financial education

The widely followed Standard & Poor’s 500 Index is the standard by which stock market performance in the U.S. is often measured, as it tracks 500 of the largest and most stable publicly traded companies in the country. The index is weighted by market capitalization, which gives more significance to companies with larger market values. The top 25 stocks in the S&P 500 by weight are the largest, most influential companies in the index.

Key Takeaways

• The S&P 500 is widely considered to be one of the best measures of stock market performance and the health of the U.S. economy.
• The 500 stocks tracked by the index represent the nation’s largest, most economically significant companies
• The S&P 500 is weighted by market cap. The larger the company, the more influence its stock price has on the overall index.
• The top 25 stocks in the index are important to follow because of their strong influence on the performance of the index and the economy at large.

As of March 24, 2025, the S&P 500 index is down 2% since the beginning of 2025, as President Donald Trump’s trade policies and threats to impose more tariffs cause widespread economic uncertainty. In addition, the Federal Reserve Board’s decision in mid-March to leave interest rates unchanged rather than cut them is another important factor in the index’s downward slant. Investors’ hopes that rates would come down may have helped prop up stock prices before the Fed announcement.

How are Stocks Selected for the S&P 500?

To be included in the S&P 500, a company must:

• Be based in the United States and trade publicly on a major U. S. exchange
• Maintain a market capitalization of $20.5 billion and a float-adjusted market cap of at least 50% of the index’s total company-level minimum market capitalization threshold
• Have reported positive earnings in the most recent quarter, along with the past four consecutive quarters
• Have a float-adjusted liquidity ratio of 0.75 or greater.
• Have traded a minimum of 250,000 shares in the previous six months before evaluation

The S&P 500 reconstitutes each June. Companies removed from the index are not replaced until the next annual reconstitution.

Top Sectors in the S&P 500

The table below lists the S&P 500’s top sectors by weighting as of March 24, 2025. The information technology, financials, health care, and consumer discretionary sectors carry a cumulative weight of 67.52%. Meanwhile, the least-weighted sectors include energy, utilities, and real estate, which have a combined weight of just 8.07%.

Top 10 Sectors in the S&P 500 by Weight
Information Technology	32.05%
Financials	14.00%
Consumer Discretionary	10.68%
Health Care	10.79%
Communications Services	9.46%
Industrials	7.33%
Consumer Staples	5.87%
Energy	3.30%
Utilities	2.58%
Real Estate	2.19%

Top 25 Companies by Index Weight

These are the top 25 companies by index weight. Since the S&P Global website fails to disclose the weighting of component stocks, we used the S&P 500 exchange-traded fund (ETF), the SPDR S&P 500 ETF Trust (SPY), in order to cite index weighting. The ETF’s holdings are a bit different, but SPY closely reflects the S&P 500 weights.

As of March 24, 2025, here are the largest SPY holdings by weight:

Top 25 Companies by Index Weight
1	APPLE (AAPL)	6.05%
2	MICROSOFT (MSFT)	5.35%
3	NVIDIA (NVDA)	5.33%
4	AMAZON.COM, INC (AMZN)	3.93%
5	ALPHABET CLASS C (GOOG)	3.86%
6	META (META)	2.55%
7	BERKSHIRE HATH (BRK.B)	2.11%
8	ALPHABET CLASS A (GOOGL)	1.84%
9	BROADCOM (AVGO)	1.66%
10	TESLA (TSLA)	1.64%
11	ELI LILLY (LLY)	1.46%
12	JP MORGAN (JPM)	1.32%
13	WALMART (WMT)	1.29%
14	VISA (V)	1.12%
15	EXXON MOBIL (XOM)	0.97%
16	MASTERCARD (MA)	0.94%
17	UNITEDHEALTH GROUP (UNH)	0.90%
18	ORACLE (ORCL)	0.81%
19	NETFLIX (NFLX)	0.81%
20	COSTCO (COST)	0.78%
21	JOHNSON & JOHNSON (JNJ)	0.75%
22	PROCTER AND GAMBLE (PG)	0.73%
23	ABBVIE (ABBV)	0.70%
24	HOME DEPOT (HD)	0.69%
25	BANK OF AMERICA (BAC)	0.63%

Why Are the S&P 500’s Top 25 Stocks Important?

The top 25 stocks in the S&P 500 by index weight are important to analyze because they can be used to gauge the health of the stock market and broader economy. These companies reflect the performance of key sectors and the benchmark itself.

The current period of outperformance by the technology sector, for example, shows how declining inflation, strong margins, and competitive positioning resulting in good cash flow can contribute to gains in the overall index.

How Do I Invest in the S&P 500 Index?

The simplest and easiest way to invest in the S&P 500 is to purchase the popular SPDR S&P 500 ETF (SPY), which reflects the minute-by-minute movements of the index. Other ETFs that also track the S&P 500 this way include the iShares Core S&P 500 ETF (IVV) and Vanguard S&P 500 ETF (VOO).

There are also index funds that reflect only the closing price at the end of the day, including the Vanguard 500 Index Fund (VFIAX) and Fidelity 500 Index Fund (FXAIX). For those interested in more complex strategies, options and futures are also available, such as E-mini S&P Futures contracts, although these are only for those wishing to speculate on the future value of the index.

Advantages and Disadvantages of Investing in the S&P 500 Index

The central advantage of investing in the S&P 500 is the wide diversification it offers across many sectors and industries. By investing in the index, an investor generally reduces the risk associated with buying individual stocks. Over the years, an investment in the S&P 500 can produce long-term growth for those willing to wait out the accompanying short-term volatility.

A disadvantage of S&P 500 investing is how concentrated the index is in the top-performing stocks, a factor that sometimes skews results and can result in increased volatility. Some investors prefer an S&P 500 Equal Weight Index, where each component has an equal weight without regard to the size of its market capitalization.

The Bottom Line

The S&P 500 index weights companies according to their market caps. Larger firms are more heavily weighted than small firms, which carries some risks. The tech sector, which includes giants like Apple, Microsoft, and Nvidia, has an enormous influence on index results. In general, the stock market’s health and that of the U.S. economy can be measured by analyzing the S&P 500’s top 25 components.

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.

These are the best undervalued stocks to keep an eye on this month

Value investors seek stocks that are trading on the market at a price point below their fundamental value. These stocks typically represent high-quality companies that are either emerging or whose shares have otherwise fallen. While it can be difficult to execute successfully, value investing allows investors to buy stocks at a relatively low price point and then benefit when the market eventually corrects itself and the price rises to be more in line with the company’s underlying value.

In April 2025, some likely candidates for value investors to keep an eye on include pre-clinical pharmaceuticals firm Agios Pharmaceuticals Inc. (AGIO), energy outfit Civitas Resources Inc. (CIVI), and utilities outfit Korea Electric Power Corp. (KEP), among others.

Key Takeaways

• Undervalued stocks on the NYSE and the Nasdaq have 12-month trailing P/E ratios as low as 0.02.
• Value investors believe it is possible to identify companies with shares trading below their fundamental value. Later, when the market corrects this pricing error, investors achieve gains as share prices rise.
• P/E ratio is a key metric used to identify value stocks, but this figure can vary significantly from one sector or industry to the next.
• For this reason, it’s most helpful to compare potential value plays against other peers in the same sector.
• Other common value metrics include forward P/E ratio, price-to-book ratio, and price/earnings-to-growth ratio.

Below, we consider some of the top undervalued stocks for this month, as measured by 12-month trailing price-to-earnings (P/E) ratio. A detailed explanation of our methodology is found below. All data are as of March 25, 2025.

Top Undervalued Stocks By Sector, Based on Lowest 12-Month Trailing P/E Ratio
Ticker	Company	Sector	Market Cap ($B)	12-Month Trailing P/E Ratio	Price ($)
CIVI	Civitas Resources Inc.	Energy	3.4	4.29	36.34
IAG	Iamgold Corp.	Materials	3.5	4.39	6.04
CAAP	Corporación América Airports SA	Industrials	3.1	0.02	19.04
SBH	Sally Beauty Holdings Inc.	Consumer Discretionary	0.9	5.20	8.66
HLF	Herbalife Ltd.	Consumer Staples	0.8	3.29	8.22
AGIO	Agios Pharmaceuticals Inc.	Healthcare	1.8	2.70	30.76
JPM	J.P. Morgan Chase & Co.	Financials	693.6	0.96	18.88
CCSI	Consensus Cloud Solutions Inc.	Information Technology	0.5	5.22	24.10
SBGI	Sinclair Inc.	Communication Services	1.1	3.59	16.69
KEP	Korea Electric Power Corp.	Utilities	9.7	3.87	7.72
PLYM	Plymouth Industrial REIT Inc.	Real Estate	0.8	5.48	16.74

Why Are These the Top Undervalued Stocks?

Our screen for the best undervalued stocks includes firms listed on either the New York Stock Exchange (NYSE) or the Nasdaq and with a price of at least $5 per share, a daily trading volume of 100,000 or more, and a market capitalization of $300 million or more. From that list, we ranked the companies in our screen by 12-month trailing P/E ratio and then selected the stock with the lowest P/E ratio from each sector.

While there are many different metrics used in value investing, P/E ratio is one of the most common. It is a measure of the price of a company’s shares against its earnings. A low P/E ratio often suggests that a firm’s recent earnings have performed well relative to its price, meaning that it is undervalued in the market.

When looking for undervalued stocks, investors should keep in mind that P/E ratio is just one of many measures of a company’s value. It’s important to look at the firm’s financials as well as other metrics like P/S ratio (for firms that have yet to achieve profitability), price-to-book ratio, and price/earnings-to-growth ratio for a fuller picture. That said, it is also inherently difficult to calculate a company’s intrinsic value, and market unpredictability means that even legitimately undervalued firms may never see a stock price increase in the future.

What Should Investors Look For in Undervalued Stocks?

While we looked at trailing P/E ratio in our screen, forward P/E ratio is also a helpful metric to use to identify undervalued stocks. The forward P/E ratio makes use of Wall Street analyst predictions of a company’s future earnings. It can be a helpful way to take stock of how developments on the horizon could impact the company’s performance, although it’s also important to note that forward P/E ratio is intrinsically speculative.

Another way of comparing price and earnings is the price/earnings-to-growth ratio, which also includes an estimate of future earnings growth. This may provide investors with a better sense of how a company is likely to fare with regard to future earnings, as well as whether the firm may be undervalued relative to potential earnings growth.

Price-to-book ratio is a measure of a company’s share price against its net value (assets less liabilities). By looking at the firm’s book value per share, investors can get a fuller view of a company’s financial wellbeing. The price-to-book ratio suggests how much investors may be willing to pay for each dollar of the company’s net value.

Finally, regardless of which metrics one uses to evaluate a company, it’s essential to consider a benchmark. When it comes to value investing, it’s impossible to determine whether a company is undervalued unless one has a sense of how it compares to peers in its industry or sector. Because P/E ratios differ significantly from one sector to another, this information helps investors make the most educated guesses possible about a company’s underlying value.

The Bottom Line

Undervalued companies may have the potential to experience outsized returns if the market corrects the price to more closely match their underlying value. Investors seeking a value play might look to metrics like 12-month trailing P/E ratio as one indicator. Our screen has revealed a selection of stocks across sectors that could be undervalued, although there is no guarantee that investors in these stocks will achieve better-than-expected results.

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 stocks.

These are some of the best-performing stocks in the health care sector over the past month

The health care sector is massive and incredibly varied, including companies that make medical equipment or drugs, those that offer medical services, and even those providing insurance in some cases. Within this sector, there are startups that are pre-revenue and working from quarter to quarter to launch an innovative product, major legacy service providers, and everything in between. Investors thus have many options to choose from when focused on health care. At the same time, though, the health care sector is highly complex, and investors are cautioned to familiarize themselves with the ins and outs of health care companies before launching an investment.

Key Takeaways

• Some of the best health care stocks for April 2025, based on 30-day returns, include Regencell Bioscience Holdings Ltd. (RGC), Zhengye Biotechnology Holding Ltd. (ZYBT), and Mineralys Therapeutics Inc. (MLYS).
• The best-performing health care stocks in the last month returned at least 32.2%.
• An aging population and increasing medical needs are two factors contributing to massive growth in the health sector.

We examine several of the best health care stocks to watch for April 2025, based on highest 30-day percentage return. We include an explanation of the other factors in our screen below. All data are current as of March 25, 2025.

Best Health Care Stocks to Watch in April 2025
Ticker	Company	Market Cap ($B)	Price ($)	30-Day Return (%)	P/E Ratio
RGC	Regencell Bioscience Holdings Ltd.	0.6	42.50	872.5	N/A
ZYBT	Zhengye Biotechnology Holding Ltd.	0.4	8.20	74.1	137.8
MLYS	Mineralys Therapeutics Inc.	1.1	16.78	73.2	N/A
CMRX	Chimerix Inc.	0.8	8.51	61.2	N/A
ORGO	Organogenesis Holdings Inc.	0.7	5.22	50.9	932.1
XERS	Xeris Biopharma Holdings Inc.	0.9	5.87	46.4	N/A
TGTX	TG Therapeutics Inc.	6.7	42.80	36.9	306.6
OMI	Owens & Minor Inc.	0.7	8.81	36.6	N/A
TRML	Tourmaline Bio Inc.	0.4	17.12	35.4	N/A
TRVI	Trevi Therapeutics Inc.	0.6	6.61	32.2	N/A

What to Know About the Health Care Sector

The health care sector was among the hardest hit by the COVID-19 pandemic and has yet to fully recover; the sector continues to face a significant labor shortage that has been exacerbated by ongoing inflation concerns. Significant elements of the way health care operations function—from a shift away from in-person medical appointments to changes in insurance and demand for new products, among many others—have forced long-time leaders in the space to reevaluate their offerings and presented openings for upstart firms to gain a foothold. Going forward, the health care sector will wrestle with a growing population of patients who are eligible for Medicaid and Medicare, opportunities presented by AI, and more.

One trend for investors to keep a close eye on is the ongoing popularity of GLP-1 agonists, a type of drug used to treat Type 2 diabetes and to help with weight loss. With about 1 billion people globally living with obesity, the potential market for these drugs is incredibly large. The two leading providers of these drugs are Novo Nordisk A/S (NVO) and Eli Lilly and Co. (LLY), but the market is far from settled.

How We Chose the Best Health Care Stocks

To screen for the best health care stocks this month, we looked at firms listed on either the Nasdaq or the New York Stock Exchange. To ensure we focused on established companies, we filtered out any companies with a share price below $5, with a minimum daily trading volume of under 100,000, and with a market capitalization below $300 million. From that subset of stocks, we ranked companies according to the highest 30-day percentage return.

Notably, all but three of the companies in our results had no P/E ratio. One of the most common reasons for a company to not have a P/E ratio is if it either took a loss or generated no earnings in the given time period, or in the prior-year period for comparison. This makes the calculation of a P/E ratio impossible. For clinical-stage pharmaceutical firms, many of which are pre-revenue or consistently post losses while developing their products, it is common to not have a P/E ratio until the launch of a significant drug product.

Health Care Stock Advantages and Disadvantages

National health expenditures reached $4.9 trillion in 2023, making the health care sector massive. A key benefit health care provides to investors is consistent demand. Because individuals will always have medical needs to be met, the overall demand for health products and services typically remains at least constant and tends to increase over time as populations grow older. Nationwide health care expenditures are expected to surge to $6.8 trillion by the year 2030.

Health care companies are enticing to investors because they are highly incentivized to use and create new technology, both to meet rising demand and to improve the affordability of care they can offer. This focus on innovation may mean that health care stocks offer the potential for short- and long-term gains.

It is common in the sector for individual companies to experience a significant breakout when an important new product is launched—such as a new medical device with broad applications or a blockbuster new drug—or even when clinical trial data is encouraging. Health care stocks often experience astronomical rallies during these moments.

On the other hand, there are some risks to investing in health care companies that investors should be aware of as well. One of the biggest risks is the size and scope of the sector. Due to the technical nature of the work of many health care companies, it can be difficult for outside investors to accurately assess the viability of a company or its products. Additionally, many companies in the space are heavily impacted by legislation, which can change and contribute to volatility.

Undoubtedly there are opportunities for major returns for investors looking to the health care sector. However, no one can predict how a company’s stock may perform. The companies above led the sector in our screen, but past performance is not a guarantee of future returns.

The Bottom Line

The health care sector is massive, complex, and rich with opportunities for investors willing to take the time to understand its ins and outs. Our screen favors companies in the pharmaceuticals space that have experienced strong returns in the last month, occasionally due to the success of a popular drug or other product. But just as some of these firms may rise rapidly, they may also fall just as precipitously, particularly if a promising new product ends up not working as expected.

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.

These strategies can help you secure your family’s financial future

Fact checked by Vikki Velasquez

It took about 10 years, but Charlie Wright, a retiree from Brooklyn, New York, finally listed her late mother’s house for sale, closing a chapter that had been delayed amid a disagreement with one of her siblings. Wright said she “waited it out” until “she gave in,” and now Wright and her two siblings plan to share the home sale proceeds equally. But Wright acknowledged this decade-long saga could have been avoided had her mother put in place an estate plan that laid out who would receive her assets after her death from cancer.

“If [my mother] would have done it years ago, before we found out that she was sick, that would have been fine,” Wright said. “People: Handle your business, get things in, put things in a proper place so that those who come behind you don’t have to deal with it.”

Wright’s situation is common in the United States. According to a survey conducted by Caring.com, a website that provides information on care of the aging, the number of Americans with a will declined from 33% of respondents in 2022 to 24% in 2025. Without key estate planning documents such as a will in place, an individual cannot convey how their assets should be distributed upon death, potentially leading to family conflicts and court visits.

For this reason, and to protect your family’s wealth and ensure the financial security of future generations, it’s critical to put an estate plan in place.

Key Takeaways

• Estate planning is crucial for protecting family wealth and ensuring financial security.
• Wills and trusts are fundamental tools in managing and distributing assets.
• Power of attorney and healthcare directives can ensure that decisions align with an incapacitated person’s wishes.
• Asset protection strategies include trusts, business entities, and homestead exemptions.
• Professional guidance is essential for personalized and effective estate planning.

Understanding Estate Planning

You may be familiar with the concept of a will, but there are many mechanisms involved in estate planning.

“On its most basic level, estate planning allows anyone to have the ability to determine and communicate to the rest of the world how they want their assets to be handled upon their passing,” says Christina Rosas, member of the trust and estate and property departments at Bond, Schoeneck & King in New York City.

Patrick Simasko, an elder law attorney and financial advisor based in Mount Clemens, Michigan, likens estate planning to building a toolbox.

“You go out in the garage, you’ve got a hammer, a screwdriver, and a wrench,” Simasko says. “Our toolbox is making sure that while you’re alive and healthy, you’re the boss. If you get sick, someone’s there to make your medical and financial decisions. Then, if you pass away, you want your stuff to go to your beneficiaries without probate, without court involvement.”

Here are the estate planning mechanisms that will help you ensure your wishes are honored.

Key Components of Smart Estate Planning

Wills and Trusts

A will is a legal document that lays out how an individual’s assets will be distributed upon their death. It could also outline custody arrangements of minor children. Typically, the individual names a trustee or executor to oversee the estate and ensure that the deceased’s wishes are fulfilled. Trusts are legal structures in which an individual (the grantor or trustor) transfers assets to a trustee for management and distribution according to their wishes. Unlike wills, trusts can go into effect while an individual is still alive.

“The law fills the void if a person doesn’t actually have a will or a trust in place, but very often, people want to have the ability to have some say in what happens with their assets upon their passing,” Rosas says. “Under a will or trust you have certain abilities to maybe even eliminate some of the people who would naturally be entitled to receive a share of an estate, like a child.”

Simasko said that lay people often overestimate the weight of a will—while it’s important, it is still susceptible to probate court. For this reason, Simasko highlights the need to designate beneficiaries across different assets to ensure a testator’s desires are followed. Trusts, on the other hand, bypass probate.

Power of Attorney and Healthcare Directives

While trusts and wills ensure your wishes are followed after your death, power of attorney and healthcare directives ensure your wishes are followed while you’re alive but unable to make decisions for yourself, such as if you are hospitalized or if your mental abilities decline. 

“It’s important when there are emergencies to be able to take actions in fairly short order,” Rosas says. “Having those advanced directives in place ahead of time will facilitate that process and make it easier for everyone involved.”

These directives also cover decisions around assets that cannot be overseen by trusts, including an IRA, 401(k), life insurance, utilities such as cable, pension checks, and health insurance, according to Simasko.

Beneficiary Designations

While wills and trusts are vital estate planning instruments, beneficiary designations can supersede them. Beneficiary designations often dictate the distribution of assets such as retirement accounts or life insurance policies.

Rosas notes that outdated designations can buck the wishes of the deceased. Take a 30-year-old man who names his two children as beneficiaries on a life insurance policy. If he subsequently has two more children but neglects to add them as beneficiaries, only the two named children will receive shares of the asset upon his death.

Or consider an individual who has named their spouse as the beneficiary of retirement benefits and who subsequently files for divorce. If the individual dies before changing their designations and the divorce is finalized, the soon-to-be ex-spouse will still receive those benefits.

“It’s very important that you’re cognizant of who you have named as your beneficiary designation,” Rosas says, “and that you check it from time to time to make sure that it’s still accurate and up to date and to make changes as needed.”

A trust can also be named as a beneficiary of various accounts, which simplifies designations, as only the trust would need to be updated, Simasko said. This approach has drawbacks, however. The assets of a retirement account are subject to required minimum distributions (RMDs) that are calculated by the oldest beneficiary’s life expectancy, removing the ability to maximize the deferral potential of the qualified plan’s interest.

Asset Protection Strategies

Trusts for Asset Protection

Trusts can ensure that certain assets are distributed to designees, but they can also be utilized to shield those assets from future creditors and legal claims. However, only certain types of trusts have these protective attributes.

Revocable trusts, as the name suggests, can be changed at any time, but for that reason they cannot be used to protect assets from creditors or tax authorities. Since the assets remain fully accessible to the grantor, they are also susceptible to creditor claims and taxes. It should be noted that revocable trusts become irrevocable upon the grantor’s death.

Trusts in which changes cannot be made are called, fittingly, irrevocable trusts. Typically, a grantor is not permitted to be a beneficiary of these trusts, meaning assets put into them will be shielded from creditors or legal claims that may arise in the future, Rosas says. (Of course, irrevocable trusts can’t be used to avoid existing creditor or legal claims, as that would be a fraudulent conveyance.) An irrevocable trust is also a good mechanism to segregate the grantor’s assets from the beneficiary, which protects those assets in certain situations, such as a divorce.

Irrevocable trusts can also be utilized to secure Medicaid benefits. Since the program for seniors limits the amount of money an individual can have, a grantor can elect to put funds in an irrevocable trust, meaning those funds are no longer in the individual’s possession. This typically has to be done five years before Medicaid benefits are claimed.

Important

For those who want to secure the financial future of children, those with special needs, or individuals with drug or gambling addictions, there are spendthrift trusts. These put limits on how the trust assets can be used by the beneficiary, effectively shielding the funds from creditors or legal claims.

Business Entities

Establishing an LLC (limited liability company) or corporation is a mechanism used to separate personal from business assets. For example, an individual who owns a construction company would create an LLC or corporation, along with distinct business bank accounts, in case they are sued or the business encounters legal or tax troubles. With this arrangement, only the business’s assets would be susceptible to the claims. Likewise, the owner of rental properties should register those properties under an LLC to shield personal assets against any legal claims. LLCs and corporations aren’t the be-all and end-all of protection, however. Business and home insurance, respectively, will play an important part in protecting the assets of the entities mentioned above.

Homestead Exemptions

Applicable in most states, the homestead exemption shields a primary residence from some creditors following the death of a homeowner’s spouse. It also provides some property tax relief. Each state has its own limits and rules surrounding the homestead exemption.

Tax Considerations and Tax Strategies in Estate Planning

Estate and Gift Taxes

The federal estate tax applies to the recipient of the property of a deceased individual, and consists of an accounting of everything the decedent owns or has certain interests in at the date of death. According to the Internal Revenue Service (IRS), “A filing is required if the gross estate of the decedent, increased by the decedent’s adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent’s death.” For 2025, that threshold is $13,990,000.

That’s a level of wealth most people won’t reach. But there’s a solution if you do. “Let’s say your estate is valued at $16 million,” Simasko says. “It’s a huge tax, so what you can do is give away a little bit each year to help reduce your estate.”

This is where gift taxes come into play. The gift giver has to pay a tax on each gift that exceeds the limits set by the IRS. For 2025, that limit is $19,000. So, if an individual decides to give each of their children $19,000 in 2025, the annual exclusion applies to each gift.

Warning

While many states don’t have an estate tax, the 12 that do have their own limits on the size of an estate before it’s susceptible to an estate tax. For example, New York’s estate tax kicks in when an estate is valued at $7.16 million.

Charitable Gifting

The passage of the Tax Cuts and Jobs Act in 2018, which bumped up the standard deduction taxpayers could claim, deflated the importance of charitable gifting in reducing an individual’s tax burden, according to Simasko.

“Charitable giving is important for a philanthropic reason, but it’s really not that beneficial like it was in the old days because of the tax laws that we have,” he says.

However, there are certain instances where charitable giving may be advantageous. Take, for example, a New York-based estate that exceeds the estate tax limit by 5% and whose entirety would be susceptible to the full estate tax (unlike the federal estate tax in which only the excess over the limit would be taxed).

“If you’re over by a few hundred thousand dollars, you might wind up paying a few hundred thousand plus in tax,” Rosas says. “Because it’s that weird little zone where that can apply, most people would rather not pay more tax if they can give the money away to a charity.”

To accomplish this, attorneys establish a “Santa Clause” in a will or trust where a certain amount of funds will be distributed to charity upon the individual’s death to avoid paying more estate tax.

Dynasty Trusts

Think of the historically wealthiest families in America—the Rockefellers or the Fords. To keep their wealth within the family from generation to generation, these families may establish a dynasty trust that allows them to pass on wealth without incurring estate or transfer taxes.

“The assets remain owned by the trust, not by the individuals,” Rosas says. “As the beneficiaries change over time, as the generations go on and people die, the next generation is provided under the trust as the successor beneficiaries.”

When Should You Start Estate Planning?

There are many mechanisms you can utilize to ensure your assets are passed on to your designated beneficiaries and ensure financial security for future generations. To do it in a thoughtful manner, you’ll want to start planning as soon as you have assets you want to protect. After all, no one knows when they will die.

“There’s a drop-dead date that you have to have it done by: the day before you drop dead,” Simasko says. “You need all your medical and financial powers of attorney before you get sick. It’s when you want it and when you need it. You want it now because you don’t know when you’re going to need it later.”

What Are the Potential Risks of Not Having an Estate Plan?

When you are dead, you have no way to convey your wishes. Without an estate plan, you cannot guarantee that your assets will go to the people you want to receive them. Not having one can also lead to messy family situations, where children fight over money or property or ex-spouses try to claim a piece of an estate.

How Often Should an Estate Plan Be Reviewed and Updated?

Every five years is a good rule of thumb to review and update an estate plan, according to Simasko. It’s also vital to update your plan after any big life changes, such as the birth of a child, a divorce, the death of a spouse or child, or the acquisition of a large asset.

What Are the Differences Between Revocable and Irrevocable Trusts?

As their names suggest, a revocable trust is one in which you can still make changes, while an irrevocable trust cannot be changed. Revocable trusts are better suited for younger individuals, whereas an elderly person concerned about their health or mental abilities may prefer to establish an irrevocable trust.

How Can Digital Assets Be Included in an Estate Plan?

Certain digital assets, such as bitcoin, typically don’t allow for beneficiary designations. Instead, there should be a plan in place to get the recipients the necessary information (such as the private key for a wallet) in a timely manner. This could be via a letter of instruction. Digital assets stored on a physical wallet or another kind of device can be stowed in a safety deposit box covered by a will or trust.

What Are the Legal Requirements for Setting Up a Power of Attorney?

Each state has different requirements, but in general it’s a good idea to write out the power of attorney (templates can be found online), sign it, have it notarized, and then file it with the proper office.

The Bottom Line

There are many aspects of estate planning—including wills and trusts, powers of attorney and healthcare directives, and beneficiary designations—along with mechanisms to protect assets and reduce tax burdens. For anyone who has assets and wants those to be distributed according to their wishes, the best time to start estate planning is as soon as possible. Engage the services of an estate attorney and/or financial advisor to walk you through each step and ensure your assets are properly protected. With proper estate planning, you can leave your loved ones with a legacy rather than a big mess.

Strategies to help you plan now for care later

Fact checked by Vikki Velasquez

A 50-year-old man today has a future life expectancy of around 28 years. For women, that number increases to 32, according to the Actuarial Life Table data collected by the Social Security Administration. As members of Generation X (those born between 1965 and 1980) prepare for the decades ahead, they need to consider the potential circumstances and challenges that could impact their well-being in retirement. Namely, the future need for long-term care. 

The longer a person lives, the more likely they are to develop health concerns. In fact, someone who is 65 years old has a 70% chance of needing long-term care in their lifetime.

With some time to think about your potential future care needs, you may want to consider incorporating long-term care strategizing into your greater financial plans. Here are some critical insights and tips for long-term care planning in your 40s and 50s.

Key Takeaways

• Long-term care planning is essential for Gen X due to the rising costs of care and insurance coverage.
• Understanding the scope of long-term care services is crucial for effective planning.
• Despite common misconceptions, Medicare and employer-sponsored insurance do not cover most long-term care costs.
• Financial strategies, including insurance and HSAs, can help manage future care costs.

Understanding Long-Term Care

Long-term care refers to the ongoing care needs a person may have beyond medical treatment and recovery. In most cases, long-term care does not involve medical care, though it may be provided by nurses or facilities with in-house medical care teams. 

Those who receive long-term care may need help completing activities of daily living (ADLs), which are the basic personal tasks that, under normal circumstances, an able-bodied person should be able to complete on their own. 

These can include:

• Feeding yourself
• Bathing and brushing your teeth
• Getting dressed
• Going to the bathroom
• Moving from the bed to a chair

In addition, there may be instrumental activities of daily living (IADLs) that require more physical or cognitive function than the basic necessities, which some long-term care programs can assist with.

Examples of IADLs include:

• General housework, cleaning, maintenance, and upkeep
• Shopping for groceries and preparing meals
• Caring for pets
• Paying bills and managing the household finances
• Communicating with others over the phone or via email or text
• Handling an emergency

Note:

While the term “long-term care” is often associated with a long-term care insurance policy, it’s actually used to describe any service offering, assistance program, or support an individual can use to address their care needs (in the event they need assistance with ADLs or IADLs).

Types of Long-Term Care

Those seeking long-term care have many options, depending on their specific care needs, timeline, support system, and financial resources. 

At-Home Care

Long-term care is often provided in the individual’s home, either by an unpaid caregiver (like a son or daughter) or a home health aide. If a professional is coming to the home, they are typically trained in basic medical care, though it will depend on their job title and general responsibilities.

The annual median cost of a home health aid is $77,792, keeping in mind rates will depend on the responsibilities and hours required.

Community-Based Care

Depending on what’s available in your area, you may be able to find community-based support services, such as an adult care center or a home care agency. An adult care center does require the individual to physically go to the facility, which may be a challenge depending on physical and cognitive ability. However, these types of services can be used to supplement ongoing care or provide some care relief for family members (say the caregiver must go to work during the day and can’t leave the individual home alone for an extended period of time).

While the cost of an adult day center will vary significantly, the annual median cost is around $26,000.

Facility-Based Care

There may come a time when you’re unable to live at home or require continuous care—or perhaps you feel more comfortable moving to a location with access to medical professionals on-site. Facility-based long-term care programs include nursing homes, assisted living facilities, and continuing care retirement communities. 

These will typically be the most expensive options, though the cost may be inclusive of care, food, medication, lodging, and more. Facility-based programs vary greatly, and you’ll need to consider what specific factors matter most when deciding on a facility that suits your care requirements and lifestyle needs.

If you’d prefer a private room in a nursing home, the annual median cost is just shy of $128,000. Assisted living communities are a little less expensive at $70,800 annually—though they generally include fewer services and care.

Remember, these costs—much like anything else—are likely to rise over time. By the time the youngest members of Gen X start looking into long-term care, it’s safe to assume prices will have climbed even higher.

Why Gen X Should Plan Now

“Gen X is really seeing firsthand what long-term care can cost as their parents get older. It’s bringing up some serious worries about how quickly assets can disappear, the quality of care available, and whether parents can stay in their homes,” said Jennifer Kirby, managing partner and senior wealth advisor at Talisman Wealth Advisors.

Kirby said that she always urges her Gen X clients to “look at what’s happening and start planning now,” while they still have time to create a strategy that can help cover some potentially significant expenses.

Members of Gen X are often referred to as the sandwich generation, metaphorically stuck between the financial pull of raising a family and caring for aging loved ones. Being in a place where their own priorities are often pushed to the back burner can make it especially challenging for Gen Xers to save for retirement and strategize for their future care needs. But as even the youngest members approach their mid-40s, time is one commodity they can’t earn back. Yet, it’s the tool that makes saving for the future most achievable. 

“The risk of delaying long-term care planning is the cost. Waiting to start makes saving for any financial goal harder and more expensive,” said Frank Iozzo, CPWA, founder of FMI Financial. 

Health Insurance, Medicare, and Long-Term Care

Perhaps one of the most compelling reasons to start preparing for long-term care? Insurance (almost) never covers it.

Despite common misconceptions, Medicare and private insurers (like the policy you receive through your employer) only cover a limited amount of long-term care services, and none that assist with ADLs or IADLs.

Once you’re enrolled in Medicare, you may be eligible for some skilled services or rehabilitative care, say if you suffer from a severe injury or surgery. These services are offered either at home or in a nursing home, and coverage only lasts for a short period of time (usually 100 days maximum). Most private insurers will offer coverage under similar circumstances.

Again, this coverage is not meant to provide ongoing care, and it is strictly limited to medical recovery and rehabilitation.

Note:

For individuals who meet the income requirements for Medicaid, more long-term care coverage may be available—though the majority of your resources will need to be exhausted before Medicaid kicks in.

Financial Planning for Long-Term Care

“The longer you wait, the tougher long-term care planning becomes,” said Kirby. “Insurance gets more expensive, it’s harder to qualify, and you have less time to save. The sooner you start, the more options you’ll have.”

Some common strategies for addressing long-term care include obtaining a separate long-term care insurance policy, funding a health savings account (HSA), and adding a long-term care rider to an existing life insurance policy.

Long-Term Care Insurance

Depending on your current health status, you may have the option to purchase a separate long-term care insurance policy—either independently or through your employer (if you’re still working). 

A long-term care policy will provide the more comprehensive coverage that your traditional Medicare or health insurance policy lacks, though the specifics will vary by provider and policy terms.

Iozzo explained the potential downsides of a long-term care policy, including a lack of availability and affordability: “One of the biggest risks with traditional long-term care insurance policies is premium increases. Insurance companies have historically underestimated their liabilities, and they have passed on their losses to policy owners in the form of premium increases.”

He said there are a few specific factors to look for in a standalone or hybrid policy such as, “Fixed premiums, inflation protection, and guarantee return of premiums (if you no longer want the policy).”

Health Savings Accounts (HSAs)

If you participate in a high-deductible health plan and are eligible to contribute to an HSA, or you’ve been accumulating savings in one for a while now, you may want to consider setting aside the account to self-fund your future long-term care needs. 

As a bonus, HSAs offer triple tax advantages:

• Contributions (up to the annual limit) are tax-deductible
• Earnings within the account grow tax-deferred
• Withdrawals used for qualifying medical expenses are tax-free

Once the account holder turns 65, withdrawals are no longer limited to medical expenses. They can be used on anything without incurring penalties, making an HSA an effective tool for building retirement savings as well. 

“An HSA is arguably the most powerful account out there because you may never pay taxes,” said Iozzo. “The sooner you contribute and invest to an HSA, the sooner you can have a tax-free balance working for your long-term health needs.”

Life Insurance Long-Term Care Rider

If you have a whole or permanent life insurance policy, you may have the option to add a long-term care rider to your policy. As with any change to insurance coverage, this will impact your monthly premiums and depends on several factors including your age and health history. 

“If you have cash value and a history of good health, it might be worth researching if you can use that cash value to pay for the rider or a new policy with a long-term care rider,” said Iozzo. “Depending on the cash value amount, it can help keep the premiums within your budget or even reduce them.”

What Are the Latest Trends in Long-Term Care Services that Gen X Should Be Aware Of?

Options for covering long-term care costs are changing, especially as the cost of care continues to rise. 

“Depending on the type of service, the cost of care has increased between 3% and 10% in the past year, and the cost of long-term care insurance coverage has increased as well,” said Steve Pedicini, senior wealth advisor of AlphaCore Wealth Advisory. “Many people already covered by insurance have received notices with options to either accept increased premiums for the same level of coverage or decreased coverage.”

How Can Gen X Balance Current Financial Obligations With Saving for Long-Term Care?

The key to addressing your future long-term care needs is to think proactively and use the time you have now to plan ahead. The sooner you can start building a long-term care fund (perhaps in an HSA or other tax-advantaged account) or obtain a policy, the more impactful your actions will be on your long-term financial well-being. For example, a policy that costs you $400 a month to obtain in your 40s will cost you more once you hit your 50s or 60s (or following a new diagnosis).

What Are the Tax Implications of Using HSAs for Long-Term Care?

The funds from an HSA can be withdrawn tax-free prior to age 65 as long as they’re used to cover qualified medical expenses. You may use your HSA withdrawals to cover long-term care insurance premiums (though there are monthly limits), as well as qualified long-term care services. To qualify, the care must be required by someone who is chronically ill and prescribed by a licensed health care provider.

The Bottom Line

There’s a statistical likelihood you (or your partner) will require some level of long-term care in the future. Exactly when—and for how long—however, are both unknown factors, which makes planning and preparing now all the more important. 

Taking simple steps like padding your savings account or obtaining a policy while you’re still in good health can help ease the long-term financial burden. Having a financial safety net for your future care needs can create some much-needed peace of mind as you approach retirement.

These are some of the best-performing stocks for companies involved in gold production.

Gold is one of the most famous of all safe-haven assets, traditionally included in portfolios as a hedge against inflation and market turbulence. Investors have many ways to access gold—as a physical commodity in the form of jewelry or bullion, through specialized exchange-traded funds (ETFs), and indirectly via investments in the stocks of companies that mine and produce gold.

Key Takeaways

• The top gold-mining companies for April 2025, based on 30-day returns, include Fortuna Mining Corp. (FSM), Perpetua Resources Corp. (PPTA), and DRDGOLD Ltd. (DRD).
• Investors looking for exposure to gold without making a direct investment in the commodity itself might consider gold-mining company stocks.
• The price of gold is roughly $3,028 per ounce, as the precious metal has repeatedly set all-time high records in recent months.

We explore the best gold stocks for investors to watch in April 2025, based on 30-day returns. Our screen focuses on mining companies that target gold, although many also include other precious metals. Below is a detailed explanation of the methodology we utilize to create our ranking of gold mining company stocks. All data are current as of March 25, 2025.

Best Gold Stocks to Watch in April 2025
Ticker	Company	Market Cap ($B)	Price ($)	30-Day Return (%)	P/E Ratio
FSM	Fortuna Mining Corp.	1.9	6.11	28.1	16.0
PPTA	Perpetua Resources Corp.	0.8	11.20	24.9	N/A
DRD	DRDGOLD Ltd.	1.2	14.05	22.1	13.0
BVN	Compañía de Minas Buenaventura S.A.A.	3.8	15.50	20.2	9.8
SAND	Sandstorm Gold Ltd.	2.2	7.37	19.6	161.2
TFPM	Triple Flag Precious Metals Corp.	3.9	19.44	17.4	N/A
EGO	Eldorado Gold Corp.	3.4	16.59	17.3	12.3
AU	AngloGold Ashanti PLC	17.6	35.62	13.7	436.5
AGI	Alamos Gold Inc.	11.0	26.20	13.3	39.8
OR	Osisko Gold Royalties Ltd.	4.0	21.16	11.9	259.2

What to Know About Investing in Gold

The price of gold was about $3,028 per ounce as of late March 2025. The metal has repeatedly set new records in recent months. Ongoing inflation concerns, market instability due to domestic and international geopolitical tensions, and a shifting interest rate environment in 2024 and early 2025 all helped to push gold higher, as investors sought out a stable place to park assets.

While investors typically look to avoid entering a new position while it’s close to a record high, there are many reasons why it may still pay to invest in gold. First, there is no guarantee that gold will fall from its high price point. Further, it can still offer a hedge against inflation, despite the fact that gold is quite expensive. But while gold does not offer some of the benefits of stock investments—such as the prospect of dividend payments—investors looking for indirect access can find it by looking to companies involved in mining and producing this precious metal.

How We Chose the Best Gold Stocks

In our screen, we considered gold-mining companies with shares trading on the Nasdaq or the New York Stock Exchange. We excluded firms with stock prices under $5, with less than 100,000 in average daily trading volume, or with a market capitalization under $300 million. These measures help ensure that our list includes only well-established companies. Finally, we ranked all remaining gold mining companies based on highest 30-day return and excluded any with a negative return during that period.

Following this search, we found a number of gold mining companies with 30-day returns as high as 28.1%. Notably, some of the companies on this list do not have a P/E ratio. This is sometimes the result of a company experiencing net losses in the current and/or prior-year quarter, making it impossible to calculate this metric.

Gold Advantages and Disadvantages

Before investing in gold mining companies, investors should consider a few important benefits and risks. Advantages of these firms may include their potential to be a leveraged play on gold. As the price of gold rises, the share prices of these companies may rise as well—and they may experience even higher returns thanks to their crucial role in producing gold for physical investment. Rising gold prices can also lead to significant capital gains for gold mining firms when their profits increase as well. Another benefit of gold mining firms is their higher liquidity compared to physical gold. Lastly, investing in bullion, jewelry, or other physical gold products also requires paying for transportation and storage costs—not required when investing in gold mining stocks—and carries the risk of loss or theft.

One of the key potential disadvantages of an investment in a gold-mining stock is that most of these companies do not focus exclusively on gold. This means they are not pure-play gold investments and that they are also subject to fluctuations in other minerals covered by the operations as well. Mining firms tend to have operations scattered around the world in many different locations, so regulations can vary dramatically from one site to another. Monitoring the impact of these regulations can be difficult for investors. Of course, mining firms are also exposed to many other risks and factors that may separate their performance from that of physical gold. And when gold rises, there is no guarantee that the price of shares of a mining firm will also climb.

The stocks listed above are at the top of our list for this month. However, past performance is not a guarantee of any future returns.

The Bottom Line

For investors seeking an alternative to physical gold investments, gold-mining stocks offer an alternative. These companies may provide some degree of indirect access to the gold market. While their prices may correlate with the price of physical gold, that’s not always the case. Still, for some investors, the opportunity to avoid the logistical considerations, liquidity limitations, and other concerns associated with a physical investment in gold makes gold-mining firms a worthwhile alternative.

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 securities listed above.

Fact checked by Suzanne Kvilhaug
Reviewed by David Kindness

Private companies often choose to go public to generate capital for expansion, reduce debt, or fund other business operations. The transition from private to a public, known as an initial public offering (IPO), comes with advantages and disadvantages. It’s a major decision that requires careful consideration, as the price of raising capital can be steep.

Key Takeaways

• Going public is primarily a way for companies to raise capital for growth.
• Not all companies are suited to going public due to the high costs and complex requirements involved.
• Company founders must give up a certain degree of control and accept public scrutiny when they go public.
• Public companies are subject to stricter regulations and disclosure requirements.
• Going public can encourage companies to focus more on short-term results and, in some cases, even engage in deceptive creative accounting.

Advantages and Disadvantages of Going Public

Before deciding whether or not to go public, companies must weigh the pros and cons. This usually happens during the underwriting process as the company works with an investment bank to determine whether going public is in the best interest of the company for that time period.

Here are some of the main pros and cons they have to consider.

The Advantages

Raising capital is the most distinct advantage of going public. When companies go public, they sell shares of ownership to the public in exchange for cash. The raised capital can be used to fund research and development (R&D) and/or capital expenditure, or pay off existing debt.

Another potential advantage is increased public awareness. IPOs often generate publicity, making the company’s products and services known to a broader audience. Subsequently, this may lead to an increase in market share for the company.

An IPO also may be used by founding individuals as an exit strategy. Many venture capitalists have used IPOs to cash in on successful companies that they helped start up.

Important

If a company wants to raise more capital sometime after an IPO, it can do a secondary public offering, selling new shares to investors.

The Disadvantages

Going public can also come with several disadvantages. One of the biggest factors that puts companies off going public is the need for added disclosure for investors. When companies go public, they are required to regularly keep the public updated about their activities and financial performance and do so in a certain way. These obligations are costly and can create public scrutiny.

Public companies are regulated by the Securities Exchange Act of 1934 in regard to periodic financial reporting, which may be difficult for newer public companies. They must also meet other rules and regulations that are monitored by the Securities and Exchange Commission (SEC).

The cost of complying with regulatory requirements can be very high, and as rules to protect investors continue to be added, these costs keep increasing. Some of the additional costs include the generation of financial reporting documents, audit fees, investor relation departments, and accounting oversight committees.

Pros

• Ability to raise money from a wide audience

• Increased visibility and brand awareness

• Exit strategy for venture capitalists and early investors

Cons

• Strict regulation and associated costs

• Loss of complete ownership and control by the founders

• Public scrutiny and pressure to meet short-term financial goals

Special Considerations

Public companies also are faced with the added pressure of the market, which may cause them to focus more on short-term results rather than long-term growth. As investors push for rising profits, company management may feel compelled to take actions—sometimes questionable ones—to boost earnings. This can lead to unethical practices like “creative accounting.”

Real-World Example

One of the most interesting IPOs of recent years was Snap Inc.’s. The company, best known for its flagship product Snapchat, raised $3.4 billion in March 2017.

Being in the public eye has presented challenges. In its first quarterly report as a public company, Snap reported disappointing user growth figures. In May 2017, investors sued, alleging the company had made “materially false and misleading” statements regarding user growth. Snap settled for $187.5 million in January 2020.

The share price has continued to be volatile ever since with financial performance disclosures and other external events triggering the occasional big swing in sentiment. However, the capital that Snap raised has helped the company expand and improve parts of the business. By Jan. 2024, its market cap was over $3 billion higher than its IPO valuation.

Why Would a Company Not Want to Go Public?

A company may choose not to go public for many reasons. These reasons include the tedious and costly task of an IPO, the founders having to give up total control, and the need for more stringent reporting to comply with SEC rules.

When a Company Goes Public, Who Gets the Money?

When a company goes public, the company initially gets all of the money raised through the IPO. When the shares trade on a stock exchange after the IPO, the company does not get any of that money. That is money that is exchanged between investors through the buying and selling of shares on the exchange.

Is It Better for a Company to Be Public or Private?

Whether it is better for a company to be public or private depends on the company’s goals. Remaining private allows the founders to run the company as they wish and not have to meet the many regulatory requirements of being a public company. Going public allows a company to raise significant capital to grow the business. At the end of the day, the best decision is the one that is best for the founders and their vision of the company.

The Bottom Line

Taking a private company public raises capital so that a business can fund its growth or use the money for other business needs. It is a common step for many companies that grow out of the startup phase.

Though taking a company public does bring in more capital, there are also significant drawbacks. These include the time-consuming process of an IPO, ensuring the company meets strict regulatory rules, giving up complete ownership and total control, and being under the scrutiny of the public and investors.

It’s important to weigh the pros and cons and have a vision of what the founders want the company to be before deciding whether or not to go public.

Investing for the future takes time, discipline, and (of course) money. If you’re wondering whether you can get help from someone else to contribute to your retirement nest egg, the short answer is yes. This means your spouse, parent, or grandparent can give you the money to deposit into your Roth individual retirement account (IRA). Keep reading to learn more about how you can use a gift to add to your Roth IRA.

Key Takeaways

• Roth IRAs are funded using after-tax dollars and allow your money and earnings to grow on a tax-advantaged basis.
• The amount you can contribute to a Roth IRA depends on your tax filing status and your modified adjusted gross income.
• Someone else can give you a check or transfer the money to you so you can contribute to your Roth IRA.

Roth IRA Contribution Requirements

A Roth individual retirement account is a tax-advantaged account that you can use to save for your retirement. The contributions are made using after-tax dollars, which means you do not get a tax deduction. But this type of account gives you the benefit of tax-free growth and withdrawals. Your earnings also grow tax-free as long as the account is open for at least five years and you are at least 59½.

You must have earned income to be able to contribute to a Roth IRA. This includes salary, wages, tips, and any self-employment income you earn during the year. The amount you can contribute depends on your tax filing status and your modified adjusted gross income (MAGI). These are highlighted in the tables below.

2024 Roth IRA Phase-out Ranges and Contribution Amounts
Filing Status	MAGI Range	Allowable Contribution
Single	Less than $146,000	$7,000 or $8,000 if 50 and older
	$146,000 to $161,000	Partial contribution
	$161,000 or more	$0
Married Filing Separately (if you didn’t live with your spouse at any point during the year)	Less than $146,000	$7,000 or $8,000 if 50 and older
	$146,000 to $161,000	Partial contribution
	$161,000 or more	$0
Married filing separately (if you lived with your spouse during the year)	Less than $10,000	Partial contribution
	$10,000 or more	$0
Married Filing Jointly	Less than $230,000	$7,000 or $8,000 if 50 and older
	$230,000 to $240,000	Partial contribution
	$240,000 or more	$0
Surviving Spouse	Less than $230,000	$7,000 or $8,000 if 50 and older
	$230,000 to $240,000	Partial contribution
	$240,000 or more	$0
Head of Household	Less than $146,000	$7,000 or $8,000 if 50 and older
	$146,000 to $161,000	Partial contribution
	$161,000	$0

2025 Roth IRA Phase-out Ranges and Contribution Amounts
Filing Status	MAGI Range	Allowable Contribution
Single	Less than $150,000	$7,000 or $8,000 if 50 and older
	$150,000 to $165,000	Partial contribution
	$165,000 or more	$0
Married Filing Separately (if you didn’t live with your spouse at any point during the year)	Less than $150,000	$7,000 or $8,000 if 50 and older
	$150,000 to $165,000	Partial contribution
	$165,000 or more	$0
Married filing separately (if you lived with your spouse during the year)	Less than $10,000	Partial contribution
	$10,000 or more	$0
Married Filing Jointly	Less than $236,000	$7,000 or $8,000 if 50 and older
	$236,000 to $246,000	Partial contribution
	$246,000 or more	$0
Surviving Spouse	Less than $236,000	$7,000 or $8,000 if 50 and older
	$236,000 to $246,000	Partial contribution
	$246,000 or more	$0
Head of Household	Less than $150,000	$7,000 or $8,000 if 50 and older
	$150,000 to $165,000	Partial contribution
	$165,000	$0

Note

Individuals 50 or older can make an additional catch-up contribution of $1,000 to their Roth IRAs.

How Someone Can Contribute to Your Roth IRA

As noted above, you need earned income during the year, and your MAGI must fall within the ranges set by the Internal Revenue Service (IRS) according to your filing status so you can contribute to a Roth IRA. In some cases, someone else may contribute to the account for you.

For instance, if you’re married and file a joint return, the income your spouse earns allows you to contribute to your Roth IRA even if you have no income yourself. If you go this route, make sure your combined MAGI meets the threshold for contributing.

Someone, such as a parent or grandparent, can also give you the money to contribute yourself. Or, they can contribute on your behalf. The funds must generally come from a brokerage or deposit account—not another retirement account—and can be deposited with a check or electronically. Keep in mind that the contribution cannot exceed the limit and that you qualify based on the filing status and income limits outlined above.

Be sure to research and understand how your plan works, as some Roth IRA administrators may have different rules about who can contribute to your account.

Warning

Make sure you and anyone else contributing to your Roth IRA are aware of how much you’re allowed to contribute. You can incur a 6% penalty on any excess contributions to your account. The penalty is based on the over contribution every year until it is corrected.

Special Considerations: Gift Taxes

The IRS imposes a limit on how much money someone can gift you each year. The maximum amount you can receive is $19,000 in 2025, which is an increase from the 2024 limit of $18,000—anything over these amounts triggers the gift tax.

The donor can avoid incurring the gift tax by giving you any amount up to the exclusion. For instance, your father can write you a check for $17,000 in 2025 ($7,000 of which you can contribute to your Roth IRA) without incurring the gift tax. But if he gives you $20,000 in 2025, he’ll end up having to pay the gift tax.

The Bottom Line

Roth IRAs can help you save money for retirement. Since you use after-tax dollars, you don’t get an immediate tax deduction. Rather, your contributions and earnings grow tax-free, and you can make tax-free withdrawals when you retire. If you have earned income, someone else can make contributions for you. But before they do, make sure you check with your plan administrator if there are any rules about third parties making contributions on your behalf.

We compare membership fees, savings, and services

If you’ve ever wandered the wide aisles of a warehouse club, you may have wondered whether you get better deals at Costco Wholesale Corp. (COST) or Sam’s Club, which is owned by Walmart Inc. (WMT). While both retail giants promise bulk savings and exclusive deals, the differences extend far beyond the price tag.

Whether you’re drawn to Costco’s famous $1.50 hot dog and soda combo (unchanged since 1985) or Sam’s Club’s Scan & Go technology, which lets you skip the checkout line entirely, understanding their key differences can help you decide where to shop.

Key Takeaways

• Costco and Sam’s Club offer different membership tiers, starting at $65 and $50, respectively.
• Both retailers have seen strong financial growth in the past year, with Costco reporting net sales of $249.6 billion for fiscal year 2024 and Sam’s Club reporting net sales of $90.2 billion for fiscal year 2025.
• Costco operates 617 U.S. locations, while Sam’s Club has 600 U.S. stores.
• The retailers differ in their service focus: Costco emphasizes travel and insurance services, while Sam’s Club concentrates on health-related services.

Costco Overview

Founded in 1983 by Jim Sinegal and Jeffrey Brotman, Costco has transformed from a single Seattle warehouse into a global retail powerhouse. The company made history by becoming the first retailer to reach $3 billion in sales in less than six years. A pivotal merger with Price Club in 1993 significantly expanded its market presence, setting the stage for continued growth.

As of February 2025, Costco had 897 warehouses worldwide, including 617 in the U.S. and Puerto Rico. The company also has a strong presence in Canada and Mexico and has been strategically expanding into new markets, opening two more stores each in China and Japan in 2024. Costco’s net sales for 2024 totaled $249.6 billion, a 5% increase from the previous year.

Sam’s Club Overview

Founded by Walmart’s Sam Walton in 1983 in Midwest City, Oklahoma, Sam’s Club has grown into a major player in the warehouse retail sector. The company expanded rapidly through both organic growth and strategic acquisitions, including Walmart’s 1987 acquisition of SuperSaver Wholesale Warehouse Club.

As of January 2025, Sam’s Club had 600 locations in 44 states in the U.S. and Puerto Rico, with a significant international presence in Mexico (173 stores) and China (50 stores). The company continues to expand, and Sam’s Club U.S. had net sales of $90.2 billion for fiscal year 2025.

Costco Membership Options

Costco has a two-tiered membership system for different shopping needs. The basic Gold Star membership, priced at $65 annually, gives you access to all Costco warehouses worldwide, its online shopping platform, and its warehouse-adjacent gas stations. For frequent Costco visitors, there’s the Executive membership at $130 per year, which includes all Gold Star benefits plus a 2% annual reward on qualified Costco purchases (up to $1,250 back).

Sam’s Club Membership Club

Sam’s Club, like Costco, has two membership tiers. The basic Club membership, priced at $50 annually, gives you access to all Sam’s Club locations and its online shopping platform, along with perks like Scan & Go and fuel savings. The Plus membership at $110 per year includes all Club benefits and free shipping on most items, free curbside pickup, early shopping hours, and 2% cash back on qualifying purchases (up to $500 annually).

Sam’s Club occasionally runs promotions where you can snag a membership for as low as $25.

Comparison of Membership Value

While both retailers offer a two-tiered membership system, Costco’s Executive membership ($130 annually) provides a 2% reward on qualifying purchases with a generous $1,250 annual cap. In contrast, Sam’s Club Plus membership ($110 annually) provides a similar 2% cash back but caps rewards at $500 annually. To make that more actionable: Members who spend about $3,000 yearly break even on the premium fee (the extra cost you pay for premium or executive memberships) at both stores.

Both premium memberships include free shipping on most items, but Sam’s Club adds free curbside pickup for Plus members. Costco Executive members receive additional perks like travel discounts and enhanced service benefits. For budget-conscious shoppers, Sam’s Club’s basic membership ($50) offers a more affordable entry point than Costco’s Gold Star membership ($65). However, both provide access to bulk pricing and core warehouse benefits.

Both Costco and Sam’s Club have extra perks beyond bulk shopping. Costco members can jet off with Costco Travel, which offers deals on vacations, cruises, and rental cars. They also offer insurance options, including home, auto, and pet insurance. Sam’s Club is better known for its pharmacy and health care offerings.

There are ways to shop Costco and Sam’s Club without a membership. Nonmembers can go with someone who is a member, shop with a branded gift card, use their pharmacies, and buy alcohol (in states where it’s legally required to sell to nonmembers).

Shopping Experience

The shopping experience between the two is very different. Sam’s Club stands out for convenience, offering both curbside pickup and “Scan & Go” technology that lets shoppers skip what can often be massive checkout lines. Nevertheless, despite its notoriously longer lines, Costco maintains loyalty through its premium product selection and well-liked Kirkland Signature brand.

Store location can be a deciding factor: Costco’s 897 worldwide locations tend to dominate coastal areas and urban centers, while Sam’s Club’s 600 U.S. stores have a stronger presence in the South and Midwest. Both retailers offer generous return policies with a 100% satisfaction guarantee, though Sam’s Club has a stricter 14-day return window for cell phones.

For many shoppers, the decision often comes down to the difference between Costco’s Kirkland and Sam’s Club’s Member’s Mark private labels. Many online reviewers claim Sam’s Club is generally cheaper but with less overall quality, though many still hold to old reports that Costco limits its markup on brand names to 14% (that’s not something Costco publicly confirms, nor could it be a rigid policy in any event).

Consumer tastes vary enough that you’ll want to check online and compare the prices for the stuff you buy most—it’s no good to you if one store wows people with deals on things you won’t use. The upshot is that both retailers tend to deliver savings compared with traditional retailers, which is why they’ve been mainstays for budget-conscious consumers for decades.

Financial Performance and Market Position

In fiscal year 2024, Costco’s net sales reached $249.6 billion, a 5% increase from the previous year. The company’s net income rose to $7.4 billion, a 17% increase. Membership fee revenue also had a healthy 5% bump to $4.8 billion, as membership grew to nearly 137 million cardholders. Costco’s ecommerce sales were particularly strong, growing by 16% year-over-year.

For the fiscal year ending Jan. 31, 2025, Sam’s Club reported net sales of net sales of $90.2 billion, up from $86.2 billion in the previous year. The chain’s comparable sales, excluding fuel, grew by 4.7%, and e-commerce sales rose 22% from $9.9 billion in fiscal year 2024 to $12.1 billion in fiscal year 2025.

The Bottom Line

The choice between Costco and Sam’s Club comes down to three key factors: location, shopping style, and rewards. Costco edges ahead on premium products and higher reward caps ($1,250 vs. $500), making it better for high-spenders and brand enthusiasts. Sam’s Club wins on convenience with Scan & Go technology and lower entry-level membership costs. Both deliver solid bulk-buying savings—just don’t let the temptation to stock up overwhelm your actual storage space and needs.

Reviewed by Michael J Boyle
Fact checked by Jiwon Ma

Gross domestic product (GDP) is the value of the finished domestic goods and services produced within a nation’s borders. Gross national product (GNP) is the value of all finished goods and services produced by a country’s citizens, domestically and abroad. GDP and GNP are calculated differently, but each represents the total market value of all goods and services produced over a certain period.

Key Takeaways

• Gross domestic product (GDP) and gross national product (GNP) measure a country’s aggregate economic output.
• GDP measures the value of goods and services produced within a country by citizens and non-citizens.
• GNP measures the value of goods and services produced by a country’s citizens, domestically and abroad.

Gross Domestic Product (GDP)

GDP helps indicate the health of a country’s economy. This metric counts the market value of all goods and services produced domestically. The gross domestic product measurement shows whether the economy is growing or contracting. The components of GDP include:

• Consumption: The value of the consumption of goods and services acquired and consumed by the country’s households.
• Government Spending: All consumption, investment, and government payments for current use.
• Capital Spending by Businesses: Spending on purchases of fixed assets and unsold stock by private businesses.
• Net Exports: The country’s balance of trade (BOT), or the difference between exports and imports. A positive number indicates that the country exports more than it imports.

Important

The United States has used GDP as its key economic metric since 1991; it replaced GNP to measure economic activity because GDP was the most common measure used internationally.

Nominal GDP and Real GDP

GDP is analyzed as real GDP or nominal GDP. A country’s real GDP is the economic output with inflation factored in, while nominal GDP does not account for inflation. When the GDP rises, it means the economy is growing. Conversely, if it drops, the economy is shrinking. If the economy grows to full production capacity, inflation may rise.

During inflationary periods, central banks may step in to tighten their monetary policies to slow growth. When interest rates rise, consumer and corporate confidence drops. During these periods, monetary policy is eased to stimulate growth. Long periods of negative GDP, indicating more spending than production, can damage the economy. This can lead to job losses, business closures, and idle productive capacity.

The nominal GDP is usually higher than the real GDP because inflation is usually a positive number, even if relatively low. GDP is used to compare the performance of two or more economies, acting as a key input for making investment decisions. It also helps the government draft policies to drive local economic growth.

Gross National Product (GNP)

Where GDP looks at the value of goods and services produced within a country’s borders, GNP is the market value of goods and services produced by all citizens domestically and abroad. GNP measures how its nationals are contributing to the country’s economy. It factors in citizenship but overlooks location.

GNP does not include the output of foreign residents. A U.S.-based Canadian NFL player who sends their income to Canada or a German investor who transfers their dividend income to Germany will be excluded from the U.S. GNP but included in the country’s GDP.

GNP is the sum of consumption, government spending, business capital spending, net exports, and the net income of domestic residents and businesses from overseas investments. This figure is then subtracted from the net income earned by foreign residents and businesses from domestic investment.

GNP is synonymous with GNI, or gross national income. Both measure domestic productivity plus net income by a country’s citizens from foreign sources.

Example

According to the most recent data compiled by the World Bank, GDP and GNP numbers moved in sync in 2023 for these selected countries. Many American businesses, entrepreneurs, service providers, and individuals who operate globally helped the nation secure a positive net inflow from overseas economic activities and assets. This makes the U.S. GNP higher than the GDP for 2023.

GDP and GNP Figures for Select Countries, 2023
Country	GDP	GNP
United States	27,360	27,525
United Kingdom	3,340	3,296
China	17,794	17,663
Israel	509	508.9
India	3,549	3,497
Greece	238.2	236.4
Saudi Arabia	1,067	1,073

Data Sources: World Bank DataBank.

Saudi Arabia’s GNP is higher than its GDP. The Kingdom is a major oil exporter with enterprises and businesses spread around the globe. The income from these enterprises may be higher than the income lost due to foreign citizens and businesses operating in Saudi Arabia. Other nations like China, the U.K., India, and Israel have lower GNPs to their corresponding GDPs. This may indicate these nations are seeing a net overall outflow from the country.

Where Is the GDP Published for the United States?

The Bureau of Economic Analysis compiles GDP data quarterly and annually, and it is available online.

What Is the Difference Between GNP and GNI?

The 1993 System of National Accounts replaced the term “gross national product” with the new term “gross national income.” Both represent a country’s domestic output plus net income from the businesses or labor of a country’s citizens abroad.

Is GDP a Better Measurement Than GNP?

GDP is the most popular metric for the overall productivity of a country’s economy. GNP was formerly the default measure for a country’s economic production, but it fell out of favor by the 1990s.

The Bottom Line

Gross national product (GNP) and gross domestic product (GDP) are popular metrics for measuring the productivity of a country’s economy. GDP measures productivity within a country’s geographical boundaries, and GNP records economic activity by that country’s citizens and businesses, regardless of location.