While one in four Americans say they’ve ended a relationship over money problems, America’s youngest adults appear to be charting a different course for managing finances in a committed relationship. Almost half of married Gen Zers (48%) say they created a formal financial plan before saying “I do,” double the average for all generations.
“It is important to talk about expectations for major milestones,” Johanna Peetz, a professor of psychology at Carleton University whose research focuses on money and relationships, told Investopedia. “It might also be helpful to talk about past experiences or how each partner’s family has arranged and handled such milestones.”
For many Gen Z couples, that isn’t just abstract advice—it’s something they’re putting into practice.
Key Takeaways
Gen Z married couples are twice as likely as the general population to have entered marriage with a formal financial plan (48% vs. 25%)
Research indicates that couples with pre-marital financial plans tend to report greater satisfaction in their relationships.
Why Gen Z Is Planning Ahead
David Tenerelli, a certified financial planner at Values Added Financial Planning, says the financial pragmatism of today’s young adults didn’t develop in a vacuum—it’s a direct response to the economic chaos that has defined their formative years.
“Some systemic headwinds include the recent spike in housing prices, the higher relative cost of college, and the destabilizing shocks to the global economy resulting from the 2008 financial crisis and COVID-19,” he said. “Some of the personal headwinds include the proliferation of social media and the resulting widespread status orientation, overconsumption, and mental health challenges, or the desire to, in their young adult years, emulate their parents’ affluent lifestyles, which may have taken decades to achieve.”
Peetz noted that what we grow up seeing forms our relationship to money. “Family background informs how we think about money even if we’re not necessarily aware of how our beliefs are shaped by family socialization,” she said.
Interestingly, two thirds of Gen Zers surveyed say they’re more financially dependent on their spouses in some way (66%), compared with just about half of millennials (53%), Gen Xers (51%), and Baby Boomers (49%). That more of them want to have a formal plan in place when tying the knot makes sense, since they’re going to need each other even more than previous cohorts.
The survey data shows Gen Z’s financial conversations are covering crucial territory. They’re addressing debt discussions, spending habits, and long-term goals before marriage becomes legally and financially binding.
“Any behavior practiced over time becomes a habit,” Peetz said. By establishing financial communication patterns early, Gen Z couples may be setting themselves up for continued openness about money throughout their marriages.
Of course, not every financial discussion is easy, and “talking about money might create conflict when two partners disagree,” Peetz said. “But making communication a habit might ensure that these conflicts are likely to be about small solvable issues rather than turn into long-standing entrenched disagreements.”
Peetz can point to her colleagues’ and her own research as evidence for this. One of her recent studies shows that couples who fully combine their finances communicate significantly more about money decisions than those who keep accounts separate. This increased communication pays dividends: “Talking more about small financial issues might prevent those from turning into larger issues,” she said.
The reverse was also true: When people hide more financial information, this tends to create a “mutuality of secretive financial behaviors,” a 2025 study by Peetz and Morgan Joseph found.
Important
More than one in four married Americans (27%) say they’ve waited until marriage to talk about their debts with their spouse, and 21% said they still haven’t done so.
The Bottom Line
While Gen Z faces specific financial challenges—from student loans to a competitive housing market—they’re approaching marriage with a level of financial preparation that previous generations largely lacked. Their willingness to have difficult money conversations before walking down the aisle suggests they understand something many couples learn too late: love can’t conquer financial incompatibility, but honest planning might.
Cross-border payments are a critical part of today’s global economy, enabling businesses to expand, suppliers to operate across borders and digital marketplaces to thrive. Despite their importance, international transactions remain fraught with friction, cost, and risk.
Whether you’re a multinational corporation or a small exporter, navigating the complexities of global payments can hinder business growth, delay operations, and create compliance headaches. Fortunately, companies like Convera, a global leader in commercial payments are helping businesses overcome these obstacles and unlock the full potential of seamless international commerce.
Below, we break down five of the most common pain points in cross-border payments and the modern tools helping to solve them.
Cross-border payments challenge #1: FX markups and hidden fees
Foreign exchange (FX) costs remain one of the biggest pain points in international transactions. Traditional banks often embed large markups in the exchange rate while layering on transaction fees, making it hard for businesses to predict or control costs. The lack of transparency in FX pricing also leads to mistrust and budgeting issues, particularly for companies dealing with high volumes or volatile currencies.
Commercial payments providers like Convera offer real-time FX rate visibility and pricing transparency, giving businesses more control over their international payment flows. And, with tools like forwards and options contracts, companies can manage currency risk and provide certainty of future cash flows*.
Cross-border payments challenge #2: Choosing the most suitable payment method
For many businesses, sending cross-border payments or receiving funds across markets remains a logistical nightmare. Traditional correspondent banking systems can be slow, expensive or simply unavailable in certain regions. In addition, every business is faced with the overwhelming challenge of choosing the most suitable payment method for its needs.
Modern cross-border payment providers simplify this choice by helping you find the most suitable payment method for your needs, and offering localized payout options to help ease costs. For example, Convera’s global footprint supports transactions in over 200 countries and territories, and access to more than 140 currencies including markets where traditional banks struggle to operate efficiently
Cross-border payments challenge #3: Lack of transparency
A major complaint from chief financial officers (CFOs) and treasury teams is the lack of visibility into payment status and settlement timelines. Funds can go missing for days in the correspondent banking chain, with no way to track their movement in real time. This uncertainty complicates cash flow forecasting and supplier relationships.
Global commercial payments providers, such as Convera, are tackling transparency issues by building end-to-end tracking tools to monitor the exact status of a payment across its entire journey. Real-time dashboards, transaction alerts and automated reconciliation are becoming the new standard, reducing the black box of cross-border transfers.
Cross-border payments challenge #4: Regulatory complexity, fraud, and compliance risk
Cross-border payments must comply with an intricate web of local and international regulations, ranging from Know Your Customer (KYC) and Anti-Money Laundering (AML) laws to sanctions screening and tax reporting. Managing this compliance burden internally is costly and risky (especially for smaller businesses, as mentioned before). At the same time, fraud attempts are growing more sophisticated, targeting B2B transactions through phishing, account takeovers, and business email compromise (BEC) scams.
Platforms like Convera use real-time sanctions screening, credit fraud screening systems, and secure user authentication to help businesses meet global standards without slowing down operations. These built-in protections allow companies to scale internationally with peace of mind.
Cross-border payments challenge #5: Slow delivery times
Despite advances in domestic payments, many international transactions still take a few business days to settle, especially when multiple banks and currencies are involved. These delays can disrupt supply chains, hobble financial forecasting, and leave accounts receivable teams chasing down confirmations.
Fintech innovations are significantly cutting delivery times. Through direct partnerships with local banks and the use of real-time payment networks, commercial payments providers like Convera can deliver funds in hours or even minutes. Their payment infrastructure is optimized for speed without compromising accuracy or compliance, helping businesses move money globally at the pace of modern commerce.
Solving commercial payments challenges, together
Cross-border payments will always involve a degree of complexity, but they don’t have to slow down business growth. With the right payment partner, organizations can reduce costs, streamline operations and improve financial control across borders.
Whether you’re a mid-sized manufacturer looking to pay overseas suppliers or a digital platform collecting funds from global users, now’s the time to evaluate your cross-border payment strategy. As the digital economy accelerates, solving cross-border payment challenges isn’t just a financial upgrade — it’s a competitive advantage.
The Department of Education said it would support struggling borrowers by creating a simplified application process for income-driven repayment (IDR) plans.
The department has not announced a new application process but has reinstated the ability of IDR applicants to transfer their tax information automatically from the IRS.
Borrowers have reported being overwhelmed and frustrated with the constant student loan policy changes, and a simpler application process could help.
The Department of Education said in April it would create a new application process for student loan repayment plans, which havechanged multiple times due to various court cases. However, little progress has been made.
When the department announced that it would resume collections on defaulted student loans, it also said it would launch an “enhanced Income-Driven Repayment process” to support struggling borrowers. This new process would simplify enrolling in income-driven repayment plans and eliminate the requirement for borrowers to recertify their income every year.
At the time, the department said it would post more information about the new IDR enrollment process on StudentAid.gov the week of April 28, but Investopedia could not locate that information. The Department of Education would not confirm to Investopedia that it has, in fact, eliminated the recertification process.
However, the department did tell Investopedia that Federal Student Aid now allows borrowers to transfer their tax information from the IRS automatically to their income-driven repayment application, “thus simplifying the application for borrowers.”
The IRS retrieval tool makes it easier for borrowers to apply for income-driven repayment plans and recertify their income, but it is not an entirely new tool. The tool was introduced to income-driven repayment applications in 2023, but was paused in February to conform to a decision from a U.S. appeals court.
A Simpler Application Process Could Help Borrowers Amidst Changing Policies
While the Department of Education hasn’t delivered on most of its promises for a simpler application, constant policy changes have made the repayment process difficult for borrowers.
For example, the department has not eliminated recertification, which borrowers are asked to do yearly. If borrowers miss their recertification date, their payment could increase to the amount they would pay under a standard repayment plan, which would likely be significantly higher.
Additionally, loan servicers have struggled with changing income-driven repayment policies as lawsuits challenge the plans. The back-and-forth policies resulted in servicers having a backlog of over 2 million income-driven repayment applications at the end of April.
The temptation to plug acronyms in this business—whether you’re an investor, analyst or someone who writes about such things—is powerful.
How powerful? Sufficiently so that just after we all learned what the “TACO Trade” was, some would have us already moving on to the next multi-letter term. (Meanwhile, some of us are old enough to remember when there was only one “A” in “FANG,” rather than however many there are now.)
If you’re sure you won’t chicken out, UBS suggests you have a “COW”—short for “Costco (COST), O’Reilly (ORLY) and Walmart (WMT),” referring to shares of the warehouse standout, the auto parts chain, and the retail giant, respectively. That’s its term, to be clear, not ours: Its research note title asks whether it’s “Best to Own the COW.”
“We think it makes sense to stick with these retail stocks for the foreseeable future,” the analysts wrote Tuesday. “This is because we believe Costco, O’Reilly, and Walmart will lead to steady outperformance over the long-term.”
Their argument boils down to this: That “best-in-class” retailers can provide investors some safety in uncertain times; these companies can benefit from “periods of disruption,” taking share and growing sustainable sales; the businesses have invested in personnel, supply chains and e-commerce; and they have strong moats around their businesses.
“We see the biggest risk to the performance of these stocks being a significant reduction in interest rates,” they wrote. “In this case, the market might shift some capital to laggards or the stocks of retailers that might stand to outperform during a period of more robust economic activity.”
UBS has “buy” ratings on all three companies’ shares. “At the end of the day, we believe [the companies] offer steady, solid performance regardless of the surrounding and are poised to continue to grow and outperform the broader industry in the long term,” its analysts wrote.
The “COW” stocks have handily outperformed the benchmark S&P 500 index since the start of the year.
A new survey found six in ten consumers wouldn’t pay more than 10% in additional costs on products impacted by tariffs.
Younger consumers were more likely to cut their budgets, purchase items before tariffs take effect, or use Buy Now, Pay Later services to contend with price increases.
Older consumers plan to purchase fewer imports if tariffs raise prices. Electronics and clothing were the most likely to be cut from consumers’ shopping lists.
A new survey found that consumers have limits on tariff-related price increases, and these limits could vary by generation.
Six in ten consumers said they wouldn’t pay more than an additional 10% on products impacted by tariffs, according to a survey from e-commerce firm ESW. An even greater majority (70%) said they plan to reduce overall spending once tariffs begin to have an effect. However, the generations are expected to react to tariffs differently.
The report comes as President Donald Trump has placed tariffs on several U.S. trading partners and products, even as some have been adjusted or paused while negotiations take place. Trump has said the move will help reinvigorate U.S. manufacturing and bring in needed tax revenue. However, economists have said that the tariffs could lead to price increases as businesses pass some of the cost of the tariffs onto consumers.
“Rather than alienating customers and risking market share, firms are hoping tariffs are dropped and costs go down,” wrote Moody’s Economist Matt Colyar on Monday. “This is a short-term salve for consumers who have not yet seen broad-based price hikes in response to U.S. trade policy, but firms indicate it will not be sustained long term.”
Older Consumers More Prepared for Tariffs
Younger shoppers were particularly inclined to slow their spending if tariffs push up prices. The survey found that more than three-in-four Millennials, aged 30 to 44, and Gen Zers, aged 18 to 29, said they planned to tighten their belts to combat higher costs from tariffs.
Gen Z shoppers were the most likely to stock up on goods now before tariffs hit, with electronics and grocery purchases being their highest priorities. Over a quarter of Millennials said they would seek Buy Now, Pay Later services to contend with tariff-induced price increases.
Meanwhile, more than half of Baby Boomers, defined as over the age of 60, are looking to purchase fewer imported goods as a result of tariffs.
“Our data finds that younger, Gen Z consumers are far more likely than older Boomers to feel unprepared for price hikes, and have already curtailed their spending in anticipation,” said Eric Eichmann, ESW chief executive officer, in a statement.
Discretionary items are the most likely to be cut from consumers’ budgets if tariffs raise their prices, with 68% saying electronic purchases were the most likely to be skipped, followed by clothing and home goods. Groceries and pet supplies were the items that consumers were most likely to keep buying, regardless of how tariffs impact the prices.
“Price-sensitive consumers, especially Millennials and Gen Z, are quick to reassess purchases that can be delayed or substituted,” the report found.
IBM shares hit an all-time high Tuesday, topping a record set just a day earlier.
The company said it has a “viable path” to a breakthrough in quantum computing by the end of the decade.
IBM’s Starling computer is expected to be able to perform 20,000 times the operations of quantum computers that exist today, IBM said.
IBM (IBM) shares hit an all-time high Tuesday as company showcased what it called a “viable path” to building the world’s first large-scale, “fault-tolerant” quantum computer by the end of the decade.
IBM shares edged 1.5% higher Tuesday to close at $276.24, topping a record set just a day earlier. The company’s shares have climbed for eight consecutive sessions, adding roughly one-quarter of their value since the start of the year.
The computer, dubbed IBM Starling, is expected to be capable of performing 20,000 times the operations of quantum computers that exist today, according to IBM. Such a computer could “accelerate time and cost efficiencies in fields such as drug development, materials discovery, chemistry, and optimization,” the company said.
A fault-tolerant computer is able to suppress the errors that can occur as a result of running quantum computing operations, IBM said. Historically, correcting those errors at a large scale has presented engineering challenges.
IBM laid out milestones along the way to Starling in 2029, including the launch of IBM Quantum Loon later this year, which the company said is meant to test certain architectural components.
Intel shares soared on Tuesday, pacing gains on the S&P 500, as chip stocks rallied amid hopes that curbs on exports to China could be eased.
The stock recently found buying interest around the lower levels of a multi-month trading range, with the price closing above both the 50- and 200-day moving averages on Tuesday.
Investors should watch crucial overhead areas on Intel’s chart around $23, $26 and $33, while also monitoring a major support level near $19.
Intel (INTC) shares soared on Tuesday, pacing gains on the S&P 500, as chip stocks rallied amid hopes that curbs on exports to China could be eased.
The gains for chip stocks—the PHLX Semiconductor Index has risen 2% in each of the past two sessions—come as the U.S. and China hold trade talks this week in London, where officials are reportedly discussing restrictions on exports of various products, including rare earth minerals and chips.
Intel shares gained nearly 8% on Tuesday, closing at just above $22. The stock is up about 10% so far in 2025, outpacing the gains of the S&P 500, but has lost nearly 30% of its value over the past 12 months amid uncertainty over the chipmaker’s strategic direction and inability to capitalize on the booming AI chip market. CEO Lip-Bu Tan, who took over the top spot in mid-March, has launched a major restructuring effort.
Below, we take a closer look at Intel’s price and use technical analysis to identify crucial price levels that investors will likely be watching.
Close Above Key Moving Averages
Intel shares have remained rangebound since gapping sharply lower last August. More recently, the stock found buying interest around the lower levels of the trading range, with the price closing above both the 50- and 200-day moving averages on Tuesday.
Importantly, the move higher occurred on the highest daily volume since early April, indicating buying conviction from larger market participants. Moreover, the rally thrust the relative strength index back above its neutral threshold to signal accelerating price momentum.
Let’s identify three crucial overhead areas to watch if the stock continues to trend higher and also locate a major support level worth monitoring during pullbacks.
Crucial Overhead Areas to Watch
It’s initially worth watching the $23 level. This area on the chart may attract selling interest near last month’s swing high during an attempt to reclaim the 200-day MA.
Buying above this level could see the shares rally toward $26. Tactical traders who employ rangebound strategies may seek exit points in this area near three prominent peaks that formed on the chart between November and March, a location that also marks the top of the stock’s multi-month trading range.
A convincing breakout above the trading range could trigger a rapid move to the $33 level. We projected this target by using the measuring principle, a technique that analyzes chart patterns to forecast future price movements. When applying the analysis to Intel’s chart, we calculate the distance of the trading range in points and add that amount to its top trendline. For example, we add $7 to $26, which projects a target of $33, nearly 50% above Tuesday’s closing price.
Major Support Level Worth Monitoring
During pullbacks in the stock, investors should closely monitor the $19 level. Intel shares would likely attract significant support in this location near the trading range’s lower trendline.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above securities.
Buy Now, Pay Later (BNPL) services have been growing in popularity in recent years as a means for consumers to spread out the impact of splurges on things like clothes and electronics. Now, however, BNPL is extending into food, including weekly grocery shopping.
Despite the popularity, BNPL isn’t always a good financial decision. In emergencies, it can be a better option than some other financing options, but the added risk might not be worth it.
Key Takeaways
Financing groceries with BNPL is growing amidst challenges like rising food prices.
BNPL loans typically don’t charge interest, which can help some users save money, but they can also come with potential charges like late fees.
Understanding how BNPL loans work and their pros and cons can help you figure out responsible usage, or you might decide to avoid them altogether.
What Is Grocery Financing and How Does It Work?
Traditional financing, like using credit cards to pay for groceries, has long existed, but another emerging option is BNPL. This financing service typically involves splitting up the cost of a purchase over time, such as requiring four payments over six weeks. These loans often have no interest charges, though there could be late fees, and some charge initial loan fees. Some of the major BNPL providers include Klarna, Afterpay, Affirm, Zip, and several others.
In recent years, grocery apps like Instacart have started offering BNPL as a payment option, along with food delivery apps like DoorDash. Major multi-platform retailers like Walmart and Amazon have too, as have some traditional retail grocers.
Some BNPL services like Zip don’t even require official partnerships, as the payment is processed like a credit card purchase on the retailer’s end, despite the consumer managing it as a BNPL loan.
Why More Consumers Are Turning to BNPL for Food
The use of BNPL for food purchases is on the rise. According to a LendingTree survey, 25% of BNPL users have used this payment option for groceries, compared to just 14% a year ago.
Part of the increase might be due to the more widespread availability of BNPL payment options and their ease of use. In many cases, you can sign up on the spot at checkout with almost instant approval, vs. going through what’s usually a more involved process to obtain a debit or credit card.
That ease, combined with economic stress like high inflation and high interest rates, could be prompting more consumers to pay for groceries with BNPL. If you’re living paycheck to paycheck, you might prefer or need to spread out the purchase over time. About one-third of BNPL users say that these loans act as bridges until they get paid, according to the LendingTree survey.
The Hidden Risks and Potential Downsides
Although BNPL loans might help some individuals afford groceries, there are many pitfalls to watch out for.
One issue is that BNPL loans can lead to debt creep, where the ease of approval and ability to use different BNPL providers for different purchases quickly leads to you stacking up more debt than you realized. Your budgeting might also get out of sync if what used to be one purchase now gets split into multiple payments over several weeks.
If you do miss BNPL payments, you may face additional fees and possibly a negative credit impact if your debt is sent to collections. Initial loan fees can also make this financing more expensive than necessary.
In comparison, putting all your purchases on one credit card might provide more clarity over debt balance, payment dates, and other key information. Also, traditional credit and debit cards might come with more consumer protections, such as around merchant disputes or payment terms.
When It Might Make Sense—And When to Avoid It
Using BNPL for groceries might make sense in situations such as:
You have a short-term cash crunch and need more time
You want to relieve financial stress by spreading out a big purchase
You want to optimize cash flow, based on a history of always paying all your bills on time
Tip
No matter the exact reason why you use BNPL, you should always have a realistic plan for how you’re going to pay it off. If your plan is to wing it, you’re setting yourself up for more costs and financial challenges.
You also might want to avoid BNPL if you:
Regularly need to use these loans to make ends meet, which suggests a deeper problem that needs to be addressed
Have multiple BNPL loans already and it would be hard to juggle more
Have other debt or budget challenges, which a new BNPL loan could further complicate
Smarter Alternatives to Financing Food
Instead of using BNPL for groceries, consider alternatives that might save you money in the long run, like:
Using budgeting tools to carefully manage spending so you have enough set aside for food each week
Doing meal planning or strategic shopping to lower your grocery bill, e.g., swapping out preferred brands for whatever’s on sale
Utilizing local food banks or other assistance programs to help you make ends meet, without adding debt
The Bottom Line: Convenience Now, Cost Later?
Although using BNPL for groceries might stretch your paycheck and lighten your current load, it can add complexity that increases costs later, such as late fees if you do not have enough to pay future installments by the due dates. Ultimately, BNPL is a financial tool. Like all tools, it can be helpful if used skillfully but dangerous in the wrong hands.
GameStop (GME) shares fell in extended trading Tuesday as the retailer’s quarterly revenue declined.
The video game retailer’s revenue dropped 17% year-over-year to $732.4 million. The company swung to an adjusted profit of $83.1 million, or 17 cents per share, from a loss of $36.7 million, or 12 cents per share, a year ago. However, adjusted earnings were down from the $136.4 million, or 30 cents per share, GameStop reported a quarter earlier.
GameStop shares slid about 5% in after-hours trading. The stock was down 4% for 2025 through Tuesday’s close.
GameStop also said it has not bought any additional bitcoin (BTCUSD) since last month it disclosed the purchase of 4,710 bitcoin. The company did not reveal the purchase price at the time, but that amount of the cryptocurrency would be worth nearly $516 million at its recent price near $109,500. In March, GameStop said it was planning to issue $1.3 billion in convertible bonds for “general corporate purposes,” including buying bitcoin.
While survey results vary, all measures seem to indicate a significant percentage of Americans feel anxious about their ability to retire. For example, according to Northwestern Mutual, 46% of U.S. pre-retirees believe they will not be financially prepared when the time comes.
That may not be surprising in the face of longer lifespans, rising costs, and a volatile stock market, but financial security in retirement is still achievable—with the right habits and strategies. Here are 13 practical tips to help you follow a retirement plan that supports the life you want to live.
Key Takeaways
Keeping track of your finances is essential for setting informed retirement goals, including how much you need to save.
Tax-advantaged accounts, like 401(k)s, IRAs, and HSAs, are invaluable for minimizing your lifetime tax liability.
Diversifying your assets and income streams, such as through asset allocation, side hustles, or annuities, can help reduce risk and hedge against inflation.
Lowering your expenses, especially by relocating to a more affordable city, can help you save more now and need less later.
Financial professionals can provide valuable support during periods of complexity, but their fees add up and may cause performance drag.
13 Strategies for a Financially Secure Retirement
1. Track Your Financial Activities and Position
In personal finance, everything starts with understanding your current position. Whether you’re decades away from retirement or rapidly approaching it, knowing where your money is and where it’s going is essential. To make informed decisions, you must keep track of your income, expenses, assets, and debts.
“In my experience advising high-achieving professionals and families, future-proofing retirement income comes down to three pillars: clarity, adaptability, and tax awareness,” said Jason Gilbert, CPA, PFS, founder and managing partner of RGA Investment Advisors.
2. Set Clear Retirement Goals
Intelligent, measurable savings goals are also fundamental to retirement planning. A popular tool for estimating how much you need to save for retirement is the 4% rule. It suggests you can safely withdraw 4% from your investments in the first year after retiring, then withdraw the same amount annually—adjusted for inflation—for roughly 30 years.
To back into your minimum retirement savings with the 4% rule, multiply your annual expenses by 25. For example, if you expect to spend $40,000 per year in retirement, you need about $1 million invested to support your expenses.
Tip
Your lifestyle and spending may shift unpredictably in retirement. Use conservative estimates to build a buffer and help ensure your savings meet your future needs.
3. Plan for Health Care Costs
Health care is one of retirement’s most significant expenses. While there is a significant degree of unpredictability, Fidelity’s latest estimate is that a 65-year-old can expect to spend an average of $165,000 on medical expenses in retirement.
A health savings account (HSA) is one of the best ways to prepare. HSAs are triple tax-advantaged: contributions are tax-deductible, growth is tax-deferred, and withdrawals for qualified medical expenses are tax-free. Withdrawals are also penalty-free before age 65 if you use them for qualified medical expenses.
Building A Solid Foundation
4. Maximize 401(k) Contributions
For most Americans, 401(k) plans are the bedrock of retirement savings. As of the end of 2024, Americans held $12.4 trillion in employer-based defined contribution plans, $8.9 trillion of which was in 401(k)s. In addition to tax-deductible contributions and tax-deferred growth, these plans have high contribution limits and often come with an employer match.
Fast Fact:
In 2025, the 401(k) contribution limit is $23,500, plus $7,500 in catch-up contributions for those aged 50 and over.
As a result, maximizing contributions to your 401(k) plan is often one of the most effective ways to build retirement savings throughout your career. To do so, Terry Parham, Jr., MSFP, CFP, co-founder of Innovative Wealth Building, emphasized the importance of mastering the fundamentals.
“Success comes down to developing solid habits,” said Parham. “Prioritize saving, invest consistently, and avoid lifestyle creep as your income rises.”
5. Open and Fund an IRA
Your 401(k) may lead the charge when it comes to retirement savings, but an individual retirement account (IRA) offers superior flexibility. IRAs aren’t tied to an employer, so you don’t have to worry about navigating vesting schedules or rollovers when switching jobs. Typically, they also provide a broader range of investment choices than most workplace plans allow.
Choosing a Roth IRA helps diversify the tax treatment of your savings. Unlike traditional accounts, Roth IRAs are funded with after-tax dollars, which means withdrawals are tax-free. Having both types of accounts can help you reduce your lifetime tax liability with strategic planning.
“One of the simplest but most impactful things we do is help clients be intentional about where they pull money from and when,” said Gilbert. “We build distribution plans that coordinate across account types—pre-tax, Roth, and taxable—and aim to keep clients in the most efficient brackets over time.”
6. Diversify Assets and Income Sources
Diversification is one of the easiest ways to protect your investments and maximize your risk-adjusted return. It involves spreading your savings across asset classes—such as stocks, bonds, and cash equivalents—and diversifying within those classes to reduce your exposure to any one risk. For example, you might hold a mix of U.S. and international stocks to limit your exposure to localized disruptions.
The same idea applies to your income sources. A side hustle or small business can insulate you from the consequences of job loss and bolster your earning power during your working years. If you enjoy it enough to pursue it into retirement, it can also reduce your reliance on your retirement savings and keep you engaged later in life.
7. Automate Your Savings
Maintaining a high savings rate is one of the most powerful ways to ensure you reach your retirement goals. The Financial Independence, Retire Early (FIRE) movement shows how impactful this can be. Some followers save as much as 50%–75% of their annual income and retire decades ahead of schedule.
However, saving consistently can be a challenge for Americans. For instance, savings rates shot up during the COVID-19 pandemic, peaking at roughly 32% in April 2020, but have since returned to their usual baseline of around 4%.
Automating your savings by pre-scheduling transfers to retirement accounts can help you stay disciplined. With a company 401(k), you can even have your employer take the funds out of your paycheck ahead of time, so you’re never tempted to use the money for anything else.
“Paying yourself first is one of the best ways to stay on track, and making small increases over time compounds into real progress,” said Parham.
Investing To Protect Your Income
8. Create an Emergency Fund
An emergency fund is a liquid reserve of money set aside to cover unexpected expenses or provide income support during disruptions. Having one can be invaluable, whether you’re working and suddenly lose your job, or retired and want to avoid drawing from investments after a market downturn.
Experts typically recommend keeping three to nine months of expenses, depending on risk tolerance and income stability. If you’ve been tracking your spending, you can estimate a more personalized target, but for the average U.S. household in 2025, that means your emergency fund should be around $35,000.
9. Consider Delaying Social Security Benefits
You may have concerns over Social Security’s stability, but it still contributes significantly to the typical American’s retirement plan. The average monthly retirement benefit was $1,948.17 in April 2025, enough to cover roughly 30% of the average household’s expenses.
While you can begin taking Social Security as early as age 62, doing so reduces your payment. Waiting until full retirement age—generally between 66 and 67, depending on your birth year—lets you claim 100% of your earned benefit. However, you still must delay until age 70 to maximize the amount. Until then, each additional year you wait beyond your full retirement age provides an 8% increase.
That said, maximizing your benefit isn’t always the right move. If you need the income to cover essential expenses, claiming earlier may be necessary. And even when you can afford to wait, the time value of money means that receiving smaller payments earlier may still be more valuable over your lifetime, depending on your life expectancy.
Tip
Calculating your breakeven age—the age at which the value of delaying benefits overtakes the value of claiming them early—can help you make an informed decision.
10. Consider an Annuity
An annuity is a financial product that offers a stream of guaranteed income, typically for life. For those approaching retirement, buying annuities can provide predictability and peace of mind, especially if you’re looking to supplement your Social Security or make up for the demise of the defined-benefit plan.
Annuities have long had a mixed reputation, criticized for high fees, limited liquidity, and complex contracts. But their popularity is rising, fueled by factors like higher interest rates, longer life expectancies, and increased market volatility. When chosen carefully, modern annuities may help stabilize your income in uncertain times.
“Guaranteed income is foundational for many retirees,” said Parham. “Social Security is the bedrock, and for those lucky enough to have a pension, it’s rarely something they regret. Annuities can serve a similar purpose. They provide an additional stream of income that isn’t tied to market performance.”
11. Hedge Against Inflation
Inflation is the gradual increase in the price of goods and services that reduces your purchasing power over time. While it can be burdensome for all consumers—especially when it exceeds the Federal Reserve’s target of 2% per year—it’s often most concerning to retirees, who may rely on partially or entirely fixed incomes.
One of the simplest ways to protect yourself from inflation is to maintain an asset allocation that includes growth investments, such as stocks, even in retirement. It’s common to shift to a more conservative portfolio as you age, but over-prioritizing stability can be a costly mistake.
“Inflation is the silent killer,” said Charles Petitjean, CFP. “A fixed income might feel fine today, but 10 or 15 years in, your purchasing power could be seriously eroded. Even in retirement, you still need a portion of your portfolio allocated to longer-term growth.”
12. Find Ways To Reduce Your Spending
Assuming it doesn’t compromise your happiness, health, or relationships, lowering your expenses is one of the best ways to improve your financial position. During your working years, it helps you save more and reach retirement faster. In retirement, it means you need less money to maintain your lifestyle.
If you’re looking for places to tighten your budget, consider starting with the three largest expense categories for the average American household: housing, transportation, and food. Together, they account for a whopping 63% of annual consumer spending.
Relocating can be one of the most efficient ways to reduce all of these costs, especially once you’re no longer tethered to a place of work. Choosing the right retirement destination can help you significantly lower your cost of living—without sacrificing quality of life.
Ensuring A Stable Financial Future
13. Seek Professional Guidance When You Need It
A financial advisor or tax expert is often invaluable when you’re navigating the more complex aspects of retirement planning. They can help you avoid costly mistakes, identify savings opportunities, and personalize your financial strategy.
However, professional advice isn’t always necessary, and it’s certainly never free. In fact, the costs can add up surprisingly quickly, especially when working with an advisor who charges a percentage of assets under management (AUM).
Fast Fact:
A 1% AUM fee on a $100,000 investment that grows just 4% annually will cost you $28,000 over 20 years. If you were to keep that $28,000 invested instead, you would earn an additional $12,000.
What Is the 4% Rule for Retirement Income?
The 4% rule for retirement income suggests you can withdraw 4% from your investments in the first year of retirement, then withdraw the same amount—adjusted for inflation—each year thereafter without depleting your savings for roughly 30 years.
What Is the Three-Bucket Retirement Strategy?
The three-bucket retirement strategy involves separating your retirement portfolio into three buckets with different investment time horizons. For example, that might include short-term (up to four years), medium-term (four to eight years), and long-term buckets (beyond eight years).
What Is the Average Social Security Monthly Payment for a Retiree?
The average monthly retirement benefit was $1,948.17 in April 2025.
The Bottom Line
A financially secure retirement doesn’t happen by accident. It requires strong financial habits, proactive planning, and a long-term investment strategy. But future-proofing your finances doesn’t have to be overwhelming. By starting early, staying consistent, and getting professional help when you need it, you can follow a retirement plan that supports the life you want to lead.
Future retirees who want to tighten their budget can look at the three largest expenses for most: housing, transportation, and food.
