previously priced at $4.29 at Target, and now it's $5.29!)

This isn't the only Kellogg’s box that’s wasting away. A “large size” box of Corn Pops has gone from 14.6 ounces to just 13.1 ounces.

14. Coca-Cola Products

Coca-Cola products are hardly limited to just Coke and Diet Coke. The company owns more than 400 brands in over 200 countries, spanning sodas, juices, teas, coffees, and more. And the company's representatives aren't shy about shrinkflation—they've outright told investors that it's part of their current strategy.

"One of the recession behaviors tends to be to try and reduce the dollar outlay of the basket and therefore the price point becomes even more important than the price per liter," Coca-Cola CEO James Quincey said during a 2022 investor and analyst call. "So around the world, that's absolutely what we're pursuing, whether it's in the U.S., having smaller bottles or smaller multipacks."

For example, two years ago, Mouseprint.org showed how Gold Peak tea went from 64 fluid ounces down to 59. And it has shrunk even more since then, all the way down to 52 fluid ounces! That's a nearly 20% reduction in just two years!

Of course, Coca-Cola doesn't back down from good, old-fashioned inflation, either. In February 2023, Quincy said that because its classic Coke and Fanta sodas had topped the beverage category, they had "earned the right" to jolt prices even higher.

Related: Drip Pricing: How You're Being Tricked [And How to Stop It]

15. Taco Shells

Does Taco Tuesday not leave you satisfied quite the same way it did several years ago?

Well, around the fall of 2022, Ortega gave its taco shell packages a new look—but the box design wasn't the only change. They also reduced the net product weight from 5.8 ounces to 4.9 ounces.

To be clear: You're still getting 12 yellow corn shells per package. Which means you're getting smaller tacos.

Related: 12 Annoying Banking + Credit Card Fees [Can You Avoid Them?]

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16. Services

Consumer goods are obviously the main source of shrinkflation—but they’re not the only source. Even some included services are being reined in while costs are holding steady.

A great for-instance: hotel housekeeping. Hotels quickly pared back daily room cleaning amid the COVID-19 outbreak because many guests balked at the idea of a stranger entering their room. Makes sense ... but when the worst of the pandemic receded, regular cleaning didn’t snap back. Many hotels still either offer less frequent cleaning during stays, or only offer intra-stay cleaning upon request.

You also see another variation of shrinkflation in hotels: toiletries. Numerous hotel chains have eschewed mini-bottles of shampoo and tiny soap bars, instead opting for large, refillable pump-bottles of body wash and hair-care products bolted to the walls.

Shrinkflation has hit your journey to the hotel, too. Airlines have notoriously pulled back in all sorts of ways, from reducing seat size to eliminating free checked bags.

Related: The 7 Best Dividend Stocks for Beginners

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How to Combat Shrinkflation to Save Money

While complaining about shrinkflation might feel cathartic, it doesn’t actually save anyone any money. Even the president has noticed the prevalence of shrinkflation. During President Biden's recent State of the Union speech, the White House called out companies for practicing shrinkflation and said it needs to stop. Fortunately, there are a few ways you can reduce your costs as shrinkflation spreads.

1. Be Wary of Package Redesigns

Do brands sometimes redesign packages just to give them a fresher look? Absolutely. But sometimes they purposely redesign products when they are making them smaller to make the shrinkage less obvious.

If a brand you buy undergoes a redesign, that’s a great time to check to see whether the amount of product is the same. You probably don’t have product design memorized, of course, but if you shop on websites or a store app, you can look at past purchases to see whether the amount listed on the old packaging is the same or less.

If you’re getting less, it might be time to consider an alternative.

2. Price Compare

Your current brand choice might not necessarily be the most affordable option—even if you opt for generic products! Check out price labels to see how many ounces, pounds, milliliters, etc., you’re getting per unit. This is the easiest way to directly compare which product is giving you the better deal.

Interestingly, buying a product in bulk doesn’t always save you money, so it’s worth comparing different sizes of the same product as well.

3. Switch to Reusables

Toilet paper prices stressing you out? Consider switching to a bidet to reduce how much toilet paper you need to buy. Yes, you might have to pay more upfront, but it should save you money over time.

For less extreme methods, consider that paper towels can be switched out for reusable washcloths, and single-use water bottles can be subbed out for reusable ones. (If you’re worried about water taste, you can even get water bottles with built-in filters.) And in many cases, reusables don’t just save money on groceries—they’re better for the planet, too.

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Related: The 10 Best Dividend ETFs [Get Income + Diversify]

We love exchange-traded funds (ETFs) because they can provide one-click access to hundreds, even thousands of stocks, while charging often minuscule fees.

One way to put that low-cost diversification to work? Collecting dividends. But trying to choose from literally hundreds of income-producing funds could take up a lot more time than you have. So let us help you narrow the field—check out our list of ten top dividend ETFs.

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And make no mistake: elderly fraud is big business, too. Data from the Federal Trade Commission (FTC) Consumer Sentinel Network shows that in 2023, adults aged 60+ reported 289,971 cases of fraud totaling a loss of more than $1.4 billion.

Financial fraudsters have built hundreds of different schemes meant to cheat money and/or sensitive information from people, businesses, even governmental organizations. But the scams sometimes differ depending on who they’re targeting. So today, I’m going to talk about some of the most popular elderly scams—including what the scam is, what the scammer is hoping to obtain, and how to avoid falling victim.

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A Note From the Editors About This Article

One of the biggest challenges surrounding fraud is how people think about susceptibility to scams.

For one, many people regardless of age think they’re too intelligent to fall victim to a scam. That argument might hold water … if scams were just about smarts. Scams are largely about manipulating people’s emotions and catching them off-guard. And everyone has emotional weaknesses. Everyone can get caught off-guard.

Consider this: Charlotte Cowles, a financial advice columnist for New York Magazine—seemingly the kind of person that would be most immune to fraud—recently published a story about how she was scammed out of $50,000. Many people read the article, observed all of the red flags, and asked, “How could this person be so stupid?”

The answer? It has nothing to do with stupid. As Cowles points out, data shows that well-educated people are just as vulnerable to scams as everyone else. The perception that the elderly are more susceptible to fraud is also built on shaky ground; Cowles cites FTC data showing that younger adults are more likely to report losing money to fraud than people over 60.

Regardless, this brings us to the second aspect of people’s views on scams: shame.

You don’t have to go far on the internet to see how virulently people talked about Cowles in the wake of her story. Again, that’s because people believe falling victim to a scam makes you dumb. But it doesn’t. Many scammers are professionals who know how to play peoples’ emotions like a fiddle.

This belief is toxic. It makes people less likely to ask for help when they think they’re about to be scammed, in the process of being scammed, or have already fallen for a scam. And all that does is compounds an already awful problem for would-be and actual victims.

Our advice? When it comes to fraud, don’t judge, and don’t let yourself be judged. Don’t think you’re above being scammed, and don’t be afraid to seek help the second you think you might be a target of fraud.

Scams for Older Adults to Avoid

No age group is immune, but scams targeting the elderly are particularly common.

1. Medicare Scams

Medicare scams can happen any time of the year, but they often increase during the annual Medicare Open Enrollment Period.

What scammers do: A caller pretends to be a Medicare representative. The scammer might offer free items or say there is a problem with your account, such as (ironically) fraudulent activity.

What scammers want: The purpose here is to gather personal information, such as your Social Security number, Medicare number, or other information that can be found on your Medicare card. Occasionally, the person might try to get your bank account details.

How to avoid these scams: The FTC explains that Medicare will never call you out of the blue. Nor will it ever try to call you to sell health products or insurance. If you get a suspicious call claiming to be Medicare, hang up. Call your Medicare provider directly to find out if the call was legitimate. You can also call 1-800-MEDICARE if you think you’ve been involved in a scam.

Related: Retired But Too Young for Medicare? Health Insurance for Early Retirees

2. Counterfeit Prescription Drug Scams

Prescription drugs can be expensive; senior citizens in particular might have several pricey medicines. So, it should be no surprise that people try to find more affordable deals—and sometimes those deals are too good to be true. Literally.

What scammers do: In this ploy, the fraudster creates fake online deals for popular, expensive medications. In all cases, the scammers will take your money—sometimes they will send you nothing in return, and other times, they’ll send a potentially dangerous counterfeit drug.

What scammers want: Simple: The thieves want money.

How to avoid these scams: Always discuss online prescription services you’re considering with your doctor and only purchase prescriptions online from a pharmacy approved by the National Association of Boards of Pharmacy.

Related: How to Negotiate Medical Bills in Collections [13 Steps to Follow]

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3. Robocall Voice Recording Scams

Nowadays, many calls require you to respond to automated questions before you can talk to a real person (if you even get to talk to a real person). Scammers have learned how to take advantage of this system through phone scams.

What scammers do: You receive a phone call from an unknown number and answer it. Caller ID might show the number has a local area code, but just know there are ways to make the number appear that way, even if the call isn’t local. In the most popular version of this scam, a voice asks if you can hear them. After you answer “yes,” and sometimes after you confirm your name and other information, the person hangs up.

What scammers want: In this scam, the robocall is recording your voice. The edited recording may be used to authorize purchases in your name over the phone.

How to avoid these scams: In general, don’t answer phone calls from somebody not saved in your phone. (And be aggressive about saving numbers you call or receive calls from frequently so you’re not forced to guess as much.) Usually, if a call is important, the person will leave a message and you can call back. Even then, be careful—if you’re given a call from someone purporting to be with, say, your credit card or local hospital, don’t use the number they’ve given you. Instead, go directly to the provider’s website and find a number where you can call them directly to inquire about whether they called.

By the way, it’s very easy to accidentally pick up these calls. If you ever do, and they ask you questions (especially “whether you can hear them”), either hang up or wait to see if they provide more information showing trustworthiness. Many times, the person on the other line is just a recording and doesn’t actually respond to anything you say.

If you receive a call like this, report the fraudulent call to the Better Business Bureau’s ScamTracker. And if you accidentally respond “yes” during a call you fear is a scam, report the call—then keep an extra-close eye on your bank and credit card statements to watch for unauthorized charges.

Related: 11 Ways to Avoid Taxes on Social Security Benefits

4. Bereavement Scams

Scammers can learn about newly deceased people and the survivors’ names through obituaries and even social media posts. And they often prey on people as they grieve.

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What scammers do: In some scams, the grifter will pretend the deceased person had outstanding debts with them. In other scams, the thief will pose as a lawyer and say they’re executing the will and testament … and require personal information or payment to do so. And in still other scams, someone will call pretending to be the funeral home and ask for additional money they claim was unpaid.

What scammers want: Money, plain and simple.

How to avoid these scams: It’s important to know your rights regarding a deceased family member’s debts. Even if a legitimate debt collector calls, you usually aren’t responsible for another person’s debts. Instead, debts are paid from a person’s estate, which the executor of the estate handles. Unless you’re confident about a person’s identity, don’t share personal information about yourself or the deceased person with someone online or over the phone. Also, funeral homes are required to provide contracts that state all terms and costs of the funeral; they will never ask for more money than what was originally owed.

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5. Tech Support Scams

Older generations are stereotyped as not being tech-savvy. As a result, they are frequently a target for technical support scams.

What scammers do: This scam often comes in the form of pop-up messages on a computer or text messages on your phone. It says there is something wrong with your device and provides a number you can call for assistance in fixing the problem. Once you call, you may be asked for further information or to provide remote access to your device.

What scammers want: These fraudsters typically want access to either your devices (computer, phone, etc.) and/or bank account. Either way, a plethora of useful information is available to them.

How to avoid these scams: Any time a message provides a phone number purporting to be for a legitimate company, compare the phone number to the one listed on the official website. When in doubt, always call the number listed on the official website.

I once received a fairly convincing-sounding text message on my iPhone that claimed to be Apple. I called Apple support from the official phone number on the website and a representative confirmed my suspicion that it was a scam message. Keep in mind that tech support generally doesn’t contact you to fix an issue—they usually wait for you to contact them if anything is wrong.

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6. Anti-Aging Beauty Scams

Nobody has found and bottled up the Fountain of Youth, but scammers try to convince people otherwise. This scam exploits people’s desires to look younger or even reverse the skin’s aging process.

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What scammers do: Fraudsters market unproven anti-aging products by either showing photos of real models but lying about their ages, or showing doctored photos.

What scammers want: It’s a money grab. Victims pay for cheap products that can’t provide the claimed results.

How to avoid these scams: If before-and-after images look too good to be true, they almost certainly are. Avoid any products that claim extreme, unrealistic results. The reviews from “real customers” are likely fake as well. Instead, stick to products that advertise more realistic outcomes. If you want to know what works, either seek out legitimate review sites or stick with recommendations from people you know.

Related: How Much to Save for Retirement by Age Group

7. Grandparent Scams

Scammers will send emails or even boldly make phone calls pretending to be someone’s grandchild.

Related: Best Investments for Grandchildren: Ways to Save and Invest

What scammers do: Scammers will prey on your desire to help out your family by posing as a grandchild in need of money. They frequently make up an urgent situation that makes your brain panic and fail to realize the voice (or writing style) is nothing like your grandchild’s. One twist on this scam involves the scammer pretending to be not your grandchild, but instead a doctor, police officer, or another person of authority claiming you must send money for a grandchild’s medical procedure, bail, etc.

What scammers want: Money, money, money—often in the form of a money transfer, but sometimes in the form of gift cards. Again, there will typically be pressure to send this money immediately.

How to avoid these scams: If it’s an email, don’t respond. If it’s a call, tell them you’ll need to call them back and write down the number. Scammers will insist you stay on the phone because the scam relies on your gut reaction to help. In both situations, always contact your grandchild directly with the contact information you already have. (If you don’t have it or know it, reach out to their parents.)

Related: 10 Common Myths About Taxes in Retirement

8. Investment Scams

You might be nearing retirement, or already in it, and it’s clear your budget needs to be tight. So, wouldn’t it be nice if there were an investment opportunity with extremely high returns available to you? Scammers want you to believe there is and that they hold the key to unlock those returns.

What scammers do: Scammers claim you can make a substantial amount of money quickly, easily, and with little to no risk, if you take part in their investment opportunities. Often, the investment is said to be related to real estate, cryptocurrency, or precious metals and coins.

What scammers want: These thieves want your money. To take part in the investment opportunity, you’ll either have to pay for training or seminars, or give your investment money directly to participate in a “black box” system.

How to avoid these scams: Stick to buying investments through trusted sources, such as big-name brokerage firms. Don’t trust any investment opportunity that promises astronomical returns.

Related: 5 Best Vanguard Retirement Funds [Save More Money for Less]

9. Zoom Phishing Scams

Zoom’s video conferencing software increased in popularity during the pandemic, and scammers took advantage. Because of the stereotype that senior citizens are less knowledgeable about new technology, this scam targets older people more frequently.

What scammers do: Fraudsters send an email or text with a Zoom logo stating that your Zoom account has been suspended and you need to click to reactivate it. Or, it might welcome you to the service and ask you to click to activate your account.

What scammers want: The hope here is clearly that you click the link. When you do, the link will download malware on your device unless your device has antivirus or other measures that will prevent it from doing so. Alternatively, the link might lead you to a page where you need to enter your Zoom username and password or create an account. However, because many people reuse usernames and passwords across different platforms, they might use that information to try to log into other accounts (bank, subscription, etc.) you hold.

How to avoid these scams: If the sender’s email information isn’t from Zoom.com or Zoom.us, it isn’t from Zoom. Don’t click the link. Instead, contact Zoom through the official website to ask whether there is a problem with your account.

10. Sweepstakes + Lottery Scams

Congratulations, you’re a winner … or are you? If you enter a lot of contests, it can be challenging to remember all of the ones you’ve entered. And if you’ve been told you’ve won, it can be really easy to assume it was a contest you entered.

Related: What's The Tax on Lottery Winnings?

What scammers do: A scammer will tell you via email, physical mail, social media message, or text, that you’ve won a contest—but you must take certain actions before your prize can be released.

What scammers want: Usually personal information, but sometimes money. You’ll often be asked to fill out and return an IRS Form 1099-MISC so your “winnings” are properly reported to the IRS. That form has personal information, including your Social Security number, that you don’t want to give to fraudsters. Occasionally, victims might be asked to send money to unlock the prize.

How to avoid these scams: Ideally, you should track every contest you enter, though that is a lot of work. So the next best thing is to be mindful of the various ways scammers give themselves away.

If you received your notification in an email, look at the sender’s email address. Is it a complicated-looking email with a long stream of random letters? Then it’s almost certainly a scam. Does the email include the company’s name, but it’s slightly misspelled? (Faceboook, for instance.) Is there a zero where the letter “O” should be? (Faceb0ok, for instance.) If so, it isn’t real.

Be wary of emails or physical mail that don’t use your name, spell it wrong, or address you by your email address. Scammers can mass-email people without making it look like it did, but they’re often sloppy and you can tell the email was sent to multiple people. Real companies don’t show you other people’s emails. (And especially for large prizes, it’s unlikely multiple people have won.)

On social media, you’ll be contacted by the company’s official account if you’ve actually won—not some random person. When in doubt, contact the official account (which usually will have a checkmark) independently to ask whether you’ve won a contest.

I can tell you I’ve been personally targeted by this scam. I’ve entered Instagram contests where you leave a comment on a post to enter. Scammers often look through the comments of a real contest, then contact those people in a message to say they’ve won. But because the message didn’t come from the official account, I didn’t reply, and thus I didn’t fall prey to the scam.

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Related: 12 Best Apps That Give You Money for Signing Up [Free Money]

11. Romance Scams

Dating is a challenge at any age, and you always risk speaking to someone who has no intention to get in a real relationship. Thus, romance scams tend to target adults of any age—though some scammers focus specifically on older adults who might be unaware of how technological advances have made these scams seem far more realistic.

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What scammers do: The scammer starts talking to you, usually through a dating app or social media, and pretends to be interested in a romantic relationship. This person likely doesn’t live nearby (or pretends not to). Communication is usually through only messages and phone calls. They might send you pictures and even videos frequently, but the person will shy away from live video.

What scammers want: Romance scams usually target your money. Once you start to develop feelings for the person, they’ll ask for money. The money might purportedly be for a plane ticket to visit you, but it might be for something more dire—they don’t have money for a phone bill or rent. They might even be facing a dire situation. Victims of this scam end up paying anywhere from tens to thousands of dollars believing the person on the other end truly does want a relationship.

How to avoid these scams: Everything a person has said may be a lie. Pictures can be stolen or photoshopped. Videos—even live video!—can be manipulated through filters and other edits. So, make a strict rule for yourself: Don’t send money to somebody you’ve never met in person, even if you feel like you know the person well. Even then, be extremely wary of financially helping a romantic interest until you’ve established a true, longstanding relationship.

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12. Social Security Scams

Scams where people pose as Social Security employees are extremely common.

What scammers do: You’re told there is a problem with your Social Security account or your benefits. They pretend to want to help you resolve the issue. In particularly well-designed scams, they might even provide a fake badge number or even a real employee’s name.

What scammers want: Your personal information.

How to avoid these scams: Typically, if the Social Security Administration actually does run into an issue with your Social Security number and/or account, they will mail a letter first. The Social Security Administration itself says “Generally, we will only contact you if you have requested a call or have ongoing business with us.”

But even when a representative does call, they will not threaten you with arrest or legal action, demand any immediate payment, or suspend your Social Security number. They also don’t request payment via gift cards, cash, prepaid debit cards, wire transfers, or internet currency. If any of the above occurs during a call, hang up.

Related: Don't Believe These 17 Social Security Myths

13. IRS Impersonation Scams

These grifters pose as IRS agents.

What scammers do: Victims are contacted and told they owe back taxes or other penalties. They might threaten you with legal consequences. Alternatively, a scammer might send you a text message about a tax refund or rebate.

What scammers want: Money, though sometimes, also information. Any funds you send back to pay back fake debts don’t go to the government, but instead into scammers’ pockets.

How to avoid these scams: The IRS will never ask you to make any sort of payment via wire transfer services (like MoneyGram), gift cards, or cryptocurrency. They also won’t call, email, text, or contact you on social media to request personal information, such as your SSN. In general, the IRS will almost always try to notify you of any issues via mail first. If you haven’t received mail about a specific issue prior to hearing from someone purporting to be the IRS, chances are, you’re talking to a fraudster.

If you do fall victim of an IRS impersonation scam, report it to the FTC here.

Related: 'Dirty Dozen': 12 Tax Scams to Watch Out For [And How to Avoid Them]

14. Online Shopping Scams

Shopping online is convenient, but it also comes with some risks.

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What scammers do: Fraudsters create fake websites and offer seemingly high-quality products at unrealistically low prices. The website might try to seem more legitimate by including fake reviews and advertisements. It might even steal logos from real brands. However, after purchasing from these websites, you either receive an item that is nothing like the photos or description … or you get nothing at all.

What scammers want: Like with most of these elderly scams, fraudsters keep your money without holding up their end of the bargain. Worse? Some might save your payment information to make unauthorized purchases elsewhere.

How to avoid these scams: There are several red flags to watch out for when buying products online. To start, if a product has an insanely low price, you should probably avoid it. A website without any terms and conditions or privacy policy is likely fake. Also avoid any websites that want you to pay by money order or pre-loaded cards. You might want to check with the Better Business Bureau, but understand that some legitimate businesses are not listed there. In general, play it safe: If you even suspect an ecommerce site is fake, buy from a trusted site instead.

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15. Charity Scams

These scams prey on your generosity to help those in need.

What scammers do: Someone reaches out asking you to donate to a cause. They might ask you to donate to an organization that doesn’t actually exist, or ask you to donate to a real organization but give you false information. This scam is most popular during the holiday season and after highly publicized tragic events (such as natural disasters).

What scammers want: Your money. You think you’re helping the world, but you’re just helping line a fraudster’s pockets.

How to avoid these scams: If you’re asked to donate to a charity you’ve never heard of, check to see whether it exists on sites like Charity Navigator, which vets U.S. charities. Also, only donate through official means. Even if you’re called by an organization you typically donate from, tell them you’ll call them back at the charity’s official number. (Or donate from official mailers or online at the charity’s website.)

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Best Practices for Avoiding Scams

In general, if you want to avoid falling prey to any scams—including the ones above—here are a few things you should always keep in mind.

1. Beware anyone asking to be paid in gift cards.

Legitimate businesses and government entities do not want to be paid in gift cards. But scammers love them because they're impossible to refund and difficult to trace.

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2. Beware anyone pressuring you to act right now.

Pressure is one of fraudsters' top weapons: They want you to act before you think. However, whether it's an actual official contest award or a government entity trying to get in touch, any legitimate organization is going to give you time to act. If you're ever being pressured on the phone, tell them you'll call back using their officially listed number. If the person on the other end tries to keep you on the phone, chances are, you're dealing with a scam artist.

3. Don't share personally identifiable information when someone contacts you unsolicited.

This applies whether it's a call, social media, text, email—you name it. If it's someone purporting to be a person you know or a company you do business with, don't share that information. Instead, look up their number, email, etc., on their official company website, and reach out to them to ask whether they called asking for that information.

4. Be familiar with cybersecurity best practices.

Many scammers will try to get you through your computer, tablet, or smartphone. So you'll want to read up on how to protect yourself from cybercrime, which includes best practices such as using strong passwords, enabling two-factor authentication (2FA), and being careful when dealing with emails and links.

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But in many cases, an employee's total compensation is made up of much more than just their salary—it includes a wide variety of benefits whose worth could total in the hundreds, thousands, or tens of thousands of dollars (or even more)! So if two potential employers offer the same salary, the one with a better compensation package might win out. In fact, benefits can be so substantial that the best financial decision is to take the lower of two salaries just to get them.

Today, I'm going to talk about financial considerations (outside of salary) that you should be aware of during your job search and negotiations. And I promise you: Annual company pizza parties are not included on this list.

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Don't Forget About These Forms of Financial Compensation

When you're choosing a job, you'll consider any number of factors, and many of them won't directly involve pay—job responsibilities, competent leadership, and workplace culture among them.

That's not what I'm talking about today.

The following list of perks are all financial in nature, whether it's giving you more money or even helping you save money. But ultimately, each of these forms of compensation impacts your bottom line, so understand where your company stands on them before choosing a new job.

1. Retirement Plan Contributions

We frequently harp on about the importance of saving money for retirement. Tax-advantaged workplace retirement plans are among the easiest (and most beneficial) ways to do so. 

That's in part because of the tax benefits—but also because employers can (and typically will) contribute to those retirement plans. In fact, according to the Plan Sponsor Council of America, a trade group, roughly 98% of companies that offer a 401(k) plan regularly contribute to their employees' workplace retirement accounts. That occasionally is a straight-up contribution regardless of whether you put a single penny into your 401(k). But most of the time, you'll be offered an employer match—25%, 50%, 75%, even 100% of your contributions, usually up to a percentage or dollar limit. That's effectively free money.

And the generosity of an employer match could easily tip the scales between two job offers. Consider these two scenarios:

1. Company A offers a salary of $80,000. It also offers a dollar-for-dollar match on contributions of up to 3% of your salary to your 401(k) account. So as long as you contributed at least $2,400, your employer would also contribute $2,400. Assuming no other compensation, your total compensation package would be $82,400.

2. Company B offers a salary of $77,000. It offers a dollar-for-dollar match on contributions of up to 10% of your salary to your 401(k) account. So as long as you contributed at least $7,700, your employer would also contribute $7,700. Assuming no other compensation, your total compensation would be $84,700.

Despite a lower salary, then, Company B's compensation package would actually be more generous. However, that $2,300 annual difference involves socking a lot more money away into your retirement account, so if you need more of your salary to go toward expenditures such as student debt and housing, Company A's offer would actually make more sense.

Related: Should I Pay Off My Mortgage Before I Retire?

2. Workplace Commute

COVID accelerated the rise of remote jobs, but most people still have to commute to work—and even some employers who were remote-friendly are starting to force people back into the office.

You'll hear these return-to-office (RTO) moves as "salary cuts" because suddenly, people have to spend more on a number of things compared to when they were remoting in. That includes the commute, which includes spending money on gasoline, more frequent car maintenance, and sometimes parking. Or it could mean bus or subway fares. 

Plus, time is money for many people, whether that's the ability to work more paid hours at their main job, or having a side hustle—and time spent in transit is time not spent earning more money.

These costs add up to a substantial sum. The average American commuter spent $8,466 on their commutes each year, per a 2022 report from Clever Real Estate. The calculation includes fuel and vehicle maintenance costs, as well as an annual opportunity cost based on the time it takes to get to and from work. (And that doesn't include parking costs for workers who have to eat that expense.)

In some cases, then, a remote or hybrid job with a smaller salary, or even an in-person job with a short transit time, might still make more sense than an in-person job with higher headline pay but a long, costly commute. 

Related: Retired But Too Young for Medicare? Health Insurance for Early Retirees

3. Childcare

Don't have kids or plan to have them in the future? Go ahead and skip this one. But if you do have children, or plan to, working for a company that provides child care or reimburses you for the costs is a major perk.

In 2023, the national average price for child care was $11,582 per child, according to an analysis by Child Care Aware of America. Importantly, that cost can vary substantially by region. For example, in Alabama, the average price for an infant in family child care was $8,186 annually. Comparatively, in New York, the average cost for an infant in family child care was $16,383—more than double that of 'Bama.

Having that large expense covered could definitely offset a lower salary. Plus, if an employer offers onsite child care, you could also save on gas, and you couldn't beat the convenience.

Related: How to Choose a Financial Advisor

4. Paid Parental Leave

Paid parental leave is unfortunately a relative rarity here in the U.S. According to widely cited data from the Bureau of Labor Statistics, as of March 2023, only 27% of civilian employees and private industry workers had access to paid family leave.

If you intend to have children, paid parental leave can stop your paychecks from completely drying up following the birth or adoption finalization. Without any type of parental leave, you might need to take time off work to physically recover from a birth or travel for an adoption. Plus, unless your company covers the costs, immediately returning to work requires most people to start paying exorbitant child care costs.

Offering this benefit helps employers, too. From a 2020 SHRM analysis: 

"Firms that offer paid leave [which includes new child, extended family care, and personal extended medical leave] also attribute boosts in performance to their offerings. When asked how paid leave offerings affect various factors, many say they strengthen employee health and wellness (61%) and engagement (60%); well over half say paid leave offerings strengthen the ability to attract (58%) or retain (55%) talent."

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5. Paid Sick Days

You can religiously take your vitamins, exercise, and get enough sleep, and still end up falling ill. If your job offers sick days, you can simply use them and getting sick won't affect your paychecks, assuming you don't exceed your allotted number of days per year. 

However, if your job doesn't provide sick days (or more commonly, provides too few), you have two options: 1.) Go into work anyways, which won't help you recover and risks infecting coworkers and customers, or 2.) Take one or more unpaid days off, which many Americans can't afford to do.

Data from the Bureau of Labor Statistics shows that the percentage of civilian workers with access to paid sick leave in March 2024 was as follows:

-- Companies with 1 to 49 workers: 72%

-- Companies with 50 to 99 workers: 76%

-- Companies with 100 to 499 workers: 88%

-- Companies with 500+ workers: 90%

While most companies offer at least some sick leave, you can see that not all do, and it's less common with small companies. So when you're considering pay packages with very different sick-leave policies, you'll want to consider the lost wages you may have to absorb if you had a particularly illness-filled year.

Related: 10 Best Fidelity Funds to Buy

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6. Bonuses + Commissions

Bonuses and commissions are the most straightforward financial considerations outside of your salary. They represent extra money—and unlike retirement plan contributions, they're typically money that goes directly into your pocket.

However, how these financial incentives are awarded varies highly by business. Some companies have bonuses tied to reaching specific quotas, others are awarded upon the completion of a project, and still others are completely at a boss's discretion. The frequency of workplace bonuses also varies. Some award them quarterly, others yearly, and some on no set schedule.

Commissions work differently than bonuses. These are based on individual performance and are prominent in sales and real estate, among other industries. Commissions are often a predetermined percentage or another set formula. For example, a home selling for $500,000 may have a 6% commission to be split between the buyer's real estate agent and the listing agent, giving each side a $15,000 commission (which may also be divided between the broker and agent, leaving the agent $7,500). Selling a more expensive home would lead to a larger commission.

How much bonuses and commissions will factor into your decision largely hinges on how your compensation is structured. In some professions, like sales, commissions might be as or even more substantial than your salary. In others, bonuses might just be gravy. And if you're viewing two jobs where all else is equal, the one offering you the potential to perform your way to higher pay could very well be the more attractive option.

Related: 9 Financial Mistakes That Can Quickly Drain Your Retirement Savings

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7. Student Loan Help 

Student loan debt is common. Roughly 25% of adults between the ages of 18 to 39 have student loan debt, per Pew Research Center analysis. That amounts to tens of millions of Americans, and you very well could be one of those adults who are saddled with debt.

The good news is that employers with educational assistance programs can use them to help pay principal and interest on their workers' qualified student loans in a tax-advantaged way. These tax-free benefits, which apply to both principal and interest payments, are limited to $5,250 per employee per year and are available for payments made between March 27, 2020, and Dec. 31, 2025, unless extended. 

If you're weighed down by student loan debt, this perk could greatly help ease that burden. The sooner you pay down student loan debt, the less you will need to pay overall in interest.

Also worth noting is another student loan-related perk. The Securing a Strong Retirement Act (SECURE 2.0) allowed employers to link retirement-plan matching contributions to their employee's student loan repayment. Per the IRS: "The 2022 legislation permits employers with a 401(k) plan, 403(b) plan, governmental 457(b) plan or SIMPLE IRA plan to provide matching contributions based on student loan payments, rather than based only on elective contributions to retirement plans, in plan years beginning after Dec. 31, 2023."

Related: How to Pay for College [12 Ways to Save for Tuition + More]

8. Top-Notch Health Benefits

W-2 employees are often offered health insurance, though it's hardly guaranteed. And even if your workplace does offer health plans, employer offerings aren't at all equal. Not only are the insurance plans themselves likely to vary from one to the next, but Company A might pay all of a worker's premiums, whereas Company B might pay as little as a quarter of those premiums.

Some companies also help pay for vision or dental insurance, family growth benefits, therapy, gym memberships and other health-related perks.

On top of all this, some companies offer tax-advantaged accounts dedicated to health spending. Health savings accounts (HSAs) and flexible spending accounts (FSAs) allow people to put away pretax dollars to pay for out-of-pocket medical expenses such as insurance copayments and deductibles, as well as qualified prescription drugs.

The various perks above can amount to many thousands of dollars. Indeed, a company with a smaller salary but a robust set of health benefits might be preferable to a company with high headline pay but lousy insurance and no HSA/FSA option.

Related: How to Plan for Health Care Expenses in Retirement

9. Stock Options

Employee stock options give employees the right to buy their company's shares at a fixed price for a predetermined number of years. These plans assume that the share price will increase over time, allowing the worker to purchase shares at a lower price, then sell them down the road for a profit.

If you're awarded a lot of stock options and/or your company's stock value increases significantly, you have the potential to make hundreds of thousands if not millions of dollars.

If a company is offering you stock options as part of your compensation package, you need to weigh that carefully. Yes, the potential is clearly sky-high. But there are potential downsides, too. 

Stock options typically come with a vesting period; you might not get all of your options at once, but across a vesting period that could last years. Your company's stock could go down in value. Your company's stock might not even be public, so its price might change infrequently (during funding rounds) and it could be extremely difficult to sell. 

And beware: Some companies offer stock options to make up for a well-below-market salary, hoping you'll "gamble on yourself"—but if you earn too little in salary, you could live a much more difficult life for a de facto lottery ticket that you might not ever get to cash.

Related: 10 Monthly Dividend Stocks for Frequent, Regular Income

10. Employee Discounts

OK, OK, it's rare that you'll get an employee discount so substantial that you should accept a lower salary just to get it. Still …

Let's say you work retail. If you got a job with REI, you could get 50% off REI Co-op Great and Apparel, 30% off vendor merchandise, and access to the vendor ProDeal Discount program, which lets you make purchases directly from vendors. Want to learn a new skill? Employees get discounted prices for REI's Outdoor School. Plus, workers get discounts on trips through REI Adventures, with most trips discounted by 30%. 

Those discounts could easily outweigh a modest salary difference at another store if you're an outdoorsy person. 

Similarly, a car enthusiast may be interested in the GM employee discount that lets them purchase or lease a new, eligible vehicle below MSRP. Or a tech lover might end up saving a chunk of money each year on phone and computer discounts.

Again, this perk is usually far less material than the others listed above, but it's still worth a quick mention.

Related: 7 High-Quality, High-Yield Dividend Stocks

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Related: The 10 Best Dividend ETFs [Get Income + Diversify]

We love exchange-traded funds (ETFs) because they can provide one-click access to hundreds, even thousands of stocks, while charging often minuscule fees.

One way to put that low-cost diversification to work? Collecting dividends. But trying to choose from literally hundreds of income-producing funds could take up a lot more time than you have. So let us help you narrow the field—check out our list of ten top dividend ETFs.

Related: Mega-Yielding Funds You've Never Heard Of

You've assuredly heard of mutual funds and exchange-traded funds (ETFs). But how much do you know about closed-end funds (CEFs)?

If the answer is "not much," don't worry—they get a fraction of the attention of those other investment funds. But you should also learn more about them. That's because CEFs have a host of enticing characteristics, including that they frequently pay mammoth yields. Check out our list of the best CEFs, many of which pay in the high-single and even double digits.

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Most of the funds you hold will require you to do something with them over time. If you own a bunch of stock funds in your 30s, for instance, you'll likely need to sell off some shares as you age and increasingly position yourself in bond funds instead. But TDFs effectively do this work for you, altering their portfolios over time to meet the needs of their shareholders based on the fund's target retirement date.

All TDFs do this, but Schwab stands out for a few reasons:

• Their target-date funds are more cost effective than most.
• Like most Schwab funds, you can begin purchasing shares for as little as $1.
• Schwab boast two target-date series, giving retirement savers more than one option.

Today, I'll introduce you to all two dozen of Schwab's target-date funds, split between two different series. I'll also provide you with some basic information about how TDFs work.

Editor's Note: Tabular data is up-to-date as of April 15, 2026.

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Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

What Is a Target-Date Fund?

Most people are familiar with funds that hold either nothing but stocks or nothing but bonds. They're the most common type of fund by far.

However, there are also "balanced" or "allocation" funds that hold a blend of both stocks and bonds—say, 60% equities and 40% debt.

Target-date funds (also known as "lifecycle funds," "age-based funds," or "dynamic-risk funds") take the ball and keep running. These funds adjust that blend of stocks and bonds over time to accommodate investors' needs as they approach a target retirement date. Fund families usually create target-date funds in five-year increments (say, 2025, 2030, 2035, etc.).

As you can imagine, they're an incredibly popular product among retirement planners. But you should know that TDFs are predominantly found as mutual funds; in fact, iShares boasts the only series of target-date ETFs. 

The math behind picking a target-date fund is simple enough.

Target-Date Funds Example

Let's say you turned 45 years old in 2025, and that you expect to work until age 70. Your expected retirement date would be in the year 2050. So, investing in a target-date fund with a target retirement date of 2050 would make sense.

Does your age fall in between five-year increments? That's OK! Let's say your retirement date would be in 2053. You could choose either a 2050 fund or a 2055 fund, or own shares in both.

What if your expected retirement age changes? No problem! Target-date funds are normal mutual funds and can be bought or sold as your needs change.

The target-date fund's allocation to stocks will generally never go to zero. Retirees need growth too, and most should maintain at least a little exposure to the stock market. The beauty of the target-date fund is that it changes your asset allocation to match your risk tolerance as you age—and it does it automatically without requiring you to actually do anything.

Related: 5 Best Stock Recommendation Services [Stock Tips + Picks]

What Is Asset Allocation?

If we're all being honest with one another for just a moment, we'd probably all admit to ourselves that stock picking is the most exciting part of investing. It's stimulating, it feels good to pick right, and if you do it well, you can add some zeros to your net worth.

But when push comes to shove, your asset allocation strategy—while an absolute yawner—is far more important than individual stock picking when it comes to meeting your financial goals. Asset allocation sits at the core of target-date funds and, really, at the core of all financial planning.

Related: Here Are the New IRA Contribution Limits for 2026

So ... what exactly is asset allocation?

Every planner has their own take, but the basic idea is simple. You diversify your portfolio across different asset classes (stocks and bonds, for instance) that, ideally, move at least somewhat independently of each other. A typical asset allocation will include:

• Equities/stocks (or stock mutual funds)
• Fixed-income investments (bonds/debt or bond funds)
• Cash
• Alternative assets such as gold, commodities, or real estate

You arrange the parts so that the overall portfolio has a risk and return profile that makes sense for you. And (importantly!) you rebalance the portfolio when the weights to each asset start to divert from your plan.

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Asset Allocation Example

Let's say your ideal asset allocation had you 65% allocated to stocks and 35% allocated to fixed income.

First, let's say the stock market crashes. Your stock weighting has suddenly dropped to just 55%, and your fixed-income investments have jumped to 45% of your portfolio's worth! You need to rebalance your portfolio to get back to 65/35. You would do that by selling off some of the fixed-income investments and buying some stock.

Related: 401(k) Contribution Limits fsor 2026 [Save More]

Now, let's say instead that the stock market shoots higher, and you find yourself allocated 75% to stocks and 25% to fixed-income investments. If you wanted to rebalance back to 65/35, you would sell some of your stocks and buy new fixed-income investments.

The idea here is to constantly reduce risk and smooth out your returns by buying low and selling high.

Asset allocation within a target-date fund takes it a step further. Apart from regular rebalancing due to market moves, the target-date fund's asset allocation decisions involve gradually reducing the risk (buying fewer and less risky stocks, and buying more bonds) as the fund gets closer to its target retirement date and its final asset allocation.

Related: 9 Best Schwab Funds You Can Buy: Low Fees, Low Minimums

A Look at Schwab Target-Date Funds

Charles Schwab became a household name by offering basic and affordable brokerage services to ordinary people. Schwab was the first real mass-market discount broker and a major trailblazer in lowering trading costs for investors. Today, it remains a giant among stock apps.

Schwab has applied that same focus on the client to its suite of low-cost mutual funds and ETFs, which have amassed an impressive $1 trillion-plus in assets under management (AUM). And Schwab target-date funds are an integral part of those offerings.

Schwab breaks its TDFs into two categories:

• Schwab Target Funds
• Schwab Target Index Funds

I'll introduce you to each line and go through a few examples of each.

Related: 8 Best Schwab Retirement Funds [High Quality, Low Costs]

Schwab Target Fund Series

Schwab Target Funds provide investors with varying mixtures of stocks and bonds, not by owning individual securities, but by holding mostly Schwab mutual funds, with the occasional outside fund.

Schwab manages the asset allocation. Each fund starts out with a high percentage of assets in stocks, and that gradually declines over time as the fund buys more bonds. (As a general rule, then, the farther out the target date, the greater the exposure to equities.)

Related: 7 Best High-Yield Dividend Stocks: The Pros’ Picks for 2026

It makes sense: When a retiree is far from retirement, they're more concerned with growing their money, and they have plenty of time to make up losses suffered in volatile markets. But when a retiree gets closer to retirement, their needs shift to preserving the wealth they've accumulated and generating income from their investments for their post-salary years.

Schwab Target Funds currently range in five-year increments from 2010 to 2070, with new iterations added over time. Here's a quick look at the lineup and their costs, many of which have been recently lowered.

• Schwab Target 2010 Fund (SWBRX): 0.25%
• Schwab Target 2015 Fund (SWGRX): 0.27%
• Schwab Target 2020 Fund (SWCRX): 0.28%
• Schwab Target 2025 Fund (SWHRX): 0.29%
• Schwab Target 2030 Fund (SWDRX): 0.38%
• Schwab Target 2035 Fund (SWIRX): 0.44%
• Schwab Target 2040 Fund (SWERX): 0.48%
• Schwab Target 2045 Fund (SWMRX): 0.52%
• Schwab Target 2050 Fund (SWNRX): 0.54%
• Schwab Target 2055 Fund (SWORX): 0.56%
• Schwab Target 2060 Fund (SWPRX): 0.57%
• Schwab Target 2065 Fund (SWQRX): 0.58%
• Schwab Target 2070 Fund (SWRRX): 0.58%

Let's compare a handful of the funds.

Related: Best Schwab Retirement Funds for an IRA

Schwab Target 2030 Fund (SWDRX)

The Schwab Target 2030 Fund (SWDRX) is currently allocated in such a way that Schwab feels is appropriate for investors who are just a few years away from retirement.

SWDRX currently invests in a roughly 55/45 blend of stocks and bonds.* Bond exposure is provided through several funds, most prominently the Schwab U.S. Aggregate Bond Index Fund (SWAGX), which accounts for a greater slice of the fund's overall assets (17%) than any other fund. This and other debt holdings provide the bulk of the TDF's income.

Related: 11 Best Vanguard Funds You Can Buy

The equity "sleeve" is most concentrated in domestic large-cap companies, which are expected to provide the bulk of capital appreciation. The Schwab S&P 500 Index Fund (SWPPX) is the biggest stock-focused holding and second-largest holding overall, at 16% of assets.

A portfolio that's split roughly 55% equities/45% debt is fairly aggressive for a person who's close to retirement, at least compared to historic norms. The old financial planning rule of thumb was that your allocation to stocks should be roughly 100 minus your age. So, assuming you're around 60 now, a 40% allocation to stocks would be "about right." By the time you retire, by that logic, you'd want closer to 35%.

Of course, rules of thumb are not ironclad laws. Some financial planners recommend a more aggressive 120 minus your age as their standard, for instance. In that event, you'd want a 55% allocation to stocks, which would put SWDRX right in the sweet spot.

* Technically, it's 55% stocks, 42% bonds, and 3% cash. For simplicity's sake, I'm going to simply lump cash (usually a very small portion of assets) in with bonds as I discuss these funds.

Related: Best Schwab Retirement Funds for a 401(k) Plan

Schwab Target 2050 Fund (SWNRX)

The Schwab Target 2050 Fund (SWNRX) would be appropriate for a person in mid-career, somewhere in their early to mid-40s.

As you might expect, this target-date fund is more aggressive, at 89% stocks and 11% bonds. Among other noteworthy features, SWNRX's portfolio invests almost a third of its assets in (predominantly developed-market) foreign equities, which tend to lag their American counterparts in growth but offer more dividend income. It gets a good chunk of this exposure from Schwab International Opportunities Fund (SWMIX), which is its second largest stock-fund holding at 13%. 

Related: How Much to Save for Retirement by Age Group [Get on Track]

No. 1, of course, is the Schwab S&P 500 Index Fund at nearly 20%.

Again, a roughly 90/10 split between stocks and bonds is a bit aggressive at this age. That's not necessarily a dealbreaker, of course. Looking back, over a 20- to 30-year window, that level of aggression has generally paid off. Just make sure you're comfortable with a feisty allocation, especially if you've already managed to amass a sizable nest egg that doesn't necessarily require high aggression to reach your retirement "number."

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Schwab Target 2070 Fund (SWRRX)

Finally, let's take a look at the series' newest member: Schwab Target 2070 Fund (SWRRX).

This is designed for that recent college graduate looking to kickstart their retirement savings. The allocation is as aggressive as you'd expect, with 97% of the fund's assets dedicated to in stocks. Apart from the expectedly high allocation to the Schwab S&P 500 Index Fund (~20%), SWRRX also has a hefty 35% weight to developed and emerging markets.

Related: 8 Best-in-Class Bond Funds to Buy

Target-date funds rarely hold sector-specific products, like a utility-stock fund or a financial-stock fund. However, Schwab's TDF line includes exposure to real estate investment trusts (REITs) via the Schwab Global Real Estate Fund (SWASX). SWRRX specifically allocates about 5% of its assets to the fund, which is greater than you'll see in Schwab Target Funds that are closer to their target date.

A worker just starting their career will generally not have a lot of money to invest. So, averaging into an aggressive target-date fund like this is generally appropriate. With four decades or more until retirement, you can afford to take risk, as you have plenty of time to make up losses. And given the modest sums you're likely investing to get started, you're not putting a substantial nest egg at risk.

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Schwab Target Index Funds

The difference between Schwab Target Funds and Schwab Target Index Funds isn't quite what it seems. Both series of target-date funds are actively managed—that is, human managers determine the blend of holdings in each and every one of these mutual funds.

However, Schwab Target Funds hold a mix of actively managed and index mutual funds (index funds try to replicate a rules-based index, like the S&P 500). But Schwab Target Index Funds get all of their stock and bond exposure exclusively from index exchange-traded funds (ETFs).

Related: The 12 Best Vanguard ETFs for 2026 [Build a Low-Cost Portfolio]

If you value low cost above all else, Schwab Target Index Funds are the better option. Because they invest solely in low-cost Schwab ETFs, these target-date funds have some of the lowest expense ratios in the business, at just 0.08%.

• Schwab Target 2010 Index Fund (SWYAX): 0.08%
• Schwab Target 2015 Index Fund (SWYBX): 0.08%
• Schwab Target 2020 Index Fund (SWYLX): 0.08%
• Schwab Target 2025 Index Fund (SWYDX): 0.08%
• Schwab Target 2030 Index Fund (SWYEX): 0.08%
• Schwab Target 2035 Index Fund (SWYFX): 0.08%
• Schwab Target 2040 Index Fund (SWYGX): 0.08%
• Schwab Target 2045 Index Fund (SWYHX): 0.08%
• Schwab Target 2050 Index Fund (SWYMX): 0.08%
• Schwab Target 2055 Index Fund (SWYJX): 0.08%
• Schwab Target 2060 Index Fund (SWYNX): 0.08%
• Schwab Target 2065 Index Fund (SWYOX): 0.08%
• Schwab Target 2070 Index Fund (SWYPX): 0.08%

Let's take a look at the three Schwab Target Index Funds that match the retirement dates of the Schwab Target Funds above.

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Schwab Target 2030 Index Fund (SWYEX)

The Schwab Target 2030 Index Fund (SWYEX) is allocated similarly to the Schwab Target 2030 Fund, splitting its assets roughly 55/45 between stocks and bonds. 

It gets the lion's share of its debt exposure (36%) via the Schwab U.S. Aggregate Bond ETF (SCHZ); another 35% is allocated to the Schwab U.S. Large Cap ETF (SCHX). SWYDX also holds funds focused on international equities, short-term Treasuries, Treasury Inflation-Protected Securities (TIPS), real estate investment trusts, and small-cap stocks, among other strategies.

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Schwab Target 2050 Index Fund (SWYMX)

The Schwab Target 2050 Index Fund (SWYMX) is more aggressive than SWYEX, and on par with its actively managed 2050 counterpart SWNRX, by allocating 89% of assets to stocks and 11% to bonds. The Schwab U.S. Large Cap ETF accounts for nearly half of the portfolio's weight by itself.

A large allocation to large caps also means a large allocation to technology stocks, which make up a full quarter of the portfolio. That's not necessarily a bad thing, of course, as U.S. tech has been a major engine of growth over the past 20 years. But tech shares are also notoriously volatile and occasionally get the short end of the stick, as they did for a stretch during 2025's almost-bear market, as well as for 2026's early innings.

Related: 10 Best ETFs to Beat Back a Bear Market

Schwab Target 2070 Index Fund (SWYPX)

Finally, let's look at the Schwab Target 2070 Index Fund (SWYPX).

SWYPX is unsurprisingly loaded with equities: At a 97% allocation to stocks, this is about as aggressive as a target-date fund can get.

Just like in the Schwab Target 2070 Fund, SWYPX allocates a massive portion of assets (52% currently) to a U.S. large-cap stock fund (SCHX, in this case). It also has a healthy helping of developed- and emerging-markets stocks, at nearly a third of assets. 

Related: The 10 Best Dividend ETFs [Get Income + Diversify]

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How Do Schwab Target-Date Funds Compare to Those From Fidelity, Vanguard, and Others?

As a general rule, your experience with Schwab Target Funds is going to be very similar to what you would get in target-date mutual funds managed by other fund sponsors like Fidelity or Vanguard. Most offer low-cost access to an asset allocation model that glides from more aggressive to more conservative as you reach your targeted retirement date.

But there can be differences, and those differences matter.

Let's compare the Schwab Target 2040 Index Fund (SWYGX) to the Vanguard Target Retirement 2040 Fund (VFORX) and Fidelity Freedom Index 2040 Fund (FBIFX). All have rock-bottom expense ratios of 0.08%, 0.08%, and 0.12%, respectively. That's close enough that fees alone aren't going to move the needle much in terms of returns.

But the asset allocations can be noticeably different.

• SWYGX: 76% stocks (53% U.S. stocks, 23% foreign stocks), 24% in fixed income and cash
• VFORX: 74% stocks (43% in U.S. stocks, 31% foreign stocks), 26% in fixed income and cash
• FBIFX: 80% stocks (47% U.S. stocks, 33% foreign stocks), 20% in fixed income and cash

In this example, Schwab's target-date fund is less aggressive than the Fidelity target-date fund but more aggressive than the Vanguard target-date fund. That's neither good nor bad. But you should measure the relative aggressiveness against your own investment objectives when choosing among the target-date funds.

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Should I Always Buy the Target-Date Fund That Corresponds Most Closely to My Estimated Retirement Year?

In a word, no. Or at least not necessarily.

Target-date mutual funds are designed to make the asset allocation process simple. And they do. But this simplicity is made possible by making assumptions about your investment objectives and risk tolerance based on only one real factor: your age.

Related: The 8 Best T. Rowe Price Funds to Buy and Hold

You might be significantly more aggressive or conservative than your age would suggest for any number of reasons. Perhaps you have a guaranteed inheritance that gives you the flexibility to be more aggressive. Or perhaps you have immediate cash needs or a sick family member that requires you to be more conservative.

As a very general rule, target-date mutual funds give you a great starting point. But you should always consider your overall financial situation and use the target funds in that context.

Are Indexed Target-Date Funds Better Than Actively Managed Funds?

This is an eternal debate, and the answer is: "It depends."

Some active managers effectively beat their indexed competition even after the higher fees, trading expenses and tax considerations are taken into account. Most, however, do not. Over the past two decades, there have been only three years—2005, 2007, and 2009—in which a majority of large-cap managers beat the S&P 500. So, as a general rule, it is safe to assume that indexed target-date funds will be your better option over time.

Furthermore, active management can muddle the waters of a target date strategy, particularly if the active manager regularly makes defensive moves, such as going to cash. The percentage of the portfolio you have exposed to stocks is determined by the number of years until the retirement date, and active management can potentially skew your weights outside of the target.

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Related: 15 Stocks You Can Buy and Hold Forever

As even novice investors probably know, funds—whether they're mutual funds or exchange-traded funds (ETFs)—are the simplest and easiest ways to invest in the stock market. But the best long-term stocks also offer many investors a way to stay "invested" intellectually—by following companies they believe in. They also provide investors with the potential for outperformance.

So if you're looking for a starting point for your own portfolio, look no further. Check out our list of the best long-term stocks for buy-and-hold investors.

Related: 7 Best Vanguard Dividend Funds Right Now

What's better than a smart, sound dividend income strategy? How about a smart, sound dividend income strategy with very little money coming out of your pocket?

If that sounds good to you, you need look no farther than low-cost pioneer Vanguard, which offers up a number of payout-oriented products. Find out what you need to know in our list of seven top-notch Vanguard dividend funds.

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To outsiders, certain aspects of Costco might seem a little annoying. You have to purchase a membership. You can't use certain brands of credit cards. You have to show your receipt on the way out.

Once you're in, however, you tend to enjoy what you're getting. A 2023 Axios Harris Poll found that Costco was found to have the second-best brand reputation, behind only Patagonia. Maybe it's the $1.50 hot dog and soda combo. Maybe it's the free samples. Maybe it's the quality of Costco's Kirkland Signature brands. Though most likely is that it's all of these things combined with the warehouse club's deep savings.

How Does Costco Keep Prices Low?

Costco keeps prices low in a number of ways. Membership fees help counter at least some of those prices. The company barely advertises. Its Kirkland brand offers good product at even lower prices. Rather than having endless options, the chain does a lot of curation and offers fewer choices. For instance: Whereas most supermarkets have around 30,000 stock keeping units (SKUs), Costco warehouses usually have only 4,000 or so. That means there might only be one, maybe two brands for most product categories, meaning little or even no in-store competition for the suppliers who do get chosen. This dynamic helps give Costco its self-described "tremendous buying power."

But another way Costco keeps prices low is by selling bulk items—whether that's a greater number of units, or just larger bottling/packaging. And that's where some consumers can start running into problems.

While Costco is known for offering many high-quality products at a lower cost, that doesn't necessarily mean it's optimal for all of your shopping needs. Grab a pen and paper, then keep reading as I highlight several items you should cross off your Costco shopping list.

Skip Buying These Products From Costco

While Costco might completely live up to the hype, it's important to understand that it's not necessarily a one-stop shop for all consumers. Many of Costco's products don't work well as bulk purchases; others simply might not offer the cheapest price.

Importantly, this list is primarily meant for people buying for themselves or a small family. If you have a large family, or are buying goods for a business or organization, purchasing many (but not all) of these items from Costco might make a lot more sense.

1. Ground Spices + Herbs

It took me far too long in adulthood to realize how quickly spices and herbs lose potency. If your cooking just doesn't have the oomph you're trying to achieve, weak spices could be your issue. According to the Food Network, ground spices lose their freshness in under six months; Bon Appétit says you shouldn't keep ground spices for more than three months.

Now think about how long that ground rosemary or thyme has been sitting in your cabinet. Has it been a few months … or is it more like a year (or more)?

That five-pound bag of paprika (or even the 35-pound container!) from Costco might have an incredible per-ounce price, but unless you're cooking for your entire town every day, it's likely to taste pretty dull by the time you reach the bottom. So rather than buying your flavorings in bulk at Costco, consider purchasing smaller quantities at your local grocery store to ensure everything you cook is full of flavor.

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2. Salad Kits

I go through several bags of salad kits, by myself, every week. It's surprising my skin hasn't turned green from all of the leafy goodness yet. But I wouldn't spend money on salad kits from Costco because they tend to be more expensive than competitors.

The following is a sample of the salad bag prices at a Costco near me:

-- Organic Mediterranean Salad Kit (2 count, 12 ounces): $8.99

-- Thai Chili Mango Salad Kit (2 count, 12.25 ounces): $7.99

-- Green Goddess Salad Kit (2 count, 12.75 ounces): $8.99

For my salad kits, I turn to Target or Aldi, both of which have more affordable options. Target's salad kits cost $3.99 per bag across the board, and depending on which type you choose, you get between $11.25 ounces and 13.85 ounces. Aldi's salad kits are cheaper than both. This chain's various salads cost the same price, even if some are bigger than others; for $2.99, I can get any salad kit I want, and they range from around 9.5 ounces to 12 ounces.

Also, Target and Aldi are better choices for anyone who doesn't inhale greens as quickly as I do and worries they wouldn't eat the second bag before it goes bad.

Related: Consumers Should Avoid These 10 Products at Walmart

3. Olive Oil

Olive oil is both healthy and flavorful. I always keep some on hand. Unfortunately, once opened, the flavor quality starts to decline fairly quickly. The North American Olive Oil Association states, once opened, you should use olive oil within three months. (Though, the NAOOA adds "it will last longer if you store it in a cool, dark cupboard with a tightly sealed cap.")

But that's slower than what Costco's best-by dates would suggest. On a recent Costco trip, I saw them selling Kirkland Signature 2-liter bottles of olive oil with a best-by date of only three weeks later.

That's a pretty big bottle in not a lot of time.

Yes, the Mediterranean diet is healthy, but that much olive oil may be taking it a bit too far. For olive oil, you might want to purchase a smaller bottle elsewhere so you can use it all while it's still at its peak taste.

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4. Junk Food

It's a common strategy among people trying to lose weight to not keep much, if any, junk food at home.

Pretend you're grocery shopping on a Friday after work. It has been a rough week. You decide you deserve a little treat.

Well, there's no such thing as "little" at Costco.

I recently bought a box of 18 small bags of chips at Target when it was heavily discounted. I figured I rarely eat chips, but it'd be nice to have them on hand. However, now that I have them, I find myself eating chips much more often than I usually do.

Had I been at Costco, my options would've only been bigger—Costco sells 30-count boxes of chips.

Again, if you're buying for a family with several kids, and you have the storage space, it makes a lot more sense. But if you're buying for one or two people, you don't have much room to spare, and/or you're trying to limit your intake, avoid buying them at Costco. It's a great deal for your wallet, but a terrible one for your waistline.

Related: Stop Shrinkflation! 10 Products Affected + Tips to Save Money

5. Flour

Do you bake so much that you should be on The Great British Bake Off? Then you're probably fine buying your flour at Costco. But if you just make the very occasional batch of cupcakes for birthday parties, a bag of flour from Costco—which will be 10 pounds at a minimum—might very well expire before you can finish using it.

How you store flour will affect its shelf life. According to Healthline, all-purpose flour stored at room temperature lasts only six to eight months. If you can spare precious refrigerator space, that can be extended to a year. If you have room in the freezer, you can stretch it to two years.

But besides a possible space issue, there are other downsides to keeping flour cold. Flour stored in the fridge needs to be put in an airtight container to avoid moisture and prevent mold. Frozen or refrigerated flour should reach room temperature before you use it or it can be lumpy.

Overall, most people might be better off just buying a more reasonably sized bag of flour at a different store.

Related: How to Save Money on Groceries: 12 Commonsense Tips

6. Fresh Produce

As a true Millennial, I love avocados. But I don't like that the window in which they're ripe but not rotten is so short. And while we're at it, sure, there are exceptions, but many fruits and vegetables don't have a very long peak-taste window.

For this reason, buying fresh produce in bulk isn't ideal—and that's exactly how Costco tends to sell it.

One of the best examples that comes to mind is Costco's bananas, which are sold in 3-pound bundles. Unless you have a large family or a potassium deficiency, you'll struggle to finish them all within the ripeness window. (Sure, you can freeze some for banana bread, but we're talking about fresh fruit you want to enjoy.

Costco also sells cut fruit in 3-pound increments, but pre-cut fruit goes bad even faster than whole fruit. So again, except for large, fruit-loving families, you might want to buy nature's sweets in smaller quantities.

Related: 20 Expenses to Cut From Your Budget in 2025

7. Condiments

Condiments can be a complementary taste—or essential to enhancing the flavor of a dish. (I don't know many people who eat completely plain French fries!) But some condiments could easily go bad before you can finish them off, and I don't think you want to risk eating expired mayonnaise.

How long exactly do condiments last? After opening, and if stored in a refrigerator, the U.S. Department of Agriculture (USDA) provides these estimates for condiments' usable lives:

-- Ketchup: six months

-- Chutney: one to two months

-- Horseradish: three to four months

-- Mustard: 12 months

-- Olives: two weeks

-- Mayonnaise and salad dressing: two months

If you are unlikely to finish a regular-size container of any of those condiments within the time frames listed, you probably should avoid buying them in bulk. And be honest with yourself: Once you open it, are you really going to tackle Costco's 64-ounce jar of mayo within two weeks?

Related: 14 Items to Buy in Bulk + 7 You NEVER Should

8. Coffee

Full disclosure: I'm a bit of a coffee aficionado. I'll openly admit that my coffee standards are a touch higher than the average coffee drinker.

But I'm definitely not alone in my assessment that Costco shouldn't be your go-to coffee location.

For one, freshness comes into play yet again. Healthline states that opened ground coffee, stored in an airtight container, stays fresh for about one to two weeks. Whole beans (my choice) stay fresh for one to three weeks. It's still safe to consume past these points, but your coffee might taste stale. Some people won't notice the difference, but if you're a coffee enthusiast, you might want to buy bags of coffee that are smaller than what Costco offers to ensure freshness.

Related: 10 Best Fidelity Funds You Can Own in 2025

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9. Eye Makeup

Usually, the word "bulk" refers to many more than two units. But when it comes to eye makeup, even buying two units at a time (which is how Costco sells them) can be too many.

While some cosmetics products can be used for much longer, eyeliner and mascara have notoriously short shelf lives.

Vogue, which The New York Times once dubbed "high fashion's bible," says eyeliner and mascara both have a lifespan of only three to six months. It's best to err on the side of caution with any products that are close to your eyes so you don't get an infection.

If you're the type of person who won't go check the mail without a full face of makeup, you might be able to go through these products fast enough. But if you only do your makeup for the occasional date night, you're better off buying eyeliner and mascara just one at a time.

Related: 11 of the Highest-Paying Blue-Collar Jobs

10. Anything You Don't Have Room to Store

This is more of a general tip than focusing on a specific product or product category, but if you can't store it, don't buy it.

I understand. It can be tough to pass up a good deal, and Costco has a lot of them. But sometimes, you have to skip that sale on toilet paper because you simply don't have any more space.

Bulk purchases can save you money, but what good is a box of 20 frozen personal pizzas if it'll take up half the room in your freezer and make it difficult to access anything else? If you don't have the space for 30 rolls of toilet paper in your cabinets, do you really want to just leave them piled up in your bathroom until you do?

Also worth mentioning is that just because something is an amazing deal, that doesn't mean it's budget-friendly. If you blow your monthly food allocation on just one or two bulk items, your palate will get extremely bored in the coming weeks, tempting you to spend even more to get a little diversity.

Related: 10 Examples of the High Cost of Being Poor

Related: 7 Best Vanguard Dividend Funds for 2026 [Low-Cost Income]

What's better than a smart, sound dividend income strategy? How about a smart, sound dividend income strategy with very little money coming out of your pocket?

If that sounds good to you, you need look no farther than low-cost pioneer Vanguard, which offers up a number of payout-oriented products. Find out what you need to know in our list of seven top-notch Vanguard dividend funds.

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However, if you're looking into home improvement projects to increase your house's value in anticipation of an eventual sale … you might just want to skip that moat, and a number of other jobs, to boot. That's because what you consider visually appealing or a home necessity might differ greatly from someone else's vision. 

And even if prospective buyers appreciate the changes you've made, some investments won't increase your resale value enough to justify the renovation costs.

Today, I'm going to list the home improvement investments that are least likely to make you a profit when you sell your house. They range from relatively affordable to downright extravagant—but every last one is generally expected to recoup less than their costs.

Consider Skipping These Home Improvements

All of the national averages listed in this article come from The Journal of Light Construction's (JLC) Remodeling 2024 Cost vs Value Report. Specifically, I'm homing in on three figures:

-- Job cost: Estimates based on product costs and installer wages, provided by the Bureau of Labor Statistics and the U.S. Bureau of Economic Analysis.

-- Resale value: Estimates about the added value of a remodeling project, provided by an online survey of more than 6,000 Realtors.

-- Cost recouped: Calculated by dividing resale value by job cost.

Every project on this list is estimated to add less to a home's resale value than the job's price tag. The home improvements are listed in order from the highest cost percentage recouped to lowest. (In other words: The projects you might want to avoid the most are listed last.)

10. Roofing Replacement (Asphalt Shingles)

-- Job cost: $30,680

-- Resale value: $17,461

-- Cost recouped: 56.9%

Replacing your roof is a good idea in many situations. For one, if you're selling your home, a roof in disrepair might deter homebuyers—especially first-time or low-income buyers. Many government financing options used by first-time home buyers have inspection requirements, and a damaged roof might not pass. Also, if a roof is making your home unlivable, by all means, replace it!

But if your roof is in decent shape, you might want to consider skipping this task.

On the upside, roof replacement (at least with new asphalt shingles) is the cheapest home improvement project on this list, and it's the only one that is expected to recoup at least more than its original cost. But generally speaking, if you sell your house, the added value to your price will likely recoup you less than 60% of your initial cost. (It can also be a lengthy process, taking weeks or even months to complete, especially if there's bad weather.)

If your roof is in OK-but-not-great condition, you can always lower your list price to account for how much buyers might need to spend on eventual shingle replacement.

Related: 9 Financial Mistakes That Can Quickly Drain Your Retirement Savings

9. Major Kitchen Remodel (Midrange)

-- Job cost: $79,982

-- Resale value: $39,587

-- Cost recouped: 49.5%

On average, you'll only recoup slightly less than half of your costs when you do a major midrange kitchen remodel, which might include getting new flooring, appliances, countertops, and cabinetry.

You may be better off with a minor midrange kitchen remodel, which includes replacing just the fronts of cabinets (rather than fully replacing), replacing laminate countertops, and painting walls. According to the JLC's report, you can recoup nearly all (roughly 96%) of your job cost, on average, when you sell your home.

Related: 11 Retirement Planning Mistakes to Avoid

8. Bath Remodel (Universal Design)

-- Job cost: $79,982

-- Resale value: $39,587

-- Cost recouped: 49.4%

A bathroom remodel with a universal design typically involves making your bathroom more accessible. It may include replacing the toilet, shower, and flooring, as well as enhancing lighting, adding hand bars, and making a space more wheelchair-friendly.

This is a great idea for people who plan on aging in place or want to make the space more comfortable for older visitors, but you won't recoup your costs if you plan to sell your home soon.

Unfortunately, while making a bathroom more accessible is wonderful for older adults, these changes aren't always the most aesthetically pleasing. For younger buyers who can't visualize themselves in the space, these features may be a deterrent, rather than a selling point.

Related: Should Retirees Move? 10 Considerations

7. Roofing Replacement (Metal)

-- Job cost: $49,928

-- Resale value: $24,034

-- Cost recouped: 48.1%

I already discussed how you're unlikely to recoup your costs if you replace your roof with asphalt shingles.

Well, a metal roof replacement isn't likely to pay off on your home sale, either.

A metal roof can last a long time—anywhere between 40 to 70 years is typical, but you can stretch to roughly a century if you maintain your roof well. Comparatively, asphalt or wood shingles usually last only 15 to 30 years. So, considering the lifespan, it's unlikely your home is due for a metal roof replacement, anyways. 

Instead, save your money and educate prospective buyers about your roof's durability. Because if you do install a new metal roof, you'll only recoup a little less than half the job's original cost, on average.

Related: Budgeting in Retirement: Our Step-by-Step Guide

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6. Bath Remodel (Upscale)

-- Job cost: $78,840

-- Resale value: $35,591

-- Cost recouped: 45.1%

An upscale bathroom remodel may involve expanding the room, adding a freestanding soaker tub, and installing ceramic tile walls. One might also enhance the lighting, add an extra sink, or install electric in-floor heating. 

That's a lot of changes that will make your bathroom shine! And yet … you still probably won't recoup even half of the money you throw at this job.

While smaller updates might be worthwhile ahead of selling your house, avoid creating a bathroom opulent enough for a king. There's just no reliable way of telling whether these changes will be appreciated enough by potential buyers. Expensive tile floors that delight one couple might horrify another couple with especially accident-prone children. Some people may fall in love with the new whirlpool tub you installed, but others might see it as an expensive maintenance item over time.

Related: 10 Retirement Questions: Are You Ready to Leave the Workforce?

5. Major Kitchen Remodel (Upscale)

-- Job cost: $158,530

-- Resale value: $60,176

-- Cost recouped: 38.0%

A major upscale major kitchen remodel is great if you're enhancing your forever home. But if you're thinking about selling anytime in the near future, you could end up recouping even less money than you would from a midrange remodel.

An upscale kitchen remodel might involve installing new premium countertops, custom cabinets, and designer faucets. Other popular jobs include upgrading appliances, such as a commercial-grade cooktop or built-in refrigerator.

According to Realtor.com, new cabinets and increasing countertop space can offer a good return on your investment. However, the website warns that making those countertops too fancy—say, marble or granite—will add a lot of cost but might add little actual value.

In general, avoid adding any nonessential luxury items before a home sale, too.

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4. Primary Suite Addition (Midrange)

-- Job cost: $164,649

-- Resale value: $58,484

-- Cost recouped: 35.5%

A midrange primary suite addition is the second-most expensive home improvement on the list. That's because it involves structural changes to your house, and close attention to detail in picking the right materials—after all, you probably want this addition to look like it was part of the original home.

But you'll want to make this kind of addition for yourself. Because as far as adding home value is concerned, you'll put in a lot more than you'll ultimately get back out.

Market conditions will be a significant factor in just how much value an addition will provide. For instance, Norman Builders says that during a seller's market, you might see a higher return on home additions, whereas during a slower market, even the best additions might not increase a home's resale value much. 

Another major factor is how your house compares to others in your neighborhood. You generally want your home to be comparable to your neighbors. A two-story home in the middle of a one-story neighborhood will stick out—and not necessarily in a good way.

Related: Should I Pay Off My Mortgage Before I Retire?

3. Bathroom Addition (Midrange)

-- Job cost: $58,586

-- Resale value: $20,334

-- Cost recouped: 34.7%

A midrange bathroom addition may be a treat while you live in your current house, but you're unlikely to recoup your costs when you sell it. 

Bathroom additions require the necessary plumbing and fixtures, and a full bath addition will come with a higher price tag than a half bathroom. And because this is an addition, you'll need basically everything—a toilet, faucets, cabinets, and more.

Overall costs for this project, including labor, materials, and any necessary permits, can vary depending on where you live. But on the whole, you can expect to recoup only about a third of your costs in a home sale.

Alternatively, you could expand one of your bathrooms, convert another area of your house into a bathroom, or remodel one or more of your current bathrooms. All of these will typically cost less than adding a new bathroom outright.

Related: 10 Most Expensive Cities to Buy a House In

2. Bathroom Addition (Upscale)

-- Job cost: $107,477

-- Resale value: $34,997

-- Cost recouped: 32.6%

"Well, what if I throw more money at it?"

An upscale bathroom addition will cost you nearly $50,000 more than a midrange addition, on average, but you'll recoup even less of your costs as a percentage, by roughly two points.

Some of the features that differentiate an upscale bathroom addition from a midrange one could include a steam shower or jetted tub and natural stone or metal.

As previously mentioned, bathroom remodels may give you more value than additions, but you're still unlikely to recoup your cost. Furthermore, your luxury tastes might not match those of prospective buyers. For instance, while some people might find a jetted tub relaxing, others may dislike the noise and how much space they take up. 

Related: 20 Big-Ticket Items Worth Splurging On

1. Primary Suite Addition (Upscale)

-- Job cost: $339,513

-- Resale value: $81,042

-- Cost recouped: 23.9%

An upscale primary suite addition may involve a fireplace, walk-in closet, soundproofing, or upgraded lighting. And while it might provide that "wow" factor, it's both the most expensive home improvement on the list (by more than double a midrange primary suite addition, the second-costliest expense!) and recoups the lowest percentage of its cost.

Said differently: This project can cost hundreds of thousands of dollars yet may only increase the resale value by less than one-fourth of that.

Keep in mind that a primary suite addition can decrease your yard space—a downside for some buyers who prioritize a larger yard. Plus, the added square footage to your home might increase property taxes, which can be another downside for cost-minded buyers.

Related: The Best REITs to Invest In for 2026

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Related: 15 Best Long-Term Stocks to Buy and Hold Forever

As even novice investors probably know, funds—whether they're mutual funds or exchange-traded funds (ETFs)—are the simplest and easiest ways to invest in the stock market. But the best long-term stocks also offer many investors a way to stay "invested" intellectually—by following companies they believe in. They also provide investors with the potential for outperformance.

So if you're looking for a starting point for your own portfolio, look no further. Check out our list of the best long-term stocks for buy-and-hold investors.

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But when you finally kick back and cast your working responsibilities aside, you might also want to toss out a few other things.

People are great at accumulating stuff, especially given decades of time. I'm not just talking about household items, either. You'd be surprised at how many work-related possessions will pile up over the course of 40 or 50 years. And past all that, there are other less conventional things that you might benefit from offloading.

Why? Well, many retirees choose to downsize their homes, and you probably wouldn't want to pack one home's worth of things into a home half the size. A few possessions can be sold for material gains that can bolster your funds in your post-career years. And hey—sometimes decluttering can be liberating.

Ready to lighten the load and add some weight to your wallet? Let's discuss some of the best items to sell leading up to and during the early part of retirement.

Household Items to Discard Before Retirement

What you want out of retirement will differ from one person to the next—some people spend more time with their families, others seek out experiences, and still others focus on their hobbies.

But one thing many retirees will (or do) have in common is that they'll have at least a few things they no longer use, need, or even want.

The following is a short list of the best things to get rid of before, or just after, you retire. Not only can doing so uncomplicate your life—but in certain cases, selling these items can result in a significant financial windfall.

I'll start with smaller and/or mundane items, and work my way to more substantial goods.

1. Work Clothes

Dress codes vary substantially depending on your field and role within a company. If you worked a position that required formal attire you're unlikely to need often in retirement, don't delay in ditching at least some of your old work clothes lest they just collect dust in your closet.

If you plan to downsize in retirement, it's likely you'll be dealing with reduced closet space and less room for dressers and other storage. So it's better to get rid of your clothes now rather than moving them all to a new location then sorting through the piles.

Even if you plan to age in place, it can be wise to sell your expensive work clothes for extra cash. Websites such as eBay, Mercari, and Poshmark make it easy to sell and ship attire you no longer need. 

Lastly: I say some of your work clothes, rather than all, because you might want to keep a suit or two for weddings, funerals, and other formal events. There's also the possibility you might decide to return to the workforce in retirement—and you won't want to buy a whole new wardrobe to do so.

Related: How to Choose a Financial Advisor

2. Lunch Boxes + Briefcases

A few work accessories can probably hit the bricks, too. 

If you always packed a lunch for work—good for you! That's a more affordable option to grabbing lunch out every day. But in retirement, whether you eat at home or go out to eat, you probably won't need to tote your midday meal around, which means your lunchbox can go.

The same goes if you still used a briefcase. Outside of the corporate world, there are very few uses for them. If you want to become more minimalist, this is an easy place to start. 

Related: What Is the 90/90 Minimalism Rule?

3. Office Supplies

Did you work a lot from home? If so, you probably have more office supplies—from pens and Post-Its to shelves of industry books and bins full of binders—hanging around the house than your average person.

While you might want to keep a few extra pens around, many of these work-related supplies can get the heave-ho. But like with work clothes, you might not want to throw all of your office supplies away if you think there's even a decent chance you'll return to the workforce, even in a part-time capacity.

Still, if you worked from home, getting rid of a lot of home-office goods could free up a substantial amount of space. And if you have any equipment (say, a printer), selling it could make you a few bucks, too.

Related: How to Invest for (And in) Retirement: Strategies + Investment Options

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4. Workplace Comfort + Job-Specific Items

Whether you had an in-person job or worked from home, you may have items you bought to make your body more comfortable during the workday. This could range from a $20 lumbar cushion for your long commute into work to a $1,000 standing desk to keep your neck and back healthy across hours of office work.

Meanwhile, certain jobs require specialized items, such as steel-toed boots for construction and manufacturing workers.

In any case, if you think your retirement will be all vacations and no vocations, you can get rid of that gear, freeing up room—and again, in the case of more expensive items, netting a little cash to sock away as well.

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5. Duplicates 

When you went into the office, were there certain items you couldn't live without—so much so that you bought duplicates of those items to keep in or at your desk? They could've been as small as phone chargers, water bottles, or headphones, but you might have even bought yourself a mini-fridge or coffeemaker.

While those items might have made for a great workplace setup, those essential items will become largely redundant once you're out of the office for good.

You still might want to keep a spare charger or even headphones, and they don't take up much room anyways. But you should ditch duplicates you have no use for and save the counter and cabinet space.

Related: How Long Will My Savings Last in Retirement? 4 Withdrawal Strategies

6. Collectibles

If you have a collection that brings you joy—whether it's coins, comic books, trading cards or something else—there's no reason to get rid of any of that before you're forced to.

But if you've been collecting items with the hope of selling them for a profit in the future … well, the future might very well be here already. It's a vague suggestion, of course—if you think a few more years could bring meaningful appreciation, by all means, ignore our advice and hang on—but it won't hurt to at least re-evaluate whether it's time to cash in on some of your collectible investments.

If you (unfortunately) missed the boat and didn't sell a collection before its value peaked, take an honest assessment of what you have and ask yourself whether it's time to call it quits.

And if you have children and plan to leave your collection as part of an inheritance? Have an open and frank conversation with them. Because your kids might not be as passionate about those items as you are.

Related: How to Achieve Financial Minimalism to Reduce Stress

7. Excess Furniture

Selling extra furniture is a particularly wise move for anyone who plans to move during retirement. If you're downsizing, odds are you won't have room for all of your current large belongings. If you part ways with some of that furniture before you change homes, that's a little less money you'll have to pay the movers—and if you're able to sell that furniture, a little more money in your pocket.

Not moving? There are still benefits to selling furniture you don't need. Again, well-made furniture can earn you a decent payday, especially if you aren't in a rush to sell it and can wait for the right buyer. A room less cluttered with furniture is also easier to clean, and represents fewer hazards to run into once you reach an advanced age.

Related: 9 Special Tax Breaks for Senior Citizens

8. Extra Vehicles

Do you and your spouse each have a designated vehicle? Do you have a pair of commuter vehicles and a third for fun? Do you have a fleet that would put Jay Leno to shame?

Retirement is an excellent time to re-evaluate your wheeled possessions.

Being a two-car household might have made a lot more sense when you were both commuting, but if your retirement driving is largely limited to the store, visiting family, and/or hitting the airport en route to your next cruise, you might not need that many vehicles anymore.

Selling a vehicle can net you a large lump sum that you could spend on home renovations, recreational activities, or simply padding your nest egg. Plus, you could cut the expense of insurance for that vehicle, leaving more room in your monthly budget.

Just make sure to consider all the possibilities when making this decision. For instance, if you own two older cars outright, you might not get a massive windfall out of selling either, while keeping both would ensure you at least have one functional vehicle if the other is in the shop.

Related: 10 Things That Are Cheaper When You Retire

9. Your House (Sometimes)

The decision about whether to move during retirement largely depends on personal preferences, but there are a few undeniable financial benefits worth considering. 

For one, selling your home to downsize can net you a substantial amount of money in a swift lump sum. Moving to a location with a lower cost of living won't come with an immediate windfall, but the savings over time could make a significant difference in your retirement budget. Moreover, a few states don't tax retirement income, so selling your house to live there could keep some of your money out of the IRS's mitts.

Related: When Should You Take Social Security?

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10. Some of Your Higher-Risk Investments

If you've had any sort of established financial plan heading into retirement, you've already been gradually adjusting your portfolio away from wealth generation and toward wealth preservation.

Put differently: You've probably been selling off some riskier growth investments and buying more stable defensive investments.

But if you haven't, now might very well be the time. 

Portfolio losses affect investors differently depending on their age. If you're young, you can afford to be aggressive because if you do lose money, you have a lot of time in which to make up your returns. But as you near retirement, and especially once you're in retirement, a big drop in stocks can substantially reduce the nest egg you'll use to fund all of your living expenses.

If you don't already have a plan, talk to a financial advisor about your financial situation to determine what, if any, adjustments you should make.

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Related: How Does the 4% Rule Work? [And Why Did It Change?] 

One of the most popular retirement withdrawal strategies of the past few decades has been the unfussy “4% rule.” It’s one of the most straightforward rules you’ll come across in finance, even as its creator has made a few tweaks to it over the years.

How does the 4% rule work, how has it changed, and can it help guide your retirement? Check out our primer on the 4% rule.

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TDFs have one significant shortcoming: The overwhelming majority of target-date fund series are available in mutual fund form only. That's great if you have a 401(k), or an individual retirement account (IRA) that allows for mutual fund investing. But not everyone does—workplace plans, while common, aren't available to all Americans, and some low-cost brokerage and retirement-account providers only allow investors to own exchange-traded funds (ETFs) and stocks.

But we have good news: If you're limited to just ETFs, you still have an option—and it's a pretty good one.

Read on as we discuss BlackRock's exchange-traded TDF series: iShares LifePath Target-Date ETFs.

Editor's Note: Tabular data presented in this article is up-to-date as of April 16, 2026.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

What to Know About iShares' LifePath Target-Date ETFs

iShares LifePath Target-Date ETFs invest in a global portfolio of both stock and bond ETFs. ("Global" is a specific term in investing that means international countries and the U.S. "International" means other countries but not the U.S.) Each product starts its life with a riskier, more growth-oriented profile, but over time, it tapers off and becomes more conservative and protection-minded.

According to iShares' model, the typical target-date ETF will begin with 99% stock exposure at the "start of the career"—effectively, 40 years until the target date—then reduce to 87% stocks by halfway through the cycle, and pare down to just 40% stocks by the time you hit retirement.

Related: The 16 Best ETFs to Buy in 2026

You'll remain invested in equities through retirement, providing added upside potential retirees need to continue growing their nest egg as they start drawing from it.

So, for instance, if you started investing at age 25, and plan on retiring in 2065, you would invest in a 2065 ETF, which would start at 99% stocks and 1% bonds. By the time you're 45, the ETF will have shifted to 87% stocks and 13% bonds. And by the time you retire, the ETF will have reduced its stock exposure to just 40%, with the remaining 60% in bonds.

iShares launched its LifePath Target-Date ETF line in 2023 with 10 funds—nine actual target-date funds, as well as a 10th ETF meant to be held in retirement.

Here's what the lineup looks like today:

• iShares LifePath Retirement ETF (IRTR), 0.08% expense ratio
• iShares LifePath Target Date 2030 (ITBD), 0.09% expense ratio
• iShares LifePath Target Date 2035 (ITDC), 0.10% expense ratio
• iShares LifePath Target Date 2040 (ITDD), 0.11% expense ratio
• iShares LifePath Target Date 2045 (ITDE), 0.11% expense ratio
• iShares LifePath Target Date 2050 (ITDF), 0.11% expense ratio
• iShares LifePath Target Date 2055 (ITDG), 0.12% expense ratio
• iShares LifePath Target Date 2060 (ITDH), 0.12% expense ratio
• iShares LifePath Target Date 2065 (ITDI), 0.12% expense ratio
• iShares LifePath Target Date 2070 (ITDJ), 0.12% expense ratio

The retirement ETF currently has an overall conservative (but aggressive relative to other similar funds) portfolio that's 55% invested in bonds and 45% invested in stocks.

We'll note, as an aside, that iShares' literature shows that by the time you retire, the funds' stock/bond blend should be 40/60, so the retirement fund is currently more aggressively positioned than what the company otherwise suggests. However, during previous updates, IRTR was closer to that 40/60 mix, so this may very well just be temporary.

Something else worth noting: There was a 2025 ETF—iShares LifePath Target Date 2025 (ITBA)—but it has been folded into IRTR. This is a common mechanism in target-date series, and it's a fate that will befall each of the other LifePath ETFs once they reach their target retirement date.

Expenses on these funds range between 0.08% and 0.12%, which means you'll pay between $8 and $12 annually on a $10,000 portfolio—lower than your average target-date mutual fund. (The fees vary based on the underlying expenses of the ETFs each target-date fund holds.) Additionally, the ETF wrapper tends to be much more tax-efficient than a mutual fund wrapper—not necessarily a concern for those with tax-advantaged accounts like IRAs and Roth IRAs, but helpful for those who only invest through a taxable brokerage account.

Another perk? Because it's an ETF, there's no required minimum initial investment. Whereas mutual fund TDFs might require several thousands of dollars to make your first purchase, you can get into LifePath ETFs for the price of a single share (or much less for those with brokerages that allow fractional shares). For instance, right now, iShares LifePath Target Date 2035 ETF shares trade right around $35.

Holdings of these target-date funds include broad iShares ETFs such as the iShares Russell 1000 ETF (IWB), iShares US Treasury Bond ETF (GOVT), and iShares Core MSCI Emerging Markets ETF (IEMG).

iShares points out that the ETFs' asset allocation is virtually identical to the iShares LifePath mutual target-date funds. However, there are some differences between what underlying ETFs are available for the ETF target-date funds to hold, and what underlying mutual funds are available for the target-date mutual funds to hold.

Related: Beginner's Guide to Vanguard Target-Date Funds

Another Run at Target-Date ETFs

These LifePath products are the only target-date ETFs on the market.

But they're not the first.

Todd Rosenbluth, Head of Research at VettaFi, noted on a conference call with BlackRock that "this has existed and it doesn't exist anymore because there wasn't demand," referring to BlackRock's 2014 closure of its previous target-date ETF line.

Asked what was different now, BlackRock responded that demographics have changed since then, and that the divergence in people who do and do not have access to 401(k) plans has grown. They also cited advancement in ETFs—the previous target-date ETFs were a different structure that mimicked an index, while the new target-date ETF line is actively managed.

"With these, we're implementing new research every 18 months or so," BlackRock says.

Related: Beginner's Guide to Fidelity Target-Date Funds

Who Are These Funds For?

Related: Beginner's Guide to Schwab Target-Date Funds

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Of course, Vanguard built that tool. Roughly a half-century ago, Vanguard founder Jack Bogle brought the original index mutual fund to life. Fast forward to today, and that fund is one of the country's largest—not to mention, it has dozens of brothers and sisters out there gobbling assets right alongside it.

What you might not know is how well-regarded those index funds are. Morningstar, for instance, provides forward-looking "Medalist" ratings for investment funds based on a variety of factors, such as price, performance, and the parent company. And Vanguard boasts literally dozens of Gold Medalist ratings across its index funds alone. (And if you're curious, its actively managed funds boast quite a bit of hardware, too.)

Today, I want to highlight some of Vanguard's best index funds. My recently revamped list includes several Vanguard funds that have long made the grade, but that didn't show up because other strategies were more pertinent at the time. Many of these funds can serve as "core" portfolio holdings, but some are better suited as "satellite" holdings that you can use to chase performance or provide protection. And all of them charge bargain-basement fees.

Editor's Note: Tabular data shown in this article is up-to-date as of April 15, 2026.

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Disclaimer: This article does not constitute individualized investment advice. Securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Why Should You Buy Index Funds?

Investment funds allow you to own different segments of the market. Funds tend to own stocks and/or bonds, but they might hold other assets, too.

For most of their history, human managers decided exactly which investments the fund would buy. But in 1975, Vanguard changed all that with the advent of the index fund.

An index measures the performance of a group of assets, and those assets are determined by the index's rules. An index fund "tracks" the index by actually investing in all (or in some cases, a representative sampling of) the underlying assets. An index's strategy can be broad, like the S&P 500, which measures a wide assortment of American companies. Or the focus can be as narrow as, say, music producers and paranormal investigators from the Korean Peninsula.

I don't necessarily recommend buying my hypothetical KPop Demon Hunters Index Fund. But for a few reasons, I think if you buy index funds, you'll be, ahem, golden.

For one, index funds are inexpensive. An actively managed index fund has one or more managers, all of whom expect to be paid for their troubles. An index fund technically has a manager overseeing the fund, but they're not performing stock research and deciding on trades—the index's rules determine those actions. Thus, fund providers can afford to charge (often much) lower expenses on index funds.

Index funds aren't chumps, either. I'll provide an eye-opening example a little later, but human managers often struggle to beat the benchmark indexes in the first place. So if you have a fund that simply tracks a benchmark index, and it's also charging less than most of the human managers trying to beat that benchmark, well … that fund has a decent potential for success.

Also worth noting? Turnover—how much the fund tends to buy and sell holdings—is often extremely low in index funds, as only a handful of holdings tend to enter or leave the underlying index in a given year. Why does that matter? Turnover can generate capital gains, which funds must distribute to shareholders, and those gains distributions are taxable. But index funds' capital gains distributions are typically small if not zero, making them very tax-efficient investments for taxable brokerage accounts.

Why Buy Vanguard Funds?

Vanguard Group is one of the largest asset managers in the world, currently boasting more than $12 trillion in assets under management (AUM).

Again, one of the primary drivers of that success is Vanguard's dirt-cheap expenses. The average asset-weighted expense ratio for U.S. mutual funds and ETFs is 0.44%, or $4.40 annually for every $1,000 invested. Vanguard's average, across 400-plus funds, is a scant 0.06%, or a mere 60¢ annually per $1,000 invested. That's an astoundingly low number—one that means even when a Vanguard fund isn't the absolute cheapest in its category, it's still going to be one of your most cost-effective options.

These numbers are tiny, measured in mere basis points (a basis point is one one-hundredth of a percentage point). But they add up to massive savings. Christine Benz, Morningstar's Director of Personal Finance and Retirement Planning, wrote in 2023 that in the previous year alone, "Vanguard's cost advantage saved its investors collectively about $26 billion compared with what they would have shelled out if they had invested in funds with average expenses."

Vanguard isn't sitting still, either. That average expense ratio was 0.08% in 2024, then declined to 0.07% in 2025 after Vanguard cut expenses on 168 share classes across 87 funds. The drop to 0.06% occurred in early 2026 when the company announced it would slash fees on another 84 share classes across 53 funds. All told, Vanguard estimates that's $600 million in savings for investors, which the firm claims is its "largest-ever two-year combined cost reduction."

Much of Vanguard's success on the fee-fighting front can be chalked up to founder Jack Bogle, who created the first index mutual fund and helped proliferate this fund type. Now, low-cost index funds can be found the world over, bringing costs down for millions of investors—even those who don't buy Vanguard's products.

But Bogle, too, was responsible for more than just cheap investing. His investment philosophies helped shape Vanguard into the titan it is today, and sparked a group (the Bogleheads) who energetically follow in his footsteps.

Related: Best Vanguard Retirement Funds for a 401(k) Plan

How Were These Index Funds Selected?

Vanguard boasts one of the largest collections of indexed mutual funds on the planet—more than 130 at last check. That's not an easy number to pare down.

So, as I normally do, I've started by booting up Morningstar Investor and running a quality screen that I customize for every search. In this case, I began by including only Vanguard index funds that have earned the top Morningstar Medalist rating of Gold. Unlike Morningstar's Star ratings, which are based upon past performance, Morningstar Medalist ratings are a forward-looking analytical view of a fund. Says Morningstar:

"For actively managed funds, the top three ratings of Gold, Silver, and Bronze all indicate that our analysts expect the rated investment vehicle to produce positive alpha relative to its Morningstar Category index over the long term, meaning a period of at least five years. For passive strategies, the same ratings indicate that we expect the fund to deliver alpha relative to its Morningstar Category index that is above the lesser of the category median or zero over the long term."

As I've written in other Young and the Invested articles, a Medalist rating doesn't mean Morningstar is necessarily bullish on the underlying asset class or categorization. It's merely an expression of confidence in the fund compared to its peers.

Because one of the primary draws of Vanguard index funds is low fees, I also decided to only consider funds whose expense ratios are well below their category average. But that ended up being pretty redundant—most Vanguard index mutual funds already fit that bill.

Believe it or not, that still left us with a remaining universe of several dozen Vanguard index funds. From there, it was dealer's choice: I selected a range of products that fit various portfolio goals and have good-to-great track records.

One last note: All the Vanguard funds on this list have a $3,000 minimum initial investment. If that sounds steep, don't worry—most Vanguard index mutual funds have ETF share classes that trade for as little as the price of one share (or less if you have a brokerage that allows fractional shares). So all the funds here should be quite accessible.

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1. Vanguard 500 Index Fund Admiral Shares

• Style: U.S. large-cap stock
• Assets under management: $1.4 trillion*
• Dividend yield: 1.2%
• Expense ratio: 0.04%, or 40¢ per year for every $1,000 invested

The original fund I mentioned earlier, called the First Index Investment Trust, was shortly thereafter rebranded as the Vanguard 500 Index Fund Admiral Shares (VFIAX)—a fund that's not only still around today, but one of the largest funds, at more than a trillion dollars in assets across its various share classes. (The assets under management figure shown above specifically represents their Admiral Shares mutual fund class.)

VFIAX tracks the S&P 500 Index—the iconic, diversified benchmark that has played a starring role in mutual fund managers' nightmares for decades. Year-end 2025 data from S&P Dow Jones Indices' SPIVA (S&P Indices versus Active) shows that only 14% of actively managed large-cap funds have managed to beat the S&P 500 over the trailing 10-year period, and that number dips to 10% when looking at the trailing 15 years.

"I know guys that rate active managers, and even they’re like, 'I'm not buying an actively managed; I'm just indexing,'" says Daniel Sotiroff, Senior Analyst for ETF and Passive Strategies at Morningstar. "You can't improve upon [the S&P 500]. You can't outdo it."

So, rather than try to outdo it, maybe the best course of action is to join it.

Related: 11 Best Vanguard Funds for the Everyday Investor

The Vanguard 500 Index Fund Admiral Shares holds shares of 500 large, dominant U.S. companies. But it doesn't hold them equally. The S&P 500 is "market-cap weighted," which means the larger the company, the more weight the stock has in the index (and thus the more impact it has on returns). Thus, right now, VFIAX dedicates the greatest portions of its assets to large-cap stocks** like Nvidia (NVDA), Apple (AAPL), and Google parent Alphabet (GOOG, GOOGL), whose market caps are measured in trillions of dollars. VFIAX is also considered to a "blend" fund, which means it has relatively even exposure to value stocks and growth stocks.

Financial experts frequently suggest using an S&P 500 fund as the core of your portfolio given its exposure to hundreds of larger, more financially stable companies across all sectors—from tech to health care to real estate. Because of this diversity of holdings, the S&P 500 not only provides access to the growth of the American economy, but a modest level of dividend income, too. VFIAX's yield might not seem like much right now. However, reinvested over time, the S&P 500's dividends make up roughly 35% to 50% of the index's returns over the very long term (depending on the time period and study you're looking at).

Also, as I mentioned before, most Vanguard index mutual funds have an ETF share class. Here, VFIAX's sister Vanguard ETF is the Vanguard S&P 500 ETF (VOO, 0.03% expense ratio), which currently trades at around $630 share.

* Many Vanguard funds have multiple share classes, including ETFs. Listed net assets for Vanguard funds in this story refer to assets under management across all of a given fund's share classes.

** There are different ways to define "cap" levels. We're adhering to Morningstar's definition, which says the largest 70% of companies by market capitalization within a fund's "style" are large-caps, the next 20% by market cap are mid-caps, and the smallest 10% by market cap are small caps.

Related: 10 Best ETFs to Beat Back a Bear Market

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2. Vanguard Small-Cap Index Fund Admiral Shares

• Style: U.S. small-cap stock
• Assets under management: $164.6 billion
• Dividend yield: 1.3%
• Expense ratio: 0.05%, or 50¢ for every $1,000 invested

Small-cap companies exhibit more potential for explosive growth than their larger peers, so investors who have both an interest in additional upside and a healthy risk appetite often try to chase down the market's more diminutive firms.

Why the growth potential? Well, they benefit from the business law of large numbers, for one: It's much easier to double your revenues from $1 million than $1 billion. But also, as these stocks become noticed by institutional investors and fund managers, large investments can help drive their prices further higher, too.

There's a catch, however. Smaller stocks are frequently riskier and more volatile. A more diminutive company's revenues might be dependent on just one or two products or services, meaning a single disruption could have massive financial consequences. Small caps also have less access to capital than their larger peers, meaning they're less likely to get a lifeline should they suffer from broader economic headwinds.

Related: 7 Best Vanguard Dividend Funds [Low-Cost Income]

High risk, high reward. A small company could feasibly double overnight … or get cut in half.

But if you wanted to harness small caps' upside while mitigating some of that risk, you could invest in a small-company fund, such as the Vanguard Small-Cap Index Fund Admiral Shares (VSMAX).

Vanguard scatters that risk across 1,320 U.S. stocks. To be precise, they're not all "true" small caps—a good third of the portfolio includes smaller mid-cap stocks. But this kind of bleed isn't unusual for cap-based funds; different fund companies and index providers may define each cap class by different thresholds.

Single-stock risk is extremely minimal in VSMAX. The fund's biggest holding, SanDisk (SNDK), accounts for more than 1% of the fund's assets. No other component makes up more than 0.6%. Yes, that means you won't enjoy the full potential of any wild upswing in any individual stock, but you also won't feel the full brunt of a collapse, either.

VSMAX is also available as an ETF: The Vanguard Small-Cap ETF (VB, 0.03% expense ratio), which goes for around $275 per share currently.

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3. Vanguard Growth Index Fund Admiral Shares

• Style: U.S. large-cap growth stock
• Assets under management: $317.9 billion
• Dividend yield: 0.4%
• Expense ratio: 0.05%, or 50¢ per year for every $1,000 invested

You don't have to invest in small companies to seek out better returns, of course. Those with a healthy risk appetite can simply gravitate toward growth stocks in the large-cap space.

A growth stock is generally viewed as a company that is improving sales and profits with each passing year—typically at a faster clip than the industry average. This should, in theory, result in faster stock price appreciation as other shareholders get wise to this success and decide to buy in themselves.

Related: The 13 Best Mutual Funds You Can Buy for 2026

Like with small caps, the upside can be nice, but the train can come to a halt awfully quickly once expectations start to outpace the company's actual results, leading to an abrupt, sharp drop in share prices. If that one stock is a significant portion of your portfolio, that could mean crippling losses. But you can mitigate that risk by owning bunches of growth stocks within a mutual fund like the Vanguard Growth Index Fund Admiral Shares (VIGAX).

VIGAX tracks an index of large-cap companies that exhibit various growth traits, including better-than-average historical growth in sales and earnings, as well as better-than-average expected short- and long-term growth in earnings.

Related: 7 Best High-Dividend ETFs for Income-Hungry Investors

The fund holds 150 predominantly U.S. growth stocks. As should be no surprise, tech stocks such as NVDA, AAPL, and MSFT account for the majority (51%) of assets. Communication services companies like Facebook parent Meta Platforms (META) and Google parent Alphabet (GOOGL) account for 17%, while consumer discretionary stocks, such as Amazon.com (AMZN) and Home Depot (HD), represent another 13%. The remaining assets are spread among the other eight market sectors, with many receiving less than 2% of assets.

VIGAX's ETF share class is the Vanguard Growth ETF (VUG), which costs 0.03% annually and trades around $470 per share.

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4. Vanguard Value Index Fund Admiral Shares

• Style: U.S. large-cap value stock
• Assets under management: $84.5 billion
• Dividend yield: 2.3%
• Expense ratio: 0.08%, or 80¢ per year for every $1,000 invested

Typically on the opposite side of growth stocks are value stocks: companies that the market is somehow undervaluing, based on one or more metrics, with the expectation that buyers will recognize that value and send shares higher.

Related: The 12 Best Vanguard ETFs for 2026 [Build a Low-Cost Portfolio]

The Vanguard Value Index Fund Admiral Shares (VVIAX) starts with the same broad investment universe of large-cap stocks that VIGAX does. However, it instead evaluates stocks by value factors such as book-to-price, sales-to-price, dividend-to-price, and historical and future earnings-to-price ratios. ("But Kyle," you say. "I thought it was price-to-earnings, price-to-sales, and so on." It typically is. I wish I could tell you why CRSP flipped the script. I cannot.)

Morningstar Associate Analyst Brian Paoli sums it up: "Vanguard Value ETF has a reasonably priced portfolio of large-cap US stocks trading at attractive valuations."

Related: The 8 Best T. Rowe Price Funds for 2026

The resulting portfolio of about 310 stocks is most heavily clustered in the financial sector, which makes up more than 20% of assets. But health care, industrials, technology, and consumer staples stocks all enjoy double-digit weightings, too.

Value strategies also tend to be thicker in dividend payers than growth strategies, and that's very much the case here. Top holding Berkshire Hathaway (BRK.B) might be known for not paying distributions to it shareholders, but many of its other holdings are high-yield dividend stocks such as JPMorgan Chase (JPM) and Exxon Mobil (XOM).

VVIAX's ETF shares, the Vanguard Value ETF (VTV, 0.03% expense ratio), trade for around $200 per share.

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5. Vanguard Dividend Appreciation Index Fund Admiral Shares

• Style: U.S. large-cap dividend stock
• Assets under management: $117.0 billion
• Dividend yield: 1.6%
• Expense ratio: 0.07%, or 70¢ per year for every $1,000 invested

Never buy an investment fund without looking under the hood. That advice goes double for dividend funds, where the word "dividend" in the name doesn't necessarily mean you're collecting a fat yield.

Take Vanguard Dividend Appreciation Index Fund Admiral Shares (VDADX) and its sub-2% yield, for instance.

This Vanguard dividend fund targets U.S. companies that consistently increase their cash distributions over time. Its tracking index is made up of firms that have improved their payouts on an annual basis for at least 10 consecutive years. High yield isn't a priority. In fact, VDADX's underlying index actually implies that high current yields are a liability, as it excludes the 25% highest-yielding eligible companies. 

Related: The 10 Best ETFs for Beginners [2026]

Why? Well … without getting too far into the weeds, high dividends can sometimes be the result of significant price drops, and in some cases might not be sustainable.

That said, VDADX's different view on dividends produces two important potential benefits:

1. High quality: Only firms with strong financials and excellent cash flows can afford to keep paying shareholders more every year. So, in a way, VDADX's commitment to dividend growers acts like a quality screen, ensuring you're owning a higher grade of stock.
2. Higher yield on cost over time: These companies might not yield much right now, but if they continue raising their dividends, you should enjoy a higher "yield on cost"—what you're actually earning based on the price at which you bought an investment. (Example: A $100 stock paying $1 in annual dividends yields 1% [$1 / $100 = 1%]. But if you bought the stock at $50 a couple of years ago, your yield on cost is actually 2% [$1 / $50 = 2%] … plus you enjoyed a 100% price gain along the way.)

VDADX holds roughly 340 predominantly large-cap stocks with bulletproof balance sheets and the ability to churn out cash—which they increasingly fork over to shareholders in the form of dividends. All of these dividend-growth stocks have raised their payouts for at least 10 years, but some have much longer histories of uninterrupted improvement. That includes Dividend Aristocrats, which are stocks that have raised their cash distributions annually for at least 25 consecutive years. And it even includes a few Dividend Kings (Aristocrats whose streaks are at 50 years or longer) such as Procter & Gamble (PG) and Johnson & Johnson (JNJ).

Related: The 11 Best Fidelity Funds You Can Own

Vanguard Dividend Appreciation Index Fund does not, however, hold real estate investment trusts (REITs). Its underlying index explicitly excludes them.

It seems like an odd exclusion, if only because REITs tend to be one of the market's highest-yielding sectors. One possible explanation? Most common stocks, like those held in this Vanguard fund, pay qualified dividends, which enjoy favorable tax treatment at the long-term capital gains tax rate. Most REIT dividends, however, are non-qualified, which are taxed as ordinary income at federal income tax rates. By excluding REITs, VDADX can pay out 100% qualified dividend income, helping shareholders avoid a potential tax headache.

I mentioned above that all the Vanguard index funds on this list have relatively low expenses. VDADX is a great example. The average fee on large-cap funds like this is 0.68%, according to Morningstar. But Vanguard Dividend Appreciation charges a mere 0.07%. Fees are even lower for VDADX's ETF class, Vanguard Dividend Appreciation ETF (VIG, 0.04% expense ratio), which goes for about $225 per share.

Related: The 7 Best Index Funds for Beginners

6. Vanguard European Stock Index Fund Admiral Shares

• Style: European stock
• Assets under management: $36.6 billion
• Dividend yield: 3.0%
• Expense ratio: 0.08%, or 80¢ per year for every $1,000 invested

You might have noticed that all of the aforementioned funds have had a specifically U.S.-centric bent. That's good—U.S. markets have long been among the most productive in the world, and if you believe in the American economy's ability to keep growing, that should remain the case.

Related: The 7 Best Mutual Funds for Beginners

But most experts would tell you that it's worth having at least some exposure to international stocks. That's because every now and then (including in 2025), the rest of the world will beat America.

Many investors who want international exposure often favor so-called "developed markets," which tend to be stable, low-growth, developed markets like Japan, Australia, and much of western Europe. Indeed, some investors opt just to own Europe-specific funds such as Vanguard European Stock Index Fund Admiral Shares (VEUSX).

VEUSX, which tracks the FTSE Developed Europe All Cap Index, holds 1,245 stocks from across the continent. It's a predominantly large-cap portfolio, with bigger companies making up about 80% of assets. Mid-caps account for another 15%, and small firms are responsible for the rest. Many of these companies also tend to be familiar multinationals such as U.K. financial HSBC Holdings (HSBC), Swiss foods giant Nestlé (NSRGY), and German automation company Siemens (SIEGY).

Related: 7 High-Yield Funds You've Never Heard Of

European large caps also tend to pay larger dividends than their American counterparts, which helps explain a 3% yield currently. You'll get the same yield from the ETF class, Vanguard FTSE Europe ETF (VGK, 0.06% expense ratio), which trades at less than $90 per share.

This is one of the narrower strategies on the list, but its low fees, history of above-average returns, and a Gold Morningstar rating make it one of the best Vanguard index funds you can buy.

Related: 10 Best Alternative Investments [Options to Consider]

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7. Vanguard International Dividend Appreciation Index Fund Admiral Shares

• Style: Foreign large-cap growth stock
• Assets under management: $8.8 billion
• Dividend yield: 2.2%
• Expense ratio: 0.16%, or $1.60 per year for every $1,000 invested

Vanguard International Dividend Appreciation Index Fund Admiral Shares (VIAAX) has a similar thrust to Vanguard Dividend Growth in that it's interested in owning high-quality companies, which it does by identifying and holding companies with a history of increasing their dividends.

VIAAX tracks the S&P Global Ex-U.S. Dividend Growers Index, which consists of international firms that have improved their payouts on an annual basis for at least seven consecutive years. Also, as an additional quality screen, the index excludes the 25% highest-yielding eligible companies from the index. REITs are kept out, too.

Related: 15 Best Investment Apps and Platforms [Free + Paid]

Vanguard International Dividend Appreciation Index is most invested in developed European and Asian markets such as Japan, Switzerland, and the U.K., though it also offers heavy exposure to Canadian stocks. The fund also owns some firms from higher-growth "emerging markets" such as India and China.

Many of the 330 dividend-growth stocks it holds will be plenty familiar to Americans. It shares several of the same components with VEUSX, but its geographic diversification shows in other top holdings such as Royal Bank of Canada (RY) and Japanese tech firm Sony (SNE). VIAAX's dividend yield isn't as high as Vanguard's European fund, but at north of 2%, you're still getting more income than you are in its U.S. counterpart, VDADX.

You can get this Vanguard fund as an ETF, too: the Vanguard International Dividend Appreciation ETF (VIGI, 0.07% expense ratio), which you can buy for around $90 per share.

Related: The 7 Best Gold ETFs You Can Buy

8. Vanguard Total World Stock Index Fund Admiral Shares

• Style: Global large-cap growth stock
• Assets under management: $79.2 billion
• Dividend yield: 1.8%
• Expense ratio: 0.09%, or 90¢ per year for every $1,000 invested

Do you just want to own all the stocks?

If that's the case, you probably want a "total market" fund, which will own most of the equities available within a particular country or geography. For instance, U.S. total-market funds typically own a couple thousand large-, mid-, and small-cap stocks.

However, if you'd like to expand your ambitions to the rest of the world, you'd be hard-pressed to find a better solution than the Vanguard Total World Stock Index Fund Admiral Shares (VTWAX).

The aforementioned VEUSX and VIAAX are "foreign" or "international" funds, which means they deal explicitly in stocks from outside the U.S. A “global” or “world” fund like VTWAX, however, invests both domestically and internationally.

Related: 8 Best Real Estate Crowdfunding Sites + Platforms

Vanguard Total World Stock Index sports a massive portfolio of 10,000 stocks, and no, that's not a typo. Holdings are predominantly large-cap in nature, with a median market cap of almost $140 billion. As is typical of a global fund, the U.S. accounts for the majority (60%) of assets, while the remainder is spread across roughly 40 countries—from significant holdings in companies from Japan (6%) and the U.K. (3%) to marginal allocations to countries such as Chile (0.1%) and Qatar (0.1%). Top holdings are decidedly American, though, peppered with Apple, Amazon (AMZN), and other big S&P 500 names.

The international bent also helps raise the dividend profile somewhat, with a fund yield of roughly 60 basis points more than an S&P 500 fund. (A basis point is one one-hundredth of a percentage point.)

This Vanguard fund has ETF shares, too: The Vanguard Total World Stock ETF (VT, 0.06% expense ratio) trades around $145 per share.

Related: How to Invest in Grocery Stores [Buy Real Estate, Not Stock]

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9. Vanguard Intermediate-Term Corporate Bond Index Fund Admiral Shares

• Style: Intermediate-term corporate bond
• Assets under management: $66.0 billion
• SEC yield: 5.1%*
• Expense ratio: 0.06%, or 60¢ per year for every $1,000 invested

Most investors will want some exposure to bonds—debt issued by governments, companies, and other entities that pay interest to bondholders. But how much will largely depend on your age.

Bonds tend to be much less volatile than stocks, for better or worse; it limits downside, yes, but it also limits upside. Instead, most of the return from bonds comes from the steady stream of interest income they produce. They're not great for generating wealth, which is your prime concern when you're younger, but they're outstanding for protecting wealth, which becomes increasingly pivotal as you age.

But it's tough to go out and buy a single bond. Data and research on individual issues is much thinner than it is for publicly traded stocks, plus, some bonds have minimum investments in the tens of thousands of dollars. So, your best (and most economical) bet is to buy a bond fund, which can provide you with access to hundreds if not thousands of bonds.

Related: 11 Best Investment Opportunities for Accredited Investors

For instance, the Vanguard Intermediate-Term Corporate Bond Index Fund Admiral Shares (VICSX) allows you to invest in nearly 2,300 investment-grade corporate bonds with maturities of between five and 10 years. 

Investment-grade corporates are a little riskier than similar-maturity Treasuries, but you get a bit more yield as a result … and they're not exactly poor-quality bonds. VICSX's portfolio is split roughly 50/50 between BBB-rated bonds (the lowest investment-grade rating) and A-rated or above. Meanwhile, the focus on intermediates provides a fair blend of risk and income.

Duration (a measure of interest-rate risk) is 6.0 years, which implies that a 1-percentage-point increase in market interest rates would lead to a 6.0% short-term decline in the fund, and vice versa.

VICSX's ETF version is the Vanguard Intermediate-Term Corporate Bond ETF (VCIT, 0.03% expense ratio), which goes for about $85 per share.

* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

Related: 7 Best Stock Advisor Websites & Services to Seize Alpha

10. Vanguard Short-Term Treasury Index Fund Admiral Shares

• Style: Short-term U.S. Treasury bond
• Assets under management: $33.4 billion
• SEC yield: 3.8%
• Expense ratio: 0.06%, or 60¢ per year for every $1,000 invested

Investors who want to significantly reduce risk might prefer the Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX), which focuses on a subset of bonds that have very low risk for two reasons: they have short maturities, and they're issued by the U.S. Treasury.

Related: The 10 Best Dividend ETFs [Get Income + Diversify]

Maturity helps determine risk. Generally speaking, the longer the bond, the greater the risk that the bond might not be repaid. Interest rates come into play, too. When rates go higher, new bonds pay more, which tempt people to sell their old bonds for the new, higher-paying bonds. But the temptation is much greater when you're dealing with longer-term bonds with lots of payments remaining—and not so great for short-term bonds with one or just a couple payments left.

Meanwhile, U.S. Treasury bonds, which are backed by the full faith and credit of the U.S. government, are some of the highest-rated bonds on the planet. Is there 100% certainty they'll be repaid? No. But is there a higher likelihood of repayment than the vast majority of issuers out there? You betcha.

Related: The 7 Best Fidelity Index Funds for Beginners

Vanguard Short-Term Treasury Index invests in more than 90 Treasury bond issues with maturities of between one and three years. And the lower risk is reflected in the averaged duration, which currently sits at just 1.9 years—thus, a 1-percentage-point hike in interest rates would knock VSBSX just 1.9% lower, versus a roughly 6% hit for the corporate bond fund VICSX. The flip side? VSBSX wouldn't rise as much if interest rates declined.

That's OK, as long as you know what you're buying. If all you want is portfolio protection that can still generate some yield (at nearly 4% currently), VSBSX is one of the best Vanguard index funds you can buy. Or, if you prefer ETFs, you can purchase the Vanguard Short-Term Treasury ETF (VGSH, 0.03%), which goes for roughly $60 per share.

Related: 9 Best Vanguard Retirement Funds [Save More in 2026]

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What Is the Minimum Investment Amount on Vanguard Mutual Funds?

Vanguard funds are known for being shareholder-friendly. The Vanguard mutual fund company blazed new trails with the index fund, and Vanguard has done more than any other investment firm to keep costs to a minimum for investors.

But there is one hitch. Many of Vanguard's cheapest funds in terms of fees have initial investment minimums of around $3,000.

If that is a problem for you, don't sweat it. Most popular Vanguard index funds are also available as ETFs. Most self-directed HSAs will allow you to buy as little as one share, and some even allow for fractional shares. And if you use a commission-free brokerage, you can buy those ETFs without incurring additional fees. ETF prices vary, of course, but many cost less than $100, and they rarely exceed $400 per share.

Why Does a Fund's Expense Ratio Matter So Much?

Every dollar you pay in expenses is a dollar that comes directly out of your returns. So, it is absolutely in your best interests to keep your expense ratios to an absolute minimum.

The expense ratio is the percentage of your investment lost each year to management fees, trading expenses and other fund expenses. Because index funds are passively managed and don't have large staffs of portfolio managers and analysts to pay, they tend to have some of the lowest expense ratios of all mutual funds.

This matters because every dollar not lost to expenses is a dollar that is available to grow and compound. And over an investing lifetime, even a half a percent can have a huge impact. If you invest just $1,000 in a fund generating 5% per year after fees, over a 30-year horizon, it will grow to $4,116. However, if you invested $1,000 in the same fund, but it had an additional 50 basis points in fees (so it only generated 4.5% per year in returns), it would grow to only $3,584 over the same period.

Schedule Your Call With Riley

Riley Adams, CPA

Licensed CPA and Financial Advisor

Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.

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Investment advisory services offered through NewEdge Advisors, a registered investment advisor.

15 Stocks You Can Buy and Hold "Forever"

As even novice investors probably know, funds—whether they're mutual funds or exchange-traded funds (ETFs)—are the simplest and easiest ways to invest in the stock market. But the best long-term stocks also offer many investors a way to stay "invested" intellectually—by following companies they believe in. They also provide investors with the potential for outperformance.

So if you're looking for a starting point for your own portfolio, look no further. Check out our list of the best long-term stocks for buy-and-hold investors.

The 10 Best-Rated Dividend Aristocrats Right Now

Dividend growth puts more cash in our pockets and signals that the company we're invested in is confident in its ability to keep churning out profits. And there's no more heralded group of dividend growers than the Dividend Aristocrats, which are companies that have paid higher cash distributions each year for at least a quarter-century.

But even Aristocrats aren't created equally. Check out which dividend growers Wall Street loves the best right now in our list of the top-rated Dividend Aristocrats.

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Tech stocks have been one of the best sources of equity growth for literally decades, but investing in the sector doesn't come without the occasional case of nausea. And rightly so: Technology is constantly in a state of flux. Businesses that make their money by innovating ... well, those innovations have a tendency to upend their very own industry again and again. Some companies are better than others at rolling with the punches, but others are unable to avoid the steamroller of progress.

The good news? The world is plenty large enough for the tech sector to produce numerous winners. You can't exactly throw a dart at the board and know you'll pick a winner ... but understanding what technologies are emergent, who's leading the way, which businesses are best capturing opportunities, and which executives are best at managing resources can go a long way in separating the wheat from the chaff.

Today, we're going to lean on Wall Street's analyst community to light the way. I've put together a list of tech stocks that currently enjoy extremely high marks from the research professionals who cover them. So, let's look at some of the market's best names right now.

Editor's Note: Tabular data presented in this article is up-to-date as of April 16, 2026.

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Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Why Invest in the Tech Sector?

Investors flock to the market's top tech stocks for good reason: Disruptive technologies can sometimes lead to dramatic revenue growth, and dramatic gains in a firm's stock price as a result.

In fact, technology companies sometimes chase that revenue growth for years without ever focusing on bottom-line profits. Just consider a couple of the best-performing tech (and "tech-esque") stocks in history: Amazon.com (AMZN) and Meta Platforms (META), which both prioritized ramping up their long-term scale over short-term profitability.

And look where they are now. Both are among the biggest companies on the planet, outperforming the market by wide margins over the last several years.

This is why many investors look for growth stocks within the tech sector and tech-adjacent companies. It's not for the short-term profits or dividends, but rather the hopes of a "moonshot" stock that grows exponential revenue growth in short order, delivering life-changing profits to its investors in the process.

The Best Tech Stocks to Invest In

Some of the best-performing tech stocks are very recognizable names. But before you buy any of them, don't forget that investing is fundamentally about the future. That means learning about the product pipeline and R&D beyond what's on the surface.

Leading tech firms are often the parent company of lesser-known products or services that could be just as interesting. Particularly when it comes to entrenched mega-cap tech stocks, their future potential depends on revenue streams that have yet to be fully realized yet—not the big-name products consumers currently use.

Related: What Is VOO? A Quick Guide to the Vanguard S&P 500 ETF

Every stock on this list also has a favorable view from Wall Street's analyst community. The consensus analyst rating, courtesy of S&P Global Market Intelligence, is the average of all known analyst ratings of the stock, boiled down to a numerical system where …

• Less than 1.5: Strong Buy
• 1.5-2.5: Buy
• 2.5-3.5: Hold
• 3.5-4.5: Sell
• More than 4.5: Strong Sell

In short, the lower the number, the better the overall consensus view on the stock. In the case of this list, I've included only stocks that have received a 2 or lower—in other words, clear-cut Buys in the analysts' eyes.

Also worth noting? Some of the technology stocks on this list have taken a beating of late. They remain among our best tech stocks because analysts view those downturns as temporary, seeing recently lower prices on these stocks as an opportunity, not a warning.

The tech stocks here are listed in reverse order of market capitalization (so, from smallest to largest).

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8. Palo Alto Networks

• Industry: Cybersecurity
• Market capitalization: $132.0 billion
• Dividend yield: N/A
• Consensus analyst rating: 1.63 (Buy)

In an age of persistent cybersecurity and hacking concerns, Palo Alto Networks (PANW) stands out as a company with both a reliable customer base as well as the near certainty of increased revenue coming its way across the coming years.

Yet PANW has also been punished in 2026, off about 10% year-to-date as I write this.

"PANW shares have also been swept up in the market sentiment that generative AI (GenAI) will wipe out the software-as-a-service (SaaS) business model, though this thesis does not take into account the critical nature of and need for 100% reliability of cybersecurity to enterprises," writes Argus Research analyst Joseph Bonner (Buy). "The cybersecurity environment is, if anything, getting more toxic as GenAI fuels even more sophisticated, rapid, and dangerous cyberattacks as well as enabling better defensive tools. GenAI and cloud expansion have made cybersecurity even more critical to enterprises.

Related: 7 Best Value Stocks for 2026 [Smart Picks to Buy]

"Palo Alto continues to stand out from its sector peers with not just best-in-class technology integrated into a comprehensive cybersecurity platform, but also with its rapid product innovation cycle, focused on next-generation cloud security, secure access at the service edge, and automated security operations," Bonner adds.

PANW also entered 2026 with a lot more firepower than it entered 2025 with. In August 2025, it announced it would acquire CyberArk Software (CYBR), a software-based identity security solutions and services. Then in November, it snapped up Chronosphere, a cloud native observability platform.

"The large CyberArk Software Ltd. acquisition is something of a strategic pivot for Palo Alto, which had heretofore been making small tuck-in acquisitions or 'acqui-hires' of discrete technologies that have helped accelerate product innovation," Bonner adds. "With CyberArk, the company enters the identity security management space, a rapidly growing area of cybersecurity that is becoming even more critical with emergence of agentic AI."

Indeed, the pros remain broadly bullish on Palo Alto's longer-term prospects. The stock currently has 45 Buys versus 10 Holds and one Sell.

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Related: The 12 Best Vanguard ETFs to Buy [Build a Low-Cost Portfolio]

7. Itron

• Industry: IT services and consulting
• Market capitalization: $4.3 billion
• Dividend yield: N/A
• Consensus analyst rating: 1.58 (Buy)

Itron (ITRI) is a producer of smart energy and water technology, solutions, and services that boasts customers in more than 100 countries. 

Its offerings help electric utilities gain insights into power quality, load management, bypass detection, and voltage monitoring; provide advanced metering infrastructure, leak detection, pressure-reducing valves, and data analytics to water utilities; and even allow cities to optimize operations and achieve sustainability goals.

"Green" initiatives might fall in and out of popularity depending on who's occupying national offices, and Itron has hardly been a pinnacle of stable top- and bottom-line growth—both seem to come in waves. Meanwhile, Itron's stock has been middling at best for the past couple years.

Related: 7 Best Growth Stocks to Buy for 2026 [Find Your Edge]

But Wall Street is overwhelmingly optimistic about Itron's long-term prospects; 10 out of 12 covering analysts call ITRI shares a Buy (the two dissenters are Holds), and their consensus view on long-term earnings growth is a decent 19% annual clip.

"We view ITRI as a diversified global vendor for the modernization of electricity, gas, and water delivery systems via intelligent monitoring and controls," say Oppenheimer analysts, who rate the stock at Outperform (equivalent of Buy). We believe ITRI is demonstrating tangible progress towards a target model with higher margins and stronger earnings quality while investing for technology leadership on the right side of secular trends such as grid resiliency, renewables/EV integration, and IIoT."

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6. Datadog

• Industry: Cybersecurity
• Market capitalization: $42.0 billion
• Dividend yield: N/A
• Consensus analyst rating: 1.42 (Strong Buy)

Cybersecurity has been a growing theme for decades, lifting the fortunes of companies that specialize in it and prompting some larger tech conglomerates to add security capabilities to their repertoire.

Datadog (DDOG) is in the former group. The company operates an observability and security platform for cloud applications that is used by thousands of customers. Among its products and solutions are infrastructure and application performance monitoring, log management, digital experience monitoring, data observability, network monitoring, error tracking, and more.

Related: The Best Dividend Stocks: 10 Pro-Grade Income Picks for 2026

The company's revenues have been growing like a weed for years—the top line tripled between its last full year as a private company (2018) and its first full year as a publicly traded company (2020), then more than quintupled between 2020 and 2024. Datadog also delivered its first full-year profit on a GAAP (generally accepted accounting principles) basis in 2023, then reported a 280% jump in earnings in 2024. Profits pulled back considerably in 2025 but are expected to rebound over the next two years.

Wall Street generally loves what it sees going forward, too. DDOG's bull camp is jam-packed at 44 Buys, against three Holds and one Sell.

Datadog, like many tech stocks, is down heavily in 2026. In fact, cybersecurity as a whole has been pounded on worries about the capabilities for Anthropic and other AI tools to disrupt the industry's business models. But analyst optimism largely remains in place as customers have been increasingly demanding AI as part of the tech stack. “We think that AI could improve efficiency in specific workflows, particularly code scanning, but does not now have the visibility, control, or reliability to replace end-to-end security platforms,” BofA analysts write.

"We believe Datadog can leverage net new customer acquisitions, grow its wallet share among existing users, and drive increased penetration among international markets to sustain a healthy double-digit top-line growth profile and demonstrate improving profitability in the coming years," say Stifel's Brad Reback and Robert Galvin, who rate shares at Buy.

5. Monolithic Power Systems

• Industry: Semiconductors
• Market capitalization: $66.2 billion
• Dividend yield: 0.7%
• Consensus analyst rating: 1.38 (Strong Buy)

Semiconductor stocks will always feature prominently in any list of the best tech stocks, but Monolithic Power Systems (MPWR) isn't your average chip company. 

MPWR designs, produces, and sells power circuits found in the automotive, enterprise data, consumer, communications, industrial, and other markets worldwide. These systems help convert and control voltages of a wide array of electronic systems, from servers, apps, and notebooks to home appliances and satellite communications. That's a big change from where Monolithic used to be.

"A deep product pipeline and steady flow of design wins have steadily diversified MPWR away from traditional consumer products and into the communications, industrial, automotive, and networking markets," say Oppenheimer analysts, who rate the stock at Outperform. "MPWR sets up well to outperform the broader semiconductor market with both an improving margin profile and an accelerating top-line outlook, in our view. We are long-term buyers."

Related: 9 Best Schwab ETFs to Buy [Build Your Core for Cheap]

Monolithic is also one of a few tech stocks that's having a boffo 2026; it's up nearly 45% as I write this. You can thank, in part, a solid fourth-quarter earnings report that saw earnings and revenues, as well as Q1 sales guidance, beat the Street. The company also raised its dividend by 28%, to $2 per share quarterly.

"Monolithic Power (our top pick for 2026) reported another beatand-raise quarter, underscored by momentum in enterprise data as well as demand across optics, memory, and autos," say William Blair's Sebastien Naji and Ana Bilbao, who rate the stock at Buy. "Moving through 2026, an expanding backlog is helping improve demand visibility and increasing confidence in the company’s ability to sustain strong top-line growth. All in all, we see this as another thesis-confirming quarter."

MPWR isn't as well covered as many of the other stocks on this list, but it's one of the best rated. Currently, Monolithic Power Systems' stock enjoys 14 Buys versus two Holds and no Sells.

Looking forward, analysts expect revenues to improve by about 20% annually over the next two years, and longer-term estimates peg profit growth at about 25% per year on average.

Related: 7 Best Fidelity Retirement Funds [Low-Cost + Long-Term]

4. Microsoft

• Industry: Enterprise software
• Market capitalization: $3.0 trillion
• Dividend yield: 0.9%
• Consensus analyst rating: 1.28 (Strong Buy)

Microsoft (MSFT) is one of the most dominant names in technology and among the largest tech stocks on the planet. The average person knows Microsoft for its iconic Windows and Office productivity software for personal computers, as well as its Xbox gaming console and related software. But Microsoft also is a major player in cloud computing, via its still-growing Azure cloud services, and an emerging titan in artificial intelligence—a position it further cemented in 2025 with the announcement of a strategic partnership with Anthropic (as well as a chipmaker I'll get to next).

None of this has immunized MSFT from the sector's pain; in fact, as I write this, the stock is in bear-market territory (but has bounced a bit in the past few days). And yet, Microsoft is among the best-loved tech stocks on Wall Street, currently boasting 54 Buys against three Holds and no Sells.

Related: 7 Best AI ETFs for the Artificial Intelligence Era

"Microsoft’s full-stack approach combining cloud + data + security + productivity + DevOps positions it at the center of the shift from GenAI experimentation to organization-wide agentic automation," say William Blair analysts, who rate the stock at Outperform. "Continued share gains in Azure, security, and M365, coupled with accelerating AI monetization and record backlog, reinforce Microsoft’s opportunity to grow IT wallet share over the next decade."

The partnership with Anthropic bodes well for Microsoft, too.

"For enterprise strength AI, vendors and developers will require many resources, services, and model choices to build out AI solutions. And this deal represents a widening of model choice with the addition of Anthropic," says HSBC's Stephen Bersey, Head of US Technology Research, who rates the stock at Buy. "Overall, the strategic announcement aligns with our thesis from last year that Microsoft is very well positioned for the AI mega-cycle as it has ample in-context data, cloud infrastructure, AI models, and AI fabric in order to orchestrate a complex AI agentic ecosystem."

Related: The 11 Best Fidelity Funds You Can Own

Another way in which Microsoft is on the bleeding edge of AI is through a new generation of AI data centers.

"Microsoft has made headlines for Fairwater—a large-scale, purposefully designed distributed network of AI data centers, [leveraging] sophisticated silicon and cooling techniques that require near-zero water waste," says Goldman Sachs analyst Kash Rangan (Buy). "Microsoft is planning to take on massive training workloads that can cover hundreds of thousands of GPUs. With shorter-than-usual cable lengths coupled with AI WAN, Microsoft can connect multiple distributed data centers to do training in one cohesive swoop. Therefore, millions of GPUs can be involved in a single training run. This leads to lower latency and greater power density, thereby creating the perfect recipe to train larger models in the future.

Revenue projections for fiscal 2026 are currently in the mid-teens, while the pros see profits jumping by 23%. That, as well as the overwhelming Buy camp, puts MSFT among the best tech stocks to buy in 2026 despite its recent woes.

Related: 13 Best Stock Screeners & Stock Scanners

3. Nvidia

• Industry: Semiconductors
• Market capitalization: $4.9 trillion
• Dividend yield: < 0.1%
• Consensus analyst rating: 1.28 (Strong Buy)

Nvidia (NVDA) is the world’s top chip stock thanks to its dominance in semiconductors that are used in cutting-edge technologies. Applications for this firm's hardware include self-driving cars, cryptocurrency mining, and other in-demand and growth-oriented areas of the 21st century economy.

But No. 1 with a bullet is the artificial intelligence market.

On the one hand, Nvidia believes AI infrastructure can become a $3 trillion to $4 trillion opportunity over the next half-decade. On the other hand, many investors are starting to wonder whether AI is in a bubble, pointing to privately held OpenAI's massive capacity commitments that seem to dwarf its actual size, as well as so-called circular funding.

Related: 9 Best Vanguard Retirement Funds [Save More in 2026]

"NVDA argues that the ground truth dynamics are not bubble-like, because three separate demand drivers are in play: (1) the transition of general purpose compute from CPU to parallel (GPU) compute; (2) the growth of generative AI replacing classic machine learning; (3) the rise of argentic AI," says Truist Managing Director William Stein (Buy). "There is another argument that we see as even more compelling. We see the telltale sign of a bubble as gear that has been ordered or shipped for which there is no operational or economic value. On its conference call, NVDA noted that its A100 chips, which began shipping six years ago, are all still in the field and are running at 100% utilization. We believe this is the clearest indication that we are not in a bubble ... at least not yet."

That's not to say there won't be bumps. Indeed, NVDA nearly fell into bear-market territory in late 2025, though the stock has since recovered somewhat and finished the year up nearly 40%. And despite putting out a Street-beating report in late February, NVDA shares slumped 5% in the immediate aftermath.

Regardless, Wall Street's pros remain unflinchingly optimistic about the stock, with NVDA boasting a whopping 55 Buy calls, two Holds and one Sell. They largely expect AI's specialization to continue the red-hot growth at Nvidia. Analysts see revenue growth averaging roughly 55% to 60% across the next two years, and long-term earnings growth at a clip of nearly 40%. Indeed, NVDA sits on our list of the market’s best growth stocks right now, too.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

2. Broadcom

• Industry: Semiconductors
• Market capitalization: $1.9 trillion
• Dividend yield: 0.7%
• Consensus analyst rating: 1.27 (Strong Buy)

Broadcom (AVGO) is one of the world’s largest semiconductor companies. It designs, develops, manufactures, and supplies semiconductor and infrastructure software products for a wide variety of uses, including (but hardly limited to) artificial intelligence (AI), data centers, networking, wireless, storage, and industrial automation.

The company has been an innovator in its own right, but you can also chalk up much of its scale to a history of aggressive merger-and-acquisition (M&A) activity. The company—itself the product of a 2016 merger between Broadcom Corporation and Avago Technologies (hence the AVGO ticker)—has swallowed up the likes of LSI Corporation, Brocade, CA Technologies, VMware, and Symantec’s enterprise security business.

Related: 7 Best Fidelity Retirement Funds for 401(k) Plans

Regardless of how it got there, the resulting entity is one of Wall Street’s most beloved chip stocks, at 45 Buys, just two Holds, and zero Sells.

“We believe AVGO has one of the most strategically and financially attractive business models in semiconductors,” say Oppenheimer analysts, who rate the stock at Outperform. Among the reasons they love Broadcom are a “sustained competitive advantage in the high-end filter market, a 'sticky' non-mobile business, efficiently managed manufactury, and substantial earnings and free cash flow growth.

That bullishness for 2026 came despite a drop into bear-market territory in 2025 that has continued into the new year, prompted by the company's warning about AI chip sales cutting into its gross profit margins. But the pros remained unfazed, and AVGO's April surge has the stock close to confirming a new bull market.

Related: 8 Best-in-Class Bond Funds to Buy

"We continue to see an attractive risk/reward equation for the stock in light of accelerating revenue growth over the coming quarters and likely upside to expectations as Broadcom benefits from an expanding set of AI ASIC and networking opportunities across its major hyperscaler customers," say William Blair analysts Sebastien Naji and Ana Bilbao (Outperform).

Also worth noting is AVGO's rapidly growing dividend, which has doubled in just the past five years alone. That puts Broadcom not just among the best tech stocks to buy, but also the best dividend-growth stocks to buy, too.

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1. Allegro MicroSystems

• Industry: Semiconductors
• Market capitalization: $7.0 billion
• Dividend yield: N/A
• Consensus analyst rating: 1.25 (Strong Buy)

Yes, another semiconductor company. The best-rated tech stocks, especially near the top, are dominated by chipmakers.

Allegro MicroSystems (ALGM) designs, develops, manufactures, and markets integrated circuits (ICs) for intelligent sensing and power. The company's products can be found all over your vehicle—in the HVAC, infotainment systems, lighting, seat electronics, braking, steering, even engine management and transmission. But its products also have industrial applications (automation, data centers, clena energy), as well as consumer applications (appliances, computers, gaming, even garden tools).

ALGM has been on a tear alongside much of the rest of the semiconductor community, but in this case, that's actually an exception to the rule. Allegro went public in late 2020. It enjoyed an initial burst across its first couple months of trading, but in the five or so years since, the stock has delivered short-term ups and downs, but long-term lethargy.

But you can't find a more dedicated bull camp. A dozen analysts cover the stock currently, and every last one of them sees ALGM as a buy. Moreover, they see the company generating 54% average annual earnings growth over the next few years.

Related: 13 Best Stock & Investment Newsletters for Inbox Alpha [2026]

What gives?

"Allegro has re-oriented around four core secular growth areas: autos' ADAS [advanced driver assistance systems] and electrification, and industrial data center and robotics," says UBS analyst Timothy Arcuri, who rates the stock at Buy. "The sales organization has restructured around end markets rather than regionally, and management has cut R&D spending on non-secular sockets to invest more in industrial secular growth and manufacturing cost efficiency while maintaining auto secular growth sockets at the current level."

What do those growth opportunities look like? Jefferies analysts say that those markets represented a combined SAM (serviceable available market, which is the part of total addressable market a company can realistically address based on its current operations) of $8.4 billion that's growing at a 21% annual rate.

"Together, these initiatives underpin a higher long‑term growth profile across Automotive and Industrial, with meaningful upside tied to humanoid robotics should emerging industry trends follow through," say the analysts, who also rate Allegro at Buy.

Related: 8 Best High-Yield Dividend Stocks: The Pros’ Picks for 2026

Is Technology the Best Sector in the Stock Market?

Technology stocks regularly are among the best-performing stocks on Wall Street, and they historically beat the broader S&P 500 index. But that should not be misunderstood to mean that the tech sector is a sure thing. For instance, the technology sector slumped by 28.2% in 2022—more than 10 percentage points worse than the broader market.

In other words, there are lots of reasons to like technology stocks and the tech sector. But there's no such thing as a sure thing when it comes to investing.

Are There Any Downsides to Investing in Tech Companies?

Many tech companies can be quite volatile as they pursue their long-term potential, often at the cost of short-term profits—or even short-term stock performance. One of the most common downsides of investing in tech stocks is that they can move up and down much more dramatically than sleepy sectors such as utility stocks or consumer staples.

That's also what makes them popular stocks to buy, however. Those big moves are great when they are in an investor's favor. Just be aware that the big downside of investing in tech companies is … well, the potential for bigger downsides.

Related: 7 Best Vanguard Dividend Funds [Low-Cost Income]

Schedule Your Call With Riley

Riley Adams, CPA

Licensed CPA and Financial Advisor

Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.

Schedule Now

Investment advisory services offered through NewEdge Advisors, a registered investment advisor.

Related: The 10 Best Dividend ETFs to Buy

We love exchange-traded funds (ETFs) because they can provide one-click access to hundreds, even thousands of stocks, while charging often minuscule fees.

One way to put that low-cost diversification to work? Collecting dividends. But trying to choose from literally hundreds of income-producing funds could take up a lot more time than you have. So let us help you narrow the field—check out our list of 10 top dividend ETFs.

Related: 10 Dividend Stocks That Pay You Each and Every Month

The vast majority of American dividend stocks pay regular, reliable payouts—and they do so at a more frequent clip (quarterly) than dividend stocks in most other countries (typically every six months or year).

Still, if you’ve ever thought to yourself, “it’d sure be nice to collect these dividends more often,” you don’t have to look far. While they’re not terribly common, American exchanges boast dozens of monthly dividend stocks.

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But you might also have a strict budget, which could limit your ability to enjoy that free time.

The good news? Many of the most sought-after experiences in the U.S. offer senior discounts. From sporting events to cruises to theme parks, you might be able to enjoy A-plus activities at a lower cost.

Today, I'm going to highlight some of the best discounted experiences for seniors that offer a discount based on your age. Let's discuss some of the affordable adventures that await you. 

Golden Years, Golden Deals: Spend Less on These Activities

Getting older doesn't mean you have to sit at home every day. Far from it: Seniors typically have much more free time, and they actively seek out new fun activities to fill that time.

The following are some of the best experiences in the U.S. that also offer senior discounts. I'll start with experiences in specific cities, then move on to discounts you can find across the country.

Importantly: The minimum age to be considered a senior varies by activity, so if a particular experience stands out, make sure you carefully verify the age limit before purchasing tickets to ensure you get your discount.

1. Metropolitan Museum of Art (MET)

The Metropolitan Museum of Art, often referred to as just "the Met," is one of the most famous museums in the world. (And for what it's worth, it's my second-favorite museum as well, second only to The Louvre.)

It's also enormous—by floor area, it's the third-largest museum in the world. And the museum is so nice, it's housed twice: The Met Fifth Avenue (Upper East Side) and The Met Cloisters (Upper Manhattan). The Met Fifth Avenue building alone has almost 14 acres of roof and could fit roughly 40 White Houses inside of it.

It's often said that visitors can easily spend an entire day exploring the museum and still not see everything, and multiple Young and the Invested editors can confirm that was the case during their visits.

Fortunately, whether they're trying to see it all in a day or spreading it out across multiple days, seniors can get into the Met for less. General adult admission, which you can purchase at metmuseum.org, is currently $30 per person, but seniors age 65 and over only need to pay $22. That's an awfully big deal for all that museum acreage.

Related: 8 Special Tax Breaks for Senior Citizens

2. Madison Square Garden Tours

Madison Square Garden is home to the NHL's New York Rangers, the NBA's New York Knicks, professional boxing, college basketball, and other sporting events. It has also hosted legendary music acts from Elvis Presley to Madonna to Stevie Wonder, and more recently, Taylor Swift and Luke Bryan. This iconic NYC venue has even held political events and been visited by multiple popes.

MSG typically is open for public tours seven days a week. At the time of writing, standard adult tickets at the Ticketmaster Box Offices at Madison Square Garden and Radio City Music Hall range from $37 to $43. Tickets purchased online range from $46 to $48. 

Fortunately, seniors get a small discount. If you're age 65 or older, you can get tickets in person at either location for between $32 to $38 or online for $41 to $43.

Related: 10 Senior Discounts for Restaurants + Grocery Stores

3. Yankees Tickets

Want to make your New York City visit complete? Why not catch a game at the new Yankee Stadium?

The 27-time MLB World Champion New York Yankees play in Yankee Stadium from April through September (and, of course, October and even November depending on whether they make a deep playoff run). And senior citizens who want to attend a game can get a home run of a deal on Yankees tickets.

Seniors can get up to 50% off advance ticket prices on select seats using XNow verification. To receive the discount, seniors need to do the following:

1.Visit the Yankees' senior-specials page.

2. Click "Buy Now."

3. Log in or get verified through XNow.

4. Enter your unique code in the Offer Passcode box and press the "Unlock" button.

5. View available seats using the interactive seat map.

6. Choose and purchase your seats.

Hoping for last-minute tickets? You can text SENIORS to (917) 809-4227 to receive offers throughout the season.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

4. Art Institute of Chicago

Not everyone wants to travel to the Big Apple, however. If the Midwest is more your style, you could always enjoy time at the renowned Art Institute of Chicago.

This Midwestern gem is one of the oldest and most expansive art museums in the United States. The Art Institute of Chicago is packed with famous artwork, including American Gothic, Nighthawks, and paintings from Pablo Picasso. 

General admission (which includes access to all of the museum's galleries and nonticketed exhibitions) for standard adult tickets is $32. For seniors who are at least 65 years old, the cost goes down to $26. You can purchase tickets on the Art Institute's website.

Related: RMDs Too High? 6 Ways to Reduce Them at Age 73

5. Brookfield Zoo

Chicago's Brookfield Zoo has strong focuses on educational programming, breeding and conservation efforts, and research in veterinary science and husbandry. The zoo, which is open seven days a week, is home to a wide variety of interesting animals such as the Galapagos tortoise, black rhinoceros, and Humboldt penguin.

A standard adult ticket currently costs $29.95. Seniors aged 65 and older only need to pay $24.95. Tickets can be bought onsite or online. In-person tickets can be paid for with cash or card.

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6. Monterey Bay Aquarium

The Monterey Bay Aquarium in Monterey, California, consistently ranks as one of the top aquariums in the United States. This oceanfront aquarium boasts more than 200 exhibits and 80,000 plants and animals. You can watch penguins waddle, sea otters swim, birds fly, and the giant Pacific octopus change colors. 

All of that education and entertainment comes with a high price tag, though. If you want to visit the aquarium, standard adult tickets for anyone between the ages of 18 to 69 cost $65. However, people age 70 and older qualify for senior pricing and can get tickets for only $50. 

Related: 10 Pros + Cons of Pets During Retirement

7. Space Needle

Seattle's Space Needle is a whopping 605 feet tall and one of the most recognized structures in the world. This iconic structure opened on the first day of the 1962 World's Fair. Fast forward to today, and about a million people visit the Space Needle each year. 

Want to step on The Loupe, the world's only revolving glass floor, but not pay full price? You might be in luck. Tickets for people between the ages of 13 to 64 are $35 to $45, depending on the day. Older adults who are age 65 or older can get tickets for $30 to $40, depending on what day you want to visit. 

Related: 8 Ways Travel Can Be More Expensive for Senior Citizens 

8. Fairchild Tropical Botanical Garden

Botanical gardens are an easy way to immerse yourself in nature. Amongst the highest-rated botanical gardens in the United States is the Fairchild Tropical Botanical Garden in Coral Gables, Florida. 

In addition to its wide variety of tropical plants, this botanical garden attracts visitors with its Wings of Tropics exhibit, which houses hundreds of butterflies, the tropical fruit exhibit, and a conservatory of rare plants. With over 3,400 species of plants, there are plenty to see blooming no matter what time of year you visit. 

The gardens are open daily. Standard adult tickets cost $24.95. Seniors can get discounted tickets for $17.95. You can purchase tickets on the garden's website.

Related: 10 Discounted Memberships + Subscriptions for Seniors

9. America the Beautiful National Parks + Recreational Lands Pass

The U.S. is home to some of the most famous national parks in the world. America's national parks offers visitors picturesque views, a way to reconnect with nature, and numerous exercise opportunities.

The America the Beautiful—the National Parks and Federal Recreational Lands Pass (or, mercifully, just the America the Beautiful Pass) covers the entrance fees and standard amenity (day-use) fees at lands managed by the following:

--National Park Service

--U.S. Forest Service

--U.S. Fish & Wildlife Service

--U.S. Army Corps of Engineers

--Bureau of Land Management

--Bureau of Reclamation

A standard annual pass costs $80. But there are two special deals for seniors who are at least 62 years old: 1.) Senior Annual Passes cost just $20, while 2.) Senior Lifetime Passes cost just $80.

These special passes may also provide a 50% discount on some amenity fees charged for facilities and services. Passes can be bought in person or ordered online at nps.gov.

Related: Plan for These 7 Hidden Retirement Costs

10. Carnival Cruise Line

A well-worn stereotype is that seniors love to go on cruises, but in truth, all generations love cruises—a recent YouGov survey shows they're actually most popular among Millennials and Gen Z'ers.

But they're especially well suited for seniors because of their relative ease. You can see many places throughout the world while cutting back on airfare and driving. And all-inclusive fares ensure seniors will have plenty to eat, see, and do. As long as you don't get seasick, this can be an excellent way to travel.

Going on cruises is a bit of a stereotype for seniors, but for good reason! It's a relaxing way to explore new places. There is no need to deal with excessive driving or airports and many offer an all-inclusive experience. As long as you don't get seasick, this can be an excellent way to travel.

Better still? Seniors can sometimes get discounted cruise deals.

Carnival Cruise Line's cruises include day and nighttime entertainment, both casual and fine dining, bars, and indoor and outdoor gathering places. They're best known for Caribbean cruises, but offer more options, such as Alaska, Mexico, Hawaii, and Europe.

Carnival doesn't offer senior discounts on every cruise, but it does for some of them. For example, the cruise line currently offers a four-day trip that leaves from Orlando and goes to The Bahamas. Carnival lists a standard price of $354 per person for a two-person room. Seniors age 55 and older can take that same cruise for $339 per person for a two-person room. You'll want to visit Carnival's site to purchase tickets.

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Related: How Does the 4% Rule Work? [And Why Did It Change?] 

One of the most popular retirement withdrawal strategies of the past few decades has been the unfussy “4% rule.” It’s one of the most straightforward rules you’ll come across in finance, even as its creator has made a few tweaks to it over the years.

How does the 4% rule work, how has it changed, and can it help guide your retirement? Check out our primer on the 4% rule.

Related: When Should You Take Social Security?

Social Security is a pillar of many older Americans’ retirement income. Typically, around 90% of people age 65 and older are collecting Social Security benefits at any given time.

But while most of us will end up on Social Security, when we choose to start collecting benefits will differ from person to person. Our guide to Social Security timing may help you decide.

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But across much of the U.S., that floor is even higher.

More than half of all states have a state-level minimum wage that exceeds the federal minimum, in some cases by quite a bit. And in various pockets around the country, cities have established their own minimum wages that even exceed the higher bar their state has set.

Today, I'll show you the cities with the highest minimum wages in the nation. Indeed, even at the bottom of this list, these cities' minimums are more than double the current federal standard.

What Is the Federal Minimum Wage?

The federal minimum wage for covered nonexempt workers is $7.25 per hour. But with the federal minimum wage mired at that same rate since 2009, some states and cities have enacted their own minimum wage requirements.

In the event there are different local, state, and federal minimum wages that all apply to the same employee, the highest rate is the one that must be paid.

Cities With the Highest Minimum Wages

Using data from the Economic Policy Institute, I've compiled a list of the U.S. cities with the highest minimum wages.

The cities with the highest minimum wages don't just beat out the federal minimum wage incrementally—every city on this list requires employers to pay more than double the federal minimum.

Understandably, many of the cities boasting the nation's highest minimum wage requirements also happen to have high costs of living. Regardless, even the lowest-paid workers in each of these cities make more than double the federal minimum wage.

#12 (tie): Cupertino + Los Altos + Santa Clara + Palo Alto, California

Cupertino, located in California's Silicon Valley, is known for being the home of Apple's headquarters. Nearby Los Altos, on the western edge of Silicon Valley, houses many of the area's workers; though it has more than 30,000 residents, people still describe the city as having a small village atmosphere. Santa Clara, in the center of Silicon Valley, is home to the headquarters of some of the world's largest chipmakers, including Nvidia, Intel, and Advanced Micro Devices. (And a fun fact: Santa Clara University is the oldest university in the state.) Palo Alto is known as the "Birthplace of Silicon Valley." It's home to numerous technology companies, including HP, VMware, and Google's Nest Labs—but, despite the name, not Palo Alto Networks, which is HQ'd in Santa Clara.

Cupertino, Los Altos, Santa Clara, and Palo Alto are all less than a half an hour's drive from one another, so it isn't surprising that they will all have the same minimum wage in 2025: $18.20 per hour. That's a big step above the upcoming 2025 California state minimum wage of $16.50 per hour.

Cupertino, Los Altos, and Palo Alto enacted their own minimum wages in 2016, and Santa Clara established its minimum wage in 2017. All three will increase their minimum wages to the upcoming rate at the beginning of 2025.

Related: The 7 Best Dividend ETFs [Get Income + Diversify]

#11: El Cerrito, California

El Cerrito, which translates to "the little hill" in Spanish, has a total area of just 3.7 square miles. From this hilly area, residents and visitors can see parts of San Francisco, including the Golden Gate Bridge. Its southern reaches are less than 500 feet from the outskirts of Berkeley and just a few miles from the University of California, Berkeley campus.

This town enacted its own minimum wage in 2015. Thanks to the most recent bump, made at the beginning of 2025, minimum wage workers in El Cerrito now make $18.34 per hour.

Related: 7 Best Wealth + Net Worth Tracker Apps [View All Your Assets]

#9 (tie): Berkeley + San Francisco, California

Berkeley is perhaps best known for the acclaimed University of California, Berkeley, as well as the university-operated Lawrence Berkeley National Laboratory. The city also has the Graduate Theological Union, which is one of the largest religious study institutions around the globe.

Most people are familiar with at least a couple of San Francisco's most noteworthy claims: the Golden Gate Bridge, Alcatraz, the "Painted Ladies" Victorian houses, great sourdough bread. And if you're a fellow Millennial and would like to reminisce with me, it's also where the characters of the show Full House lived.

As Berkeley and San Francisco are both high-cost-of-living cities, it's no surprise that they also have higher minimum wages than most of the country. Both cities made local minimum wage increases on July 1, 2024, which brought their minimum rates up to $18.67 per hour.

Related: 7 Best High-Dividend ETFs for Income-Minded Investors

#8: Denver, Colorado

You're probably wondering by now whether every city on this list is located in California. Not so! Colorado's capital city has a high minimum wage that matches its altitude! Denver is known for being nestled in the foothills of the Rocky Mountains, hence its nickname, "The Mile-High City." It's best known for Coors Field, the Red Rocks Amphitheatre, and the Denver Art Museum, among other attractions.

Denver enacted its own minimum wage in 2019, and its most recent increase—effective as of the start of 2025—ensures that even its lowest-paid hourly workers enjoy a rate of $18.81 per hour. That's not just a higher minimum wage than the federal standard—it's considerably better than even Colorado, which provides one of the 10 highest state minimum wages.

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#7: Sunnyvale, California

Sunnyvale is another city in the Bay Area chock full of tech names, including LinkedIn, Armorblox, Fortinet, and med-tech name Intuitive Surgical, which makes robotic surgical systems. (It's also where Atari was founded.) And many of the city's residents who don't work for Sunnyvale companies tend to commute to work for Apple, Google, Lockheed Martin Space, Amazon, and more.

Sunnyvale, like many other California cities, makes minimum-wage adjustments every year. Its latest update, effective as of Jan. 1, 2025, was a bump from $18.55 per hour to $19.00 per hour.

Related: 9 Best Fidelity ETFs for 2025 [Invest Tactically]

#6: Emeryville, California

Emeryville is a town on the San Francisco Bay. It's home to Pixar Animation Studios—fun fact: nearly all Pixar films feature Emeryville in some small way—Peet's Coffee & Tea, Clif Bar, and LeapFrog.

The town enacted its own minimum wage in 2015. Emeryville's most recent increase became effective on July 1, 2024, bringing the minimum wage to $19.36 per hour.

Related: 12 Best Apps That Give You Money for Signing Up [Free Money]

#5: Mountain View, California

Mountain View is another Silicon Valley city—headquarters to not just a slew of technology giants including Google and Intuit, but also the home of Microsoft's Silicon Valley HQ. Among points of interest in the city are Shoreline Park, the Computer History Museum, and the Shoreline Amphitheater.

The city established its minimum wage law in 2015. Its most recent increase, effective Jan. 1, 2025, will raise the current minimum wage to $19.20 per hour, up from $18.75 per hour in 2024.

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#4: SeaTac, Washington

While this list is just loaded with California names, the top cities for high minimum wages all belong to Washington—which offers up the highest minimum wage for any state, at $16.28 per hour.

I'll start with SeaTac, which is a portmanteau of Seattle and Tacoma. This area includes the communities of Angle Lake, Bow Lake, McMicken Heights, and Riverton Heights. SeaTac is home to the Seattle-Tacoma International Airport and is the headquarters for Alaska Airlines and Horizon Air. Roughly 80 of the city's businesses are Fortune 1000 companies.

SeaTac's minimum wage, which was bumped from $19.71 per hour to $20.17 per hour on Jan. 1, 2025, increases every year based on inflation. But there's a big caveat: It doesn't apply to all workers making minimum wage—it only applies to hospitality and transportation workers.

Related: 10 Monthly Dividend Stocks for Frequent, Regular Income

#3: Seattle, Washington

Many of the cities with the highest minimum wages are home to giant tech firms, and Seattle is no exception, hosting Amazon's headquarters. But it's also home to Starbucks, it's where Boeing got its start, and it's just a hop, skip, and a jump away from other massive HQs, including Microsoft's and Costco's home bases. On top of that, Seattle is known for the Space Needle, Pike Place Market, Frasier, and being the birthplace of grunge.

This seaport city enacted its own minimum wage back in 2014, and it will soon increase that wage on Jan. 1, 2025, to $20.76 per hour, up from $19.97 per hour in 2024. But again, there's an asterisk: Smaller employers (with 500 or fewer employees) only have to pay $17.25 per hour if covered employees receive tips, or if employer contributions toward their medical benefits are equivalent to at least $2.72 per hour.

Related: How Are Social Security Benefits Taxed?

#2: West Hollywood, California

Trendy, progressive West Hollywood is a city within Los Angeles County. It's home to the Sunset Strip, which is well-known for its restaurants, shops, and vibrant nightlife. And visitors going celebrity-watching can sometimes find the stars at some of West Hollywood's more upscale locales.

While hourly paid workers almost certainly don't make as much as those celebrities, they do earn some of the higher minimum wages around. The most recent minimum wage increase in West Hollywood went into effect on July 1, 2024, raising the bar to $20.86 per hour.

Related: 50+ Best Money-Making Apps That Pay You Real Money

#1: Tukwila, Washington

Tukwila, located south of Seattle, boasts a diversity of cultures—the city claims more than 80 languages are spoken in the area, and unsurprisingly, residents also get to enjoy a wide range of cuisines. Top employers include Sound Health, Boeing Employees Credit Union, Boeing Company, and Prime Now LLC.

Tukwila also is home to the highest city-level minimum wage in the country. The city enacted its own minimum wage in 2022. The most recent increase, which became effective at the beginning of 2024, puts the current minimum rate at $20.29 per hour, but this rate will rise to $21.20 per hour on July 1, 2025.

But like with Washington's other city-level minimum wages, Tukwila's minimum isn't applicable across the board—it only applies for large employers (those with 500 or more employees). Employers with between 15 and 499 employees have a separate minimum wage of $18.29 per hour. And employers with fewer than 15 employees that also earn less than $2 million in annual revenue default to the state minimum wage.

Related: The 10 Best Vanguard ETFs for 2025 [Build a Low-Cost Portfolio]

Related: The 10 Best-Rated Dividend Aristocrats Right Now

Dividend growth puts more cash in our pockets and signals that the company we're invested in is confident in its ability to keep churning out profits. And there's no more heralded group of dividend growers than the Dividend Aristocrats, which are companies that have paid higher cash distributions each year for at least a quarter-century.

But even Aristocrats aren't created equally. Check out which dividend growers Wall Street loves the best right now in our list of the top-rated Dividend Aristocrats.

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Understandably, if you haven't had extensive exposure to personal finance or sound financial planning while growing up, you might not have a clear answer to several burning questions you likely face right now.

Some of the most common questions young adults face regarding money include the following 4 items:

--"Should I invest aggressively just because I'm young?"

--"Should I pay off debt before investing?"

--"Should I contribute to a Roth or Traditional retirement account?"

--"How long does it take to see results?"

Let's explore these 4 top-of-mind questions and you can develop a clearer answer to each with sound investment advice for young adults.

1. “Should I invest aggressively just because I’m young?”

When you have time on your side, the common advice for young investors is to invest aggressively. This usually holds true because you have little to lose and need a path for accumulating wealth with higher returns.

To accomplish this task, the typical portfolio recommendation includes investing in a high percentage of stocks and a small percentage of bonds or cash. Undoubtedly, in a vacuum, this logic proves sound but only truly represents half the story young investors face.

In fact, the missing half should serve as the most important part of your financial decision-making: your financial foundation.

Before proceeding in earnest with building a long-term investment portfolio, such as funds set aside for retirement, you will need to build other financial accounts important for financial security.

While retirement accounts and other excess money you want to invest should bias toward riskier assets (e.g., stock index funds), learning the best ways to invest money in your 20s should also include building these account balances to accomplish other nearer-term goals.

Before we throw everything in a retirement account and wait 40 years to withdraw, let's look at some examples of goals which should not have aggressive risk-taking, high return investments just because we're young.

→ An Emergency Fund.

You know what's more important than holding a low-cost index fund which doubled in value over a five year period? A fully funded emergency fund capable of covering at least 3-6 months of expenses.

Depending on the nature of your work, reliability of paycheck, and lifestyle you may opt to hold more or less in this account.

While specifically recommended below as two of the best short-term investments for young investors, consider holding these funds in a high-yield savings account or money market fund.

In either type of account, your emergency fund can earn considerable interest while being held for a rainy day.

→ Wedding Costs.

If you haven't yet tied the knot and have plans to do so in your 20s, you'll fall in line with your peers according to data provided by the U.S. Census Bureau. In particular, the median age of a first marriage for men is 29, and 27 for women.

When it comes time to say your vows, you will want to have access to some liquidity and conservatively-invested funds so you won't have to worry about what to do when stocks go down during a market crash.

You don't want to delay formalizing your union because these funds get tied up in a bear market, so you'll want this money set in conservative investments.

→ A Home Down Payment.

My wife and I bought our first home together in 2020 during the COVID-19 pandemic. We were at an age where we'd saved enough money for a down payment to buy a house where we could raise our young (and growing!) family.

While I purchased a condo by myself shortly after graduate school, I knew it would always serve as an investment property long-term. Investment property is often a good investment idea for young adults who do not need the money immediately and have excess funds to invest.

I made the decision to withdraw money from the stock market about 6 months before I entered the market and missed out on a decent stretch of market gains. However, I could just as easily had the opposite market environment give my home down payment fund a haircut of 10% or more. If that had happened, I might not have had enough money to buy a condo, forcing me to continue renting.

We were around the median first-time home buying age (32) seen today. That means most people saved for a house in their twenties, likely in conservative investments to provide certainty the funds would be there when needed.

As highlighted above, thinking about how to invest money for these shorter-term goals should involve keeping a considerable amount in cash in some conservative income-generating assets like certificates of deposit, high-yield savings accounts, or the like. Both of these accounts tend to earn a higher rate than traditional savings accounts.

Related: Is Your Personality Limiting Your Income? Here's What the Research Says

2. "Should I pay off debt before investing?"

As touched upon above, young adults struggle to decide where their financial priorities should lie in terms of paying off debt quickly and starting to invest as soon as possible. Many are faced with the dilemma of deciding whether to invest or pay off student loans, and the answer can be complicated. When making this decision, consider the type of loan, the interest rate, your risk tolerance, and your overall expected return from an investment.

Credit card debt routinely carries double digit interest rates, usually between 15%-20%. Furthermore, this debt is guaranteed, whereas most investments are not.

It’s almost always smarter for young adults to pay off credit card debt first than investing. This is because you are more likely to receive a lower rate of return on the investment than you would avoid by paying off the high interest from a credit card.

Whether you should invest before or after paying off student loans is trickier. That's become a key decision young adults must make when learning how to invest in your 20s or 30s.

The average interest rate for student loans is between 5% and 7%, which is much lower than credit card interest. Paired with the fact that you can use interest payments on student loans as a tax write off (subject to certain income limitations), this means that for many people, it’s a good move to be investing and paying off student loans simultaneously.

However, some people are stuck with higher interest rates on their student loans and might desire the mental relief of paying down loans first. Should you qualify, there may be several great offers on the market for refinancing your student loans.

Depending on the amount of student loan taken on and the profession you chose to pursue, student loans may act as a cost-effective way to invest in yourself. If you stand to make substantially more income from your decision to take on student loans and you come out ahead, you can safely consider your student loans to count as “good debt.”

Another form of “good debt” comes from pursuing a mortgage on a home appreciating in value. However, in the world of investing, we must look at how you invest in terms of opportunity cost. Meaning, how else could you have invested your money which may have led to better returns?

Some people face the decision of investing or paying off their mortgage faster. Usually, people can achieve higher returns by investing rather than the reduced interest expense they would pay by paying off their mortgages a bit earlier.

Additionally, because of the possibility of housing bubbles bursting, it’s strategic to have a diversified portfolio. In many cases, most people agree that you should begin investing before paying off a mortgage.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

3. "Should I contribute to a Roth or Traditional retirement account?"

Another common question young investors ask themselves involves deciding which type of retirement account they should choose for investing.

Specifically, should you choose a Roth retirement account (e.g. Roth 401(k), Roth IRA) in your twenties when your tax burden is lower? Or should you use a traditional account to save more money now and pay taxes later?

In general terms, these two retirement account types works as follows:

--Traditional: Contributions to these accounts are usually pre-tax, meaning you set aside tax-deferred money now and pay taxes on this money when you withdraw it later.

--Roth: Contributions to these accounts generally occur after-tax, meaning you take advantage of lower tax brackets today and keep all gains from these investments when you withdraw them later.

In either scenario, you face a tax consequence. The question comes from when you think you will face a higher tax rate: now or later.

If you think your income is set to rise over your career and push you into higher tax brackets as you go, investing in a Roth account might serve as a good option.

Likewise, if you expect your tax bracket to drop in retirement, a traditional retirement account could also lead to beneficial results. As a general rule:

--If you currently have a higher tax bracket than your expected tax bracket in retirement, you should choose the Traditional option.

--If you currently have a similar or lower tax bracket than your expected tax bracket in retirement, you should choose the Roth option. Roth options also come with the ability to withdraw contributions without facing a tax penalty under certain scenarios.

Related: What Is FIRE? A Beginner's Guide to the Early Retirement Movement

4. "How long does it take to see results?"

Undoubtedly, waiting is the hardest part when it comes to long-term investing. Because humans seek instant gratification, something Millennials have a notorious reputation for possessing, waiting to see the fruits of your labor might appear difficult. The same challenge applies to the investments we pick to hold over long-periods of time as we want to see overnight results. Who doesn't?

While we have learned about the magic of compounding interest, remaining motivated can prove a tall task. Perhaps the marketing behind Acorns, another popular Millennial investing app, can help to teach us about how the mightiest investments start small and take time to grow.

In fact, having a measured approach to investing expectations is likely best because most of the investment growth happens later in life. Very little growth occurs when you initially invest your money.

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How to Invest Money in Your 20s

When it comes to investing, the sooner you start, the better. Young adults have the opportunity to make simple investments now which will appear smart with significant time added. The only exception would be if you have a substantial amount of high-interest debt to pay off first.

If the amount of debt held overwhelms your personal finances and leaves little room for investing, allocating more money early on toward rapid debt repayment might serve you better.

As an alternative, you can also consider investing small amounts through investing apps to deploy small amounts of money into diversified investments.

Young adults have a need to own and hold both short-term and long-term investments. The right combination ensures you’re prepared for major purchases, as well as retirement, down the road.

Many investment apps today were created with young adults in mind and make it easy to get started investing with little money. Start your investing journey now and improve it along the way.

You will see how your net worth grows and can track your stock portfolio progress across time with a free app like Empower (Personal Capital is now Empower). Your future self will thank you.

Best Overall Portfolio Tracker

Empower | Free Net Worth and Investment Tracking

4.5

Tools: Free. Wealth Management: Starts at 0.89% of assets annually.*

• Empower offers both a free set of portfolio, net worth, and cash flow tracking tools, as well as paid asset management service.
• Link Empower to your bank and investing accounts, credit cards, and more to see a single view of useful information and data, including your net worth.
• Empower Advisory Group offers a comprehensive wealth management service known as Personal Strategy. This managed account solution provides clients with discretionary investment management, personalized portfolio construction, and access to financial planning support. Accounts investing $100k to $250k receive unlimited advice and retirement planning help from financial advisors, as well as a professionally managed ETF portfolio with reviews upon request. Higher asset tiers offer access to dedicated advisors, estate planning, and tax specialists, plus additional investment options like access to private equity.**
• Special offer: If you have $100k+ in investible assets, sign up with our link to schedule a free initial 30-minute financial consultation with an Empower professional.

Pros:

• Free portfolio tracker (Dashboard)
• Free net worth, cash flow, and investment reporting tools (Dashboard)
• Tax-loss harvesting (Personal Strategy)
• Dividend reinvestment (Personal Strategy)
• Automatic rebalancing (Personal Strategy)
• Low investment expense ratios (Personal Strategy)
• High number of investment accounts supported (Personal Strategy)
• Low $100k minimum for investment management (Personal Strategy) compared to traditional advisors.

Cons:

• Moderately high investment management fee (0.89% AUM) compared to other online advisors (Personal Strategy)
• No dedicated advisor unless you have $250k+ in assets

Track Your Net Worth for Free

* Fees for clients with $100,000 to $1 million in assets pay 0.89% of assets annually. Clients with more than $1 million in assets pay 0.79% of assets annually on the first $3 million, 0.69% on the next $2 million, 0.59% on the next $5 million, and 0.49% on anything over $10 million. ** Advisory services are provided for a fee by Empower Advisory Group, LLC (EAG). EAG is a registered investment adviser with the Securities and Exchange Commission (SEC) and an indirect subsidiary of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training. Investing involves risk. Past performance is not indicative of future returns. You may lose money. Advisory fees are calculated based upon the amount of assets being managed (as detailed further in the Empower Advisory Group, LLC Form ADV).

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But today, we want to focus on tariffs through the lens of small businesses.

Running a small business is already an uphill climb against poor odds. A little more than 20% of businesses fail in the first year, per U.S. Bureau of Labor Statistics data, while nearly half fail within five years, and almost two-thirds fail within a decade.

Additional challenges, then, aren't likely to help those odds—which is why many small business owners are understandably anxious about tariffs. That includes not just the economic impact of tariffs, but also the fallout from numerous months' worth of rapidly changing tariff policy.

Today, we're going to discuss some of the ways small businesses are affected by tariffs. While not all negative—some small businesses expect to thrive amid an era of higher import taxes—these are issues that many small business owners are confronting right now.

How Tariffs Could Change How Small Businesses Function

Small Business Majority is a small business organization that engages with more than 85,000 small businesses to advocate for public policy solutions. And it conducts a quarterly survey called "Voice of Main Street."

In the most recent edition of this survey, a whopping 81% of respondents said they are concerned about the impact of tariffs on their business.

Tariffs can negatively affect companies of any size, but small businesses are particularly vulnerable because they have limited resources, fewer supply-chain options, and far less flexibility to absorb costs. However, tariffs won't affect all small companies in the same manner nor to the same extent, and a few businesses might even benefit from import taxes.

Here are some changes that small businesses can expect as tariffs become a permanent part of the operating environment.

1. Increased Costs for Finished Goods + Materials

The Voice of Main Street survey shows that 60% of small businesses are facing higher costs as a result of tariffs, with most stating their costs have increased by between 10% and 25%.

Whether businesses manufacture their own goods or simply import goods to sell, they face a potential hit from tariffs. When small retailers sell products that are imported from other countries, they're subject to the import levies. But even if they make their own goods, they might rely on imported raw materials from countries that are subject to tariffs.

And either way, much of these costs get passed on to consumers. Nearly a third (31%) of small businesses responded that they either have raised, or are considering raising, prices in response to tariff pressures.

2. Customer Loss + Fewer Sales

In a 2025 survey administered through networking platform Alignable, when asked how they expect U.S. tariffs and foreign retaliations to affect their sales, 43% of respondents said they expect it will decrease their sales.

It's a genuine concern. Raising prices risks losing customers. No matter how much consumers want to support small businesses, most are ultimately at the mercy of their bank account. So while they might happily choose a small business over a major retail chain when prices are similar, they might not be able to afford to do so when the disparity between prices grows.

Related: Stagflation: When Inflation Clashes With an Economic Slowdown

3. Potential for Increased Demand

Of course, if the majority of a company's products are manufactured domestically with materials sourced throughout the U.S., they won't have the same pricing issues—potentially giving them a leg up over some competitors. Indeed, in the same Alignable survey, 18% of small businesses said they expected tariffs to result in an increase in sales.

Put simply: Tariffs aren't necessarily a kill switch for all small businesses—though some might benefit from the damage to others.

Related: How to Invest in Whiskey [A Not-So-Whiskey Business?]

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

4. Health Insurance

"President Trump indicated that the administration will phase in tariffs on pharmaceutical imports—starting with a "small tariff," climbing to 150% within roughly 12 to 18 months, and eventually rising to as much as 250%—as part of an effort to bring drug manufacturing back to the U.S."

That's part of a report from health care nonprofit KFF about how tariffs are driving up health care premiums on small businesses. Insurers need to make medical cost estimates far in advance. So even if the tariffs never reach those higher percentages, insurers could very well err on the side of caution and assume they will—and thus raise premiums in response to just the threat of pharmaceutical tariffs.

While larger companies might be able to absorb some of these higher benefit costs, small businesses have fewer resources with which to do so. Says KFF: "For employers operating on narrow margins, even small premium increases can influence decisions around employer contributions, cost sharing, or continuing to offer coverage at all."

Related: How to Make Your Money Work for You: 7 Mighty Money Moves

5. Supply Chain Issues

Small businesses that mainly or exclusively source from a country subject to high tariffs might seek new suppliers elsewhere.

If they're able to find comparable American suppliers, that could give the economy (potentially including other U.S. small businesses) a boost.

But finding new, affordable suppliers is easier said than done. It requires locating new suppliers, vetting, setup, and ensuring quality—a time-consuming process. Again, that's easier absorbed by a large business with resources than a small business without. And it might not even be possible to find a supplier that offers comparable pricing and/or quality. 

Also, in some cases, a business might rely on multiple vendors to ensure that difficulties at any single vendor won't have an outsized impact on operations. If tariffs force a company to a narrower vendor roster, the ripple effect from a disruption could be more severe.

Related: How to Protect Your Wealth: 10 Proven Strategies

6. Cash Flow Issues

The vast majority (88%) of U.S. small businesses have regular cash flow disruptions, according to a recent survey from online business banking provider Relay Financial Technologies. Approximately one-third of respondents also said they were unprepared to manage an economic or financial downturn, and inflation and trade/tariff actions were cited as the top two external pressures.

Cash flow is a common problem for small businesses as it is. Tariffs can exacerbate that issue by reducing cash flow, sure. But even the threat of tariffs can force small businesses to make difficult decisions that will disturb their cash flow—and a constantly changing tariff environment (like the one we're currently in) can force a small business into having to frequently make these decisions.

Not to mention, businesses that serve as vendors may also struggle as other companies are forced to put off or constantly change plans to deal with the shifting tariff landscape.

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7. More Administrative Hours

Businesses of all sizes are being forced to deal with customs regulations and increased paperwork as a result of tariffs, and that means more administrative hours need to be spent on these tasks. 

These hours are a weight on even the largest of businesses (especially those with significant overseas operations and supply chains), knocking managers and important personnel off their normal duties to wade through additional administrative muck each time a tariff is levied or a "deal" is announced.

But these burdens are amplified at small businesses, where this paperwork could take up an even higher percentage of time from a smaller workforce.

Related: How Much Money Do You Need to Work With a Financial Advisor?

8. Adjustments to Inventory Management

Inventory management is the process of tracking and optimizing inventory to keep costs low, while still meeting customer demand. 

Small businesses want to prevent overstocking (having far more inventory than demand) because it increases storage costs, eats up working capital, and can even leaves businesses with obsolete, unsellable products. However, businesses also want to avoid understocking, where too little inventory is purchased and you lose out on sales. 

It's a delicate balance. 

Tariffs can affect how small businesses manage their inventory. Some small businesses have decided/are deciding to stock up on more inventory before prices increase. Others might buy less to have more cash saved during times of uncertainty. Either way, tariffs are forcing many small businesses to drastically change their current inventory management, which adds additional risk to their operations.

Related: How to Get Free Money Now [14 Ways to Earn Money]

9. Lower Profit Margins

Some small businesses might try to fully or partially absorb tariff costs, rather than passing them off as higher prices, to retain their customers. While that might stabilize sales, it could cut into profit margins—sometimes substantially.

Reduced profit margins make it more challenging to invest in new equipment, research, marketing, and other important growth expenditures. It can also make it unfeasible to hire more employees or even continue offering the same number of hours to current workers.

And, of course, if a small business becomes outright unprofitable for long, it might need to shut down operations altogether.

Related: 50+ Best Money-Making Apps That Pay You Real Money

10. Possible Need for Financing

To stay afloat, some small businesses might seek a loan or a business line of credit (LOC) from a bank or credit union—a small financial boost to help them get their footing in the new tariff environment.

Business LOCs and loans can help companies manage cash flow fluctuations, purchase more inventory before prices go up, cover the costs of researching and onboarding new suppliers, and more.

However, that debt must be repaid—and again, the debt is being used not necessarily to grow, but simply to deal with the added burden of tariffs. Debt repayments will eventually become another cost, and even if they manage to stabilize operations, some businesses might be unable to keep up.

Related: 8 Best Wealth + Net Worth Tracker Apps [View All Your Assets]

Related: 7 Best Vanguard Dividend Funds for 2026 [Low-Cost Income]

What's better than a smart, sound dividend income strategy? How about a smart, sound dividend income strategy with very little money coming out of your pocket?

If that sounds good to you, you need look no farther than low-cost pioneer Vanguard, which offers up a number of payout-oriented products. Find out what you need to know in our list of seven top-notch Vanguard dividend funds.

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Starting in 2025, American retirement savers could make super catch-up contributions to their 401(k)s and other workplace plans—if they're within the right age range. Specifically, super catch-up contributions—which have an even higher limit than standard catch-up contributions—are for adults between the ages of 60 and 63.

Read on as I discuss which accounts are affected by the newly introduced super catch-up contribution limits, how contribution limits differed before the addition of the super catch-up contributions, and what catch-up contributions look like for 2026.

The information and analysis contained within this article appears for your consideration, but it does not constitute individualized financial advice. Always act at your own discretion.

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Which Accounts Added Super Catch-Up Contributions?

In addition to 401(k) accounts, the following equivalent workplace accounts also have new super-catch-up contributions:

-- 403(b)

-- Governmental 457 plans

-- Thrift Savings Plan

-- SIMPLE IRA

401(k), 403(b), 457, and Thrift Savings Plans all have the same catch-up contribution limit for adults aged 60 to 63, but the limit for SIMPLE IRAs is different, as we'll discuss below.

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Do All Accounts Have Super Catch-Up Contributions for Ages 60-63?

No, not every retirement account has super catch-up contributions. 

For instance, an individual retirement account (IRA) doesn't have super catch-up contributions, but it does have regular catch-up contributions. For 2026, the contribution limit for an IRA is $7,500 (up from $7,000 in 2025), and the catch-up contribution limit for an IRA is $1,100 (up $100 from 2025). To qualify for catch-up contributions, you must be at least 50 years old.

While not technically a retirement account, many people use health savings accounts (HSAs) as a retirement savings vehicle. The HSA contribution limits for 2026 are $4,400 (self-only coverage) and $8,750 (family coverage), while the catch-up contribution limit—for those age 55 and older—is $1,000, same as it was in 2024.

Related: How to Invest for (and in) Retirement

2025 Contribution Limits Under Age 50

In 2025, the annual contribution limit for people under age 50 who are saving in a 401(k) or equivalent was $23,500, up $500 from 2024. Employer contribution limits increased, too, to $47,500, for a combined limit of $71,000.

For SIMPLE IRAs, the baseline employee contribution limit is $16,500, which is also up $500 from 2024. However, workers of employers with 1-25 employees, or employers with 26-100 employees who offer a 4% match or 3% flat contribution, have a higher contribution limit of $17,600.

2025 Catch-Up Contribution Limits

The catch-up contribution limit for 401(k)s and equivalents didn't increase in 2025. It was still $7,500, but a new rule, courtesy of the SECURE 2.0 Act, split catch-up contribution limits into two categories:

-- Ages 50-59, 64+: Your catch-up contribution limit was still $7,500.

--> Total employee contribution limit: $31,000

--> Total employee/employer contribution limit: $78,500

-- Ages 60-63: You had a super catch-up contribution limit of $11,250.

--> Total employee contribution limit: $34,750

--> Total employer contribution limit: $82,250

For SIMPLE IRAs …

-- Ages 50-59, 64+: Your catch-up contribution limit was $3,500, or $3,850 if your company had 1-25 employees, or 26-100 employees and a 4% match/3% contribution.

--> Total employee contribution limit: $20,000

--> Total employee contribution limit if bonus limits apply: $21,450

-- Ages 60-63: Your super catch-up contribution limit for 2025 was the greater of $5,000 or 150% of the regular SIMPLE IRA contribution limit (so, $5,250) no matter your company size.

--> Total employee contribution limit: $21,750

--> Total employee contribution limit if bonus limits apply: $22,850

Additionally, employers with a SIMPLE IRA plan could make an additional, uniform nonelective contribution to all employees, limited to the lesser of up to 10% of compensation or $5,100.

Related: 5 Costly 401(k) Rollover Mistakes You Must Avoid

2026 Contribution Limits Under Age 50 

Good news for retirement savers of all ages: Contribution limits in 2026 have gone up across the board!

In 2026, the annual contribution limit for people under age 50 who are saving in a 401(k) or equivalent is $24,500, up $1,000 from 2025. Employer contribution limits have also jumped by $1,000, to $47,500, for a combined limit of $72,000.

For SIMPLE IRAs, the baseline employee contribution limit is $17,000, which is also up $500 from 2025. However, employees who work for an employer with 1-25 employees, or for an employer with 26-100 employees that also provides one of the qualifying higher employer contributions, enjoy a higher contribution limit of $18,100 in 2026.

2026 Catch-Up Contribution Limits

The regular catch-up contribution for 2026 was increased by $500, to $8,000, while the super catch-up contribution was maintained at the $11,250 it began at in 2025. So, here's what the larger catch-up situation looks like for 2026:

-- Ages 50-59, 64+: Your catch-up contribution limit is $8,000.

--> Total employee contribution limit: $32,500

--> Total employee/employer contribution limit: $80,000

-- Ages 60-63: You have a super catch-up contribution limit of $11,250.

--> Total employee contribution limit: $35,750

--> Total employer contribution limit: $83,250

For SIMPLE IRAs, the 2026 baseline catch-up contribution limit for those ages 50-59 and 64-plus has grown by $500, to $4,000. However, the catch-up contribution limit for employees of businesses with 1-25 employees or with 26-100 employees and a qualifying employer match or contribution is actually a little less than that, at $3,850.

The super catch-up contribution limit for employees ages 60-63 is the greater of $5,000 or 150% of the regular SIMPLE IRA contribution limit, regardless of employer size. That’s $5,250 in 2026, which is unchanged from 2025.

In other words …

-- Ages 50-59, 64+ (company has 26-100 employees, makes 3% match or 2% contribution): Your catch-up contribution limit is $4,000.

--> Total employee contribution limit: $21,000

-- Ages 50-59, 64+ (company has 1-25 employees, or 26-100 employees and employer makes a 4% match/3% contribution): Your catch-up contribution limit is $3,850.

--> Total employee contribution limit: $21,950

-- Ages 60-63 (company has 26-100 employees, makes 3% match or 2% contribution): Your catch-up contribution limit is $5,250.

--> Total employee contribution limit: $22,250

-- Ages 60-63 (company has 1-25 employees, or 26-100 employees and employer makes a 4% match/3% contribution): Your catch-up contribution limit is $5,250.

--> Total employee contribution limit: $23,350

Meanwhile, the SIMPLE IRA additional nonelective contribution for 2026 is the lesser of up to 10% of compensation or $5,300.

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Should I Take Advantage of The Super Catch-Up Contribution Limit?

Generally, the more money you contribute to retirement accounts, the better. But your 401(k) or equivalent may not be the only retirement account you have. Usually, your order of operations should be as follows:

-- Employer retirement account match

-- Max out an HSA (if you're eligible for one), including catch-up contributions

-- Max out an IRA, including catch-up contributions

-- Max out your 401(k), including catch-up/super catch-up contributions

-- Invest in a taxable brokerage account

If you can afford to do so, making super catch-up contributions is an excellent way to boost your retirement savings. 

One more consideration is whether you have any high-interest debt, such as credit card debt or a payday loan. In this situation, you likely want to prioritize paying off your high-interest debt before making any catch-up contributions to retirement accounts. 

Related: What to Do With Your 401(k) When You Retire

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How Else Can I Save for Retirement?

As I touched upon in the last section, a traditional or Roth IRA and HSA—all tax-advantaged accounts—are wonderful ways to save for retirement.

-- Traditional IRA earnings grow on a tax-deferred basis and, if you don't have a workplace retirement plan, contributions may be tax-deductible. 

-- Comparatively, Roth IRAs are funded with after-tax funds. The money grows tax-free and withdrawals during retirement are tax-free (assuming you are at least 59½ and the account has been open for at least five years). 

-- HSA contributions are tax-deductible (even if you don't itemize), contributions grow tax-deferred, and any money withdrawn for qualified medical expenses isn't taxed.

You can also invest for retirement through a taxable brokerage account. There are no tax benefits, but there are no contribution limits either. 

A few other options include (but aren't limited to) setting up an annuity, buying alternative investments, or investing in real estate.

Not confident in your best course of action? Consider discussing your retirement goals with a financial advisor who can help you develop a retirement plan. 

Related: 10 Worst 401(k) Money Mistakes to Avoid

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Licensed CPA and Financial Advisor

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Related: What's Your Standard Deduction in 2025/2026?

For most people, their largest and most important tax deduction is the standard deduction. However, the standard deduction amounts change every year to account for inflation. Plus, the standard deduction isn’t the same for everyone.

So, before start your tax return or jumping into tax planning mode, you’ll need to know how much your standard deduction will be for the tax year.

Related: What Tax Bracket Are You In for 2025/2026?

Perhaps the best way to lower your federal income tax bill is push yourself down into a lower tax bracket to reduce your tax rate. On the flip side, you certainly want to avoid getting kicked into a higher bracket and increasing your tax rate.

But, of course, under either scenario you need to have a good feel for where you are right now. For that purpose, check out the federal tax brackets and rates that will apply for your next federal tax return.

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529 plans are a popular choice because contributions grow tax-free when used for qualified education expenses. But they're not without drawbacks. Limited investment options and restrictions on how you can spend the money can make planning for the future a bit tricky.

Fortunately, if a 529 plan isn't right for you (or even if it is), there are many ways to squirrel away money for your child's education. Below are my picks for the best ways to save for college. Consider all the options available and see which savings strategy, or combination of strategies, is the best fit for your family. You might find that a 529 plan is not the best (or only) choice for you.

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529 Savings Plans

Let's start with 529 plans, since that's what most people think of when you mention college savings accounts. I'll also draw comparisons to 529 plans when discussing certain other options, so it will be helpful to develop a basic understanding of 529 plans before moving on to other college saving methods.

529 Plan Basics

When you open a 529 account for a child or other person (you can open an account for an adult), the account is funded with “after-tax” dollars. Basically, that means there are no federal tax deductions, exclusions, or other tax breaks for contributions to the plan (although state tax breaks might be available), so you put money in the account after paying federal taxes on it.

The money you put in a 529 plan is invested and, hopefully, increases in value (although you can lose money in a 529 plan). The good news is that funds in a 529 account generally grow on a tax-free basis. So, you’re not hit with a tax bill each year for any earnings.

You also don't pay tax when withdrawing funds from the account, as long as the money is used for qualified educational expenses—including up to $10,000 for tuition at eligible elementary and secondary (K-12) schools or $10,000 in student loan payments. If 529 plan funds are used for other purposes, a penalty applies and related earnings are considered taxable income subject to the same federal tax rates as wages, tips, and other “ordinary” income.

If a 529 account is created for someone who doesn’t attend college or otherwise incur qualified educational expenses, unused 529 plan funds can be rolled over into a family member’s 529 account or ABLE account.

New 529 Rule for 2024 and Onward

A new rule began in 2024. Now, a beneficiary can also roll over up to $35,000 of leftover money in a 529 plan into a Roth IRA in the beneficiary’s name. Any rollover is subject to annual Roth IRA contribution limits, and the 529 account must have been open for at least 15 years.

1. Custodial Accounts (UGMA/UTMA)

With a custodial account, you can put cash or other assets in a special account for a minor. As the account’s custodian, you control it until the child reaches the age of majority—typically 18 to 21 years old, but possibly as late as 25 years of age, depending on the child’s state of residence.

Money can be withdrawn from a custodial account at any time, but it can only be spent in ways that directly benefit the minor.

Once the child reaches the age or majority, they become the owner of the account and can do whatever they want with the funds.

There are two main types of custodial accounts:

-- Uniform Gifts to Minors Act (UGMA) accounts

-- Uniform Transfers to Minors Act (UTMA) accounts

These custodial accounts generally function in the same way, but they have a couple of minor differences. For example, a UGMA account can only hold traditional financial assets, such as (but not limited to) stocks, bonds, mutual funds, exchange-traded funds (ETFs), and insurance products. UTMA accounts can hold those assets, plus property—say, real estate or cars.

Young and the Invested Tip: Even if a brokerage firm advertises both UGMA and UTMA accounts, you can’t open a new UGMA account today if you live in any of the 50 U.S. states or the District of Columbia. If you try to open a UGMA account, a UTMA account will be opened instead (although you can still own a UGMA account that was opened years ago).

Related: Should You Let Your Kids Move Back Home After College?

Advantages of Saving With a Custodial Account

There are a few significant advantages to using a custodial account to save for a child's education. For example, as a brokerage account, money in the account can (and should) be invested. Invested capital has the potential to grow in value far more than money in a regular checking or savings account.

There’s also a great deal of flexibility when it comes to spending money in the account. Suppose the child doesn’t need the funds for higher education, but urgently needs money for a different expense. Unlike 529 Plans, there’s no penalty if the money is used for something unrelated to education and there are no early withdrawal fees.

Downside of Saving With a Custodial Account

There is a downside to using custodial accounts to save for college when it comes to a student’s financial aid eligibility. When applying for financial aid, custodial accounts are considered assets of the child, while 529 plans are typically considered assets of the parent. Since students are expected to use a higher percentage of their assets to pay for college (20%) than what their parents are expected to pay (up to 5.64%), the student’s expected family contribution (EFC) will be higher with a custodial account than with a 529 plan. A higher EFC typically means less in financial aid.

Related: 6 Times When You Should Hire a Financial Advisor

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2. Coverdell Education Savings Accounts (ESAs)

A Coverdell Education Savings Account (ESA) is a type of investment account that makes it easier to pay education expenses for your children or loved ones.

Coverdell ESAs are similar to 529 plans. For instance, as with a 529 plan, contributions to a Coverdell ESA are made on an “after-tax” basis, money in a Coverdell ESA grows tax-free at the federal level if used for qualifying education expenses, and taxes must be paid on related earnings (along with a penalty) if funds in a Coverdell ESA are used for nonqualified expenses.

However, there are also some important differences between Coverdell ESAs and 529 plans. For example, unlike 529 plans, the following rules apply to Coverdell ESAs:

-- Contributions to an account must be made before the beneficiary is 18 years old (except in the case of a special needs beneficiary).

-- Annual contributions per beneficiary are limited to $2,000.

-- The $2,000 annual contribution limit is gradually reduced to $0 if the contributor’s modified adjusted gross income (AGI) is between $95,000 and $110,000 ($190,000 to $220,000 for married couples filing a joint tax return).

-- Funds in the account must be distributed by the time the beneficiary reaches age 30 (except in the case of a special needs beneficiary).

-- There’s no limit on distributions used for K-12 school expenses.

Because of the additional restrictions on contributions, Coverdell ESAs aren’t as popular as 529 plans. However, if you’re saving for K-12 education costs, a Coverdell ESA might be a better option since there’s no limit on distributions for these expenses. Money from a Coverdell ESA can also be used for more than just K-12 tuition.

Coverdell ESAs typically offer more investment options and control, too. This might be an important consideration for some families.

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3. Prepaid Tuition Plans

Prepaid tuition plans (also called guaranteed savings plans) are actually a type of 529 plan. However, we’re treating them as an alternative to traditional 529 plans since they work differently.

While not available in every state, prepaid tuition plans allow you to lock in current tuition rates for college expenses incurred years from now. You can often purchase anywhere from one semester to four years of college in advance with a prepaid tuition plan. When the beneficiary is ready to attend college, the plan will cover eligible expenses while the beneficiary is in school and pay the educational institution.

So, unlike standard 529 plans, a prepaid tuition plan protects you from rapidly rising tuition rates in the future. That’s the main benefit of these plans. But they’re also a lower-risk option, since you’re not subject to the same kind of investment loss associated with standard 529 plans.

On the other hand, a prepaid tuition plan only covers tuition and fees. It generally can’t be used to pay for other higher-education expenses, such as room and board.

Related: Is Your Personality Limiting Your Income? Here's What the Research Says

Are There Tax Benefits to Saving With a Prepaid Tuition Plan?

As with standard 529 plans, there’s no tax deduction for contributions to a prepaid tuition plan (i.e., money is put into the account on an “after-tax” basis). But there’s also no tax on earnings or distributions for qualified educational expenses.

Prepaid tuition plans are typically state-run plans set up to pay tuition at in-state colleges and universities. However, if the beneficiary ends up attending an out-of-state or private school, you can usually transfer the value of a prepaid tuition plan to the other school.

There’s also a prepaid tuition plan offered by a group of nearly 300 private school members from across the country. It’s called the Private College 529 Plan, and might be a good option for kids who have their heart set on attending one of the participating private colleges or universities.

Related: Should You Buy a Car Outright or Finance It?

4. Roth IRAs

Roth IRAs are best known for retirement savings, but they’re also an excellent option for funding your child’s college expenses. The tax advantages are similar to those for 529 plans. However, you’ll have more investment options with a Roth IRA than with a typical 529 plan. Another bonus is that any money not used toward education can stay in the account as retirement funds.

From a tax perspective, contributions to a Roth IRA are made on an “after-tax” basis, so you don’t get a tax break when you put money into the account. However, contributions and earnings grow tax-free.

You also never have to pay taxes when you withdraw contributions. Withdrawals of earnings are subject to income tax if you tax money out of the account before you turn 59½ years old.

In addition, withdrawing earnings before age 59½ generally results in a 10% penalty. However, the penalty doesn’t apply if the money is used for qualified higher-education expenses for either:

-- Yourself

-- Your spouse

-- Your or your spouse's child, foster child, or adopted child

-- Your or your spouse’s grandchild

Keep in mind that you can only contribute to a Roth IRA if you have earned income. As a result, if a Roth IRA is opened in a child’s name, the child needs to have some type of work that makes them money.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

Roth IRA Contribution Limits To Know

There are also annual contribution limits for Roth IRAs that might make it difficult to save enough for a pricey college education. The 2026 contribution maximum is $7,500 for everyone under age 50, but it rises to $8,800 if you’re 50 or older (these limits apply to the total amount contributed to all IRAs you own). However, the maximum amount is gradually reduced to zero if your 2026 modified AGI is:

-- $153,000 to $168,000 if you use the single or head of household filing status on your tax return

-- $242,000 to $252,000 if you’re married and file a joint return

-- $0 to $10,000 if you’re married but file a separate return

Roth IRA funds aren't included in financial aid calculations, but withdrawals count and can affect the amount of aid awarded.

Young and the Invested Tip: You have until the tax filing deadline for the year to make contributions to a Roth IRA. So, for example, you have until April 15, 2026 to put money in an IRA for the 2025 tax year. 

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5. High-Yield Savings Accounts

If you’re looking for the ultimate in flexibility and low risk, there’s always a traditional savings account with a bank.

You can put in as much as you want (although be mindful of FDIC insurance limitations), withdraw funds almost any time you want, and use the money for whatever you wish.

It’s also a safe bet. Unlike 529 plans and other investment accounts, there’s generally no chance of losing money in a savings account if you fall within the FDIC’s $250,000 of insurance coverage per depositor.

But, of course, the downside is that your return on investment is going to be low with a savings account. And with the sky-high cost of higher education these days, most people probably won’t see the type of growth they need to save up enough money for college.

You’ll also miss out on the tax savings available with 529 plans and some of the other methods for saving for college.

Nevertheless, if you do decide to put money in a savings account to beef up funds for higher education, at least consider a high-yield savings account. With a high-yield account, you’ll accumulate more money for college than with a standard savings account.

High-yield savings accounts often pay upwards of 15 to 25 times the national average of a standard savings account. They are also typically offered by online-only banks because of their lower cost structure than brick-and-mortar banks.

The interest rates for high-yield savings accounts are variable, so the rate you sign up for might change. However, even if your rate goes down, it will likely still be significantly higher than the rate of a standard savings account.

Consider placing your money in one of the most competitive high-yield savings accounts available on the market through CIT Bank. It offers an easy application process (about five minutes), extremely competitive rates, no service fees, and mobile banking functionality.

Related: 10 Home Improvement Investments That Don't Pay Off

6. Savings Bonds

Savings bonds are loans to the U.S. government. When you purchase a U.S. savings bond, you get your principal back, plus interest, when you cash in the bond or it reaches full maturity. You can cash in a bond after one year, but you’ll lose three months of interest if you cash it in before five years.

For Series EE and I bonds, the interest is only taxed at the federal level. They’re not subject to state or local income tax in most situations. You can also choose to pay federal tax on the interest earned each year or wait to pay tax on all the interest when you cash in the bond.

But here’s what makes savings bonds a good choice if you’re saving for college: If the money is used for qualifying education expenses, you won’t have to pay any tax on the interest if all of the following requirements are satisfied:

- -You were at least 24 years old when the bonds were issued.

-- Your modified adjusted gross income is less than the cut-off amount for the year in which you claim the exclusion, which is $182,650 for joint filers and $116,800 for everyone else for 2026.

- -You cash in the savings bonds in the same tax year for which you claim the exclusion.

-- You paid qualified higher education expenses to an eligible institution that same year.

- -The expenses were for yourself, your spouse, or someone you list as a dependent on your federal income tax return.

-- You don’t use the married filing separately filing status on your federal tax return.

Savings bonds are considered one of the safer investment options, meaning you can rest assured that the child will get the amount of money they’re promised.

U.S. savings bonds are also easy to purchase online at TreasuryDirect. Once they're bought and gifted, all you have to do is wait until they mature for the child to cash in and use the funds. You don't need to actively buy and sell any financial assets frequently.

Related: What Is a Savings Burn Rate?

7. Trusts

Setting up a trust fund to pay for higher-education expenses can offer more flexibility than a 529 plan. However, trusts set up for educational expenses are often irrevocable, so you might not be able to designate funds for college and then change your mind later.

With regard to greater flexibility, trusts offer more investment options than 529 plans, which are usually more limited in their investment options. With a 529 plan, only cash contributions are allowed, but you can put stocks, bonds, and other investment assets in a trust.

You’ll also have more choices with a trust than with a 529 plan when it comes to when and how money and assets in the trust are used. For instance, you can set up a trust so that some funds are to be used on tuition and fees, while other funds are used for other expenses, such as housing or medical expenses.

On the other hand, a trust might make it harder for the beneficiary to qualify for financial aid. Trust funds are generally treated as the beneficiary’s asset. As noted earlier, the beneficiary (student) is expected to use a higher percentage of their assets to pay for college than what their parents are expected to pay, which means the beneficiary’s expected family contribution will be higher with a trust than with a 529 plan.

Trusts also aren’t a quick and easy way to save for college, and there are additional costs associated with them. For instance, you’ll need to hire an attorney to set up the trust, and you might also want to consult with a financial advisor as well.

Related: How to Choose a Financial Advisor

Options For Unused 529 Plan Funds: 1. Roll Them Into a Roth IRA

There’s a new rule in place that makes 529 plans an even more attractive way to save for your child’s education. Starting this year, unused funds in a 529 plan can be transferred into a Roth IRA.

As a result, parents don’t have to worry as much about having leftover funds in a 529 plan if their child doesn’t attend or finish college, earns a scholarship, picks a less expensive school than expected, or otherwise doesn’t need all the money saved over the year in a 529 plan.

However, there are a number of requirements, restrictions, and limitations to the new 529-to-Roth IRA transfer rules. And if you mess up and don’t follow the rules, you could end up with a big tax bill and be hit with a hefty IRS penalty.

Related: Should You Ease Into Retirement? These Are the Pros + Cons

2. Transfer Unused 529 Funds to a Family Member’s 529 Plan

Leftover 529 plan funds can be transferred to a family member’s 529 account without triggering any taxes or penalties. You can also simply change the beneficiary to a member of the original beneficiary’s family.

However, taxes and penalties will still be due if the money eventually is used for something other than qualifying educational expenses.

Related: Do These 10 Home Renovations Before You Retire

3. Transfer Unused 529 Funds to a Family Member’s ABLE Account

Excess funds in a 529 plan can also be moved to a family member’s ABLE account, which is a savings account for people with disabilities.

However, if you’re transferring money from a 529 plan to an ABLE account, make sure you don’t exceed the ABLE account’s annual contribution limit.

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4. Pay Student Loan Debt With Unused 529 Funds

As noted earlier, money in a 529 plan can be used to pay up to $10,000 of a beneficiary’s student loan debt. It can also be used to pay up to $10,000 of student loan debt owed by the beneficiary’s sibling.

The $10,000 cap is a lifetime limit, not an annual one. It’s also a per beneficiary limit, not a per account limit. Payment of a sibling’s student loan counts against the sibling’s lifetime limit, not the beneficiary’s limit.

Young and the Invested Tip: The student loan interest deduction is reduced by the amount of student loan interest paid with tax-free earnings withdrawn from a 529 account. However, the deduction isn’t impacted by interest paid with 529 account contributions.

Related: Are you Saving Enough for Retirement?

5. Leave Unused 529 Funds In Your Account

Since there’s no time limit on using money in a 529 plan, you can always leave excess funds in a 529 plan account to use in the future. The beneficiary might eventually decide to take additional courses, attend graduate school, or even pass the leftover funds on to children of their own.

Related: 7 High-Quality, High-Yield Dividend Stocks

It’s difficult to resist the charm of high-yield dividend stocks. Their ability to generate outsized amounts of cash makes them the stuff of dreams for those living on a fixed income—as well as for any investors who simply want a little performance ballast during periods of rough stock-price returns.

But we prefer quantity and quality. For instance, our favorite high-yield dividend stocks deliver much sweeter yields than the average stock, show more signs of fundamental quality than most, and have the confidence of Wall Street's analyst community.

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But what if you're not collecting a paycheck?

People who live off their retirement investments and Social Security are said to live on a "fixed income," but that's not 100% accurate. Social Security benefits do in fact go up in most years as a way to offset the impact of inflation.

Today, I'll talk about the annual Social Security cost-of-living adjustment (or simply "COLA"). I'll show you how it's calculated, its connection to inflation, historical changes in COLA, this year's increase to payments, and more.

What Is the Cost-of-Living Adjustment (COLA)?

Roughly half of American adults age 65 or older receive at least 50% of their family income from Social Security, and about a quarter receive 90% or more from the program, according to data from the Social Security Administration (SSA).

So if Social Security checks remained stagnant while prices endlessly marched higher, it’s safe to say that millions of Americans would suffer.

That’s precisely why, starting in 1975, Social Security began the practice of making automatic cost-of-living adjustments (COLAs).

The COLA is an annual, formulaic tweak to Social Security benefits that reflects changes in consumer prices. The goal: Prevent inflation from diminishing the purchasing power of Social Security and Supplemental Security Income (SSI) benefits.

“The COLA is a vital component of Social Security, ensuring older Americans have an inflation-protected source of income in retirement,” AARP CEO Jo Ann Jenkins says. “This adjustment means older Americans will receive needed relief to help better afford essential items, from groceries to gas.”

How Is the COLA Calculated?

The adjustment is calculated based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 

This mouthful of an index is overseen by the Labor Department’s Bureau of Labor Statistics (BLS), which describes the index as “a monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.”

A COLA calculation is quite straightforward. It’s simply the percentage increase in CPI-W from the third quarter of the most recent year a cost-of-living adjustment was made, to the CPI-W from the third quarter of the current year. The SSA typically announces this change in mid-October of the current year, and the COLA goes into effect starting in January of the next year.

If there’s an increase in CPI-W, a COLA will be announced, and Social Security benefits will be increased by the same percentage. Percentages are rounded to the nearest tenth of a percent.

If there’s no increase in CPI-W, no COLA will be announced that year. But that’s a rarity—2010, 2011, and 2016 are the only three years in which there was no cost-of-living adjustment.

Example: Let’s say Q3 2027’s CPI-W is 1.0% higher than Q3 2026’s CPI-W. In mid-October 2027, the SSA would announce a 1.0% cost-of-living adjustment, and Social Security recipients’ benefits would reflect that increase starting in January 2028.

Related: 8 Special Tax Breaks for Senior Citizens

How Much Is the 2026 COLA?

The 2026 COLA was announced on Oct. 24, 2025 ... a little later than usual because of the federal government shutdown. It was 2.8%—a little higher than 2025's increase of 2.5%, but still behind the 3.1% average raise over the past decade.

The annual COLA can vary substantially from one year to the next. Just take a look at the past seven years’ worth of cost-of-living adjustments:

It’s important to note that COLA often won’t align with what most of us think of when we think about inflation. That’s because:

1. The index cited when reporting headline inflation is simply the Consumer Price Index (CPI), not CPI-W.
2. Any given year’s inflation rate is calculated with data from across the entire year, whereas COLA is based on a Q3-to-Q3 reading.

For context, consider the seven years’ worth of CPI-W growth that led to the 2020-26 COLA increases, and the corresponding CPI growth in those same years.

Related: How Much Social Security Will I Receive?

When Will I Receive My First Increased Payment?

The 2026 COLA will impact benefit checks in January 2026—for most Social Security recipients, anyways.

When exactly you’ll see the higher benefit check predominantly depends on where your birthday falls within your birth month. Here’s when most people can expect their Social Security checks to arrive:

However, there is an exception: Anyone who has received Social Security benefits since before May 1997 will receive their first 2026 benefits check on Jan. 3.

Supplemental Security Income (SSI) checks reflecting the new payment will be sent out Dec. 31, 2025. Typically, SSI checks go out on the first of the month, but January’s checks are always pushed up a day because New Year’s Day is a federal holiday.

Related: Does Your Credit Score Matter in Retirement?

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Social Security Work Credits Will Change, Too

The COLA isn’t the only change coming to Social Security in 2026. Americans also will need to earn more to qualify for the program.

Americans must accumulate 40 work credits during their lifetime to qualify for Social Security retirement benefits. You do that by reaching a certain level of “covered earnings”—earnings subject to Medicare taxation. 

And just like Social Security can announce a COLA every year, the amount required to earn a work credit can go up any given year, too. When that happens, the SSA announces the work credit threshold alongside the COLA.

For 2026, you must make at least $1,890 in covered earnings during a quarter to receive a work credit, up from $1,810 in 2025. And you can compile a maximum of four work credits per year, at $7,560 in total earnings. (Note: You can earn work credits at a faster rate than once per quarter. For instance, if you made $7,560 in covered earnings during your first month of work, you would earn all four credits for the year.)

Other Updates for 2026

Social Security announced other updates pertaining to taxes and worker earnings limits:

• In 2026, the maximum earnings subject to Social Security tax will be $184,500, up from $176,100 in 2025.
• Workers who are younger than full retirement age (FRA), but are collecting Social Security benefits, have an earnings limit of $24,480 in 2026 (up from $23,400 in 2025). That means the SSA will deduct $1 for every $2 earned over $24,480 in 2026.
• Meanwhile, beneficiaries who work and will reach FRA in 2026 will have an earnings cap of $65,160 in 2026 (up from $62,160 in 2025). That means the SSA will deduct $1 for every $3 earned over $65,160 up until the month the worker reaches FRA.

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How Big Is the Average Social Security Benefits Check?

It’s difficult to understand how much of a difference the COLA makes without knowing the size of the average Social Security check. 

As of August 2025, the average monthly check for a Social Security retirement benefits recipient was $1,864.87 … but that number can vary substantially by person.

How much you receive as your benefit depends on several factors, including the age you started taking Social Security, your lifetime earnings, the number of years you worked, and, in certain circumstances, whether you’re a government worker with a pension affected by the Windfall Elimination Provision. 

Also, some people receive Social Security spousal benefits, so their eligibility is largely based on their spouse’s work history, rather than their own.

Related: What Is Medicare? A Guide to Types of Medicare Coverage

How Can Retirees Protect Their Savings From Inflation?

The COLA helps protect one’s Social Security payments against inflation … but it doesn’t protect any of your retirement savings or investments.

The only way to do that is to ensure, at the very least, your money is growing at the rate of inflation. Though ideally, you should aim for better than that.

"When you’re in retirement you can’t afford to stay only in a low-interest rate investment like a CD just because it’s safe," Kelly LaVigne, VP of Consumer Insights at Allianz Life, told Young and the Invested in an interview. "You also need to have at least some of your retirement funds in a position to grow a bit more than inflation will."

He encourages people to take a look at their financial strategy and talk to a financial advisor about it. Depending on your situation, you might need to invest at least a portion of your portfolio more aggressively to stay well ahead of inflation over the long term.

"For those nearing retirement, this year’s increase is also a timely reminder to plan carefully when and how to claim benefits—even small timing decisions can make a big difference," adds Lisa Featherngill, National Director of Strategic Wealth & Business Advisory at Comerica Wealth Management. "And with higher taxable wage and earnings limits next year, both workers and early retirees should revisit their financial strategies to ensure they’re maximizing every opportunity."

Related: Medicare FAQs: Your Questions Answered

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These IRS forms are some of the most important documents employers and employees must use and understand in order to comply with federal tax laws. While each form is distinct, they all share the common purpose of ensuring that federal taxes are accurately calculated and reported each year.

This article will provide a high-level exploration of Forms W-2, W-4, and W-9. I’ll cover these three forms' unique functions, how they relate to one another, and the differences between them.

With this knowledge, employers and employees will be better equipped to file their taxes accurately and avoid any penalties associated with misclassification.

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What Is IRS Form W-2, Wage and Tax Statement?

A W-2 form, officially named a “Wage and Tax Statement,” is an annual form you receive as an employee that reports compensation you’ve earned from your employer.

Items covered include amounts related to your:

-- Salary, wages, tips, and other compensation

-- Employer-offered fringe benefits, such as health insurance, adoption assistance, and dependent care benefits

-- Health savings account (HSA) and employer-sponsored retirement plan contributions

-- Taxes you’ve paid to various taxing authorities, such as the IRS or a state tax agency

Arguably the most important tax form you’ll receive as an individual each year, you’ll use this form to prepare your annual federal and state taxes.

Who Receives a Form W-2?

If you worked as an employee for an employer who paid you $600 or more for services you performed during the tax year, your employer must send you a Form W-2 reporting your earnings, taxes withheld, and any associated benefits paid (even if you are related to the employer). Meeting this $600 threshold can come from both cash and noncash payments.

Further, if your employer withheld any income, Social Security, or Medicare taxes from your pay, the company must provide you with a W-2 regardless of whether you met the $600 earnings threshold. You might need this information when filing your tax return.

The IRS requires W-2 forms for the previous year to be distributed to employees by the end of January. That means if you worked for an employer in 2025 and met the above qualifications, you should expect to have your W-2 by Jan. 31, 2026. Employers can send the forms physically, digitally, or both to comply with the IRS requirements.

You may receive multiple W-2s if:

-- You worked more than one job where you’re classified as an employee and meet the minimum filing requirements

-- Your employer was acquired by another company despite your employment status not changing

-- You changed jobs within the tax year

Your employer must also send a copy of your W-2 form to the Social Security Administration, and perhaps to state or local tax agencies where you live.

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What Is IRS Form W-4, Employee's Withholding Certificate?

IRS Form W-4, also known as the “Employee's Withholding Certificate,” is the form you complete as an employee to tell your employer how much federal income tax to withhold from your paycheck. By preparing your W-4 form appropriately for your unique tax situation, you can avoid any unpleasant surprises at tax time and allow your employer to withhold income taxes in the correct amount.

Related: IRA vs. 401(k): How These Retirement Accounts Differ

What Does a Form W-4 Do?

The W-4 tax form allows employees to specify how much tax they should have withheld from their paychecks.

In the past, the W-4 was based on a system of withholding allowances, which were used to calculate the amount of tax that should be deducted from an employee’s pay. However, in 2020, the IRS changed the format of Form W-4 to improve the accuracy of the tax withholding system. (The previous iteration of the form was called the Employee’s Withholding Allowance Certificate, but that’s since been changed to read simply “Employee’s Withholding Certificate” since the IRS removed allowances.) Now, the form takes into account various factors, such as marital status, dependents, and other sources of income.

Form W-4 still offers employees a significant amount of flexibility, though. This gives you a significant amount of control over your tax withholding, which helps you avoid overpaying or underpaying taxes throughout the year.

For instance, you can have additional taxes withheld from your paycheck to account for other earnings outside of your job, such as from side hustles, consulting work, or other sources of income. That way, you can avoid the need to make quarterly estimated tax payments on their due dates.

You can also reduce the amount of taxes withheld from your paycheck because you're making other tax moves that will lower your tax bill for the year (e.g., contributing to a traditional individual retirement account (IRA), traditional 401(k) plan, HSA, flexible spending account, or other tax-advantaged account).

Again, the W-4 is an important form that helps employees control how much federal income tax they have withheld from their paychecks each year.

Related: Should You Max Out Your 401(k) Each Year? [Yes…and No]

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What Is IRS Form W-9, Request for Taxpayer Identification Number and Certification?

IRS Form W-9, formally known as a “Request for Taxpayer Identification Number and Certification,” is used to verify the tax identification number (TIN) of an individual or entity that you paid or otherwise sent money that needs to be reported to the IRS. For example, you might need a TIN to prepare Form 1099-NEC (nonemployee compensation), Form 1099-MISC (miscellaneous income), or other information returns. In addition to the TIN, the form collects other information needed to prepare the proper forms for IRS tax reporting purposes.

Aside from collecting this important identification information, the W-9 form is also used to determine if the individual or entity is subject to backup withholding. Backup withholding usually comes into play when a taxpayer has previously under-reported interest, dividend, or other forms of income. If backup withholding is required, 24% of any payments to the individual or entity must be withheld and sent to the IRS.

Further, if an individual or entity is exempt from the Foreign Account Tax Compliance Act (FATCA) reporting requirements, they can declare this and provide the appropriate exemption code on the form.

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Who Needs to Fill Out IRS Form W-9?

You’ll need to fill out a Form W-9 if you’re working as an independent contractor for an entity that pays you for your work. When filling out your W-9, you’ll need to include the appropriate exempt payee code if you’re not subject to backup withholding or the FATCA reporting requirements. Generally speaking, these items don’t apply to most independent contractors or freelancers.

If you’re an Independent contractor, you’ll need to provide the following information on Form W-9:

-- Your name and, if applicable, your business name

-- Your federal tax classification (i.e., individual/sole-proprietor, single-member limited liability company, C corporation, S corporation, partnership, etc.)

-- Your current, full mailing address

-- Your TIN, which is either an Employer Identification Number (EIN) or Social Security number

You’ll also have to certify, under penalty of perjury, that the information provided on the form is correct.

YATI Tip: Whether you’re an independent contractor or an employee largely depends on who controls, or has the right to control, when and how you do your job. If the control is in your hands, then you’re an independent contractor (i.e., a “1099 worker”). If the person or business paying for your services controls how and when you work, then you’re an employee (i.e., a “W-2 worker”).

Related: 1099 vs W-2: Contractor and Employee Taxes, Costs & Benefits

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What Is the Difference Between Forms W-2, W-4, and W-9?

If you’re conducting a Form W2 vs. W4 vs. W9 comparison, the high-level highlights of each form are provided below.

W-2 Highlights: Used by Employers and Employees

-- Used to report earnings, benefits paid, taxes withheld, and other important tax information needed by employees to prepare personal income tax returns

-- Prepared by your employer and sent to you each January if you worked for the employer during the previous tax year

W-4 Highlights: Used by Employers and Employees

-- Used by employees to inform their employers how much money they want withheld from their paychecks for taxes

-- Can be resubmitted during the year to request additional or less withholding

W-9 Highlights: Used by Entities and Independent Contractors

-- Used by companies to collect necessary tax information from independent contractors to ensure proper tax reporting

-- Independent contractors also use this form to inform the company if they are exempt to backup withholding or FATCA reporting requirements

Related: Tax Planning Tips to Lower Your Next Tax Bill

Is There an Equivalent For Form W-2 for Independent Contractors?

Independent contractors won’t receive a Form W-2 reporting their earnings, benefits payments, or tax withholding information at the conclusion of every tax year. Instead, they’ll likely receive a Form 1099-NEC, Nonemployee Compensation. This form is used to report any payments made to independent contractors, freelancers, or gig workers that exceed $600 in value. While a payer can prepare and file a Form 1099-NEC for any payments made below this value, they aren’t obligated by the IRS to do so.

As an independent contractor, you’ll use this information to prepare the Schedule C that goes with your Form 1040 if you’ve organized your business as a sole proprietorship. If you’re organized as another legal entity, such as a limited liability company, C corporation, or S corporation, you may not receive a Form 1099-NEC and you’ll need to use your own records to prepare your tax return.

If you work as an independent contractor, you’ll also need to pay both the employer’s share and the employee’s share of employment taxes (i.e., Social Security taxes and Medicare taxes). In total, this amounts to 15.3%, or 6.2% + 6.2% for Social Security taxes and 1.45% + 1.45% for Medicare taxes.

Related: Student Loan Interest Deduction: How Much, Eligibility + More

Recap: Forms W-2 vs. W-4. vs. W-9

If you work as an employee, you’ll encounter two forms in the course of your employment: Forms W-2 and W-4. Your W-2 will report your earnings, benefits paid, and taxes withheld each year while the W-4 form is used to inform your employer of how much money should be withheld from your paychecks for taxes.

On the other hand, the W-9 form is provided to individual independent contractors taxpayers by third parties who intend to pay them certain types of income, such as interest, dividends, rents, royalties, or compensation. Just like the W-4 form, correctly completing the W-9 form is crucial to ensuring you meet your tax obligations and avoid potential issues with the IRS.

By understanding what these forms are and when they’re needed, you can better navigate the tax system and ensure your financial affairs are in order.

Schedule Your Call With Riley

Riley Adams, CPA

Licensed CPA and Financial Advisor

Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.

Schedule Now

Investment advisory services offered through NewEdge Advisors, a registered investment advisor.

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Related: What Tax Bracket Are You In?

Perhaps the best way to lower your federal income tax bill is push yourself down into a lower tax bracket to reduce your tax rate. On the flip side, you certainly want to avoid getting kicked into a higher bracket and increasing your tax rate.

But, of course, under either scenario you need to have a good feel for where you are right now. For that purpose, check out the federal tax brackets and rates that will apply for your next federal tax return.

Related: What's Your Standard Deduction?

For most people, their largest and most important tax deduction is the standard deduction. However, the standard deduction amounts change every year to account for inflation. Plus, the standard deduction isn’t the same for everyone.

So, before start your tax return or jumping into tax planning mode, you’ll need to know how much your standard deduction will be for the tax year.

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If so, congratulations! You've worked hard for years and deserve to enjoy the fruits of that labor. But planning for this monumental life shift isn't just about marking days off of a calendar. It's about making strategic, impactful decisions that will shape your future. Don't treat this time as a passive waiting game, but as active preparation for the next chapter of your life.

If I were setting my sights on retiring this year, there are five critical steps I'd tackle first to ensure a smooth and secure transition. By checking off these priorities, you can enter retirement better prepared and with greater peace of mind.

Your Immediate Must-Dos for Retirement

Are you ready for your quickly approaching retirement? Well, before you collect your gold watch or pop the retirement party champagne, you should get on top of a few high-priority tasks.

If you're planning to retire this year, make sure you've addressed the following steps.

1. Know When You're Applying for Medicare

Most retirees use Medicare to help pay for their health care expenses. But you can't just sign up for Medicare whenever you want. 

There are three types of enrollment periods, which are as follows:

-- Initial Enrollment Period

-- Special Enrollment Periods

-- General Enrollment Periods

Initial Enrollment Period (IEP)

Your Initial Enrollment Period (IEP) is when you first qualify to sign up for Part A and Part B. The IEP lasts for seven months and revolves around your 65th birthday. It usually includes the following:

-- The three months before the month in which you turn 65

-- The month in which you turn 65

-- Three months after the month in which you turn 65

For example, if your birthday was May 12, your IEP would start Feb. 1 of the year you turn 65 and end Aug. 31.

It works slightly differently if your birthday is on the first of the month, however—you still have a seven-month IEP, but the timing is shifted. In this situation, your IEP starts four months before your birthday and ends two months after your birth month. For instance, if your birthday is May 1, your IEP would start Jan. 1 and end July 31.

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General Enrollment Period (GEP)

If you don't sign up during your IEP, and you don't qualify for a Special Enrollment Period (more on that in a moment), you'll need to sign up through the General Enrollment Period (GEP).

The GEP runs from Jan. 1 through March 31 of each year.

If you sign up during a GEP without qualifying for a Special Enrollment Period, you could be assessed a monthly late enrollment penalty.

Special Enrollment Periods (SEPs)

Certain situations will trigger a Special Enrollment Period (SEP), which allows you to sign up for Premium-Part A and Part B without paying a late enrollment penalty. 

All SEPs are temporary; the length of time it lasts depends on the qualifying event, but it's frequently between six and 12 months.

If you miss that window, you have to wait until the next GEP (which might result in paying a monthly late enrollment penalty). 

Related: 12 Income Sources That Don't Affect Your Social Security Benefits

2. Prepare for Social Security Taxes

If you were a W-2 employee during your working years, your employer withheld taxes for you. As a retiree, however, you'll need to plan for (and withhold money for) taxes on your own. 

First, figure out whether you make enough money where you'll even need to pay taxes. If your sole income as a retiree is Social Security, those benefits generally won't be subject to federal income tax—thus, your adjusted gross income (AGI) will be zero, thus you don't have to file a federal income tax return. (However, you still can.) But if you have taxable income from elsewhere—such as retirement accounts, life insurance, an annuity, even a job—you might have to pay taxes on your Social Security benefits and other income.

Once you start receiving Social Security benefits, you'll get a statement each January stating the benefits you received the previous year. To calculate your taxes, the IRS looks at your provisional income (aka “combined income”), which is your AGI added to nontaxable interest and half of your Social Security benefits from the year, minus any deductions and exclusions.

Your provisional income determines what percentage of your benefits are taxable. A quick guide:

-- Under $25,000 (single) or $32,000 (filing jointly): Social Security benefits are not taxed.

-- Between $25,000 and $34,000 (single) or $32,000 and $44,000 (filing jointly): Up to 50% of Social Security benefits can be taxed.

-- Over $34,000 (single) or over $44,000 (filing jointly): Up to 85% of Social Security benefits can be taxed.

Want a shortcut? This IRS tool can help you determine whether any of your Social Security benefits, as well as your spouse's if filing jointly, are taxable.

If you'll need to pay federal Social Security taxes, you can be proactive and withhold taxes from your Social Security payments by filling out Form W-4V and choosing one of the following withholding rates:

-- 7%

-- 10%

-- 12%

-- 22%

Whether you pay Social Security taxes at the state level depends on where you live. While most states no longer do, there are still some states that tax Social Security benefits.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

3. Be Aware of Current Market Conditions

Market volatility can take a bite out of anyone's returns, no matter how skilled an investor you are. And while virtually any expert would tell everyday buy-and-hold investors to stick to their guns and ignore market volatility in the decades leading up to retirement, current market conditions are a very real concern if you plan to retire within the next year.

You'll need to see how vulnerable you are to sequence-of-returns risk: the risk of experiencing poor market performance just before or in the early years of retirement. Significant downturns during this time can result in nest eggs becoming depleted earlier than expected. (A retirement buckets strategy may help reduce your sequence-of-returns risk.)

If the market has been significantly lower in the period leading up to your retirement, and/or if you're pessimistic about the market as you're about to retire, you might need to make some changes. That might mean adjusting your withdrawal rate lower during your initial year of retirement, or operating under a more conservative budget. Or if the market has plunged very deeply, you might even need to consider postponing your retirement.

Related: How Much Is My RMD If I've Saved $1 Million for Retirement?

4. Determine Whether You Want to Roll Over Your 401(k)

401(k)s are ubiquitous at this point, so there's a good chance you have one. If so, when you retire, you'll need to decide whether to leave your 401(k) funds where they are, or roll over your 401(k) into an individual retirement account (IRA).

If you have a 401(k) balance under $7,000, you might not have a choice. Many (but not all) employers' 401(k) plans have provisions in which former employees' accounts automatically will be rolled over into an IRA if they leave with a balance of less than $7,000. Also, in some cases, accounts with less than $1,000 may be cashed out; your workplace would send you a check for the balance minus any taxes and/or applicable early withdrawal penalties.

If you have a 401(k) balance over $7,000, you basically have two options:

First, you can leave your 401(k) as is. And it might be advantageous to do so—large-employer 401(k) plans have very low costs, and most plans' investment options will include at least a few funds that are attractive to investors in retirement. While you can no longer contribute to your 401(k) once you leave, you can still manage your investments. Additionally, you might be able to take early withdrawals without the hefty penalty via the Rule of 55 or Rule 72(t).

Alternatively, you can roll your 401(k) into another account (typically a traditional IRA). IRAs typically offer a far wider array of investment options—such as stocks, exchange-traded funds (ETFs), individual bonds, and options—than 401(k)s, which usually only offer mutual funds. If you have multiple 401(k)s, you could simplify your finances by consolidating them into a single IRA. Also, once you reach age 70 ½, IRAs give you the option of making charitable IRA rollovers or qualified charitable distributions. 

Related: Rule of 55 vs Rule 72(t): What's the Difference?

5. Determine Whether You Want to Do a Roth Conversion

A 401(k) rollover involves transferring money from one tax-deferred account to another. It's simple, it's straightforward, and it shouldn't have tax consequences.

A Roth conversion is a transfer from a tax-deferred retirement account (like a traditional 401(k) or IRA) into a tax-exempt Roth retirement account (usually a Roth IRA). And it has considerable benefits, but considerable drawbacks, too.

A Roth conversion puts a portion of your money into a tax-exempt account, which means once you withdraw those funds from your Roth account, you won't be taxed on those withdrawals. It's a great way to diversify your tax treatment if you already have a traditional IRA. And Roth accounts aren't subject to required minimum distributions (RMDs).

However, you will face tax consequences in the year of the conversion—a potentially hefty tax bill on any converted funds. You can't withdraw any converted money for five years without penalty. And you can't undo a Roth conversion, so you can't change your mind after the fact.

There are income limitations, too, based on your modified adjusted gross income (MAGI). However, if you earn more than the annual MAGI limit, that's OK—you still might be able to execute a backdoor Roth conversion. In a backdoor Roth conversion, you simultaneously make nondeductible contributions to a traditional IRA then complete a Roth conversion soon after.

How do you know if a Roth conversion is a smart strategy for you? To start, the best tax brackets for Roth conversions are generally lower ones. However, your current financial situation, market conditions, how a conversion may affect your heirs, and much more goes into this decision.

Timing matters, too. If you're retiring very late in the year, you will have collected income from your job throughout the year, which could put you in a higher tax bracket. It may be more advantageous to do this in January or February after you retire, as your income likely will be lower during your first full year as a retiree.

As you can tell, this is a complex process—one with a lot of conditions to consider—so your best move is to discuss your options with a financial advisor.

Schedule Your Call With Riley

Riley Adams, CPA

Licensed CPA and Financial Advisor

Want to talk more about your financial goals or concerns? Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you.

Schedule Now

Investment advisory services offered through NewEdge Advisors, a registered investment advisor.

Related: How Long Will My Savings Last in Retirement?

When a person finally decides to retire, they don’t quit their job one day, then liquidate their entire nest egg and stash it into a bank account the next day. (Or at least, they probably shouldn’t.) They withdraw money over time, which allows them to cover their expenses while the remaining nest egg continues to grow in price and/or generate income.

That’s where these retirement withdrawal strategies come in.

Related: How Does the 4% Rule Work? [And Why Did It Change?] 

One of the most popular retirement withdrawal strategies of the past few decades has been the unfussy “4% rule.” It’s one of the most straightforward rules you’ll come across in finance, even as its creator has made a few tweaks to it over the years.

How does the 4% rule work, how has it changed, and can it help guide your retirement? Check out our primer on the 4% rule.

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The balancing act doesn't go away when your children grow up, but it does shift in nature. That is, the nature of the question becomes a financial one: You don't want your adult children to suffer unnecessarily when you have the means to help them, but you also don't want them to be so spoiled that they never learn how to support themselves.

Today, I'll discuss ways that parents of adult children can find that balance. What's financially feasible varies by family—the amount of support one set of parents can provide won't be the same as what another set (or what a single parent) might be able to offer. So rather than exact advice you should follow to the letter, consider the following as a way to frame your thinking about supporting adult children.

Here are the dos and don'ts of financially supporting your fully grown children.

How Common Is Supporting Your Adult Children?

Some parents completely cut their children off financially when they graduate high school. Others are willing to pay for all of their adult children's expenses indefinitely. Most parents fall between these extremes and provide a limited amount of support to their adult children until they are financially stable.

According to a 2024 Savings.com survey …

-- 47% of parents with adult children (excluding children with disabilities) provide them with some form of financial support. 

-- About 61% of adults who live with their parents don't pay rent or otherwise contribute to household expenses. 

-- 46% of parents who financially support adult children give them money for vacations and discretionary spending.

-- 18% of parents who financially support adult children help them pay off credit cards.

We aren't just talking about teenage adults either. Millennials and even members of Gen X receive monetary help from their parents.

It's common to help your kids out a bit as they adjust to normal adult expenses; a little help likely won't set them up for failure.

Unfortunately, supporting adult children can sometimes lead to parents developing their own financial struggles. About 58% of the Savings.com survey respondents said they have sacrificed their own financial security for the sake of their adult children. And that's the point at which "common" doesn't necessarily line up with "wise."

When Should You Financially Support Adult Children?

When you support your adult children, you want to provide them with stepping stones—paying for things that set them up to be independent on their own—rather than carry them through life.

Often, that means offering help only if there is proof your adult child is working toward financial independence or another goal. Nearly two-thirds (74%) of parents put contingencies on their support, such as their children needing jobs, avoiding certain behaviors, or attending therapy, per a 2023 USA Today survey. Other times, it means providing essentials, such as food and shelter, but not luxuries. 

But when it comes to how much financial support to give, the answer isn't based solely on what's best for your adult children—you must consider yourself, too.

Because you're older, you have less time to make up for shortcomings in your retirement plan. So while you might want to help your younger children, the line should be drawn at putting yourself in debt or otherwise sacrificing your future. For example, if you don't have enough saved for your own retirement … you probably want to reconsider paying for your child's college tuition.

All of the following suggestions are based on the assumption that supporting your child in these ways is financially feasible for you. If any of these forms of support put a strain on your finances to the point where you can't afford essentials, you shouldn't do them.

Related: Should I Pay Off My Mortgage Before I Retire?

1. Housing

Homeownership remains a pivotal part of the American Dream—according to the Harris Poll's The Status of Real Estate in 2024 survey, 81% of respondents said they want to own a house/residence one day. Unfortunately, 61% worry that they'll never be able to, and costs are a major reason why. 

At the same time, rents have skyrocketed nationwide. A StreetEasy study, using data from the Zillow Observed Rent Index, found that between 2019 and 2023, rent costs grew faster than wages in 44 of the 50 largest metros. 

Some parents look forward to the day they become empty nesters and might struggle with how to achieve that goal. Our thoughts?

Do consider letting your children keep living with you temporarily as adults. 

You might let your adult children live with you while they get a college degree, attend a trade school, or start a career. You might let your kids move back home after college as they apply for jobs as well. 

In high-cost-of-living cities, it might be impossible for your child to find safe accommodations with their current salary. It's easier to find a job where you're living than to secure employment elsewhere. Even in low-cost-of-living areas, saving enough for a home down payment while paying rent can be impossible. Assuming your child is indeed setting aside money for their future, this is one of the best ways for them to save money quickly.

Don't completely pay for an apartment for your child. That might sound preferable if you can afford it, as doing so would help you retain your personal space, but a 100% free apartment might put your child out of touch with current housing costs. Alternatively, offer your child a set amount you'll pay toward housing. 

Don't be afraid to put conditions on these arrangements, either. Many parents will let adult children live with them, but only if they are attending school or working. Some parents have their children pay them some portion of rent—and sometimes, as additional incentive, they'll return that money once the child is able to move out.

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2. Food

The previously mentioned USA Today survey showed that groceries were the most common type of support parents give their adult children. More than a quarter (27%) of respondents said they helped their adult children with groceries, while 18% said they paid for take-out food or dining out.

Do include your adult child in family meals. Unless you're making Kobe beef, making an extra serving of a meal usually doesn't cost much more money, especially if you buy in bulk. This can also be a great opportunity to bond with your child and catch up on their lives. You may naturally learn how school, work, or a job search is going. 

Don't give your child an unlimited budget for food delivery or dining out. If your kid can drive, you shouldn't constantly be footing the bill for them to have food delivered. It's one thing to treat your child to a dinner out. It's another to always pay for it even if you aren't in attendance. If your adult child doesn't want to eat the dinner you've made, it's reasonable for them to handle feeding themselves another way.

Also, consider asking your child to occasionally cook. Adults of any age should be able to wash their own dishes after a meal or load them into a dishwasher as well. Helping them with high food prices doesn't mean you need to be a short-order cook and dishwasher, too.

Related: Cooking Costs Heating Up? Here's How to Save Money Cooking

3. Healthcare

Assuming your health insurance plan covers dependents, you can typically have adult children on your plan until they turn 26 years old. This is an option even if your kid is married, also a parent, isn't claimed as a tax dependent, and has the opportunity for job-based coverage (if they turn it down). In some situations, your child might even be able to stay on your insurance until an older age. 

But just because your child can stay on your plan that long doesn't mean you have to let them. 

Do keep your child on your health insurance if it doesn't raise your premiums. Often, if you already have other dependents on your plan, such as a minor child or your spouse, it doesn't cost you more money to include your adult child. Don't make your child unnecessarily pay for health care premiums when they could instead save that money for other expenses. 

Even if it does cost you to include your child, you still might want to add them. If your child doesn't have a job that offers health insurance yet, your insurance could still be the best option.

Don't automatically put your child on your health care plan if they live far away. If you have a Health Maintenance Organization (HMO) plan, it typically requires you to get care from medical professionals who work for or contract with the HMO, except for emergencies.  If you live in Maine and your kid moved to California, it might not make sense to have them on your plan as most care would be out-of-network and likely very expensive. 

Related: Retired But Too Young for Medicare? Health Insurance for Early Retirees

4. Higher Education

It's no secret: Higher education prices can be exorbitant. According to the Education Data Initiative, the average cost of a four-year postsecondary undergraduate degree program for full-time students (including tuition, books, supplies, and other daily living expenses) is $38,270 … per year. 

We know the perks. A university degree can make it much easier to land a high-paying job. The path to this achievement nets other benefits too, such as learning vital social skills, making professional connections, and, of course, knowing more about our big, wide world.

Do help your children with tuition costs and other necessary supplies as you can. On average, federal student loan debt sits around $38,000, with some students racking up six figures' worth. Every dollar in student loans your child doesn't have to take out is many dollars they don't have to pay back down the line. Plus, the learned skills and resume boost will increase their chances of finding work, which could prevent them from having to rely on you more in the future.

Also, do suggest methods that could bring down the cost of schooling, even if paying for college would be feasible for you. Require your child to apply for scholarships or grants. Limit your child to in-state and/or public schools rather than out-of-state and/or private schools.

Some parents also forbid adult children from pursuing certain degrees, but it's worth noting that there are high-paying jobs you can get with "vanity degrees." So, if your child has a plan for how they want to use a seemingly "useless" degree, it's with hearing them out. 

Don't feel as if you can't put any contingencies in place. For example, you might require your child to maintain a certain grade point average (GPA) to continue paying tuition every semester. (After all, if your child flunks out of college, that's a lot of money down the drain.)

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

5. Co-signing Loans

Your child might not ask you to fully pay for something, but rather co-sign for something they intend to pay for on their own. Maybe your child has bad credit, or maybe they simply haven't established a credit history.

There may be situations where your child doesn't ask you to fully pay for something, but rather co-sign for something they intend to pay for on their own. When you co-sign a loan with your child, you agree to pay back the loan if your kid stops paying it. You might be asked to co-sign if your child has bad credit or simply hasn't established enough of a credit history.

Do consider co-signing a loan if you already planned on footing the bill. For example, if you have an agreement with your child that you'll help pay for their education or a car, you aren't risking paying more money than you planned. It gives your child an opportunity to build credit, and you're not taking on much more risk than anticipated.

Don't jump to co-sign a loan if it's an expense your child plans to pay, but they've shown themselves to be financially irresponsible. If your kid's poor credit score makes banks hesitant to trust them, you might want to be similarly hesitant. Of course, you know your child's circumstances better than the bank, and can more easily determine how at fault they are for a poor credit score.

And don't co-sign a large loan, such as a mortgage—even if your child is responsible—unless you can absolutely afford those payments. If your child faces a financial crisis, not only could you be left on the hook to finish the payments—it could end up hurting your credit score in retirement, and you might still need strong credit to get home refinancing, a new credit card, and other monetary endeavors. 

Related: 9 Financial Mistakes That Can Quickly Drain Your Retirement Savings

6. Luxuries

Should you only help your child out with essentials? Or should you give them special treats sometimes? 

No matter what their age, your adult child is still your offspring and it can be hard to see them forgo items or experiences that could bring them happiness. At the same time, you aren't doing your kids any favors if they become overly spoiled and entitled.

Do celebrate your child's birthdays and special occasions. Don't be a Grinch during the holidays and insist your kid is too old for any type of gift, or fail to give a wedding present because you think marriage doesn't warrant a party. The occasional treat for no reason at all is fine, too. Even adults deserve some fun.

Don't be a human credit card. Don't fund all of your child's luxury purchases, such as designer bags and endless international travel. If you cover most of your kid's discretionary purchases, they'll be far less likely to understand the value of money and less motivated to earn anything on their own.

Additionally, pay attention to whether you're indirectly funding your child's luxuries. Perhaps you're letting your child live with you for free and covering all of their groceries with the understanding that they are setting aside the money they're saving for a house down payment. There is nothing wrong with that! But if that same child ends up going on vacation to the Maldives and comes back wearing head-to-toe Gucci, it might be time to rethink your arrangement.

Related: How to Choose a Financial Advisor

How to Financially Prepare Your Child

You want your children to achieve financial independence as young as possible. You should be a  backup plan, not Plan A. 

You can help your child learn financial skills far before they reach adulthood, helping them more easily transition into making sound monetary decisions once they grow up.

Teach your children financial subjects such as budgeting and how compound interest works. You can teach them responsible spending habits through children's bank accounts and kids' debit cards. And if you don't feel like you were born with innate money management skills, you can encourage your children to take financial classes in school or at least read relevant books.

Besides teaching them the necessary financial skills they'll need, the more money your children have saved by adulthood, the better prepared they will be. You can save college money for them in a 529 account, have them put aside some of their own earnings in a Roth IRA, or set up a custodial account for them. There are even microsavings apps that help people save little by little. 

The more knowledge and the more money your child has as they reach adulthood, the better off they'll be.

Related: 401(k) Super Catch-Up Contributions: How They Work

Related: How Long Will My Savings Last in Retirement?

When a person finally decides to retire, they don’t quit their job one day, then liquidate their entire nest egg and stash it into a bank account the next day. (Or at least, they probably shouldn’t.) They withdraw money over time, which allows them to cover their expenses while the remaining nest egg continues to grow in price and/or generate income.

That’s where these retirement withdrawal strategies come in.

Please Don't Forget to Like, Follow and Comment

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When you first start investing, you'll start with the core. Going forward, you'll likely spend most of your time tinkering at the periphery with "satellite" holdings, but it's still a good idea to keep an eye on your core investments, rebalancing and optimizing where you can. That's true no matter what your age—20, 40, 60, or 80.

One important step in tending to your core is making sure the stocks and funds you've selected are still the best ones for the job. For instance, mutual funds you bought when you were younger and less experienced might still do the job, but there also might be better-performing, more cost-efficient replaces.

Let's look at some of the best basic index funds from Fidelity. Fidelity's mutual funds typically charge well-below-average fees, are often respectable performers within their respective categories, and require no minimum initial investment. That means you can start buying them for as little as $1.

Editor's Note: Tabular data presented in this article is up-to-date as of April 15, 2026.

Featured Financial Products

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

What Is an Index Fund?

If you want to understand index funds, it helps to understand actively managed funds first.

Actively managed funds are run by one or more fund managers, who collect money from investors, then allocate that money to stocks, bonds, or other assets. With active funds, the managers are often tasked with beating some sort of benchmark index, but they'll generally have a lot of discretion as to what they can buy and sell to accomplish that. Once upon a time, this is how all mutual funds were run.

Index funds, which came into being about 50 years ago, are passive. The fund manager isn't actively looking to "beat the market" or "beat an index." They're simply looking to mimic a stock market index—like, say, the S&P 500—enjoying that underlying investment exposure.

Let's use the S&P 500 as an example.

The S&P 500 holds the stocks of 500 companies, but it doesn't hold equal amounts of each—it "weights" each stock by size. The larger the market capitalization (stock price times number of shares outstanding), the larger the percentage of the index is allocated to that stock. As I write this, the S&P 500's heaviest weights go to tech stocks Nvidia (NVDA, ~7%), Apple (AAPL, ~7%), and Microsoft (MSFT, ~5%). So an index fund mimicking the S&P 500 should have 7% of its assets invested in NVDA, another 7% in AAPL, and 5% in MSFT.

An active manager, on the other hand, doesn't have those constraints. Their research might lead them to allocate the same 7% to AAPL, but 15% to NVDA and none to MSFT. It's up to the manager's discretion.

The primary advantage of actively managed funds is that a talented manager can potentially outperform over time and might be adept at navigating a difficult period such as a bear market. But you pay for that possibility in the form of higher fees and often worse tax efficiency.

Index investing generally comes with much lower costs in terms of management fees and trading expenses. It's also more tax efficient, and performance often ends up being better than that of many active managers.

If you believe the stock market will generally rise over time, an index fund is the easiest and most direct way to get exposure.

Related: The 7 Best Gold ETFs You Can Buy

Why Fidelity?

Fidelity is a leader in investment funds—both mutual funds and exchange-traded funds (ETFs).

Today, this premier mutual fund company has a whopping $18 trillion in assets under administration. That's in large part because it has adapted with the times. The company rose to fame on the backs of its star active managers, such as Peter Lynch, the long-time manager of the Fidelity Magellan Fund (FMAGX) who averaged an incredible 29.2% per year between 1977 and 1990. But over the past three decades, Fidelity has evolved into a leader in low-cost index funds and even broke new ground by offering zero-fee index funds via its Fidelity ZERO line.

Apart from its mutual fund management business, Fidelity also operates one of the biggest brokerage houses in the United States. It's also the largest record keeper of 401(k) plans, and one of the largest providers of 403(b) plans for nonprofit organizations. Fidelity provides more than 26,000 companies with defined-contribution and defined-benefit plans.

Today, we’re going to take a look at the very best Fidelity index funds for the everyday investor. They run the spectrum in terms of styles and strategies, but all of the best Fidelity index funds share one thing in common: They're extremely cost-efficient ways for investors to quickly diversify.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

7 Great Fidelity Index Funds That Cover the Basics

I'm not trying to call out the seven absolute best Fidelity index funds in existence, nor am I trying to create a comprehensive portfolio.

Instead, I'm presenting a list of Fidelity index funds that can act as a starting point for beginner investors, or as a "most used" list for investors who want to rebuild part of their core. These funds cover all the major bases, providing exposure to U.S. stocks, developed- and emerging-market equities, and government and corporate bonds. Put differently: This list represents most of what the average investor needs in a basic portfolio.

So without further ado, let's look at the best Fidelity index funds for beginners.

Best Large-Cap Index Fund: Fidelity 500 Index Fund

• Style: U.S. large-cap stock
• Assets under management: $714.9 billion
• Dividend yield: 1.2%
• Expense ratio: 0.015%, or $15¢ per year for every $1,000 invested
• Minimum initial investment: None

I will virtually always start a list of a fund provider's best products with an S&P 500 index fund if they have one available. Why? Because even professional mutual fund managers—literal experts who are paid to try to beat the large-cap* index—consistently struggle to get over the benchmark. According to S&P Dow Jones Indices data from the end of 2025, only 14% of all actively managed large-cap funds were able to out-return the S&P 500 over the trailing 10-year period. That number drops to just 10% over the trailing 15 years.

"The S&P 500 is so hard to beat," says Daniel Sotiroff, Senior Analyst for ETF and Passive Strategies at Morningstar. "I know guys that rate active managers in all these categories, and even they’re like, 'I'm not buying actively managed large blend; I'm just indexing,' because it’s so brutally tough to beat a dirt-cheap index fund in the large blend category."

Related: The 7 Best Index Funds for Beginners

If the pros can't beat it, that's a pretty good indication that we should just join it—which we can do by investing in a simple S&P 500 Index fund like the Fidelity 500 Index Fund (FXAIX).

FXAIX exposes you to all the market sectors, though not equally. As I mentioned earlier, the biggest chunk of the fund's assets (roughly a third) is invested in tech stocks like Nvidia and Apple. Some sectors, like utilities and real estate, only account for about 2% to 3% each.

Still, if you believe in the American growth story, then buying a basket of America's biggest and most recognized companies only makes sense. Even Warren Buffett himself (considered by many to be the greatest investor in history) has said on multiple occasions that most investors, most of the time, should simply invest in an S&P 500 index fund and let it run.

A few other considerations?

The Fidelity 500 Index Fund has a razor-thin expense ratio of 0.015%. That's virtually impossible to beat. It's even cheaper than S&P 500 ETFs. No wonder, then, that FXAIX has attracted an incredible $715 billion in assets under management.

Related: 7 Best Fidelity Retirement Funds [Low-Cost + Long-Term]

A few other considerations?

The Fidelity 500 Index Fund has a razor-thin expense ratio of 0.015%. That's virtually impossible to beat. It's even cheaper than S&P 500 ETFs. No wonder, then, that FXAIX has attracted an incredible $715 billion in assets under management.

Also, S&P 500 index funds' turnover (the percentage of a fund's holdings that are bought and sold in a given year) tends to be low, at just a couple percent in any given year. Why does it matter? Because mutual funds have to distribute net capital gains from trading back to shareholders; those gains are taxable, with long-term gains taxable at more favorable capital gains rates, and short-term gains taxable at even worse ordinary income tax rates.

In short: Low turnover makes S&P 500 funds an extraordinarily tax-efficient way to invest. So, if you find yourself with limited IRA or 401(k) funds available to invest, don't worry—you can stuff a fund like FXAIX into your taxable brokerage account, too.

* There are different ways to define "cap" levels. We're adhering to Morningstar's definition, which says the largest 70% of companies by market capitalization within a fund's "style" are large caps, the next 20% by market cap are mid-caps, and the smallest 10% by market cap are small caps.

Featured Financial Products

Best Small-Cap Index Fund: Fidelity ZERO Extended Market Index Fund

• Style: U.S. mid- and small-cap stock
• Assets under management: $2.2 billion
• Dividend yield: 1.2%
• Expense ratio: None
• Minimum initial investment: None

You'll pay low fees on virtually any Fidelity fund you own. But with a select few, you'll actually pay no fees.

Yes, you read that right. The Fidelity ZERO Extended Market Index Fund (FZIPX) plugs investors into a broad universe of U.S. mid- and small-cap stocks, and it does so with an expense ratio of 0%. Cero. Nulle. 영. Not even a penny.

Large-cap stocks are often relied upon to generate not just capital gains, but also some level of stability and dividend income. However, investors who want to generate outperformance often try to allocate some of their portfolio to smaller firms. Generally speaking, small- and mid-cap companies have more growth potential than larger firms. And as these stocks become noticed by institutional investors and fund managers, or begin qualifying for certain indexes, they can begin to enjoy large-scale investments that drive their prices even higher.

Related: The 7 Best Vanguard Index Funds for Beginners

But smaller stocks tend to be more volatile. That's because their underlying companies might be dependent on just one or two products or services, which means a single disruption (be it the economy, a competitor, what have you) could have massive financial consequences. They also have less access to capital than their larger peers, so they're less likely to get a lifeline should they suffer from broader economic headwinds.

We can defray some of that risk by investing in hundreds or even thousands of mid- and small-cap stocks via funds like the FZIPX.

Fidelity ZERO Extended Market Index Fund tracks the Fidelity U.S. Extended Investable Market Index, designed to reflect the performance of U.S. mid- and small-cap stocks. In this case, Fidelity defines that as the largest 2,500 U.S. companies by market capitalization excluding the largest 500. It's float-adjusted market cap-weighted, so the larger the company (based on its publicly available shares), the more assets FZPIX dedicates to holding it. To further keep costs down, the fund uses statistical sampling to replicate the returns of the index.

As of right now, only one of SanDisk's 2,000 or so holdings has a weight of more than 1%. That diversification means the fund's overall performance isn't beholden to a select few names.

Related: The 12 Best Vanguard ETFs for 2026 [Build a Low-Cost Portfolio]

While mid- and small-cap stocks historically deliver more growth than their larger peers, they've significantly lagged since 2022. The good news? They've started to outperform again in 2026. And FZIPX allows people to capture that growth for the absolutely unbeatable price of free.

There is one condition to the zero fees in the ZERO line of funds, however: They're only available in Fidelity brokerage accounts. That might not be a problem, as Fidelity brokerage accounts are generally well regarded and competitive with the other major online brokers. But if you do not already have a Fidelity account, you'd need to open one.

Can't access FZIPX? That's OK. The Fidelity Small Cap Index Fund (FSSNX) is a respectable fund I've highlighted in other articles.

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Best Total Market Fund: Fidelity Zero Total Market Index Fund

• Style: U.S. all-cap stock
• Assets under management: $32.4 billion
• Dividend yield: 1.1%
• Expense ratio: None
• Minimum initial investment: None

If you're looking to tailor your portfolio, you can use large-cap funds like FXAIX and small-cap funds like FZIPX to adjust your allocations to different-sized stocks. However, if you want to take it easy, a "total" stock market index fund will provide investors with one-stop access to large, medium, and even small companies.

Related: 5 Best Stock Recommendation Services [Stock Tips + Picks]

There are plenty of total-market funds out there. However, Fidelity Zero Total Market Index Fund (FZROX) is a rarity in that it provides broad exposure to the entire universe of U.S. stocks for absolutely zero expenses and no investment minimum.

FZROX tracks the Fidelity U.S. Total Investable Market Index, which is a float-adjusted market cap-weighted index designed to reflect the performance of the full U.S. equity market (in other words, large-, mid-, and small-cap stocks). Admittedly, "total" is a bit exaggerative; to keep costs down, the fund will use statistical sampling techniques to replicate the returns of the index without necessarily having to own every underlying stock.

Related: 15 Best Long-Term Stocks to Buy and Hold Forever

Still, at more than 2,520 stocks currently, FZROX is as close to owning "the market" as you'd realistically need to get. he fund holds virtually every public U.S. company you've ever heard of—and likely thousands you haven't. Just understand that the cap weighting means you're still getting very heavy exposure to large caps, and less to mid- and small caps.

If you don't have a Fidelity brokerage account, the Fidelity Total Market Index Fund (FSKAX) charges a thin 0.015% in annual expenses and also has zero minimum initial investment.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

Best International Fund: Fidelity ZERO International Index Fund

• Style: International large-cap stock
• Assets under management: $9.8 billion
• Dividend yield: 2.6%
• Expense ratio: None
• Minimum initial investment: None

America isn't the only game in town.

Yes, the U.S. is the world's premier idea factory and the engine that makes the global economy go. But there are hundreds or even thousands of quality companies in other developed markets (established, slower-growing) and emerging markets (less stable but faster-growing) outside America's shores.

And while U.S. stocks have bested their peers over the past decade, there are long stretches when foreign stocks outperform, such as between 2000 and 2008. More recently, while U.S. equities performed admirably in 2025, international stocks simply crushed it.

Related: The 10 Best Fidelity ETFs for 2026 [Invest Tactically]

So if you are an American investor, it makes sense to keep the bulk of your investments in American companies. But it also makes sense to diversify and allocate at least a small portion of your funds into non-U.S. stocks.

For exposure to developed and emerging markets, the Fidelity ZERO International Index Fund (FZILX) is a solid option. Like its sisters in the Fidelity ZERO funds family, the fund offers zero expenses and no minimum investment. The fund tracks the Fidelity Global ex U.S. Index, a float-adjusted market capitalization-weighted index designed to reflect the performance of non-U.S. large- and mid-cap stocks. At the moment, that's a basket of more than 2,150 stocks with significant holdings in companies domiciled in Japan, the U.K., Canada, and China, among other countries.

If you don't have a Fidelity brokerage account, the Fidelity International Index Fund (FSPSX) charges just 0.035% in annual fees and has no minimum to invest.

Related: 15 Dividend Kings for Royally Resilient Income

Best Sector Fund: Fidelity Real Estate Index Fund

• Style: Sector (Real estate)
• Assets under management: $2.9 billion
• Dividend yield: 2.8%
• Expense ratio: 0.07%, or 70¢ per year for every $1,000 invested
• Minimum initial investment: None

Real estate is one of the world’s oldest asset classes and a preferred store of value for the world's wealthy since the dawn of civilization. Having a portion of your assets dedicated to real estate investments only makes sense, and Fidelity makes it easy via the Fidelity Real Estate Index Fund (FSRNX).

This Fidelity index fund tracks the performance of the MSCI US IMI Real Estate 25/25 Index, which results in a portfolio of about 155 real estate investment trusts (REITs).

Related: The 16 Best ETFs to Buy for a Prosperous 2026

REITs are a special class of company that owns and sometimes operates real estate. They enjoy special tax considerations in exchange for distributing at least 90% of their taxable income to shareholders as dividends. The index has certain limits in place—no holding can exceed 25% of the index's assets, and all holdings that are weighted above 5% cannot collectively exceed 25% of the index's assets—that keep the fund diversified and prevents it from being concentrated in a small number of mega-cap REITs.

Real estate has traditionally been a good inflation hedge, as many commercial leases have automatic rent increases tied to inflation. So, if inflation lasts longer than we hope or expect, having a little money in real estate will likely pay off nicely.

If you prefer the convenience and liquidity of an ETF, Fidelity offers the Fidelity MSCI Real Estate ETF (FREL). FREL tracks a different index, but one that still holds REITs, and it charges a skinflint 0.084% in annual expenses.

Related: 8 Best Real Estate Crowdfunding Sites + Platforms

Best ESG Fund: Fidelity U.S. Sustainability Index Fund

• Style: U.S. large-cap stock
• Assets under management: $4.9 billion
• Dividend yield: 1.2%
• Expense ratio: 0.11%, or $1.10 per year for every $1,000 invested
• Minimum initial investment: None

While it's not as popular among older generations, younger investors passionately believe in ethical investing. They want to do well by doing good, allocating their capital to companies that meet their environmental, social and governance (ESG) standards.

Every investor's definition of "ethical" will be a little different, so no mutual fund will ever be perfect. But if you're looking for a single solution that should get you close, the Fidelity U.S. Sustainability Index Fund (FITLX) is a good option.

Related: Best Target-Date Funds: Fidelity vs. Schwab vs. T. Rowe vs. Vanguard

This Fidelity fund tracks the performance of the MSCI USA ESG Index, which represents the performance of stocks of large- to mid-cap U.S. companies with high environmental, social, and governance performance relative to their sector peers, as rated by MSCI ESG Research. As a practical matter, this means excluding companies in the tobacco, firearms, adult entertainment industries as well as many energy companies deemed to be heavy polluters. FITLX will also exclude companies with a history of bad labor relations or poor corporate governance.

Past that, though, FITLX and its nearly 270 holdings are going to look a lot like your standard large-cap fund, including top holdings such as Nvidia (NVDA), Eli Lilly (LLY), and Visa (V).

Related: Best Fidelity Retirement Funds for a 401(k) Plan

Featured Financial Products

Best Bond Fund: Fidelity U.S. Bond Index Fund (FXNAX)

• Style: Intermediate core bond
• Assets under management: $69.0 billion
• SEC yield: 4.3%*
• Expense ratio: 0.025%, or 25¢ per year for every $1,000 invested
• Minimum initial investment: None

As 2022 taught us, no one should have 100% of their investable capital in stocks. Stocks can be wildly volatile. Having a portion of your capital in safe short-term bond funds can lower your overall portfolio volatility.

Bond funds are pretty diverse. You can leverage short-term bonds to collect a little yield while shielding your investments. You can try to collect a high income from corporate "junk" or emerging-market debt. You can even skirt federal tax on the income from municipal bonds.

Related: The 9 Best Dividend Stocks for Beginners

But if you're just looking for blanket bond exposure, it's difficult to beat the Fidelity U.S. Bond Index Fund (FXNAX).

This Fidelity index fund tracks the performance of the Bloomberg U.S. Aggregate Bond Index (or "the Agg"), a premier debt index. You could consider it the S&P 500 of bond indexes.

FXNAX owns more than 10,000 different investment-grade bonds across a variety of issuers and maturities. U.S. Treasuries are tops at 45% of assets, followed by investment-grade corporate bonds and pass-through mortgage-backed securities (MBSes) at another 25% or so each. The remaining sliver of assets is sprinkled around other government-related debt, U.S. agency bonds, and commercial mortgage-backed securities (CMBSes), among other issues. Maturities run the gamut, from more than 20 years to less than one year, though the average remaining maturity is about 8 years

Related: The 10 Best Dividend ETFs [Get Income + Diversify]

In short, these are moderately-dated bonds, and ratings agencies have determined investors have a high chance of receiving their money back from them. (Hence “investment-grade.”)

One bond-fund metric to look at is duration, which is a measurement of risk. FXNAX currently has a duration of 5.8 years, which implies that if interest rates grew by 1 percentage point, the fund should suffer modest short-term capital losses of about 5.8%. (And vice versa: A 1-point hike should mean a gain of about 5.8%.) That's a moderate amount of risk, and you're getting a nice yield of more than 4% in return.

* An SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

Related: Buy ‘The Future’: 5 Tech Stock ETFs You Should Own in 2026

What Are Fidelity Zero Funds?

Fidelity ZERO Funds are a line of zero-minimum, zero-expense index funds launched by Fidelity in 2018. Currently, there are four Fidelity ZERO funds:

• Fidelity Zero International Index Fund (FZILX)
• Fidelity Zero Total Market Index Fund (FZROX)
• Fidelity Zero Extended Market Index (FZIPX)
• Fidelity Zero Large Cap Index Fund (FNILX)

The ZERO funds are true to their name: Investors literally pay nothing in management fees. But there are conditions. The Fidelity ZERO funds are only available in Fidelity brokerage accounts. That might not be a problem, as Fidelity brokerage accounts are generally well regarded and competitive with the other major online brokers. But if you do not already have a Fidelity account, you'd need to open one.

Related: 8 Low- and Minimum-Volatility ETFs for Peace of Mind in 2026

Fidelity ZERO Funds are, strictly speaking, index funds. But they are based on customized indexes that Fidelity has created in-house. The typical large-cap index fund tracks the S&P 500 or another recognized index, but they have to pay licensing fees to the index creator. Fidelity avoids the licensing fees by creating their own indexes, which allows them to pay the savings on in the form of zero fees.

The Fidelity indexes tend to be very similar to popular indexes such as the S&P 500, but they are not the same. So, if tracking a specific index is a priority for you, you should take that under advisement.

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Should You Use An Active or Passive Fund Strategy?

The primary advantage of actively managed funds is that a talented manager can potentially outperform over time and might be adept at navigating a difficult period such as a bear market. But you pay for that possibility in the form of higher fees and often worse tax efficiency.

With index investing, you generally get much lower costs in terms of management fees and trading expenses, better tax efficiency, and performance that often ends up being better than that of many active managers.

If you believe the stock market will generally rise over time, an index fund is the easiest and most direct way to get exposure.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested's free retirement planning newsletter.

Mutual Funds vs. ETFs

Mutual funds and ETFs are similar vehicles that have a few key differences. But also confusing the conversation is that many people use the term "index funds" interchangeably with "exchange-traded funds (ETFs)," and "actively managed funds" with "mutual funds."

While there's a lot of overlap, they're not the same thing. So, we'll tackle the differences between mutual funds and ETFs, and explain why people are so quick to automatically equate them to index or actively managed products.

Mutual Funds

When you invest in a mutual fund, you (or your broker) actually send money to the fund company, which in turn uses the cash to buy stocks or other investments. When you want to sell, the fund company will sell off a tiny piece of the securities the mutual fund owns and send you the proceeds. Money generally enters or exits the fund once per day.

Mutual funds are the traditional vehicles of choice for 401(k) plans or other situations when an investor is dollar-cost averaging, which means investing in regular installments. If you have a specific dollar amount to invest each month, whether it's $100 or $10,000, a mutual fund will generally be able to accommodate you easier than an exchange-traded fund.

But the key here is that you don't need a specific amount based on the price of a share. Once you meet the minimum initial investment (a certain dollar amount you must invest when you first buy the fund), you can generally invest just about any amount.

The thing is, most mutual funds are actively managed, which is why people conflate "mutual funds" and "actively managed funds." But there are numerous index mutual funds.

The best Fidelity mutual funds tend to be some of the cheapest in the business in terms of fees, many of them indexed. And there are Fidelity index funds for virtually every stock market index you can imagine.

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Exchange-Traded Funds (ETFs)

ETFs are quite similar to mutual funds, but their differences are significant ... and make them superior in certain situations.

Like traditional index mutual funds, an ETF will hold a basket of stocks, bonds and other securities. These can be broad and benchmarked to a major index like the S&P 500, or they can be exceptionally narrow and focus on a specific sector or even a specific trading strategy. For the most part, anything that can be held in an exchange-traded fund can also be held in a mutual fund.

However, unlike mutual funds, ETFs trade on major exchanges—such as the New York Stock Exchange or Nasdaq—like a stock. If you want to buy shares, you don't send the manager money; you just buy shares from another investor on the open market.

The need to buy shares can be problematic when dollar-cost averaging. As an example, let's say you have exactly $100 to invest, but the shares of the ETF trade for $65. You can only buy one share, and you're stuck with $35 in cash uninvested.

Related: 8 Best Schwab Index Funds for Thrifty Investors

Why Should You Consider ETFs Instead?

But ETFs have their own advantages. For one, they have intraday liquidity—that is, if you want to buy or sell in the middle of the trading day (or multiple times throughout the trading day), you can.

The second advantage is tax efficiency. In a traditional mutual fund, redemptions by investors can generate selling by the manager that creates taxable capital gains for the remaining investors who didn't sell. This doesn't happen with ETFs, as the manager isn't forced to buy or sell anything when an investor sells their shares.

Like we said, many investors use "ETF" and "index fund" interchangeably. That's because most exchange-traded funds are index funds—but not all. Some are actively managed.

As is the case with index funds provided by Fidelity, their ETFs tend to have some of the lowest costs in the business.

Related: The 9 Best ETFs for Beginners

Why Does a Fund's Expense Ratio Matter So Much?

Every dollar you pay in expenses is a dollar that comes directly out of your returns. So, it is absolutely in your best interests to keep your expense ratios to an absolute minimum.

The expense ratio is the percentage of your investment lost each year to management fees, trading expenses and other fund expenses. Because index funds are passively managed and don't have large staffs of portfolio managers and analysts to pay, they tend to have some of the lowest expense ratios of all mutual funds.

This matters because every dollar not lost to expenses is a dollar that is available to grow and compound. And over an investing lifetime, even a half a percent can have a huge impact. If you invest just $1,000 in a fund generating 5% per year after fees, over a 30-year horizon, it will grow to $4,116. However, if you invested $1,000 in the same fund, but it had an additional 50 basis points in fees (so it only generated 4.5% per year in returns), it would grow to only $3,584 over the same period.

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What Is the Minimum Investment Amount on a Fidelity Fund?

Every Fidelity fund has its own minimum investment amount specific to that fund. But Fidelity has been a trailblazer in making its funds available to beginning investors with ultra-low minimums, and many Fidelity funds have no minimum investment at all.

Part of our criteria in selecting the best Fidelity index funds was accessibility, and every fund selected here has a minimum investment of zero, meaning you can literally start your investment with as little as $1.

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7 Mega-Yielding Funds You've Never Heard Of

You've assuredly heard of mutual funds and exchange-traded funds (ETFs). But how much do you know about closed-end funds (CEFs)?

If the answer is "not much," don't worry—they get a fraction of the attention of those other investment funds. But you should also learn more about them. That's because CEFs have a host of enticing characteristics, including that they frequently pay mammoth yields. Check out our list of the best CEFs, many of which pay in the high-single and even double digits.

Related: 10 Dividend Stocks That Pay Us Each and Every Month

The vast majority of American dividend stocks pay regular, reliable payouts—and they do so at a more frequent clip (quarterly) than dividend stocks in most other countries (typically every six months or year).

Still, if you’ve ever thought to yourself, “it’d sure be nice to collect these dividends more often,” you don’t have to look far. While they’re not terribly common, American exchanges boast dozens of monthly dividend stocks.

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Good—those are indeed all factors that could give you an edge! But believe it or not, your personality could play an outsized role, too.

Consider a software developer who delivers flawless code and brings smart ideas to the table at every meeting. Well … if that same developer is easily agitated and often lashes out at coworkers, a more affable applicant might have the edge in applying for a managerial position.

Today, I want to bring you up to speed with how your personality can affect your attractiveness as a job candidate, your earnings, and your potential for advancement. And I'll do so with a heavy emphasis on the "Big 5" personality traits, which many employers consider in their hiring decisions, whether consciously or subconsciously. 

What Are The 'Big 5' Personality Traits? [And How Do They Affect Income?]

Ever heard of a "personality hire?" These are employees who have been hired more so for their personality and approach to work, and less so for their experience or technical skills.

According to a 2024 Monster survey, nearly half of workers (48%) self-identify as personality hires. Traditional hires and personality hires agree that the most valuable attribute of personality hires is their skill of strengthening relationships among coworkers, clients, and customers. Personality hires also are praised for their ability to improve work culture and lift morale.

When judging a prospective employee's personality, interviewers tend to look for signs of what's known as the "Big 5" personality traits, which you can remember using the word "CANOE":

--Conscientiousness

--Agreeableness

--Neuroticism

--Openness

--Extraversion

In short: Depending on which of these five traits you exhibit, and which traits your prospective employer sees as desirable, you might just earn a job … and a crisp high-five.

But these traits don't just benefit job seekers. Your temperament can affect your likelihood of receiving raises and/or promotions in your current job as well.

Let's look at each of these traits and discuss how they affect your employability.

Conscientiousness

Do you have a nonchalant attitude about work? Do you frequently fumble your tasks or even leave them incomplete?

Well, if so, you wouldn't be considered a very conscientious employee. 

People who are conscientious care about doing their tasks correctly and thoroughly. Whether as a student or professional, these are the people known to "check their work." And these types of employees are generally desirable.

Data from Germany's Socio-Economic Panel shows that conscientiousness in the workplace has a positive effect on income and reduces people's time spent unemployed. Meanwhile, per a 2022 Joblist survey, respondents in the U.S., U.K., Canada, and Australia classified as "highly conscientious" were more likely to have a salary of at least $75,000 than anyone classified as having a high level of any of the other Big 5 traits.

Managers and department heads tend to score high on the conscientiousness scale, too, based on a 2024 Journal of Applied Psychology study of 263 occupations. Among the lowest in conscientiousness? Visual artists, electronics engineers, and graphic and multimedia designers.

Related: Pensions Aren't Dead Yet: 15 Jobs With Pensions

Agreeableness

Although the word agreeable has largely fallen out of popular vernacular, the trait itself is still prominent within certain professions. An agreeable person is usually known for being considerate, kind, and cooperative. We tend to trust these people and enjoy working with them more than those who are disagreeable. 

And yet …

While agreeable people may have an advantage in being hired, that doesn't necessarily mean their kindness is rewarded with a high paycheck. Quite the opposite: Agreeableness is often correlated with lower earnings. But it makes sense when you think about it. A person who wants to avoid conflict might not push for a higher salary when hired or for a raise later. If you're too humble, it might hinder your ability to make more money. 

Additionally, agreeable people might miss out on promotions. If you're good friends with everybody at your workplace, upper management might worry you would struggle with disciplining employees or firing them.

Some of the occupations with the highest average agreeableness levels include electronics engineers, web and multimedia developers, and psychologists. Conversely, if you've ever encountered a pushy salesperson, it won't shock you to learn that salespeople and real estate agents tend to score the lowest in agreeability, as do self-employed workers.

Related: 11 of the Highest-Paying Blue-Collar Jobs

Neuroticism 

People with high levels of neuroticism are more likely to feel pessimism, anxiety, frustration, or jealousy. These feelings can be difficult in some types of workplaces, as they can result in procrastination and being more reactive to stress.

This is a trait where low scores are considered desirable. Low scores indicate lower stress, higher self-confidence, and better adaptability. Meanwhile, high scores could be a warning of awkwardness, anxiety, and a difficulty in managing emotions.

Being highly neurotic can make it more difficult to earn promotions and subsequently a high salary. Based on the aforementioned Joblist survey, highly neurotic workers were the least likely to have senior or executive positions. Lower-level positions tend to have lower pay, so it may be unsurprising that these employees were also the most likely to have an annual salary of $34,999 or less. 

Would you want your airline pilot to be extra anxious during an emergency? Probably not. Unsurprisingly, then, pilots, database and network professionals, as well as people in managerial roles, tend to have lower levels of neuroticism. 

Don't think being a bit neurotic makes you unemployable, though. The trait can sometimes fit well with jobs for creative people. Actors, visual artists, graphic designers, and musicians tend to score higher on neuroticism measurements.

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Openness

Imagine your boss starts a team meeting by saying, "It's time for us to mix things up and take some more risks. Today I want to hear people's ideas for how we can be more innovative and think outside the box!"

Did you just feel a sudden jolt of excitement? Or were you awash in dread?

Your immediate reaction could be a hint as to where you land on the openness scale.

People with high levels of openness are usually creative, imaginative, and adventurous. Joblist research finds that workers who have a lot of openness are also often open to switching jobs, though that was likely connected to the fact that it was common for highly open people to have low job satisfaction. If you consider yourself a very open person, it might serve you well to pick a career that aligns with that trait. Otherwise, you could end up making a career change later in life, which could hinder your earnings potential.

People with careers as visual artists, language teachers, authors, and psychologists tend to have high openness scores. Plant operators, plumbers and pipe fitters, and drivers tend to have some of the lowest openness scores.

Related: 10 High-Paying Jobs You Can Get With 'Vanity Degrees'

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Extroversion

You might already have a preconceived notion of whether you're an introvert or extrovert. However, when thinking about introversion and extroversion, you might want to focus more on how social situations make you feel, rather than how you react to them or deal with them. 

If being around people energizes you, you're more of an introvert. If crowds zap your energy, you're likely more introverted.

Joblist 2022 survey results showed that highly extroverted professionals were the most likely to have received a promotion in the past year. This may go hand-in-hand with the fact that highly extroverted people also scored the highest in believing they have a good relationship with co-workers and their immediate supervisor. Or it could be that extroverts tend to be outgoing, assertive, and able to articulate concepts better.

Some best-fit roles for extroverts include advertising and public relations managers, actors, and conference and event planners. And while some believe extroversion is highly coveted in just about every field, there are still plenty of high-paying careers for introverts. Some of the jobs that score lowest on extroversion are electronics engineers, software developers, and web and multimedia developers. 

Related: 10 High-Paying Jobs That Are Dying (Or Evolving)

Can You Change Your Personality?

In short, yes. While we might naturally have certain traits, they're not all-or-nothing qualities—they're measured on a scale. Which means that, if you want to tilt your own scale so that you have a bit more or less of a personality trait, you can absolutely accomplish it!

A great for-instance? Extroversion can be somewhat of a fake-it-until-you-make-it trait. By forcing yourself to spend more time with people and speak up more, you might become more naturally extroverted. 

Is too much neuroticism limiting your employment prospects? Try practicing mindfulness through breathwork, a gratitude journal, or meditation. If your neuroticism has a highly negative effect on your life, therapy can be extremely helpful.

Even small personality adjustments might open the door to significantly better career opportunities and earning potential. 

Related: 10 Late-Night Jobs With High Salaries

Company Culture Matters Too

How your personality aligns with your chosen career isn't the only factor in whether you're hired and how much you earn. Whether or not a person fits into a specific company's culture matters as well.

Does the idea of random Nerf gun fights at work excite you or horrify you? Businesses want their employee's personalities to mesh well together and with the company's mission. 

Consider Elon Musk, Tesla's current CEO, and Tim Cook, Apple's current CEO. While both hold CEO titles, most people would agree the two have different personalities. Public perception of Cook shows him as much more agreeable and substantially less neurotic than Musk. 

Although your personality is a factor in your career trajectory, don't assume it's a hard-and-fast rule as to the job you need to have and how far you might progress.

Related: 10 Fun Jobs That Pay Well

Related: 15 Best Long-Term Stocks to Buy and Hold Forever

As even novice investors probably know, funds—whether they're mutual funds or exchange-traded funds (ETFs)—are the simplest and easiest ways to invest in the stock market. But the best long-term stocks also offer many investors a way to stay "invested" intellectually—by following companies they believe in. They also provide investors with the potential for outperformance.

So if you're looking for a starting point for your own portfolio, look no further. Check out our list of the best long-term stocks for buy-and-hold investors.

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Well, if you've ever been in the middle of a "GOAT" (greatest of all time) conversation—or an argument, as tends to be the case in particularly heated matchups like Jordan vs. LeBron—it depends on who you're asking and what measurement's you're using.

What makes a president great? Economic prosperity? Geographic expansion? Noteworthy legislation passed during their term?

You, like many others, might measure a president's success (at least in part) by how stock market performance. Some people consider equity returns to be a proxy of sorts for economic growth—not to mention fatter 401(k)s mean better financial security for anyone saving for retirement. Conversely, declines in the stock market don't just mean smaller investment account balances—they might accompany a period of slower economic growth (or even contraction), higher unemployment, and less financial stability for Americans.

Like with many measurements, it has its issues, such as the fact that much of what drives the stock market is out of a president's control. Also, we can't measure every president based on stock market performance. Major exchanges as we know them didn't come about until the 1790s, and modern stock indexes still used today, like the Dow Jones Transportation Average (DJTA) and the Dow Jones Industrial Average (DJIA), didn't come about until the 1880s.

But we can cover a little more than half of U.S. history this way. That's roughly two dozen presidents.

So let's do it. Let's look at how America's stock markets have fared under our country's leaders, and which commanders-in-chief stand above the rest.

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Methodology

First, let's lay the ground rules.

We're ranking every president since William McKinley, who was the first president to have a term begin after the creation of the Dow Jones Industrial Average. Stock market performance under Presidents McKinley through Calvin Coolidge is calculated using the Dow. Starting with former President Herbert Hoover, performance is based on the returns of the S&P 500 or its precursor indexes, which have all included hundreds of companies, versus the Dow's mere 30 members.

Returns are based on price performance only—dividends are not included in these calculations. Changes in tax treatment have made dividend programs more attractive to publicly traded companies in more recent times. Returns data also is not adjusted for inflation, which will admittedly favor presidents that presided over periods of higher inflation.

A Final Note Before We Get Started

This is all in the spirit of fun, entertainment, and education. Presidents aren't the only variable determining the fate of publicly traded companies—oftentimes, they're not even the greatest variable, and on rare occasions, they have very little impact. Congress, other domestic economic forces, international politics, global economics, technological innovation, and even dumb luck have plenty to say about how the stock market moves.

Further, measuring who the greatest president of all time is shouldn't necessarily tie only to stock market performance. But, like we said, this is all in the spirit of fun, entertainment, and education. We're not actually saying these are the greatest presidents of all time measured solely by stock market performance.

With that, let's begin an interesting look at presidential performance!

23. Herbert Hoover

-- Party: Republican

-- Time in office: March 4, 1929-March 4, 1933

-- Average annual market return: -30.8%

Poor Mr. Hoover.

Somebody had to be in office during the Great Depression, and that someone was Mr. Hoover—the 31st president of the United States, and the man with the ignominy of presiding over the worst stock market crash in American history.

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Myriad factors helped contribute to the Great Depression—the end of a boom in postwar building, bank speculation in stocks, a glut of consumer goods that demand simply couldn't keep up with. But Hoover exacerbated the depression, signing the Smoot-Hawley Tariff Act that raised already high tariffs and triggered retaliatory measures by Canada and other nations, drying up international trade.

At its lows, the bear market devoured nearly 90% of stocks' value under Hoover's watch.

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22. George W. Bush

-- Party: Republican

-- Time in office: Jan. 20, 2001-Jan. 20, 2009

-- Average annual market return: -5.6%

No other president has come remotely close to Hoover's wretched stock market performance, but the silver sombrero belongs to George W. Bush, who served during much of the dot-com bubble burst; the Sept. 11, 2001, terrorist attacks; and the start of the Great Recession.

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Among the blame that can be placed on Bush's shoulders? Extreme federal deficits, the costly war in Iraq, and broad deregulation that in part helped stoke the Great Financial Crisis (GFC) in 2007.

To be fair, the Bush tax cuts, as well as the aforementioned regulatory changes, helped stocks recover to the point that they briefly reclaimed their dot-com peak in 2007. Unfortunately, Bush was in office for not one but two of America's most notorious bear markets. The GFC and Great Recession soon followed, putting stocks into the ground and putting Bush near the Wall Street caboose.

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21. Richard Nixon

-- Party: Republican

-- Time in office: Jan. 20, 1969-Aug. 9, 1974

-- Average annual market return: -3.9%

If you put on horse blinders for a moment, you could make a case that Nixon wasn't all that bad. He helped usher in the Environmental Protection Agency and the Consumer Product Safety Commission, and helped open international relations in various parts of Asia.

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But those accomplishments hardly make up for the catastrophes that earned him his ill repute: most notably, his administration's break-in of the Democratic National Committee headquarters (and subsequent cover-up), aka Watergate.

Less ballyhooed but more pertinent to this discussion are the stock market's losses during his tenure—which actually were worse than they seem given high inflation during his term.

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Nixon contributed to that inflation by closing the "gold window," which had allowed the U.S. dollar to be directly convertible into gold. Doing so effectively killed the Bretton Woods system—an international currency system that followed the end of the gold standard and had ushered in a couple decades of economic expansion. The resulting inflation led to the 1973-74 stock market crash and bear market.

20. William Howard Taft

-- Party: Republican

-- Time in office: March 4, 1909-March 4, 1913

-- Average annual market return: -0.1%

William Howard Taft is best known among Americans for his weight, and for the fact that he also later served as a Supreme Court justice—which tells you something about how unremarkable the rest of his one-term presidency was.

So it's no surprise that he left virtually no mark on the stock market, which, much like his waistline, hardly budged by the time he exited office.

Still, Taft did leave behind one lasting legacy: the 16th Amendment, which laid the groundwork for our current federal income tax.

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19. Theodore Roosevelt

-- Party: Republican

-- Time in office: Sept. 14, 1901-March 4, 1909

-- Average annual market return: 2.2%

Theodore "Teddy" Roosevelt first entered the White House not with his own election as president, but following the assassination of President William McKinley.

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A bold, boastful, and blustery man, Roosevelt was one of America's most vivid presidents—and quite accomplished, too. He won the Nobel Peace Prize for helping to end the Russo-Japanese War; expanded America's role in international politics; improved consumer protections by helping bring about several regulatory agencies overseeing railways, food, and drugs; and was one of the nation's greatest champions for natural conservation, establishing protection for hundreds of millions of acres of public land and creating the Forest Service.

But while Teddy merited inclusion on the actual Mount Rushmore, any thought that he belongs on the Mount Rushmore of stock-friendly presidents is pure "bullfeathers!" He was a renowned "trust buster," breaking up monopolies in the sugar and rail industries, among many others. This stance in part contributed to very modest stock market returns—just a hair over 2% annually—during his eight-plus years in office.

Related: 7 Best High-Yield Dividend Stocks: The Pros’ Picks for 2026

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18. Woodrow Wilson

-- Party: Democrat

-- Time in office: March 4, 1913-March 4, 1921

-- Average annual market return: 3.1%

While Taft might have set up the current federal income tax by championing the 16th Amendment, President Woodrow Wilson punched it into the endzone.

Woodrow Wilson, who served during World War I, signed into law the Revenue Act of 1913, which greatly reduced tariffs while establishing both a 1% tax on anyone earning more than $3,000 per year (at the time, just 3% of the population) and a 1% corporate tax. He also presided over a massive expansion in both duties and importance of the Internal Revenue Service, and oversaw the creation of the Federal Reserve System—which, for all its criticisms, improved stability within the country's banking system.

Wilson also backed anti-competitive practices, helping to establish the Federal Trade Commission and enhancing antitrust laws via the Clayton Antitrust Act of 1914.

His overall impact on the stock market was more muted. Wilson exited his second term with a light average return for stocks of about 3% annually.

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17. Franklin Delano Roosevelt

-- Party: Democrat

-- Time in office: March 4, 1933-April 12, 1945

-- Average annual market return: 6.2%

Franklin Delano Roosevelt is one of the most influential presidents in our nation's history.

That's in part because he had so much time to work with—he was elected to a total of four terms, though he died in office, cutting his service "short" at just more than 12 years. That's also in part because he steered America through World War II.

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Roosevelt inherited an economy wracked by the Great Depression, which he responded to with the First and Second New Deals. This series of programs include the creation of Social Security, union protections, banking reform, work relief, the United States Housing Authority, and the Farm Security Administration.

While many of his policies helped improve unemployment and economic activity, critics argue that his heavy regulatory reforms also greatly expanded the federal government's reach and might have blunted the economy's recovery.

Indeed, the average annual market return was more than 6% during FDR's tenure—but that feels modest considering his presidency started with stocks in the toilet.

Related: How Are Social Security Benefits Taxed?

16. John F. Kennedy

-- Party: Democrat

-- Time in office: Jan. 20, 1961-Nov. 22, 1963

-- Average annual market return: 6.5%

John F. Kennedy, who served less than a full term before he was assassinated, is remembered for a great many things, including navigating the Cuban Missile Crisis, turning America into a global leader in space exploration, and proposing the Civil Rights Act of 1964, which failed during his tenure but was pushed into law by President Lyndon B. Johnson.

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Another policy that Kennedy championed but that ultimately didn't pass until after his death was tax reform. Kennedy proposed, among other things, that the U.S. lower the top marginal tax rate from 91% to 65%, and the corporate tax rate from 52% to 47%. He believed these tax cuts would ultimately increase federal revenues by spurring economic growth. Congress blocked the bill initially, but a revised version—the Revenue Act of 1964—was passed by Congress and signed into law by Johnson.

Overall, Kennedy appeared to have minimal impact on the stock market. Still, stocks enjoyed average annual gains of more than 6% while he was in office.

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15. Jimmy Carter

-- Party: Democrat

-- Time in office: Jan. 20, 1977-Jan. 20, 1981

-- Average annual market return: 6.9%

President Jimmy Carter wasn't given much to work with when he entered the Oval Office—the U.S. was suffering from both slow economic growth and high inflation (aka "stagflation").

He primarily attacked the former via the $19 billion tax cut laid out in the Revenue Act of 1978. At first, he largely leaned on the Council on Wage and Price Stability (COWPS) to address the latter, though he eventually helmed the Federal Reserve Board with Paul Volcker, who used tight monetary policy to rein in inflation … but at the cost of an additional headwind on economic growth. Indeed, the U.S. fell into recession under Carter, and it wouldn't emerge until after Carter had left office.

Despite miserable circumstances, the stock market gained nearly 7% annually while Carter was in office.

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14. Warren G. Harding

-- Party: Republican

-- Time in office: March 4, 1921-Aug. 2, 1923

-- Average annual market return: 6.9%

Warren G. Harding's stock market performance was historically middling—which, given how the rest of his presidency went, rates among his greatest accomplishments.

Harding only spent a little more than two years in office, with his term cut short by a heart attack that put Calvin Coolidge into the White House. But he did manage to push through a round of tax cuts and deregulation that started to pave the way for the "Roaring Twenties" growth Coolidge would enjoy while in office. But while stock market returns were nowhere near as robust as they were under his successor, Harding still enjoyed nearly 7% annual market growth.

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Unfortunately for Harding, that's not what defined his legacy after death. While he was initially mourned across the world, a number of scandals were revealed after his passing that fundamentally soured public opinion of the 29th president.

Most notable was the Teapot Dome scandal, in which his Secretary of the Interior, Albert Bacon Fall, leased oil production rights at Wyoming's Teapot Dome Oil Field without competitive bidding—which, while legal, induced illegal gifts from oil companies that would be worth millions of dollars today. While Harding wasn't directly involved, he suffered a hit to his reputation—a reputation that was further sullied by revelations of his extramarital affairs and claims of support payments to a child born out of wedlock.

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13. Lyndon B. Johnson

-- Party: Democrat

-- Time in office: Nov. 22, 1963-Jan. 20, 1969

-- Average annual market return: 7.7%