Investopedia

Fact checked by Stella Osoba

The legendary “Oracle of Omaha” may be stepping away from the helm of Berkshire Hathaway Inc. (BRK.A, BRK.B), but his investment philosophy will continue to be a force in the market, not least through investment products aiming to replicate his value investing approach. While Warren Buffett himself has said retail investors should rely mostly on broad index exchange-traded funds (ETFs), a new ETF launched in March 2025 claims to offer investors both Buffett-style equity exposure and something Berkshire has famously never provided—monthly income.

The VistaShares Target 15 Berkshire Select Income ETF (OMAH) maintains a basket of Berkshire Hathaway’s most representative equity holdings, while adding an options strategy designed to generate an annual income of 15%, distributed monthly. For investors who have long admired Buffett’s investment acumen but want the dividends that Berkshire doesn’t provide, this ETF could have potential. But is it really investing like Buffett, and does the income strategy justify the 0.95% expense ratio, especially with other Buffett-inspired investments available?

Key Takeaways

• The VistaShares Target 15 Berkshire Select Income ETF offers exposure to 20 of Berkshire Hathaway’s top holdings plus Berkshire stock itself, while targeting 15% annual income through an options strategy.
• While the ETF provides Buffett-inspired stock selection, its complex structure, 0.95% expense ratio, and income-generation strategy should be weighed against other Buffett-inspired investments, including Berkshire Hathaway itself.

OMAH and Other Buffett-Inspired ETFs

The VistaShares Target 15 Berkshire Select Income ETF provides a monthly dividend through a dual strategy:

1. It invests in the top 20 equity holdings of Berkshire Hathaway while allocating about 10.6% to Berkshire Hathaway stock itself.
2. The ETF uses an options strategy managed by Tidal Financial Group to generate a target income of 15% annually, distributed monthly.

Income-generating options strategies like the one used in OMAH typically involve selling covered call options against the ETF’s stock holdings. This approach has become increasingly popular among ETF issuers seeking to provide income during periods of market volatility.

There are ironies with this ETF offering. Berkshire Hathaway doesn’t pay dividends. An irony that for some lurches into contradiction is the expense ratio of 0.95%—Buffett famously advises retail investors to seek out only low-cost funds.

Why Not Just Invest in Berkshire Hathaway?

For investors seeking to truly “invest like Buffett,” the most straightforward approach would be to buy Berkshire Hathaway stock, offered in less-expensive fractional shares and BRK.B versions. This grants direct exposure to Buffett’s and his chosen executives’ investment decisions. Berkshire has tripled the S&P 500 Index‘s performance over the past year and delivered a 203% five-year return, double the broader market (as of May 2025).

But Berkshire pays no dividends—Buffett’s team prefers reinvesting cash—creating a market opportunity for OMAH. But it’s not the only ETF looking to capture market share by using Buffett’s approach:

1. Market Vectors Wide Moat ETF (MOAT): Launched in 2012, this fund follows Buffett’s in looking for companies with sustainable competitive advantages, or “moats,” that protect them from competition. $10.8 billion in assets, 0.46% expense ratio.
2. SPDR Financial Select Sector ETF (XLF): XLF provides exposure to the financial sector that has featured prominently in Berkshire’s portfolio over the years and holds Berkshire Hathaway stock itself (about 13% of the portfolio). $48.8 billion in assets, 0.09% expense ratio.
3. iShares Edge MSCI USA Quality Factor ETF (QUAL): This ETF follows quality metrics like those Buffett values, focusing on companies with low debt, strong returns on equity, and earnings stability. $48.2 billion in assets, 0.15% expense ratio.

The Bottom Line

As the Oracle of Omaha leaves his perch at Berkshire, many investors will be looking beyond Berkshire for ways to invest the Buffett way. Several ETFs, including OMAH, claim to do so, though often with comparatively high expense ratios and income payments that seem to run counter to Buffett’s own investment principles of simplicity, low costs, and long-term capital appreciation.

Fact checked by Yarilet Perez

If you sold stocks during the market turmoil this year and captured a loss on that sale, you might consider using a tactic known as tax-loss harvesting to help you save money on taxes.

“At a basic level, tax-loss harvesting is selling an investment for a loss, on paper, and using it to reduce your taxes,” says Filip Telibasa, a certified financial planner and owner of Benzina Wealth. “Losses can either be used to offset gains realized in other areas or to reduce up to $3,000 of your income.”

Here’s what you need to know about using the strategy.

Key Takeaways

• Tax-loss harvesting is one way to save money on your taxes after you have losses in the stock market.
• But you’ll need to be careful of the stock offerings you purchase 30 days before or after the sale of a loss. If the purchase is substantially identical to the stock offering you just sold at a loss, you won’t be able to deduct the loss.
• To avoid this from happening, choose similar but not identical stock offerings before or after you sell a stock for a loss.

A Closer Look at Tax-Loss Harvesting

Tax-loss harvesting can be a good strategy to use in a volatile stock market, helping you take advantage of any losses you may experience.

“A volatile market is the best time to use tax-loss harvesting since there is a lot of movement and therefore opportunities to capture short-term losses,” Telibasa says.

In addition to saving you money on taxes, tax-loss harvesting can help to rebalance your portfolio.

“Your investments are out of balance when individual positions move in different directions. By selling positions at a loss, it helps to even things out,” Telibasa says.

Another thing to keep in mind is that a loss can be carried over from one year to the next.

“When you sell an investment at a loss, you can use that loss to offset gains from other investments you sold at a profit. If your losses exceed your gains, you can use up to $3,000 of that excess to reduce your ordinary income for the year,” says Alvin Carlos, certified financial planner and founder of District Capital Management. “Any remaining losses carry forward to future tax years. This can result in a smaller tax bill today and help soften the tax impact of gains in the future.”

Watch Out for Wash Sales

According to the IRS, a wash sale occurs when you sell a security at a loss and acquire the same “substantially identical” security within 30 days of the sale date, both before and after the sale date. When this occurs, the taxpayer cannot deduct the loss on the security.

“The purpose of this rule is to prevent investors from selling assets purely to generate a tax loss and then immediately repurchasing the same or very similar assets to maintain their investment position,” says Austin Lee, a certified financial planner and founder of Lee Financial Group.

To avoid a wash sale, stick with buying a similar but not identical stock following tax-loss harvesting.

“Avoid buying the same or substantially identical security, such as the same ETF or stock, within 30 days before or after the sale,” says Christopher Stroup, a certified financial planner and founder of Silicon Beach Financial. “Instead, swap into a similar but not identical holding. For example, if you sell an S&P 500 index fund, consider buying a total market fund to maintain exposure.”

Another way to avoid a wash sale is to wait 31 days or longer from the date of the sale to make a new purchase.

Only Applies to Taxable Brokerage Investments

Tax-loss harvesting cannot be applied to retirement accounts, as these accounts are tax-deferred already.

“Tax-loss harvesting only applies to taxable brokerage accounts. Retirement accounts like 401(k)s and IRAs grow tax-deferred, so gains and losses inside them don’t affect your annual tax bill,” Carlos says. “That’s why you don’t harvest losses in those accounts; there’s no tax to offset.”

The Bottom Line

Tax-loss harvesting is one way to make up for losses in the stock market. Selling at a loss will help to offset gains from other investments and will lower your tax bill. There are a lot of losses with a volatile stock market, so it is a good time to consider this tactic, which can only be used in taxable brokerage accounts.

Just be careful about the investment you choose before and after the sale of a loss. If you make an investment that is substantially identical to the one you sold at a loss within 30 days before or after the sale, you won’t be able to deduct the loss on your tax return. To avoid this, choose to buy similar but not identical investments within the 30 days before or after the sale of a loss, or wait 31 days or longer to make a new purchase. Both strategies will allow you to deduct a loss on your tax return.

Fact checked by Stella Osoba

For retail investors, a fundamental question emerges: Should you try to time the market to buy low and sell high, or invest consistently regardless of market conditions?

Dollar-cost averaging (DCA)—investing equal amounts at regular intervals regardless of market conditions—is widely championed by financial advisors as a disciplined approach that reduces risk and emotional decisions. “Dollar-cost averaging into quality investments—think ETFs [exchange-traded funds], blue-chip stocks, and even undervalued sectors like utilities or health care—can be powerful,” Stoy Hall, CEO and founder of Black Mammoth, told Investopedia.

Meanwhile, attempting to buy at market lows and sell at highs potentially maximizes returns but requires precision that even professional investors struggle to achieve. As volatility shakes the markets, understanding which approach better serves your financial goals is crucial.

Key Takeaways

• DCA, a strategy of investing fixed amounts at regular intervals no matter what, tends to match or beat many market-timing strategies.
• Market timing attempts to buy at market lows and sell at highs but requires precision that even professional investors struggle to achieve consistently.

‘Time in the Market’ vs. ‘Timing the Market’

Investors are often split between those looking for “time in the market” (seeking gains from long-term investing) versus those trying to “time the market” (those buying the dip and so on).

“To figure out your style, pay attention to how you feel during different market situations,” Yvan Byeajee, author of Trading Composure: Mastering Your Mind for Trading Success, told Investopedia. “By reflecting on these emotional responses and aligning them with your strategy, you’ll start to define a style that fits you best, which means that your decisions will feel more natural and effective.”

DCA provides a consistent routine without difficult decisions during turbulence. David Tenerelli, a financial advisor at Values Added Financial, said that for more people trying to time the market is a “folly.” But that doesn’t mean DCA is always easy emotionally. “It takes discipline to continue to buy investments during a market downturn,” he said. “A shift in mindset can help—rather than fearing financial loss, an investor can reframe it as buying stocks ‘on sale.'”

DCA’s biggest drawback appears during strong bull markets, where early lump-sum investing would yield higher returns—assuming you had both the money on hand and foresight to time it right. “Forget trying to ‘time the bottom,'” Hall said. “Nobody knows when that hits, not even the so-called experts.”

Market timing sounds appealing in theory—buy low, sell high, and maximize returns. However, executing this strategy successfully requires predicting market movements with remarkable accuracy, a feat that even professional investors rarely achieve consistently.

What the Research Tells Us

Researchers have compared how different strategies would have performed over time.

Research in the Journal of Financial Issues, which analyzed 30 years of S&P 500 data, compared DCA against three market timing strategies. Over this period, DCA produced a 254% return, outperforming market timing approaches (whose net returns ranged from 227% to 252%). Only a theoretical “perfect foresight” strategy—assuming impossible market prediction abilities—consistently outperformed DCA, with a 289% return.

Other studies looking at different periods provide additional nuance. Galaxy Asset Management looking at crypto and S&P 500 fund data from 2007 to 2024, found DCA coming out ahead for both kinds of assets. “Dollar-cost averaging simplifies investing, mitigates emotional biases, and often delivers better outcomes than buying the dip, even in extreme market scenarios,” it concluded.

Other researchers have found that modifying DCA—say, by attempting to buy more shares at market lows—can provide more benefits than market timing or DCA alone. This happens to match, in fact, what many investors already do: practice DCA while setting aside a small percentage to “play the market.”

The Bottom Line

While market timing might occasionally produce great results, DCA offers a more reliable path for most investors, particularly those investing for long-term goals like retirement. By reducing the impact of market volatility on your investment decisions and creating a disciplined investment habit, this strategy helps overcome the psychological barriers that often prevent long-term growth.

Leaving work completely is no longer the only choice

Reviewed by Charlene Rhinehart
Fact checked by Vikki Velasquez

What Is Semi-Retirement?

Whether you love your job or don’t have a enough savings to leave the workforce entirely, semi-retirement could be a good option for you.

Semi-retirement is a phenomenon where people continue to work part-time in retirement. This could look like scaling back hours at a full-time job or quitting your current role to work part-time or freelance instead.

Some people may opt for semi-retirement out of financial necessity, while others may have a desire to keep working because they enjoy their jobs and find meaning and purpose in their careers.

Key Takeaways

• During semi-retirement, retirees work part-time instead of fully retiring. This may be driven by financial needs or a desire to continue to work.
• Although semi-retirement offers financial perks, it can help support well-being by giving retirees structure and social connection.
• Before choosing semi-retirement, consider its potential impact on taxes, Social Security benefits, and healthcare coverage.

The Financial Benefits of Semi-Retirement

While you may earn less in semi-retirement than in full-time work, the added income can help you build a larger nest egg and potentially delay collecting Social Security benefits.

For example, you can take advantage of semi-retirement by contributing to your retirement accounts, since part-time workers are eligible to contribute to individual retirement accounts (IRAs). Plus, workers age 50 or older can make catch-up contributions. In 2025, the catch-up contribution for older workers is $1,000, making the total contribution limit $8,000 for these workers.

And if you keep your existing job and are still eligible for a 401(k), older workers can make catch-up contributions to their 401(k)s, too. In 2025, workers aged 50 or older can contribute an additional $7,500. For those aged 60 to 63, the limit is even higher at $11,500.

Additionally, working longer may allow you to put off collecting Social Security benefits, which can be helpful if you want to receive larger monthly checks and anticipate a longer life expectancy.

Beyond the financial benefits, some retirees find psychological value in continuing to work.

Semi-Retirement Could Improve Your Wellbeing

When Carolyn McClanahan, CFP and founder of Life Planning Partners, works with clients to draft their retirement plan, she encourages them to think about how they’ll spend their time—and with whom.

“Before people retire, like within five years of retirement, we start having conversations with people about what they’re going to be doing in retirement,” she said.

For some of her clients, reducing their work hours instead of abruptly quitting makes them more likely to have a successful retirement.

Some research has found that losing a job-related identity and leaving behind a social network at work can be risk factors for depression, potentially causing lower life satisfaction and loneliness.

“Money aside, that [working part-time] is just another way that retirees can find purpose,” said Ben Loughery, CFP and founder of Lock Wealth Management.

However, Teresa Ghilarducci, a labor economist and professor at the New School, has noted that working longer may only be beneficial for a select group of people.

“My research showed that work was good for the types of people who make pension policies, like politicians and professors. But they have jobs with status where they can control the pace and content of their work,” Ghilarducci told Investopedia in a 2024 interview. “For people who don’t, data shows their stress and cortisol levels are higher. For most people, their job doesn’t provide meaning, satisfaction, or personal growth.”

How to Decide If Semi-Retirement Is Right for You

To determine if semi-retirement is the right decision for you, you’ll want to figure out whether you’re doing it out of choice or necessity.

If you want to work longer because you can’t afford to retire, you’ll want get a complete picture of your finances to calculate the gap in savings you’ll need to make up. You may want to ask yourself the following questions: How large is the gap in savings? How much longer will I need to work to cover the gap in savings?

Loughery notes that semi-retirement can also be a good option for those who already have savings, but still want to bolster their nest egg.

“What if there’s some bad market environment or some unexpected life event that comes up? It’s nice to have the buffer of extra income because [then] we’re not tapping fully into the portfolio for withdrawals and we’re also allowing ourselves to extend [waiting to collect] Social Security,” said Loughery.

For those opting for semi-retirement out of choice, you’ll have more flexibility than your peers who must work out of necessity. This means that you can choose the terms of your semi-retirement without having to worry about finances.

For example, you may want to reduce the workload in your current role or take up a passion project, like selling handmade goods online or becoming a freelance writer.

Factors to Weigh When Considering Semi-Retirement

Before semi-retiring, you’ll also want to think about how part-time or contract work could potentially impact your tax brackets, Social Security benefits, and healthcare options.

Tax Brackets

If you plan to pull money from your retirement savings while you’re still earning money on the side, you’ll want to look into how this could impact your tax brackets, as your extra income could end up pushing you into a higher tax bracket. Pay close attention to the income tax brackets, your withdrawal amount, and your income.

Social Security

While opting for part-time work may allow you to hold off on collecting Social Security benefits, those who decide to take benefits before full retirement age (FRA) and continue to work may be at risk of having their benefits reduced.

If you’re bellow FRA and earn income, your benefit will be reduced by $1 for every $2 you earn above the annual limit of $23,400 in 2025. Once you reach FRA, your benefit will be recalculated and the benefits that were withheld will be credited back to you.

Healthcare

People who stay at their current job may still be able to rely on health insurance through their employer. However, retirees under the age of 65 who decide to quit their jobs may have to purchase a health insurance plan off the exchange, as you must be at least age 65 (or have certain chronic medical conditions) to qualify for Medicare.

Be aware of your income before you become eligible for Medicare. Some Medicare premiums (Medicare Part B and Medicare prescription drug coverage) are determined by your tax return from the previous year. For 2025, your Medicare premiums would be based on your income from 2023.

The Bottom Line

Semi-retirement provides flexible path for those who need or want to keep working. Working part-time can help you grow your nest egg, delay collecting Social Security, and ease the transition into retirement. Just make sure to think about how it might impact your taxes and healthcare options.

Fact checked by Katie Reilly

When Greg Abel takes over for Warren Buffett as CEO of Berkshire Hathaway (BRK.A, BRK.B), he’ll have big shoes to fill. Buffett leaves an unparalleled legacy as one of the greatest investors ever, having transformed Berkshire from a struggling textile company into a $1.1 trillion conglomerate.

Abel, a famously private executive who has run Berkshire’s non-insurance operations, offered a glimpse into his philosophy for success while addressing shareholders at Berkshire’s annual meeting this month.

Key Takeaways

• Abel said hard work and a great work ethic are the keys to success.
• Americans tend to agree with him; surveys consistently show they view hard work as a top contributor to success.
• Abel has humble beginnings that mirror Buffett’s, and his interest in business began at a young age.

Abel’s Key to Success

At the 2025 shareholder meeting, where Buffett announced he would step down as CEO by the end of the year, a teenager from Hong Kong seized her moment during the meeting’s famed Q&A session. When she asked Abel what it would take to get hired by him, he offered a simple answer.

“You’re going to have to work hard, and I think hard work takes all of us a long way in life,” Abel said. “There’s a lot of things that matter in life, but if you start with a great work ethic and have that attitude that you want to contribute, you’re going to go a long way in life.”

“If you work hard, you’re going to find the things you love in life,” he added. “We truly look forward to the day you’re part of Berkshire.”

Surveys consistently show that most Americans agree with Abel about the importance of hard work. In a 2023 survey by the American Communities Project and Ipsos, 68% of Americans said “hard work and grit” was the top contributor to success. A 2024 survey by Empower and Morning Consult found that 84% of Americans said success is about hard work—above talent (65%), who you know (55%), or luck and circumstance (51%).

Abel’s Humble Roots

Abel’s grounded advice echoes the values long espoused by Buffett, a Wall Street titan famous for his modest lifestyle—he still lives in the same Omaha, Neb., home he bought in 1958 for $31,500 (about $353,000 in April 2025 dollars). Like Buffett, Abel had humble beginnings. A Canadian by birth and an accountant by training, he earned a bachelor’s degree in accounting from the University of Alberta in 1984.

Also, like his predecessor, he started working on his business acumen at an early age. “From a young age, business intrigued me,” Abel told the Calgary Herald in 2024. “It was as simple as back in the day, you could collect pop bottles, and people had a tendency to throw them away. And we’d get the nickel. I almost viewed it like a business.”

He said he started to optimize his route home to pick up more bottles and earn more money. If he made $1 one week, he would try to make $1.05 the next week.

“How many could I pick up in a week?” Abel said. “I still remember thinking, ‘OK, well, there’s a better route home…Maybe I can get five pop bottles on the way home.'”

Is Hard Work Enough?

Abel acknowledges that success isn’t guaranteed by effort alone. “I think hard work leads to good outcomes,” Abel told the Horatio Alger Association. “In my schooling, in sports, and in my business positions, I learned that if I put in a lot of work and was well-prepared, then success would be more likely.”

That measured “more likely” reveals a nuanced view—preparation improves the odds of success, but it doesn’t guarantee results.

At the 2025 Berkshire meeting, Buffett himself highlighted this reality. “The luckiest day in my life is the day I was born—because I was born in the United States,” he said. “At the time, about 3% of all the births in the world were taking place in the United States.”

“I was just lucky, and I was lucky to be born male. I was lucky to be born white,” he added, acknowledging the role of sexism and racism as barriers to success.

The Bottom Line

As Buffett steps down, Abel brings a practical work ethic and an understated approach to the helm of Berkshire Hathaway. His message is straightforward: Hard work significantly improves your chances of success, but it doesn’t guarantee it.

Reviewed by Thomas J. Catalano
Fact checked by David Rubin

Simple Random Sample vs. Stratified Random Sample: An Overview

In statistical analysis, the population is the total set of observations or data that exists. However, it is often unfeasible to measure every individual or data point in a population.

Instead, researchers rely on samples. A sample is a set of observations from the population. The sampling method is the process used to pull samples from the population.

Simple random samples and stratified random samples are both common methods for obtaining a sample. A simple random sample is used to represent the entire data population and randomly selects individuals from the population without any other consideration. A stratified random sample, on the other hand, first divides the population into smaller groups, or strata, based on shared characteristics. Therefore, a stratified sampling strategy will ensure that members from each subgroup are included in the data analysis.

Key Takeaways

• Simple random and stratified random samples are statistical measurement tools.
• A simple random sample takes a small, basic portion of the entire population to represent the entire data set.
• Stratified random sampling divides a population into different groups based on certain characteristics, and a random sample is taken from each.

Simple Random Sampling

Simple random sampling is a statistical tool used to describe a very basic sample taken from a data population. This sample represents the equivalent of the entire population.

The simple random sample is often used when there is very little information available about the data population, when the data population has far too many differences to divide into various subsets, or when there is only one distinct characteristic among the data population.

For instance, a candy company may want to study the buying habits of its customers in order to determine the future of its product line. If there are 10,000 customers, it may use 100 of those customers as a random sample. It can then apply what it finds from those 100 customers to the rest of its base.

Statisticians will devise an exhaustive list of a data population and then select a random sample within that large group. In this sample, every member of the population has an equal chance of being selected to be part of the sample. They can be chosen in two ways:

• Through a manual lottery, in which each member of the population is given a number. Numbers are then drawn at random by someone to include in the sample. This is best used when looking at a small group.
• Computer-generated sampling. This method works best with larger data sets, by using a computer to select the samples rather than a human.

Using simple random sampling allows researchers to make generalizations about a specific population and leave out any bias. This can help determine how to make future decisions. That way, the candy company from the example above can use this tool to develop a new candy flavor to manufacture based on the current tastes of the 100 customers.

However, keep in mind that these are generalizations, so there is room for error. After all, it is a simple sample. Those 100 customers may not have an accurate representation of the tastes of the entire population.

Stratified Random Sampling

Unlike simple random samples, stratified random samples are used with populations that can be easily broken into different subgroups or subsets. These groups are based on certain criteria, then samples are randomly chosen from each in proportion to the group’s size vs. the population.

This method of sampling means there will be selections from each different group—the size of which is based on its proportion to the entire population. However, the researchers must ensure that the strata do not overlap. Each point in the population must only belong to one stratum so that each point is mutually exclusive. Overlapping strata would increase the likelihood that some data are included, thus skewing the sample.

The candy company may decide to use the random stratified sampling method by dividing its 100 customers into different age groups to help make determinations about the future of its production.

Important

Portfolio managers can use stratified random sampling to create portfolios by replicating an index such as a bond index.

Key Differences

The simple random sample is often used when:

• Very little information is available about the data population.
• The data population has too many differences to divide into various subsets.
• Only one characteristic is distinct among the data population.

Stratified random samples are used with populations that can be easily broken into different subgroups or subsets based on certain criteria. Samples are randomly chosen from each proportional to the group’s size vs. the population.

Advantages and Disadvantages

Stratified random sampling offers some advantages and disadvantages compared to simple random sampling. Because it uses specific characteristics, it can provide a more accurate representation of the population based on what’s used to divide it into different subsets. This often requires a smaller sample size, which can save resources and time. In addition, by including sufficient sample points from each stratum, the researchers can conduct a separate analysis on each individual stratum.

But more work is required to pull a stratified sample than a random sample. Researchers must individually track and verify the data for each stratum for inclusion, which can take a lot more time compared with random sampling.

How Does Simple Random Sampling Work?

Simple random sampling is used to describe a very basic sample taken from a data population. This statistical tool represents the equivalent of the entire population.

How Does Stratified Random Sampling Work?

Stratified random samples are used with populations that can be easily broken into different subgroups or subsets based on certain criteria. Samples are then randomly chosen from each in proportion to the group’s size vs. the population.

How Do Simple Random and Stratified Random Sampling Benefit Researchers?

Simple random sampling lets researchers make generalizations about a specific population and leave out any bias. This can help determine how to make future decisions.

Stratified random sampling lets researchers make selections from each subgroup, the size of which is based on its proportion to the entire population. However, the researchers must make sure that the strata do not overlap.

The Bottom Line

Simple random samples and stratified random samples are both common methods for obtaining a sample. A simple random sample represents the entire data population and randomly selects individuals from the population without any other consideration. A stratified random sample divides the population into smaller groups, or strata, based on shared characteristics—thus ensuring that members from each subgroup are included in the data analysis.

Insights from a financial advisor

A historic number of Baby Boomers are turning 65 this year, a phenomenon dubbed Peak 65, putting retirement readiness in the spotlight.

While they face unique challenges, such as rising healthcare costs and longevity risk, these issues also serve as a cautionary tale for millennials. Millennials have the advantage of time, but if they don’t optimize their strategies now, they could face similar hurdles down the road.

As a millennial finance expert, I often tell my peers that small, consistent actions taken today can significantly impact our future retirement security.

Key Takeaways

• Longevity is rising, placing increasing demands on retirement savings for millennials.
• Healthcare costs can derail even the best-laid plans if not accounted for early.
• Maximizing employer benefits and auto-increasing retirement contributions can help millennials stay on track.
• Roth accounts and Health Savings Accounts (HSAs) can provide both tax advantages and flexibility in retirement.
• Scenario planning helps millennials prepare for varying outcomes, from market downturns to delayed Social Security benefits.

The Social Security program faces funding challenges, which could impact the future benefits millennials receive. While feeling overwhelmed is easy, millennials should recognize they have more time to invest and can leverage compounding growth.

Taking a cue from the financial hurdles boomers face, such as inadequate savings or underestimating healthcare expenses, can guide them toward better preparation.

Note

According to a study by Allianz Life, 66% of millennials worry about running out of money.

Moreover, the financial environment is increasingly complex, with fluctuating markets, new asset classes (like cryptocurrency), and a shifting tax landscape. Employers, too, may continue to move away from pensions or specific benefits, so millennials need to be proactive in securing their own retirements.

What I’m Telling My Clients

1. Max Out Employer Plans and Automate Increases

If your employer offers a 401(k) or similar retirement plan, start contributing enough to capture the full match; otherwise, you’re leaving free money on the table. Many plans allow automatic contribution increases—by 1% or so annually—which can painlessly boost savings over time. If affordable, consider maxing out your retirement plan for tax-advantaged savings.

2. Diversify and Consider Future Tax Scenarios

Roth 401(k)s and Roth IRAs can be strategic for millennials. Paying taxes on contributions now could provide tax-free withdrawals in retirement, a big advantage if you find yourself in a higher tax bracket later in life. However, pre-tax deductions could offer meaningful relief for individuals currently in high tax environments. 

Tip

 Working with a tax advisor could help determine which path is right for you.

3. Plan for Healthcare Early

Health Savings Accounts (HSAs) are especially powerful if you have a high-deductible health plan. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses remain tax-free. Over time, these accounts can help offset the escalating healthcare costs that boomers currently face.

Moreover, maintaining an active lifestyle and prioritizing your health today could help reduce future medical costs.

4. Prepare for Longevity and Uncertainty

Longer lifespans mean your retirement could span 30 or more years. When appropriate, consider insurance products (like long-term care insurance) or riders on life insurance policies that can help with elder-care expenses.

I also advise creating scenario plans, looking at potential Social Security shortfalls, and running simulations of various market returns to ensure your portfolio can weather downturns.

The Bottom Line

Boomers turning 65 in record numbers is a crystal ball into the challenges millennials will eventually face. By saving diligently, diversifying investments, and planning ahead for healthcare costs and longer retirements, millennials can avoid the pitfalls some older adults are experiencing today. Ultimately, millennials who make consistent, proactive choices now stand the best chance of enjoying a secure and flexible retirement in the decades to come.

A Roth IRA can provide tax-free income for years if you follow the right rules

Fact checked by Yarilet Perez
Reviewed by Margaret James

If you inherit a Roth individual retirement arrangement (Roth IRA) from a parent and take withdrawals correctly, you’ll be able to enjoy tax-free withdrawals for years. Your options will depend on whether you are considered a designated beneficiary or eligible designated beneficiary.

Learn more about these designations and what to do when you inherit a Roth IRA in different circumstances.

Key Takeaways

• You must withdraw all of the money from a Roth IRA that you inherit from a parent.
• You can take the money in a lump sum or in smaller withdrawals.
• You can keep the money or deposit it into an inherited IRA account, but you cannot move it to a Roth IRA.
• In most cases, withdrawals will be tax free.

Your Roth IRA Options

If you are a beneficiary inheriting a Roth IRA, you must follow differ rules depending on your circumstances. If the IRA originally belonged to your parent, you fall into one of two categories: designated beneficiary or eligible designated beneficiary.

What Is a Designated Beneficiary?

Designated beneficiary applies to most people who inherit an IRA from a parent. Also called a “named beneficiary,” is defined by the SECURE Act as someone designated to receive an asset when the original owner dies.

If you are a designated beneficiary on your parent’s IRA, you will be required to withdraw all of the money from the account within the 10-year period following your parent’s death. This period starts December 31 the year after the original account owner died. This is sometimes referred to as the “10-year rule.”

However, you have flexibility with when you take out money and how much you take out each withdrawal before the 10-year period is over. You do not have to take required minimum distributions (RMDs) every year, but you can make withdrawals whenever you like—just as long as you deplete the account within the 10 years.

In the meantime, if you don’t need the money, you can keep it invested in the IRA and enjoy another decade of tax-free growth.

Note

With traditional IRAs, you can take a tax deduction the year you make the deposit. When you withdraw the funds, you will then pay income tax. With Roth IRAs, you deposit funds after they’ve been taxed. The tax advantage with Roth IRAs is then when you make the withdrawals, which you can do tax-free.

What Is an Eligible Designated Beneficiary?

The eligible designated beneficiary category applies to minor children (the age of majority varies by state), a surviving spouse, and individuals who are disabled or chronically ill.

Minors can begin to take distributions over their remaining life expectancy, as determined by the tables in Publication 590-B of the Internal Revenue Service (IRS), until they reach the age of majority. (Generally, anyone up to age 26 may be considered a minor.) After that, beneficiaries must follow the 10-year rule in which they must withdraw funds within 10 years. But they are not required to take RMDs.

Others in the eligible designated beneficiary category can simply take distributions over their IRS-determined life expectancy.

These more flexible rules give eligible designated beneficiaries an opportunity to stretch their distributions over a longer time period and thus benefit from the Roth IRA’s tax-free compounding for that extended period. However, eligible designated beneficiaries are not obligated to do that—they can take distributions as soon as they like, even right away in the form of a lump sum. As long as the account that they inherited satisfies the five-year holding period rule, their distributions will be tax free.

Important

Consider consulting a professional financial advisor to review your options for the funds from an IRA you inherit. The best strategy for you will depend on you financial situation. 

Opening an Inherited IRA Account

If you inherit a parent’s IRA—either Roth or traditional—you will need to decide how you will accept the money. One option is to take the money in a lump sum.

If you want to maintain the account’s tax advantages, you can open an inherited IRA, which is sometimes called a beneficiary IRA, and move the money into it. You can do that at many financial institutions that handle regular IRAs. Unfortunately, you will not be able to contribute additional money to your inherited IRA.

How Inherited Roth IRAs Are Taxed

The money in an inherited IRA will continue to grow tax-free as long as it remains in the account. Distributions of the original account owner’s contributions aren’t taxed, but distributions of earnings are taxable if the Roth IRA or any other Roth IRA held by that same account owner is not at least five years old. Inherited IRAs are not subject to the 10% penalty that is normally imposed on account holders who take distributions before age 59½.

Frequently Asked Questions (FAQs)

How Does the Internal Revenue Service (IRS) Define ‘Child’?

Under federal law, a child is the son, daughter, stepson, stepdaughter, legally adopted child, or eligible foster child of the taxpayer.

Can an IRA Have More Than One Beneficiary?

An IRA can have more than one beneficiary. When the original account owner dies, each beneficiary should set up their own inherited IRA with their portion of the account funds.

What Happens if I Don’t Take Required Minimum Distributions (RMDs)?

Individual retirement account (IRA) holders who don’t take required minimum distributions (RMDs) on schedule can be subject to an excess accumulation penalty, which is a 25% tax on the difference between the amount that they should have taken as a distribution and the amount (if any) that they actually took.

For an account whose original owner died in 2020 or later, the deadline for emptying an inherited Roth IRA is generally Dec. 31 of the tenth year after the original owner’s death. Some additional rules apply to a spousal beneficiary. And the liquidation deadline can vary, depending on whether the original owner started to take RMDs.

The Internal Revenue Service (IRS) says it can waive all or part of the penalty “if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall.”

The Bottom Line

Children who inherit a parent’s Roth IRA eventually will have to take all of the money out of the account. The rules differ depending on whether they are classified as a designated beneficiary or an eligible designated beneficiary. Either way, if they handle the account properly, then all of their distributions will be tax free. The rules on inheriting an IRA can be complex, so consider consulting a financial professional for more guidance.

You’ll save hundreds if you do it yourself

Fact checked by Betsy Petrick

Staging your home can help you get an offer faster and get more for your home, but how much does staging cost? According to HomeAdvisor, homeowners pay between $832 and $2,926 for this service. This works out to a national average of $1,843, but your home staging cost can vary depending on your home’s location, condition, asking price, and more.

Key Takeaways

• Staging your home involves cleaning, furnishing, and decorating the house so potential buyers can envision living in the space.
• Staging costs an average of $1,843, but the cost varies greatly depending on whether you stage the home yourself or hire a professional company.
• The goal of staging is to sell your home faster and at a higher price.

Factors Affecting the Cost of Staging a House

The range you might pay for staging varies widely, based on a number of factors:

• Home size: Bigger homes equal more rooms to fill and stage, so you’ll pay more for a larger home. Be prepared to pay more if your home has an accessory dwelling unit (ADU) that also needs to be staged.
• Current condition of the house: Staging is more expensive if you have to make repairs or do maintenance before updating and redecorating the space. On the other hand, newer homes in great shape might cost less to stage.
• Home’s price point: Some professional staging companies charge a percentage of your home’s selling price. So, it will cost more to stage homes listed at a higher price point.
• Cost of hiring a professional: Pay attention to the company’s quote, which explains how staging is charged: by house, by room, by the hour, by set fee, or by percentage of the sale. These can all affect how much you pay overall for staging.
• Home location: Staging can be expensive if you live in a well-off metropolitan area compared to an average suburban neighborhood. Factor in your neighborhood’s income when setting a staging budget.

Tip

Play around with the Real Estate Staging Association (RESA)‘s staging calculator to see how much money or time you might save by staging your house.

Example Scenarios

Before you commit to staging your entire house, take a look at how much it costs to stage a single room. This way, if you’re on a limited budget, you can focus on specific rooms and still make a big impact.

Room or Space	Avg. Staging Cost
Occupied home (minimally or partially staged)	$800
Occupied home (fully staged)	$800-$2,000
Vacant home	$2,000
Small condo or apartment	$500-$800
Monthly rental fees for furniture	$500-$600 per room

The Bottom Line

Staging a home can cost you several hundred dollars (or even several thousands). However, it can be money well spent if your home goes for over asking or you can accept an offer more quickly. If money is tight but you still want to stage, focus on just a few critical rooms: the living room, kitchen, and primary bedroom. The biggest budget saver is to stick to necessary updates only. When in doubt, ask your real estate agent before renovating or splurging on something to stage the space.

After a five-year pause, the government is restarting involuntary collections on defaulted federal student loans. The resumption of student loan payments marks a major shift for millions of borrowers, especially women. They carry most of the country’s student debt and typically earn less than men, both of which can make repaying loans harder.

Key Takeaways

• Involuntary collections on defaulted student loans are resuming after a five-year pause.
• Women, who held almost two-thirds of all student loan debt in 2021, could be hit harder.
• Lower earnings, caregiving responsibilities, and racial wage gaps make repayment tougher for many women.

Background on Student Loan Payments

Student loans were first paused in early 2020 to provide relief during the pandemic. The pause stopped payments and interest on most federal student loans, and it was extended several times under both the first Trump administration and the Biden administration.

After over three years, the pause officially ended on Sept. 1, 2023. Borrowers were given a 12-month “on-ramp” period during which missed payments weren’t considered delinquent, reported to credit bureaus, placed in default, or sent to collection agencies. As of May 5, 2025, that grace period has passed.

Warning

If you’re in student loan default, the government can now garnish your wages or seize your tax refund and Social Security payments.

Social and Demographic Factors

Women held nearly two-thirds of the nation’s $1.6 trillion student debt in 2021, according to the American Association of University Women. With collections restarting, many women who relied on the payment pause now risk losing a portion of their paychecks or certain federal benefits if their loans aren’t in good standing.

Additionally, women often earn less than men, leaving them with fewer resources to repay their debts. Faced with suspended careers and caregiving demands, women take about two years longer to pay off their loans, which are approximately $2,000 higher on average compared to those of their male counterparts. Longer repayment terms and bigger balances also typically lead to paying more in interest.

Race adds another dimension to this issue. Black women, for example, borrow more for school than anyone and face a steeper wage gap. A 2022 study from the Education Trust found that 12 years after college, White men had paid off nearly half of their loan balances, while Black women owed 13% more than they’d originally borrowed.

The Bottom Line

As collections restart, now is the time for borrowers in default to explore their repayment options. Income-driven repayment (IDR) plans and loan forgiveness programs may be able to offer some relief.

At the same time, there’s still work to be done. Policymakers must take steps to close the gender wage gap and address other systemic issues that cause student debt inequality.