This article will help you avoid those bulk-buying blunders by highlighting items that are better purchased in smaller quantities.

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Don't Buy These Items in Bulk

Think twice before purchasing any of these items in bulk. In many cases, whatever per-unit savings you might achieve are going to be canceled out in other ways.

1. Highly Perishable Foods

Unless you have a very large family, perishables don't make good bulk purchases. Avoid buying an excessive amount of certain fruits, vegetables, fish, meat, or milk. Sure, you might get an incredible discount by the pound or the ounce when you buy in bulk, but if half of it ends up tossed into the trash, your savings have gone to waste.

(Note: You can make some of these fresh foods last longer by freezing them. But in some cases, doing so for too long can impact flavor and texture.)

2. Items Expiring Soon

Even if an item isn't highly perishable, it might be close to expiring and won't be usable (or at least usable in prime condition) for much longer. Yes, you can often use unopened items past the expiration date, but determining exactly how long you can do so safely can be risky.

For example, you might be compelled to stock up on your favorite makeup items when they're on sale. But if very old eye makeup gets into your eyes, particularly after it's been open for a while, it can lead to an eye infection. So even if your makeup isn't to the point of being dangerous, it might dry out before you get the chance to use it.

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3. Spices

Everyone needs a little spice in their life, but except for your most commonly used spices, it's best not to buy these in bulk. Spices start to lose potency and flavor after about six months.

For full flavor potential, buy smaller portions of your less commonly used spices. You will pay more and have to buy them more frequently, but it should translate into a noticeable difference in flavor when you cook.

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

4. Items You've Never Tried

This goes without saying, but don't try out anything new in warehouse-club sizes. Even if the food sounds delicious, even if the face cream looks magical, don't do it. You might hate those frozen pizzas, and that face cream might cause a significant breakout—and if you have to throw away your bulk purchase, you're throwing away a lot of money.

I'll note that some items are warehouse-club exclusives you can only buy in bulk, so there might be no way of sidestepping this issue with those products. But wherever possible, only buy items in bulk that you've already tested.

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5. Anything You Don't Use

I know this seems painfully obvious, but some people truly can't say no to any bargain—and they'll end up buying products they don't even use. Even if a store is practically giving away perfume, ask yourself: Do you even wear perfume? Do you plan to? Similarly, don't buy toys that your child has already aged out of, or hefty winter gloves when you live in a hot climate.

It's OK to say no to some deals.

Related: 10 Frugal Habits That Make Retirees' Lives Better

6. Junk Food

Do you ever feel like candy bars call to you like a siren's song? Well, plug your ears. People trying to improve their health shouldn't buy junk food in bulk. You can tell yourself that you'll eat that 12-pack of king-sized Snickers over the course of a year, but when you see that box every day, there is a good chance you'll indulge more than you planned.

It's common for people who are trying to eat better to have little (if any) junk food around the house. If you have to go to the store to satiate a craving, you're much more likely to skip it to avoid the hassle. You might save money buying treats in bulk, but your body will thank you for purchasing smaller amounts instead.

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7. Items That Take Up Too Much Space

People living in shoebox apartments should hold off on getting a membership to warehouse stores like Costco or Sam's Club in general. But if you are compelled to buy in bulk, avoid bulky items.

Even if you can get a bunch of great deals in bulk, what good are those deals if you have nowhere to store everything? You don't want a paper-towel avalanche every time you open a cabinet or your closet, so until you have more space, only buy smaller items in bulk.

8. 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.

* As noted in the intro, toilet paper (and similarly, paper towels), don't "expire" nor should you have worry about them not being up-to-snuff when they're called into action on account of their age. However, time erodes all things, so true for TP and PT.

Buying these for the very long-term could prove problematic in those out years. Again, this isn't to say buying these paper products for later use within a year or two will be a bad bulk buy. We're talking about the many, many years scenarios, such as someone receiving a "lifetime supply of TP" consolation prize for appearing on a game show but getting all of the TP upfront.

Related: Stop Shrinkflation! 14 Products Affected + Tips to Save Money

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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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You could spend countless hours (that you don't have) researching hundreds or thousands of stocks and bonds. Then you could spend hundreds of thousands of dollars (that you also might not have) to buy all the individual stocks and bonds you'd need to put together a truly diversified portfolio.

Or, you could do all of that at a fraction of the time and cost, and get similar if not better results, by purchasing a mutual fund or two with a few quick clicks.

Most investors agree, which is why trillions of dollars remain parked in mutual funds today. However, while mutual funds are a valuable shortcut, they can't help you completely sidestep the decision-making process—because you still have to determine the best mutual funds to buy out of a field of literally thousands.

But I can help with that. Today, I'm going to show you our list of the very best mutual funds you can buy right now. Whether you're interested in something as simple as a core fund of blue-chip names or as complex as a state-specific municipal-bond fund—or one of the many investment categories in between—this list has something for you.

Editor's Note: Tabular information in this article is up-to-date as of May 28, 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.

How Were the Best Mutual Funds Selected?

According to the Investment Company Institute's most recent annual Fact Book, investors have plowed $25.5 trillion in assets into nearly 8,600 U.S. mutual funds. But according to that same Fact Book, the median number of mutual funds that a given household owns is … three.

Selecting the three (or two or four or however many mutual funds you personally need) best mutual funds for you from a universe of thousands is awfully unrealistic. So I've whittled that list down into a more digestible group numbering in the teens.

I start virtually every review of investment funds by booting up Morningstar Investor and running a quality screen I customize for each article. Here, I began my search by seeking out only mutual funds that have earned a Gold Morningstar Medalist rating*. Morningstar has two ratings systems—the Star ratings and the Medalist ratings. The latter are a forward-looking analytical view of a fund. Per 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. 

That's the starting piece of criteria. Now let's look at other features each fund must have.

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Additional Criteria Our Best Funds Had to Meet

To narrow the list further, I also required the following:

• No sales "loads": In addition to annual expenses, some funds charge additional fees, including "loads." For instance, if you invested $10,000 in a mutual fund with a 5% front-end load, the mutual fund provider would immediately take $500 out in fees. So, you'd already be starting behind the 8-ball, investing just $9,500 to start with. The funds here have no sales charges.
• Reasonable investment minimums. The maximum investment minimum for inclusion is $3,000. But only one fund on this list requires that much to start. Most require between $1,000 and $2,500, and a few funds have zero investment minimums. Also, some fund providers explicitly lay out lower investment minimums for specific accounts, such as individual retirement accounts (IRAs). T. Rowe Price, for instance, has $2,500 minimum initial investments on many of its funds, but lowers that minimum to $1,000 when investing through an IRA.
• Broad availability: Many mutual funds have several share classes, many of which are limited to certain types of accounts, like, say, only for 401(k)s or only for wealth management clients. All funds here are Investor-class or other shares that are generally considered to be widely available to retail investors.

From the much more manageable resulting list, I've selected a group of mutual funds that provide a wide array of core and tactical strategies, ensuring there's at least one fund, if not many funds, for just about everyone.

* All mutual funds on this list had a Gold Medalist rating as of their selection. Funds will remain on the list as long as they maintain a minimum of Silver. Funds that fall below this threshold will be replaced.

The Best Mutual Funds to Buy Now

The following represent some of the best mutual funds you can buy at the moment—and they're priced quite reasonably too. 

While annual expense ratios weren't used explicitly in the selection process, the vast majority of these funds sport below-category-average fees. It makes sense, too: Fees eat into a fund's performance, so providers that charge onerous management expenses are, in a way, handicapping their fund's returns. Meanwhile, providers with lower fees get a bit of an intrinsic performance edge.

A few final notes to keep in mind as you're reading this list:

• All of these funds have no loads, but brokerage commission fees might apply; check your brokerage before purchasing.
• Your brokerage might require a larger minimum initial investment for mutual funds than the fund itself requires.
• Some brokerage accounts might not let you purchase certain funds, even if they're generally available to retail investors. (For instance, you might be able to buy the completely made-up Woodley Investments Large-Cap Fund at Schwab, but not at Fidelity.)

Lastly, this isn't a ranking of the best funds. Every fund on here rates as excellent already. This is just listed in a natural progression of various portfolio needs, starting broadly with different stock flavors and ending with a few bond funds.

With all that out of the way, let's look at the best mutual funds you can buy.

Related: 8 Best-in-Class Bond Funds to Buy

1. Fidelity 500 Index Fund

• Style: U.S. large-cap stock
• Assets under management: $791.7 billion
• Dividend yield: 1.1%
• Expense ratio: 0.015%, or 15¢ per year for every $1,000 invested
• Minimum initial investment: None
• Morningstar Medalist Rating: Gold

Investors are frequently told to start building their portfolio's foundation with an equity fund that invests in large, American companies. These stocks provide a relatively high amount of stability while still offering some upside potential—and in many cases, returns from dividends, too.

One of the most common ways of getting this exposure is through an S&P 500 Index fund like the Fidelity 500 Index Fund (FXAIX).

The S&P 500 Index is a collection of 500 of the largest American businesses, and a barometer of the American stock market. The index requires a few other criteria for a company to join, including a market cap of at least $22.7 billion, highly liquid shares (the stock is frequently bought and sold), and more. There's a bit of a quality check, too: A company must also have positive earnings in the most recent quarter, and the sum of its previous four quarters must be positive. (Note: Once a company becomes an S&P 500 component, it's not automatically kicked out if it fails to meet all of the criteria. However, the selection committee would take this under consideration and possibly boot the company.)

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

The S&P 500 is considered a reflection of the U.S. economy, but it's not perfectly representative, nor is the U.S. economy evenly split among certain types of business. Right now, for instance, technology makes up a full third of FXAIX's assets, but energy, real estate, materials, and utilities only account for 3% apiece. That's because the S&P 500 is market capitalization-weighted—a common weighting system in which the greater the company's size by market cap (share price times outstanding shares), the more "weight" it's given in the index. That's why this Fidelity index fund currently has the largest percentages of its assets invested in multitrillion-dollar companies like Nvidia (NVDA), Apple (AAPL), and Google parent Alphabet (GOOG/GOOGL).

Meanwhile, turnover (how much the fund tends to buy and sell holdings) is always low, given that only a handful of stocks enter or leave the index in any given year. This tamps down and sometimes even eliminates capital-gains distributions, which can receive unfavorable tax treatment, making FXAIX an extremely tax-efficient option for taxable brokerage accounts.

Now that you understand what the S&P 500 is, you're probably wondering: Why should we unload such a core part of our portfolio to a brainless index fund?

The S&P 500 Index is commonly used as a performance benchmark for mutual funds that invest in U.S.-based large-cap stocks.* But most fund managers who run these products typically struggle to beat this benchmark. Indeed, according to S&P Dow Jones Indices, the vast majority (86%) of active large-cap U.S. equity funds failed to beat the S&P 500 over the trailing 10-year period, and that number is closer to 90% when looking at the past 15 years.

"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,'" says Daniel Sotiroff, Senior Analyst for ETF and Passive Strategies at Morningstar. "Because it’s so brutally tough to beat a dirt-cheap index fund in the large blend category."

And if you're buying an S&P 500 fund, it might as well be Fidelity 500 Index Fund. It has one of the cheapest expense ratios for any mutual fund period, it has no minimum initial investment, and it's widely available. That makes FXAIX not just one of the best Fidelity mutual funds to buy—but one of the best mutual funds across all providers.

* There are different ways to define the different "cap" levels. We're going by 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: 9 Best Fidelity Retirement Funds [Low-Cost + Long-Term]

2. T. Rowe Price Dividend Growth Fund

• Style: U.S. large-cap dividend-growth stock
• Assets under management: $23.6 billion
• Dividend yield: 0.9%
• Expense ratio: 0.64%, or $6.40 per year for every $1,000 invested
• Minimum initial investment: $2,500
• Morningstar Medalist Rating: Gold

If you’d prefer a large-cap “blend” fund (a mix of value and growth, like the S&P 500) that’s actively managed, you can look to one of T. Rowe Price’s best mutual funds: T. Rowe Price Dividend Growth Fund (PRDGX).

Dividend funds are not all built the same. Some expectedly prioritize a higher-than-average level of equity income. But some, like PRDGX, focus more on dividend growth, where its components' payouts increase over time, than headline yield.

What’s the appeal? Well, even dividend stocks with a low yield right now can deliver a higher “yield on cost” down the road. Yield on cost is what you're actually earning based on the price at which you bought the stock. (Example: A $100 stock paying $1 in annual dividends yields 1%. But because you bought the stock at $50, your yield on cost is 2%.)

Also, dividend-growth stocks tend to be high-quality equities. After all, you can't sustainably increase how much cash you're shelling out to shareholders if you're unable to turn a profit—you need strong financials and excellent cash flows. So dividend growth is often considered a quality screen of sorts that ensures the fund owns a higher grade of company.

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

That's what you get with PRDGX. "[Manager Tom] Huber targets financially healthy companies capable of sustaining above-average payout growth, believing dividend growers offer attractive returns with lower volatility," Morningstar Senior Analyst Stephen Welch says about this Gold-rated fund.

But one thing to note: Huber is tasked with building a portfolio of companies "that have a strong track record of paying dividends or that are expected to increase their dividends over time." I emphasize "or" because it's … well, different. 

Many dividend-growth index funds are required, thanks to the rules that govern the index, to own companies that have improved their payouts without interruption for some set period of time. That's not the case with T. Rowe Price Dividend Growth. Huber has full discretion here. For instance, holding Ross Stores (ROST) actually suspended its distribution for a few quarters in 2020—and was booted from the Dividend Aristocrats as a result. However, it resumed payouts in 2021 at its previous level and has raised each year since then, so it's certainly a dividend grower once more.

For the most part, however, this U.S.-centric portfolio of about 90 holdings is full of blue-chip stocks such as Visa (V), Chubb (CB), and Walmart (WMT) that boast solid dividend-growth histories.

The actively managed T. Rowe Price Dividend Growth ETF (TDVG) offers similar exposure and charges 0.50% annually.

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

3. Vanguard Strategic Small-Cap Equity Fund Investor Shares

• Style: U.S. small-cap stock
• Assets under management: $2.8 billion
• Dividend yield: 0.9%
• Expense ratio: 0.21%, or $2.10 per year for every $1,000 invested
• Minimum initial investment: $3,000
• Morningstar Medalist Rating: Gold

Naturally, you don't need to limit yourself to just the market's largest companies—you can (and often should) invest in companies of all sizes.

As a general rule, smaller companies (usually considered to be those with market capitalizations of $2 billion or less) have more growth potential than larger firms. For one, as they say, it's much easier to double your revenues from $1 million than $1 billion. 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.

The rub is that smaller stocks tend to be more volatile. A smaller 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, so they're less likely to get a lifeline should they suffer from broader economic headwinds.

Related: 11 Best Vanguard Funds for the Everyday Investor

Buying these kinds of stocks individually is a high-risk, high-reward proposal—a company could feasibly double or get cut in half overnight. But if you wanted to harness some of the upside potential of small caps while tamping down risk, you could invest in a small-company fund like the Vanguard Strategic Small-Cap Equity Fund (VSTCX).

VSTCX, managed by Cesar Orosco, invests in roughly 635 small-cap equities that can be found within the MSCI US Small Cap 1750 Index. Orosco selects stocks that have similar risk to the index, but that he believes will provide better performance. The result is a diversified portfolio blending value stocks and growth stocks that have produced much better earnings growth as a whole than the benchmark index's average.

Toss in top-90th-percentile performance over the trailing three-, five-, and 15-year periods, as well as exceedingly low management fees compared to its peers, and Strategic Small-Cap Equity easily rates among the best Vanguard mutual funds I've reviewed.

Just note that, like with many small-cap funds, turnover is on the high side at 66%, so this is best held in tax-advantaged accounts like an individual retirement account (IRA), health savings account (HSA), or, if available, a 401(k).

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4. Fidelity Mid Cap Index Fund

• Style: U.S. mid-cap stock
• Assets under management: $50.0 billion
• Dividend yield: 1.0%
• Expense ratio: 0.025%, or 25¢ per year for every $1,000 invested
• Minimum initial investment: None
• Morningstar Medalist Rating: Gold

I frequently refer to mid-cap stocks—companies worth $2 billion to $10 billion by market cap—as "Goldilocks" stocks. That's because they enjoy some qualities of their large-cap brethren (some size, some stability, revenue stream diversity, some access to capital) and some qualities of smaller firms (they're nimble and have more upside potential). That combination of traits is what Goldilocks would call "just right."

Related: 10 Best Schwab Mutual Funds You Can Buy [Low Fees, $1 Minimums]

"Since 1978, mid-cap stocks have outperformed small-caps over each of these rolling time periods: five, 10, 20, 30 and 40 years," says Oregon-based equity manager Jensen Investment Management. "They've even bested large-caps over the 30- and 40-year windows. These returns came with lower volatility than small-caps as well, making the evidence even more compelling.

"That means mid-caps haven't just delivered better performance—they've done it more consistently, with fewer drawdowns."

Fidelity Mid Cap Index Fund (FSMDX) is an exceedingly cost-efficient way to tap this area of the market. FSMDX tracks the Russell MidCap Index, which is made up of the 800 smallest stocks in the Russell 1000 (which is itself an index of the U.S. market's 1,000 largest stocks). As a result, you're getting exposure to about 800 mostly mid-cap stocks—the fund typically is 75% weighted in mids, with another 5%-10% in smaller large caps, and another 10%-15% in larger small caps.

Related: 5 Best Tech Dividend Stocks [According to the Pros]

That might seem odd. But it's pretty commonplace for 20%-30% of a mid-cap fund's holdings to bleed into small- and/or large-company territory, largely because different fund providers and indexes have different definitions for market-cap ranges. Where FSMDX stands out is that "the index selects larger stocks than most," Morningstar says. "Larger stocks are generally less volatile, so the portfolio could exhibit lower volatility than its peers."

Sector weights will naturally change over time as certain businesses come into and go out of favor, but right now, industrials are tops at 19%, followed by financials (15%), consumer discretionary (12%), and information technology (12%). Also, thanks to both the market cap-weighting of the Russell MidCap Index and the high number of holdings, single-stock risk is minimal; currently, every stock is weighted at less than 1%.

A sound methodology for Wall Street's mid-sized companies, dirt-cheap fee, and strong historical performance all make FSMDX one of the best index funds you can buy, and one of the best mutual funds period.

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5. Primecap Odyssey Aggressive Growth Fund

• Style: U.S. all-cap growth stock
• Assets under management: $7.8 billion
• Dividend yield: 0.3%
• Expense ratio: 0.66%, or $6.60 per year for every $1,000 invested
• Minimum initial investment: $2,000
• Morningstar Medalist Rating: Gold

Primecap Odyssey Aggressive Growth Fund (POAGX) is a supreme example of the advice to "look under the hood" before you buy a mutual fund.

This is a fund that has the words "aggressive growth" in the name, and that is categorized as a mid-cap growth fund. However …

1. POAGX isn't an "aggressive growth" fund—at least not right now. While it's true that POAGX's management aims to own companies with "prospects for rapid earnings growth," its actual holdings aren't as aggressively "growthy" as comparable products. "The fund has recently tilted more toward the core column of the Morningstar Style Box as many of its holdings' growth rates and valuation ratios have declined in recent years, and the managers have been unwilling to chase benchmark stocks they think are overvalued," says Morningstar Principal Robby Greengold.
2. POAGX isn't really a mid-cap growth fund, either. The fund's page itself says the company "has historically invested significant portions of its assets in mid- and small-capitalization companies," and "may invest in stocks across all market sectors and market capitalizations." There's nothing strictly tethering this fund to mid-caps. In fact, it currently boasts a pretty balanced 40/30/30 blend of large-, mid-, and small-cap stocks.

Related: 7 Space ETFs for the Next Frontier of Investing

Fortunately, you're still left with an awfully useful fund.

Primecap Odyssey Aggressive Growth and its team of managers own nearly 200 stocks across the market-cap spectrum, with an eye for growth. Each manager oversees a separate "sleeve" of selections, while a few picks are made by other analysts.

As is common with actively managed funds, size isn't everything when it comes to allocations. Yes, top holdings include mega-caps like Micron (MU), Nvidia, and Alphabet ... but they also include companies like $6 billion Rhythm Pharmaceuticals (RYTM) and $38 billion BeOne Medicines (ONC) that would never see daylight in a cap-weighted index fund.

The proof is in the performance pudding. POAGX is in the top 20% of all category funds by performance over the trailing three-, five-, and 10-year periods, and the top 5% over the trailing 15 years.

Again, past performance isn't indicative of future returns, but management has a track record of going anywhere within the U.S. market-cap spectrum and finding gold. And that makes Primecap's product one of the best mutual funds to buy in 2026.

Related: 8 Best Schwab Index Funds for Thrifty Investors

6. Fidelity Select Semiconductors Portfolio

• Style: Industry (Semiconductors)
• Assets under management: $43.1 billion
• Dividend yield: < 0.0%
• Expense ratio: 0.60%, or $6.00 per year for every $1,000 invested
• Minimum initial investment: None
• Morningstar Medalist Rating: Gold

Fidelity has roughly 30 "Select" funds—the company's name for its sector- and industry-specific funds. Several of these funds currently boast Morningstar Gold Medalist ratings. However, given that many investors have a heightened interest in the technology sector, I figured a tech-focused offering was the top fit for our best mutual funds list.

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

Fidelity Select Semiconductors Portfolio (FSELX) is an actively managed industry fund focused on semiconductor stocks, which have a pretty straightforward bull case: As both our personal and business worlds become increasingly dependent on technology, semiconductor companies—which design and manufacture one of the most essential components of technology—stand to benefit. And some of the greatest opportunities rest within those semiconductor companies powering emergent and high-growth technologies such as data centers, cloud computing, and artificial intelligence.

Adam Benjamin, who has led FSELX for six years, aims to beat the broader semiconductor industry by picking winners and losers within the space. In addition to single-company research, Benjamin also attempts to identify themes that will impact the largest end markets, and determine how technology disruptors might impact incumbent companies. 

Related: The 10 Best Fidelity ETFs You Can Buy [Invest Tactically]

Fidelity Select Semiconductors' 65-stock portfolio might seem tight, but it's pretty standard for a single-industry fund. The same goes for the massive 25% weight in Nvidia—as it goes, so too goes most semiconductor portfolios, not just Benjamin's pick list.

Kudos to Fidelity Select Semiconductors: In addition to its Gold Medalist rating, it has beaten every meaningful benchmark—the S&P 500, the technology sector, the MSCI US IMI Information Technology 25/50 Index—over every meaningful time period. And over the trailing three-, five-, 10- and 15-year periods, it has been in either the top 2% or 1% of products in its Morningstar category: tech-stock funds.

Morningstar, in explaining its Gold Medalist rating, also points out that "Benjamin has invested between $100,000 and $500,000 in the strategy, making an effort to align interests with shareholders and establish a proper incentive structure." To be clear: Fund managers virtually always have investors' best interests in mind, but when a manager actually has tangible skin in the game, that often provides additional confidence and comfort in the product.

Related: The 10 Best ETFs for Beginners

7. Vanguard Real Estate Index Fund Admiral Shares

• Style: Sector (Real estate)
• Assets under management: $69.9 billion
• Dividend yield: 3.6%
• Expense ratio: 0.13%, or $1.30 per year for every $1,000 invested
• Minimum initial investment: $3,000
• Morningstar Medalist Rating: Gold

Real estate investment trusts (REITs) are a specially structured type of company that owns and sometimes operates real estate. REITs enjoy a special tax status that allows them to avoid corporate taxation so long as they distribute at least 90% of their net profits as dividends. Because of this tax incentive, REITs tend to be one of the highest-yielding sectors and a perennial favorite among income investors.

By the way: This tax status was built in by Congress when it created REITs as part of the Cigar Excise Tax Extension of 1960. REITs were brought to life to give regular Joes and Janes like us to invest in real estate. After all, most of us don't have the six or seven digits it takes to buy investment properties, but we probably have the $20 or $30 it takes to buy a share of a REIT.

We need a little bit more than that—$3,000—to own the collection of REITs held by Vanguard Real Estate Index Fund Admiral Shares (VGSLX), but it's still a doable sum for most investors. (And if it's not doable for you, I'll tell you about the lower-dollar-cost exchange-traded alternative in a second.)

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

This Vanguard index fund plugs investors into nearly 150 REITs across a variety of property types, including industrial, retail, telecom tower, self-storage, office, residential, and more. Right now, top holdings include health care property owner Welltower (WELL), logistics and warehousing REIT Prologis (PLD) and datacenter landlord Equinix (EQIX).

Also worth noting is that the fund's top position is another Vanguard fund: the Vanguard Real Estate II Index Fund Institutional Plus Shares (VRTPX), which makes up about 15% of assets and owns many of the same companies.

VGSLX is one of the better-yielding REIT funds out there, paying out well more than 3% at the moment. That's more than three times what you'd get from an S&P 500 fund.

Just note that REITs are very tax-inefficient. As mentioned above, they tend to pay nonqualified dividends, which are taxed as ordinary income (thus as high as 37%, depending on your bracket). So if at all possible, you'll want to hold REITs and REIT funds like FRESX in a tax-advantaged plan like a 401(k) or IRA to negate those tax consequences.

And if that $3,000 minimum is an issue, you can get VGSLX in ETF form via the Vanguard Real Estate ETF (VNQ, 0.13% expense ratio), which trades around $90 per share.

Related: 7 Best Closed-End Funds (CEFs) Paying Us Up to 15.2%

8. Schwab Fundamental International Equity Index Fund

• Style: International large-cap value stock
• Assets under management: $5.1 billion
• Dividend yield: 3.1%
• Expense ratio: 0.25%, or $2.50 per year for every $1,000 invested
• Minimum initial investment: $1
• Morningstar Medalist Rating: Gold

The U.S. has been one of the world's most fruitful stock markets for decades. So if you believe in the American economy's ability to keep growing, naturally, you should continue to invest the lion's share of your money in U.S. assets.

Still, many advisors will tell you it's important to diversify geographically, too. It's a little hedging of bets, sure—while U.S. stocks tend to outperform international, 2025 was a year in which the rest of the world outdid America. But also, there are hundreds of high-achieving companies scattered across the globe, and it makes sense to have a little exposure to those firms, too.

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

Schwab Fundamental International Equity Index Fund (SFNNX) isn't your average international-stock index fund. Whereas most cheap index funds use a few baseline qualifying criteria and assign weights by market capitalization, SFNXX tracks a RAFI (Research Affiliates Fundamental Index) series index that prioritizes fundamental metrics—adjusted sales, retained operating cash flow, and dividends plus buybacks—when both selecting and weighting its components.

"When the fund rebalances, it increases exposure to stocks that have become cheaper relative to these metrics and trims those that have become more expensive," Morningstar Senior Analyst Daniel Sotiroff says.

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

Top country allocations are pretty similar to what you'd get in other large-cap international funds—a heavy dose of Japan, western European countries like the U.K. and France, and Canada. Top holdings? Similar again! Big, blue-chip firms like South Korea's Samsung and British energy giant Shell (SHEL) can be found in many competitor funds. And while the dividend is indeed juicy compared to U.S. blue-chip funds, that's also typical of most international large-cap offerings.

However, SFNNX's fundamental focus has made itself heard where it counts: performance. Schwab Fundamental International Equity Index has topped both its Morningstar category average and index returns across all meaningful time periods. It's also within the top 15% of category funds over the trailing-15-year period, and within the top 10% over the past 10 years.

* 0.48% gross expense ratio is reduced with a 15-basis-point fee waiver until at least April 30, 2026.

Related: 15 Dividend Kings for Royally Resilient Income

9. Artisan Sustainable Emerging Markets Fund Investor Class

• Style: Emerging-markets stock
• Assets under management: $568.3 million
• Dividend yield: 1.5%
• Expense ratio: 1.15%, or $11.50 per year for every $1,000 invested
• Minimum initial investment: $1,000
• Morningstar Medalist Rating: Silver

If you're a little more adventurous, you might eschew developed markets for "emerging markets" (EMs).

Emerging markets are considered to be less developed economies and capital markets. The downside here is more risk, ranging from political corruption and possible nationalization of publicly traded companies to less scrutinizing stock markets or economies dependent on just a handful of goods or services. But the upside is far greater growth potential compared to more established countries—and Wall Street is generally favorable on them heading into 2026.

"EM stocks have benefited from capital flight out of the U.S. while the global economy is benefiting from easing trade tensions and rising fiscal stimulus," T. Rowe Price said in its 2026 equity outlook. "A weaker U.S. dollar offers a further tailwind." And indeed, so far this year, emerging markets have outperformed their U.S. counterparts.

Related: 10 Best Schwab ETFs to Buy [Build Your Core for Cheap]

It's rare for EM funds to earn Morningstar's Gold Medalist rating. Artisan Sustainable Emerging Markets Fund Investor Class (ARTZX) did at the time of selection, though it is now rated Silver. Regardless, that still makes it one of the highest-rated emerging-markets mutual funds that's accessible to your average investor.

Manager Maria Negrete-Gruson brings 34 years of investment experience to this strategy, in which she's looking for not just the growth potential typical of emerging markets—but companies that boast "sustainability" in more ways than you'd expect. Some of that sustainability involves assessing environmental, sustainability, and governance (ESG) issues, sure. But the fund also focuses on companies with sustainable earnings, analyzing potential picks' historical drivers of sustainable return on equity (RoE) and companies' competitive advantages.

Most emerging-markets funds have a large allocation to Chinese equities, and ARTZX is no different, at a 18% weight currently. Taiwan is tops, though, at 21%, and South Korea is the only other double-digit country weight at 14%. The rest of the portfolio is largely allocated to countries from South America, southeast Asia, and Eastern Europe.

Historical performance hasn't been as dominant as some of the other funds on this list, but its three- and 10-year returns are within the top 20% of category 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.

10. Dodge & Cox Income Fund

• Style: Intermediate-term core-plus bond
• Assets under management: $107.7 billion
• SEC yield: 4.3%*
• Expense ratio: 0.41%, or $4.10 per year for every $1,000 invested
• Minimum initial investment: $2,500
• Morningstar Medalist Rating: Gold

Most investors need some exposure to bonds, which is debt that's issued by governments, companies, and other entities. Their interest payments and relative lack of volatility make them an excellent tool for providing a portfolio with stability and income.

But how much bond exposure you need will vary by age—because they're better at protecting wealth than growing it, people typically start with little in the way of bond holdings earlier in life, then gradually hold more bonds as they get closer to (and into) retirement. (Purpose-built investment products called target-date funds capture this dynamic automatically for investors.)

Individual bonds can be a hassle. Data and research on individual issues is much thinner than it is for publicly traded stocks. And some bonds have minimum investments in the tens of thousands of dollars. But you can blunt these problems by purchasing a bond fund, which allows you to invest in hundreds or even thousands of bonds with a single click—and, in many cases, very low fees.

Bond funds like Dodge & Cox Income Fund (DODIX) are, ahem, the gold standard.

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

DODIX is referred to as a "core-plus" bond fund, which means it can hold not only several types of core debt categories, but also noncore categories such as below-investment-grade (aka junk) corporate bonds and emerging-markets debt.

While this Dodge & Cox fund is allowed to pursue "below-investment-grade debt, debt of non-U.S. issuers, and other structured products," it's not doing much of that at the moment. Currently, more than half of assets are invested in securitized debt, 28% is allocated to mostly investment-grade corporates, 14% goes to Treasuries, and the rest is scattered other government-related bonds. Across all of that, DODIX does hold a little international debt, and about 5% of the portfolio is junk-rated, but past that, it's more "core" than "core-plus"—but it's an opportunistic fund, so that could change at any time.

Duration, a measure of interest-rate sensitivity, is 6.1 years. While the actual calculation is much more complex, this basically implies that for every 1-percentage-point increase in interest rates, DODIX would decline by 6.1% in the short term, and vice versa. It's a moderate amount of risk, nothing more.

Past that, Dodge & Cox Income has beaten its category average and its benchmark index—the Bloomberg U.S. Aggregate Bond Index (the "Agg"), arguably the market's most prominent broad bond index—in every meaningful time period. It's also among the top 20% or better of all category funds over the trailing one-, five-, 10-, and 15-year periods.

* SEC yield reflects the interest earned across the most recent 30-day period.

Related: The 9 Best Dividend Stocks for Beginners

11. Fidelity Tax-Free Bond Fund

• Style: National long-term municipal bond
• Assets under management: $3.8 billion
• SEC yield: 3.6%
• Expense ratio: 0.25%, or $2.50 per year for every $1,000 invested*
• Minimum initial investment: None
• Morningstar Medalist Rating: Gold

Municipal bonds are typically issued by states, counties, cities, and other sub-federal government agencies. They're sometimes used to fund general obligations and are backed by the municipality, though some are backed by the revenue a project would generate—say, a toll road. Muni bonds' quality usually isn't as high as similar federal debt but higher than comparable corporates.

But the glitziest trait of "munibonds" is their tax treatment. Municipal bonds' interest is exempt from federal income taxes and net investment income tax (NIIT) … and if you live in the municipality in which it was issued, state and possibly even local income taxes. So whatever headline yield you see on a municipal bond, you're probably earning much more once you factor in taxes.

Related: 10 Best Alternative Investments [Options to Consider]

Here's a hypothetical example: You live in Maryland, make $275,000 per year, and are a single filer. In 2026, that puts you in the 35% federal tax bracket and the 5.75% Maryland state tax bracket, plus it requires you to pay an additional 3.8% in NIIT, for a total tax rate of 44.55%. You buy a Maryland municipal bond with a 3% yield, so your income isn't subject to any of those taxes. Your "tax-equivalent yield" would be 5.4%. That means if you wanted to buy a normal taxable bond and get the same amount of post-tax yield as the muni, that bond would have to yield 5.4%!

The Fidelity Tax-Free Bond Fund (FTABX) is a national munibond fund that holds about 1,300 debt issues from 48 states and the District of Columbia. Issuers include the likes of the New Jersey State Transportation Trust Fund Authority, Alabama's Black Belt Energy Gas District, and the state of Illinois.

Because it holds such a wide variety of funds, state taxes won't be much of a factor no matter where you live—the greatest portion of the portfolio is invested in munis from New York State, and even then that's just a little more than 10% of assets. The big break is on the federal end. While a 3.6% SEC yield doesn't sound like all that much, someone paying the top 35% federal rate and the 3.8% NIIT would need to be earning a yield of roughly 5.9% from a taxable bond fund to bring in the same amount of post-tax income.

Just be smart about account selection. This tax advantage disappears inside of a tax-advantaged account like an individual retirement account (IRA) or 401(k). To get the benefit of the tax-free income, you need to hold munibond funds like FTABX in a taxable brokerage account.

* 0.43% gross expense ratio is currently reduced with an 18-basis-point fee waiver.

Related: The 11 Best Fidelity Funds You Can Own

12. Vanguard Wellington Fund Investor Shares

• Style: Moderate allocation
• Assets under management: $121.3 billion
• Dividend yield: 2.0%
• Expense ratio: 0.24%, or $2.40 per year for every $1,000 invested
• Minimum initial investment: $3,000
• Morningstar Medalist Rating: Gold

It's possible to get both your stock and bond exposure in a single fund. These funds are known by many names, including "balanced" or "allocation" funds, though I prefer to refer to them as "portfolios in a can."

One of the best such funds—Vanguard Wellington Fund Investor Shares (VWELX)—is Vanguard's oldest mutual fund, a product that debuted back in 1929. It's managed by Wellington Management, an investment management company with nearly a century of operational experience.

Wellington, which is considered a moderate allocation fund, invests about two-thirds of assets in stocks, and the other third in bonds. The stock portion of the portfolio currently holds about 80 predominantly large-cap stocks with a median market cap of more than $325 billion. It's a "who's who" of blue chips such as Nvidia, Apple, Alphabet, Microsoft (MSFT), and Amazon (AMZN). It also includes a little exposure to international stocks—predominantly developed-country names like UBS Group (UBS) and British American Tobacco (BTI).

Related: 5 Best Energy ETFs for the Rise of Oil, Natural Gas + More

The bond portfolio is much more broadly diversified, at more than 1,500 investment-grade issues. Two-thirds of that is invested in corporate bonds, with another 25% or so in Treasuries and agency bonds. The rest is peppered across mortgage-backed securities (MBSes), foreign sovereign bonds, and other debt.

Put more succinctly: Wellington is a one-stop shop for your core large-cap stock and bond needs, and its 0.24% in annual expenses is very inexpensive for the skilled management and strong performance track record you're getting in return. It's one of the best Vanguard funds you can buy, and in our view, one of the best mutual funds you can buy.

Just make sure you're considering your specific investment needs with this fund. If you don't want a third of your portfolio to be in bonds, you'll want to put additional money into individual stocks, equity funds, and/or alternative investments.

13. T. Rowe Price Capital Appreciation

• Style: Moderate allocation
• Assets under management: $70.8 billion
• Dividend yield: 1.7%
• Expense ratio: 0.71%*, or $7.10 per year for every $1,000 invested
• Minimum initial investment: $2,500
• Morningstar Medalist Rating: Gold

T. Rowe Price Capital Appreciation (PRWCX) comes at the tail end of this list—very much out of order—because of its status. Specifically, PRWCX is closed to most new investors. This is very much an exception to the rules I laid out above. However, I'm still including it among the best mutual funds you can buy both because of its extremely high quality and because this T. Rowe fund still might be available to some investors via select registered investment advisory (RIA) firms.

Related: The 7 Best Vanguard Retirement Funds for an IRA

T. Rowe Price Capital Appreciation is another allocation fund—this one designed to invest at least half its assets in stocks, with the rest socked into various debt securities, including corporate bonds, government debt (Treasuries, MBSes, asset-backed securities), and bank loans. It's primarily a domestic fund, but it can hold at least a quarter of its assets in foreign equities and debt. PRWCX, which currently holds around 165 securities, places 55% of assets in domestic shares and a little more than than 30% in domestic bonds, sprinkling the rest around foreign bonds, foreign stock, preferred stock, convertible securities, and cash.

Morningstar Analyst Jason Kephart says David Giroux, who has managed the fund since June 2006, and his team "have earned a well-deserved reputation as one of the leading investment teams managing money for individual investors."

"Giroux has helmed T. Rowe Price Capital Appreciation since mid-2006," Kephart says. "Over that time, he's displayed an innate ability to invest opportunistically across equities and bonds, capturing pockets of value through strong stock selection and impressively timed shifts between stock and bond exposure. His execution of this strategy's nimble, contrarian approach has delivered topnotch returns for its investors."

Related: 7 Best Fidelity Retirement Funds for IRA Investors

During his tenure, Giroux has beaten all of his category peers on both an absolute and risk-adjusted basis. He has also bested 89% of peers over the trailing five-year period, 97% over the trailing 10 years, and all peers over the trailing 15 years.

However, T. Rowe Price Capital Appreciation has a couple of critical sticking points, too:

1. The nature of its returns. The lion's share of PRWCX's returns come not as price appreciation, but year-end distributions of dividends and capital gains. That adds a layer of tax complexity, and as such, PRWCX is best held in tax-advantaged accounts like 401(k)s and IRAs.
2. Availability. Again, PRWCX is largely closed to new investors, so most of us can't just log into our browsers and buy this fund. But again, if your money is managed through certain registered investment advisers, you might actually be able to buy shares of this gem.

* 0.74% gross expense ratio is reduced with a 3-basis-point fee waiver until at least Feb. 29, 2028.

Related: 15 Best Stock Research & Analysis Apps, Tools and Sites

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.

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.

Related: The 7 Best Index Funds for Beginners

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.

Why Should I Buy No-Load Funds?

You should buy no-load funds for the same reason you should look to buy funds with lower expenses: The less money that goes to the provider, the more money that goes into your pocket.

Let's say you have $20,000, so you invest $10,000 into two different mutual funds. Mutual Fund A has no sales charge. Mutual Fund B has a 5% front-end sales charge. Both funds gain 7% annually over the next 30 years. And for the sake of simplicity in this example, we'll say both funds don't charge any annual expenses.

• Mutual Fund A will earn you $76,123 at the end of those 30 years.
• Mutual Fund B will earn you $72,317 at the end of those 30 years. You see, when you buy Mutual Fund B, that 5% front-end sales charge means the provider takes 5% out of your initial investment. So rather than investing $10,000 to start, you're actually just investing $9,500. But you don't lose just that $500—you also lose another $3,806 in "opportunity cost," which is the additional money that $500 would have earned had it not been lost to fees!

Sales charges are a significant handicap to a fund's performance, so it's only worth buying funds with loads if they produce much superior performance compared to the other funds you're considering.

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Riley Adams, CPA

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Related: 8 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.

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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What fewer people know is that Social Security benefits can vary a lot from one person to the next, because the size of those benefits hinges on several factors—among them, age.

Age 70 is a particularly noteworthy age, however, as it marks one of the most important milestones for Social Security: The age at which you have truly maximized out your potential benefit. (More on that in a moment.)

And yet, it's exceedingly uncommon for Americans to hold off until they become septuagenarians—the vast majority of adults begin receiving Social Security benefits checks much earlier. Specifically, according to the Transamerica Center for Retirement Studies' 2023 Life in Retirement: Pre-Retiree Expectations and Retiree Realities report, only 4% of retirees waited until age 70 to start the Social Security clock.

Why do so few people delay receiving Social Security benefits when doing so can mean markedly higher payments down the line? Well, it's not just a matter of willpower and patience—there are several legitimate reasons to begin earlier. So read on as I dive into why most people start collecting Social Security younger than age 70, and how to determine your ideal Social Security start date.

How Is Social Security Calculated?

The size of your Social Security benefit is determined by a few factors, including your age. But before we get to the age element, let me explain the role your earnings history plays.

Social Security's benefit formula adjusts (indexes) a worker's covered earnings (wages and self-employment income that are subject to Social Security taxes) to reflect the rise in standard of living over their working years, then adds up the 35 years with the highest indexed earnings, and divides them by the total number of months across those years. (If a person has fewer than 35 years of covered earnings, they receive a zero for each year under 35 when calculating the average.) The number is then rounded down to provide a figure called "average indexed monthly earnings," or AIME.

A person's primary insurance amount, or PIA (your benefits before factoring in early retirement, delayed retirement credits, cost-of-living adjustments, etc.), is calculated by multiplying different brackets of AIME by different factors. These brackets are adjusted every year.

In 2025, the calculation goes like this:

--90% of the first $1,226 of AIME, plus

--32% of AIME above $1,226 and through $7,391, plus

--15% of AIME above $7,391

In other words, at certain thresholds, higher pay has a diminishing impact on your Social Security benefits.

By the way, if you didn't keep your tax returns from the last 35 years … virtually no one does, and that's OK! You can see your estimated monthly Social Security benefit amount in your SSA account.

When Can I Start Collecting Social Security?

The Social Security retirement benefits most of us think of are "Old-Age" benefits, which you can begin collecting as early as age 62.

But the key word there is "early." Each person has a "full retirement age," or FRA. If you retire earlier than that, your future monthly benefits will be permanently reduced. And the farther away you are from your FRA, the greater the reduction.

Your FRA depends on your birth year. Currently, the brackets for one's FRA are as follows:

--Born between 1943 to 1954: 66

--Born in 1955: 66 and 2 months

--Born in 1956: 66 and 4 months

--Born in 1957: 66 and 6 months

--Born in 1958: 66 and 8 months

--Born in 1959: 66 and 10 months

--Born 1960 or later: 67

Once you reach FRA, you qualify to receive 100% of your earned Social Security benefits.

That said, 100% isn't the most you can earn. 

Related: Can You Receive Social Security Benefits While Working?

The Advantages of Delaying Social Security

You can collect your full benefit amount when you reach full retirement age. But if you delay collecting Social Security until past your FRA, you can actually increase your benefit past 100%.

For each month you delay collecting Social Security, you earn a delayed retirement credit that increases your benefit by a set amount. The monthly rate of increase depends on your birth year:

--Born 1933-34: 11/14 of 1% (5.5% 12-month rate of increase)

--Born 1935-36: 1/2 of 1% (6.0% 12-month rate of increase)

--Born 1937-38: 13/24 of 1% (6.5% 12-month rate of increase)

--Born 1939-40: 7/12 of 1% (7.0% 12-month rate of increase)

--Born 1941-42: 5/8 of 1% (7.5% 12-month rate of increase)

--Born 1943 or later: 2/3 of 1% (8.0% 12-month rate of increase)

However, delayed retirement credits (and thus your benefit) max out once you reach age 70. So while there's an advantage to waiting until you reach age 70 to retire, there are no additional perks for waiting any longer than that.

Based on Morningstar research, people in retirement who want the highest level of lifetime income should consider waiting to file for Social Security benefits. "However, the benefit of delayed filing is the most pronounced if the retiree can use nonportfolio income, such as a part-time job or rental income, to provide cash flows until Social Security benefits begin," Morningstar says. That allows the retiree to delay taking withdrawals from tax-advantaged retirement accounts, which gives the account funds more time to grow.

Delaying Social Security can also be beneficial in a situation where a younger, lower-earning spouse is married to an older, higher-earning spouse, as the younger spouse can take the larger benefit as their own if the older spouse passes away first.

Related: How to Maximize Social Security Spousal Benefits

The Disadvantages of Delaying Social Security

Delaying Social Security doesn't make sense for everybody, even if it could potentially result in more money collected in the long run. 

Among the considerations that might lead you to decide to take Social Security earlier than age 70? Your life expectancy, whether you have the financial resources to cover essential expenses without those benefits, and even your belief in Social Security's stability.

Related: 10 Common Social Security Mistakes You Should Know

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.

You Might Need to Withdraw From Tax-Advantaged Retirement Accounts

Let's pretend that life's circumstances necessitate that you retire at age 67. Unless you have other income sources, delaying Social Security could force you to take withdrawals (or higher withdrawals than you originally expected) from your retirement accounts.

If that's the case, delaying your Social Security benefit could be detrimental to your financial health. Why? The reduction in your retirement accounts' growth potential could more than offset what you would gain from the higher benefit check.

Retiring on a combination of both Social Security benefits and portfolio withdrawals (as well as other income sources) also helps to protect against "sequence of returns risk." This is the risk that a bear market or other market conditions shrink your portfolio early in your retirement, which can amplify the toll that each withdrawal takes on your investment account and result in running out of retirement funds far earlier than expected.

Related: How Much Should I Save Each Month?

You Have a Low Life Expectancy

If you're in very poor health and don't expect to have a very long remaining life, waiting until age 70 to collect a maxed-out benefit might be downright impractical. 

Indeed, depending on your situation, you might want to begin receiving Social Security checks before you even reach FRA. Because while a reduced monthly check might not be ideal, delaying your filing could result in you receiving few (or even none) of your earned benefits.

To be clear: Many people overestimate their longevity risk.

"Longevity risk is a problem that's also happening more, and it has the potential to be more common today than we've seen in the past," says R. Dale Hall, FSA, MAAA, CFA, CERA, Managing Director of Research at Society of Actuaries. "In 2024, roughly 100,000 people were expected to reach 100 years of age in the U.S., according to [estimates from the U.S.] Census Bureau. But looking forward, the Census Bureau says that could quadruple to more than 420,000 by 2054."

Everyone has a breakeven point where missing out on early payments is made up for by the larger size of later payments. However, if you have a serious health condition that doctors believe will shave many years off your life, you should weigh that heavily when considering a late retirement. Just make sure that your retirement plan at least accounts for the possibility that you might live longer than you expect.

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You Worry Social Security Will Be Weakened or Not Exist

I'm not here to give my opinion about the future of Social Security. 

Some people believe it will continue to function as normal for decades to come, while others fear the program is unsustainable and won't have much money left by the time they retire. And if you're in the latter group, I can understand wanting to collect your benefit as soon as possible.

Roughly 40% of Americans worry Social Security will be reduced or not exist in the future, per the Transamerica Center for Retirement Studies' 2024 The Retirement Outlook of the American Middle Class report. 

Some of this fear stems from statements from the Social Security Administration itself. The SSA's 2024 report on the Status of the Social Security and Medicare Programs states that the Old-Age and Survivor's Insurance Trust Fund will only be able to pay 100% of the total scheduled benefits until 2033. At that point, the fund's reserves will be depleted and the program income will only be sufficient to pay out 79% of scheduled benefits. 

It's possible funds could be drawn from elsewhere to supplement the difference, but not everybody believes that would be the case.

Related: How Are Social Security Benefits Taxed?

How Else Can I Fund My Retirement?

Social Security isn't designed to be a person's sole source of income during retirement, so it's vital to plan on funding your retirement through additional methods.

Those who have jobs with pensions might be able to live completely off of that income alone until they start claiming Social Security.

Many people take withdrawals from tax-deferred or tax-exempt retirement accounts. The longer you keep money within those accounts, the greater their growth potential. (That said, some tax-deferred accounts are eventually subject to required minimum distributions, or RMDs.) Some people also use earnings from taxable brokerage accounts to fund their lifestyle.

You can also support your retirement with savings products, such as certificates of deposit (CDs), money market accounts (MMAs), and other cash equivalents. Insurance and real estate are common choices as well. 

Some people choose to only partially retire and work part-time as an employee or contractor. Although this is an excellent way to ensure ongoing income, keep in mind that continuing to work isn't always feasible. In older age, a person might struggle to find work for a number of reasons, from antiquated skill sets to ageism to health issues that make work challenging or impossible.

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

Schedule Your Call With Riley

Riley Adams, CPA

Licensed CPA and Financial Advisor

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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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Still, Treasuries are complex enough that you shouldn't dive in without at least a little research first. Also, certain market conditions can affect the value of Treasury bonds—sometimes it pays to be strategic about when you purchase Treasuries.

So, is now a good time to buy Treasury bonds? Depending on what you want to get out of them, the answer is either "yes" or "maybe."

Today, we'll dive into the subject of Treasury bonds—what they are, how they work, and how they differ from similar investments. And once you fully understand how these bonds function, it'll be easier to decide whether you should buy now or wait.

Disclaimer: This article does not constitute individualized investment advice. These securities appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

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What Are Treasury Bonds?

Much like businesses, the federal government needs to borrow to finance operations or projects, and can do so by issuing debt. Specifically, it does so through the U.S. Treasury, which issues a number of different debt securities dubbed "Treasury marketable securities."

Among these Treasury marketable securities are a set of three different traditional bonds that differ by how long they need to mature (maturity is when the bond issuer has to repay the bondholder):

-- Treasury bills (T-bills): Mature in four to 52 weeks

-- Treasury notes (T-notes): Mature in two to 10 years

-- Treasury bonds (T-bonds): Mature in 20 to 30 years

Confusingly, though, the term "Treasury bonds" is also loosely used to refer to any of these types of bonds. As an example, there's an exchange-traded fund, called the iShares U.S. Treasury Bond ETF, that invests in T-bills, T-notes, and T-bonds.

So today, in exploring whether now's a good time to buy Treasury bonds (also nicknamed "Treasuries," though you'll also see it spelled "Treasurys"), we'll be talking about that broader definition: Treasury bonds of all maturities.

How Do Treasury Bonds Work?

When you purchase a Treasury bond from the U.S. Treasury Department, the government will pay back your principal (your original investment) when the bond matures.

T-notes and T-bonds will also pay interest semi-annually at a set rate (the "coupon rate"), expressed as a percentage of the bond's value when it was issued (the "par value").

However, T-bills are a little different. Their "interest" is just the difference between your principal and the bond's face value when you sell. T-bills are typically issued at a discount from the par value. For instance, a 52-week T-bill might be sold at $99 but have a par value of $100. When you get that $100 back after 52 weeks, you'll have earned $1 in "interest."

Ways to Buy Treasury Bonds

There are three primary ways to buy Treasury bonds:

1. Directly from government auctions: When you do this, you're buying the bond as it's being created, with its original maturity and coupon rate.

2. On the secondary market: When you do this, you're buying a bond that already exists. You'll likely have less time to maturity than when the bond was issued (say, you might have four years left on a five-year Treasury). Also, while the coupon rate will remain the same, your actual yield might be different depending on whether the bond is worth more or less than when it was originally issued.

3. Via a bond fund: A bond mutual fund, exchange-traded fund (ETF), or closed-end fund (CEF), can hold dozens, hundreds, or even thousands of bonds. That reduces the risk you take by investing in a single bond. Some funds invest exclusively in Treasury bonds; others hold Treasuries as well as a variety of other debt.

Related: The 13 Best Mutual Funds You Can Buy

When you own individual bonds, your returns are made up of the return of the original principal at maturity, as well as the interest you receive while you hold the bond—or, if you sell the bond before it matures, the difference between the price you sold the bond at and the price you bought the bond at.

However, returns on bond funds are different. For one, you don't receive a set amount of money when a bond matures; instead, your returns hinge on how the fund itself performs. On the upside, rather than receiving interest only twice a year, most bond funds pay interest each and every month.

Related: 15 Dividend Kings for Royally Resilient Income

Bonds themselves can grow or shrink in value for any number of reasons, most notably changes in interest rates and investor appetite for bonds, usually for their perceived safety.

You see, Treasuries have extremely little risk of defaulting because they are backed by the full faith and credit of the U.S. federal government. They are among the safest investments you can make, and they often get used as a proxy for the "risk-free" rate of return in the economy. If the government could not pay its bills, it would either cut spending, raise taxes or both to make sure they can pay their creditors.

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What Are the Advantages of Treasury Bonds?

Treasuries are generally favored for three reasons: safety, income, and liquidity.

-- Safety: Treasury bonds have extremely little risk of defaulting because they are backed by the full faith and credit of the U.S. federal government. They are among the safest investments you can make, and they often get used as a proxy for the "risk-free" rate of return in the economy. If the government could not pay its bills, it would either cut spending, raise taxes or both to make sure they can pay their creditors.

-- Income: Treasuries, like most other bonds, provide a fixed level of income. That's attractive to investors looking for a guaranteed (or virtually guaranteed) rate of return on their investment.

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

-- Liquidity: Liquidity refers to how quickly and easily a security can be bought and sold. Because the market for Treasuries is very active, investors typically don't struggle to buy and sell these securities. Furthermore, the Treasury regularly sells new T-bonds at auctions, allowing people to buy Treasuries directly from the government without needing a bond broker.

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What Are the Disadvantages of Treasury Bonds?

Treasury bonds also have a few noteworthy drawbacks:

Modest price returns: While bond prices can go up and down, most of their return is tethered to the interest they pay. Thus, bonds tend to trade in a range around their par value. This differs from stocks, which can be much more volatile. It's a double-edged sword—it means bonds are less likely to sink significantly in value, but it also means they're less likely to deliver significant price performance.

Relatively low yields: When a government or business issues a bond, they look at the current interest-rate environment, factor in the risk of the bond they're issuing, and determine a coupon rate that will be attractive enough to interest investors. Take a bond that matures in 20 years—that's a lot of time for something to go wrong and the bond go unpaid. Thus, a 20-year bond likely will have a higher interest rate than, say, a six-month bond. Well, Treasury bonds are among the safest and most in-demand bonds on the market—and thus they typically feature much lower yields than comparable bonds from corporate issuers.

Related: 10 Monthly Dividend Stocks for Frequent, Regular Income

Currency risk: Treasuries are denominated in U.S. dollars. If you're an American, that's just fine. But it's a concern for foreign investors. Let's say 1 euro equals 1 U.S. dollar. You spend 1,000 euros to buy $1,000 in U.S. Treasury bonds. But by the time those bonds mature, 1 euro equals 2 U.S. dollars. So, you still receive $1,000 in principal at maturity—but that's only worth 500 euros.

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Treasury Bond Math Example

Here's an example just to show you how T-bond returns are calculated. (This is in no way a prediction of future bond prices or interest rates.)

Let's say you buy a 20-year Treasury bond for $1,000. The interest rate as of this writing is 4.58%. If you hold the bond until maturity, you will receive $1,916 ($1,000 in principal and $916 in interest).

What happens if you don't hold the bond to maturity?

Let's say you buy a 20-year Treasury bond for $1,000. The interest rate as of this writing is 4.58%. However, the bond appreciates by 10% by the end of the 10th year, so you decide to sell it. You will receive $1,558. ($1,000 in principal, $458 in interest, and $100 in capital gains.)

Related: 13 Best Long-Term Stocks to Buy and Hold Forever

Also, while you technically would have earned more overall by holding the bond to maturity, you would have earned a greater average return by selling and locking in your gains. In this example, holding on to the Treasury netted you an average annual return of 3.3%, while selling it at the end of Year 10 after it appreciated netted you an average annual return of 4.5%.

Note: This example doesn't include any federal taxes you might owe. (Treasuries are exempt from state and local tax.)

Do I Pay Taxes on Treasury Bond Earnings?

Good news there! While Treasury bonds' interest income is subject to federal taxes, it's exempt from state and local taxes. Investors are provided a 1099-INT showing the total amount of interest earned as well as how much was withheld and paid to the IRS for the previous calendar year.

If you hold a bond from issuance to maturity, you won't owe any capital gains taxes because all you're getting back is your principal—no more, no less.

However, if you buy a bond, then sell it, and make a profit off the transaction, those returns will be subject to capital gains taxes. Capital gains tax rates are based on your income and the length you held an investment.

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How Can I Invest in Treasury Bonds?

As mentioned above, you can primarily invest in Treasury bonds (as well as other Treasury marketable securities) in one of three ways.

1. Directly from government auctions. You can do this via TreasuryDirect.gov, the official U.S. Department of the Treasury website for these and other bonds. The minimum amount to buy a bond is $100, and you can buy them in $100 increments. You can also do this via numerous brokers.

2. On the secondary market: You can access the secondary markets for Treasuries and other bonds via numerous brokers.

3. Via a bond fund: You can buy bond funds through the vast majority of brokers. You can select bond funds that only invest in short-, medium-, or long-term Treasury bonds, funds that invest in Treasuries of various lengths, or funds that invest in Treasuries as well as other debt.

On rare occasion, you can find other Treasury-related products. For instance, the Public investing platform allows you to invest in T-bills through its Treasury Account. Or, if you'd like to buy them directly, you can through a brokerage house like E*Trade.

Treasury Bonds vs. Savings Bonds

The primary difference between U.S. savings bonds and Treasury bonds is liquidity.

Treasury bonds can be bought and sold at virtually any time, via either primary or secondary markets, or via bond funds.

However, you can only purchase U.S. savings bonds at TreasuryDirect.gov. You can typically only sell them at TreasuryDirect.gov, too, though you can cash paper bonds at a bank or credit union, too.

Also, you're very limited as to when you can sell. You have to wait at least one year before cashing in both Series EE and Series I bonds. However, if you cash out before five years, you lose three months' worth of interest.

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

Treasury Bonds vs. Treasury Notes

Remember: The term "Treasury bonds" can be used to refer to T-bills, T-notes, and T-bonds collectively, but it can also mean T-bonds specifically.

If we're referring to the latter, Treasury bonds' primary difference from Treasury notes is maturity. T-bonds mature in 20 to 30 years, while T-notes mature in two to 10 years.

Because of the longer time to maturity, T-bonds are considered a little riskier than T-notes, and thus often (but not always) sport higher yields. Their prices can also be more volatile.

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

Treasury Bonds vs. Treasury Bills

Again, the biggest difference between T-bonds and T-bills is length. T-bonds are considerably longer-term at 20 to 30 years, while T-bills are very short-term in nature at four to 52 weeks. T-bonds are considered to have much more interest-rate risk because of their longer maturity, so again, they often (but not always) have higher yields than T-bills.

Another important difference is interest. T-bonds pay semi-annual interest payments throughout the life of the bond. T-bills, however, don't pay traditional interest. Instead, T-bills sell for a discount to their par value, and your "interest" is the difference when the bill matures. So, let's say you buy a T-bill for $99, but its par value is $100. You'll collect $100 at maturity, and the $1 difference is your "interest."

Related: 6 Best Stock Recommendation Services [Stock Tips + Picks]

Treasury Bonds vs. CDs

Treasury bonds and certificates of deposit (CDs) are both relatively safe, fixed-rate investments, but there are numerous differences:

-- A Treasury bond is an investment you own. CDs are accounts where you store your money.

-- Treasury bonds either pay interest semi-annually or, in the case of T-bills, at maturity. CDs' rates compound either monthly or daily.

-- Treasury bonds are extremely liquid, able to be sold pretty much whenever you want. CDs are extremely illiquid; trying to withdraw your money before the end of its term will typically result in a penalty.

-- Treasury bond interest is exempt from state and local taxes. CD interest is not.

-- Treasury bonds' lengths range from four weeks to 30 years. CDs' terms range from three months to five years.

Related: 11 Best CD Alternatives to Capture Interest With Low Risk

So, Is it a Good Time to Buy Treasury Bonds?

Treasury bonds' interest rates are heavily influenced by the Fed funds rate set by the Federal Reserve. So if you're thinking about buying Treasuries, you want to know what the Fed is up to.

At the most recent meeting later April 2026, they once again decided to keep rates unchanged in the 3.5%-3.75% range. It's currently expected rates will either remain the same or rise by the end of the year.

Related: 10 Best Dividend Stocks to Buy

Bond prices and interest rates have an inverse relationship—when rates go up, bond prices go down, and vice versa. Of course, this mostly matters if you plan on selling your Treasury bonds before they mature. If you just plan to hold a Treasury bond to maturity, then all you need to know at any point you're considering buying is whether the interest rate on current Treasuries is enough return on your investment.

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Riley Adams, CPA

Licensed CPA and Financial Advisor

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And for many, the best AI ETFs should continue being the investment of choice, especially as artificial intelligence spreads its wings.

"AI-related investment growth remains strong, particularly for semiconductors, where equity analysts expect global revenue growth of 50% from current levels by the end of 2026," Goldman Sachs Research analysts Sarah Dong and Joseph Briggs wrote in a May note. "AI-related investment in the US national accounts also continues to rise and now stands at $360 billion (1.1% of GDP) above its 2022 level. U.S. investment in AI-related hardware and software continued to rise in today's 2025 Q4 GDP release."

ETFs dedicated to the AI trend can give you the best of either or both worlds, whether that's exposing you to the first-level AI winners in technology, the downstream winners, or a wide net of companies primed to benefit in one way or another.

Let's look at seven of the best AI ETFs you can buy. These essential funds all broadly share a focus on artificial intelligence, but they go about investing in the theme in different ways.

Editor's Note: Tabular data presented in this article is up-to-date as of May 28, 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.

How Big Is the AI Opportunity?

It's a fair assumption that anyone reading this has heard at least some almost outlandish-sounding prediction about how massive artificial intelligence will end up being, whether that's how many people will use it, the market opportunity, even how many jobs it will replace.

So I won't flood the zone. I'll just provide a few numbers I think sum up the prevailing thoughts on where AI is going:

• $15.7 trillion: "AI could contribute up to $15.7 trillion to the global economy in 2030, more than the current output of China and India combined. Of this, $6.6 trillion is likely to come from increased productivity and $9.1 trillion is likely to come from consumption-side effects." (PWC)
• $2.5 trillion: "Worldwide spending on AI is forecast to total $2.52 trillion in 2026, a 44% increase year-over-year. ... Building AI foundations alone will drive a 49% increase in spending on AI-optimized servers for 2026, representing 17% of total AI spending. AI infrastructure will also add $401 billion in spending in 2026 as a result of technology providers building out AI foundations." (Gartner)
• 331: "FactSet searched for the term 'AI' in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from Dec. 15 through March 11. Overall, the term 'AI' was cited on 331 earnings calls conducted by S&P 500 companies during this period. This number is well above the five-year average of 149 and the 10-year average of 94. In fact, this is the highest number of S&P 500 earnings calls on which 'AI' has been cited over the past 10 years (using current index constituents going back in time). The previous record over the past 10 years was 314, which occurred in Q3 2025. This number also reflects 68% (331 out of 485) of the earnings calls conducted by S&P 500 companies during this period." (FactSet)

And this is just a small sampling of the pro-AI estimates, forecasts, and analyses that have been sent my way in just the past few months.

A Fair Warning About AI Hype

A lot of money is betting that AI will be one of the greatest technological mega-trends of our time, but ultimately, those bets boil down to belief—they're not a guarantee.

In fact, there are two ways in which betting on AI from here could go horribly wrong:

1. Timing

The internet was once viewed exactly how AI is treated today—as "the next big thing" in technology. Those who predicted the internet would become a massive part of the global economy were indeed right ... eventually. The dot-com bubble became the dot-com bubble bust. Some promising internet companies collapsed. Some were never the same. Some eventually lived up to their potential and then some, but it took years for their shares to eclipse those 2000-01 levels.

"The internet will change everything. That was the story of the dot-com bubble: The "information superhighway" would revolutionize how we work, communicate, socialize, and inform ourselves. It was all true," Rob Arnott, Trent Commins, and Xi Liu write in a Research Affiliates research paper. "Yet the 10 most valuable tech stocks in 2000 underperformed the S&P 500 for the next 15 years. Why? Because the narrative missed two important nuances: It assumed that early dominance meant enduring dominance, and it overestimated the pace of change.

"As with all technological innovation, the pace of human adoption may be slower than the visionaries predict. Some early leaders may lose their edge amid the fierce competition or even disappear altogether." 

2. Failure to Stick

Over the past few months, you've probably heard a lot more than ever before about the possibility of an AI bubble.

It certainly wouldn't be unprecedented.

"Like the internet highflyers of 2000, today's AI darlings must exceed already lofty expectations to beat the market in the years ahead," Arnott, Commins, and Liu write. "If cracks form in the narrative—if the fundamentals fail to keep pace with investors' fanciful projections—the broader story may begin to crumble and even collapse completely. This can cause sharp market downturns, outsized investor losses, and a cascading effect that turns bull markets into bears."

While business coverage of AI has become at least a little more critical and even-handed, I still frequently see reports from OpenAI and Anthropic developments that read like glorified press releases. But a few journalists continue to point out cracks in the AI narrative. For instance, Ed Zitron, writer of the Where's Your Ed At newsletter and host of the Better Offline podcast, routinely punches holes in the rose-colored coverage of the AI industry.

Consider this from a May missive: "Every AI startup loses millions or billions of dollars a year, and nobody appears to have worked out a way to stop hemorrhaging cash. Hyperscalers have invested over $800 billion in the last three years, with plans to add another $700 billion or so in 2026 and another $1 trillion in 2027, meaning that they need to make at least $3 trillion in AI-specific revenue just to break even, and $6 trillion or more for AI to be anything other than a wash."

Alternatively, AI could stick ... but not in the way we expect it will. Artificial intelligence could prove extremely useful and lucrative in certain industries but come up short in others. Which, if you're buying into AI, makes it all the more important to understand exactly how you're buying into AI—say, how one AI ETF's approach differs from the next.

7 AI ETFs Every Investor Should Know

If you want to get into AI without making potentially risky bets on just one or two stocks, exchange-traded funds are the way to go.

Why not mutual funds? AI mutual funds simply don't exist. Thanks to less stringent requirements and regulations for ETFs, ETF providers can quickly pump out products to serve just about any emerging trend—mutual funds, not so much. The "funkiest" mutual funds you're likely to see are sector-level funds, such as technology or healthcare funds. But you can find an ETF or two for the smallest of niches. And the number of artificial intelligence ETFs already numbers in the double digits.

With all of that said, I'm going to home in on seven of the best AI ETFs on the market right now.

ETFs are listed in order of assets under management (AUM), from largest to smallest.

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1. Global X Artificial Intelligence & Technology ETF

• Inception: May 11, 2018
• Assets under management: $10.3 billion
• Expense ratio: 0.68%, or $6.80 per year on every $1,000 invested

The Global X Artificial Intelligence & Technology ETF (AIQ) is the 500-pound gorilla of the artificial intelligence ETF space. It's the only one to boast more than $10 billion in assets under management (AUM), and that's roughly three times the closest broad AI ETF.

Here's how AIQ explains its "unconstrained" approach: "AI spans multiple segments, and its most innovative companies include both household names and newcomers from around the world. AIQ invests accordingly, without regard for sector or geography."

Related: The 16 Best ETFs to Buy Right Now

Put differently: Global X's ETF believes AI profits will be made not just by companies that produce the technology, but also companies that adopt it. That's reflected in AIQ's tracking index, which breaks companies down into two categories, which themselves are broken down into a total of four easier-to-understand subcategories:

1. AI applied to products and services: Companies with developed internal AI capabilities and that are directly applying AI tech into their products and services. This can include image and/or language processing, threat detection, recommendation generation, and more.
2. AI-as-a-service for Big Data applications: Companies that provide AI capabilities to their customers as a service. They usually offer cloud-based platforms that let their customers apply AI techniques to big data without having to build their own capabilities.
3. AI hardware providers: Companies that produce semiconductors, memory storage and other hardware needed for AI applications.
4. Quantum computing: Companies developing quantum computing technology. This isn't highly commercialized yet, but it's expected to be a hotbed of potential in the AI space.

AIQ's index takes 60 companies from Nos. 1-2, and 25 companies from Nos. 3-4. Stocks are given an "exposure score" (effectively, the more business exposure to AI, the greater the score). All stocks with a score greater than 20% are capped at 3% of assets at each rebalancing, while all stocks with a score less than 20% are capped at 1%. (Stocks can exceed these levels if they rise in value between rebalancings.)

The resulting 84-stock portfolio is unsurprisingly thick in tech stocks, but it's not technology-exclusive. Right now, the tech sector accounts for 77% of assets, followed by communication services (11%), consumer discretionary (8%), and industrials (4%). The remainder is sprinkled across financials, healthcare, and materials.

Related: 5 Best Tech Dividend Stocks [According to the Pros]

Names such as SK Hynix, Samsung, and Micron (MU) are the hardware providers you're used to seeing in AI conversations. Microsoft (MSFT) and Google parent Alphabet (GOOGL) enable organizations to utilize AI through their software. Names like Netflix (NFLX) and Uber Technologies (UBER) are examples of companies on the AI-application side of the equation.

And as the inclusion of SK Hynix and Samsung might suggest, AIQ isn't a strictly U.S.-based fund. It's global (read: U.S. plus international), with a roughly 65/35 split of American and foreign stocks. That international exposure includes South Korea, China, Taiwan, and Germany, among other nations.

This broad coverage of the industry has made AIQ an immensely popular fund, and deserving of a spot on any list of the best AI ETFs.

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2. Defiance Quantum ETF

• Inception: Sept. 4, 2018
• Assets under management: $5.4 billion
• Expense ratio: 0.40%, or $4.00 per year on every $1,000 invested

Somewhere, in an alternate universe, Raphael is yelling at Casey Jones: "Quantum? Nobody understands quantum! You gotta know what a qubit is to understand quantum!"

My tortured brain's asides aside, quantum computing is an eagerly awaited game-changer for artificial intelligence … but it takes a little background to understand. This video by Veritasium is helpful, but here's an extremely shortened version of what you need to know:

All of today's devices use "classical computing," which is based on bits. Bits, short for "binary digit," represent either a 0 or a 1, and they're the smallest unit of digital information in computing. And the more of these bits you string together, the more complex functions you can tackle. However, in "quantum computing," the smallest units are qubits, which can exist in multiple states simultaneously.

Related: How to Rebalance Your Portfolio: A Quick Guide

"A quantum computer solving a maze would not try each path one at a time to find the exit. Instead, it will try each route simultaneously, finding the exit in a fraction of the time," says Ahmet Erdemir, PhD, Associate Staff at Cleveland Clinic's Center for Computational Life Sciences.

Why does this matter for AI? "AI methods are currently limited by the abilities of classical computers to process complex data," Erdemir says. "Quantum computing can potentially enhance AI's capabilities by removing the limitations of data size, complexity, and the speed of problem solving."

Put simply: Quantum computing can take AI to the next level.

The Defiance Quantum ETF (QTUM) tracks 86 companies in the global quantum computing and machine learning industries. This includes developing quantum computers or chips, making applications built on quantum computers, software specializing in big data, and more.

Related: How to Invest Money: 5 Steps to Start Investing w/Little Money

Quantum computers technically exist, but they're nowhere near commercial development. For instance, Nvidia CEO Jensen Huang received flak last year after saying quantum computing wouldn't be useful for at least 15 years "on the early side." Not long after, he walked back some of his skepticism and generally said he underestimated the pace of progress. (But I'll note that he also didn't give a quicker concrete timetable, either.)

QTUM is slowly becoming a more direct play on quantum computing, but it's far from a pure play simply because quantum doesn't yet drive meaningful revenues right now. Yes, it holds dedicated quantum companies like IonQ (IONQ) and D-Wave Quantum (QBTS). But most components—such as Intel (INTC), Nokia (NOK), and Lam Research (LRCX)—are plays on many other things that aren't quantum. QTUM also uses a modified equal-weighting system, so those few pure-play quantum companies are structurally limited as to how much influence they can wield; indeed, IONQ and QBTS are in the bottom half of the ETF's holdings by weight.

But I also feel obligated to point out that Defiance Quantum's lack of purity hasn't held the fund back at all. QTUM has beaten the pants off artificial intelligence pure-play and adjacent ETFs alike since launching in 2018, and has since grown into the market's second largest AI ETF.

* 0.75% gross expense ratio is reduced with a 7-basis-point fee waiver until at least Aug. 31, 2026.

** There are different ways to define “cap” levels. We’re going by 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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3. ARK Autonomous Technology & Robotics ETF

• Inception: Sept. 30, 2014
• Assets under management: $3.4 billion
• Expense ratio: 0.75%, or $7.50 per year on every $1,000 invested

The ARK Autonomous Technology & Robotics ETF (ARKQ) is different from many of the other AI ETFs in that it's actively managed. It was one of the first two funds to launch under Cathie Wood's innovation-minded ARK Invest firm.

And like QTUM, it's somewhat more specialized than some of the broad-spectrum artificial intelligence funds on this list.

ARK Autonomous Technology & Robotics holds autonomous technology and robotics companies "relevant to the Fund's investment theme of disruptive innovation." These are companies that develop, produce, or enable autonomous mobility, intelligent devices, advanced battery technologies, adaptive robotics, neural networks, reusable rockets, next-gen cloud technology, and 3D printing. In selecting companies, Wood is looking for three types of companies: "automation transformation," "energy transformation," and "artificial intelligence."

Related: The 7 Best Gold ETFs You Can Buy

Put differently: ARKQ absolutely provides AI exposure, but AI isn't explicitly the point.

While technology accounts for a third of assets, it's not even the biggest sector by weight—the industrial sector is, at just under 40%. There's also a healthy helping of consumer discretionary (17%) and a decent amount of communication services (8%), with sprinklings across energy, healthcare, and utilities.

ARKQ has relatively little exposure to large caps compared to other funds on this list. Only half of its assets are invested in large caps, with another 35% in mid-caps and 15% dedicated to smalls. But Wood, who runs a tight ship of fewer than 40 holdings, is also more than happy to concentrate weights in her favorite bets; Tesla (TSLA), Advanced Micro Devices (AMD), and Teradyne (TER) alone account for more than a quarter of assets.

That aggression can cut both ways, performance-wise. But Wood's ability to capture upside is a strong argument for putting ARKQ among the market's best AI ETFs.

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

4. Roundhill Generative AI & Technology ETF

• Inception: May 18, 2023
• Assets under management: $1.9 billion
• Expense ratio: 0.75%, or $7.50 per year on every $1,000 invested

The Roundhill Generative AI & Technology ETF (CHAT) is a another focused play, this time on "generative" AI, which is AI used to generate content (so, text, images, even video) from a prompt.

"AI-driven tools and platforms are significantly boosting enterprise productivity, efficiency, and decision-making," Roundhill says of the opportunity. It points to OpenAI's ChatGPT, which "has become one of the fastest applications of all time to surpass 100 million users."

Related: 5 Best Energy ETFs for the Rise of Oil, Natural Gas + More

However, I said it's a "somewhat" more focused play for a reason.

The actively managed CHAT's 42-holding portfolio does have a few pure plays, such as Hong Kong-based Knowledge Atlas Technology, though much of its weight is in more familiar names such as Alphabet, with its Google Gemini platform, and Meta Platforms, with its Meta AI. Of course, those are multitrillion-dollar behemoths with many business lines outside generative AI. The same goes with chipmakers such as Nvidia, AMD, and Broadcom (AVGO), which produce semiconductors that power generative AI, sure ... but also many other applications of artificial intelligence.

That's not necessarily a bad thing. If you believe not just in the upside potential of generative AI, but also the ability for that field to widen, CHAT should over time become more specialized.

I can say the same about the final fund on this list, too.

Related: 5 Best Silver ETFs You Can Own

5. Invesco AI and Next Gen Software ETF

• Inception: June 23, 2005
• Assets under management: $1.2 billion
• Expense ratio: 0.56%, or $5.60 per year on every $1,000 invested

The Invesco AI and Next Gen Software ETF (IGPT) boasts an inception of 2005, which makes it more than two decades old ... but don't congratulate Invesco for unparalleled prescience. This AI ETF has only existed in its current form since Aug. 28, 2023, when the fund provider changed its name and ticker from "Invesco Dynamic Software ETF (PSJ)."

Do, however, congratulate the marketing department for a smart pivot.

Anyways, IGPT is another broad-AI-industry fund that works similarly to the aforementioned AIQ, but without any requirements that are explicitly tied to artificial intelligence. Instead, IGPT's tracking index, the STOXX World AC NexGen Software Development Index, requires a baseline amount of exposure to (specifically, at least 50% of revenues from one or more) subsectors "associated with future software development." So while it includes areas like AI and robotics, it's not limited to them.

Related: Best Vanguard Funds to Hold in an HSA

Invesco AI and Next Gen Software ETF is another global fund, though it has a pretty low international exposure at just 20% of assets right now. It's also thick in large caps, which account for 85% of the portfolio. And it frequently boasts higher single-stock concentrations than many of the funds on this list. Consider that it has six holdings, including SK Hynix and Micron, that account for 6% to 11% of assets; AIQ's largest holding (also SK Hynix) tops out at 6%. 

This is because IGPT factors both revenue exposure and market capitalization when weighing stocks. It caps constituents at 8% between rebalancings, but that's still an enormous difference—one that means IGPT's returns are far more beholden to the AI industry's mega-caps than similar funds. Good news: That could provide more stability in flat and down markets. Bad news: That could mean a little less upside in up markets.

Invesco's AI ETF is also economically priced. At 56 basis points in fees, it's not the absolute cheapest broad-spectrum AI play on this list, but it's one of the least expensive. (A basis point is one one-hundredth of a percentage point.)

Related: The 10 Best Fidelity ETFs You Can Buy [Invest Tactically]

6. Robo Global Artificial Intelligence ETF

• Inception: May 11, 2020
• Assets under management: $403.9 million
• Expense ratio: 0.68%*, or $6.80 per year on every $1,000 invested

Robo Global Artificial Intelligence ETF (THNQ)—launched two years to the day after AIQ—is similar to Global X's fund. In fact, they even spell it out up front (emphasis mine):

"Included in THNQ are companies developing the technology and infrastructure enabling AI, such as computing, data and cloud-services, as well as companies that apply AI in various verticals, from business processes to e-commerce and healthcare, among others."

Related: 9 Best Robo-Advisors for Investing Money Automatically

Indeed, whereas most fund providers break down their holdings by sector, Robo Global divides THNQ's holdings into "infrastructure" (currently 69% of assets) and "applications & services" (31%).

Robo Global Artificial Intelligence ETF is global in nature, too, albeit with a much higher allocation to U.S. stocks than AIQ. Robo Global's prospectus says it "expects" at least 25% of the portfolio to be international, and right now, it is. THNQ uses a scoring system as well. Its "THNQ score" is based on revenues derived from AI, investments in AI, and leadership in the AI industry. Companies need a score of at least 50 to be included, and weights are determined by score, though currently only no stock has a weighting of more than 3%.

The two major differences between the Robo Global and Global X offerings worth noting are: 

1. Company size: THNQ specifically calls out its focus on providing more exposure to mid- and small-cap stocks**, which it does. Also, its large-cap holdings are, on average, smaller than AIQ's. This leads to substantially different average market caps: $383 billion for AIQ, and just $77 billion for THNQ.
2. Portfolio breadth: Right now, THNQ's holdings list includes just 53 companies, so it holds 31 fewer stocks than AIQ.

Related: What Is FIRE? A Beginner's Guide to the Early Retirement Movement

Practically speaking, both funds are considered "large growth" plays on AI, and they largely move in tandem with one another. But THNQ tends to exhibit more volatility (what you'd expect from having more exposure to mid- and small-caps), and in theory, those smaller holdings could have more growth potential over time.

Just note that neither difference is guaranteed to continue in perpetuity. The level of exposure to various market caps isn't mandated in the methodology, and THNQ's index allows the fund to hold up to 100 constituents.

* 0.75% gross expense ratio is reduced with a 7-basis-point fee waiver until at least Aug. 31, 2026.

** There are different ways to define “cap” levels. We’re going by 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 Dividend-Growth Stocks That Wall Street Loves Now

7. Xtrackers Artificial Intelligence and Big Data ETF

• Inception: Aug. 2, 2024
• Assets under management: $148.4 million
• Expense ratio: 0.35%, or $3.50 per year on every $1,000 invested

If your biggest concern is cost, it's hard to do better than the young Xtrackers Artificial Intelligence and Big Data ETF (XAIX), which at 35 basis points undercuts just about all other AI ETFs out there.

Related: 14 Best Investing Research & Stock Analysis Websites

This index fund is tethered to the Nasdaq Global Artificial Intelligence and Big Data Index, which tracks the performance of companies engaged in deep learning, image recognition, neuro-linguistic programming, speech recognition and chatbots, cloud computing, cybersecurity, and big data.

It's not as thoughtful an index as the ones AIQ and THNQ are built upon, but it generally gives investors the tech-heavy AI coverage they'd expect. Information technology currently accounts for 70% of assets, and communication services makes up another 15%. The remainder is largely split between consumer discretionary and financial stocks. Top holdings such as Samsung, Micron, and Nvidia are bog-standard positions.

Still, if you're optimizing for fees, XAIX has it where it counts.

Related: 8 Low- and Minimum Volatility ETFs for Peace of Mind

But quantum computing is downright nascent. Quantum computers technically exist, but they're nowhere near commercial development. For instance, Nvidia CEO Jensen Huang received flak last year after saying quantum computing wouldn't be useful for at least 15 years "on the early side." Not long after, he walked back some of his skepticism and generally said he underestimated the pace of progress. (But I'll note that he also didn't give a quicker concrete timetable, either.)

I say all that to say this: Over time, QTUM will become a more direct play on quantum computing, but it's not right now because quantum computing simply doesn't drive meaningful revenues right now. Yes, it holds dedicated quantum companies like Rigetti Computing (RGTI) and D-wave Quantum (QBTS). But most components—such as Lockheed Martin (LMT), Nokia (NOK), and Lam Research (LRCX)—are plays on many other things that aren't quantum. QTUM also uses a modified equal-weighting system, so those few pure-play quantum companies are structurally limited as to how much influence they can wield; indeed, RGTI and QBTS are among the ETF's smallest holdings.

But I also feel obligated to point out that Defiance Quantum's lack of purity hasn't held the fund back at all. QTUM has beaten the pants off AI pure-play and adjacent ETFs alike since it hit the market in 2018.

Does the Fund Say It's "AI"? Be Careful!

One final warning to would-be AI ETF buyers: Don't judge these books by their covers.

Some funds with "AI" in their name are wholly dedicated to AI stocks, while others might have a specific focus on certain industries impacted by AI. 

But most deceiving of all are a few funds that say "AI" but aren't trying to invest in AI at all.

Two funds immediately come to mind: the Amplify AI Powered Equity ETF (AIEQ) and the WisdomTree U.S. AI Enhanced Value Fund (AIVL). Rather than explicitly investing in AI stocks, these two funds use AI to select equities—the former uses AI to select generally attractive stocks, while the latter uses an AI model to select value-priced stocks. But in neither case are these ETFs trying to invest your money in AI technology.

So, as I always say: Don't buy until you've looked under the hood.

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Related: The 13 Best Mutual Funds You Can Buy

ETFs aren't the only way to build a portfolio of diversified investments. While mutual funds aren't as en vogue as they were decades ago, there's a reason millions of Americans still have trillions of their dollars parked in these investment vehicles.

Whether you're interested in something as simple as a core fund of blue-chip names or as complex as a state-specific municipal-bond fund—or one of the many investment categories in between—our list of the best mutual funds to buy now has something for you.

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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You have more than a few options for health insurance coverage when you leave your job, including signing onto COBRA or enrolling in a plan in the health insurance marketplace, among others.

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What Health Care Options Do You Have After Leaving a Job?

If you're looking for backup plans, you've got a few to choose from covered below.

1. COBRA

The Consolidated Omnibus Budget Reconciliation Act, COBRA, is when you get your old employer's health care coverage after you've stopped working for them.

--Pros: You get to keep your current plan while exploring other options. Using insurance through COBRA is also a good option if you have dependents on your plan, like a spouse or children. It helps them keep their insurance, doctors, and level of care. If your old employer approves it, you could get COBRA for up to 18 months after you leave your job.

--Cons: Your old employer isn't obligated to cover those premiums anymore. That means you're on the hook for up to 102% of the cost — 100% of the plan plus a 2% administrative fee. Going this route could be an expensive option if you don't have the income to afford it.

2. Health Care Marketplace

With the Affordable Care Act, you can sign up for health insurance any time after you leave your job during the year.

Leaving your job qualifies as a special enrollment period, so you don't need to wait until open enrollment to get health insurance.

Depending on your income, you might qualify for a subsidy.

--Pros: The ACA marketplace gives you a chance to get affordable health insurance without having a lapse in coverage. Plans vary by how much you want to pay in premiums, copays, deductibles, etc. You might pay less than you think based on your income and expenses. You can also choose this option after using COBRA, but it's not required.

--Cons: Your plan changes from what you had before. For instance, if you went from a PPO to an HMO, you might have to change doctors and networks, which can cause a bit of a hassle. You may have to pay more than what you paid on your employer plan.

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3. Parent/Spouse Plan

If you're under the age of 26, you might qualify for health insurance on your parent's plan. Even if you're married, you can get or stay on your parent's plan until your 26th birthday.

If you're not eligible for this, you might want to look into getting on your spouse's health insurance plan through their employer, as long as they're offering coverage for dependents.

--Pros: You might be able to eliminate any out-of-pocket costs associated with getting an independent health care plan. As a result, you can focus your money on other needs, like saving for a home, car, or creating your own small business.

--Cons: Once you turn 26, you'll need to get off your parent's plan. But this qualifies you for a special enrollment period on the health care marketplace. If you hop on a spouse's plan, this increases monthly payments, which you'll need to budget for now.

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4. Paying out of pocket

You don't have to pick up another plan elsewhere when your health insurance ends. You'll pay for health care costs at face value without going through any insurance protocols if that sounds of interest.

--Pros: You only pay for what you need when you need it. Choosing this option might work for relatively healthy people who don't have significant health concerns and work in low-risk industries.

--Cons: Any costs associated with doctor visits, prescriptions, emergency or urgent care visits, and procedures are paid out-of-pocket, which you may not have accounted for in your budget. While you might not pay anything every month, you'll pay full costs whenever something comes up.

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5. Short-term health plans

These plans are exactly how they sound: they are short-term health plans that provide coverage for a short amount of time, from a couple of months to a year.

--Pros: You don't face any lapse in coverage when you leave one job and before you start another that has health insurance for employees. If you miss a special enrollment period, you can get this any time you need it. Just about everyone is eligible and qualifies. These plans tend to be cheaper than those in the marketplace.

--Cons: These plans aren't regulated the same way ACA plans are. Since minimum benefits aren't required for recipients, you might miss essential coverage. That could be anything, such as a free annual wellness exam customarily covered by insurance through the ACA.

What to Consider With New Health Care Plans

Finding a new health care insurance plan isn't easy or fun. If you're exploring new options — or even considering keeping the one you have on COBRA — it's essential to review your needs and options first. Ask yourself questions like:

-- How healthy am I? If you don't believe you go to the doctor a lot and don't want to pay high health costs, you might want to find the least expensive plan available. You might consider dropping coverage altogether and paying for either a short-term health plan or out-of-pocket when something comes up. That way, you're getting a plan based on your needs.

-- What are the costs involved? It's your deductible, copays, out-of-pocket maximum, and monthly premiums. These can add up, especially if you're covering an entire family.

-- Am I doing this alone? Suppose it's only you who's facing a health care insurance loss. You might be inclined to drop coverage and take a risk by not carrying health insurance. But if you've got a spouse or dependents on a health plan, consider how this will impact them.

-- What are the risks involved? Not carrying insurance is costly, but carrying insurance is also an expensive line item in your budget. Remember this as you weigh your options to find the right plan for you.

Related: Are You Retirement-Ready? 10 Questions to Ask Yourself

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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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As a retiree, you'll have much more control over how and where you spend your time. We're all aware of how work-from-home policies have provided enormous flexibility to American workers … but statistically, the vast majority of us remain tethered to a workplace to some extent. In fact, only 14% of adult workers have fully remote roles, per Pew Research Center survey data.

That means 86% of workers must go to work in person at least some of the time—a reality that limits where those workers can choose to live. However, when you retire, those workplace ties are gone, which means you likely have more freedom to move than you ever have.

But should you?

There's no easy answer to that question, of course—moving, whether before or after retirement, still has financial, social, and emotional ramifications. It can greatly improve your quality of life … or lead to isolation, debt, and/or regret.

Today, I'm going to help you make a more informed decision by evaluating the various pros and cons of moving during retirement. Everyone will have their own hopes and concerns about moving, but these are among the most common considerations.

Advantages of Moving During Retirement

Let's start with the pros of moving once you're retired.

Many adults choose a change of scenery once they hang up their entry badges. A 2024 study from online moving services marketplace Hire A Helper found that 338,000 Americans moved to retire in 2023—a significant rebound from a two-year post-COVID slump.

So, what can motivate a retiree to pack up and put down roots somewhere else? Here's a look at some of the most commonly cited benefits.

1. Better Weather

The Hire A Helper study also found that Florida was the top destination for retirees who moved to another state. You'll be unsurprised to find that "The Sunshine State" frequently sits at No. 1 in this regard—in 2023, more than 1 in 10 (11%) of all retirement movers headed to Florida. South Carolina, which also boasts warm and pleasant weather, was a close second at 10%.

As we age, we become more sensitive to the cold. Certain chronic conditions and medications can affect body heat, too. Older adults can also have a tougher time recovering from icy falls, frostbite, and hypothermia. And some people are just plain ready to leave their decades of shoveling snow behind them.

Overall, living in a warmer climate is easier and more comfortable for older Americans—a fact that spurs many people to move once they retire.

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

2. Lower Taxes

Once you retire, it's a good bet that you'll be living on a fixed income—likely a mix of Social Security and withdrawals from your retirement account. If you happened to build most of your retirement savings in a Roth IRA, taxes won't matter much, but if you saved through a 401(k) or a traditional IRA, you'll be taxed whenever you pull any money out. So the more you can reduce your tax burden, the more money you'll have to spend on yourself.

That brings us to another reason retirees flock to Florida: It has no state income tax.

It's not alone, either. Six other states—Alaska, Nevada, South Dakota, Tennessee, Texas, and Wyoming—have no state income tax. New Hampshire doesn't tax wages or salaries; it does tax dividends and interest income, but that tax will be eliminated come Jan. 1, 2025. Washington has no state tax on individual income, but it does tax capital gains.

Of course, state income tax isn't the only tax consideration for potential retirees. 

For instance, real estate taxes might hit you hard if you plan on owning a home somewhere. You can get a little relief in most states through the homestead exemption, but 12 states—Alabama, Alaska, Florida Georgia, Hawaii, Mississippi, New Hampshire, New York, South Carolina, South Dakota, Texas, and Washington—have additional exemptions for seniors age 65 and older. 

And 17 states—Alabama, Arkansas, Florida, Hawaii, Illinois, Iowa, Maryland, Michigan, Nebraska, New Hampshire, New Jersey, New Mexico, Oklahoma, Pennsylvania, South Carolina, Texas, and Virginia—assess no property tax if you're a disabled veteran.

Also, there are 9 states that still tax Social Security benefits. And while you might not think about sales taxes because they're taken out little by little over time, a high sales tax can smash your purchasing power.

Related: 5 Best Vanguard Retirement Funds [Start Saving More, for Less]

3. Lower Housing Costs

The 2022 U.S. Census American Community Survey estimates that almost 80% of adults aged 60 and older own a home—or more succinctly, most older adults are homeowners. 

However, by downsizing, retirees can gain a substantial lump sum of money, not to mention save on a monthly basis via lower mortgage payments, insurance, and maintenance costs. And, of course, empty nesters don't necessarily need as much space as they once did, making downsizing even more attractive.

Retirees downsize in a variety of ways: buy a smaller house, rent a condo, get a trailer and travel, find cheaper accommodations abroad, even move in with other family members.

Again: When you're working (assuming you have an in-person role), you must live within a certain radius of your job, and that puts certain limitations on just how creative you can be. But in retirement, you have far more flexibility to find a housing situation that fits your budget. And often, that involves moving.

Related: Pensions Aren't Dead Yet: 15 Jobs With Pensions

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4. Proximity to Family

Retirees also often move to live closer to their children, grandchildren, and/or other family.

Spending time with family can be a rewarding, enjoyable experience—an experience you can enjoy more frequently and easily when you live nearby.

A study published in 2022 by University of Wisconsin research shows that, among older adults who don't currently live near their children, the chances they move within close proximity to at least one child nearly doubles around their time of retirement. 

It can also be useful for families from a financial perspective. Some retirees move in with their adult children, which greatly reduces housing costs for the retiree and makes it easier to help parents with health and mobility issues. And if their adult children have grandchildren, retirees can provide childcare, lifting a significant financial burden for the parents.

The same study found that if an older adult is already caring for a grandchild, they're twice as likely to move closer to the grandparents at retirement than they would be pre-retirement. (This behavior also increases for older adults not already providing care, but to a lesser extent.)

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

5. The Excitement of a New Place

Have you ever traveled somewhere and loved it so much you wish you lived there? Well, once you're no longer tied to a location because of work … why not make that move if you can afford it?

To be clear, this works for places you've visited—and places you haven't. Retirees might live abroad to reconnect with great times in past travels, or to immerse themselves in new cultures and create new, exciting memories.

Living somewhere new can be mentally stimulating. You get to learn the ins and outs of a new city, meet new people, try new hobbies (or start up old hobbies anew). A senior from a big city might move near a lake to take up fishing or boating. A senior from the country might move to an overseas metropolis to take in new cuisines and enjoy the arts.

A global study published in Nature Medicine in 2023 states that hobbies "involve imagination, novelty, creativity, sensory activation, self-expression, relaxation, and cognitive stimulation, all of which are positively related to mental health and wellbeing via psychological, biological, social and behavioral pathways." Among other things, taking up hobbies, especially in groups, can help reduce loneliness and social isolation.

Related: The Best Retirement Plans for 2024 + 2025 [Workplace + Individual]

Disadvantages of Moving During Retirement

Before you start packing up your home, let's go over some of the downsides to moving during retirement.

A lot of retirees are plenty happy right where they are. In 2023, OnePoll, on behalf of ClearMatch Medicare, conducted a survey of 2,000 Americans age 65-plus, 95% of whom were already retired or plan to do so. Of that group, less than a third (29%) said they either have or planned on changing their living arrangements.

Moving can be complicated and have significant financial drawbacks. Moreover, even once you've settled in, living somewhere different isn't necessarily easy.

Let's talk about some of the common reasons retirees are hesitant to move.

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1. Moving Is Expensive

When you're young, moving is easy and cheap. You don't have much stuff, so you order some pizza, have a few friends come over, load your things into the back of a pickup truck, and head on to your new place.

But once you're older, moving becomes far more difficult and costly.

According to Forbes Home research, the average price to hire professionals to move a three-bedroom home locally is about $2,200. For long-distance moves, that cost jumps to around $4,400. Need help packing? That'll cost you more, too. You'll also incur additional costs for items that need special packaging, like a painting or piano. It's customary to tip movers, too. And there are all of the hidden or unforeseen costs that always seem to pop up.

These costs can be burdensome even when you're collecting a regular check from work. But they can really be a hindrance in retirement, when you're living on a fixed (and likely lower) income. 

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

2. Moving Can Be a Hassle

Moving isn't just expensive—it's a pain in the derriere, too.

Homeowners need to list and sell their current homes. Renters need to thoroughly clean their homes for the next tenants. Both need to carefully find a new place to live. 

You need to pack. You need to move. You need to unpack. You might have to deal with a gap between when you move out and when you move into your residence. You have to update your new address on dozens of accounts. 

It's a daunting checklist—one that seniors need to seriously consider when stacking up pros and cons.

In a Home Bay survey, 75% of respondents said they regretted moving in 2022, and just under half said they cried at some point during the move. Expenses and the hassles of moving were among the most commonly cited reasons.

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

3. You Need to Find New Professionals

The process of moving is often stressful … and the work isn't necessarily over once you're done.

Unless you've moved just a few miles down the road, you're likely going to need to build new relationships with a slew of service professionals. Family physician. Specialists. Dentist. Optometrist. Mechanic. Contractor.

It's a difficult and often frustrating task—so much so that people can go months or years without these professionals after they've moved.

In a 2024 survey by Harmony Healthcare IT, nearly half (46%) of respondents who have moved within the past five years said they've procrastinated finding a new doctor after moving; 36% put it off for a year or longer; and 22% said they still hadn't found a primary doctor.

In other words: Moving can potentially cause retirees to neglect their own health, and other issues, once they get settled in a new location.

Related: 5 Best Schwab Retirement Funds [High Quality, Low Costs]

4. Downsizing Has Its Downsides, Too

Downsizing one's home is frequently considered an advantage in retirement because of the financial benefits. And it's the most common move for retirees—data from the National Association of Realtors Research Group shows homebuyers age 57 and older are more likely to downsize their homes (in terms of price and size) than upsize.

But not everybody is happy in a smaller home. In the aforementioned Home Bay survey, 20% of respondents said they wished they had moved to a bigger place. 

The thing is, by the time you reach retirement, you've usually accumulated a lot of possessions, and downsizing necessitates getting rid of stuff. And while getting rid of a few old things can be therapeutic, having to scale down significantly to fit in a new place can result in a lot of difficult choices.

A smaller home can have other drawbacks, too. You might feel cramped in your new home. If you don't have a guest room, it could be difficult to accommodate visitors for an extended period.

So while downsizing might be a great way to save, some retirees might not find it worth the sacrifice.

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

5. The Grass Isn't Always Greener 

You've assuredly heard the phrase "It's a great place to visit, but I wouldn't want to live there."

A lot of places sound great in theory, or are incredible vacation destinations, but lose their luster once you've had a few months to soak it all in. And that's a very real danger for retirees.

Once a retiree starts life in a new location, they might not enjoy it as much as they hoped, or as much as when they visited. Maybe they loved escaping to a warm locale during the winter, but living there all year means dealing with the scorching summers. Or maybe they love the charm of a smaller, more affordable town … but didn't factor in how much farther they'd have to drive to get to a large grocery store or various medical appointments.

And if you suddenly realize the grass isn't greener on the other side, you're stuck with a lousy choice—stay where you're unhappy, or spend even more money moving again.

This is always a risk, no matter your age. The best way to reduce this risk is to be diligent in doing your homework about wherever you want to move, and if at all possible, visit the area for an extended period of time.

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: 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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While I can’t take those deep breaths for you, I can share some guidance for people of all ages who want to know how to start retirement planning. Hopefully, this information will quell any retirement planning anxiety you might have and help you focus on your retirement goals.

First, I’ll try to motivate you to get moving as soon as possible by pointing out some of the advantages to starting a retirement fund early. After that, we’ll take a look at several factors affecting your retirement savings, how much to save for retirement, and some potential retirement accounts.

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Why Starting Early Has Its Advantages

If you’re young and haven’t started saving for retirement yet, there’s no better time to start than now. That’s because starting early has its perks, like taking advantage of compound interest, developing a savings habit, and weathering market changes.

1. Compound Interest

You’ve likely heard about the benefits of compound interest, or interest earned on interest and principal. The table above illustrates how compound interest can play out in practice … and why starting early makes sense. In this example, we’re assuming an average annualized return of 8%.

While setting aside $400 a month might not be feasible for everyone, the saver who started at 25 will have a balance that’s $1,109,132 more by age 65 than the saver who started at 45.

2. Builds Lifelong Saving Habits

Not only will starting early help you take full advantage of compound interest, but you’ll also build good savings habits in general. Consider an automated savings plan: Designate a portion of your paycheck as retirement savings each month and have that amount automatically deposited into a retirement account.

This savings habit will help as you continue to grow in your career and your earning potential increases, and it can also help you keep your savings on track in retirement.

Related: 9 States That Tax Social Security Benefits

3. More Time to Adjust

When the stock market tanks, it can have a big impact on your retirement savings. Depending on how much you’ve saved, that impact could cost you tens (or even hundreds) of thousands of dollars. Having a long time horizon gives you more time to adjust and can help you rebound more easily after a market crash than someone who’s closer to retirement.

Young and the Invested Tip: Dollar-cost averaging (i.e., investing a specific amount of money at regular intervals despite market performance) can be a smart long-term retirement investment strategy.

Related: 7 Best Fidelity ETFs for 2025 [Invest Tactically]

Factors Affecting How Much Retirement Savings You'll Need

Whether you’re planning to retire soon or decades from now, several constant factors will impact how much retirement savings you’ll need.

1. Retirement Age

The age at which you plan to retire is a major factor. While many people opt to retire at 65 (i.e., when you qualify for Medicare), you might want to retire early—or even later if you love your work. Obviously, the sooner you retire, the more you’ll likely need to save.

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

2. Expected Lifespan

Lifespan is also a key consideration. Outliving your savings is a real concern, so keeping this factor in mind can be helpful as you plan for retirement.

According to the most recent CDC data, the average life expectancy in the U.S. dipped slightly in 2021, but it’s still 76.4 years old (down from 77 years of age in 2020).

3. General Health

Medical costs tend to be a larger burden the older you get. So, you should factor your general health and expected medical expenses into your retirement savings plan.

If you have unhealthy habits (e.g., smoking), have a family history of illness, or otherwise expect to be in generally poor health in retirement, you might want to save even more for retirement to cover greater medical expenses.

4. Desired Lifestyle in Retirement

Do you want to live the high life in retirement, travel, and eat takeout five days a week? Or would you prefer a more modest lifestyle? Your desired lifestyle will play an important role in how much you’ll need to save.

5. Where You Want to Live

Where you plan to live also impacts the amount you’ll need to set aside for retirement. Do you plan to move to an area with a lower or higher cost of living? If you decide on the former, you might need to save less. But if you’d like to move somewhere more expensive, plan on padding your savings a bit more.

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How Much Should You Save for Retirement?

I wish I could tell you that there's a one-size-fits-all answer to how much you should save for retirement, but unfortunately, there's no such thing. The magic number will depend on what you want from retirement, as well as the other factors we’ve discussed.

Related: How Much to Save for Retirement by Age Group [Get on Track]

As you start calculating the right amount for you, it often then makes sense to work backwards after you’ve thought about the factors we mentioned above. Consider what defines a successful retirement lifestyle, and from there identify how many years you have until you retire. Research realistic investment returns over past periods that align with your time horizon. (While past performance isn’t a guarantee of future returns, it can offer some insight into how the market generally behaves.)

Once you understand potential returns, it’s time to review your budget and determine how much you can afford to contribute toward retirement savings each month. Also consider any employer matches of 401(k) contributions in your equation, as this perk can help grow your nest egg a little faster. If possible, try to set aside a little more than the minimum you can afford to account for any unexpected market swings or life changes.

Again, the amount of money you’ll need in retirement will depend upon your individual lifestyle goals as well as other factors. But here’s some guidance if you’re struggling to determine how much you’ll need.

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.

1. Safe Withdrawal Rate

Another way to evaluate the adequacy of your retirement savings is to see if you can withdraw enough each year to support your desired retirement lifestyle without depleting your nest egg prematurely. As a general rule of thumb, 4.7% is considered a safe withdrawal rate for many retirees.

After you have a sense of how much you’ll be able to save for retirement, and how much you’ll need to pull out of your retirement savings each year, use the following formula to calculate your withdrawal rate:

If your expected withdrawal rate is significantly above 4.7%, consider squirreling away more money for retirement.

Of course, while the 4.7% withdrawal rate can serve as a good rule of thumb, it has some limitations and can vary based on your age at retirement and your retirement portfolio mix.

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

2. Expect to Replace 80% of Your Current Income

The 80% rule is another common benchmark for retirement savings. Under this rule, estimate your annual retirement costs at around 80% of your pre-retirement income. So, for example, if your pre-retirement annual income is $100,000, you should expect your annual retirement expenses to be around $80,000. Knowing this amount should help you calculate how much money you need to save for retirement.

Keep in mind that you won’t necessarily spend 80% of your pre-retirement income each year after you retire, but it’s a decent rule of thumb. You could end up spending more or less, depending on your lifestyle goals and where you choose to live.

Related: How to Max Out Your 401(k) and Other Retirement Accounts

What Types of Retirement Accounts Are Available?

When it comes to retirement accounts, there are a few different options. But as I’ll explain in a moment, the best place to start saving retirement money is typically your workplace retirement plan.

Young and the Invested Tip: Working with a certified financial planner or other financial advisor is a good idea for anyone setting up a retirement plan. Not only can financial advisors help you determine how much to save for retirement, but they can also help set up the necessary retirement accounts.

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

Employer-Sponsored Retirement Plans

As its name suggests, an employer-sponsored retirement plan is offered by a business or government agency for the benefit of its employees. However, there are a few types of workplace retirement plans … and each one works a bit differently.

As you’ll see, advantages of employer-sponsored retirement plans include:

-- Employer matching possible

-- High contribution limits

-- Traditional plan contributions reduce taxable income

-- Roth plan contributions can be withdrawn tax-free in retirement

-- Guaranteed retirement benefits with a pension

On the other hand, disadvantages of employer-sponsored retirement plans include:

-- Employer controls often-limited investment choices

-- Vesting terms might apply

-- Certain plans charge administration fees

Let’s take a brief look at some of the different types of workplace retirement plans.

Related: 5 Best Vanguard Retirement Funds [Start Saving in 2025]

1. 401(k) Plans

For-profit companies often offer 401(k) plans, though they aren’t required to do so. Many employers that offer 401(k) plans also provide a matching benefit to employees, meaning they’ll match your contributions to the plan up to a certain percentage. It’s common for companies to offer matches of 3% to 6%, though certain companies provide a lower or higher percentage match.

For 2026, you can contribute up to $24,500 into a 401(k) as an employee if you’re under 50 years of age. You can also make additional “catch-up” 401(k) contributions in 2026 of up to $8,000 if you’re 50 or older. People turning 60-63 can contribute up to $11,250 as a "super" catch-up contribution due to recent changes enacted by the SECURE Act 2.0. Combined employee and employer contributions are capped at $72,000 for 2026.

Employers can offer both traditional and Roth 401(k) options. With a traditional 401(k) plan, employee contributions are typically made on a “pre-tax” basis, which means the money you put into a traditional 401(k) account aren’t included in your overall taxable income. Funds in a traditional 401(k) grow tax-deferred, so you won’t be taxed until you start withdrawing money from the plan.

In addition, money taken out of a traditional 401(k) before you turn 59½ years old is typically subject to a 10% early withdrawal penalty (although there are exceptions).

Furthermore, when you turn 73, you must begin taking a certain amount of money out of a traditional 401(k) each year if you haven’t already started. These withdrawals are called required minimum distributions (RMDs).

If you have a Roth 401(k) account, contributions are made on a “post-tax” basis, which means there’s no tax break when you put money into the account. However, withdrawals are tax-free in retirement.

You can withdraw your contributions to a Roth 401(k) plan at any time without having to pay income taxes or the 10% penalty. However, income tax and the 10% penalty generally apply to earnings taken out of the account if you aren’t 59½ years old or the account isn’t at least five years old.

As of 2024, RMDs are no longer be required from Roth 401(k) accounts.

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

2. 403(b) Plans

403(b) plans, sometimes called tax-sheltered annuities (TSAs), work similarly to 401(k) plans, except they’re typically offered by public schools and some 501(c)(3) tax-exempt organizations. Similar to what you’d see with certain 401(k) plans, some employers offer matching contributions to a 403(b). The matching percentage offered varies by employer.

As with 401(k) plans, employees under 50 can contribute up to $24,500 to a 403(b) in 2026. While those 50 and older can make an additional contribution of $8,000 (those turning 60-63 in 2026 can contribute up to $11,250). Total employee and employer contributions can’t exceed $72,000.

Both traditional and Roth 403(b) plans are possible. They work like traditional and Roth 401(k) accounts when it comes to taxes, penalties, and RMDs.

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

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3. 457(b) Plans

457(b) plans are generally for employees of state or local governments (although non-government tax-exempt organizations can also establish 457(b) plans). While employer matches are relatively common with 401(k) and 403(b) plans, employees are unlikely to see matching benefits with a 457(b) plan.

Contribution limits, taxes, penalties, and RMD rules for 457(b) plans are similar to those for 401(k) plans. Both traditional and Roth 457(b) accounts are possible, too.

Young and the Invested Tip: Federal employees can participate in the Thrift Savings Plan, which also operates much like a 401(k) plan.

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. Pensions

Pensions are a type of retirement plan where employers set aside money into a pooled fund and pay employees a defined benefit for life once they retire. These plans are rare in the private sector, but public pensions from state or local governments are fairly common. If you work in a public service role, such as for a police or fire department, you might receive a pension when you retire.

These plans are typically employer-funded and employer-controlled, though employees can contribute to their pension with certain plans. Pension plans often come with a lengthy vesting term, though these terms can vary by employer. For instance, with certain employers, you might need to stay on the job for seven or 10 years to receive a percentage of your pension.

Something to Note for Employer Plans: At Least Get The Match

As I noted earlier, your workplace retirement plan is often the best place to start saving for retirement. Why? Because of the employer match (if one is available).

Even if you can’t afford to contribute much to your plan right now, contributing enough to get a matching benefit makes sense. An employer match is essentially free money in your retirement account, and leaving that money on the table can be a costly mistake!

Related: How to Get Free Money [Don’t Forget That Employer Match!]

What Happens If You Change Jobs?

The fate of your employer-sponsored retirement plan can vary if you change jobs. With a 401(k), 403(b), or 457(b) plan, you’ll likely be able to roll over your contributions to a new plan of a similar type.

However, vesting periods might apply for employer contributions, though these periods generally aren’t as long as you might see with a pension plan. If you leave before you’re vested, you might also be leaving your employer match behind.

Pension plans work differently. If you leave your employer before you're vested, you probably won't get a pension at all. But if you're vested, you can generally opt to receive your pension as a lump-sum payment or future guaranteed income in retirement. Pension distributions are typically taxed as ordinary income, and you might need to pay an early withdrawal penalty if you take a lump-sum payment before age 59½.

Related: Best Vanguard Retirement Funds for an IRA

Small Business and Self-Employed Retirement Plans

Special retirement plans are also available for small business owners, including self-employed people. Two popular options include a Simplified Employee Pension (SEP) IRA and a Savings Incentive Match Plan for Employees (SIMPLE) IRA.

1. SEP IRAs

With a SEP IRA, small business owners and self-employed people contribute to individual retirement accounts for themselves and any qualified employees. Employees don’t contribute to their own SEP IRA, though.

Per IRS rules, a business owner must contribute an equal percentage to all employees. So, if you set aside 20% of your salary for your retirement as the owner, you’ll also need to set aside 20% of each qualifying employee’s salary for their retirement. Given this, SEPs are generally best for businesses with no employees or very few.

Contribution limits for SEP IRAs are relatively high—up to 25% of compensation or $72,000 for 2026, whichever is less. Contributions are made on a “pre-tax” basis, which means they’re tax deductible. However, distributions in retirement will be taxed as ordinary income.

RMDs are also required when the account holder turns 73.

Related: Best Schwab Retirement Funds for an IRA

2. SIMPLE IRAs

Like SEP IRAs, SIMPLE IRAs are individual retirement accounts for self-employed people and small business owners. However, these two plans work differently.

With a SIMPLE IRA, both employers and employees can contribute on a tax-deferred basis. Roth-style SIMPLE IRAs aren’t allowed, so contributions and gains will be taxed when they’re withdrawn in retirement.

For 2026, an employer must contribute one of the following to each eligible employee’s SIMPLE IRA account:

-- A dollar-for-dollar match of the employee’s contribution, up to 3% of the employee’s compensation

-- 2% of the first $3460,000 of the employee’s compensation

Employees under 50 can contribute up to $17,000 to a SIMPLE IRA. Those age 50-59 or 64+ can make catch-up contributions up to $4,000 and people between ages 60-63 can make super catch-up contributions up to $5,250.

As with SEP IRAs, RMDs kick in when you turn 73.

Related: SEP IRA vs. Roth IRA: What’s the Difference?

3. Individual Retirement Accounts

Another option for stashing away some money for retirement is an individual retirement account (IRA). You can put money in a traditional or Roth IRA—or both if you’re seeking tax diversification. Both allow you to contribute a little extra toward retirement, but each works a bit differently.

Related: IRA Contribution Limits 

As with traditional and Roth 401(k) plans, the main difference is when you pay tax on contributions and earnings in the account. With a traditional IRA, most people get a tax break when they contribute to their account, but they owe taxes when they take money out of the account. On the other hand, there are no tax breaks when you put money in a Roth IRA, but withdrawals are tax-free.

Also be aware that the total combined contribution limits for these accounts are fairly low. For 2026, you only can contribute up to $7,500 to all your IRAs if you’re under 50, and $8,600 if you’re 50 or older.

In addition, there’s an income limit on contributions to Roth IRAs that’s based on the filing status used on your tax return for the year. For 2026, you can’t contribute anything to a Roth IRA if your modified adjusted gross income for the tax year is:

-- $252,000 or more if your filing status is married filing jointly or surviving spouse 

-- $168,000 or more if your filing status is single, head of household, or married filing separately and you didn’t live with your spouse at any time during the year ($165,000 in 2025)

-- $10,000 or more if your filing status is married filing separately and you lived with your spouse at any time during the year

If your income is below the applicable amount, you still might not be able to contribute the full amount.

Finally, the RMD rules apply to traditional IRAs, but not to Roth IRAs.

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Advantages and Disadvantages of IRAs

Advantages of IRAs

Some of the most common advantages to traditional IRAs are:

-- Contributions might reduce your taxable income

-- Growth is tax-deferred

-- No income limits for contributors

For Roth IRAs, advantages include:

-- Withdrawals are tax-free in retirement

-- Contributions can be withdrawn anytime tax- and penalty-free

-- RMDs do not apply

Disadvantages of IRAs

Here are some reasons to think twice before opening a traditional IRA:

-- RMDs apply starting at age 73

-- Withdrawals are taxable in retirement

-- Low contribution limits

And here are some disadvantages that come with Roth IRAs:

-- No current-year tax benefits

-- Low contribution limits

-- Income limits apply

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

Can You Contribute to an Employer-Sponsored Retirement Plan and an IRA?

Yes, you can contribute to both an employer-sponsored retirement plan and an IRA in the same year. For instance, if you're maxing out your traditional 401(k) contributions, you might choose to stash some additional retirement savings in a Roth IRA, too. Doing so will not only allow you to build a larger nest egg, but you’ll also get the benefits of tax diversification in retirement.

Related: IRA vs. 401(k): How These Retirement Accounts Differ

Other Savings and Investment Vehicles You Can Use to Save for Retirement

In addition to the retirement accounts discussed above, other savings and investment vehicles exist that can be used to save for retirement. These accounts can be useful to cover medical costs in retirement or avoid tax penalties if you plan to retire early.

1. Health Savings Accounts

If you have a high-deductible healthcare plan, a health savings account (HSA) can be a great way to set aside money for current and future medical costs. HSAs can have both a savings and investment component, and they offer tax-deductible contributions, tax-free withdrawals for qualified medical expenses, and tax-free growth. However, you might have to pay taxes and penalties if you use your HSA funds to pay for non-medical expenses.

As with 401(k) plans and IRAs, there are contribution limits for HSAs, too. For 2026, you can contribute up to $4,400 to an HSA if you have self-only health insurance coverage. If you have family coverage, you can put in up to $8,750. An additional “catch-up” contribution of up to $1,000 is allowed for those 55 and older.

Related: How to Use Your HSA for Retirement

2. Taxable Brokerage Accounts

A taxable brokerage account isn’t a dedicated retirement account, but you can use it to invest for retirement, as well as other large expenses. These accounts offer some valuable flexibility for those who are planning to retire early. Unlike many retirement accounts, you won’t incur an IRS penalty for withdrawing money from a taxable brokerage account before age 59½.

There’s no limit to how much you can contribute to a taxable brokerage account, either. Just keep in mind that you will pay capital gains tax if you sell an investment for a profit through your brokerage account. Profits on investments held for one year or less are typically taxed at a higher rate than profits on investments held more than a year.

Related: Federal Tax Brackets and Rates

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If every new retiree had a nickel for every time a family member or friend suggested the above … well, they’d have a lot of nickels. It’s accepted wisdom that people love to dole out—now that you’re retired, maybe you don’t need so much space, or don’t need to maintain so much house, or shouldn’t foot such a high mortgage or rent, or could use the break on property taxes.

All valid arguments! Not to mention, selling a larger home could finance the purchase of a smaller home and generate a tidy profit that could help fund a better retirement.

And yet … many Baby Boomers prefer to stay right where they are, in a glut of square footage.

It’s not for nothing. Today, I’m going to review some of the top reasons Baby Boomers may be reluctant to downsize their homes.

Why Baby Boomers Are Hesitant to Downsize

In early 2024, Redfin released a report about ownership of large homes, defined as those with three or more bedrooms. 

I don’t think anyone would be surprised to find that Baby Boomers were the biggest owner of large homes by generation, at 37%. They’re the single largest purchase most people will make in their lives, and you typically have to be at least somewhat far along in your career to be able to afford one.

But a little more interesting is this: Empty-nest Boomers own 28% of the nation’s large homes, while Millennials with kids own just 14%.

I point out this juxtaposition because it educates one of the most common thoughts we have about retirees in large homes. “You don’t need this much home—you don’t have kids that live with you!”

That might very well be true. But don’t mistake Boomers’ insistence on staying put as selfishness. There are a number of financial, logistical, and emotional reasons why older adults keep their big homes.

Let’s dig in.

1. Capital Gains Taxes

Generally speaking, if you sell an asset and make a profit (aka, a capital gain), you’ll have to pay capital gains taxes. That goes for assets like stocks and bonds, sure, but more relevant to today’s subject, it goes for real estate, too.

The good news? Taxpayers who sell their primary residence might be able to exclude up to $250,000 of that gain from their income when figuring out taxes. (Married couples who file jointly may be able to exclude up to $500,000). So, let’s say you bought a home for $450,000, lived in it for a few years, then sold it for $500,000. Your capital gain would be just $50,000, so whether single or married filing jointly, you would be well under the threshold to pay capital gains on that residence.

But housing prices have skyrocketed over the past few decades, and Baby Boomers’ home prices might be substantially higher. 

Let’s say you bought a home for $200,000, lived in it for 30 years, and sold it today for $1.2 million. That $1 million gain ($1.2 million sales price - $200,000 purchase price, assuming no upgrades to increase your basis in the property) would greatly exceed the $250,000 or $500,000 exclusion. You’d be looking at a taxable gain of either $750,000 (single) or $500,000 (married), likely at the 20% long-term capital gains tax rate. And that doesn’t include any state taxes you might owe.

Sure, you’d still have a little more than $1 million left either way, but remember: If you’re selling your home, you need to buy a new home to move into … and thanks to capital gains taxes, you’d be starting from behind. 

That’s enough to be a strong deterrent not just for Boomers, but for people in any generation with a similar problem.

2. Current Mortgage Rates + Housing Costs

Let’s say a Boomer is considering downsizing, but they’d want to live in an area with a much higher cost of living relative to their current one.

It’s possible that, even after the proceeds on their home sale, they’re still going to have to pay a mortgage. And if that’s the case, current high mortgage rates could make that proposition even less attractive.

And while 30-year mortgage rates today are close to where they were 30 years ago, it’s very likely that any Boomer who owned a home between then and now would have refinanced to take advantage of declining rates—and thus today’s rates would still signify a step up in financing costs.

Related: Budgeting in Retirement: Our Step-by-Step Guide

3. Low Housing Supply

Even if it makes financial sense to downsize, that doesn’t mean it’s easy to find another place.

Depending on your information source, America’s current housing shortage is estimated to be somewhere between 4 million and 7 million homes. That applies to houses, condos, apartments, and to buyers and renters alike. Housing construction plunged during the Great Recession (more than 15 years ago!) and never fully rebounded, leaving the U.S. perpetually behind the population-growth 8-ball.

It’s a simple case of supply and demand. The likelihood of older adults finding a home where they want, that has everything they need, for the price they want, isn’t as high as it might have been several years ago. Indeed, even finding a home that meets them partway—and doesn’t quickly sell to somebody else—could prove difficult.

Some Boomers might just prefer to avoid the hassle and disappointment.

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

4. Lack of Accessible Homes

Along the same lines, older adults who need accessibility features might be compelled to stay put.

Per a 2023 report from the Joint Center for Housing Studies of Harvard University:

“Nationally, fewer than 4 percent of homes offered the three foundational features of accessible housing—single-floor living, no-step entries, and wide hallways and doorways—in 2011, the last year for which comprehensive data were available from the American Housing Survey.”

That data is a little dusty, but it’s likely still in the ballpark. In 2023, Sen. Bob Casey, chairman of the Senate Special Committee on Aging, said that less than 5% of America’s housing supply was accessible.

If a Baby Boomer’s current home is accessible, that would be a high incentive to stick around. Heck, even if their home isn’t highly accessible, they still might feel more comfortable with their current layout—instinctively remembering every step—and prefer to stick with what they know than learn a new home’s layout.

Related: Is Your Retirement on Track? Here Are the Average 401(k) Balances By Age

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. Nostalgia

Moving isn’t just a financial decision—it’s an emotional one as well. Older adults might have memories of hosting grand holiday parties in their house or measuring their now-adult children against a wall. 

About 22% of Baby Boomers said they won’t want to move because they have an emotional attachment to their home in a 2024 survey by Clever Real Estate, a real estate agent matching platform.

The attachment isn’t just to the house itself, either, but also the items within it. Assuming one’s current home is full, downsizing would require a person to get rid of many of these physical memories. And while some people may enjoy becoming more minimalistic, others struggle with the idea of getting rid of sentimental items.

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

6. Their Home Perfectly Fits Their Tastes

Imagine that you’ve lived in the same home for decades. In that time, you’ve slowly made it into your dream home. You’ve painted the walls, renovated the kitchen and master bathroom, and installed a hot tub. Outside, those small trees you planted have matured and produced fruit, and your patio furniture collection is finally complete.

After all that time and money, why would you want to sell your customized dream home and move into someone else’s idea of what a living space should be like?

Some Baby Boomers want longer to reap the rewards of all the work they’ve done to their homes, rather than go to a new space that isn’t tailored to their wants and needs.

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7. Caring for Children + Grandchildren

Some Baby Boomers have children or grandchildren who live with them. According to a Redfin analysis, 7.5% of the nation’s large homes are owned by Baby Boomers whose households have three or more adults (mainly adult children). This often happens to help the adult children more easily save for their eventual home purchases.

Even when Baby Boomers don’t have others living with them, they might want extra room for frequent visitors. Seniors who regularly babysit might have a designated bedroom for their grandchildren, or they might play host to extended family for many holidays.

Related: 8 Special Tax Breaks for Senior Citizens

8. Zoning Regulations

Some Baby Boomers are more attached to their neighborhoods than the house they live in. 

The problem, of course, is that certain neighborhoods’ zoning only permits single-family homes, so if a senior wanted to downsize to a condo or apartment, they might have to leave their neighborhood.

This is pretty common, in fact: Information published in the Journal of Housing & Community Development states that about 75% of land in U.S. cities is “constrained by zoning practices that exclusively permit single-family residences.”

To stay in the area, Baby Boomers would often have to make a lateral move from one single-family home to another. Switching to a condo or apartment would mean adjusting to a new area. Instead, many choose to stay put, even if the space is larger than they need.

Related: The Best REITs to Invest In for 2025

9. Condos’ Regulations

When you own a house, you largely make your own rules. Sure, the city or a homeowners association might be allowed to enforce a few restrictions, but overall, you’re in control. 

A condo might seem like a fantastic option for older adults who want to downsize. For some, it is—but others might not want to follow condo association regulations, which can be even stricter than HOAs. They may have rules about when and where you host events, how loud your guests can be, or how many cars you can have on site. 

And while most condos accept pets, there might be restrictions on the type of pet, size, breed, or number. Senior pet owners don’t want to get rid of long-time companions, so those kinds of policies could be a nonstarter. (And even if your pet is allowed, you might have to pay a bigger deposit and monitor your pet more closely to ensure it doesn’t upset other residents.)

Related: Do I Need a Financial Advisor? 7 Questions to Ask Yourself

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10. Cost + Hassle of Moving

Lastly, moving is a pain for everyone, but it’s especially rough on Boomers.

Because many Baby Boomers have accumulated a lot of stuff over time, moving in retirement can be much more work than, say, moving out of a dorm room in college. Plus, Boomers have a lot more miles on their backs and knees, forcing them to choose between physically overexerting themselves or hiring movers.

Whoever chooses the latter will pay handsomely for the service. Hiring professionals to move a three-bedroom home (locally!) will set you back roughly $2,200, according to Forbes Home Research. Need help packing? That’s an additional cost. And don’t forget the tip!

Transporting all your stuff isn’t the only hassle of moving either. You need to change your address for a seemingly endless list of accounts. And depending on how far away they move, Baby Boomers might also need to find new doctors, dentists, and other professionals. 

Related:

• When Should You Take Social Security?
• Decoding the 4% Rule: How This Retirement Strategy Works
• What Are the Different Medicare Enrollment Periods?

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"But you don't really need it," the angel whispers, barely audible. Wait, was that anything at all?

If you want to save money, your frugal angel needs to speak out with its whole chest. And today, I'm going to help make that happen.

Read on as I explore a list of questions you should always silently ask yourself before you purchase non-essential items. The answers to these questions could result in better shopping decisions—finding savings in some cases, and not buying what you don't really want in others.

Avoid Buyer's Remorse With These Questions

Most of us have experienced buyer's remorse at one point or another. What seemed like a smart purchase at the moment eventually felt like a big waste of money.

If you've felt that before, you know you don't want to feel it again. And if you haven't yet … well, just trust me, it's not among life's best experiences.

Fortunately, you can greatly lower your chances of regretting a purchase by asking yourself these questions before you fork over your payment. You'll likely need some discipline in reminding yourself to go through each one, one by one, each time you consider buying something. But if you keep at it, they should readily flip through your mind anytime you shop.

1. Do I need it right now?

, ignoring the possibility that said item might not only be available down the road, but it might be cheaper at that point. 

Don't buy a wedding dress before you're engaged. (A friend of mine actually did this once, just to return it later). Don't grab the world's cutest baby onesie because you think you might try to get pregnant in a few years. 

Even if it's an item you're confident you'll use, you shouldn't feel pressured to stock up far before you'll need it—because by the time you need it, it might be on sale, a competitor might have released a better more affordable version, and you might not even want it anymore.

Related: What Is the 90/90 Minimalism Rule?

2. Do I already own something similar?

Do you already own five little black dresses? How badly, then, do you really need No. 6? Do you rarely wear heels but own three pairs? Maybe skip getting another pair, even if they would make you feel like a character in Emily in Paris.

These are fashion examples, but this question applies to many other categories.

Crafters love to buy yarn, pens, and paints, even if they already have plenty of a nearly identical color at home. The same holds true for makeup. If you already have light pink eye shadow at home, maybe wait until that runs out before you buy an ever-so-slightly different shade of light pink. Do you have a perfectly good Craftsman tool cabinet that's only half-full? Then as much as you might love Kobalt blue, you should probably leave Lowe's empty-handed.

Related: Career Compensation Is More Than Salary: 10 Other Financial Perks to Consider

3. Can I get a discount?

The exercise of thinking about your purchases isn't solely meant to prevent you from buying too many things. It's also meant to think about how to make more cost-effective choices when you do need to purchase something.

Never pay full price for a product or service if you're eligible for a discount. My mother is never shy about asking for senior discounts. Students, teachers, military members, veterans, and AARP members. 

You might be surprised just how many stores, restaurants, and experiences offer certain groups discounts. For example, Apple is known to offer student and teacher discounts. As of this writing, Apple.com is selling its M4 MacBook Air starting at $999. However, with education savings, students can not only get $100 off, but they can also receive one of several eligible accessories—such as AirPods Pro 2, Magic Trackpads, and Magic Keyboards—representing another $79 to $199 in value.

Related: 10 Senior Discounts for Restaurants + Grocery Stores [2025]

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4. Can I find it cheaper elsewhere?

Doing price comparisons can sometimes take a little bit of time and effort, but it's worth it. Another store might have the exact same toy, shoes, tool, or whatever product you need, at a cheaper price. 

And thanks to smartphones, we can literally compare prices while we're in the store—so if you have a phone, you don't really have an excuse. Just type the brand and product description in the search bar of similar stores or marketplaces and see how it's priced elsewhere.

Young and the Invested tip: If you don't know the brand or relevant product details, take a picture and do a reverse image search. That often leads you to websites where the item is sold.

For what it's worth, there is something to be said for supporting smaller businesses rather than always flocking to Amazon, Walmart, or Target to get the lowest price. If you see a price cheaper elsewhere, but would prefer to buy from the store you're currently at, you can always ask if they will do a price match.

I've done this before. For those unfamiliar, the Midwest chain Blain's Farm & Fleet has over 40 stores. While it's still a chain, it's much less prominent than, say, Walmart, which has thousands of locations in the U.S. alone. During the holiday season, my significant other and I have successfully had them price-match toys that were cheaper at major chains.

If that's not doable? You can always choose to pay the higher price in the name of supporting a specific business. There'll be plenty more purchases down the road where you can find your savings.

Related: Walmart vs. Target: 10 Big-Box Price Comparisons

5. Can I get this item for free?

Every now and then, you might be thinking about buying an item that you can actually get for free.

Your local library is the best source for many of these things. If I bought all of the books I read instead of borrowing them from the library, I'd be broke. But libraries offer much more than paperbacks. For instance, my library system sends out HappyLights to help people keep their spirits up in the winter. Some libraries near me also give away free planting seeds in the summer. Your local library may lend out games, movies, and even tools. Don't forget about free events that may make for a perfect date night!

Some electric utilities will send out free (or if not free, extremely deeply discounted) energy-efficient LED bulbs, smart thermometers, high-efficiency showerheads, and faucet aerators.

You might be able to get big expenses for free too. For instance, you might move back home after college to save on rent—you might have less privacy for a few months, but in that time, you could save a substantial amount of money that could go toward a condo or house down payment.

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6. Can I buy it used?

I'm a big fan of buying gently used clothes off of Poshmark. Not only is used clothing more affordable, but with the rise of fast fashion, thrifting can often unearth higher-quality items than what you'll find new at many stores.

Clothes aren't the only item that can be beneficial to buy pre-owned, either. In fact, there are some items you should almost always buy used, such as holiday decor and new-hobby equipment.

Before you go to the store to buy yourself a treadmill or other workout equipment, consider checking if anyone is selling a used one on Facebook Marketplace or Craigslist. There's a good chance one is currently being used as a coat rack in someone's home and they are willing to sell it at a significantly discounted price. 

Sure, there are some items you should always buy new. But more often than not, you can save a lot of money buying something used, without sacrificing much (if any) quality. 

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

7. Can I rent it?

For any item you will only need once, or very infrequently, you should consider renting instead of buying outright.

One of my friends loves to use Rent the Runway for vacation and wedding outfits. It lets her dress in designer clothes without the high price tags of buying them. (However, if you love it, RTR usually gives you the option to buy outfits after renting them). 

Do you want to do a project that requires expensive power tools? You might be better off renting them rather than buying them, using them once, then letting them collect dust in your garage for the next 20 years. Not only are tools expensive, but they're a major source of garage clutter, which is a no-no for anyone trying to become more minimalist. 

You can rent deep-cleaning equipment, event decorations, even caskets (yes, caskets) if you're trying to cut down on common funeral expenses. 

Unless you're confident you'll get a lot of use out of a product and have the room to store it, always consider if renting is the better route.

Related: How to Achieve Financial Minimalism to Reduce Stress

8. Could I share the cost with someone?

Splitting the cost of something with another person can often be a financial win-win.

Let's talk about an expense that has become ubiquitous: subscription costs. Using Spotify as an example, as of this writing, a Premium Individual account costs $11.99 per month, while a Premium Duo account (which includes two accounts) costs $16.99 per month, and a Premium Family account (which allows for up to six Premium or Kids accounts) is $19.99 per month.

In other words, rather than spending $12 per month for your own account, you could split a Duo account with a roommate, spouse, or sibling and pay only $8.50 per month each ($17 / 2). If you live with more roommates, an adult family member or two, or have teenage kids, you could pay even less per month by splitting up a Family account, which would cost $6.67 per month for three people, $5 per month for four people … you get the point.

A popular venue for splitting costs is sports tickets. Love your hometown team but think you and your wife will only be able to go to a few games each year? Split a pair of season tickets or two multigame packages with friends or coworkers. 

An oldie (but a goodie) is carpooling, which lets you save on fuel costs and maintenance. Just need a ride around the city? UberPool (where available) lets riders share a ride with other people heading in the same direction. This option typically gives you a lower price regardless of whether the driver picks up other riders.

Related: 10 Highest-Rated Kirkland Signature Products You Don't Want to Miss

9. Would I rather put the money toward something else?

When it comes to discretionary purchases, sometimes it's not about whether you can get a good deal, but instead, about whether your money would be better spent on a more important or attractive expenditure.

Let's say you're saving for a vacation to Paris. One day, as you wait in a long check-out line, you spot your favorite candy and consider grabbing it as a treat for your drive home. Ask yourself, "Do I want this chocolate now, or would I prefer to spend that money on a freshly baked croissant in Paris?" 

Or maybe you want to see a new movie that's coming out. Before buying that ticket, ask yourself, "Would I rather buy this movie ticket now, or watch this movie on Disney+ in a couple of months and use this money to buy a ticket to the Louvre instead?"

Your money isn't unlimited, so you should always consider whether you're using your discretionary funds in a way that will make you happiest.

Related: How Your Personality Affects Your Pay + Promotions

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10. How much did I have to work to earn this?

If you work, you exchange your time and effort for money. That seems obvious, but most people tend not to think about that at the exact moment they're making a recreational purchases.

But it can help to remind yourself of how much time you have to work to pay for an item.

Let's say you really want to splurge and buy yourself a Louis Vuitton purse that costs $3,500. Your current purse is falling apart, so you need a new bag anyway, and you have enough money in your savings account to buy it outright. But if you actively think about the fact that you'd have to work, say, an entire month to get $3,500 worth of take-home pay, it might no longer feel worth the cost—and you might buy a more affordable purse instead.

If you're not willing to work overtime for a luxury purchase, it's probably not worth it.

Related: The Tax Implications of Losing Your Job

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Well, I have good news for you! Sometimes, generic items are just as good, or even better, than name-brand products. Strategic shopping can mean you save money and get the best items. It's the ultimate win-win situation. Let's dive into which generic products are better than their name-brand counterparts.

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Top-Rated Generic Products

They say imitation is the sincerest form of flattery. But what starts as an imitation can lead to something even better. This often happens with generic brands that base a product on a popular name-brand item, then make small adjustments that improve it. 

Here's a peek at some of the copycats that outshine the originals based on user ratings.

Products are listed in order of the degree to which they outperformed the name-brand rating.

10. Kirkland Signature Laundry Detergent

--Generic rating: 4.8

--Name-brand rating: 4.7

Costco shoppers don't like the in-store Kirkland Signature brand—they love it. It's common to find sky-high reviews for products under the brand umbrella, and that includes Kirkland Signature Ultra Clean Free & Clear HE Liquid Laundry Detergent, which boasts a consensus rating of 4.8 stars out of a possible 5.

That's enough to have the edge against name-brand All Free & Clear Plus+ HE Liquid Laundry Detergent, which earns 4.7 stars.

A review of Kirkland Signature's laundry detergent explained how they did a comparison between the two brands:

"I bought this laundry detergent to save on the major ALL brand … I did a side by side comparison of the ingredients in this and the major free and clear brand. They were 1-1 comparable, so I took a risk and tried it," the reviewer says, "NO irritation at all! So, unless I find the other brand on a major coupon sale, I have just replaced it with Kirkland. In my opinion, these are identical. So, for anyone with an exclusive ALL requirement, consider using this."

Related: 10 Items You Should Never Buy at Aldi

9. Kirkland Signature Aller-Flo Allergy Spray

--Generic rating: 4.9

--Name-brand rating: 4.8

Another raved-about Kirkland Signature product is Aller-Flo Allergy Spray. Reviewers laud its efficacy, saying it works just as well as (or even better than) Flonase, which has the same active ingredient.

They've rated it higher, too—Aller-Flo earns a whopping 4.9 stars, edging out Flonase's 4.8 rating and even putting it among Costco's best Kirkland Signature products period.

"I remained loyal to the brand even though the Kirkland brand costs much less," says one reviewer who had used Flonase for years. "I finally gave the Kirkland brand a try and I've actually been much happier with the product than with Flonase. The product work[s] equally as well, but more importantly the Kirkland Signature Aller-Flo has a much better applicator/sprayer that delivers a more consistent spray."

We'll note that like with many store-brand products, the price tends to be more compelling, too.

Related: Avoid Buying These 10 Products at Costco

8. Great Value Snack Bags

--Generic rating: 4.8

--Name-brand rating: 4.6

Walmart shoppers express a high level of satisfaction with Great Value Fresh Seal Zipper Square Snack Bags, with the Walmart store brand earning a consensus 4.8-star rating. 

Reviewers commonly compliment the size of the snack bags and mention they're great for packing lunches.

Ziploc—the gold standard of snack bags—has nothing to be ashamed of with its own 4.6-star rating. Many more recent reviews give it a full five stars. But if you scroll for a while, you'll see occasional complaints about the seal … and those not-fully satisfied customers help give Great Value the edge.

Related: Consumers Should Avoid These 10 Products at Walmart

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7. Favorite Day Moose Tracks Ice Cream

--Generic rating: 4.4

--Name-brand rating: 4.1

Favorite Day Moose Tracks Ice Cream is a Target store brand's version of "moose tracks": vanilla-flavored ice cream with miniature peanut butter cups and swirls of chocolate fudge.

Target customers give this dessert a high consensus rating of 4.4 stars out of a possible five stars. "Hands down the best [ice cream] I've ever had!!! (and I'm old)," one happy consumer says.

At the moment, Favorite Day enjoys a better rating than the moose tracks ice cream from Kemps—a popular independent brand that's sold at Target, Walmart, Kroger, and more. The 4.1-star rating is good … just not good enough to beat out the Target store brand.

6. Market Pantry Strawberry Preserves

--Generic rating: 4.5

--Name-brand rating: 4.2

Market Pantry, another one of Target's private-label food brands, offers up strawberry preserves that enjoy a consensus 4.5-star rating. A recent review reads: "So good. It's better than smuckers or whatever the brand is. I've been eating it for months and I literally cannot get enough. Try it and save $$$ too."

Don't doubt yourself, reviewer! You got the name right!

And on the whole, other shoppers seem to feel the same way; Smucker's strawberry preserves earn a rating of 4.2 stars—respectable, but below the generic brand. Among the reviews that weighed on Smucker's score were a one-star complaint that the preserves were "like mush," and another that bemoaned a lack of strawberry chunks.

Related: Walmart vs. Target: 10 Big-Box Price Comparisons

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5. Good & Gather Organic Corn Tortilla Chips

--Generic rating: 4.7

--Name-brand rating: 4.4

Good & Gather, another Target brand, covers a variety of grocery categories, including (but not limited to) meat, dairy, produce, snacks, beverages, cheese, coffee, and frozen foods. 

Among the best-rated Good & Gather products are the Organic Blue Corn Tortilla Chips, which currently boast a rating of 4.7 stars. A review by "Lizzy" reads, "These chips are SO good. We get them every Target trip- good price and amazing flavor! We even eat them on their own, they are that good."

That puts Good & Gather over Tostitos' Organic Blue Corn Tortilla Chips, which earn 4.4 stars. The reviews are largely positive, but one can't help but wonder whether fans are still salty over Tostitos ending its Fiesta Bowl sponsorship years ago.

Related: Cooking Costs Heating Up? Here's How to Save Money Cooking

4. Member's Mark Select & Tear 2-Ply Paper Towels

--Generic rating: 4.9

--Name-brand rating: 4.6

Member's Mark Select & Tear 2-Ply Paper Towels have earned a spot among highly rated Member's Mark products, and it's easy to see why. The Sam's Club store brand's paper towels enjoy a remarkable 4.9-star rating across 134,000 reviews.

"I think these are stronger than the 'other' popular, more expensive brand-name paper towels. Perforated sheets tear off easily, and have the half sheet option," reviewer "Cindy" states. "Rolls are large, and equivalent to 1.5 times larger than a standard roll and seem to last 2-3 days in my heavily used kitchen." 

The reference to other, more costly brand-name paper towels might be throwing shade at Bounty. Their name-brand Select-A-Size 2-Play Paper towels have an also-high 4.6-star rating and a bevy of positive reviews … but some people complain that the brand is participating in shrinkflation, and a handful think the quality has gone down.

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3. Kirkland Signature Dishwasher Detergent Pacs

--Generic rating: 4.6

--Name-brand rating: 4.2

Another Kirkland Signature product that has outdone the competition is the Kirkland Signature Platinum Performance UltraShine Dishwasher Detergent Pacs, with a lofty 4.6-star rating.

One recent shopper explains that they used to have a name-brand dishwasher detergent that didn't work well and clogged the dishwasher detergent basket, but that they didn't have this problem when they switched to Kirkland Signature.

The competition? Finish Powerball Quantum Dishwasher Detergent Tabs. While there's nothing wrong with the product's 4.2-star rating, it's not Kirkland good. The most common complaint by reviewers is that the tabs leave a strong scent on whatever runs through the dishwasher.

Related: 10 Sneaky Grocery Store Scams to Avoid 

2. Great Value Mustard

--Generic rating: 4.6

--Name-brand rating: 4.2

Does Great Value Yellow Mustard, ahem, cut the mustard?

Metaphorically? Absolutely—the Walmart store brand's yellow mustard earns a fantastic 4.6-star rating. Literally? No—Walmart shoppers seem to think it's every bit as flavorful as name-brand mustard.

"It's a reasonable price for yellow mustard, and to me there isn't any taste difference between name brand and great value," one reviewer writes. "I'm satisfied with the product."

That's a tall wall to climb for French's—too tall, if we ask Walmart shoppers. French's receives mostly positive reviews, but the 4.2-star rating is a good deal below Great Value.

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

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1. Trader Joe's Creamy Spinach & Artichoke Dip

--Generic rating: N/A

--Name-brand rating: N/A

Trader Joe's is extremely well known for its store-brand products. While the most-talked-about foods tend to have unique flavor combinations, the store carries classics, as well, including spinach and artichoke dip.

You won't find customer ratings on Trader Joe's site, so I can't quantify its superiority to other dips—but I think I've gathered sufficient evidence to make an argument.

The item description says, "This dip has the ideal blend of 'chokes and spinach, with Swiss and Parmesan cheeses, and just the right amount of herbs and spices." But we don't need to take TJ's word for it: It was voted the #1 Appetizer Winner for Trader Joe's 16th Annual Customer Choice Awards. 

On Reddit, consumers rave about this spinach dip as well. A recent Reddit post states, "In my opinion it's way better (and cheaper) than the [TGI] Friday brand. I should have got more than one!" The comment section unanimously agrees that it's delicious. 

In a different Reddit thread, the top comment reads, "The frozen dip is my life. I had to stop buying it. It's too good. I got a little baking dish for it, I just throw it in the oven at like 375ish for 30 minutes or so until it looks delicious." This food is also versatile and I've seen several people online say they use it as a pasta sauce and one person claims it makes for a "stellar egg bake."

OK, it's not as scientific as comparing ratings … but it has the votes and the reviews.

Related: 10 Best Trader Joe's Shopping Tips

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Generally, then, being frugal is considered a good financial trait. After all, it wouldn't hurt most people to save a little more money. Some people even make frugality fun by turning it into a challenge for themselves.

But beware: There is such a thing as too frugal. You can cross the line and become cheap or even downright be in over your head.

The wise path to frugality involves a little flexibility. Strict rules—never spend money whenever possible, always buy the cheapest item, always grab the biggest discount—can actually result in you having to spend more money in the long run. No, to do frugal right, you need to know the nuances of when to fully cheap out … and when to spend up.

If you're looking at becoming a more frugal person, here are some "frugal fails" you should strive to avoid.

Frugal Mistakes to Avoid

Like I just mentioned, some extreme attempts at saving money can backfire on you—you might have the best financial intentions, but you could end up spending more money than you intended.

When you're trying to decide how to allocate your funds, keep these frugal fails in mind. Avoiding these pitfalls won't just save you money in the long run—several of them will also help you maximize the value and quality you get for your money.

1. Not Buying Health Insurance + Avoiding Health Concerns

American health care can be exorbitantly expensive. So naturally, if you feel healthy and have no chronic conditions, you could be tempted to skip out on buying health insurance, saving yourself from those high monthly premiums.

It's a calculated gamble, but one that could financially ruin you if you're unlucky.

If you get in an accident that requires surgery, you'll wish you had insurance. Data published by Debt.org shows that the average hospital stay in 2021 cost $13,262. That's just the average—the type of treatment necessary while hospitalized can increase the cost substantially. Surgeries often rocket that bill to $100,000 or more! With health insurance, you'll only pay a fraction of that. But without … you could be stuck with the entire bill. 

Even when people do have health insurance, they often make the mistake of not using it to avoid additional copays and coinsurance costs. Indeed, according to the Commonwealth Fund's 2023 Health Care Affordability Survey, more than a third of respondents admitted to delaying or not getting needed health care or prescription drugs because of the cost.

Again, you might save a little now, but you could put yourself in a situation where your health care costs explode. If you don't get regular checkups, you might not detect certain health conditions until they're much more serious and costly to treat. And if you don't take prescribed medicine to fight known conditions early on, they could worsen, requiring more (and more expensive) prescriptions just to stay alive.

Related: 10 Frugal Life Hacks From Around the World

2. Delaying Home Repairs

Property casualty insurance agency Hippo conducts an annual Homeowner Preparedness Pulse Report. The 2023 report found that around three-fourths of surveyed homeowners said price increases and inflation hindered their planned home improvement projects in the past few months.

That shouldn't come as any surprise. When times are tight, people often scale back or delay improvements to their homes.

But there's a difference between holding off on, say, painting a few rooms versus doing necessary plumbing or electrical work.

In that same survey, 45% of homeowners said they experienced damage to their homes that could have been prevented—up sharply from just 19% in 2022's Preparedness Report.

So while aesthetics can wait, delaying certain important home repairs could, in time, worsen a problem and result in much more expensive repairs. (Examples include foundational sinking, structural damage, and roof leaks.) 

3. Doing Tricky Repairs Yourself 

Some people are born do-it-yourselfers. Some people are not. But people in both camps are capable of overestimating their ability to DIY a repair. And that's a lot more likely to happen when weighing DIY versus bringing in a costly professional.

Listen, if you regret that modern art you nailed into your drywall, you can probably handle a little spackle by yourself. And with the help of articles and YouTube videos, you might be able to plunge a toilet or fix a leaky faucet.

But now let's pretend you need to repair a gas line. Maybe you're in the minority of people who could do it themselves without a problem. But if you're wrong, you could start a fire, requiring you to make much more expensive repairs. More importantly, this dangerous task could cause serious injury—which could lead to high hospital bills, make you miss work, and negatively affect your overall quality of life.

Again, I'm not recommending you never DIY a project. But weigh the cons of getting it wrong. If the potential downside is too high, the most frugal thing you could do might be to pony up for a professional.

4. Using Only Cash, No Credit Cards 

Some people looking to cut down on their spending avoid credit cards like the plague. And in a way, it makes sense. If you can't spend any more money than what's physically on you, you should, in theory, be able to curb overspending. For example: If you're at a bar, and you tell yourself you won't spend any more than $50, it's still really easy to blow through that resolution with a credit card. But if you only have $50 in cash … well, good luck trying to spend $75!

However, if you use them responsibly, credit cards can actually put you in a better financial situation.

To start, having a credit card (and paying it off in a timely manner) is one of the easiest ways to build credit. And having a good credit score can help you secure loans and save money on interest payments.

Plus, rewards credit cards often offer a variety of bonuses you'd never get by only using cash. For instance, you can receive sign-up bonuses, cash-back rewards, flight miles, free hotel stays, and other monetary and prize benefits.

There's also the issue of security: If you're robbed of a large sum of cash, you're unlikely to ever get it back. But when someone steals your credit card, you can cancel it and limit the damage. Also, most major credit card providers offer zero liability coverage, so if you speedily report any fraudulent charges, you won't be responsible for them.

Related: 5 Best Debit Cards for Rewards and Cash Back

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5. Always Buying the Cheapest Option 

Think it's frugal to always buy the cheapest version of whatever it is you need?

Imagine two siblings, Mike and Martha, shopping together for kitchen supplies. They stop to look at pots and pans. Mike, wanting to save money, grabs a two-piece nonstick frying pan set for $40. Martha spends $65 on a cast iron set.

At the time, Mike thought he was being more frugal. But you're supposed to replace nonstick pots and pans every five years (and even sooner if they start to peel), so five years later, Mike buys another set, at $50 thanks to inflation. Martha, meanwhile, keeps using her cast iron cookware, which is built to last. So now, Mike has spent $90 on cookware versus Martha's $65. This continues over the years—Mike keeps replacing his pots and pans every five years, while Martha's cookware is so durable, she eventually passes it down to her daughter.

Listen: Sometimes, the cheaper version of a product is every bit as good (or even better!) than a more expensive counterpart. But in other situations, spending a little more now will net you a product that lasts much longer, saving you in the long run with less frequent replacements.

Sometimes, the cheaper version of a product is just as good, or even better, than a more expensive counterpart. In other situations, it's worth spending a bit more for an item that will last. If something needs to continually be replaced, you pay more over time.

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6. Buying Everything in Bulk 

Buying items in bulk can be an excellent way to save money—but it's not always the most cost-efficient option. Indeed, people who buy everything in bulk are sometimes wasting money without realizing it.

The biggest risk to buying in bulk is waste. If you buy a large quantity of items that go bad quickly and don't use them before they expire, you're not necessarily saving anything. For example: You could buy 3 pounds of oranges at your local grocery store for $3, or 5 pounds for $4 at a nearby warehouse retailer. You buy the 5-pound bag but only eat 3 pounds of oranges. While you received a better per-orange price initially, you ultimately spent more for the amount of oranges you actually ended up consuming.

Buying in bulk also is risky when it comes to products you've never tried before. It's a great deal if you end up liking the product, but if you don't, you've still spent a lot to secure a large quantity of something you ultimately won't consume.

Again: Buying in bulk can save you both time and money. But you need to be strategic about which items to purchase in bulk—and which items are better off bought in smaller quantities.

Related: 10 Generic Products That Are Better Than Name Brands

7. Using (But Forgetting to Cancel) Free Trials

Signing up for a free trial is easy, but forgetting to cancel it is even easier. 

I should know: I'm personally guilty of this frugal failure. 

A free trial can absolutely save you money, whether it's using software for a week or enjoying some shows on a subscription service for a month.

But typically, companies will charge you as soon as the trial period ends. That's fine if you either always intended to keep subscribing or were convinced to during the trial period. But many people simply forget to cancel and are stuck paying an onerous fee for something outside of their budget—in some cases for products they never plan on using again. Indeed, in a survey by Forbes Home and OnePoll, almost half of respondents admitted to forgetting to cancel a free trial and being charged for a subscription.

Don't avoid free trials. Just make sure to cancel them on time. One of your best bets is to set calendar events reminding you to cancel a day before the trial period is over.

Another clever idea is to sign up using a prepaid Visa or Mastercard gift card with a low balance. For instance, let's say your job gave you a $50 Visa gift card as a reward, and you spent $49 of it—use that card to sign up for a free trial. In the event you forget to cancel in time, the charge will be denied because of an insufficient balance, so you won't be charged. (Note: Not all subscription services will allow you to use prepaid cards, but some will.)

8. Not Contributing to Retirement Accounts

In some cases, some frugal fails are unavoidable depending on your financial situation. Not contributing to retirement accounts is a great example.

The financial benefits of contributing to a retirement account are pretty obvious. Money saved now can grow into a lot more money once you've hit retirement, when you'll no longer be earning an income but still need money to get by.

Better still, retirement plans such as 401(k)s and individual retirement accounts (IRAs) offer tax advantages that help you get more from your savings than you would through other instruments.

And in some cases, employers will even pay you more for contributing to your 401(k). Employers who offer 401(k) plans sometimes offer a contribution match—either dollar-for-dollar or a percentage, up to a certain cap. So, for instance, your company might offer a match of up to 3%, so if you contribute 3%, your company will toss in an additional 3%. If you contribute nothing, though, you miss out on that free money.

Thing is, if you have your essentials covered and are merely looking for cuttable expenses to tighten up your budget, then yes, not contributing to a retirement account is a massive frugal fail. Look for other discretionary expenses to cut back on first.

But you shouldn't, say, max out your 401(k) if it means not being able to afford groceries or rent. While you should do what you can to secure your financial future, it's meaningless if you're actively harming yourself today to do so.

Related: 10 Senior Discounts for Restaurants + Grocery Stores

9. Signing Long-Term Gym Contracts 

At one point, I decided to get a YMCA membership. I could either pay month by month, or pay for a year upfront at a cheaper rate (on a per-month basis). I thought the choice was pretty obvious: Pay for the entire year and save a bunch of money.

Then the pandemic hit.

I cautiously decided not to go to the gym for most of that year. But the YMCA kept its facilities open, and as long as they were open, I couldn't get any of my money back. They wouldn't delay my membership months easier. As a result, I ended up paying far more for a couple of months than I would have had I chosen a month-to-month contract that I could have canceled anytime.

Naturally, pandemics aren't the only reason long-term gym contracts can go awry. You might get a serious injury that prevents you from working out for a few months. The gym might stop offering your favorite workout classes. You might move.

Some gyms also make it difficult to cancel your membership, while also automatically renewing your membership if you don't cancel in time. And in fact, certain gyms will even try to lock you into multiyear contracts, heightening the chances something will go wrong and you won't enjoy the savings you expected.

Related: What Is FIRE? A Beginner's Guide to the Early Retirement Movement

10. Missing "Once in a Lifetime" Events

Extreme frugality can save you money, but it can also cause a lot of regret. 

Specifically, don't be so frugal that you miss out on important milestones. Yes, your bank account will be better off if you don't say yes to every dinner and event invite. But there's a big difference between being frugal most of the time (but still spending for important events) and being frugal all of the time (and missing out on everything).

American author Daniel H. Pink has written seven New York Times bestsellers, including The Power of Regret: How Looking Backward Moves Us Forward. A mini-survey on regret created for the book found that "regrets of omission" (not doing something) outnumber the regrets of commission (something you did) by more than 3-to-1. Put simply: We tend to regret the things we skip more than the actions we take.

Don't miss your sibling's wedding because you'll need to get a hotel room for the night. Don't eschew vacations with your family and miss out on the opportunity to make memories that will last a lifetime. Skip nightly takeout, but don't skip the pasta in Venice. Saving money isn't its own reward—frugality allows you to, at a minimum, afford your needs and absorb emergencies, but ideally, it also allows you to save more to put toward the things that truly make you happy.

Related: 10 Monthly Dividend Stocks for Frequent, Regular Income

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You can save some time and check out the digging I’ve done for you. Read on to check out a number of free things for older adults (many are always free and several more are often-free).

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Always Free Stuff for Senior Citizens

I'm going to start with things that are always free. You don't need a membership, a buy-one-get-one-free coupon, nothing. As long as you meet the age of eligibility, you can literally get these things for a smile—or a frown, if you're not the smiling type.

1. Tax Help

Taxes can be time-consuming and confusing no matter your age. So thank your lucky stars if you've reached age 60, because at that point, you can begin to receive free tax help from the Tax Counseling for the Elderly (TCE) grant program.

Through this program, volunteers at eligible organizations provide tax assistance to the elderly, typically in locations that are convenient for senior citizens to get to. The IRS in turn reimburses the volunteers for transportation, meals, and other expenses.

To be clear: These volunteers are qualified to provide tax assistance. Before they can help prepare tax returns, they must take and pass tax law training that meets or exceeds IRS standards. And the IRS requires every return prepared by TCE volunteers to undergo a quality review before they're filed.

This free tax preparation help is available from Jan. 1 to April 15 every year. And the program must offer tax assistance to older adults year-round.

2. Free Courses

While you can't get free education at every single university, many colleges do offer tuition-free courses to senior citizens. They might be online courses, in-person courses, or a mix of both.

Most states have at least one tuition-free state university program for seniors. (The exceptions—Arizona, Idaho, Indiana, and South Dakota—still have deeply discounted tuition programs for senior citizens.)

Depending on the state, the minimum age for free tuition ranges from 55 to 65.

Alternatively, you can audit a class. When senior citizens audit a class, they get to attend lectures and join in on discussions. But they don't take tests, do homework, or receive course credits. This is an excellent option if you want to learn more but don't care about working toward a degree.

Related: 10 Common Myths About Taxes in Retirement

3. Additional Standard Deduction

Are you 65 or older? Then you're entitled to an additional standard deduction that can be added to the regular standard deduction for your filing status.

The additional standard deduction for the 2025 tax year is $1,600 (up from $1,550 in 2024) per eligible taxpayer for married couples filing jointly, married taxpayers filing separately, and surviving spouses. For single and head-of-household filers, the additional standard deduction for the 2025 tax year is $2,000 (up from $1,950 in 2024).

It's worth noting that the additional standard deduction isn't only for people who are 65 or older—it also applies to people who are blind, too. And if you are at least age 65 and blind, the additional deduction is doubled. For example, if you're a blind 70-year-old and filing single or head of household, your additional standard deduction for the 2025 tax year would be $4,000 (up from the $3,900 for the 2024 tax year).

Related: 7 Outdated Money Rules That No Longer Make Sense

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4. Senior Deduction

The passage of the 2025 budget reconciliation bill also ushered in a new (albeit temporary) Senior Deduction. 

To qualify for the Senior Deduction, you must turn 65 within the tax year you want to claim it, you must have a Social Security number (an individual taxpayer identification number, or ITIN, is not enough), and if you're married, you must file a joint return. You can take the Senior Deduction regardless of whether you itemize or take the standard deduction, and you can take it in addition to the additional standard deduction.

All qualified seniors start with a $6,000 deduction. If you’re married and filing a joint return, both you and your spouse start with a $6,000 deduction, for a total of $12,000. However, if your “modified adjusted gross income” (MAGI) is more than $75,000 ($150,000 if you’re filing a joint return), then your $6,000 deduction is reduced by 6¢ for every dollar of MAGI over the applicable threshold. The $6,000 deduction is reduced all the way to $0 when your MAGI reaches $175,000 ($250,000 for joint filers).

For purposes of this deduction, MAGI is equal to the adjusted gross income reported on your tax return, plus any:

--foreign earned income or housing excluded from taxation

--income excluded from taxation for residents of Guam, American Samoa, the Northern Mariana Islands, or Puerto Rico

Example: Suzanne is 80 years old and single. Her MAGI for the year is $90,000, which is $15,000 over the phase-out threshold for single taxpayers ($90,000 – $75,000 = $15,000). As a result, her deduction is reduced by $900 ($15,000 x .06 = $900). So, her Senior Deduction for the year is $5,100 ($6,000 – $900 = $5,100).

Just note that the Senior Deduction is temporary: Per the reconciliation bill, it is only available between the 2025 and 2028 tax years.

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5. Senior Center Events

Senior centers are community centers designed specifically for older adults, and they typically host free events. The event calendar for a senior center near me shows bridge games, gentle yoga classes, a veteran's social, movie screenings, and more, all occurring within the next few days—and all completely free to senior citizens. Some of the events even include free food.

The exact events will vary by location, but there is always free stuff to do. If you seek more socialization, check out the website of a center near you. Also consider looking at Facebook Events to see if any free events pique your interest.

Related: Should You Wait Until Age 70 to Claim Social Security?

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Often-Free Stuff for Senior Citizens

Next up, I'm going to look at free stuff that isn't always free for senior citizens, but is often free. Whether the service is free or not might depend on location, age, or other eligibility criteria.

6. Medicare Part A Premiums

You might have heard that premiums for Medicare Part A are free. That's largely, but not entirely, true.

The majority of U.S. senior citizens can indeed get Medicare Part A premiums for free. Specifically, you'll get it for free if you or a spouse paid Medicare taxes for long enough (typically 10 years), or if you receive Medicare earlier than age 65.

Related: Medicare Explained: A Guide to Types of Medicare Coverage

If you're 65 or older but don't qualify for premium-free Part A, you still might be able to buy it. But you'll also have to sign up for Medicare Part B to do so. And you'll want to do so when you're first eligible for Medicare—if you buy it outside of your initial enrollment period (and didn't have similar coverage until then), you could face late enrollment penalties, which are tacked on to your monthly premium for as long as you have that coverage.

I cannot emphasize enough that only Part A premiums are free for most senior citizens. That does not mean that all of your healthcare is free. You still will have a deductible, and many services will require a copay. Plus, there is no limit on out-of-pocket costs, unless you have supplemental coverage.

Related: Medicare's Confusing. Here's How You Can Lose It [And How You Won't]

Young and the Invested Tip: During one's working years, it's highly recommended to open and fully fund a health savings account (HSA) any year you are eligible to do so. HSA contributions, investment growth, and withdrawals are all tax-free when used for qualified medical expenses.

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

7. Health Insurance Assistance

Do you struggle to understand the complexities of Medicare? You aren't alone. According to the MedicareAdvantage.com 2023 Medicare Literacy Survey, roughly 65% of its 2,013 respondents said "Medicare is confusing and difficult to understand," while 25.5% felt neutral and only 9.9% disagreed with the statement.

Luckily, the State Health Insurance Assistance Program (SHIP) has community-based counselor networks that help educate Medicare-eligible individuals (as well as their family members and/or caregivers) about numerous aspects of Medicare.

The counselors make group presentations and media to teach people, but you can also get one-on-one help. In person or by phone, someone can help you make more informed Medicare decisions. SHIP uses both its own staff, in-kind professionals, and volunteers, all of whom are certified and highly knowledgeable.

To receive these free services, you must meet at least one of the following criteria:

-- Have a limited income

-- Be a Medicare beneficiary under the age of 65 with a disability

-- Be dually eligible for Medicare and Medicaid

Go to shiphelp.org to contact your local SHIP for more information.

Related: Original Medicare Doesn't Cover Everything: Here's What It's Missing

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8. Transportation

Various types of transportation are available to seniors, too.

People with Medicaid, which include many low-income seniors, can typically receive non-emergency medical transportation (NEMT) at no to low cost, per federal regulations. Plans typically stress that people should only use NEMT when they have no other means of transportation, but when that's the case, NEMT can help. States' specific policies vary; you might have to get your State Medicaid agency's approval to qualify for a ride

If you have private insurance (whether it's traditional coverage or a Medicare Part C [aka Medicare Advantage] plan), you should check with your provider—it's possible they provide some level of NEMT coverage, too.

Senior citizens can often get free, or at least affordable, public transportation to non-medical places as well. To see if there are free transportation services or other resources for older adults near you, enter your ZIP code in the ElderCareLocator tool. You can also use Google's Volunteer Transportation search tool to see volunteer transportation providers in each state.

Related: What Is the Rule of 55 for 401(k) Withdrawals?

9. Select Medical Screenings

The earlier cancer and other serious medical conditions are diagnosed, the higher the chances of recovery. Thus, medical screenings and other preventive services are vital to surviving these conditions

Age is a factor in whether you can receive these services for free—and in some cases, you don't even have to be a senior to get them at no cost.

For example, insurance companies don't all provide the same mammogram coverage. Some cover them yearly, while others only do over two years. You might need to be at least 40 years old to get a free mammogram under some plans.

Age 45 is the minimum age to receive a free colonoscopy, fecal blood test, or sigmoidoscopy, per the Affordable Care Act.

Anyone with Medicare Part B is entitled to around two dozen free preventive services, though eligibility is also determined by risk factors, age, and Medicare-determined time frames. If you have Medicare, find out which preventative services you may be able to get free of charge.

Keep in mind that while some preventative care is free for senior citizens, any follow-up diagnostics might still carry a cost.

Related: 10 Useful Decluttering Tips for Retirees

10. Legal Services

Senior citizens can often get free legal help, too.

Title III-B, Section 321, of the Older Americans Act (OAA) provides funds for legal assistance to "older individuals with economic or social needs." This assistance is available in every state, and provided by Area Agencies on Aging. Note: Area Agencies on Aging is a generic term; local agencies have specific names. To find one of these agencies near you, use the ElderCareLocator tool.

Other programs are available only to seniors who live in specific areas. For example, Washington, D.C. residents might also be able to get free legal help through the Legal Counsel for the Elderly (LCE), which is sponsored by the AARP and also receives funding from the District of Columbia Office on Aging.

Related: 7 Best Wealth + Net Worth Tracker Apps [View All Your Assets]

11. Health and Fitness

Many Medicare Advantage plans include SilverSneakers—a health and fitness program designed specifically for seniors 65 and older (though there isn't an age requirement). If you're eligible for SilverSneakers (you can check eligibility here), you receive access to the following:

-- Online fitness classes (both live and prerecorded)

-- Thousands of gyms, community centers, and other fitness locations

-- The SilverSneakers GO app

-- Community classes via Zoom where you can connect with other participants

Senior centers, libraries, and other public programs also often host free workout classes. Although gyms typically don't give out free memberships based on age, they do sometimes host special free events for seniors.

Related: 5 Social Security Moves Every High-Net-Worth Individual Should Know

12. Eye Exams

As you age, it's common for your eyesight capabilities to change. You might start struggling to see up close, find more difficulty distinguishing between similar colors, or need additional time to adjust to lighting changes. The good news is many of these issues are often easily fixed by glasses or contact lenses. But you'll also need to be on the lookout for more serious issues, such as age-related macular degeneration (AMD) and cataracts.

To stay up-to-date on your eye health, it's important to get regular eye exams. Older adults can get free medical eye exams through EyeCare America, which has a pool of over 4,600 volunteer ophthalmologists. The Seniors Program pairs older adults with a volunteer than can conduct an eye exam with no out-of-pocket charge. Plus, it offers up to a year of follow-up care for any conditions diagnosed during that exam.

To receive a free eye exam, you must meet the following requirements:

-- Be a U.S. citizen or legal resident

-- Be age 65 or older

-- Not belong to an HMO or get Veterans Affairs (VA) eye care benefits

-- Not have visited an ophthalmologist in three or more years

EyeCare America also has a Glaucoma Program. This is provided for free to those who are both eligible and uninsured. To be eligible, you must meet the following requirements:

-- Be a U.S. citizen or legal resident

-- Not belong to an HMO or get Veterans Affairs (VA) eye care benefits

-- Not had an eye exam in 12 months or more

-- Be at increased risk for glaucoma, determined by age, race, and family history

Note: The Glaucoma Program doesn't provide eyeglasses or eyeglass prescriptions.

Related: The 10 Best Fidelity Funds You Can Own

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13. Dental Care

Oral care is strongly connected to one's overall health. Unfortunately, Medicare usually doesn't cover common dental services, such as cleanings, fillings, tooth extractions, or dentures, which can make older adults hesitant to see a dentist. But the longer a dental issue is ignored, the more serious—and expensive—it can become. According to the Centers for Disease Control (CDC), almost one in five adults age 65 or older have lost all of their teeth. 

Preventative dental care can help you avoid joining that statistic, but it can be expensive. Fortunately, many older adults can get dental care from the Dental Lifeline Network through Donated Dental Services (DDS). To qualify, people typically need to have no means to afford dental care and meet one of the following criteria:

-- Be aged 65 or older

-- Be permanently disabled

-- Require medically necessary dental care

Keep in mind that volunteers cannot provide cosmetic treatment or emergency services. The program is also not able to offer services in all counties, so prospective applicants are encouraged to check out the programs for their state. 

Related: 10 Best Vanguard Funds for the Everyday Investor

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What About Senior Citizen Discounts?

While you can't always get free stuff where you want, many businesses and government programs offer senior discounts.

For example, the National Park Service offers a senior discount on annual passes. Usually, an Annual Pass costs $80, but the Annual Senior Pass, for Americans aged 62+, is only $20. The Lifetime Senior Pass is $80 for anyone who plans to visit national parks over the next several years.

Want to learn more? You can check our list of popular senior discounts, or our list of discounts available to AARP members.

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Related:

• When Should You Take Social Security?
• Decoding the 4% Rule: How This Retirement Strategy Works
• What Are the Different Medicare Enrollment Periods?

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But cooking at home can become mighty costly, too. Grocery prices keep rising, cooking tools can be expensive, and you can lose some of your savings to spoilage.

So, how can you squeeze more savings out of staying in for dinner?

Today, I'll discuss some tips and tricks you can use to save money when you cook at home. By implementing enough of this advice, you might be able to meaningfully shrink your ingredient and cooking costs while still feeding your family well.

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How to Tighten Your Food Budget

In a 2024 Intuit Credit Karma survey, 27% of respondents who noticed an increase in grocery costs said it caused them to occasionally skip meals.

While it probably goes without saying, I'll say it anyways: You shouldn't skip meals if you can help it at all. So today, we'll go over some ways to keep both your stomach and wallet full.

Many of these tips involve saving money at the grocery store, but there are other ways to stretch your eating dollar. We'll also talk about how to make food last longer, how to utilize the ingredients you already have at home, and more.

Related: 10 Fun Jobs That Pay Well

1. Plan Out Your Meals

Is your current routine to stroll through the grocery aisles, grab anything that looks appealing, then try to cobble together meals with whatever you bought?

You're not alone. In a 2022 OnePoll survey conducted on behalf of Pound of Ground, a frozen meats company, more than a third of respondents (35%) said they don't figure out what to eat for dinner until that day or even just hours before it's time to eat.

Planning out your meals and shopping accordingly can prevent you from buying random ingredients you won't end up using, reducing food waste and thus saving you money. Having a plan also reduces the likelihood you'll toss expensive (and unhealthy) frozen meals into your cart.

2. Use Store + Couponing Apps

I don't know about you, but I'm suffering from app fatigue. I feel like I'm being asked to download a new app almost every day.

But while app culture can be annoying, your grocery store's app (if it has one) is probably one of the best apps you can put on your phone. Because it will almost certainly save you money.

For example: I have the Target Circle app. Using it gives me 5% off of just about everything but gift cards. It also provides varying offers throughout the year; just today, it offered me 15% off my purchase. Kyle Woodley, our Editor-in-Chief, notes that his local grocery store has certain deals where simply scanning your loyalty card isn't enough—you also need to have clipped a coupon in the app ahead of your purchase (or brought a physical version of the coupon with you).

In addition to store-specific apps, you can also use general couponing or cash-back apps. A few of today's highly popular apps that can save you money grocery shopping include Capital One Shopping, Ibotta, and Shopkick.

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

3. Repurpose Leftovers

Most families seem to have at least one family member who refuses to eat leftovers. In fact, in a 2023 OnePoll survey conducted on behalf of HelloFresh, nearly a third of Americans (32%) said they're likely to forget about leftovers if they're out of sight.

I get it—some people don't want to eat the same thing too many times in a row. But with a little creativity, you can repurpose leftovers so that they're unrecognizable from their original form. 

For instance, you can easily transform pizza sauce into pasta sauce, and vice versa. Let's say you made homemade pizza for dinner one night (or you opened a giant container from Costco). You have lots of pizza sauce left over, but you don't want pizza again. If the sauce is too thick at the current consistency, you can blend it with a little water, add some olive oil, crushed tomatoes, and a few spices, and—voilà!—you have pasta sauce.

Related: Consumers Should Avoid These 10 Products at Walmart

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4. Buy Frozen Produce

Frozen produce is often cheaper than buying fresh—but some people worry that by purchasing frozen, they're sacrificing nutrition.

That isn't necessarily true. 

"Frozen vegetables in their natural form—without additives—can be as healthy as fresh vegetables," writes Joanna Foley, RD. "Usually, vegetables are quickly frozen after being harvested, so they keep most of their nutrients."

The same holds true for fruit. In fact, some fruits, when frozen right away, might even retain their nutrients better than their fresh counterparts. 

Moral of the story: You don't need to fear unprocessed frozen fruits and vegetables. The next time they go on sale, you might want to stock up.

Related: 20 Big-Ticket Items Worth Splurging On

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5. Watch Out for Shrinkflation

Thrifty shoppers do their homework to find the best grocery deals. But even if you have the price of every ingredient in a meal memorized, shrinkflation might throw a wrench into your recipe. 

Shrinkflation is when the amount of a product goes down while the price stays the same (or even increases). Shoppers are quick to notice price hikes, but it typically takes a lot more time to realize that a bag of chips or a can of soup is half an ounce smaller. As a result, shrinkflation has become an increasingly popular strategy for food producers looking to expand their profit margins.

So unfortunately, as you shop for groceries, you might need to break out your reading glasses. Check the labels and mind the measurements each time out so you're better equipped to notice if and when your go-to products shrink in the future. (And if they do, and if you're getting less bang for your buck, re-evaluate competing products to ensure you're still making the most budget-friendly decision.)

Related: The Pink Tax: Why It's So Expensive to Be a Woman

6. Grow Your Own Herbs

Fresh herbs at grocery stores can be pricey. Fortunately, most herbs are easy to grow, low-maintenance, and can be grown indoors. (No need to live in a tropical environment!)

If you grow your own herbs at home, you can wait to cut or pluck herbs until right before you use them, reducing your risk of those herbs going bad and being wasted. Plus, that freshness means they're more flavorful; in fact, you might end up using a smaller amount than you would with dried herbs that have started losing potency. 

Besides the financial benefit, fresh herbs are also aesthetically pleasing, smell good, and are delicious.

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7. Get Secondhand Cooking Tools

Food isn't the only cost associated with cooking—you need tools, too. 

Maybe you need kitchen basics such as knives, spatulas, pots, and pans. Or maybe you want more specific appliances—a bread maker to pump out your own raisin wheat loaves, perhaps, or your own waffle iron so you can cut back on visits to Waffle House.

In many cases, you don't need to buy these items new.

If your city has a local Buy Nothing group, join it and keep watch for secondhand cooking tools. You can also check garage sales, thrift stores, and online marketplaces. People routinely go through cooking phases then decide to get rid of barely used cooking equipment. And you can use some of this equipment to further lower your food expenditures, by making cheap crockpot meals, your own bread, and your own frozen fruit smoothies.

But you shouldn't buy everything used. For instance, avoid vintage plastic Tupperware that might have Bisphenol A (BPA) and old nonstick Teflon pans that might have perfluorooctanoic acid (PFOA) in the coating. These chemicals are toxic and are being phased out by many manufacturers.

Related: Do I Need a Financial Advisor? 7 Questions to Ask Yourself

8. Buy Certain Foods in Bulk

Assuming you have the storage space, strategic bulk purchases could save you a lot of money over time. Besides the fact that food is often cheaper in bulk, you can take advantage of sales to double down on the savings. 

Food items that are canned or dried are perfect candidates for bulk purchases as they typically have long shelf lives. But don't buy everything in bulk—a 10-pound bag of fresh avocados won't save you anything if you can only get through a few pounds before they go bad. 

Related: How Much Should I Save Each Month?

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9. Organize Freezer Meal Parties

Some people reduce food waste, save money, and save time by making meals that freeze well. For example, you might buy bulk ingredients to make lasagna, then make four lasagnas, three of which immediately get frozen for future meals. 

But you can up your freezer game even more by organizing freezer meal parties.

These parties put you to work—several people team up to cook, package, and freeze meals. You gain some efficiency because you can make some meals assembly-line style. Doing this can also add variety to your diet as you learn new recipes. And, of course, it can be fun!

Related: U.S. Presidents Ranked by Stock Market Performance

10. Try Meatless Mondays

Meat is often the most expensive part of a meal. A Sous Vide Guy survey had three-fourths of meat eaters say a plant-based diet is a cheaper alternative. 

But you don't need to go completely meatless to enjoy a financial benefit. Some people choose to not eat meat as little as one day a week (say, Mondays) to save money.

If you go meatless, you can still get high-protein meals by using beans, lentils, tofu, peas, and/or eggs in your recipes. 

Many people also consider cutting down on meat consumption (especially red meat) to be a healthy change, and it's a positive for the environment, too.

Related: 7 Best Self-Employed Retirement Plans [2024]

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11. Learn How to Prevent Spoilage

See a great deal on strawberries, but worried they won't last? Learn how to extend the life of all of your favorite foods that spoil quickly. 

Let's take fruit for example. You can extend your fruits' life by waiting to cut them up until right before you eat them. For berries, you can also use lemon juice to stop them from prematurely browning. 

You also might be surprised at just how many foods are freezer-friendly. For example, half-and-half and milk can be kept in the freezer for a few months. You can freeze bread, too; and if the bread is already cut into slices, it's simple to pop them into the toaster to quickly thaw them out.

Related: 10 Items You Should Always Buy Used

12. Check Your Pantry Before Shopping

Have you peered into the depths of your pantry lately? You very likely have boxes and cans of food you've forgotten about.

After a shopping trip, it's easiest to add your new haul in front and forget about the contents in the back, especially when you have deep cabinets. But that makes it more likely that you'll purchase items you already have while the food in your pantry closes in on its expiration date.

Before you buy more groceries, take the time to see what you have hiding. Do you have several boxes of cornbread mix that are about to expire? Prioritize making chili and cornbread. Do you grab an "emergency" frozen pizza during every shopping trip? If there already are several waiting in your freezer and they're not on sale, save money on your next shopping trip and don't buy any more.

Related: 10 Items You Should Always Buy New

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Much like a child has similarities to a parent, Sam's Club is similar to Walmart in that it aims to keep prices low. In that aspect, the apple doesn't fall far from the tree. Indeed, sometimes you can buy products for less at Sam's Club—but not always, as Walmart sometimes can offer better deals.

And if you do find yourself wondering which of the two is a better value, there's a lot more to it than price. Quality of the items matters. So do the other perks your dollars are buying.

Which chain—Walmart or Sam's Club—deserves your dollars more? Today, I'll dig in, including price comparisons on several grocery-store staples, as well as a look at a number of other factors that determine value, regardless of whether they directly or indirectly impact your costs.

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Considerations Besides Price Comparisons

Before we dive into product cost comparisons, I want to start with a number of other considerations that should impact your decision.

Some are directly related to money (one requires a membership, one doesn't), while others are indirectly related to money (number of locations could impact how far you have to drive to get to one, which ultimately requires more fuel which equals an additional cost).

1. Number of Locations

Advantage: Walmart

Why should you care about which store has more locations? As I just mentioned, if you need to drive significantly further for one store instead of the other, you're wasting more money on gas, which ultimately eats into your savings.

As a for-instance, the closest Walmart to me is just 2.7 miles away, but the closest Sam's Club is 32 miles away. The latter would effectively tack the cost of two gallons of gas onto the price of the grocery bill.

Unfortunately, it's likely many people reading this have the same issue. That's because while Walmart has more than 3,500 Supercenters and more than 350 discount stores in the U.S., the country has only 600 Sam's Club locations. 

Related: 10 Sneaky Grocery Store Scams to Avoid

2. Membership Costs

Advantage: Walmart

Anyone can walk into a Walmart and purchase items, no membership required.

That said, Walmart does have a subscription tier (Walmart+) that is entirely optional and provides a boatload of benefits. Among them:

--Auto care (free flat repair, free road hazard warranty when you buy new tires with installation)

--Burger King savings

--Early access deals

--Free delivery from your store

--Free shipping with no order minimum

--Free online pet care with Pawp

--Member savings on fuel

--Mobile Scan & Go

--Returns from home

--InHome returns pickup

--Streaming services with Paramount+

--Walmart+ travel

--Free pharmacy delivery with no order minimum

As of the time of writing, Walmart+ costs $98/year or $12.95/month (plus applicable taxes).

Walmart also offers an Walmart+ InHome add-on—which allows for orders to be delivered anywhere in your home, whether that's at your doorstep, in your garage, even in your kitchen—for an additional $40/year or $7/monthly (plus applicable tax). The service has a $35 order minimum.

Sam's Club, however, requires shoppers to have a membership just to do your shopping. That said, memberships do come with their share of perks.

The Club tier, currently priced at $50/year, includes the following:

--Instant savings

--Member-only fuel prices

--Scan & Go

--Two membership cards

--Free curbside pickup on orders over $50

--Sam's Club Mastercard

--100% satisfaction guarantee

The Plus tier costs $110/year and includes everything in the Club tier as well as the following:

--2% Sam's Cash Back

--Free Shipping on Orders Over $50

--Free Delivery from Club on Orders Over $50

--Pharmacy Savings

--Optical Savings

--Tire & Battery Center Savings

--Early Shopping Hours

While I have Walmart listed as a winner, that's largely based on the fact that Sam's Club requires a membership, while Sam's Club does not. The comparison is closer to a tie when you consider each membership's benefits—while Sam's Club offers cash back and numerous store savings, Walmart also provides serious value with freebies like flat-tire repairs and streaming TV.

Related: 10 of the Highest-Rated Kirkland Signature Products You Don't Want to Miss

3. Pharmacy Perks

Advantage: Sam's Club

Walmart and Sam's Club typically have in-house pharmacies. Walmart, you can schedule several types of vaccines, refill or transfer prescriptions, and more. You can also get your prescriptions delivered (free with a Walmart+ membership, $9.95 per delivery without).

All Sam's Club members pay $10 or less on more than 600 generics, as well as discounted prices on brand-name medications at both Sam’s Club pharmacies and 62,000 other participating locations. Plus members enjoy $0 prescriptions on up to 10 generic drugs:

--Amlodipine

--Donepezil

--Escitalopram oxalate

--Finasteride

--Lisinopril

--Metformin

--Montelukast

--Pioglitazone

--Sertraline

--Vitamin D

Plus members also receive discounts on many pet prescriptions.

The J.D. Power 2025 U.S. Pharmacy Study ranked Sam's Club the highest among brick-and-mortar mass merchandiser pharmacies … for the 10th year in a row. 

When it comes to pharmacy needs, Sam's Club wins.

Related: Walmart vs. Target: 10 Big-Box Comparisons

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4. Coupons

Advantage: Walmart

Who doesn't love coupons? Well … Sam's Club, apparently. Sam's Club doesn't accept manufacturer coupons, though it does accept vendor checks from products such as Purina, Enfamil or Similac.

Walmart, on the other hand, accepts both traditional paper and internet (print-at-home) manufacturer coupons, though there are some limitations. For instance, Walmart accepts coupons that allow for a set number of cents or dollars off, as well as buy one get one free (BOGO) coupons, but it won't accept BOGO coupons with a set percentage. 

If you love couponing, Walmart is easily the winner here.

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5. Product Variety

Advantage: Walmart

A stock keeping unit (SKU) is a code that a company uses to identify and track a specific product it sells. And the number of SKUs a store carries can indicate both the breadth of the product types it offers, as well as whether you can expect a lot of variety within each product type.

Consider this: Each individual Walmart store carries about 140,000 SKUs on any given day. Online, Walmart carries hundreds of millions of SKUs. A typical Sam's Club, however, carries only 6,000 to 7,000 items.

A walk through both stores easily demonstrates that you can buy many kinds of products that you can't in Sam's Club. And even when Sam's Club does carry a type of product, it's likely to only carry one or two brands/varieties, versus many more for Walmart. This is by design—limiting product and brand selection helps Sam's Club and other warehouse-model retailers put leverage on suppliers, emphasize in-house brands, and keep operations simple and more efficient.

Still, if you want variety, Walmart is the winner by a landslide.

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

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Walmart + Sam's Club Price Comparisons

Now that we have established some of the other important considerations when it comes to choosing between Walmart and Sam's Club, let's get down to comparing prices. Today, I'm going to evaluate a few of the most basic supermarket staples. These items include:

--Milk

--Eggs

--Bread

--Fruits

--Vegetables

Note that pricing can change at any time. These are the prices as of the time of writing.

1. Milk

Advantage: Walmart

Walmart's Great Value Whole Vitamin D Milk currently costs $2.56 per gallon. Sam's Club Member's Mark Whole Vitamin D Milk is priced at $3.18 per gallon. In terms of price, Walmart is the clear winner.

But it's at least worth noting that Sam's Club milk has a higher customer satisfaction rating. Walmart's milk receives a star rating of 4.2 out of 5, while Sam's Club's milk enjoys a rating of 4.7 stars.

Related: 10 Senior Discounts for Restaurants + Grocery Stores [2025]

2. Eggs

Advantage: Walmart

You can't make an omelet without breaking some eggs, but you can't (or at least shouldn't) break some eggs without buying them first.

Walmart's Great Value Cage Free Large White Eggs are sold in packs of a dozen each. The current price is $2.72, which comes to 22.7¢ per egg. Sam's Club Member's Mark Cage Free Large White Eggs are sold in packs of two dozen. One pack costs $6.42, which is about 26.8¢ per egg. Again, on price, Walmart wins.

But also again, Sam's Club's eggs enjoy a higher rating. Walmart's eggs are rated at 4.1 stars, while Sam's Club's eggs are rated at 4.7.

Related: Cooking Costs Heating Up? Here's How to Save Money Cooking

3. Bread

Advantage: Sam's Club

Both stores sell a variety of breads, so I'm comparing the exact type of bread to provide the most direct comparison.

Walmart and Sam's Club sell 20-ounce loaves of Bimbo Soft White Bread. At Walmart, you buy one loaf at a time at $1.98 each. Sam's Club requires you to buy two loaves at a time, but at $3.37 total, or $1.69 per loaf. Sam's Club wins on price comparison.

Interestingly, Sam's Club members rate the bread at 4.6 stars, while Walmart members rate it at 4.2 stars … despite the fact that it's the exact same bread. (For what it's worth, some of the negative reviews you see on Walmart's site complain about freshness, while others complain about the bread being squished.)

Related: 10 Items You Should Never Buy at Aldi

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4. Fruit

Advantage: Sam's Club

I chose bananas for our fruit comparison. At Walmart, you can buy bananas individually, or you can buy them in bunches priced by weight. A bunch of Marketside Fresh Organic Bananas at Walmart costs 78¢ per pound. At Sam's Club, Organic Bananas are sold in 3-pound bunches for $1.97, which comes out to about 66¢ per pound.

Sam's Club doesn't just win on price—they also have a drastic rating advantage. Walmart's organic bananas receive a paltry 2.8 star rating, while Sam's Club's bananas boast 4.6 stars.

Related: Consumers Should Avoid These 10 Products at Walmart

5. Potatoes

Advantage: Sam's Club

Our vegetable comparison centers on potatoes. Walmart sells 5-pound bags of fresh whole russet potatoes for $3.64, or 73¢ per pound. At Sam's Club, russet potatoes are sold in 10-pound bags for $5.96, which comes out to around 60¢ per pound—significantly cheaper than Walmart.

Sam's Club's potatoes also win on ratings; Walmart's potatoes currently garner 3.6 stars versus 4.6 for the warehouse chain's potatoes.

Related: 10 Best Trader Joe's Shopping Tips

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Which Retailer Deserves Your Dollars?

As with all things, the answer isn't black-and-white—it's fair to say both chains are deserving of your dollars, but which one is more so depends on your preferences and needs.

Walmart likely wins out for the majority of shoppers. It doesn't require a cent in membership costs, and you can use coupons to bring down their already low prices. Its massive footprint means you likely have a Walmart within a reasonable distance. And with its extremely wide variety of products, Walmart is as close to a one-stop shop as you can get.

But if you have a Sam's Club anywhere near you, it might be the better option. Many of its goods are cheaper, and its pharmacy benefits are terrific.

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If you have a newborn at home, or you plan to have a baby within the next few years, you could enjoy a kickstart of $1,000, courtesy of the Treasury. But because that one-time grant doesn't apply to most children, and because it might not be awarded after a few years, the math behind Trump Accounts looks a lot murkier for many current and would-be parents.

Should you embrace these investment plans for minors and start building their nest eggs with a Trump Account? We'll explore everything you need to know, including eligibility requirements, how these accounts operate, their advantages, their drawbacks, and whether it makes sense to open one.

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What Is a Trump Account?

A Trump account (also known as the more politically neutral 530A account) is a tax-deferred account where savings can grow on a tax-free basis on behalf of a child. 

Funds generally can't be withdrawn until the child reaches age 18, with only a few exceptions. Once the child reaches age 18, standard IRA rules for withdrawals will apply—and those rules include carve-outs for larger pre-retirement expenses such as paying for an education or purchasing a first home.

These accounts also allow for a temporary one-time $1,000 grant for children born between 2025 and 2028.

Who Is Eligible for Trump Accounts?

Trump Accounts are designed for children under age 18. Parents are expected to be able to open 530A accounts starting in early to mid-2026, then contribute starting July 4, 2026.

For an account to be eligible for the one-time $1,000 grant from the government, the child must have been born between Jan. 1, 2025, and Dec. 31, 2028. The child must also be a U.S. citizen with a Social Security number.

How Do Trump Accounts Work?

While Trump Accounts are extremely similar to IRAs (and indeed act just like IRAs once a child becomes age 18), they have certain rules that don't apply to comparable accounts.

The opening of a 530A account kicks off a "growth period" that lasts until Jan. 1 of the calendar year in which the account beneficiary turns 18. For instance, a child born Nov. 5, 2025, would turn 18 on Nov. 5, 2043; thus, the last day of the growth period would be Dec. 31, 2042.

Five types of contributions can be made during this period:

1. The pilot program contribution of $1,000 from the U.S. Treasury
2. Contributions from other sources, such as parents, the beneficiary, or others
3. Qualified general contributions (by states or political subdivisions), the U.S., D.C., and more.
4. Qualified rollover contributions
5. Employer contributions, which aren't includable in the gross income of the employee (limited to $2,500; subject to cost-of-living adjustments after 2027)

There is no annual contribution limit for pilot program contributions, qualified general contributions, or qualified rollover contributions. But combined employer and "other sources" contributions are capped at $5,000 annually, with that number subject to cost-of-living adjustments after 2027. Trustees must collect and report the amount and source of all contributions.

And importantly, no one can make any type of contribution to these accounts until July 4, 2026.

Also during this growth period, the following special rules apply:

• Contributions are made on a post-tax basis; thus, they are not deductible.
• Trump Accounts' contribution limit is separate from other IRAs.
• Funds in the account can be invested solely in eligible investments (generally mutual funds and exchange-traded funds that track an index of primarily U.S. companies).
• The account generally is not allowed to make distributions (exceptions apply).
• Account trustees have similar, but different, reporting requirements from trustees of other IRAs.

While 530A accounts generally don't allow withdrawals until Jan. 1 of the calendar year in which the child turns 18 years old, as mentioned before, there are a few exceptions: 1.) qualified rollover contributions, 2.) qualified ABLE rollover contributions, 3.) distributions of excess contributions, and 4.) distributions upon death of the account beneficiary.

Once the growth period ends, most of these special rules no longer apply. Instead, the accounts effectively become traditional IRAs and operate under those rules—including IRA contribution limits, allowable investments, and the 10% penalty for early withdrawals.

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Benefits of Trump Accounts

The most noteworthy benefit of the 530A account is the free $1,000 if you have a qualifying newborn between 2025 and 2028.

Also helpful is that, if you can convince your employer to contribute to the account, those contributions wouldn't count as part of your income.

Unlike IRAs, which require the account owner to have includible compensation (basically workers can't contribute more to an IRA than they earned that year), Trump Accounts don't require the beneficiary to have includible compensation.

I'd add that opening one of these accounts could be the start of a healthy habit of investing for your kids … but in truth, you can get that same benefit by opening virtually any other type of account, whether that's a 529 college fund or a custodial brokerage account.

Related: 5 Best Paid Surveys for Kids and Teens [Online Surveys]

Downsides to Trump Accounts

Unfortunately, Trump Accounts come up short compared to most other tax-advantaged accounts.

530A accounts start out more similarly to Roth IRAs—most contributions are after-tax, but contributions can grow tax-free in the account. But they're far more restrictive. Funds can't be accessed until age 18. Once the child does reach age 18, the account instead resembles a traditional IRA in that, yes, you can withdraw tax- and penalty-free, but generally only under traditional IRA exceptions (some educational costs, first-time home purchase, withdrawals after age 59 ½). 

Parents looking to save for their children's education will enjoy much better flexibility and tax benefits through a 529 plan. While custodial brokerage accounts will be more complex from a tax perspective, there are benefits—account income is considered the child's and thus generally taxed at a much lower rate—and they're far more flexible than standard retirement accounts. 

And if you did plan on investing in retirement accounts for your child while acknowledging the possibility they might make withdrawals that fall under IRA exceptions, Roth IRAs would generally be more advantageous than 530A accounts. (So too would traditional IRAs, but for kids, Roth IRAs are generally more beneficial from a tax perspective.)

On top of all this, investment choices are much more limited than you'd find in an IRA or custodial brokerage account. That's a wash with 529s, though, which also tend to have minimal investment options.

Lastly, some important details have yet to be revealed—most notably, which financial institutions will serve as initial trustees of the Trump Accounts. (Said differently: They haven't announced which brokers and/or banks will be able to oversee these accounts.)

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

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Should You Open a Trump Account for Your Kid?

If you have a newborn, you should absolutely open a Trump Account—the free $1,000 alone makes it worth it. With no other investments, that $1,000, given 30 years at a 7% average annual growth rate, would balloon to $8,117.

If you managed to get your employer to contribute up to the $2,500 limit for just the first year, for a $3,500 balance, that same 30 years/7% would add up to $28,408.

Past that, though, Trump Accounts fall flat.

"Trump Accounts do not offer much of an additional incentive to save," says the Tax Foundation, a nonpartisan think tank. "Rather, the main benefit is in the form of the $1,000 initial deposit from the federal government and whatever employers choose to contribute (perhaps Trump Accounts might encourage young beneficiaries to engage in more money management than the otherwise would if not saving per se)."

A 529 account, Education Savings Account (ESA), or custodial account are all great options. If your child earns income, a Roth IRA is an excellent investment tool. 

Related: How Much to Save for Your Kid's College [3 Tax-Smart Options]

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How Do I Open a Trump Account for My Child?

Authorized individuals can establish a Trump account by making the election on IRS Form 4547, Trump Account Election(s). Alternatively, you can use an online tool or application on trumpaccounts.gov (application not yet live, but you can sign up for email updates).

The account may be established at the same time an election is made to get a pilot program contribution, or at any other time before Jan. 1 of the calendar year in which the beneficiary attains the age of 18.

Related: 10 Best Banking Apps for Kids & Teens [Kid + Teen Banking]

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Sometimes, older technology sits in the shadows while modern advances take center stage … only for that vintage tech to return and steal the show. And other times, people assume a gadget is long gone, but it only really disappeared from their own lives.

In short: New technologies often kill their predecessors, but not always.

Today, we're going to take a nostalgic look at technology that many of us loved years ago but have since left for dead—only to discover that it's still alive, in use, and in some cases, even returning to popularity.

Outdated Tech Still Used Today

People can really start feeling their age when they discover what was once cutting-edge is now considered obsolete technology. 

But much like Michael Myers in the Halloween franchise, some types of technology simply refuse to die. 

Before you toss out some of the old tech that's buried deep in the depths of your closet, you might want to see whether it's enjoying a resurgence. Let's look at some technology that's assumed obsolete but is actually still around (and in a few cases, even thriving).

1. Compact Discs (CDs)

Cassette tapes were replaced with compact discs (CDs). Then, CDs were replaced by iPods and streaming music … right?

Well, sort of.

From a computing standpoint, CDs still seem to be going the way of the dodo. Apple's last computer to have an optical drive for playing CDs (and DVDs) was the 2012 13-inch MacBook Pro, which the company stopped selling in 2016. 

Apple even has its own definition for obsolete: 

"Products are considered obsolete when Apple stopped distributing them for sale more than 7 years ago. … Apple discontinues all hardware service for obsolete products, and service providers cannot order parts for obsolete products."

But music CDs are putting up some fight. In 2021, CD sales had risen for the first time in nearly two decades. After dropping in 2022, revenues from CDs rebounded in 2023 and rose again in 2024, albeit not back to 2021 levels. Comparatively, digital download (not streaming) revenues have been declining for 11 consecutive years.

The question is: Why?

And there are several reasons. People are increasingly fatigued by subscription services, which do give you more selection for your money but also ensure you always rent (and never own) your media. Some people believe CDs have a superior sound quality compared to streaming. And in a time when so much is digital, tangible objects can actually be comforting.

CDs' future growth will be limited by people's ability to easily listen to them, but the technology is far from dead.

Related: 10 High-Paying Jobs You Can Get With 'Vanity Degrees'

2. Vinyl

Vinyl records are enjoying even more of a renaissance.

Combined sales for LP/EP and vinyl singles bottomed out at $25.6 million in 2006, but have improved every year since then, including 7% growth in 2024 to $1.5 billion. In fact, vinyl has actually outsold CDs for the past five years.

Die-hard vinyl fans will insist vinyl sounds even better than CDs. Some enjoy the hunt for rare records at thrift stores or record shops. Highly collectible records hold monetary value, and you can't put a price tag on nostalgia. Popular modern artists such as Taylor Swift are helping vinyl's resurgence by making their new music available via records, too.

Related: 14 Items to Buy in Bulk + 7 You NEVER Should

3. Pagers

I know! I was shocked, too!

For those of you who don't know what a pager is, here's a quick explanation. A pager is a small device that simply receives messages. A person will send you said message using either a phone or email, and that message is forwarded to the pager, which notifies the user via a beep or vibration. The person then knows to call or otherwise respond to the sender.

Pagers peaked in the 1980s and early '90s, but mobile phones largely replaced them.

In fact, the idea of paging a friend might sound absurd today, but they're still widely used—within the health care and emergency services industries. They're a simple and affordable way to alert medical personnel, and for that particular use, the lack of other distracting features is actually a perk.

Besides the medical industry, pagers can also be popular within hospitality and event management industries. Some parents use them to contact their children. Additionally, pagers don't rely on cell service, so they can be useful for emergency purposes in areas where cellular coverage isn't reliable.

They'll never again be as popular as smartphones, but pager demand is increasing. Cognitive Market Research states that the global pager market was $1.6 billion in 2023, and it expects that market to grow by 5.9% annually, on average, through 2030.

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

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4. Fax Machines

As one Gen Zer told the New York Post, "If you told me to fax three documents, I would have to Google it. I didn't even know people were still faxing." 

Sorry Gen Z, but fax machines aren't completely disappearing just yet. 

You might not use them in your office, but many health care providers still exchange medical information via fax machine—as recently as 2021, 70% of those offices were still using faxes, says Bloomberg Law. 

Faxing is also popular in finance, legal, and even government agencies, as documents can be transmitted securely with end-to-end encryption.

Related: What Is the 90/90 Minimalism Rule?

5. Printers

Paper jam. Low ink. PC load letter. 

These and other errors are why printers, at least in my humble opinion, are among the most frustrating pieces of technology. Anyone who has owned a printer has likely pondered why being low in yellow ink means you can't print a black-and-white document. Sometimes, printers are unresponsive for seemingly no reason. And when you restart them, they insist on wasting your ink on yet another alignment test page.

Yet, despite being almost hostile toward users, old-school printers are still alive and well. Printer sales are declining, sure, but it's still a massive industry—market researcher International Data Corp. estimates that the U.S. home and office market for printers was still more than $10 billion as of 2023, with unit sales in the millions.

Digital documents aren't always accessible. Health care providers still heavily rely on printers, as they collect a lot of patient information on paper. The legal system also heavily uses printers for evidence collection, contracts, court documents, and more. Marketing materials, such as brochures, still require printers, too. 

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6. Feature Phones / Dumbphones

Feature phones mimic the predecessors to the modern smartphone—rather than a big touchscreen, these phones have buttons, a regular screen, and (ironically) far fewer features. And because they're not smartphones, they've been labeled dumbphones.

But feature phones still have plenty of appeal.

Many parents want a way to stay in touch with their children without giving them unfettered access to the Internet. Sure, there are parental controls, but some kids are tech-savvy enough to work around those. On the other end of the spectrum, some older adults have no interest in learning all the ins and outs of fancy phones.

People of any age may worry about their smartphones listening to their conversations and tracking their locations. This isn't unwarranted paranoia. Recently, Apple settled a class action lawsuit about Siri eavesdropping on iPhone users and agreed to pay $95 million. 

Others seek ways to lessen their overall screen time. According to 2022 data published by the Pew Research Center, 97% of teenagers say they use the internet daily and 46% say they are online "almost constantly." 

Plus, feature phones are far more affordable than smartphones.

Statista Market Insights projects that feature phone revenue will continue to decline over the next few years, but they still expect 2025 revenues to top $10 billion in 2025. Meanwhile, Goldstein Market Intelligence actually expects feature phone demand to grow between 2024 and 2026.

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

7. Wired Headphones

I was thrilled when AirPods came out because wired headphones were always a hassle for me. I would knock them out of my ears when fixing my hair or making expressive hand motions. 

But perhaps everyone else isn't so spastic, because wired headphones are far from dead—they're alive and growing!

The wired headphones segment is expected to grow by 13.4% annually through 2030, according to estimates provided in the Smart Headphones - Global Strategic Business Report.

But why would people prefer something seemingly less convenient? 

To start, they're typically more affordable than their wireless counterparts. As of this writing, Apple's AirPods 4 cost $129, or $179 if you want active noise cancellation, and their AirPods Pro 2 cost $249. Comparatively, the basic wired Apple EarPods cost all of $19. If you're on a tight budget (and many people are), the financially responsible decision is obvious.

Plus, some people have connectivity issues with wireless earbuds and want to worry about Bluetooth. Wireless earbuds must be charged; wired headphones don't.

Don't underestimate nostalgia or trendiness either. Many younger adults consider wired headphones vintage and cool. They have become a fashion accessory that sets people apart in a sea of Airpod wearers. In fact, in fall 2024, luxury brand Chanel created a set of wired headphones on a necklace that is fully functional.

Related: 7 Car Maintenance Tasks That Save You Money

8. Analog Watches

Analog watches are simply a traditional watch with mechanical hands. They stand in contrast with digital watches (basic electronic display) and smartwatches (limited smartphone on your wrist).

Younger generations might be less and less familiar with analog displays, but analog watches are still quite popular—specifically in the luxury market. 

A smartwatch is simply more functional, so watches' selling point has largely shifted to one of aesthetics and status. When you see a celebrity wearing a watch on a red carpet, they're typically wearing a Cartier, Rolex, or other expensive analog watch.

That said, analog watches probably have smartwatches beat on longevity—a properly maintained analog watch can last for decades, even centuries. Even if a smartwatch lasts a few years, you'll always have to worry about whether the operating system will continue to support it.

Related: Career Compensation Is More Than Salary: 10 Other Financial Perks to Consider

9. Floppy Disks

Floppy disks—so named for their round, flexible plastic interior, not the harder outer shells we're all familiar with seeing—are used for data and program transfers between computers. 

Long gone are the days when floppy disks were common in the average household, but this 1970s technology is indeed alive … largely thanks to the transportation industry.

Airplanes such as the Boeing 747 still receive some software updates via 3.5-inch floppy disks. San Francisco's subway system relies on them as well. And outside of the transportation industry, some medical equipment and embroidery machines use floppy disks. The occasional musician, vintage technology collector, or artist covets them too. 

It might be a stretch to say floppy disks are thriving, but they're still ingrained in a few parts of modern industry.

Related: The Pink Tax: Why It's So Expensive to Be a Woman

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10. Instant Cameras

Photography on a smartphone is easy and convenient, and it increasingly produces outstanding results. In addition to the fact that smartphone cameras keep getting better, software lets even tech novices quickly edit imperfections out of any image.

But nostalgia for the authenticity of unedited photos, and the desire to physically hold memories in one's hands, are helping physical photography make a comeback.

And that's a boon for instant cameras.

I'm not talking about vintage products. Popular retailers such as Urban Outfitters and Target are selling instant cameras once more.

The global instant print camera sales market was $1.6 billion in 2024, and it's expected to reach nearly $3 billion by 2032, with North America at the forefront of this push. 

So, break out the old physical photo albums and practice taking selfies with the other side of your smartphone.

Related: Walmart vs. Target: 10 Big-Box Price Comparisons

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But if you use either of these stores exclusively, you won't always land the best deals.

Spoiler alert: Sometimes, Walmart beats Target's prices, and sometimes, it's the other way around. So if you're open to shopping at both, you can optimize your savings by knowing where one tends to top the other.

Today, I'll go over some price comparisons between Walmart and Target. While costs aren't always going to be your only consideration, they're definitely the most important factor for many shoppers.

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Where Walmart Has Better Prices Than Target

Walmart's current slogan tells shoppers to "Save Money. Live Better." It's catchy, and in a lot of cases, it's not wrong—many of Walmart's products will indeed help you save money!

Check out some of the products that are cheaper at Walmart than Target.

Note: All prices are as of the original publication date. Prices may change in the future.

1. Frozen Pizza

Generally, Walmart has lower frozen pizza prices than Target. For instance, let's take a look at Digiorno Four Cheese Rising Crust 24.6 oz pizza. At Walmart, that pizza costs $5.97. At Target, the regular price is $6.49 for the exact same pizza. 

Here's another example. Jack's Original Thin Crust Pepperoni pizza at Walmart costs $3.86. Meanwhile, each of those pizzas costs $3.99 at Target. (Sure, it's only a slight difference, but the more you stock up on emergency frozen pizzas, the more the difference matters!)

2. Birthday Cards

Is a loved one's birthday coming up? Assuming you have the necessary supplies, making a card is the most affordable option. But, sometimes, you're in a rush. 

If you need to make a quick stop on the way to a party to pick up a card, you'll find cheaper birthday cards at Walmart than you will at Target. 

Birthday cards at Target frequently cost around $4.99. At Walmart, they range substantially depending on the card, but while you can find a few that are more expensive than Target's cards, you'll more often than not find them cheaper—and you can find a great many options for less than $2.

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

3. Chips

If you're hosting an event and need to stock up on chips, Walmart will save you more money on popular chip brands. 

For example, a 9.25-ounce bag of Doritos Nacho Cheese chips currently costs $4.48 at Walmart. The same-sized bag at Target would cost $5.19.

Prefer to get a bag of Party Size Ruffles Original chips for dipping in a tasty French onion dip? That bag of chips is priced at $5.94 at Walmart. At Target, you would have to shell out $6.69 for it. (By the way, a 16-ounce container of Dean's French onion dip costs about 15¢ more at Target, too!)

Related: Cooking Costs Heating Up? Here's How to Save Money Cooking

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4. Private-Label Milk

Whether you prefer whole, 1% low-fat, or something in between, Walmart is likely going to be the cheaper place to buy private-label milk. As a for instance, right now, a gallon of Great Value milk is selling for $2.66. Target's Good & Gather brand milks have varying prices, depending on the type. For example, a gallon of Vitamin D Whole Milk costs $3.79, while 2% Reduced Fat Milk only costs $3.39. 

No matter which kind, though, Walmart wins in the price department. 

But Target's milk has notably higher ratings. For example, Walmart's generic Whole Vitamin D milk has an average rating of 2.7 stars out of a possible five. Target's Vitamin D Whole milk boasts a 4.7 rating. 

The taste might not matter if you're using milk for baking, but if you love it for the taste, it might make sense to ante up for Target's moo juice.

Related: What Is the 90/90 Minimalism Rule?

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5. Name-Brand Garbage Bags

Walmart and Target both sell a variety of name-brand trash bags. Unfortunately, both stores sell them in different quantities, so you can't just focus on the overall price—you need to know the cost per bag. 

Looking at this number, Walmart tends to be the price winner. 

A box of Glad ForceFlex 30-gallon large trash bags costs $13.78 at Walmart and comes with 40 bags. That puts the per-bag cost at about 34.5¢. Comparatively, Target sells the same type of bags for $13.29, but the box only has 34 bags, putting the per-bag price at about 39¢. 

Hefty-brand bags are a bit cheaper at Walmart too. Hefty Strong 30G Multipurpose trash bags cost $12.98 for a 40-count box at Walmart. That comes out to about 32.5¢ per bag. Target sells 36 bags to a box for $12.29, which is about 34¢ each.

Related: 10 Best Trader Joe's Shopping Tips

Where Target Has Better Prices Than Walmart

Target's current slogan encourages customers to "Expect More. Pay Less." Target has indeed built its reputation by trying to be a higher-quality version of its big-box rival, but in some cases, you do pay less at Target than you would at Walmart for the same items.

Let's take a peek at some of the shopping situations where you save money by shopping at Target.

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1. Shredded Cheese

Getting ready for Taco Tuesday? Then you need to load up on shredded cheese.

No matter what flavor you seek, an 8-ounce bag of shredded cheese from Target is cheaper than it is at Walmart. Currently, an 8-ounce bag of shredded cheese at Walmart costs $2.24, while the same amount will cost you just $1.99 at Target.

In addition to being more affordable, Target's shredded cheese also has better ratings. The obvious choice (in my opinion) for taco cheese from Walmart is the Fiesta Blend, which has an average rating of 3.3 out of 5 stars. The Target equivalent would be the Mexican-Style shredded cheese that has an impressive 4.7 average rating.

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

2. LEGO Creator 3in1 Toys

Full disclosure: I didn't look through every single LEGO Creator 3in1 toy on both websites (there are a lot). But a number of comparisons showed the prices for the same sets were largely the same or cheaper at Target.

For instance, the LEGO Creator 3in1 Deep Sea Creatures Sea Animal Toy Building Kit at Walmart currently costs $21.64, while the same set at Target is priced at only $12.99. And Target shoppers can snag the LEGO Creator 3in1 Mighty Dinosaurs Model Building Set for just $11.99, but at Walmart, that same toy rings up at $15.96.

Related: How to Save Money on Groceries: 12 Commonsense Tips

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3. Fresh Berries

Target beats out Walmart both in terms of fresh berry prices and quality. 

Currently, fresh strawberries are on sale at my Target, but even if they weren't, they would be cheaper than Walmart. One pound of strawberries at Target, which has a 4.2 average rating, costs $2.79; meanwhile, a pound of strawberries at Walmart costs $2.82 but averages just 1.5 stars.

If you prefer blueberries, a pint of organic blueberries at the Target near me costs $3.99 and has an average star rating of 4.6. Comparatively, organic blueberries at Walmart currently cost more ($4.96) but have a drastically lower average star rating (2.1).

Related: 20 Expenses to Cut From Your Budget in 2025

4. Batteries

Is your remote out of batteries? You may want to run over to Target, rather than Walmart. A 24-pack of Duracell Coppertop AA batteries is priced at $16.49 at Target. A 24-pack of the same batteries costs $20.78 at Walmart. 

Energizer batteries are cheaper at Target as well. A 24-pack of Energizer Max AA alkaline batteries is marked as $15.99 at Target. Buying those same batteries at Walmart would put you out $17.98.

Related: 14 Items to Buy in Bulk + 7 You NEVER Should

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5. Oscar Mayer Bacon

If bacon is a breakfast staple in your household, you may want to stock up at Target instead of Walmart. 

A 16-ounce package of Oscar Mayer Hardwood Smoked Bacon costs $6.99 at Target. For the same amount of that brand's hardwood smoked bacon, you would have to pay $7.48 at Walmart. It's the same deal for 16 ounces of Oscar Mayer Thick Cut Bacon ($6.99 at Target and $7.48 at Walmart).

Are those portions too small for your family's appetite? A 22-ounce package of the Original Hardwood Smoked bacon is $9.39 at Target and $9.48 at Walmart.

Related: Consumers Should Avoid These 10 Products at Walmart

Other Shopping Considerations

While product prices may be many people's main factor when choosing a store, it shouldn't be the only consideration. Keep the additional following factors in mind when deciding if you should head over to Target or Walmart:

-- Product quality: When prices are similar, compare on quality. If you have to toss half of your fresh produce because it's rotten, you're literally throwing away your savings.

-- Location: Let's say the store down the street is slightly more expensive than another store 25 minutes away. What you save in gas could very well make up the difference.

-- Ambiance: Is one store cleaner? Better lit? Has superior customer service? These things aren't the bottom line, but they matter psychologically.

-- Memberships: Do you have a free Target Circle membership? Are you paying for a Walmart+ membership? Price comparisons change after you add in membership discounts.

At the end of the day, no store is perfect. Do your shopping at whatever store makes more sense for you.

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But if we want a little inner peace, some of that stuff needs to find its way out of our homes.

Whether you prefer to get rid of things little by little or conduct sweeping cleanup operations, paring down some of your accumulated things can be healthy. Tidying up can simplify making decisions, reduce stress, and even make your living space look better. And at the very least, giving a little junk the heave-ho will help you avoid crossing into hoarder territory.

Today, I'll explain the 90/90 rule (or the 90/90 minimalist rule) for decluttering so you can discover whether this neatening strategy is a good fit for you. I'll also introduce you to a few other minimalist strategies so you have a few options in your playbook to beat back the clutter.

Why Decluttering Is Important

Before we dive specifically into the 90/90 minimalist rule, let's briefly review the importance of cutting down on clutter. 

You don't need to be a hoarder to benefit from getting rid of excess items you don't need. A few reasons you should consider decluttering include:

-- Easier choices. Let's say you're decluttering your closet. In many cases, you probably own clothes that you never wear, but that you spend time thinking about wearing when you're picking out an outfit. Getting rid of those clothes cuts down that thought process. And in general, it's much easier to choose from among, say, 20 dress shirts than 40.

-- Simpler to find items. The more of any object you have, the harder it is to find what you need. Going back to the close, it's hard to look through clothes that are packed together like sardines. Or think about your kitchen: How can you find your cheese grater if it's hiding under the potato peeler and garlic press you never use?

-- Improved appearance. You can highlight your favorite decorative items, rather than overwhelm the eyes.

-- Easier to clean. Dust doesn't discriminate. It lands everywhere. So if you have fewer objects, you have fewer landing spots for dust—and thus a quicker dusting process.

-- Peace of mind. Clutter can be stressful. Simplicity can be soothing.

If you think decluttering would do some good for you, let's explore how the 90/90 minimalist rule might be a useful method.

What Is the 90/90 Rule?

The 90/90 rule was developed by Joshua Fields Millburn and Ryan Nicodemus of The Minimalists podcast. And the rule is a simple one. 

Just ask yourself the following two questions as you evaluate each item during the decluttering process:

1. Have I used this item in the last 90 days?

2. Will I use it in the next 90 days?

If you answer "no" to both questions, you should ditch the item. (However, Millburn and Ryan Nicodemus do allow an exception for seasonal items; you don't have to throw out your fake Christmas tree just because it's August and you haven't used it since December.)

The creators acknowledge that 90 isn't a concrete number. You can ask the questions, but use 120 days, 180 days, or any other reasonable time period. The point is to prevent you from clutching on to items you haven't used recently and have no intention of using soon. 

Related: 14 Items to Buy in Bulk + 7 You NEVER Should

Why People Like the 90/90 Rule

The 90/90 rule is easy to understand and implement, and it values the logical over the emotional.

Sure, you might not remember exactly when you last used an object. But if you can't bring up any recent memories of using it, there is a good chance that it's been more than three months.

Contrast this rule to the popular KonMari Method, which asks you to pick up items and ask yourself, "Does this spark joy?" Although it's a yes-or-no query, whether an item "sparks joy" is an emotional question—subjective and sometimes difficult to determine. The answer might vary depending on your mood at that moment.

Related: Want to Become More Minimalist? Start by Tossing Out These Items

Potential Downfalls of the 90/90 Rule

The 90/90 minimalism rule might be too low of a number for some situations. 

For example, I live in Wisconsin, which has four distinct seasons—including a long winter. So let's say I was trying to use this method to clean out my closet in mid-January and I started pulling out sundresses.  There is a decent chance that I wouldn't have worn any of them within the last 90 days (mid-October) and that I wouldn't be wearing them in the next 90 days (mid-April). But once summer eventually arrives, would I wear them often? Definitely. 

The obvious solution is to change 90 to another number. But sometimes people lock themselves into the letter of the law ("it must be 90 days!") rather than the spirit.

Another issue? It doesn't account for expensive, useful items you use infrequently. For instance, you might have tools in your garage that you don't use often, but you would be happy to have them if a repair needed to be done. 

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

What Are Other Popular Decluttering Methods?

Let's discuss a few other methods people try when they want to reduce the amount of stuff in their homes. 

After all, while the 90/90 rule has its upsides, there is no one-size-fits-all decluttering method—and one of these other strategies might be a better match for you.

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KonMari Method

I briefly mentioned the KonMari Method, but let's dive in a little deeper. 

This method is named after its creator, Marie Kondo. The strategy focuses on decluttering by category (clothes, books, etc.), rather than location. It encourages people to keep objects that give them joy and discard those that don't.

It involves six basic rules:

1. Commit yourself to tidying up.

2. Imagine your ideal lifestyle.

3. Finish discarding first.

4. Tidy by category, not by location.

5. Follow the right order.

6. Ask yourself if it sparks joy.

This is meant to be a continual process of tidying, rather than something you simply do on occasion.  Similarly to how people talk about adapting new diets or workout routines, this isn't meant to be an action you take, but rather a lifestyle change. 

You don't want to clean out a closet just for it to be filled with excess clothing again later. You want a life in which joyless items don't exist and everything remains tidy.

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SIMPLE Method

The SIMPLE Method, developed by professional organizer Kathy Jenkins, is useful for spaces such as refrigerators, pantries, or junk drawers. SIMPLE is an anagram for the following:

-- S: Sort like with like.

-- I: Identify what to keep.

-- M: Make a home for it.

-- P: Put it in containers.

-- L: Label it.

-- E: Establish a routine. 

The SIMPLE method is mostly … well, simple. Just follow the steps. 

That said, you're encouraged to run through this process quickly and not dwell too long on any individual item. But while it might be easy to toss useless objects from a junk drawer, this strategy might be difficult to pull off when approaching sentimental items.

Related: Here's How Much Gen-Xers Have Saved for Retirement On Average. The Number Might Surprise You

The 20/20 Rule

The 20/20 Rule is another method created by the cohosts of The Minimalists podcast. 

This rule states that you should get rid of any "just in case" objects that you could replace for under $20 in fewer than 20 minutes from your current location. The creators say "this theory likely work 99% of the time for 99% of all items and 99% of all people."

One of the great mysteries of the world is what happens to bobby pins. Sometimes, I'm convinced my hair has miraculously eaten some of the bobby pins. Sometimes, I think they've jumped from my head to live in the couch cushions for a while.

But let's pretend they didn't disappear and I suddenly found myself with an overabundance of bobby pins I might never need. This rule would encourage me to toss them even if I wanted to hold on to them "just in case" they were needed.

The downside to this rule, though, is it remains financially wasteful. Yes, you might be able to buy a number of things for less than $20 in a pinch. But if you throw out lots of objects like this, then need to replace them, that's a lot of unnecessary expenditures in the name of being tidy.

Related: 10 Cheapest Places to Buy a House

So, Should I Use the 90/90 Rule for Decluttering?

I can't say whether the 90/90 rule will work specifically for you, but I can say it's a logical, effective decluttering method.

If you do try it out, make sure you adjust it when necessary. Cleaning out the fridge? Expired items should be tossed even if they haven't reached 90 days. Live in a climate with similar weather year-round? This system could help you clean out your closet. 

And remember: You can ultimately quit it and pick a different tidying strategy whenever you want.

You can combine this rule with others as well. For instance, you might wear a sweater frequently, but always think you look terrible in it. Ditch that sweater that isn't bringing you joy. Love your old wedding veil? You might have no reason to wear it soon, but go ahead and keep it if you're feeling sentimental. Have you worn that Halloween headband recently but don't anticipate wearing it soon? It only cost you $5 from the nearby Target, so you could easily buy another one if you later want it.

Whether you use this system or another, make sure to audit your household items regularly. Stuff has a way of accumulating, and it can get out of hand if left unchecked. 

Related: Do I Need a Financial Advisor? 7 Questions to Ask Yourself

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As people age, some responsibilities start to fade away. Older adults no longer have young children who require near-constant attention. Many seniors are retired or at least cutting back on work hours. Some people downsize their homes so they no longer have as much yardwork to handle. 

For seniors who want to spend that newfound time traveling, high costs can prove burdensome—in a 2024 AARP survey, 45% of respondents said costs were the biggest travel barrier. But there are several ways to save, including on one of the most expensive components of vacationing: hotel costs.

Today, I'm going to highlight 10 major hotel chains that offer senior discounts. And I'm not just taking the hotels' words for it, either. For each hotel group, I've conducted research to get an idea to see how much seniors can save when they filter for senior discounts, and any hurdles they might come across as they search for a place to stay.

Hotels Where Seniors Save Money

When you think of senior discounts, your mind might go straight to restaurants and stores. It makes sense—those businesses sport senior deals more frequently than many other types of businesses.

But they're not the only types of establishments that reward people of ample age.

Let me introduce you to several hotel brands that offer senior discounts. I'll provide the minimum age to quality, the size of discounts (when explicit and available), where to find the discounts on the hotel's website, any caveats you should know about the program, and more.

1. Marriott International

--Discount available for: Seniors age 62 and up

Marriott International is one of the world's most well-known hoteliers. Its brand umbrella spans more than 30 names, including Ritz-Carlton, Sheraton, Westin, and the namesake Marriott. All told, Marriott International is responsible for some 9,100 properties across 142 countries and territories.

The Marriott Senior Discount Program is available to guests ages 62 and up. Importantly: While the reservation must be booked in the name of the senior, everyone in the room doesn't have to be of qualifying age. Eligible seniors can enjoy the discount for up to two rooms per night. Hotel staff will ask for proof of age eligibility at check-in, and the discounted rate is subject to availability.

If you are accessing Marriott's website via a computer, access the senior discount by going to the Lowest Regular Rate drop-down menu and choose Senior Discount. If you are using the Marriott Bonvoy mobile app, tap within the Special Rates field, check the Senior Discount box, and tap Apply.

Our test example: I looked for a two-night stay at The Westin Dan Diego Gaslamp Quarter. The senior rate (including a $25 destination fee) was $298 per night for a total of $596. Comparatively, the standard rate was $314 per night for a total of $628. The $31 difference represented a 5% discount.

Related: 8 Ways Travel Can Be More Expensive for Senior Citizens

2. Choice Hotels International

--Discount available for: Seniors age 60 and up

Choice Hotels International is another international hotelier chain, this one boasting more than 7,500 hotels across 46 countries and territories. A few of their popular brands include Quality Inn, Radisson, and Country Inn & Suites. 

Choice's hotels are typically considered a budget-friendly option, and seniors can save even more.

Adults age 60 and older can save up to 10% with Choice's senior rates. To find your discounted rates, in the area where you put in your destination and dates, click the Rate section that defaults to Best Available. Select Senior (60+) from the drop-down choices. 

I'll note that Choice's path to getting to the senior rates isn't nearly as intuitive as other hotel chains' websites, so alternatively, you can request the senior rate by booking over the phone. Either way, you might be asked for proof of age when you check in.

Our test example: For select dates at the Rodeway Inn in Jersey City, N.J., the Best Available Rates started at $166 per night. Comparatively, senior pricing started at $157 per night—a roughly 5% discount.

However, in testing out the site, I found that the senior rate isn't always the best rate. For instance, I tested the senior discount at the Cambria Hotel New York - Chelsea for a one-night stay. When I selected Senior (60+) under the rate tab, prices started at $290 per night. However, the Best Available rate (which anyone can use) started at $261 per night—a lower rate than the senior "deal."

So if you're a senior booking at a Choice hotel, don't assume the Senior (60+) rate will be the best rate. Always check both the Best Available and Senior (60+) rate to ensure maximum savings for your stay.

Related: 10 Discounted Memberships + Subscriptions for Seniors

3. Wyndham Hotels & Resorts

--Discount available for: Seniors age 60 and up

Another international hotel parent, Wyndham Hotels & Resorts, is "Making Hotel Travel Possible For All" serving about 135 million global guests every year. It does so through its namesake Wyndham brand, as well as Days Inn, La Quinta, Super 8, Ramada, Travelodge, and more.

Seniors age 60 and up enjoy a discount on participating hotels across several of those brands.

If you're booking online, you'll want to click the "Special Rates" tab and select "Senior." You can also ask for the senior discount over the phone. Be ready to present proof of identification when you check in.

Similar to Choice Hotels, when you select senior rates across Wyndham brands, some of the rates shown might be the same or even higher than normal rates. Fortunately, I was able to find great senior discounts at several Wyndham hotels.

Our test example: I searched for Wyndham hotels in the Washington, D.C., area across several dates. The Wyndham Garden Washington DC Area (technically in Maryland) offered standard rates starting at $139.40 per night, while the senior rate started at only $106.60 per night. That ~$33 difference translates into a 24% reduction in price!

That said, I came across several other area hotels under the Wyndham brand that didn't have discounted rates. So if you're planning a trip to a large city with multiple Wyndham Hotels, I suggest comparing multiple properties' prices both with and without the Senior option selected.

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4. IHG Hotels & Resorts

--Discount available for: Seniors age 62 and up

"We at the hotel, motel, Holiday Inn." –Pitbull

Pitbull has heard of the Holiday Inn. Have you? We're guessing yes—but you might not be aware that it's one of the 19 brands under the IHG Hotels & Resorts umbrella. The company boasts more than 6,000 global destinations across Holiday Inn, InterContinental Hotels & Resorts, Kimpton, Hotel Indigo, Iberostar, and other brands.

You must sign up for the IHG One Rewards program to take advantage of IHG's senior discounts, but there is no fee to join. Past that, you just need to be age 62 or older. And seniors who book at least three days in advance can get even steeper discounts than normal at participating hotels.

When searching for a hotel, under Rate Preference, select Member Senior Discount or Member Senior Advance Purchase Discount, depending on your intended travel dates. 

Our test example: I searched for hotels in Chicago using both Best Available rates and the Member Senior Advance Purchase Discount rate. The vast majority of available hotels had cheaper rates for seniors. Standard rates for my date range at the InterContinental Chicago Magnificent Mile started at $277 per night before taxes. With the Member Senior Advance Purchase Discount selected, prices started at $267 per night before taxes—a nearly 4% discount.

Related: 15 Senior Discounts That Will Save You Money

5. BWH Hotels

--Discount available for: Seniors age 55 and up

It's a good bet that the BWH Hotels name will sound unfamiliar to you. But it's a global hotel network that includes three hotel companies—WorldHotels, SureStayHotels, and best known to most, Best Western Hotels & Resorts. All told, BWH Hotels span 4,300 hotels in more than 100 countries and territories around the globe—across not just these brands, but also Vīb, GLō, Aiden, and more. It's an expansive set of brands that include wallet-friendly, extended-stay, boutique, upscale, and luxury hotels alike. 

Best Western has one of the lowest age thresholds for senior discounts: You only need to have traveled around the sun 55 times to qualify for a deal on your room.

To see senior rates when booking your room, select AARP/Senior from the Rates drop-down menu. Searches default to Best Rate, which then shows the Rewards Member rates. If you're not a Rewards Member, you'll need to click into individual lists to see rates for non-members. (When looking at senior rates, it will also show you the non-member, flexible rate as a comparison.)

Our test example: I compared the rates for the Best Western Plus Dragon Gate Inn in Los Angeles for several dates. The Flexible Rate for non-members, which would allow you to cancel up to the day before with no charge, cost $259 per night excluding taxes and fees. Comparatively, the Senior price for the same room was $240.87 per night excluding taxes and fees. In addition to the 7% discount, you could still also cancel up to the day before with no charge.

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6. Motel 6

--Discount available for: Seniors age 60 and up

Motel 6, which operates more than 1,450 hotels across 49 states and five Canadian provinces, has always been among the motel industry's best values. In fact, the company was named after the $6 rate it charged upon its founding in 1962.

I'm sorry to report that you can no longer secure that rate, no matter your age. 

However, seniors age 60 and up can still get up to 5% off the motel's best available nightly rates at all locations within the continental United States. The discounted rate can be used for a maximum of two rooms for up to six consecutive nights per stay. The rooms must be paid for by the senior, and the senior must present a valid ID when they check in.

To book your discounted room, go to the Special Rates drop-down menu and select Senior Citizen Rate. 

Our test example: Prices at San Francisco's Motel 6 Fisherman's Wharf started at $149.99 per night before taxes using the flexible rate. For seniors, prices started at $142.49—a 5% discount.

But as we've seen with other chains, the senior rate won't always be cheaper than the standard (or in this case, "flexible") rate. I compared rates for San Francisco for the same date range using the flexible rates and senior rates; sometimes the senior price was lower, but sometimes it wasn't.

7. Omni Hotels & Resorts

--Discount available for: Seniors age 55 and up

Seniors seeking a more luxurious experience might consider Omni Hotels & Resorts. Each of the brand's 50 hotels is distinctive and reflect the city it's located in. Omni's properties often have amenities such as golf courses, restaurants, and spas.

Omni offers two senior discount options: 1.) a standard senior rate, and 2.) a deeper discount for seniors who book prepaid, non-refundable rooms. You must be age 55 or older to qualify for a senior rate, and you'll be asked for proof of age when you check in. 

To see senior pricing, select Senior Discount (Ages 55+) in the Special Rates box. 

Our test example: The non-senior rate at an Omni location in Denver, during the fall, for a Deluxe Room with two queen beds started at $354 per night. The regular senior rate was $339 per night (a 4% discount), and the prepaid, nonrefundable senior rate was just $323 (a 9% discount).

As of this writing, 49 out of the 50 locations participated in the senior discounts. However, lower senior prices aren't offered for all dates. For instance, my comparison of "All Rates" versus "Senior Discount (Ages 55+) for the Denver location across numerous dates during the summer showed slightly higher rates for seniors, even if choosing the prepaid, non-refundable rate.

Always check both senior and non-senior rates before booking, and if your dates are flexible, play around with different days to see when you can get the best deal. 

Related: 10 Senior Discounts for Restaurants + Grocery Stores

8. Hilton Worldwide

--Discount available for: Seniors age 65 and up

Hilton Worldwide is another massive hotel chain whose 8,000-plus global locations are spread among two dozen brands, including Waldorf Astoria, Conrad, Canopy, DoubleTree, Hampton, Embassy Suites, Homewood Suites, and the namesake Hilton brand.

Hilton offers a senior discount of up to 6% off any participating hotel's Best Available rate, with a maximum of two rooms bookable at the discounted rate. However, Hilton has one of the most stringent age policies: You must be at least 65 to qualify. And expect to be asked for proof of age during check-in.

When booking your discount online, click the Special Rates box and select "Senior Rate."

Our test example: I looked for rooms at the Homewood Suites by Hilton Las Vegas City Center. A king bed studio at the Best Available rate started at $149 per night before fees and taxes, while the senior rate started at $141 per night before fees and taxes—a 5% discount. (It's worth noting that the senior rate was identical to the Hilton Honors discount rate.)

Interestingly, I found discounts greater than the advertised 6% maximum at Hilton Club Elara Las Vegas, part of Hilton Grand Vacations. The standard rate for the night I chose was $602 including fees, while the senior rate was $552 including fees—an 8% discount.

But again, always check both the standard and senior rates, because sometimes the most affordable rate varies.

Related: 12 Free Things for Seniors to Do

9. Hyatt

--Discount available for: Seniors age 62 and up

Hyatt has 35 global brands, ranging from essentials to luxury, so both budget-conscious travelers and splurgers can find something. The company's 1,460 hotels and all-inclusive properties span names such as Impression, Alila, Andaz, and Thompson Hotels, as well as a number of Hyatt-centric names including Hyatt Regency, Destination by Hyatt, Grand Hyatt, Hyatt Vacation Club … and, of course, Hyatt.

Seniors age 62 and older can enjoy a senior discount at participating Hyatt properties. To filter for senior rates, click the Special Rate tab and select Senior. 

Our test example: The Hyatt Regency Orlando had regular room prices starting at $355 per night including fees but not taxes. Comparatively, the senior rate started at $320 per night—a nearly 10% discount.

I had to do some playing around to find locations that participated, but when I did, I was able to find savings. But I wasn't successful in every city. For instance, I also tried looking for discounted rates at Hyatt hotels in Miami for the same date, but at each hotel, the senior rate was identical to the standard rate.

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10. Red Roof

--Discount available for: Seniors age 59 and up

Red Roof is a smaller hotel collective, with four brands—Red Roof Inn, Red Roof Plus+, The Red Collection, and HomeTowne Studios & Suites—spanning roughly 700 properties in the U.S. and Japan.

Worth noting is that Red Roof is a pet-friendly brand; both Red Roof Inns and Red Roof Plus+ locations allow small pets.

But more pertinent to today's conversation is that Red Roof is extremely senior-friendly. Red Roof offers a generous discount of 10% at Red Roof properties any time of the year, and it has a low age minimum of 59 years old.

To receive your discount when booking online, go to the Special Rates dropdown menu and select Senior. You will be asked to verify your age at check-in.

Our test example: The Los Angeles Bellflower location had rooms starting at $120 per night. True to the 10% discount claim, the Senior rate started at $108 per night.

I want to call out how much more consistent Red Roof was about discounts than the other chains. My test included a search for Red Roof hotels in Los Angeles for the same night, both with and without Senior selected. Red Roof has five hotels in Los Angeles—four had discounted rates for seniors, and only one cost the same with either rate. That's easily the best "hit rate" I saw among all the major hotel chains.

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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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While it would be nice to shop exclusively at small, specialty grocery stores with only local, organic products, price is at the top of most people's minds during their regular grocery shopping trip. But that doesn't necessarily mean they're looking for the absolute cheapest products—value matters. Most shoppers want to know they're getting something fair in exchange for their money.

So while you might have a few good guesses about which grocery stores boast the lowest prices, you might be surprised by which grocers give you the best value for your money.

Today, I'll share the 10 best value grocery stores in America, as ranked by your peers. While it's still a smart move to comparison shop, as different grocers excel in different areas, this is a good starting point for determining where you'll find the best values on average.

Methodology

These rankings are based on "value scores" provided by the YouGov US Grocery Store Rankings 2025 report. 

The value scores, sourced from the YouGov BrandIndex brand tracker, are based on respondents' answers to two questions:

1.Which of the following grocery stores do you think represents GOOD VALUE FOR MONEY? By that we don't mean 'cheap,' but that the brands offer a customer a lot in return for the price paid.

2.Which of the following grocery stores do you think represents POOR VALUE FOR MONEY? By that, we don't mean 'expensive,' but that the brands do not offer a custom much in return for the price paid.

The greater the score, the greater the perceived value.

I'll also note that this report included "quality scores," which were based on respondents' answers to the following two YouGov questions:

1.Which of the following grocery stores do you think represents GOOD QUALITY?

2.Which of the following grocery stores represents POOR QUALITY?

Where applicable, I've noted when stores on our value list also ranked among the top 10 for quality.

Shop Smarter at These Top-Ranked Grocery Stores

Most grocery shoppers agree that "when I go grocery shopping I usually stick to a strict budget," according to the YouGov survey. 

But which grocery stores help that strict budget stretch farthest? Are they the chains that are known for cheap prices, such as Walmart? Or is it trendier stores like Trader Joe's?

Keep reading to find out which grocery stores survey takers say offer the best value. 

Note: Grocery stores are listed in reverse order of value score (so, from the lowest score to the highest score).

Related: 10 Best Trader Joe's Shopping Tips

10. Amazon Fresh

--Value score: 8.4

Life can get busy, making the convenience of services like Amazon Fresh—both an online and physical grocer run by retail giant Amazon—appealing. You can shop online for same-day delivery, schedule free grocery pickup at a time convenient for you, or avoid the long checkout with Dash Cart. 

Amazon Fresh is an even better value for people with a Prime Visa credit card and a Prime membership as they get 5% cash back. And part of that value proposition is quality, where Amazon Fresh also made the top-10 list.

Just one note on relative value: Value scores are net scores—so this isn't, say, an 8.4 out of 10. In fact, the top-ranked grocer by value has a score that's exactly five times higher than Amazon Fresh.

Related: 10 Sneaky Grocery Store Scams to Avoid

9. Save A Lot

--Value score: 8.9

True to its name, Save A Lot does indeed save people a lot, meriting a spot among the best value grocery store list and edging out Amazon Fresh for No. 9.

Save A Lot has more than 800 stores, predominantly in the Midwest, but with clusters in the South and Northeast. Shoppers who use the brand's loyalty program, Save A Lot Rewards, can get the best value out of the store. Program members earn one dot for every dollar spent in-store at participating stores and can earn more during activated challenges. (Purchases paid with an EBT card or a Healthy Benefits card count.) Dots can then be used to redeem rewards in the app.

Related: Cooking Costs Heating Up? Here's How to Save Money Cooking

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8. BJ's Wholesale

--Value score: 11.0

BJ's Wholesale Club is a membership-based wholesaler with more than 210 locations in 17 states. You have to pay an annual fee to shop at BJ's, but the chain offers membership discounts to the following groups:

--Veterans and active-duty military personnel

--Medical professionals

--First responders

--Government employees

--Teachers, staff members, and educators

--College students

In exchange for membership fees, BJ's members can save money with low grocery store prices, use curbside pickup, have items shipped to their homes, and check out with ExpressPay in the app. 

How can they keep grocery prices down? Customers can usually buy items in bulk. So you'll be unsurprised to find that there are other wholesale clubs on this list of value-oriented grocers.

Related: 10 Senior Discounts for Restaurants + Grocery Stores [2025]

7. Trader Joe's

--Value score: 14.8

The No. 7 value slot goes to Trader Joe's, which is known for fair prices—and a whole lot more.

Trader Joe's carries intriguing products you won't find elsewhere, as well as some of the best seasonal treats of any grocer. It has a generous return policy, and it provides a fun shopping experience. I also personally know someone who collects their "Mystery Bags" whenever they can find them.

This chain is able to keep prices low because a large percentage of its products are private-label. It also doesn't run ads, and it's quick to cut items that don't sell well.

On top of ranking No. 7 for value, it ranked No. 3 for quality—a fantastic combination considering that some of the grocers that made the value cut don't even appear in the top-10 grocery stores by quality.

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6. Kroger

--Value score: 17.5

This is the point in the rankings where you really start to see some separation in value scores. Kroger, No. 6 among the best value grocery stores, has a score that's more than double No. 10 Amazon Fresh.

Kroger is a gigantic regional grocer that boasts more than 2,730 supermarkets and multi-department stores across numerous brands—including Food4Less, Baker's, Ralphs, Harris Teeter, and more—that serve 11 million customers daily across 35 states and the District of Columbia. It also boasts more than 1,700 fuel centers and even roughly 130 Fred Meyer Jewelers locations. 

The Kroger brand itself has more than 1,200 locations in 16 states that serve more than 11 million customers every day. In addition to grocery staples, it sells household supplies, health products, ready-to-eat meals, and more.

And Kroger offers a fair deal to its shoppers, boasting the No. 6 slot for both value and quality.

Related: Food Costing a Fortune? Here's 12 Tips for How to Save Money on Groceries

5. Sam's Club

--Value score: 25.0

Sam's Club, Walmart's paid-membership warehouse division, is another popular option for shoppers who love to buy in bulk and are willing to pay an annual fee in exchange for cheaper prices. You can find one of Sam's Club's 600-plus locations in 45 states and Puerto Rico.

The products aren't just cheap—they're often pretty good, or at least, that's what Sam's No. 7 quality ranking would indicate. Sam's Club's store brand, Member's Mark, is particularly popular among customers. The highest-rated Member's Mark products keep people coming back … but it's not a one-stop shop, either, which is why there are some items you should never buy at Sam's Club.

Related: 10 Frugal Habits That Make Retirees' Lives Better

4. Target

--Value score: 29.2

More than 75% of people who live in the U.S. live within 10 miles of a Target. So there's a good chance you live near one. And if you're like YouGov's respondents, there's also a good chance you consider Target, which is ranked fourth overall, to be good value compared to the grocery competition.

More impressively? It ranked second in quality.

While there are certainly items you should avoid at Target, its grocery products—including those under its white-label Good & Gather brand—generally sport positive reviews.

One thing worth noting: YouGov also compiled "consideration scores" based on answers to the question "When you are in the market next to purchase groceries, from which of the following would you consider purchasing?" Most grocery stores ranked differently across generations: Gen Z, Millennials, Gen X, and Baby Boomers. Target was one of only two stores to have the same ranking—second—across all four generations.

Related: Walmart vs. Target: Who Wins the Price War on These 10 Products?

3. Costco

--Value score: 35.1

Most people won't be surprised to see Costco among the top three grocery stores by value.

This membership-centric warehouse club boasts more than 800 locations worldwide. The stores don't offer a limitless selection of choices, but instead curates options based on what they believe members will like best. It's also extremely well-known for its Kirkland Signature store brand.

Membership dues make up a small percentage of revenues but a massive portion of the company's profits, which allows Costco to keep its prices low. Customers also save by purchasing in bulk. And because Costco is a well-known name, it rarely spends any money on advertising—more savings it passes along to customers.

While there are certainly some products you shouldn't buy at Costco, people tend to agree that most of the items are solid—hence a No. 4 ranking in product quality.

Related: The Highest-Rated Kirkland Signature Products

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2. Aldi

--Value score: 38.6

Earning the value silver is European brand Aldi, which has focused on affordability since its 1961 and brought that knack for savings over to the U.S.

Aldi is able to maintain reasonable prices by implementing several strategies. Employees don't need to spend time collecting shopping carts because employees must pay a quarter to check out a cart, which is returned when the cart is put back properly. Stores don't waste money on plastic bags; shoppers are expected to bring their own reusable totes. And many of the produce items are sold in prepackaged units so workers don't need to weigh and price them.

There are a few items you should avoid at Aldi, but overall, its goods make the grade, earning a No. 5 ranking in quality.

Related: What Is the 90/90 Minimalism Rule?

1. Walmart

--Value score: 42.0

No. 1 in value, and No. 1 in many Americans' hearts, is Walmart.

Walmart is a global behemoth, operating nearly 11,000 stores and clubs in 19 countries, including 4,600 stores—not just Supercenters, but also discount stores, Neighborhood Markets and small-format stores—in the U.S. That doesn't even include its 600 Sam's Club locations.

Its size and scale have allowed Walmart to become synonymous with low prices—so it should be unsurprising that it earned the top spot among best value grocery stores. 

Walmart's sterling reputation for prices doesn't fully translate to product quality—there are plenty of products you should skip at Walmart, as sometimes the quality lacks—but it still managed to earn a top-10 quality score, ranking eighth among all grocers.

Lastly, Walmart was the only other store to earn the same consideration rank among all four generations—from young to old, everyone considers Walmart to be No. 1.

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

The thing is, the majority of jobs (roughly 85%) have standard schedules, which means they start at 9 a.m. and end at 5 p.m. That doesn't exactly mesh well with a night owl's internal clock.

Fortunately, if you do operate best once the sun goes down, you have better options than barely keeping your eyes open during a day shift.

Today, I'm going to talk about some of the best job opportunities for people who prefer overnight shifts. These high-paying careers for night owls deliver far better wages than the national average while letting you do the job when you're the most awake and alert.

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Late Night Doesn't Always Equal Low Pay

It might not be the most prominent employment stigma, but it exists: Some people believe that night owls simply can't make as much as early birds.

This largely comes from a disparity in how familiar people are with jobs that are available during regular working hours and those that largely operate at night.

But contrary to popular belief, night owls can do pretty well for themselves. All of the jobs on this list, for instance, boast a mean annual wage of over $90,000, based on 2023 data from the Bureau of Labor Statistics (BLS). That's well above the $65,470 mean annual wage across all occupations.

Today, we'll look at some of these professions, listed in reverse order of mean annual wage.

10. First-Line Supervisors of Firefighting and Prevention Workers

-- 2023 mean annual wage: $90,740

-- 2023 employment: 84,120

First-line supervisors of firefighting and prevention workers have a higher ranking than other firefighters. Within the field, they usually aren't referred to as "supervisors," but instead have titles such as "lieutenant" or "fire chief." These workers are responsible for supervising and coordinating the activities of firefighters. They also provide emergency medical services when necessary.

Just like their subordinates, these professionals are on duty for long hours and typically have 24-hour shifts. Occasionally, a fire department will use 12-hour shift rotations instead.

Firefighter ranks, in order, are usually as follows:

-- Probationary firefighter

-- Firefighter

-- Driver engineer

-- Lieutenant

-- Captain

-- Battalion chief

-- Assistant chief

-- Fire chief

The necessary steps to becoming a firefighter can vary by state. Usually, the minimum formal education requirement is a high school diploma or GED, though some earn a degree in fire science. This is labor-intensive work, so a physical ability test is necessary. These roles also usually require a background check and a written exam.

Also, to rise through the ranks as a firefighter, a person usually must serve a set amount of time at each level of the department. Additionally, they will need to take written exams and participate in interviews. 

Once you reach a supervisory level, the BLS estimates your mean annual wage to be $90,740.

9. Gambling Managers

-- 2023 mean annual wage: $98,270

-- 2023 employment: 4,590

Gambling managers plan and oversee all of the gambling operations in a casino, and they sometimes also help to establish house rules. This worker ensures both a high level of customer service and compliance with all applicable regulations.

As gambling is more popularly a nighttime activity than a daytime one, many casino managers work night shifts so they're around when the casino is busiest. Energetic night owls can really thrive in this role; according to the BLS, the mean annual wage for this job is north of $98,000.

Typically, a high school diploma is a sufficient level of education, though people with a degree in casino management have a leg up on the competition. But relevant experience is typically more important than formal education. Often, casino managers start as shift managers or pit bosses. To advance to the managerial role, you need a state-specific license. Would-be managers also need to pass a criminal background test, take a drug test, and pay a licensing fee.

Related: 10 High-Paying Careers for Introverts

8. Ship Engineers

-- 2023 mean annual wage: $100,550

-- 2023 employment: 8,860

Many workers aboard a ship operate and maintain engines, deck machinery, boilers, and other types of equipment. Ship engineers monitor and coordinate the activities of these crew members. They also operate the ship's engine (per the captain's orders), test the performance of electrical and mechanical systems, and sometimes order necessary parts when they are ashore.

These professionals' shifts frequently include nights, weekends, and public holidays. On the flip side, though, after long stretches at sea, these workers can often enjoy several weeks of shore leave.

While ship engineers are paid well (a mean annual wage of $100,550, per BLS data), it takes effort to break into the field. You need to get a license from the U.S. Coast Guard and often need to have attended the U.S. Merchant Marine Academy or another state marine academy. It's also useful to have years of experience for this position as well as relevant technical skills.

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7. News Analysts, Reporters, and Journalists

-- 2023 mean annual wage: $101,430

-- 2023 employment: 45,020

News analysts, reporters, and journalists work for communications media, including newspapers, magazines, social media outlets, radio, or television. These workers gather information and use it to write stories, commentary, or reviews.

As the saying goes, "The news never sleeps." Newsworthy happenings, such as natural disasters, can occur at any day and time, so these workers's schedules vary and can change when something momentous happens. Some news workers only work nights and weekends when necessary, whereas others regularly work late hours to lead news programs or offer commentary.

In return for a possibly unpredictable schedule, these workers earn a mean annual wage of more than $101,000, according to BLS data. 

Often, news analysts, reporters, and journalists need a bachelor's degree in journalism, communications, or another related field. Some specialize in a specific type of journalism, such a broadcast or print. Additionally, employers prefer applicants who have journalism experience, whether that be from an internship or working on a school paper.

Related: 10 Best Vanguard Funds to Buy in 2025

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6. Information Security Analysts

-- 2023 mean annual wage: $124,740

-- 2023 employment: 175,350

To protect an organization's computer systems, information security analysts assess systems for security risks, then suggest and implement strategies to fix any vulnerabilities found. These workers make sure sufficient controls and safeguards are in place. They also may take action in the event of a virus, security breach, or other incident. (Note: The BLS excludes computer network architects from this employment category.)

The majority of information security analysts have full-time positions and sometimes have to be on call outside of normal business hours to promptly attend to any emergencies. However, while less common, some positions specifically work overnight shifts. 

Typically, information security analysts have a bachelor's degree in computer and information technology or a related field, though this isn't always a hard rule. They should always have relevant work experience, however; and some employers want prospective analysts to have a professional certification. 

This job is very well compensated, at just under $125,000 annually, according to BLS data. 

Related: How Are Social Security Benefits Taxed?

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5. Industrial Production Managers

-- 2023 mean annual wage: $125,900

-- 2023 employment: 222,890

Industrial production managers, also referred to as plant managers, plan and oversee the operations of manufacturing and related plants. A few of their tasks typically include ensuring production stays within budget and on schedule, hiring and training workers, helping resolve problems, and streamlining the production process.

Some of these employees work day shifts, while others work night shifts. Some roles also require managers to work some weekends. And no matter what shift you work, you might need to be on call to handle any emergencies that arise. 

In exchange for a possibly unpredictable schedule, the mean annual wage for this job is $125,900, based on BLS data.

Usually, employers want industrial managers to have a bachelor's degree, preferably in business or engineering, and several years of relevant work experience. But, sometimes, if a person has enough production experience, the bachelor's degree requirement can be waived. Some employees start as production workers before becoming production managers.

Related: 7 Best T. Rowe Price Funds to Buy in 2025

4. Nurse Practitioners

-- 2023 mean annual wage: $128,490

-- 2023 employment: 280,140

Nurse practitioners may work as part of a healthcare team or independently. They can help diagnose and treat illnesses. Some workers may order or perform diagnostic tests and prescribe medication. 

Nurse practitioners must be registered nurses with specialized graduate education.

Expect long shifts as a nurse practitioner—they often work 12-hour shifts. Hospitals never sleep, so some people in this profession work day shifts, while others work night shifts. Some roles might have rotating day and night shifts. 

Fortunately, the long shifts are rewarded with high pay. The BLS's estimates for mean annual wage sit above $128,000.

You need a lot of education to work as a nurse practitioner. A person must be a registered nurse, earn a bachelor's degree in nursing, complete a nursing-focused graduate master's or doctoral nursing program, and pass a national nurse practitioner board certification exam. 

Related: 10 High-Paying Jobs You Can Get With 'Vanity Degrees'

3. Air Traffic Controllers

-- 2023 mean annual wage: $136,790

-- 2023 employment: 22,310

Airports hire air traffic controllers to coordinate the movement of aircraft and ensure they maintain safe distances. These roles involve issuing takeoff and landing instructions to pilots, telling them about any runway closures or weather issues, and alerting airport response staff to any aircraft emergencies.

At major airports, control towers may need to be operated around the clock, meaning some air traffic controllers work evening or night shifts. Weekends and holidays may be required, too. 

That said, for safety reasons, the Federal Aviation Administration (FAA) regulates air traffic controllers' hours. These workers cannot work more than 10 hours straight per shift, and they receive required breaks, too. Additionally, these employees must get at least nine hours of rest between shifts.

This work has a high level of responsibility and a commensurate high pay, with the mean annual wage sitting just below $137,000.

There are a few different ways to become an air traffic controller. Usually, people need an associate's or bachelor's degree through an FAA-approved Air Traffic Collegiate Training Initiative. Alternatively, a person may have several years of progressively responsible work experience, or a satisfactory combination of experience and education.

You must be a U.S. citizen to work in these roles. You also need to pass a background check, medical evaluation, FAA pre-employment tests, and a training course at the FAA Academy. This all needs to be done before the FAA's age cutoff, which is currently 30 years old. New air traffic controllers usually have on-the-job training that lasts over a year. Every year, these employees must pass a physical exam. They must also pass a job performance exam twice a year and undergo regular drug screenings.

Related: 7 Best Schwab Funds to Buy in 2025

2. Commercial Pilots

-- 2023 mean annual wage: $138,010

-- 2023 employment: 52,750

You're likely already familiar with commercial pilots, who fly airplanes, helicopters and other aircraft. Besides navigating aircraft, these workers inspect the aircraft before flights, submit flight plans to air traffic control, and monitor engines and fuel consumption. (Note: This BLS employment category excludes electro-mechanical and mechatronics technologists and technicians.)

Most flying happens during the day, and some pilots are home almost every night—but there are plenty of red-eye flights requiring pilots to work late at night and early in the morning. The more seniority a pilot has, the more control they typically have over their schedules. If you're specifically gunning for night flying, your best bet is to work as a cargo pilot, which will record far more night flights than your average pilot.

According to BLS data, commercial pilots enjoy a mean annual wage of just more than $138,000.

Commercial pilots need to complete flight training. Some employers also prefer or even require a degree. Additionally, they should have specific certifications and ratings from the FAA. Once hired, training typically involves several weeks of ground school and flight training. 

Related: 17 Best Income-Generating Assets [Invest in Cash Flow]

1. Petroleum Engineers

-- 2023 mean annual wage: $148,590

-- 2023 employment: 20,390

Petroleum engineers design equipment to extract gas and ensure all equipment is installed and operated properly. They also assess the production of wells through surveys, testing, and analysis. 

Some petroleum engineers work in offices onshore and work mainly during standard business hours. However, others work offshore and have longer shifts (usually 12 hours), including nights. And some on-site engineers work in rotations. For instance, they might be on duty for 80 hours, then off duty for 80 hours. 

This is the highest-paid profession on the list with a mean annual wage of nearly $149,000, per BLS data.

Petroleum engineers usually need a bachelor's degree in petroleum engineering or a related field, such as mechanical or chemical engineering. When possible, cooperative-education programs that provide practical experience and academic credit are recommended. Some higher education facilities offer five-year engineering programs that result in both a bachelor's and master's degree. As some employers prefer workers with a master's degree, those programs may be a wise route.

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But many millions more are building up a nest egg with Fidelity in a different way: by owning Fidelity retirement funds.

Whether you invest through Fidelity or another major brokerage provider, chances are you have access to hundreds of Fidelity funds. If that's the case, you might want to take a closer look at some of those offerings. That's because Fidelity boasts a long history of both stellar fund management and creating tactical index funds, making them a mainstay for investors preparing for their post-career years.

Let's explore some of the best Fidelity retirement funds you can hold within an IRA. Most of the funds listed here were chosen for their tax-inefficiency—something that you can effectively counter by holding them in an IRA or another tax-advantaged account. Indeed, these funds make sense not just for IRAs, but also HSAs and (when available) 401(k)s.

Editor's Note: Tabular data presented in this article is up-to-date as of May 27, 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 Should You Want in a Retirement Fund?

Are you investing your retirement savings in an IRA? If so, you'll want to keep a few things in mind as you evaluate funds to add to it:

• Costs are first and foremost. Every dollar you spend on fees is a dollar that doesn't have the opportunity to grow and compound over time. Occasionally, a fund might justify higher fees than its peers, but if all else is more or less equal, the lower the cost, the better. Good news here: The fees charged by the best Fidelity retirement funds 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.
• 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 HSAs, 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. A "diversified" portfolio will typically hold multiple assets, such as stocks, bonds, and alternatives like real estate equities or commodity funds. But you can diversify within assets, too, whether that's holding, say, stocks from different countries, or stocks from different market sectors. Investment funds—which can own any number of stocks, bonds, or other holdings all at once—can help you achieve that diversification. But every fund has its own level of built-in diversification, too. 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.

What Types of Funds Are Available in IRAs?

The biggest distinction between traditional taxable brokerage accounts and IRAs is their tax treatment. The former faces tax consequences for events such as asset sales and dividend distributions; the latter is allowed to grow over time without tax consequences year in and year out.

But otherwise, from a user-experience perspective, they're almost indistinguishable. IRAs usually are self-directed and extremely flexible, allowing you to own stocks, ETFs, and mutual funds at a bare minimum, and often other investments such as individual bonds, options, and more.

One might ask, "If you can own ETFs, why would you bother with mutual funds?"

Fair question. ETFs are cheaper, on average; they cover a wider range of investment strategies; and the cost of getting started is as little as the price of one share (or much less if you have a fractional-share account provider).

However, Fidelity mutual funds are a different critter. They cover a wide range of strategies. They often boast low fees that are lower than many of their mutual fund peers and even competitive with ETFs. And Fidelity has no minimum initial investment for many of its funds, allowing you to purchase as little as whatever your brokerage will allow (often just $1). 

And specifically as it pertains to IRAs, many of Fidelity's mutual funds are actively managed, which as I mentioned above is more efficiently held within an individual retirement account.

The Best Fidelity Retirement Funds for IRA Investors

These Fidelity 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.

Lastly, not a single one of these funds has an investment minimum. You can begin with as little as your IRA provider will allow.

With all of that out of the way, let's explore some of Fidelity's best mutual funds for IRAs. Most of these funds can be used to build your portfolio core, though a few can be more helpful as satellite positions to drive returns or reduce risk.

Related: The 10 Best Fidelity ETFs You Can Buy [Invest Tactically]

1. Fidelity Conservative Income Bond Fund

• Style: Ultrashort bond
• Assets under management: $6.8 billion
• SEC yield: 3.9%*
• Expense ratio: 0.25%**, or $2.50 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 2 (Conservative)

Let's start with bonds and bond funds, which are a core holding of just about any portfolio.

You should be selective about which accounts you're using to hold these fixed-income assets. That's because bonds also happen to be among the most tax-inefficient asset classes on earth—the bulk of their returns will generally come from interest paid, and interest income is taxed as ordinary income. For instance: If you're in the 37% tax bracket, and you hold a bond fund in a taxable account, you're losing 37% of your bond interest to taxes each year. But you won't face any tax consequences for collecting that income within a 401(k), IRA, HSA, or other tax-advantaged accounts.

I'll start with the Fidelity Conservative Income Bond Fund (FCNVX), which is maximally designed for safety but also delivers a competitive amount of income given the debt issues it owns.

Related: 8 Best-in-Class Bond Funds to Buy

FCNVX's management team holds roughly 320 bonds across a number of categories. Investment-grade corporate debt is the biggest sleeve at 55% of assets, but U.S. Treasuries (22%) and asset-backed securities (16%) also enjoy double-digit allocations. Credit quality is exceptionally high—most of the bonds it holds are considered investment-grade, though about 10% aren't rated (which doesn't indicate anything about their credit quality; it just means they haven't been scored by the major credit ratings agencies).

A vital metric to consider when considering bonds is duration, which is a measure of how sensitive the fund is to changes in interest rates. The actual calculation is complex; a simple way to think about it is a bond with a duration of two years would see its price rise by 2% if market interest rates fell by 1 percentage point, or fall by 2% if market rates rose by 1 point. The most important takeaway is that all else equal, the longer a bond's time to maturity, the higher its duration, and thus the higher its interest-rate risk.

FCNVX has a low weighted average maturity of just 0.7 years, which feeds into a similarly microscopic duration of just 0.4 years. This means interest-rate fluctuations will have very little impact on the fund's performance.

* 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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2. Fidelity Total Bond Fund

• Style: Intermediate-term core bond
• Assets under management: $42.3 billion
• SEC yield: 4.7%
• Expense ratio: 0.45%, or $4.50 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 15 (Conservative)

Of course, you have a wealth of bond options that extend far beyond hyperconservative ultrashort debt. Investors willing to accept a little more risk for a greater level of interest income might consider the more diversified Fidelity Total Bond Fund (FTBFX), for instance.

FTBFX's management team allocates its assets across 6,635 holdings representing a wide variety of bonds and other income-producing debt. Currently, it invests the largest percentage of its assets (more than 40%) into U.S. government bonds, another 26% into corporates, and about 14% into pass-through mortgage-backed securities (MBSes). The rest is sprinkled across ABSes, commercial MBSes (CMBSes), collateralized mortgage obligations (CMOs), foreign sovereign debt, and more. 

Related: The 16 Best ETFs to Buy Right Now

While FTBFX tends to gravitate toward investment-grade debt, the fund is allowed to invest up to 20% of assets in bonds rated below investment-grade, which potentially offer higher returns in exchange for accepting slightly higher risk. (Sub-investment-grade bonds are also referred to as high-yield debt securities or junk bonds.) Right now, management is only using about half (10%) of its allowable allotment to high-yield debt.

Credit quality, while good, isn't quite as lofty as FCNVX. The bonds are much longer-term in nature, too, at a weighted average maturity of 8 years. That shows up in a much higher duration of 6 years, which means a 1-percentage-point increase in market interest rates would result in a 6% short-term drop in FTBFX shares, and vice versa.

In other words: Fidelity Total Bond Fund is still a conservative fund overall, but it's more aggressive than an ultrashort bond fund like Fidelity Conservative Income Bond.

Related: What Is a Custodial Brokerage Account + How Does It Work?

3. Fidelity Real Estate Income Fund

• Style: Sector (Real estate)
• Assets under management: $4.1 billion
• SEC yield: 4.9%
• Expense ratio: 0.66%, or $6.60 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 34 (Moderate)

Real estate is capable of delivering both regular income as well as appreciation over time, which is why it has been a preferred asset class since the dawn of human civilization. But regular Joes like us typically don't have the assets to go out and buy, say, a strip mall or an office building. Instead, the most accessible way we have to invest in real estate is the real estate investment trust (REIT): a specifically structured business with a special tax status that allows it to avoid corporate taxation so long as it distributes at least 90% of their net profits as dividends.

Because of this tax incentive, REITs tend to be one of the highest-yielding sectors and a perennial favorite among income investors.

Related: 15 Dividend Kings for Royally Resilient Income

Unfortunately, this also makes REITs very tax-inefficient, as a large percentage of the total return comes from taxable dividends. What's more, REIT dividends are generally not classified as "qualified dividends." Qualified dividends are taxed at the long-term capital gains rate (0%, 15% or 20% depending on your tax bracket). Non-qualified dividends are taxed as ordinary income, like bond interest, and can face rates as high as 37%, depending on your bracket. Thus, it makes more sense to hold REITs and REIT funds in a tax-advantaged plan like an IRA rather than a taxable brokerage account.

If you're looking for a good contender, the Fidelity Real Estate Income Fund (FRIFX) is a solid albeit unorthodox option.

The fund's holdings include common stock in U.S. REITs such as datacenter specialist Equinix (EQIX), communications infrastructure REIT American Tower (AMT), and logistics real estate leader Prologis (PLD). Nothing odd about that.

What sets FRIFX apart from most of its competitors is that common stock—what people are referring to 99.9% of the time when they're talking about stock—are only part of the story. These equities make up only about a third of the fund's assets. The majority of holdings are fixed-income assets including bonds, preferred stocks, and even mortgage-backed securities. Thus, while I would normally show a trailing-12-month yield for a REIT fund, FRIFX's debt-heavy portfolio mix makes an SEC yield more appropriate.

On that basis, FRIFX yields nearly 5%, making it a very competitive income option—even in a high-yield environment like today.

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4. Fidelity Puritan Fund

• Style: Allocation (moderate)
• Assets under management: $32.9 billion
• Dividend yield: 1.6%
• Expense ratio: 0.47%, or $4.70 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 51 (Aggressive)

No, the Fidelity Puritan Fund (FPURX) isn't trying to strip you of any of your Roman Catholic traditions. It's merely a nod toward Fidelity founder Edward Johnson II's Puritan ancestry, as well as the fund's conservative approach.

Fidelity Puritan is an "allocation" fund, which means that it invests in both stocks and bonds, which are the two fundamental assets most investors are expected to own. Importantly, allocation funds don't all hold the same ratio of equity and debt—they range from conservative (lots of bonds) to aggressive (lots of stocks). Puritan's target 60/40 blend of equities and debt is considered a "moderate" allocation.

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

On the equity side, manager Daniel Kelley favors large-cap stocks with a value tilt. His bond selections are heaviest in U.S. Treasuries, though he'll also own investment-grade corporates, junk, MBSes, ABSes, foreign sovereign debt, and other securities.

The traditional 60/40 portfolio is arguably too conservative for many investors, especially younger retirement savers. Even the fund's current 65/35 mix, while a little better, might still be too tame. But if you did want to own an actively managed blend of stocks and bonds, it's hard to do much better than Puritan. This Fidelity mutual fund is better than at least 90% of its peers over the trailing three-, five-, 10-, and 15-year periods, and it has returned nearly 11% annually since its inception in 1947.

Related: The 7 Best Gold ETFs You Can Buy

Also, while FPURX is the definition of a buy-and-hold investment, Kelley does a fair bit of trading. Why does that matter? When a fund trades its positions, it can generate capital gains. If a fund has net capital gains (after backing out capital losses), it must distribute those at least once a year to shareholders. And if you hold a fund in a taxable account and you receive capital gains distributions, you'll owe taxes on those distributions for the tax year in which they are paid, at differing rates depending on whether those distributions are long- or short-term in nature.

However, if you hold the fund in an IRA or another tax-advantaged account, you won't face any tax consequences.

There is no precise, universally accepted threshold for what constitutes "a lot" of active trading, but I would consider any fund with portfolio turnover (how much of the portfolio's holdings are turned over, or replaced, in a given year) over 30% or so to be fairly tax-inefficient. The higher that number goes, the more inefficient the fund. Fidelity Puritan's turnover sits around 60%. Thus, holding this Fidelity retirement fund (and any other high-turnover funds) in an IRA might be a tax-smart move.

Related: 11 Best Vanguard Funds for the Everyday Investor

5. Fidelity Equity-Income Fund

• Style: U.S. large-cap growth
• Assets under management: $11.4 billion
• Dividend yield: 1.5%
• Expense ratio: 0.53%, or $5.30 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 60 (Aggressive)

One of the simplest ways to dip your toe into pure-play equity without taking on immense risk is to target dividend mutual funds. Specifically, you'll want to focus on dividend funds that prioritize above-average yields, as the stocks tend to be more defensive and value-oriented in nature than dividend funds that prioritize dividend growth.

Fidelity Equity-Income Fund (FEQIX) is in the former camp.

While dividend index funds are governed by a few specific rules and parameters dictating what they can hold, FEQIX is a little looser. Manager Romana Persaud seeks out companies that can deliver above-average yields, downside protection, and capital appreciation. Her 124-stock portfolio is brimming with blue-chip dividend payers like Exxon Mobil (XOM), JPMorgan Chase (JPM), and Johnson & Johnson (JNJ). Those stocks collectively offer a yield of 1.5% that, while not particularly generous, is at least meaningfully higher than the S&P 500.

Related: Retirement Plan Contribution Limits and Deadlines for 2026

Persaud came on board in 2012; the fund's 15-year trailing return isn't much to crow about, and in fact it actually sits in the bottom half of the category (U.S. large-cap growth). But FEQIX has been improving, with Persaud posting category-beating results across all medium-term time frames.

"This strategy posted stellar results in 2025," Morningstar Senior Analyst Todd Trubey says about the fund's Gold Medalist rating. "The retail share class gained 19.0%, thumping the Russell 1000 Value category index’s 15.9% return, and landed just outside the large-value Morningstar Category’s top decile.

"While the fund’s low-turnover approach might suggest it simply benefited from favorable market trends, portfolio manager Ramona Persaud explains the year differently. In late 2024 and early 2025, Persaud saw elevated market risks with heightened market concentration in tech stocks, momentous election outcomes in the U.S. and France, and interest rate uncertainty. In response, she leaned on idiosyncratic ideas such as inexpensive turnarounds and special situations that she perceived diversified and lowered the market risk of the portfolio. For example, she added to positions such as Samsung, Rolls-Royce, and Wells Fargo in the first half of 2025. Those positions posted some of the portfolio’s most significant gains."

Despite the active management, there's not a ton of trading here; turnover is just less than 20%. Still, you'll absorb at least some capital-gains distributions, so this Fidelity fund remains a good holding for an IRA.

Related: Buy 'The Future': 5 Tech Stock ETFs You Should Own in 2026

6. Fidelity Worldwide Fund

• Style: Global large-cap growth
• Assets under management: $3.8 billion
• Dividend yield: 0.5%
• Expense ratio: 0.77%, or $7.70 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 77 (Aggressive)

If you're a retirement investor who wants exposure to international stocks, you generally have two broad options:

1. Buy an "international" stock fund, which will hold companies headquartered outside of the U.S.
2. Buy a "global" stock fund, which will hold both domestic and international companies.

Related: 10 Best Alternative Investments [Options to Consider]

Fidelity Worldwide Fund (FWWFX), for instance, provides a blend of exposure typical to many global funds: Two-thirds of assets are invested in U.S. equities, while the remainder is allocated to foreign stocks. Most of that international presence comes from developed-market countries such as the U.K., Canada, and Japan, but FWWFX does provide a little exposure to emerging markets, including Taiwan and China.

Co-Managers Andrew Sergeant and Stephen DuFour have "a holistic and long-term view," prioritizing "above-average growth prospects … stable and high returns on capital, durable competitive positions, consistent profitability," and other qualities.

Their strategy has been plenty successful. FWWFX has a stellar long-term record—it has beaten its Morningstar category and index over the trailing three-, five-, 10-, and 15-year periods.

Related: The 10 Best-Rated Dividend Aristocrats Right Now

Despite their long view, Sergeant and DuFour do quite a bit of trading. Annual turnover is more than 140%, which effectively means that within a year, the entire portfolio has flipped ... and another 40% of those new positions have flipped, too! That means capital gains distributions are a given; historically, some of those capital gains have been short-term in nature and thus taxed at less favorable ordinary income rates.

That's a problem you can easily snuff out by holding Fidelity Worldwide in an IRA or another tax-advantaged account.

Related: 8 Best High-Yield Dividend ETFs for Income-Hungry Investors

7. Fidelity Trend Fund

• Style: U.S. large-cap growth stock
• Assets under management: $4.6 billion
• Dividend yield: < 0.1%
• Expense ratio: 0.74%, or $7.40 per year for every $1,000 invested
• Morningstar Portfolio Risk Score: 91 (Very Aggressive)

Buying and holding good stocks or good funds and allowing them to compound over years or even decades is the way to go, generally speaking. But having at least part of your portfolio in actively traded strategies can also make sense, particularly in bear markets. Actively traded strategies have their stretches when they outperform passive index strategies, and they can potentially help you to avoid major declines.

Unfortunately, as mentioned above, active trading strategies are also woefully tax-inefficient, particularly if your holding period is less than a year. Short-term capital gains are taxed as ordinary income, meaning you could be sharing up to 37% of your gains with Uncle Sam. That's why we want to hold trade-happy funds in tax-advantaged accounts.

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

Our last selection, Fidelity Trend Fund (FTRNX), is yet another example of this kind of trade-happy fund.

This fairly aggressive fund aims to own companies the manager believes have above-average growth potential. Unsurprisingly, FTRNX is heavy in tech names such as Nvidia (NVDA) and Apple (AAPL), as well as tech-adjacent companies such as Google parent Alphabet (GOOGL) and Facebook parent Meta Platforms (META). It has has beaten its Morningstar category average over every meaningful time period, and it's in the top 15% (or better) of its peers by performance across those time frames, too.

But this high performance comes at the cost of a lot of active trading; the annual portfolio turnover is 60%. And its distributions reflect this. For instance, in 2024, it distributed nearly $26 per share in capital gains—a distribution amounting to 14% of the fund's net asset value at the time. That is a simply massive payout that would've resulted in a massive tax liability in a standard brokerage account.

In an IRA, however, hat distribution would not have resulted in any tax consequence.

Related: 8 Low- and Minimum-Volatility ETFs for Peace of Mind

Learn More About These and Other Funds With Morningstar Investor

If you're buying a mutual fund or ETF you plan on holding for years (if not forever), you want to know you're making the right selection.

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.

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

Why Fidelity?

Fidelity is a leader in mutual funds (and ETFs, for that matter) and has been a force in the industry since the launch of its Fidelity Puritan Fund (FPURX) back in 1947.

Today, this premier mutual fund company has more than $17 trillion in assets under administration thanks to many successes over the intervening years. That includes star money 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.

However, while Fidelity first built its name on actively managed funds, over the past three decades, the firm has built out its low-cost and even no-cost index funds as part of the movement to reduce expense ratios and transaction costs for individual investors.

The end result is a fund lineup that can serve just about every need, and that's typically competitive on price.

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 Is the Minimum Investment Amount on Fidelity Mutual Funds?

Fidelity's mutual funds (and ETFs, for that matter) make plenty of sense for investors of all shapes and sizes, but they have a particular appeal among people who don't have much money to work with. That's because many Fidelity mutual funds have no investment minimums—you can literally start with as little as $1.

That's extremely beneficial in self-directed accounts like an IRA. Many mutual funds from other providers require high minimums in the thousands of dollars, hamstringing investors with little capital to work with.

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.

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

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.

Related: The 10 Best ETFs for Beginners

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.

Related: 10 Best Schwab Mutual Funds You Can Buy [Low Fees, $1 Minimums]

What Is an Exchange-Traded Fund?

Exchange-traded funds are actually very similar to mutual funds but feature a handful of significant differences that may 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.

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.

Related: 10 Best Schwab ETFs to Buy [Build Your Core for Cheap]

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 Schwab mutual index funds, Schwab ETFs—most of which are indexed—tend to have some of the lowest costs in the business in terms of fees and expenses.

Related: UBS: Micron (MU) Stock Has More Than 100% Upside

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.

Related: 15 Stocks You'll Be Able to Hand Down to Your Kids

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: 10 Best Monthly Dividend Stocks for Frequent, Regular Income

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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Of course, it wasn't too long ago that money market funds were seen as dead money by many investors.

For years, loose Federal Reserve monetary policy kept interest rates pegged at zero, and money market funds threw off virtually useless yields. No more: At today’s rates, the best money market mutual funds deliver competitive income, making them a useful refuge for investors during periods of stock-market volatility.

One need only look back to March 2023, which saw the second- and third-largest bank failures in U.S. history. These failures raised some uncomfortable questions about the safety of our savings.

This is where money market funds really shine. Checking and savings accounts are only insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). If your bank fails and you have deposits higher than that amount, your savings are not guaranteed. You become a general creditor along with everyone else. However, in the case of money market funds, you don’t hold cash—you hold a diversified basket of high-quality "cash equivalents" like short-term U.S. government Treasury bills or corporate commercial paper. Those assets belong to the money market mutual fund and its investors, not the manager, so if the manager of the fund gets into financial trouble, you don't have to fight for your assets in bankruptcy court.

Today, we’re going to take a look at some of the best money market funds to earn a solid return while also steering clear of both stock market volatility and the risks of bank failure.

Editor's Note: Tabular data presented in this article is up-to-date as of May 27, 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 Money Market Fund?

A money market fund, or a money market mutual fund, is an open-ended mutual fund that invests in extremely short-term debt investments. These may include:

• U.S. government T-bills
• Commercial paper (short-term debt issued by companies)
• Repurchase agreements
• Other high-quality, low-risk debt investments with a very short maturity. (Maturity is how long it takes before the principal on the debt must be repaid.)

Under current rules, any assets the money market fund holds should have a maturity of under 13 months, and the portfolio’s weighted average maturity should be 60 days or less. This keeps the funds liquid (easily converted into cash) and eliminates interest-rate risk (the risk that a spike in market interest rates will cause the value of the portfolio to fall).

Money market funds aren't bulletproof, however. In a few extreme cases, selling your shares might be costly or even impossible. In fact, most fund providers have boilerplate warnings explaining that they might charge you a fee, or suspend your ability to sell shares, if the fund’s liquidity falls below certain minimums on account of market conditions or other factors.

Also, money market funds are somewhat unique among mutual funds in that they specifically target a net asset value (NAV) of $1 per share. Any earnings that cause the NAV to go higher than $1 get distributed as dividends. This means that, unless you reinvest your dividends, the value of your money market mutual fund will not grow over time.

Types of Money Market Funds

Money market funds are not a monolith; while they all act somewhat similar to one another, they often hold different investments, which results in different levels of income.

Let’s walk through some of the different types of money market funds.

1. Treasury Money Market Fund

A Treasury money market fund will only invest in U.S. Treasury securities or in repurchase agreements ("repos") collateralized by Treasury securities. It will not hold bank or corporate securities.

Treasury money market funds are the best option for investors who value safety above all else.

Related: What to Do With Your Assets If You Don't Have Heirs

2. Government Money Market Fund

A government money market fund is slightly different. It will generally hold government securities just like a Treasury money market fund will, but a government money market fund can also hold government agency debt such as Fannie Mae or Freddie Mac securities.

This inclusion of both government and agency securities makes government money market funds, in theory, slightly less secure than a pure Treasury money market fund. That’s because agency bonds are not explicitly guaranteed by the U.S. Treasury.

The flip side? They'll sometimes offer a higher level of yield.

Related: 10 Best ETFs to Beat Back a Bear Market

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3. Prime Money Market Funds

Prime money market funds have a little more flexibility. In addition to government and agency securities, they can also hold corporate commercial paper, certificates of deposit (CDs), and other private short-term securities.

Of course, this added flexibility and generally slightly higher yield comes at the expense of slightly higher credit risk.

Related: 11 Best CD Alternatives to Capture Interest With Low Risk

4. Municipal Money Market Funds

The income from money market funds is fully taxable, but municipal money market funds' income is generally exempt from federal income tax.

"Muni" money market funds invest in short-term securities issued by state or local governments. These can be further divided into national and even single-state municipal money market funds.

Finally, note that money market funds are different from money market accounts. A money market fund is a mutual fund, whereas a money market account (MMA) is a form of bank account.

Related: The 16 Best ETFs to Buy Right Now

Why Invest in Money Market Mutual Funds?

You have many options for your cash these days, and money market funds can play an important role. So let’s cover when a money market mutual fund might make sense.

To start, remember that money market funds are liquid, generally giving you access to your funds within 24 hours. But they’re still savings vehicles, and they’re really not designed to be used for day-to-day expenses like checking accounts. So, think of a money market fund as a nice place to park cash that you might need sometime in the near future.

The most direct competition for money market funds would be savings accounts or money market accounts offered by a bank or credit union. In each of these cases, your funds earn interest while remaining liquid and generally free of interest-rate risk. As a general rule, money market funds will offer slightly higher interest rates than bank products, though that can change based on market conditions.

Related: 10 Best Schwab ETFs to Buy [Build Your Core for Cheap]

There are differences, however, that go beyond raw interest rates.

Savings accounts and money market accounts offered by a bank or credited union will generally be protected by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. So long as your account remains below that threshold, you can’t lose money.

Money market mutual funds are not protected by the Federal Deposit Insurance Corporation. Though you generally have minimal credit risk, it is possible to lose money in a money market mutual fund, particularly if it holds corporate commercial paper or other non-government securities.

But here’s where it gets interesting.

Related: The 10 Best Fidelity ETFs You Can Buy [Invest Tactically]

2023 made it clear how fragile our banking system can be. In cases where you have more than $250,000 to park, a money market fund—and in particular, one that invests in government and agency securities—will be safer than a bank savings product (where you’re limited to $250,000 in protection) because the money market fund’s assets are held separate from those of the manager or sponsor. Effectively, even if the fund’s management company goes bankrupt, it doesn’t mean the fund does.

If your bank fails like Silicon Valley Bank and your account balance is over $250,000, you have to hope and pray the government decides to bend the rules and come to your rescue. Because otherwise, you’re in line with everyone else fighting for the scraps in bankruptcy court.

Our Favorite Money Market Funds

Today, I'm going to discuss some of the best money market funds you can buy right now.

But before I do that, here are two important notes:

First, if you're buying or own a money market fund, pay attention to what the Federal Reserve is doing. Its federal funds rate effectively determines the cost of borrowing for banks, which has a ripple effect through most the interest rates of bonds, loans, Treasuries, and other debt. That ripple effect varies: It has some influence on longer-term rates, but a much more direct influence on short-term rates. Given that money market funds typically hold short-term debt, lower Fed rates over time can result in lower yields on money market funds.

Second, availability will vary by broker. It’s common for a major brokerage house like Fidelity or Charles Schwab to limit availability mostly to their own in-house money market funds. That’s perfectly fine. So long as you understand the basics and know what to look for, you can generally find a comparable fund at your respective broker.

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1. Schwab U.S. Treasury Money Fund Investor Shares

• Assets under management: $41.2 billion
• 7-day SEC yield: 3.4%*
• Expense ratio: 0.34%**, or $34 per year for every $10,000 invested
• Minimum initial investment: $0

I'll start with money market funds appropriate for people who are most concerned about safety.

Related: Best Schwab Retirement Funds for an IRA

If you're worried about potential bank failures or other troubles in the financial sector, it makes sense to stick to only the most secure money market funds. Few are going to be safer than the Schwab U.S. Treasury Money Fund Investor Shares (SNSXX), which owns a portfolio of Treasury securities backed by the full faith and credit of the U.S. government—and that's it. No corporate or agency securities. No repo agreements or derivatives. This is as safe as money market funds get.

The weighted average maturity of its holdings is just 52 days, meaning you have virtually no interest-rate risk. And yet, you're still receiving a very competitive yield of well more than 3% as I write this.

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

And importantly: Unlike many other mutual fund providers that require a minimum initial investment in the hundreds or even thousands of dollars, SNSXX has no required minimum investment. That means you can invest in as little as your platform allows, which if you invest for Schwab is just one lonely greenback.

If your IRA or 401(k) is held at Charles Schwab, the Schwab U.S. Treasury Money Fund could be an excellent option to park the cash you want to keep safe.

* 7-day SEC yield reflects the annualized daily income distributions made over the previous seven days. This is a standard measure for money market funds.

** 0.35% gross expense ratio is reduced with a 1-basis-point fee waiver for as long as Charles Schwab Investment Management serves as adviser to the fund. (A basis point is one one-hundredth of a percentage point.) The agreement can only be amended or terminated with approval of the fund's board of trustees.

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2. Fidelity Government Money Market Fund

• Assets under management: $451.4 billion
• 7-day SEC yield: 3.2%
• Expense ratio: 0.42%, or $42 per year for every $10,000 invested
• Minimum initial investment: $0

The Fidelity Government Money Market Fund (SPAXX) is a much more expansive government money market fund than the Schwab U.S. Treasury Money Fund. That's because it can go beyond U.S. Treasury securities.

Right now, for instance, SPAXX invests more than 40% of assets in repurchase agreements backed by Treasury securities. More than 20% is invested in agency floating-rate securities, and another 20% is tied up in Treasury bills. The remainder is used to own fixed-rate agency securities (e.g., Fannie Mae and Freddie Mac securities), Treasury coupons, and Treasury Inflation-Protected Securities (TIPS).

Related: 9 Best Fidelity Retirement Funds [Low-Cost + Long-Term]

There is ever so slightly more credit risk in a "government" money market fund as opposed to a "Treasury" money market fund, so keep that in mind. But your risk of loss in a government fund is still exceedingly small. This Fidelity fund has a weighted average maturity of just 45 days and sports a current yield of well more than 3%.

If you hold your brokerage accounts at Fidelity, this is a worthy option for your idle cash. (Many brokerage accounts will actually sweep idle cash into their money market funds so you’re still earning interest even if you don’t have all of your funds invested.)

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

3. JPMorgan Prime Money Market Fund Morgan Class

• Assets under management: $92.5 billion
• 7-day SEC yield: 3.3%
• Expense ratio: 0.48%, or $48 per year for every $10,000 invested
• Minimum initial investment: $1,000

The JPMorgan Prime Money Market Fund Morgan Class (VMVXX) is one of the larger prime money market funds out there. It's also more diversified than the first two money market funds on this list, going well beyond just government debt.

Currently, VMVXX's largest debt category is financial-company commercial paper, which makes up 28% of assets. That's followed by "other" repurchase agreements at around 25%, and CDs at around 17%. The rest of the portfolio is made up of non-negotiable time deposits, U.S. Treasuries, non-financial company commercial paper, asset-backed commercial paper, U.S. Treasury repos, and more.

This highly diversified portfolio's weighted average maturity sits at just 50 days. Meanwhile, the fund pays out a decent 3.3%.

The minimum initial investment of $1,000 is certainly higher than the likes of Schwab or Fidelity, but still lower than other major fund providers.

Related: How to Rebalance Your Portfolio: A Quick Guide

4. Schwab Municipal Money Fund Investor Shares

• Assets under management: $4.5 billion
• 7-day SEC yield: 1.7%
• Expense ratio: 0.34%*, or $34 per year for every $10,000 invested
• Minimum initial investment: $0

If you find yourself in a high tax bracket, the Schwab Municipal Money Fund Investor Shares (SWTXX) might be an ideal option. Its current tax-free yield is a seemingly modest 1.7%, but if you're in the 37% tax bracket and pay the 3.8% Medicare surcharge, this is equivalent to a much more respectable 2.9% yield!

SWTXX holds a diverse basket of municipal securities spanning the 50 states and Washington, D.C., and the weighted average maturity of its holdings is just 26 days, reducing interest-rate risk to effectively zero.

And like most other Schwab mutual funds, it also has no minimum investment.

Related: Best Schwab Funds to Hold in an HSA

As a general rule, a municipal money market fund will only make sense if you are in a high tax bracket and tax minimization is a priority. Most investors will enjoy a higher return, even after taxes, in good, old-fashioned taxable money market funds.

* 0.35% gross expense ratio is reduced with a 1-basis-point fee waiver for so long as Schwab Asset Management serves as the adviser to this fund. The agreement can only be amended or terminated with the approval of the fund's board of trustees.

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5. Vanguard Treasury Money Market Fund

• Assets under management: $107.0 billion
• 7-day SEC yield: 3.6%
• Expense ratio: 0.07%, or $7 per year for every $10,000 invested
• Minimum initial investment: $3,000

Vanguard has a well-deserved reputation for offering some of the lowest fees in the industry. And remember: A dollar saved in fees is a dollar that goes straight to your returns.

You might not notice as much in an equity mutual fund, where the differences in fees can get lost in the noise of market volatility. But in a money market fund, where the differences with the competition are measured in basis points, every little bit counts.

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

Consider the Vanguard Treasury Money Market Fund (VUSXX). This Vanguard fund has an expense ratio of just 0.07%, the lowest of the money market funds covered here. Those lower fees mean you get to keep more of that 3.6% seven-day yield.

VUSXX is a Treasury money market fund that has 95% of its assets invested in Treasury bills, with the small remainder plunked into U.S. government obligations. Its weighted average maturity is a mere 34 days.

The minimum investment, at $3,000, is higher than that of the other funds reviewed in this article, but it’s far from onerous. So if your broker gives you access to Vanguard funds, you’ll be hard pressed to do better than this one.

6. Vanguard Municipal Money Market Fund

• Assets under management: $18.0 billion
• 7-day SEC yield: 1.7%
• Expense ratio: 0.11%, or $11 per year for every $10,000 invested
• Minimum initial investment: $3,000

If you're an investor in a high tax bracket looking for another tax-free option, consider the Vanguard Municipal Money Market Fund (VMSXX). This fund sports a portfolio of state and local government securities. Its weighted average maturity is an exceptionally low 16 days. And like most Vanguard funds, its minimum investment is just $3,000.

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

VMSXX sports a current yield of 1.7%, which is 100% free of federal income tax. This is equivalent to a 2.9% taxable yield if you are in the highest federal tax bracket and pay the 3.8% Medicare surcharge.

In general, it's best to hold Vanguard Municipal Money Market (and other tax-advantaged municipal-bond funds) in a taxable brokerage account, where its munibonds' tax exemptions can maximize your yield. If you hold it in a tax-exempt account like an IRA or HSA, its interest will have the same taxable consequences (none) as your taxable bond funds, putting it at a disadvantage.

But let's say you had to choose between owning Vanguard Treasury Money Market (3.6% yield) and Vanguard Municipal Money Market (2.9% tax-equivalent yield) in a brokerage account? Even with the tax advantages, VUSXX would be the better bet for income right now.

Related: Best Vanguard Retirement Funds for an IRA

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.

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Related: 8 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.

Related: 10 Best Monthly Dividend Stocks for Frequent, Regular Income

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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Let's be clear: Some fees make sense. Clearly listed and explained fees that pay for defined benefits are just the cost of doing business. But many junk fees add little to no value—in many cases, they're just ways to pad a company's bottom line.

Compounding the problem? Hidden and misleading fees are often not disclosed until you've taken several steps toward making a purchase. So all that time you spent carefully comparison shopping to get the best deal has been wasted, as you're stuck staring at a total that was much higher than you anticipated.

These fees have become so commonplace that they're core to many businesses in several industries, becoming an annoyance to (and a drain on) consumers. But good news: You can often mitigate the impact of these fees.

Read on as I talk about some of the most hated consumer fees, and discuss which ones you can eliminate, which ones you might be able to lower, and how to deal with the ones you're stuck paying. And after that, I'll also talk about ways in which the government is (finally) cracking down on some of these junk fees.

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1. "Convenience" Fees

Convenience fees are a type of charge for making a purchase through a specific channel. For instance, you might be charged a convenience fee for buying your tickets online instead of in person. Or you might be charged a convenience fee for using a credit card instead of check or cash.

Frustratingly, though, these fees are often charged when only one method of payment is available—and thus there's no way to avoid the fee.

What can you do? Look at the vendor's terms for the convenience fee. While the fee might simply be inevitable in some cases, you might be able to avoid the fee by changing your method of payment (credit card, ACH, etc.) or place of payment (in person, on the phone, online).

2. Resort Fees

A hotel, at its most core definition, is simply a business that provides lodging in exchange for money. They're typically a little more than that, offering amenities such as a breakfast buffet or a business center.

But a resort is more than a hotel—it typically offers both fuller and more varied amenities and even experiences, from full-service restaurants and spas to water parks and casinos.

Once upon a time, you would simply pay for whatever amenities you wanted to use, and resorts would use that money to maintain those amenities. But increasingly, resorts have ... ahem, resorted ... to charging all-inclusive resort fees—regardless of whether you actually plan on using any of those amenities. This allows them to still quote a lower booking price up front, then tack on the resort fee during checkout to juice the final charge right as you're about to book a room.

What can you do? While these fees are often non-negotiable, it's worth at least asking the staff if they can waive the fee if you don't actually plan on using any of the amenities. (You're more likely to have luck if you're a rewards member or experienced problems during your stay.) When you're searching for a place to stay, use booking sites that provide all-in prices so you can more accurately compare costs. And if you're the kind of person who doesn't use many amenities in the first place, try booking with a more "rooms-oriented" hotel that focuses less on perks and more on a comfortable stay.

Related: Cooking Costs Heating Up? Here's How to Save Money Cooking

3. Overdraft Fees + Nonsufficient Funds Fees (NSFs)

Two of the most common banking fees are overdraft fees and nonsufficient funds (NSF) fees. Both fees involve trying to spend more money than you have in your account, but they're not quite the same.

A bank charges an overdraft fee when it clears a transaction that's overdrawn the account and temporarily covers your shortfall. But if a bank declines to cash a check or approve a payment that would overdraw the account, it will charge an NSF fee.

What can you do? The glib answer: Don't overdraw your account. But if we're being practical, and you want to prevent an accidental overdraft or NSF fee, consider switching where you do your banking. Many banks and credit unions don't charge these fees as long as you aren't overdrawn by a substantial amount. For instance, the Axos ONE® Checking and Savings bundle charges no overdraft fees whatsoever.

Related: 10 Best Fidelity Funds to Buy

4. Short-Term Rental Cleaning Fees

Ask anyone you know who frequently uses Airbnb, Vrbo, or another short-term rental app, and they'll tell you one of their biggest sources of angst are skyrocketing cleaning fees.

Early on in these apps' history, these were hidden fees, so they were nasty surprises that popped up as you were about to book. After considerable backlash, some started to make the fees more visible. For instance, Airbnb has added the total price display feature, so users now can change their settings to see an accommodation's "total price" (it still doesn't include taxes) upfront.

That said, the fees themselves remain, and some of them are downright exorbitant. In many cases, they amount to a quarter of a stay's total cost. Worse? Rentals often come with instructions on cleaning the guest is required to do—leaving many guests confused about just why they're paying high cleaning fees.

What can you do? There's no negotiating cleaning fees or requesting they be waived. Your best bet is to choose rentals that have reasonable to no cleaning fees and modest expectations for how much the guest should clean. Or you could always stay at a hotel.

Related: 10 Frugal Habits That Make Retirees' Lives Better

5. ATM Withdrawal Fee

You know the drill: If you go to an ATM within your bank's network, you can use it for free. But if you go to another bank's ATM or a third-party machine, get ready to pay a few bucks in ATM withdrawal fees.

ATM fees are naturally frustrating because it's an extra charge to access your own money. And while the fees might only be a couple bucks in many locations, a few are eye-poppingly high. I recently used an ATM while traveling to Costa Rica, and I was charged a $7.80 fee!

What can you do? You have two realistic options for getting around these fees. You can either bank with an institution that has an exceedingly high number of in-network bank and/or third-party ATMs. Or you can bank with a financial institution that reimburses out-of-network ATM fees. (That foreign ATM fee I mentioned? That's getting reimbursed.)

Related: 6 Best Stock Recommendation Services [Stock Tips + Picks]

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6. Excess Airline Fees

I just mentioned that I used an ATM during a recent trip out of the country. Well, for my return flight, I paid the following taxes and fees:

-- U.S. Transportation Tax

-- Costa Rica Sales Tax

-- Costa Rica Transportation Sales Tax

-- U.S. Immigration User Fee

-- U.S. Customs User Fee

-- U.S. APHIS User Fee

-- International Boarding Tax

-- Costa Rica Common Area User Charge

-- Costa Rica Baggage Inspection Fee

-- Costa Rica Security Fee

-- September 11th Security Fee

-- U.S. Passenger Facility Charge

-- Baggage fee (checked bag; no carry-on allowed)

Not all airline fees are junk fees, but some can be. And they've become a lot more commonplace—many airlines added hidden charges as a way to make up for losses suffered during the pandemic. Even before the pandemic, airlines were becoming a little too fee-happy, charging for elements of air travel (checked bags, seat selection) that once were just part of the normal ticket price. Indeed, despite booking under one name, I wasn't assigned a seat next to my travel companion for the return flight.

What can you do? While there's no way of getting out of many of the government fees listed above, you can reduce airline-related fees. One way is to not pay for what you won't use; for instance, if you can get through a trip with just carry-on luggage, you won't need to worry about checked bag fees. You should use booking sites to compare flight prices inclusive of fees, so you're comparing apples to apples. Also, if you want to get creative, some travel cards reward cardholders with significant airline fee credits each year.

Related: 31 Millennial Spending Habits & Income Statistics to Know

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7. Credit Card Surcharges

A credit card surcharge is a specific fee that helps offset the cost of completing a credit card transaction. You see, when you use a credit card, the merchant must pay the credit card network (think Visa or Mastercard), a processor (think Square), and potentially other companies that enabled the transaction. These fees usually add up to between 1% and 4% of the purchase cost; nominally, the costs are high enough that some businesses will require a minimum purchase amount to use a card.

A few states have limitations on these fees—some limit how much a business can levy in credit card surcharges (and a couple prohibit them!), and some require the business to disclose that they have a surcharge. But in some cases, there are no limits and no disclosure rules, making these fees difficult to sniff out.

What can you do? Again, depending on what state you live in, you might have no way of discovering whether those credit card costs are being baked in or not. Where these fees are disclosed, you can simply avoid shopping anywhere that has a credit card surcharge—and instead spend money with merchants that charge less when you pay in cash.

Related: What Is FIRE? A Beginner's Guide to the Early Retirement Movement

8. Annual Credit Card Fees

Rewards credit cards offer some excellent perks, but these and other high-end plastic often comes with an annual fee. This fee is one of the most important things to weigh when choosing a credit card—after all, you don't want to end up spending more on fees than you reap in rewards.

What can you do? While annoying, credit card companies are typically upfront about annual fees, so if you don't want to pay an annual fee, simply choose from the credit card world's wide variety of free options. And though it won't work often, it's worth at least calling to see if you can get the fee waived; the worst they can say is "no."

But sometimes, it pays to pay the fee. Just make sure you take a close look at all of the rewards, and how likely you'll be to use them all, to get an idea of whether you're going to come out ahead.

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9. College Application Fees

Everyone knows that going to college in the U.S. is expensive. But not everyone knows that merely applying to colleges isn't exactly cheap, either.

The average college application fee for a four-year, not-for-profit institution is around $50. That's not exactly great if your child's applying to just one college—but given that most students apply to many schools, these fees can really add up. And if you have several children … OK, you get the idea.

What can you do? Good news here. College application fees can frequently be waived if you meet certain financial eligibility requirements and/or can show that the fee would be a significant financial burden. So consider contacting college admission offices of the universities your child wants to apply to and ask about whether (and how) you can get an application fee waived.

Related: Roth IRA vs. 529 Plan: Which Is Better For College Savings?

10. Rental Application Fees

Landlords often require prospective tenants to fill out an application and authorize background checks and other reports. These reports cost money, so it's common for landlords to pass those expenses onto applicants via a rental application fee.

These fees typically range from $30 to $75 apiece—and that will quickly pile up if you're applying to several apartments at once.

What can you do? It is extremely unlikely you'll ever get a landlord to waive these fees. So your best bet, when you can, is to avoid a shotgun approach when apartment-hunting. Find out as much as you can about each of your prospective residences, then apply to them one by one—start by applying to your most preferred building, then wait to hear back before applying to the next building.

(And while you're at it, inquire about all other fees, including administrative fees, pet fees, amenity fees, parking fees, and so on.)

You also might be able to skip multiple application fees if you use a shareable rental application through a service like Avail. Avail's Renter Profile feature lets you share a digital rental application with landlords that includes commonly asked information, background checks, and more. This strategy may enable you avoid paying multiple fees to several landlords.

Related: 8 Best Rent Collection Apps & Software for Landlords

11. Late Fees

A broad range of businesses—banks, credit card issuers, landlords, and even some merchants—will tack on a late fee when a payment is past due. Some will allow a grace period, but many will levy the fee immediately.

We all might hate paying late fees, but there's at least a justification. Just like you and I have bills to pay, companies have bills to pay, too—late fees compel customers to pay on time so the business in turn can settle their debts on time.

What can you do? If you're charged a late fee, call or email the business; it's common for companies to remove a late fee. If you already have a history of on-time payments and/or this is your first offense, that usually helps your case.

Of course, the best option is to pay your bills on time. Putting your bills on autopay is a good way to stay current, but if that's not an option, set a calendar reminder for a few days before your payment is due.

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

12. Rideshare Surge Pricing

You've just left a football game or a concert, and now you need a ride back to your hotel. Well … you're not alone. And that sudden surge in demand? Rideshare apps take these, as well as supply of drivers, into account—and when there's a lot more demand than supply, they'll add surge pricing.

In short: If you want a ride at that time, you'll have to pay more (sometimes much more) than you usually would.

What can you do? Your options for avoiding surge pricing vary. You could leave the event early before the rush starts, but that's not for everyone. Alternatively, if you're not in a hurry, you can wait out the surge until prices drop back to normal. Another option is to check a different rideshare app that might have lower (or no) surge pricing—if Uber is showing 2x fares, check Lyft to see if their rates are more affordable. 

Related: 10 Best Fidelity Funds to Own

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13. Realtor Fees

Real estate agents are paid a commission when you buy or sell a house. Typically, the home seller pays the full commission to the listing agent and the buyer's agent (if one is used), and that commission is baked into the sale price. Of course, these professionals are only paid when a deal occurs—if you look at several houses but don't buy one, you're not out any money.

What can you do? Sometimes, the commission is negotiable—you'll have to talk to the agent to see if you can get the fee reduced. You could also try not to use a real estate agent at all, but you might not know everything you need to know about closing documents, purchase agreements, and state laws. You might save money, you'll have to invest much more of your time. And if you're a for-sale-by-owner (FBSO) seller, real estate agents representing buyers might not want to work with you.

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

14. Home Closing Costs

One of the biggest mistakes that novice homebuyers and sellers make is underestimating closing costs. These fees are separate from the real estate agency fees and cover loan processing, title company fees, recording of the real estate deed, insurance, and more.

What can you do? Can you avoid paying closing costs? Maybe! There isn't a set rule as to whether the buyer or seller pays the closing costs (though traditionally, the buyer pays more). You or your real estate agent may be able to negotiate having the other party pay more. Plus, some of those fees can sometimes be negotiated down.

Related: 7 Best Banks for Real Estate Investors + Landlords

15. Resale Fees

Whether you're a professional reseller or just trying to clear out your closet, sellers have to pay resale fees to online marketplaces. Sellers can be resentful of these fees—after all, just how much should a middleman be entitled to?

What can you do? Unfortunately, these fees are the same for everyone—you can't strike your own deal with a platform. But you can compare the fee structures of any platforms you're considering. Poshmark, eBay, and Mercari all have different fee rates, for instance. And occasionally, you can save if you're a volume reseller—eBay, for instance, And eBay does let you save on volume, reducing fees if you sell more than 250 items per month.

You could skip fees altogether by selling items directly to buyers, whether that's having a garage sale or alerting people to what you're selling via social media posts. But your reach will be far more limited this way.

Related: 7 Best Vanguard ETFs to Buy

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16. Early Check-In / Late Check-out Fees

Maybe your flight arrived way before your hotel check-in time and you don't want to lug around your heavy luggage. Or maybe you just want to sleep in later than check-out time. Well, the hotel might be able to do something about that … if you pay early check-in and late check-out fees.

What can you do? You can get around these fees in many cases. Even if a hotel doesn't allow you to check in early for free, if you just want to unload your bags, many hotels are willing to store your luggage for a few hours before you check in or after you check out—for free. (In fact, once, when I asked a hotel to hold my luggage for a few hours before I checked in, they offered to let me check in early at no additional cost.)

Another way to avoid these fees can be to join a hotel chain's loyalty program. Certain hotel chains provide fee-free early check-in and late check-outs if you're part of their program.

Related: 12 Best Investment Opportunities for Accredited Investors

17. Hotel Parking Fees

Being a hotel guest doesn't ensure your parking is free, especially in busy cities. Parking fees can be hefty—even if they're self-parking solutions. Valets are typically even more expensive, plus a tip is expected.

What can you do? No one is going to negotiate parking fees with you, so your best bet is to seek out alternative options. You can opt to park in a cheaper parking garage that isn't affiliated with the hotel. You can check for street parking. You can use rideshare services. Or you can use public transit.

Related: 7 Best Fidelity ETFs to Buy

18. Rental Car Fees

The price you originally see for renting a car is often substantially lower than what you end up paying once taxes and fees are added. Rental car companies have loads of different fees—some they charge upfront for extras, but many others are racked up from normal use of the car.

What can you do? The list of rental car fees and other costs is long, but let's talk about how to avoid a few:

-- For one, skip any optional insurance; also, many credit card companies actually cover car rental insurance, so check with your card company to see whether they do. (We saved a chunk of money on our recent car rental in Costa Rica because the card we used covered one of the required types.)

-- Rental companies will offer satellite radio, but that's a fee—stream from your phone instead.

-- They'll also loan you children's car seats, but bring your own if you want to avoid that extra cost.

-- Avoid tolls, because rental car companies will charge a convenience fee on top of any tolls you incur.

-- And fill up the gas before you return the car unless you want to pay an extra couple bucks per gallon in refill fees.

Related: Best Accounting Software for Rental Properties [Free + Paid]

19. Robo-Advisor Fees

If you're looking for investing help, you might hire an advisor. But if you don't have the money for a human advisor, you might enlist a robo-advisory service, which typically charges a lower fee.

What can you do? That said, if you want to cut back on fees as much as possible, you can find robo-advisors that don't charge any management fees. For instance, Fidelity Go is free for accounts with less than $25,000 in assets, and Automated Investing with SoFi Invest is completely free regardless of assets held. And, of course, you could always opt for self-directed investing, where you make all the investment decisions.

Just remember: You don't pay any of these fees out of pocket—they're automatically taken from your assets over time. So while it's always smart to save on fees, you don't need to sweat being short of cash on hand before you sign up for any advisory service.

Related: 9 Best Robo-Advisors for Investing Money Automatically

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20. Fund Fees

Whenever you buy an investment fund, you have to pay certain fees. All funds charge ongoing expense fees (listed as an annual percent of assets invested). And mutual funds might have additional fees, such as sales loads, which are a percentage of your investment taken out, sometimes at the onset, sometimes when you sell.

What can you do? There is no negotiating fund fees. Period. So your best bet is to comparison shop—but it's not easy. If you're comparing two or more funds, and all else is equal, you should pick the one with lower fees. But typically, even if funds have the same type of investment strategies, they'll go about it in different ways. So your goal should be to avoid funds with extremely high fees; but if you're deciding between two low-cost funds, don't overthink a couple of basis points (a basis point is one one-hundredth of a percentage point).

Related: The 9 Best ETFs for Beginners

The Government Is Trying to Stop Excessive Fees

Here are a few ways in which the government has gone after excessive fees:

-- After President Joe Biden encouraged federal agencies to help curb junk fees, the Consumer Financial Protection Bureau (CFPB) proposed a rule to slash most credit card late fees to not exceed $8.

-- The CFPB also proposed a rule to curb overdraft fees charged by the biggest financial institutions. This wouldn't ban businesses from charging overdraft fees, but it would require them to provide clear disclosures and other protections. It would also limit how much could be charged.

-- The CFPB has compelled companies to refund more than $100 million to consumers, much of which was for surprise overdraft fees and double-dipping on non-sufficient funds fees.

-- Additionally, the Federal Communications Commission (FCC) finalized a previously proposed rule requiring internet and cable providers to list fees and services upfront.

-- The Department of Transportation's new proposed junk fee rule wants airlines and online booking services to display the full price of plane tickets up front, including baggage and other hidden fees. In response to the government's newfound attention to illegal junk fees, several major airlines and financial companies have taken action to be more transparent about fees or eliminate some altogether.

-- Perhaps best of all, the Federal Trade Commission announced a proposed rule in October 2023 to prohibit junk fees altogether. The agency estimates these fees can cost consumers tens of billions of dollars each year. The proposed rule would ban businesses from adding junk fees, require them to be more transparent, allow the FTC to get refunds for scammed consumers, and penalize companies that don't comply with its provisions.

Has the government still not cracked down on your most hated junk fees? Consumers can submit junk fee complaints on the CFPB's website or by calling (855) 411-2372.

Related:

• 8 Best High-Yield Dividend Stocks: The Pros' Picks for 2026
• 15 Best Long-Term Stocks to Buy and Hold Forever
• How Retirees Can Master Budgeting With a Variable Income

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For older Americans, receiving that first solicitation letter from the AARP is something of a rite of passage. Taken poorly, it's a sign that you might not be the spring chicken you once were. Taken well, it's a statement that you're now a person of age, experience, and wisdom.

But AARP—once known as the American Association of Retired Persons, but now under the banner of the acronym alone—isn't just for seniors, or even generally older people.

Oh, it's main purpose is to advocate for Americans aged 50 and older. The nonprofit homes in on issues such as fixing Social Security and promoting affordable health care, housing, and transportation. But its membership isn't limited to those near or in retirement—indeed, you can become an AARP member as young as 18 years old.

Why would you? Well … the discounts.

AARP discounts help people save on everything from prescriptions and eyeglasses to flapjacks and resort stays. So today, I'm going to discuss a number of AARP discounts and other benefits that can save members money.

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AARP Membership Discounts

Remember: While AARP is an interest group dedicated to seniors, you can join AARP as soon as you're 18 years old. And doing so unlocks a bevy of discounts at hundreds of locations, including hotels, car rental shops, restaurants, and theme parks, as well as for hundreds of services, including home security, auto insurance, and health care.

Today, I'm going to share a small but wide-ranging sample of some of the best member benefits.

1. LensCrafters

LensCrafters has 931 stores across 49 states and D.C. (sorry, Wyoming), and all told, the company boasts that it has provided "quality vision care to more than 9 million people in 41 countries."

LensCrafters' AARP discounts, which are provided by EyeMed, cover several eyecare wellness services and products:

-- Exam copay: $55 for AARP members; $50 for AARP UnitedHealthcare members (participating locations only)

-- Lenses: 50% off (valid on multiple pairs; cannot be combined with other discounts)

-- Non-prescription sunglasses: 30% off (valid on multiple pairs; cannot be combined with other discounts)

-- Frame-only purchases: 15% off (cannot be combined with other discounts)

-- Conventional, disposable, and premium contact lenses: 10% off (participating locations only)

2. Outback Steakhouse

If you want an onion blossom, you can go to any number of steakhouses. But if you want the original Bloomin' Onion, you need to make your way to Aussie-inspired Outback Steakhouse. The steakhouse chain has 1,000-plus locations in 23 countries on four continents, including 673 locations spread across 44 states.

It's also home to one of a couple dozen restaurant discounts offered by AARP.

Whether you're in the mood for a full steak dinner or just feel like filling up on onion petals, your AARP membership card can get you a 10% discount off your entire check (excluding alcohol). This discount also can apply to online pickup orders. To do so, select "Pay at Restaurant" while checking out; the full price will be shown when you place the order, but once you show your membership ID at pickup, the discount will be applied.

Related: 12 Senior Discounts That Will Save You Money

3. Denny's

Denny's might be known as America's diner, but while the lion's share of its 1,573 restaurants are indeed scattered across the U.S., you can get yourself a Grand Slam in Canada, Mexico, the Philippines, New Zealand, and several other countries. It serves breakfast all day—and given that many of its restaurants are open 24 hours, "all day" isn't just a figure of speech.

AARP members can enjoy a 15% discount at Denny's, though the restaurant and AARP are at odds over how they can be used. Denny's explicitly says that the discount is only applicable to dine-in at participating locations, where you'll have your membership card scanned. But AARP says the discount applies to both dine-in and pick-up (you can just mention your membership number over the phone).

Calls placed to several local Denny's locations failed to clear this up—some said they would accept AARP membership over the phone, but others didn't. So if you do want to try your luck with pickup orders, make sure that before you do, you ask your local Denny's whether they'll honor the discount that way.

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

4. Papa Johns

The popular Papa Johns pizza chain has grown from a single location—where founder John Schnatter baked pizzas out of a converted broom closet—to a global mega-chain sporting 5,000-plus locations in 45 countries and territories worldwide.

Whether you prefer a classic cheese pie, The Works, or a pineapple pizza to spark a fight among friends, your AARP membership can make your order more affordable. Members enjoy a 20% AARP discount on regular menu prices for online orders. (Just note that the discount can't be combined with other promotions.)

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. Avis Car Rental

Avis Car Rental is one of the world's largest car rental services, boasting 5,5000 locations in over 165 countries—including the U.S., where it has available rentals in all 50 states and the District of Columbia.

Avis offers several AARP member discounts and perks, including one of the biggest price reductions among all AARP discounts:

-- Up to 30% off base rates for rentals

-- Up to 35% off base rates for rentals when choosing the Pay Now option

-- 3% credit that can be applied to future rentals (12-month limit)

-- Free upgrade on compact through full-sized car rentals (based on availability)

-- No additional charge to add a second driver

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

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6. Budget Rent A Car

Budget Rent A Car (which, by the way, is owned by the same parent company that owns Avis) is another massive rental giant with more than 3,000 locations worldwide. And it offers several AARP travel discounts and benefits, some of which are similar to Avis':

-- 30% off the company's base rates at participating locations in the U.S. and Canada by using a special discount code

-- 3% credit that can be applied to your next rental (12-month limit, available at participating locations)

-- Free upgrade on compact through full-sized car rentals (subject to availability)

-- Unlimited mileage on most rentals

-- No additional charge to add a second driver

-- Protection ensuring AARP members are responsible for only up to $5,000 in out-of-pocket costs in the event your car is damaged

-- Complementary primary liability coverage for U.S. travel up to $25,000 per person/$50,000 per accident, and property damage coverage of up to $10,000  (participating locations)

Depending on the timing of your travel, you might also get lucky and be offered a limited-time AARP member exclusive deal. As of this writing, Budget offers a $10 discount for AARP members who spend at least $175. But the deal isn't permanent.

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

7. Prescription Discounts

You can enjoy exclusive deals on prescriptions via AARP, too, thanks to the AARP Prescription Discounts program, which is provided by pharmacy-care firm Optum Rx.

To be clear: Prescription discounts are also available to non-AARP members. However, AARP members receive bigger savings and enjoy additional benefits.

The program is run through the AARP Prescription Discount Card, which you can use at more than 66,000 participating pharmacies, including Walgreens, CVS Pharmacy, Walmart, and Kroger. And these wellness discounts are applicable to home delivery. You can use the card for over-the-counter medications, too, but only if you have a prescription.

You can use the discount card whether you have insurance or not, but it cannot be used with insurance. So you'll need to ask your pharmacist which option (card or insurance) will provide better savings.

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8. National Hearing Test

The World Health Organization estimates unaddressed hearing loss costs the global economy $980 billion each year. Unfortunately, there aren't any surgical or medical treatments for hearing loss from loud noises. But, based on the severity, you can often improve hearing through hearing aids, assistive listening devices, cochlear implants, or personal sound amplification products.

The National Hearing Test was created to help people decide whether or not they want to get a full-scale hearing evaluation. This independent hearing screening is scientifically validated and can be done over the phone without leaving your home. The test is free for AARP members once a year. Membership is verified online.

Related: 9 Monthly Dividend Stocks for Frequent, Regular Income

9. AARP Movies for Grownups

AARP Movies for Grownups began as a way to battle ageism in the entertainment industry. The selected films spotlight people in the movie industry (actors, writers, directors) who are age 50+ and the movies are geared towards adult audiences.

But it has since expanded to provide nationwide in-person community movie screenings. And in 2020, in the midst of the pandemic, it added free online movie screenings with real-time chat.

Forget entertainment discounts—this is completely free entertainment. This easily ranks among one of AARP's best and most unique benefits.

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

10. Hilton Hotels & Resorts

Hilton Hotels & Resorts, Hilton's flagship brand, has more than 600 hotels across six continents. While these hotels aren't considered "luxury," they're certainly upscale, and they typically offer a full-service experience.

They're also very friendly toward AARP members, offering:

-- Up to 10% off the Best Available Rate

-- Up to 17% off the Best Available Rate when you book at least seven days in advance

-- Up to 40% off the Best Available Rate when you book even farther in advance

-- Late checkout (subject to availability)

-- Free parking (at select properties)

-- 20% off the Stay Longer in Paradise package, which provides free parking, resort credits, and extra time at certain properties in Hawaii, Mexico, the Caribbean, and more (at select properties)

Related: Best Schwab Funds to Hold in an HSA

11. Vacations By Rail

Vacations by Rail offers more than 400 independent train trips, escorted rail trips, luxury rail trips, and rail-cruise combinations. Tours are available throughout the United States, Canada, Europe, Australia, New Zealand, Africa, and Asia.

Whether you want to stay in the country and visit our awe-worthy national parks, head north for the scenic Banff rail, or take a romantic trip through Paris and London—there's something for everyone.

The company offers AARP members a 5% discount on worldwide rail vacations, tours, and select train tickets—an average savings of $175 per person. An AARP membership also gives you access to exclusive offers and customization options.

Related: How to Get Free Money Now [15 Ways to Earn Money]

12. Ancestry

Have you ever wondered where you came from? No, not the "birds and the bees" talk—where your ancestors originated. Well, Ancestry holds an extensive collection of online family history records, provides historical insights, and can help you connect to living relatives.

An AARP membership can give you 30% off an All Access or World Explorer Subscription for your first year:

-- World Explorer provides access to all U.S. and international records on the website and lets you see all public family trees.

-- All Access comes with everything in World Explorer, as well as more than 100 million articles on Newspapers.com Basic, and historical military records on Fold3.

You don't have to be a new member either. If you're an AARP member who already has an Ancestry account, you can receive the discount when you renew your subscription for an additional year.

Related: 7 Best Value Stocks for 2025 [Smart Picks to Buy]

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Sometimes.

However, Costco's Kirkland Signature brand is among the store brands that have flipped many shoppers' opinions about whether to buy "white-label." For good reason! Kirkland Signature isn't your everyday house brand—it's a carefully curated collection of products that often rival (and sometimes even surpass!) their name-brand counterparts in quality and value.

Grab your Costco shopping list and read along as I dive into some of Kirkland Signature's hidden gems with ultra-high ratings. These products are widely viewed as equivalent or superior to their higher-priced, fancier-label counterparts.

High-Quality, Low-Priced Kirkland Signature Products

The Kirkland Signature brand can be found across numerous product categories—food and drink, household goods, baby care, pet supplies, even gasoline.

Today, I'm going to focus on Kirkland Signature-brand items across several of these categories that aren't just hits, but home runs. 

Just remember: No matter how high the recommendation, you shouldn't buy certain products in bulk (mostly fresh food and ingredients, but generally anything that has a short shelf life) unless you consume them quickly and in large volumes. Otherwise, you're just throwing money away.

Listed ratings reflect Costco reviewers' average star ratings. Products listed in reverse order of average star rating, from lowest to highest.

1. Paper Towels

--Rating: 4.8/5.0

Kirkland Signature Premium Towel paper towels don't have a perfect rating, but at 4.8 stars on average, they're pretty darn close.

One recent review states that these paper towels "Work great! Tear[s] off roll easily. Convenient to have the option of a smaller amount of paper. The whole roll last[s] a long time. Super absorbent!" 

Another recent comment says "These paper towels are great, better than any other towels I've ever used before."

Not only are these paper towels considered high-quality, but they're also more affordable than other brands. Some reviews say that these are as good as Bounty paper towels, but with much better pricing. Indeed, one of my fellow Young and the Invested colleagues mentioned that he switched from Bounty to Costco's paper towels, and he hasn't looked back.

Paper towels can last a long time and serve a variety of purposes, so this product might be one of the best ones to buy in bulk.

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

2. Baby Wipes

--Rating: 4.8/5.0

Baby wipes are great cleaning tools to always have on hand. And it's hard to do better than Kirkland Signature Baby Wipes are fragrance and alcohol-free, hypoallergenic, clinically proven to moisturize skin, and gentle enough for eczema. 

These factors have helped Costco's baby wipes earn a 4.8 average out of 5.0 score. Reviews frequently mention that the wipes are high-quality, and several say they're the best wipes on the market.

And apparently, as one five-star review points out, they're mighty versatile:

"I don't have babies in my house, but use these as facial wipes mainly. I carry a package in each vehicle to use as hand wipes too. They work very well. Definitely recommend at least for the uses I mentioned."

Related: Consumers Should Avoid These 10 Products at Walmart

3. Organic Olive Oil

--Rating: 4.8/5.0

If you're like many people, olive oil is a household staple—one you don't want to be caught without. So if you always make sure you have olive oil on hand, Kirkland Signature's Organic Extra Virgin Olive Oil is a great candidate. 

The two-liter bottle has earned a spectacular 4.8-star rating. Users describe this olive oil as delicious and many say they use it daily.

"I use this as my go-to oil," one five-star review reads. "It has a mild flavor that works well for sauté and dressings." 

Others agree it's great for both salads and cooking.

Just remember: Olive oil doesn't last forever, so don't buy it from Costco (or any other warehouse stores) if you don't use much of it.

But if you have a daily EVOO habit, Kirkland Signature-brand olive oil should fit the bill.

Related: Cooking Costs Heating Up? Here's How to Save Money Cooking

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4. Dark Roast Colombian Coffee

--Rating: 4.8/5.0

A cup of coffee in the morning is a comforting daily routine for tens of millions of Americans. And if you're consuming a product every day, I say you deserve to enjoy it.

And many people enjoy starting their days with coffee from Costco.

Kirkland Signature's Colombian Dark Roast has a sky-high 4.8 average star rating. Recent reviews declare it the best coffee around. 

"We couldn't start our day without it," one fan writes. "This coffee is fantastic! We use 4-5 cans/month at my job and everyone raves about [its] rich and balanced flavor," another says. 

If you're not already drinking Costco's java and you're open to a change in caffeine scenery, Kirkland's Colombian Roast might be worth a taste. (But again: Avoid buying this in bulk if you only want ultra-fresh coffee and don't drink the stuff in large quantities.)

Related: Walmart vs. Target: 10 Big-Box Price Comparisons

5. Ultra Clean Premium Laundry Detergent

--Rating: 4.8/5.0

Laundry: It's a boring chore for some, and a therapeutic task for others. But regardless of your preference, it's important to keep your clothes and bedding clean and fresh.

If you're a Costco member, you can do that with Kirkland Signature's Ultra Clean Premium Laundry Detergent. This liquid detergent is hypo-allergenic and marketed as being tough on stains.

It's also another 4.8-out-of-5.0 product. Reviewers love its lack of fragrance, its ability to keep clothes clean, and its value proposition—and they commonly mention they've been using it for years. 

"I have used this laundry product and my clothes come out perfect," one reviewer raves. "No discoloration, no perfume smell and colors don't fade. [I] have sensitive skin and I have no itch or discomfort."

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6. Walnut Halves

--Rating: 4.8/5.0

Are you nuts about walnuts? 

Costco carries 3-pound bags of this healthy, crunchy snack. Specifically, Kirkland Signature Walnut Halves are U.S. #1 Grade walnuts. But despite the name, they're actually just 20% halves, and the remaining 80% is broken pieces—common among many brands of walnuts.

Still, this is another Kirkland Signature product that Costco shoppers can't get enough of. The walnuts have earned a 4.8-star average rating, with reviews frequently mentioning freshness, good value, and the fact that bags feature big pieces and not too much dust.

One enthusiastic reviewer said she loves using the walnuts in salads, as toppings for ice cream sundaes, or just on their own as a snack for guests.

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

7. Kitchen Garbage Bags

--Rating: 4.8/5.0

Buy something you didn't enjoy? Unless it can be tossed in a recycling bin, you'll need a sturdy trash bag to dispose of it. 

That's not a problem if you have Kirkland Signature's Flex-Tech 13-Gallon Kitchen Trash Bags stored somewhere closeby. Costco's drawstring bags, which come 200 to a box, are reinforced at the top, and the flexible plastic lets it expand without a high risk of tearing. 

The bags currently garner a 4.8-star average review, with reviewers frequently lauding their durability.

"I really like using these Costco kitchen trash bags," one reviewer says. "Very strong and durable. Don't know that I've had any holes or tears in these bags. I appreciate that these Kirkland bags are tough and hold up well, are strong and durable. I highly recommend! Glad the bags are odor-less. A very satisfied customer!"

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

8. Aller-Flo Allergy Spray

--Rating: 4.9/5.0

Ah, springtime. The sound of birds chirping. The earlier sunrises. The constant urge to cut one's nose off to stop the sniffling.

OK, no one looks forward to that last point, but that's what Kirkland Signature Aller-Flo—a generic version of Flonase that shares the same active ingredient (fluticasone propionate)—is designed to combat. The nasal spray offers 24-hour relief for itchy or watery eyes, runny or itchy noses, sneezing, and nasal congestion. 

Based on its incredible average rating of 4.9 stars, it seems to deliver.

Many reviews (and another Young and the Invested colleague) insist that Aller-Flo is just as effective as Flonase while being much less expensive. And several reviewers claim they've been happily buying this product for years.

Related: 10 Best Trader Joe's Shopping Tips

9. Maple Syrup

--Rating: 4.9/5.0

Good news, breakfast lovers: Costco offers a highly-rated maple syrup for your pancakes and waffles. It's organic, 100%-pure Grade A amber, and it's kosher. 

Kirkland Signature Organic Pure Maple Syrup has a nearly perfect rating of 4.9 stars. Users love the taste and the price.

"We don't eat pancakes without Kirkland syrup. It's that good," one reviewer insists. "The syrup is consistently delicious and always the same viscosity. If you love genuine maple syrup, this is the product for you," another says.

Related: 10 Senior Discounts for Restaurants + Grocery Stores

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10. Almond Flour

--Rating: 4.9/5.0

Do you love baking macarons? Do you bake desserts for your gluten-free friends? Well, for these and other reasons, you might keep almond flour in your pantry.

And shoppers who buy Kirkland Signature Almond Flour tend to be very happy with the results.

"I always use this flour in my recipes," says a review by "Lisa C." "Wouldn't be without it. It's a great brand of almond flour." One of my Young and the Invested colleagues adds that his wife frequently used this flour in her macarons, which were a hit at his previous workplace before everyone shifted to work-from-home.

One bit of bad news, however: Many comments claim Costco has stopped carrying the flour in some of its stores. Fortunately, even if it's not at your closest location, you can still order it online.

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

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I can't tell you how many times my good friend and longtime colleague Dan Burrows had to explain that relationship to me as I was learning the ropes of financial markets.

It seems so simple. Once you know it, it is simple. 

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However, as a former sports copy editor trying to wrap his head around something that wasn't WAR or QBR, it took some hammering home. Bonds were difficult! And boring! And heck, when I opened up my 401(k), everyone around me told me that I was so young I probably didn't even need to hold any, so I really had some resistance to learning about them.

More than a decade later, I'm here to tell you that … well, bonds are still boring, and don't let anyone ever tell you otherwise.

But they're also important to understand and monitor, no matter where you are in your investing lifecycle—even if you don't own a single bond.

Bonds vs. Stocks

First, a quick primer for any readers who are very fresh:

A bond is debt issued by some sort of entity—the U.S. government, a multinational corporation, the township you live in. When you buy a bond, you're buying that debt, and that entity is promising you that they'll pay you a stream of interest income until some date in the future, at which point they'll return your initial investment (your principal). Bond prices generally also don't move nearly as much as stocks—because of this promise, bonds tend to trade in a band around their "par value" (the price the bond was issued at).

A stock is a piece of ownership in a company that allows you to share in its profits (and conversely, losses). A stock might pay you income in the form of a dividend, but nothing is promised. Thus, stocks tend to move much more drastically based on the company's finances, future prospects, and other market conditions—not great when those factors are lousy, but it provides much more upside potential when those factors are in the company's favor. 

OK, primer over.

Young and the Invested Tip: Want to learn more about bonds? Check out our breakdown of various income-generating investments.

Think about the homepage of MarketWatch, Yahoo! Finance, or any other market-news site you visit frequently. Think about what you hear and see on CNBC or Fox Business. Think about the last few conversations you had about "the market."

Good. Now, what percentage of all of that involved bonds?

Hardly none, right? We retail investors are a stock-centric bunch, and for several good reasons, all of them related:

• Stocks have more potential for growth: Consider this: Since 1975, three-month Treasury notes have returned 621%. Longer-term Treasury bonds? 1,749%. Medium-investment-grade corporate bonds? 5,427%. Meanwhile, the stock-centric S&P 500 Index, with dividends included, has returned 18,900%. Bonds do occasionally enjoy periods of outperformance, but for the most part, stocks are king.
• Companies are interesting, and stocks reflect that—bonds do not. That growth potential is a byproduct of how stocks and bonds work: Stocks are more volatile, and their movement is more closely tied to the company's financial performance, sentiment about the company, and so on. Thus, when we read about companies, we tend to read about their stocks as well. How often do you read about Nvidia (NVDA), Tesla (TSLA), and Apple (AAPL)? See how there are stock tickers there? But you'll almost never read about their bonds.
• Brokerage infrastructure: Many online brokers will allow you to buy individual stocks, but far fewer allow you to buy individual bonds—often, your only option is to buy exchange-traded funds (ETFs) or mutual funds that hold bonds. And even when brokers do let you buy bonds, the tools and research available for stocks tend to be much more robust than for bonds. That's because … 
• There's relatively little information available about bonds: Investing data sites are largely built to provide stock data first. That's not to say you can't find bond info anywhere, but most research outfits, screeners, and data portals will typically have a wealth of available information and analysis on stocks … and precious little on bonds.
• Retail investors tend to invest in bonds in batches: Because of all of the above, most of us just throw our hands in the air and say "forget it, I'm just letting an index or fund manager deal with it" and get our bond exposure through ETFs and mutual funds.

Great! I've made the case for why no one cares about bonds.

Now, I'll let our guest for this week make the case for why you should care about bonds.

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Why Should I Care About Bonds?

The reasons for investor bond apathy that I listed above are very real, but if you haven't caught it yet, my general tone about bonds is very much tongue-and-cheek.

Bonds might be more difficult to wrap your head around because there's less available information about them and investor education tends to center around stocks. But they not only play a vital role in most portfolios (if not for you now, eventually), they also are a helpful measuring stick for both the stock market and general financial purposes! (Not to mention their sensitivity to interest rate policy set by the Federal Reserve—something that's currently in flux.)

Here to explain this today is Michael Brenner, Research Analyst at FBB Capital Partners, which provides customized wealth management solutions for financially established individuals and institutions out of lovely Bethesda, Maryland.

Young and the Invested: Let's start simple: What does the bond market offer investors?

Brenner: It offers security. In the equity market, if something goes wrong with a company and it goes out of business, there's a high probability you'll lose every penny you've got. The way you get cash flow out of your equities is that companies pay you a dividend, but those dividends are discretionary—they can be raised, lowered, the company is not legally obligated to pay. 

But the bond market provides investors with security in a number of ways.

A bond is a contract between you and the borrower, between the lender and the borrower. So when you invest in bonds, you have a contractual right to get cash flows and your principal back from the borrower. And then the other difference between stocks and bonds is that bonds have a finite life, so almost every bond will eventually end and you'll get your principal back. 

Young and the Invested Tip: One of the simplest ways to start investing in various assets—bonds, yes, but stocks, commodities and more—is to buy an index fund.

Because a bond is a series of payments and then your principal, the value of that contract doesn't change as rapidly as the value of the future dividend stream that comes off of equities. Thus, bonds' value doesn't change nearly as much as stocks do; they bring stability and ballast and income.

Young and the Invested: What's something a beginning investor might not realize about the bond market?

Brenner: The bond market is in some ways more diverse than the equity market. The stock market is made up of companies that use the stock market to raise capital to finance their operations. The bond market is a loan from a lender to a borrower of any type. So the bond market includes governments. It includes national governments, state and local governments, and companies.

Young and the Invested: Let's say I'm an investor who owns nothing but stocks. How do I get started investing in stocks?

Brenner: You can buy individual bonds, but you'll run into issues because the bond market is so much more diverse. It has so many more issuers and structures and bond types, so it can be hard for an individual investor to own enough different types of bonds in the portfolio to be properly diversified. It also would have a minimum capital requirement [you'd need a certain amount of money to build a diversified bond portfolio with only individual bonds].

The other way to get involved would be through exchange-traded funds (ETFs) or mutual funds. Those are a great way to get just a taste of bonds. And in particular with the world of ETFs, you can really target to get exactly what you're looking for in terms of exposure because there are a lot of different options out there, many of which are very low-cost and well-designed. 

Much like the S&P 500 or the MSCI All Country World Index (ACWI) covers the equity market, there are indices that cover the bond market. The most basic introductory bond index would be the Bloomberg US Aggregate Bond Index ("the Agg"), which holds what we call intermediate-term bonds of various types. That index is going to focus on investment-grade bonds, which are bonds that have a very high probability of returning their principal back to investors. It's going to focus on largely government-guaranteed bonds, along with some bonds from companies and also mortgage securities.

Most investors could have a core exposure to the Agg, then [build satellite positions in] other areas of the bond market that might offer more income or have a different maturity profile.

Another strategy that investors can employ is a bond ladder. A bond ladder takes a group of bonds and structures the portfolio by maturity, so you can invest portions of your assets in bonds that mature in various years. What you do is guarantee that you're going to get a cash flow in each year in which a bond matures, and then you can reinvest that cash flow or use it for personal expenses. At our firm, we use both bond ladders for clients that have more capital, and we use ETFs and mutual funds for clients that have smaller amounts.

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Young and the Invested: Are there any tax considerations when investing in bonds?

Brenner: If you're investing money on which you have to pay taxes on the income, you can buy bonds in state and local governments. Those bonds are going to be exempt from federal taxes, and may, depending on the type of bond you buy, be exempt from state and local taxes. So if you're paying a high tax rate, it could be advantageous to buy bonds from municipal issuers. You also have tax advantages with Treasuries [their income is exempt from all state and local taxes].

But, say, corporate bonds, that would be something you'd put in an individual retirement account (IRA).  

However, there's one wrinkle there, which is, this decision depends a little bit on your tax rate.

Young and the Invested Tip: For higher-flying investors, direct indexing can help you maximize tax savings across your investment accounts.

If you're paying, say, a 20% tax … well, if you take the 20% tax out of a corporate bond's yield, it might still out-yield an equivalent municipal bond. Of course, corporates, even at the same credit rating, have higher default rates than munis, so you have to take your risk tolerance into account, too.

If you're paying the full 35% marginal tax rate, in most market environments, you're probably going to be better off investing in municipals. If you're paying more in the 20s, even if you only invest in a brokerage account, you might be better off investing in corporates. You just have to look at your tax situation and the bonds' tax-equivalent yield.

Young and the Invested: Should you pay attention to the bond market if you don't invest in bonds?

Brenner: The bond market has a lot to say about what's going on with the state of the economy. 

So first, inflation. Most U.S. government debt has nominal interest rates—interest rates that are just printed on the prospectus of the bond, and that's the interest rate the government pays. However, the U.S. government, and governments around the world, also issue inflation-linked bonds—bonds where the interest rate is variable depending on the level of inflation. The difference in returns and interest rates between inflation-linked bonds and nominal bonds can give us an assumption about what inflation is going to look like.

Inflation has a big impact on interest rates, and it's something that we can directly read out of the bond market. If inflation is going up, we would expect that the difference in yield between inflation-linked and nominal bonds is getting wider. And if inflation is narrowing, we can see that narrowing in the bond market.

There's also underlying economic growth. After the financial crisis, economic growth slowed quite a bit. Interest rates fell quite a bit. That had an impact on what investments and asset allocators might select, because the income we associated with bonds was much lower than typical, and that affected investor interest in stocks. This idea went around that bond returns are going to be so low that you had to invest in equities. So, economic growth has an impact on the bond market. And we can try to get insights about where the bond market thinks economic growth will be.

The other component of this that might be interesting is in the corporate bond market. We can see different types of companies are borrowing money at different interest rates, and we can look at the difference in interest rates across companies, and the riskier it becomes to lend to a company, that can have an impact on their equity price.

Young and the Invested: Can you look at the bond market as a proxy for, say, a mortgage, or the cost of an auto loan? If a consumer has a big purchase coming up, how might they observe the bond market?

Brenner: In the bond market, we think of the Treasury yield curve [the interest rates of U.S. government bonds at different maturities] as being the base. Then everything else, based on how risky it is, prices off of those Treasury rates.

The Federal Reserve sets the "overnight interest rate" (the interest rate at which it costs to borrow money overnight). That interest rate is very important because it is the shortest-term, lowest-credit-risk interest rate in the economy. Interest-rate risk is priced off of the Fed funds rate—the longer it takes you to get your money back, the more risk that's going to entail, because we don't know what $100 is going to be worth next year, next month, or in the next 30 years. From there, you price out the Treasury curve, and then you price up credit risk [in other words, you determine loan terms based on perceived credit risk]. 

Young and the Invested Tip: Treasury bonds are a relatively safe investment, but there are "right" times to buy and "wrong" times to buy.

Auto loans, mortgages—those products aren't directly tied into what the Fed does. When you get a mortgage, you're going to pay your principal back over a 30-year period, but the Fed funds rate is really only an overnight interest rate. So what the bond market does is it looks at what the cost of financing is going to be over one month, one year, 10 years, 20 years, 30 years, and sets a base rate, then all those consumer products are going to get priced off of that base rate. 

Young and the Invested: If you walk into your financial advisor and say, "I'd like to know more about what bonds can do for me," I'm sure a request that simple is going to be enough to get them talking. But I wonder: Is there anything a client could ask their financial professional that would help shape the conversation better?

Brenner: I think any conversation about bonds is going to be a conversation about risk, because bonds are the most straightforward way to reduce the risk in your portfolio. 

When you're asking your advisor, "Should I be invested in bonds?" that's really going to be a question "How much risk do I want to take in my portfolio?" If you start with an all-equity portfolio, the more bonds you put in there, by and large, you're going to be taking down the risk of your portfolio. 

The second question to think about is your tax situation. As we mentioned, there's a lot of different types of bonds out there, and they do have an impact on your taxes. The income you get from bonds is taxed as ordinary income. So you want to make sure that your bond strategy is in line with where you think your tax rate is going to go and what your tax situation looks like. 

Then the other piece to think about is diversification. I mentioned at the beginning that the Agg is the broad bond market index, but the Agg doesn't cover all of the asset classes within the bond market. The Agg doesn't include inflation-linked bonds, the Agg doesn't include municipal bonds, junk bonds, a lot of floating-rate bonds. The Agg is only tradable bonds, so it's not going to include strategies like private credit or asset-backed lending. So make sure you're getting the full exposure and diversification of the bond market. 

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For instance, you might have heard that there are three capital gains tax rates: 0%, 15% or 20%. However, the tax rate that applies to your capital gain very well might not be one of those three rates. Plus, you might also have to pay an additional surtax on your profits.

So, how do you determine the proper capital gain tax rate? When you drill down a bit, you’ll see that the actual capital gains tax rate that applies to your profits depends on several different factors, such as how long you held the asset before selling it, the type of property sold, your taxable income, and the filing status used for your federal tax return.

But don’t worry—I’ll walk you through the process. Read on to see how all the factors listed above play a role in determining the tax rate that applies to your capital gains in 2026.

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What You Need to Know About Capital Gains

Before exploring the different capital gains tax rates, it’s probably a good idea to cover a few capital gains tax basics.

As implied above, the federal capital gains tax is imposed on any gain (i.e., profit) from the sale of capital assets. The tax is typically paid when you file your federal income tax return for the year the asset is sold.

The profit subject to the capital gains tax is generally equal to the amount you receive from the sale of an asset minus your adjusted basis in the property. (You have a capital loss if you sell a capital asset for less than your adjusted basis.) So, the higher your adjusted basis, the lower your capital gains tax.

Young and the Invested (YATI) Tip: Up to $250,000 of gain from the sale of your home is generally not subject to capital gains taxes if you owned the home and used it as your primary residence for at least two of the five years immediately preceding the sale (up to $500,000 of gain is excluded for married couples filing a joint tax return).

If you sell a capital asset for a loss, you can use the capital loss to offset capital gains (if any), which will reduce the amount of gain for which you owe capital gains taxes. Plus, if you have a net capital loss after offsetting gains with losses, you can use up to $3,000 of the net loss to reduce your “ordinary” taxable income. Anything over the $3,000 limit is carried forward and applied against gains or deducted from ordinary income in future years.

What’s a Capital Asset?

Capital assets include stocks, bonds, mutual funds, cryptocurrency, precious metals, and similar investment properties. But personal items—such as your car, home, furniture, stamp collections, jewelry, and so on—are also capital assets for which you can incur capital gains taxes when they’re sold.

What’s an Asset’s Adjusted Basis?

Basically, your adjusted basis in an asset is the amount you have invested in the property. Start with your cost basis, which in most cases is your purchase price, plus sales tax, broker commissions, legal fees, and various other expenses related to your purchase. That amount is then increased by the cost of items that add value to the property, such as improvements to real estate. It’s then decreased by certain property-related benefits you previously received, such as stock splits or tax deductions for depreciation.

In some cases, an alternative basis is used. For instance:

-- The basis of inherited property is generally the property’s fair market value (FMV) at the date of the previous owner’s death (this is known as “stepped-up basis”).

-- If you receive property as a gift, your initial basis can either be the donor’s adjusted basis or the property’s FMV when you received the gift, and your basis can be increased by any gift tax paid.

-- If you replace destroyed property with similar property (e.g., property lost in a natural disaster), the old property’s basis generally becomes the replacement property’s basis.

-- For property received in exchange for services, the property’s FMV is your basis (if a price is agreed upon before services are provided, that price will generally be accepted as the property’s FMV).

Related: 30 Tax Statistics and Facts That Might Surprise You

“Netting” Rules for Offsetting Capital Gains With Capital Losses

You must follow a certain sequence when offsetting capital gains with capital losses. This is known as “netting” capital gains and losses.

The order is as follows:

1. First, you must offset short-term gains with short-term losses.

2. Second, long-term gains are offset with long-term losses.

3. Last, if there are any net losses of either variety, they can then be used to offset any gains remaining of the opposite type.

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Long-Term Capital Gains vs. Short-Term Capital Gains

Now let’s get back to the capital gains tax rates. Since it’s often the most important factor for determining which capital gains tax rate applies, I want to start with the difference between long-term capital gains and short-term capital gains.

Generally speaking, if you sell a capital asset for a profit, you have a long-term capital gain if you held the asset for more than one year before selling it. On the other hand, you have a short-term capital gain if you held the asset for one year or less.

If you end up with a net capital gain after netting gains and losses, the tax rate that applies usually depends on whether the net gain is long-term or short-term capital gain. In most cases, the tax rate on your net capital gains will be lower for long-term gains, which creates an incentive to hold on to investments and other assets for more than a year if possible.

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Calculating Your Holding Period

To determine how long you held an asset, start counting on the day after the day you acquired the property, and then count the day you disposed of the property as part of your holding period.

For example, if you bought stock on Nov. 15, 2024, the clock started running on Nov. 16, 2024. If you sold the stock for a profit on Nov. 16, 2025, you didn’t hold it for more than one year, so you have short-term capital gain. However, if you sold the stock on Nov. 17, 2025, you have a long-term capital gain because you held it for more than a year.

Related: How to Give Stocks as a Gift in a Tax-Efficient Way

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2026 Long-Term Capital Gains Tax Rates

The Internal Revenue Service (IRS) adjusts the taxable income ranges each year to account for inflation. As a result, your long-term capital gains tax rate for 2026 might not be the same as the rate you paid for 2025.

If you’re already thinking about selling appreciated stock that you’ve held for a while in 2026, you’ll want to know the 2026 long-term capital gains tax rates and brackets.

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2026 Short-Term Capital Gains Tax Rates

As with the long-term rates, the IRS adjusted the income ranges for the short-term capital gains tax rates each year to account for inflation.

So, if you’re already planning ahead for this year, here are the short-term capital gains tax rates for the 2026 tax year (again, each table is based on your filing status).

Related: American Opportunity Tax Credit: Eligibility, Amount + More

Alternative Capital Gains Tax Rates

As mentioned earlier, the type of property is also a factor in determining the tax rate applied to a capital gain. This is because there are special capital gains tax rates for certain types of assets.

The following special capital gains tax rates apply for both the 2025 tax year and 2026 tax year:

-- 28% for the taxable portion of a gain from selling qualified small business stock (a.k.a., “Section 1202 stock”)

-- 28% for collectibles (e.g., art, coins, stamps, historic artifacts, etc.)

-- 25% for unrecaptured gain from selling certain real estate (“Section 1250 property”) subject to depreciation

Each special capital gains rate is a maximum rate. As a result, your ordinary income tax rate might still apply to short-term capital gains on the sale of qualified small business stock, collectibles, or Section 1250 property if it’s higher than the special maximum capital gains tax rate.

Related: 11 Education Tax Credits and Deductions

State Capital Gains Tax Rates

Let’s not forget about state taxes, since state capital gains taxes apply in most states that impose an income tax. Generally, the capital gains included in your state taxable income are treated and taxed at the same rate as other income, regardless of whether they’re long-term capital gains or short-term capital gains.

YATI Tip: Washington State, which doesn’t have an income tax, also levies a separate 7% capital gains tax.

For more information on state taxes on capital gains, check with the state tax agency where you live.

Related: States That Tax Social Security Benefits

Net Investment Income Tax

In addition to paying capital gains taxes when you sell profitable assets, you might also have to pay what’s called the net investment income tax. This 3.8% surtax is imposed on your “net investment income” if your modified adjusted gross income (AGI) exceeds a certain amount.

Among other things, your net investment income generally includes interest, dividend income, capital gains, rental and royalty income, and non-qualified annuities. It doesn’t include wages, unemployment compensation, Social Security benefits, alimony, and most self-employment income. Net investment income also doesn’t include any gain on the sale of a personal residence that’s excluded from gross income for regular income tax purposes.

Income Thresholds for Net Investment Income Tax

The income thresholds, which are based on your filing status, are as shown above.

For purposes of the net investment income tax, modified adjusted gross income means the adjusted gross income reported on your federal income tax return, plus any excluded foreign earned income.

The thresholds aren’t adjusted annually for inflation, so the 2026 amount is the same as it was for 2025.

Related: IRS Delays 1099-K Rules: What PayPal, Venmo, StubHub Users Need to Know

How to Reduce or Avoid Capital Gains Taxes

As with any other type of tax, you want to lower or even avoid capital gains taxes if you can. There are several ways to whittle down your capital gains tax bill and cut your overall tax liability in the process. Some methods take advance planning, while others can be implemented relatively quickly. And, of course, some might not be practical or even feasible for you.

To get you thinking about ways to slash your capital gains taxes, here are some quick-hit capital gains tax strategies that might be right for you:

1. Hold assets for more than one year before selling for a profit.

With a long-term gain, you’ll qualify for a lower capital gains tax rate. These long-term capital gains rates are generally more advantageous than the applicable short-term capital gains rate (ordinary income tax rates).

2. Sell investments or other assets that have declined in value to generate capital losses.

When you sell investments or other assets that have declined in value, they generate capital losses that you can then use to offset capital gains. This approach is commonly referred to as “tax loss harvesting.” Be mindful of one provision that can affect your timing of taking advantage of this strategy called the "wash sale rule," which prohibits you from deducting capital losses from the sale of an asset if you buy it (or a very similar asset) back within a 30-day period before or after the sale.

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3. Place assets that are likely to increase significantly in value in tax-advantaged retirement accounts

To minimize how much you pay in capital gains, you can place assets likely to appreciate in value inside a tax-advantaged retirement account, such as a traditional IRA. If you sell assets in these accounts, you don’t have to pay capital gains taxes. However, withdrawals from these accounts will be taxed at ordinary income tax rates regardless of how long you held the asset.

4. Donate the appreciated property to charity

Consider donating appreciated property to charity to receive a tax deduction for the property’s FMV. Under certain circumstances, the FMV is reduced by any long-term capital gain you would have realized had you sold the property. Your charitable tax deductions might also be limited to up to 50% of your adjusted gross income.

5. Use a Section 1031 exchange

If you’re selling investment real estate, defer capital gains taxes with a Section 1031 like-kind exchange. If you use the profits from the sale to purchase real estate of the same nature or character, then any gain or loss generally won’t be recognized until you sell or otherwise dispose of the new property.

Related: Child Tax Credit FAQs [What Every Parent Needs to Know]

6. Stay put in your primary residence for a little while longer

Delay selling your home if you haven’t lived there very long. If you expect to owe capital gains taxes on the sale, you definitely don’t want to leave the $250,000 exclusion ($500,000 if married filing jointly) on the table. If you currently don’t meet the ownership or residency requirements, consider postponing the sale until you do.

7. Consider Investing in Qualified Opportunity Funds

You can defer or eliminate capital gains taxes if you invest profits from the sale of property in a Qualified Opportunity Fund, which then invests in economically distressed communities. Your capital gains tax liability can be deferred until 2027. In addition, if you hold your investment in a QOF for 10 years, your basis is increased to 100% of the investment’s FMV (other basis increases are available if you hold the investment for five or seven years).

Check with your tax advisor to see if any of these strategies can provide tax advantages for you and reduce your overall tax burden.

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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.

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Related: IRA Contribution Limits

Saving for retirement is one of the primary goals of financial planning … and IRAs are one of the most important vehicles for achieving your retirement saving goals. However, you can only put so much in IRAs each year (and the amount is subject to change on an annual basis).

Want to know how much you can stuff in an IRA this year? Check out the current IRA contribution limits before you plan your retirement savings goals for the year.

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.

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The question, of course, is whether now's a good time to buy CDs.

The answer largely depends on what kind of return you're looking to get, how liquid you need your funds to be, and a few other factors, including the likely direction of interest rates.

Today, we'll help you determine for yourself whether now (or any time) is a good time to buy CDs. To get there, we'll review how CDs work, their pros and cons, even a few popular CD alternatives. Then we'll talk about how this information can help you figure out when you should or shouldn't consider stashing your money into a CD.

Disclaimer: This article does not constitute individualized investment advice. These securities appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

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What Are Certificates of Deposit (CDs)?

Certificates of deposit (CDs) are savings products offered by most banks and credit unions. They pay you a fixed interest rate on a lump sum of money over a predetermined period of time. This interest rate is typically much higher than standard and even high-yield savings accounts (HYSAs).

CDs typically are insured up to at least $250,000, either through the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA), depending on where you open your CD.

How Do CDs Work?

You usually will open a CD with a bank or a credit union. You'll need to make a minimum deposit—while they vary from one institution to the next, you'll usually need between $500 and $1,500.

This money is effectively a loan to the bank or credit union. The money will be locked up over the set term of the CD—terms largely span from three months to five years—and you'll be paid a fixed interest rate during that time. The CD will likely advertise an annual percentage yield (APY). The APY is what you can actually expect to receive in one year as the interest is added to your original deposit and generates additional interest (aka compounding interest).

Technically, you can withdraw your money before the term is over, but it's common for a financial institution to assess an early withdrawal penalty.

What Are the Advantages of CDs?

Among the reasons to like CDs?

-- They're extremely safe. No investment is risk-free, but CDs have exceedingly low risk. You're receiving a guaranteed rate of return, and even if the bank or credit union where you opened the CD goes out of business, as long as they're FDIC- or NCUA-insured, your money will be returned.

-- They're simple to open. Almost every bank and credit union offers CDs. It usually takes just 10 to 20 minutes to apply—and some institutions even allow you to open them online.

-- They offer high yields. CDs tend to offer better yields than high-yield savings accounts and money market accounts. That's largely to compensate for the fact that your money will be locked up over a set period of time.

Related: Best Savings Account Alternatives [9 Other Ways to Save]

What Are the Disadvantages of CDs?

CDs are an effective savings product, but they're hardly perfect. A couple drawbacks to keep in mind:

-- They're illiquid. Technically, you can withdraw your money from a CD before its term is over, but you'll likely face an early withdrawal penalty. (Some people create a "CD ladder" to help with this illiquidity, stashing their money in a series of CDs that mature at different intervals. That way, they're never too far away from one maturing should they need extra funds.

-- They're capped. CDs offer a fixed amount of income. So, while they do deliver more interest than your typical HYSA or money market account, they'll rarely be on par with more aggressive investments, such as stocks.

Related: 11 Best Alternative Investments [Options to Consider]

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Certificate of Deposit Math Example

Here's an example just to show you how CD returns are calculated. (This is in no way a prediction of future interest rates.)

Let's say you opened a CD with an initial deposit of $10,000. It has a one-year term at a 5% APY. When you withdraw your money after a year, your balance would be $10,500 ($10,000 original deposit, $500 in interest).

Remember: That APY includes the effects of your interest compounding. The longer the CD term, the more effect that compounding can have.

Related: 9 Best Fidelity ETFs for 2025 [Invest Tactically]

Let's say you opened a CD with an initial deposit of $1,000. It has a five-year term at a 5% APY. When you withdraw your money after a year, your balance would be $12,762.82 ($10,000 original deposit, $2,762.82 in interest).

In other words, rather than making $500 a year, as the first example would suggest, you'd actually earn a little more than $550 per year thanks to compounding interest.

Note: This example doesn't include any federal taxes you might owe.

Related: 11 Best CD Alternatives to Capture Interest With Low Risk

Do I Pay Taxes on CD Earnings?

Yes. CD interest is treated as ordinary income, and thus is taxed at your marginal tax rate.

CD interest is taxable the year it's paid. So, let's say you have a CD with a five-year term. When it's time to prepare your filing for the 2025 tax year, you'll only need to pay taxes on the interest you earned in 2025.

If you've earned more than $10 in interest in a year, you should receive a 1099-INT from the CD issuer.

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How Can I Invest in Certificates of Deposit?

All you need to do is open a CD through a bank or credit union. You can apply and be accepted within 10 to 20 minutes—at that point, you simply agree to the terms and transfer the money.

But don't think you have to open a CD with your current bank. In fact, it's worth shopping around. CD rates can vary substantially, and online banks are frequently able to offer more competitive rates than brick-and-mortar institutions.

One of our top recommendations for new CDs is CIT Bank, an online-only institution that offers traditional CDs, as well as no-penalty 11-month CDs, jumbo CDs, and more.

Related: 7 Best Wealth + Net Worth Tracker Apps [View All Your Assets]

CDs vs. Treasuries

CDs and Treasury bonds are both relatively safe, fixed-rate investments, but there are numerous differences:

-- CDs are accounts where you store your money. A Treasury bond is an investment you own.

-- A CD's value can only grow, which occurs as interest compounds. In addition to providing income, Treasury bonds can gain in value … but they can also lose value, too.

-- CDs' rates compound either monthly or daily. Treasury bonds either pay interest semi-annually or, in the case of T-bills, at maturity.

-- CDs are extremely illiquid; trying to withdraw your money before the end of its term will typically result in a penalty. Treasury bonds are extremely liquid, able to be sold pretty much whenever you want.

-- CD interest is fully taxable at the federal, state, and local levels. Treasury bond interest is exempt from state and local taxes.

-- CDs' terms range from three months to five years. Treasury bonds' lengths range from four weeks to 30 years.

I should note that you can get around a few of CDs' weaknesses. For instance, you can actually add CDs to a traditional individual retirement account (IRA) or Roth IRA, which shelters that income from taxation while it's in the account. (Just remember: With a traditional IRA, you still pay taxes on withdrawals in retirement.)

Also, a CD ladder can help you get past some liquidity issues.

Related: The 10 Best Vanguard ETFs for 2025 [Build a Low-Cost Portfolio]

CDs vs. High-Yield Savings Accounts

High-yield savings accounts and CDs both allow you to generate a higher interest rate on your money than a traditional savings account.

CDs usually offer higher interest rates than high-yield savings accounts. Also, CDs' rates are fixed—HYSAs' rates can fluctuate, which is great when rates rise, but not so advantageous when they decline.

On the flip side, HYSAs provide much more access to your money, whereas you'll virtually always pay a penalty if you try to withdraw from a CD before its term has expired. To be clear: Some high-yield savings accounts provide unlimited access to your funds, while others enforce a monthly transaction limit. But even in the latter's case, that's a lot more liquidity than CDs provide.

Generally, a high-yield savings account is better for short-term savings you might need to access in a pinch. A CD is a more suitable home for savings you are confident you won't need to touch before the CD matures.

Related: 13 Best Long-Term Stocks to Buy and Hold Forever

CDs vs. Money Market Accounts

Like with HYSAs, CDs also tend to offer higher yields than money market accounts. They also offer fixed rates, whereas money market accounts have variable interest rates.

However, money market accounts are much more liquid. Users are typically able to write checks against, and/or use a debit card associated with, the account. (Though the number of monthly transactions is typically limited.)

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CDs vs. Stocks

CDs and stocks are two very different types of investment.

CDs are highly illiquid but provide a virtually guaranteed rate of return. And that rate, at least currently, is fairly attractive.

Stocks, on the other hand, provide almost no guarantees—they're far riskier than CDs will ever be. That said, stocks also deliver a higher average annual return, historically speaking, and provide much higher upside potential than CDs.

Moreover, stocks are incredibly liquid—you can buy and sell at will (though you'll have to deal with capital gains taxes if you're buying and selling in a taxable account).

Given all this, CDs and stocks should be treated much differently. Stocks should largely be relied upon to build wealth over longer periods of time, with the understanding that the worth of those investments could fluctuate considerably. CDs, however, are a great way to modestly grow any money you don't need right this second, but know you'll need at or after some determined point in the short- to medium-term.

Related: 9 Best Schwab ETFs to Buy [Build Your Core for Cheap]

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So, Is it a Good Time to Buy CDs?

You know up front what kind of return you're going to get from a CD. So as long as you're happy with the rate of return a CD will give you, there's never really a bad time to buy a CD.

That said, some times are better than others.

CDs' rates are in large part determined by the Federal Reserve's benchmark interest rate. The higher that rate, the higher CDs' rates need to be to compete with other products that also are tied to the federal funds rate.

The most recent Federal Reserve meeting was late April 2026. It was decided to keep interest rates unchanged in the 3.5%-3.75% range. It's expected rates will remain the same or increase by the end of the year.

Generally, it can be strategic to buy CDs in a stable-to-declining rate environment. Some savers may want to wait and see if rates increase, particularly if they are considering longer-term CDs. However, given the current market volatility fears, it may still be a good time to buy CDs.

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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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In fact, one of the most difficult choices left on our plate is deciding which of several low-cost fund providers we want to provide the foundation of our investing accounts. ("Oh no, my lobster is too buttery and my steak is too juicy!")

You're not required to select products from only fund provider, of course—you can mix and match funds from numerous offerers. But some people prefer to buy all of their core portfolio holdings from one fund provider. That could be for any number of reasons; you might prefer one provider's managers, for instance, or you might prefer the way their index funds are built.

Today, I'll show you the benefits of keeping it all within the Schwab family, and how to go about it. Schwab ETFs only number around 30 or so, but they're among the lowest-cost products on the market, and they largely tend to earn strong ratings from analysts who cover funds.

Let's look at some of the best Schwab ETFs you can buy right now. I'll touch on funds that address a variety of core investment needs, which each providing you access to hundreds if not thousands of securities within that space for a low annual cost.

Editor's Note: Tabular data presented in this is up-to-date as of May 27, 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 an ETF?

If you're familiar with ETFs, just scroll a little lower to get to the list.

For those of you new to the game, here's a very quick introduction: “ETF” is an acronym for an “exchange-traded fund.”

In plain English, an ETF is a type of investment fund. It's similar to a mutual fund in that it owns assets (stocks, bonds, etc.). But whereas mutual funds only change hands once a day (at the end of the day), ETFs are listed and trade on an exchange, just like individual stocks. As such, an ETF can fluctuate in price across the trading day according to the value of those underlying assets.

Are ETFs the Same Thing as Index Funds?

Not always. Most ETFs are index funds, meaning they are tied to a fixed “index” or list of securities. However, mutual can also be tied to indexes and thus be categorized as index funds, too. Similarly, both ETFs and mutual funds can instead follow a more dynamic or “active” list of investments.

It can be confusing sometimes, but the bottom line is you should always read the investment materials an asset manager provides and look for a description. In the case of Schwab, the "Objective" or "Highlights" sections at the top of most ETF pages will clearly identify whether funds are index funds, or active funds.

The Best Schwab ETFs to Buy Now

I'm writing this article to introduce you to the best Schwab ETFs to buy if you want to address basic portfolio needs in both stocks and bonds. 

In other words: This isn't an exhaustive list of every fund you'd ever want for every swing or day trading need. This is simply a smart place to start if you want to build a core buy-and-hold portfolio using Schwab ETFs.

In addition to important data information such as dividend yield and expense ratio, I've listed Morningstar's Medalist and Star ratings for each ETF. Morningstar's Medalist rating is a forward-looking analytical view of the fund, while Morningstar's Star rating is a backward-looking view that measures a fund's risk-adjusted return vs. its peers. Every fund on this list has a minimum Medalist rating of Silver and Star rating of 3 (out of 5).

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

1. Schwab U.S. Large-Cap ETF

• Style: U.S. large-cap stock
• Assets under management: $71.2 billion
• Dividend yield: 1.1%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 4 stars

American investors are commonly told to build their portfolio core around large-capitalization U.S. stocks.* That large-cap stock exposure will often come from an index fund tracking the S&P 500—a collection of 500 major U.S. businesses, and a proxy for the American stock market. That's why three of the biggest fund providers—Vanguard, State Street, and BlackRock's iShares—offer up ETFs that track this ubiquitous index.

Schwab doesn't. Instead, it provides something similar with the Schwab U.S. Large-Cap ETF (SCHX).

SCHX doesn't track the S&P 500, but instead the Dow Jones U.S. Large-Cap Total Stock Market Index. Why not just offer an S&P 500 fund? Well, at the time Schwab's ETF was launched, using this index allowed the firm to keep costs extremely low—at inception in 2009, SCHX was at least as cheap, if not cheaper, than any of the S&P 500 ETFs.

Related: The 16 Best ETFs to Buy Right Now

Schwab U.S. Large-Cap ETF holds about 750 U.S. large-cap stocks, so you're enjoying even broader exposure than what you'd receive from an S&P 500 ETF. Of course, 97% of the S&P 500's stocks are in SCHX. Additionally, like S&P 500 trackers (and many other index funds), Schwab's fund is "cap-weighted," meaning the bigger the stock, the more of it SCHX holds—Nvidia (NVDA), Apple (AAPL), and Google parent Alphabet (GOOG/GOOGL) are currently top dogs. In fact, more than 90% of SCHX's "weight" (the percentage of the fund's assets dedicated to a specific holding) is placed in S&P 500 holdings.

Put differently? While SCHX doesn't track the S&P 500, it's really similar. 

Since Schwab U.S. Large-Cap ETF launched, other fund providers have lowered the expenses on their S&P 500 ETFs, so while SCHX is still cheaper than many similar funds, it doesn't have a cost edge over as many funds as it used to. Performance is generally close to the S&P 500, though long-term it has marginally underperformed. Regardless, it remains one of Schwab's best ETFs: a straightforward and dirt-cheap way to address one of the most crucial aspects of your portfolio.

* 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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2. Schwab U.S. Broad Market ETF

• Style: U.S. total market stock
• Assets under management: $42.9 billion
• Dividend yield: 1.1%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 3 stars

You'll likely be told to hold more than just domestic large caps, of course. It's also common to put at least a little money into the shares of U.S. mid- and small-cap companies. These firms tend to be less financially secure (and their stocks more volatile) than their bigger counterparts ... but, historically speaking, they hold more upside potential for those willing to take on the risk.

Related: 11 Best Vanguard Funds for the Everyday Investor

You can buy these stocks (in fund form) in one of two ways:

1. Purchase mid- and small-cap funds alongside your large-cap funds.
2. Purchase a "total market" fund, which allows you to hold stocks of all sizes in one place.

The first option gives you more control of how much, or how little, you want to invest in stocks of each size. But the second option is by far the easier one, allowing you to invest in a diversified portfolio of various-sized stocks with a single click.

The Schwab U.S. Broad Market ETF (SCHB) is a way to achieve the latter. It owns more than 2,400 of the largest publicly traded U.S. companies. That figure includes virtually all U.S. large-cap stocks, sure, but also various amounts of mid- and small-sized equities. Right now, around 70% of SCHB's portfolio is invested in large-cap stocks, 20% is dedicated to mid-caps, and the remaining 10% or so is invested in small companies.

Like most of the other Schwab ETFs on this list, SCHB is market cap-weighted, so stocks such as Nvidia and Apple still have the most impact on the ETF's performance. But you're gaining more exposure to mid- and small-sized firms than you would by owning a fund like SCHX.

Related: 10 Best Schwab Mutual Funds You Can Buy [Low Fees, $1 Minimums]

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3. Schwab U.S. Small-Cap ETF

• Style: U.S. small-cap stock
• Assets under management: $22.3 billion
• Dividend yield: 1.1%
• Expense ratio: 0.04%, or 40¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 3 stars

If you'd instead prefer to hold varying proportions of large- and small-cap funds, Schwab U.S. Small-Cap ETF (SCHA) is one of the least expensive versions of the latter.

Related: 14 Best Investing Research & Stock Analysis Websites

SCHA tracks the Dow Jones U.S. Small-Cap Total Stock Market Index, which has an interesting selection methodology:

"Companies not selected for the large-cap index ranked 2,000 or higher are automatically assigned to the small cap index. Current small-cap companies ranked 3,000 or higher are selected, in descending market capitalization order, until the index contains 1,750 companies. If the index does not contain 1,750 companies after applying the buffer, the largest non-constituent companies are added until the index contains 1,750 companies."

As a result, SCHA is a predominantly small-cap fund, but not a pure one. Currently, 85% of assets are allocated to small-cap stocks, but it has a 10% allocation to mid-caps and even 5% invested in smaller large caps.

Another feature of most small-cap index funds is typically low single-stock risk—much of the time, every holding in SCHA will be weighted at less than 1% of assets, which means an implosion in any one stock won't threaten to torpedo the whole portfolio. However, a recent red-hot run by SanDisk (SNDK) has the company at an unusually high 5% of assets right now, while Lumentum Holdings (LITE) is at more than 1%. It's very possible that SanDisk, now at $230 billion in market cap, will be replaced the next time the fund rebalances.

SCHA, like other top Schwab ETFs, also charges razor-thin annual expenses (currently 0.04%).

Related: Best Schwab Retirement Funds for an IRA

4. Schwab U.S. Dividend Equity ETF

• Style: U.S. dividend stock
• Assets under management: $94.9 billion
• Dividend yield: 3.3%
• Expense ratio: 0.06%, or 60¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 4 stars

Not all equity returns come from stock prices increasing—dividends often play an important role, too.

Dividends are cash payments that companies make to its shareholders. They're a vital source of return for stocks, especially when prices are flat or down. They can be reinvested to compound your returns over time (over longer time periods, dividends have accounted for roughly 40% to 50% of equity returns). And once you hit retirement, that investment income can be used to pay your regular bills.

While you could try to get that exposure by picking individual dividend stocks, you could also diversify your risk across hundreds of payers via a dividend ETF like the Schwab U.S. Dividend Equity ETF (SCHD).

Related: 8 Best T. Rowe Price Funds to Buy Now

This Schwab index ETF holds around 105 dividend stocks selected for their high yields, track records of consistent dividend payments, and relative strength of their financial fundamentals. Specifically, SCHD requires its components to have paid dividends for at least 10 consecutive years, and it measures them based on yield, five-year dividend growth rate, return on equity (RoE), and free cash flow (FCF)/total debt.

Schwab U.S. Dividend Equity ETF skews large-cap, at about 75% of the portfolio, but mids are decently represented at roughly 20% of assets. Small companies occupy the remaining sliver. The fund also holds a number of Dividend Aristocrats—companies that have raised their dividends on an annual basis for at least 25 consecutive years—such as Chevron (CVX) and PepsiCo (PEP). And it even holds a few Dividend Kings (50-plus years) including Coca-Cola (KO) and Procter & Gamble (PG). These stocks help SCHD throw off a sizable annual yield of well more than 3% currently, which is more than triple what you'd earn from holding an S&P 500 fund.

"Schwab U.S. Dividend Equity ETF stands out for its sensible, transparent, and defensive approach," Morningstar Associate Analyst Brian Paoli says. "The Dow Jones US Dividend 100 Index, which this fund tracks, includes 100 stocks that have a proven track record of dividend growth and stability. By requiring a minimum of 10 years of uninterrupted dividends and five years of stable dividend growth, the index has naturally favored stocks that have a healthy financial history."

This all makes SCHD one of the best Schwab ETFs to buy if you want much higher-than-average yield while still paying a low fee.

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5. Schwab U.S. Large-Cap Growth ETF

• Style: U.S. large-cap growth stock
• Assets under management: $59.8 billion
• Dividend yield: 0.4%
• Expense ratio: 0.04%, or 40¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 4 stars

Investors who want to outperform the S&P 500 and other major indices often start gravitate toward growth stocks—companies expected to improve their revenues, earnings, and/or other performance metrics at a greater clip than their peers.

Of course, growth stocks sometimes offer a bumpier ride along the way. Investors are happy to bid growth stocks higher, often ignoring too-hot valuations, as long as future expectations remain high. However, if the growth story gets interrupted, those investors can flee just as quickly as they arrived.

Rather than gamble on one or two individual plays, then, some investors buy ETFs to spread that risk across a few hundred names.

Related: UBS: Micron (MU) Stock Has More Than 100% Upside

The Schwab U.S. Large-Cap Growth ETF (SCHG) allows investors to do just that. SCHG tracks an index of companies that have been selected based on metrics including trailing revenue growth, trailing earnings growth, and projected earnings growth. The 200-stock portfolio is about 85% large-cap in nature, with virtually all of the remainder invested in (larger) midsized companies.

SCHG is pretty consistent with many growth funds in that a huge chunk of assets are parked in technology and adjacent sectors. Tech stocks account for almost half of this Schwab ETF's assets; another quarter is split between communication services and consumer discretionary stocks.

While completely unremarkable from a portfolio construction point of view, Schwab U.S. Large-Cap Growth ETF is nonetheless one of the best Schwab ETFs you can buy because it has it where it counts: returns. While past performance isn't a guarantee of future returns, SCHG has done extremely well against its peers—its trailing five-, 10-, and 15-year returns are all roughly around the top 10% of the fund's Morningstar category.

"Schwab US Large-Cap Growth ETF accurately represents the large-growth segment of the US stock market, allowing its low fee and efficient portfolio to carve out a long-term edge," Morningstar Associate Analyst Brendan McCann says about the fund, which recently earned a Medalist rating upgrade to Gold.

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6. Schwab Fundamental U.S. Large Company ETF

• Style: U.S. large-cap value stock
• Assets under management: $25.3 billion
• Dividend yield: 1.5%
• Expense ratio: 0.25%, or $2.50 annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 5 stars

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.

Schwab has a value fund similar to the aforementioned SCHG: Schwab U.S. Large-Cap Value ETF (SCHV). However, I think a better Schwab fund for the task is the Schwab Fundamental U.S. Large Company ETF (FNDX).

SCHV is similar to SCHG in that it's a market cap-weighted group of stocks that exhibit value characteristics. The index FNDX tracks, however, evaluates stocks differently: "It selects, ranks, and weights securities by fundamental measures of company size—adjusted sales, retained operating cash flow, and dividends plus buybacks—rather than market capitalization." 

Related: 8 Best Schwab Index Funds for Thrifty Investors

Schwab Fundamental U.S. Large Company ETF currently holds 735 stocks, 60% of which are invested in large caps. That means you're also getting significant exposure to mid-caps (30%) and a little exposure to smalls (10%). Top sectors include technology, financial services, healthcare, communication services, and energy, all of which enjoy double-digit weightings at the moment.

There's nothing special about that. Where FNDX's selection process shines is that it boasts equivalent (and sometimes even better) valuation metrics compared to SCHV, as well as superior performance over time.

To wit, Schwab Fundamental U.S. Large Company ETF has outperformed Schwab U.S. Large-Cap Value ETF over every meaningful time frame since inception in 2013. Meanwhile, as I write this, FNDX's portfolio price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), and price-to-cash flow (P/CF) are all lower than SCHV. That makes it one of the best (if not the best) Schwab ETFs to buy if you're looking too add a value strategy to your portfolio.

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

7. Schwab International Equity ETF

• Style: International large-cap stock
• Assets under management: $65.8 billion
• Dividend yield: 3.1%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 4 stars

Up until now, every Schwab ETF I've talked about has focused on U.S. companies.

Why not? Most everyone reading this is from the States. And besides: America's stock markets have long been among the best-performing on the planet. Thus, most advisers will tell you to put the lion's share of your assets into owning U.S.-based stocks and bonds.

Related: Buy 'The Future': 5 Tech Stock ETFs You Should Own in 2026

But those same advisors will also typically tell you to get a little geographic diversification, too. The U.S. might not carry the torch every single year, and having international exposure might help smooth out rough patches when American stocks struggle. (And in some cases, like 2025, they outperform even when U.S. equities shine.)

The Schwab International Equity ETF (SCHF) is an extremely low-cost way to do so, at just 0.03% annually. It holds a broad selection of 1,500 equities of companies domiciled outside the U.S., with most of those coming from developed-market countries such as Japan, the U.K., Canada, and France.

Like many ETFs heavy in developed-nation exposure, SCHF is loaded with blue chips; large companies enjoy an 85% weight, with virtually all the rest of assets dedicated to mid-caps. Developed-market stocks tend to offer higher dividends on average than their American counterparts; positions such as HSBC Holdings (HSBC), AstraZeneca (AZN), and Nestlé (NSRGY) contribute to a fund yield that's about thrice what the S&P 500 pays.

"Low fees also contribute to strong performance relative to its Morningstar Category," Morningstar Analyst Zachary Evens says about this Gold-rated ETF. "The fund returned 11.4% annualized for the five years through September 2025, outpacing its average peer by more than 1 percentage point. Its volatility was slightly higher, but risk-adjusted returns also were favorable relative to the category average. Going forward, investors should expect the strategy to do well when developed markets do well."

Related: The 11 Best Fidelity Funds You Can Own

8. Schwab U.S. Aggregate Bond ETF

• Style: U.S. intermediate core bond
• Assets under management: $9.9 billion
• SEC yield: 4.3%*
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 3 stars

Investors are also told to allocate some of their nest egg to bonds, which serve a very different purpose than stocks.

With stocks, price changes are the primary driver of returns—you can receive dividend income, too, but in general, you're expected to get more performance from the stock growing in value. But bonds tend to be much less volatile and mostly trade around a "par" value. Instead, their performance largely comes from the interest income they generate. As a result, younger investors are told to invest almost exclusively in stocks, then slowly raise their allocation to bonds as they get older, as they shift from wealth creation to wealth preservation.

You could hold individual bonds, but they're even more difficult to assess than stocks, and it's much more difficult to find publicly available information and analysis on them. So, many investors buy a bond fund instead and let a fund manager or index do the heavy lifting.

Related: 8 Best High-Yield Dividend ETFs for Income-Hungry Investors

The Schwab U.S. Aggregate Bond ETF (SCHZ), for instance, gets you under a vast umbrella of more than 12,200 bonds and other debt securities in just one click. It's a diversified portfolio largely made up of U.S. Treasury bonds, corporate bonds, and mortgage-backed securities, all of which have earned ratings within the "investment-grade" spectrum of debt. SCHZ's holdings also span a wide number of maturities, from just a few months to more than 20 years.

Schwab U.S. Aggregate Bond ETF has a portfolio duration of 5.8 years. Duration is a measure of interest-rate risk—in this ETF's case, a duration of 5.8 years implies that if interest rates fell by a percentage point, SCHZ's price would enjoy a short-term improvement of 5.8% (and vice versa). Remember: Bond prices and interest rates have an inverse relationship.

If you're building a basic portfolio, SCHZ is one of the best Schwab ETFs to buy to get essential debt exposure. It's is not a scintillating fund (few bond funds are!), but it offers a moderate level of income for a moderate amount of risk. 

* 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 Closed-End Funds (CEFs) Paying Us Up to 15.2%

9. Schwab Short-Term U.S. Treasury ETF

• Style: U.S. short-term government bond
• Assets under management: $12.7 billion
• SEC yield: 4.0%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 3 stars

As a general rule, the longer a bond's maturity, the higher the risk. Think about it: If you buy a two-year bond from a financially strong company, you'll be pretty confident it can repay that bond in full. However, if you buy a 20-year bond from that same company … sure, you might still have plenty of faith in the company, but 20 years is a lot longer for something to go wrong. As a result, issuers typically have to offer higher yields to convince investors to take that added risk.

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

Short-term bond funds, then, typically offer investors a relatively safe place to invest while earning a modest amount of income.

The Schwab Short-Term U.S. Treasury ETF (SCHO) further ratchets down risk by holding only short-term debt from the U.S. Treasury—an institution that enjoys some of the highest debt ratings on the planet given their long history of paying back its debtors. This Schwab ETF currently invests in almost 100 different Treasury issues with an average maturity of two years. And it has a duration of just 1.9 years, meaning if interest rates rose a full percentage point, SCHO's price would decline by a mere 1.9%.

Also worth noting: The "yield curve" was inverted (meaning short-term rates were higher than long-term rates) for a two-year stretch that started in 2022. While the inversion ended in 2024, SCHO still offers a yield of 4%, which is mighty competitive given its relatively modest risk profile. That's only a little less yield than SCHZ, which has a significantly longer average maturity and a much higher level of interest-rate risk.

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10. Schwab U.S. TIPS ETF

• Style: U.S. inflation-protected bond
• Assets under management: $15.6 billion
• SEC yield: 13.4%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 3 stars

The Schwab U.S. TIPS ETF (SCHP) is the other newest addition to this list, and it focuses on a small but useful niche within the debt market.

Treasury Inflation-Protected Securities, or TIPS, are government bonds whose returns are connected to changes in the consumer price index—specifically, the "Non-seasonally Adjusted Consumer Price Index for All Urban Consumers" (CPI-U). As the CPI (and thus inflation) increases, so too do TIPS. Here's an example to help you out:

You buy $50,000 in U.S. TIPS with a 4% coupon. Inflation in the first year is 5%. The face value of your TIPS would be adjusted higher by 5% ($2,500), to $52,500. The 4% coupon would remain the same, but it would be based on the adjusted face value. So instead of receiving $2,000 in annual interest, you would receive $2,100. (Note: Like other Treasury-issued bonds, TIPS pay semiannually.)

Related: 10 Best ETFs to Beat Back a Bear Market

But TIPS have their downsides, too. They not only face the same interest-risk issues of regular bonds, but expectations for low inflation (and even deflation) can weigh on their value. Also, while all bond funds' yields tend to vary a little bit over time, TIPS yields can vary wildly depending on the inflation environment. SCHP currently shows a wild SEC yield of more than 13%. But it was in the low single digits just a few months ago.

Schwab's inflation-protected ETF owns about 50 different TIPS issues with a weighted average maturity of 7.3 years. Its duration is a moderate 6.5 years. Both of these are in line with other popular TIPS funds.

One thing to know if you're going to hold SCHP or another TIPS fund? TIPS, much like traditional Treasuries, are exempt from local and state taxes. It's a nice perk if you're investing through a taxable brokerage account; that advantage is blunted somewhat if you hold it in a tax-advantaged account like an individual retirement account (IRA) or health savings account (HSA).

But in short: If you're looking to hedge against inflation, SCHP is one of the best Schwab ETFs you can buy.

Related: 10 Best Alternative Investments [Options to Consider]

How Do You Invest in Schwab ETFs?

Once you know which Schwab ETFs you want to invest in, buying them couldn't be easier.

As long as you have a brokerage account that allows you to buy ETFs that trade on a major U.S. exchange (which is the vast majority of brokerage accounts), you simply pop in the ticker and buy your desired number of shares.

That's literally it.

If you're asking us, Young and the Invested's highest-rated brokerages include Robinhood, Webull, and Moomoo. But you can get Schwab ETFs through E*Trade, Fidelity, Schwab (of course), Vanguard, and many, many other brokerages.

However, since this is an article about Schwab ETFs, we suggest considering Schwab's brokerage account to invest in their funds. We provide more details below.

Related: 5 Best Silver ETFs You Can Own

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.

Related: The 10 Best Vanguard Index Funds You Can Buy

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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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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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.

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.

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That’s because the cap on how much you can put in a 401(k) plan is adjusted each year to account for inflation, and that’s pushing up the 401(k) contribution limits for 2026. Better still? Catch-up contributions for older employees are also heading north in the coming year.

Even if you can’t put the full amount in every year, it’s wise to contribute some money to a 401(k) account each year if you have access to this type of retirement plan. You’ll probably need some extra income once you retire, since Social Security alone probably isn’t going to pay all the bills in your golden years. Plus, depending on the type of 401(k) account you have, you can access some terrific tax breaks either now or once you retire.

How much can you contribute to a 401(k) account in 2026? Read on to find out.

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Tax Benefits of 401(k) Plans

Before jumping into next year’s 401(k) contribution limits, let’s go over a few basic facts about 401(k) plans and how your account is taxed.

A 401(k) plan is a retirement savings plan established by your employer. The employer-sponsored retirement accounts set up under a 401(k) plan can be either a traditional or Roth account, depending on what your company offers. Each type of 401(k) account has its own tax benefits.

The main difference between a traditional 401(k) account and a Roth 401(k) account is when funds in the account are taxed.

Money contributed to your traditional 401(k) account isn't included in your taxable income for the year. So, you get a tax break right away. Funds in the account then grow on a tax-deferred basis (i.e., you don’t have to pay tax each year on any interest or earnings). However, you eventually have to pay income tax on any withdrawals from the account down the road.

With a Roth 401(k) account, contributions are included in your taxable income. As a result, you owe income tax on the amount you put in the account for the year the contribution is made. But after that, funds in the account grow on a tax-free basis and no income tax is due when you take money out of the account in retirement.

In addition, you might also qualify for a tax credit of up to $1,000 ($2,000 for married couples filing a joint tax return) for putting money into either a traditional or Roth 401(k) account. However, this credit—commonly called the Saver’s Credit—is only available to low- and moderate-income individuals. So, to claim the credit, your federal adjusted gross income must be at or below a certain amount, which is based on your filing status.

YATI Tip: Starting in 2024, required minimum distributions (RMDs) were no longer required for Roth 401(k) accounts.

Related: IRA Contribution Limits for 2026

Early Withdrawal Penalties

There are restrictions on when you can withdraw money from a 401(k) account, and a 10% early withdrawal penalty if you take money out of your account too soon.

With a traditional 401(k) account, you might have to pay the penalty if you withdraw money from the account before you turn 59½ years old. And, with a Roth 401(k) account, you could be hit with the penalty if you withdraw earnings before reaching 59½ years of age.

There are various exceptions to the early withdrawal penalty, though. For instance, you can withdraw funds from a 401(k) plan before you turn 59½ to pay certain medical expenses. You can also avoid the penalty if you lose or leave a job after the year you turn 55 and pull money out of that company’s 401(k) plan. Other exceptions might also apply.

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401(k) Contribution Limits for 2026

For 2026, employees under 50 years old can contribute $24,500 to one or more 401(k) plans. That’s an increase of $1,000 from 2025.

Workers who are between ages 50 and 59, or 64 and older, can put an additional $8,000 in their 401(k) plans for 2026—for a total of $32,500. The $8,000 catch-up contribution limit is a $500 improvement from 2025.

The super catch-up contribution limit remains $11,250, for a total of $35,750.

Employers' contribution limit increased by $1,000 to $47,500 of additional funds, good for a combined total of $72,000 in employee and employer contributions for workers under 50. (The combined total limit is $80,000 for employees age 50 or older who make catch-up contributions, and $83,250 for employees ages 60-63 who make catch-up contributions.)

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What to Do With Your 401(k) Plan After Leaving a Job

These days, few people stay with one company for their entire career. In fact, a lot of people switch jobs every few years. But whenever you do leave a job, there’s often questions about what to do with your old 401(k) account.

When you leave a job, you basically have four options:

1. Keep the 401(k) account with your former employer
2. Roll over the money in your 401(k) account into a traditional or Roth IRA
3. Roll over the money to your new employer’s 401(k) plan
4. Cash out your 401(k) and pay any taxes due

Which option is best for you depends on your own situation and goals. In other words, there’s no right way or wrong way … just the best way for you.

However, if at all possible, try to keep your money invested and growing in one way or another. Unless you absolutely need the money right away, cashing out an old 401(k) is often a risky move because you’re probably going to need that money in retirement.

If you're not sure which option is best for you, consider discussing your options with a financial advisor to determine might be best for your situation.

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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.

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Everyone’s favorite financial nonagenarian has been a staple of the financial media world for decades. People want to read about him, and boy howdy, do we supply it.

Search “Warren Buffett” at any given time, and chances are you’ll see a plethora of recent stories about his latest stock moves, Berkshire shareholder letters, or recent musings. But lately, that stream of news has changed.

The "Oracle of Omaha" stepped down as CEO of Berkshire Hathaway at the end of 2025 after spending six decades leading the sprawling conglomerate. While he remains as chairman, the ascension of current Vice Chairman Greg Abel very much marks the end of an era that saw Buffett evolve into not just one of the planet's richest people, but a uniquely beloved and respected billionaire whose words and actions were almost religiously followed by people trying to build their own wealth in this world.

So ... how exactly did so many of us come to care so much about Buffett?

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Why Are We Fascinated by Warren Buffett?

In a moment, we’ll ask that (and a few other Buffett-related questions) of our guest this week—Chris Ballard, CFP®, Managing Director at Check Capital Management, a Registered Investment Advisor.

But first, I’ve put in the time, so I’ll put forth a few thoughts.

I think the base assumption here is that most people want to mirror Buffett’s success. Which, sure! Why wouldn’t they?

• The guy bought his first stock at age 11 (1942).
• He bought a pinball machine for $25 at age 16 (1946)—not to play, but to put to work in a barbershop. (He later told Bill Gates he built “a small empire” out of that machine.)
• Buffett cooked up his first investment partnership at age 25 (1956)
• He reached $1 million in net worth by the time he was 32 (1962). Which, by the way, that $1 million then would be worth more than $10 million today.
• That same year, he began investing in Berkshire Hathaway. Three years later (1965), he owned enough to formally take control.
• He became a billionaire by age 55 (1985).
• He first became the world’s richest person at age 78 (2008), at an estimated value of between $58 billion and $62 billion. He has largely sat in the top 10 since then.
• Berkshire Hathaway is consistently among the nation’s 10 largest companies by market capitalization, and often the largest non-tech-related firm.

Note: Buffett was born Aug. 30, 1930, so the ages and years above might add up differently depending on when in the year the milestone was achieved.

Young and the Invested Tip: You don’t need to be Buffett to find good stocks to buy. There are several top stock analysis websites to help.

But there are many, many other billionaires the world over. Always have been. Always will be.

And yet, we in the financial media have tried replicating Warren Buffett fever—writing stories about other billionaires’ stock picks, financial habits, and words of wisdom—for years, with little to show for it. 

Because Buffett’s popularity is about more than just the numbers.

It’s one man’s opinion, but Buffett is perhaps the most relatable of the Wall Street billionaires.

For one, he’s not a Wall Street billionaire—he’s the Oracle of Omaha. While he did get a master’s in economics from Columbia University and worked in New York for a few years, he has spent the lion’s share of his life in Nebraska, most of it in Omaha. The man’s a Midwesterner. He lives in Big Ten Country*.

His wisdom is elegant, in the scientific sense of the word. While you and I don’t enjoy many of the same advantages he does—BofA isn’t offering us a special class of preferreds because we bought a handful of shares!—his lessons are simple and applicable. Pick businesses, not stocks. Invest in what you understand. Price is what you pay; value is what you get.

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Young and the Invested Tip: These are some of the best stocks to buy and hold forever.

While I can’t speak to this personally—I haven’t met the man—he’s widely reported as being good-natured, humble, reasonable, patient, and frugal. You’d be lucky to get one or two of these qualities out of a modern billionaire. But Buffett, more than just about anyone in the jet set, seems like the kind of guy you would want as a next-door neighbor.

Buffett also is wealthy despite himself. The man has donated more than $58 billion to a variety of causes—though primarily the Bill & Melinda Gates Foundation—since 2006. And he’s even tasked his children for giving away most of his remaining wealth once he passes.

And lastly, Buffett has pretty relatable interests. Sure, he golfs—what C-suiter doesn’t? But he also loves to play bridge. He drinks Coca-Cola and eats Utz potato sticks. He can strum a ukulele.

Back out those billions, and the guy is just a guy. And I mean that in the most complimentary way.

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Why We Like Warren Buffett

Of course, you can’t just back out the billions. Which means when it comes to adoring Buffett, it’s OK to love his quirks … but if we really want to be more like Warren Buffett, we have to be a little more discerning.

For one, he’s not perfect. No one is! But more importantly, Buffett has advantages we simply don’t, making some of his advice less applicable than others.

That’s why this week, we’ve sat down to ask Chris Ballard, Managing Partner at certified financial advisor company Check Capital Management, a little bit more about Warren Buffett: Why we like him, of course, but also whether it pays to look at his portfolio, and which advice the everyday investor is best-positioned to use. 

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Young and the Invested: Plenty of billionaire investors have achieved investing success—after all, they're billionaires. What is it about Buffett explicitly that has made him such a popular figure in the media and among regular investors?

Chris Ballard: Buffett has been as much a teacher as he has been an investor, and the way he teaches is through his words, both written and spoken, and by example. He is honest, straightforward and willing to speak his mind and caution against what he considers hazards, whether you are an investor or not. He is as down to earth and wholesome as any Midwesterner could be at nearly 100 years of age. 

Warren has defied the odds, and everyone loves it when the good guys win.

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Young and the Invested: What do you think about the popular practice of looking at the Berkshire portfolio for investing ideas?

Ballard: The practice at looking at the portfolios of successful investors is mostly a healthy endeavor. It can be a guide of sorts.

At the same time, it’s important to do your own homework and not just rely upon someone else’s ownership as confirmation that you should also be partnering with a business through shared ownership.

It’s important to know your own strengths and weaknesses, which are surely different than Warren’s. In the case of Berkshire’s portfolio, Buffett has owned some stocks for a very long time. Take American Express (AXP); he first bought shares 50 years ago. Using this holding as a possible new investment idea just because Warren owns it might be taking things too far.  It’s a great company, and might be worth owning, but the decision criteria to buy this stock today versus whether Berkshire should continue to own it are indeed different imperatives. 

Related: 8 Best Stock Picking Services

Young and the Invested: Obviously, given the difference between Buffett's Berkshire war chest and the average investor's portfolio, the everyday investor can't necessarily put all of Buffett's strategies and wisdom to work. Which of Buffett's values and strategies can most people implement with a decent hope of success?

Ballard: The vast majority of individuals can apply the same principles Buffett has espoused through the decades; the question lies in whether they will be successful doing so.  

It’s important to define what an “everyday investor” is. For the most part this means individuals who are not professional investors or financial advisors. Most people are not Warren Buffett—and I don’t mean they don’t have his wealth or experience, but they don’t have his innate talents, acumen, and temperament.

Young and the Invested Tip: Looking for the best high-yield dividend stocks for your portfolio? Check here.

There are unfavorable statistics on this group of investors in that they tend to follow the crowds more often than not, and are susceptible to influences that can lead to unpleasant outcomes. For most people, it’s best to focus on things that can be controlled, like how much they spend and how much they can pay their future selves through savings. 

After that, the values and strategies Buffett would advise the average investor is to buy and hold a low-cost index fund and don’t touch it. 

Becoming Warren Buffett is likely not in the cards for any of us. That said, if the everyday investor decides that becoming an investment professional is something they might want to do, and that they want to do more than just invest in low-cost index funds, reading all of Buffett’s letters to Berkshire shareholders (which are available to the public) and Benjamin Graham’s The Intelligent Investor is probably the best place to start.

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Young and the Invested: Is there anything within the Buffett mystique, or any advice that he's given, that you explicitly think investors should ignore, whether because it's simply not applicable or even inaccurate?

Ballard: I personally feel Buffett’s story is one everyone should be interested in. He isn’t a perfect human being—no one is. But he strives to live life in a way that makes him and others happier and better individuals, and he helps further the idea of what’s possible. I won’t dissuade anyone from investigating Berkshire Hathaway or Warren Buffett and coming to their own conclusions. 

Well, maybe I have one differing opinion: Eating vegetables and getting good exercise are probably good for most of us.

Young and the Invested: Everyone loves themselves a good Buffett quote. Any in particular that you live by, or that you think are applicable to most people?

Ballard: “Predicting rain doesn't count; building the arc does.”

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Because, let's be honest, most of us don't actively seek out uncomfortable topics. And precious few topics are more uncomfortable than divorce.

I should know.

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Divorce Happens

You've probably heard in broad terms that half of American marriages end in divorce.

Statistically speaking, that's about right. Specifically, the American Psychological Association says that 40% to 50% of first marriages end in divorce, and there's an even higher failure rate of 60% to 67% for second marriages.

But for many people, including myself, statistics just don't hit you with their full force … until you become that statistic.

—

My first job out of college was as a copy editor at a small newspaper in Ohio—briefly in news, but after a few months, I was lucky enough to shift over into editing for the sports desk. The hours were crap: I'd start at 4 or 5 p.m., leave at 1 or 2 a.m. But it did give me a pleasant, half-hour against-the-flow of traffic drive with nothing but my thoughts and sports radio.

I left the job, but not sports radio, which I listen to on Sirius XM all the time now. And if you put in as much time as I have, you'll start to realize just how targeted you are as an audience. Vermont Teddy Bears. Pajamagrams. Little blue pills. Physical gold. 1-877-KARS-4-KIDS (Donate your car today!)

And, of course, life insurance.

If a smile just crept into your face, that means you too are aware of the advertising masterpieces that are Big Lou Insurance commercials. These ads, which are chock full o' playful nudges and winks, are directly aimed at guys (like me!) who are far from perfect and know it. It's a masterclass of understanding your audience, with writing so skilled you can't help but laugh when they call you "kind of porky."

The end of each ad reminds you that you and "Big Lou" are in the same boat. For instance, at the end of one ad directed at men who have been divorced multiple times and are looking for a life insurance policy for their new wife, the radio announcer lets you know that "He's like you … except he's only on Number Two."

My wife and I can't help but laugh every time we hear it. 

Because I'm exactly like Big Lou—I'm on Number Two.

Don't worry! I'm not going to bog you down with the sad story of my divorce. It was emotionally painful for the both of us, and dredging up details would do no one a lick of good.

I say all of that to say this: Throughout the filings and proceedings, I learned that our divorce was logistically easy. No kids. No house. No assets we needed to figure out how to split amid acrimony.

I still remember hearing the same thing over and over again, as it pertained to that aspect: "You're lucky."

Because most people aren't so lucky! For instance, most of us are aware that if you have children by the time you've divorced, you could be in for a dreadful custody battle. And speaking directly to today's topic: If you've had time to accumulate assets and accounts, your financial life could get messy, too.

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Forgetting About Previous Account Beneficiaries

Today, we're going to talk about your retirement accounts as it pertains to divorce.

In truth, it's not complicated—designating a beneficiary of, say, a 401(k) or an IRA is quite easy, and the rules are pretty straightforward.

The problem is that many people don't think about these simple rules and practices right up until they matter. And at that point, they're in the middle of an extremely emotional decision—the perfect conditions for messing up the easiest of things.

Young and the Invested Tip: Do you get emotional when it comes to your finances? That's one sign that you might benefit from having a financial advisor.

Our advice? It pays to suck it up and seek out financial lessons about life's hardest moments (divorce, a loss of employment, even death) before you're in the moment yourself. Because you're much more likely to absorb the information when you're cool, calm, and collected—and that will improve your chances of putting that information to proper use in the moment.

I know. That's a lot of tea. So, let's move on to the practical advice.

Divorce and Retirement Account Beneficiaries

This week, we sat down with Michael DiFalco, a seasoned divorce attorney based in Long Island, New York, to talk about a critical financial aspect of divorce that many people don't think about until it happens (and that many people forget even after it does!): retirement account beneficiaries.

How the beneficiary system works

Generally speaking, as soon as you open a retirement account—so, a 401(k), a 403(b), an individual retirement account (IRA), and so on—you will have the option to designate beneficiaries.

A beneficiary is a person who will receive some or all of the assets when you die. So, you can either elect to have one beneficiary receive all of an account's assets when you die, or you can elect multiple beneficiaries who will receive a predetermined percentage of assets upon your death. (Example: You're 21 and single. You have a 401(k). You designate your sister as a beneficiary at 40%, your mom at 30%, and your dad at 30%.)

But the law is a bit more specific when spouses are in the picture.

Employer-sponsored retirement plans (401(k), pensions, etc.): The most common area where spousal rules come into play is any account governed by the Employee Retirement Income Security Act (ERISA), which sets the standards for a wide variety of employee benefits, including everything from health, dental, vision, and disability insurance to health savings accounts (HRAs) and flexible spending accounts (FSAs) to vacation and severance benefits.

Young and the Invested Tip: Have a government pension? You'll want to be familiar with this (now-defunct) Social Security provision.

Pertinently, ERISA also oversees defined-benefit plans, such as pensions, and defined-contribution plans, such as the almighty 401(k).

"Under federal law, most workplace retirement plans are governed by ERISA," DiFalco says. "And most plans that are governed by ERISA are very particular about the requirements and regulations that they impose on the plan administrators to follow the beneficiary designations to protect the third parties, especially spouses."

When it comes to ERISA accounts, spouses are effectively a beneficiary default. If you have a spouse, then …

• If you do decide to designate a beneficiary, your spouse is entitled to 50% of your ERISA account funds after you pass. Thus, your spouse must be your primary beneficiary. You can designate one or more secondary beneficiaries, but only up to the remaining 50%.
  • If you want someone other than your spouse to be the primary beneficiary on your account, your spouse must complete a spousal consent waiver that says they forgo their right to 50% of the account.
• If you never designate a beneficiary, your surviving spouse automatically inherits 100% of your ERISA account funds after you pass.

(A note on all of the above: This speaks to how ERISA protects spouses in the beneficiary chain. For instance, if you were married, you could go into your account and designate your mother as a 100% beneficiary. But when you pass away, the law will step in and make your spouse the primary beneficiary, entitled to 50% of your ERISA account funds.)

Individually managed accounts (IRAs, Roth IRAs, etc.): "IRAs are not covered by ERISA," DiFalco says. "There's less oversight and regulation."