3 Types of Practical Disability Coverage You Should Know

Contributed by: Josh Bitel, CFP®

According to the Social Security Administration, studies have shown close to 1 in 4 20-year-olds, will become disabled at some point before reaching age 67. Wow! This is a pretty staggering statistic – these odds are far greater than a premature death, which is what life insurance is typically purchased to protect against. However, often when we discuss disability insurance with clients, we find that it’s an area of confusion. Many aren’t even sure if they have coverage or they may believe that Social Security will kick in and be enough. For most of us, especially if you’re in the early stages of the “accumulation mode” of your career, your earnings power is most likely your largest asset both now and into the foreseeable future. A disability can wreak havoc on this “asset” which is essentially why disability insurance is purchased. Let’s look at the basic types of coverage:

1.  Short-Term Vs. Long-Term Disability

Long-term disability typically has what’s known as an “elimination period” of how many days must pass before benefits begin. This is often called the “time deductible” of the policy which in many cases is 90 days, though ranges can vary. Benefits can payout up until Normal Retirement Age, which can be 67 (depending on birth year), however, most policies have a stated period of time where benefits would be payable. To help bridge this gap of coverage, a short-term disability policy can come in handy because benefits will usually begin within a week or two of disability and continue for up to one year, although benefits typically last between three to six months. Short-term disability policies can be a great tool to preserve your emergency cash fund, typically at a somewhat reasonable cost.

2.  Group Coverage

As with life insurance, many employers offer a form of disability insurance to their employees as part of their benefits package. Sometimes the employer will pay for the premium in full and other times the employee will have the option to pay for premiums (fully or partially). You may be asking yourself, “Why would an employee want to pay for the group coverage instead of having the employer foot the bill?” Great question, with very important ramifications! If the employer pays your premiums in full, the entire amount of your benefit if needed (typically between 50% and 60% of your pay, some employers offering up to 70% coverage, up to certain limits) would be taxable. If you as the employee were paying for the premiums in full and you needed the coverage, benefits paid out would NOT be taxable. If you were only paying a portion of the total premium, say 20%, only 20% of the benefits paid would be non-taxable to you as the employee. The tax treatment of benefits will have a large impact on the net amount of benefit that hits your bank account so it’s important to understand who’s paying for what if you have access to a group disability policy at work.

3.  Individual Coverage

As the name implies, individual coverage is purchased by you through an insurance company – the policy is not offered through your employer. A major benefit of purchasing an individual policy is that the coverage is portable, meaning you can take it with you if you change jobs because it’s not tied to your company’s benefits package (most group policies are non-portable). Another advantage (or disadvantage depending on how you look at it), is that you are paying for the coverage in full so if benefits are needed, they will not be taxable to you. With an individual policy, you have control over selecting the definition of disability that your policy uses (any occupation, own occupation, etc.) and you’d also have the option to add any additional features to the policy, usually at an additional cost.

In this blog, we’ve merely scratched the surface on disability coverage. As I mentioned, it is often one of the most overlooked parts of a client’s financial plan and coverage types, despite its high probability and significant risk of long-term financial loss. At a minimum, check with your employer to see if group coverage is offered (both long-term and short-term) and consult with your financial planner on whether or not it is sufficient or if additional coverage would be recommended.

Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.

What are The Hidden Costs of Buying a Home?

Contributed by: Robert Ingram, CFP®

When buying a home within your budget, it’s important to consider the costs beyond the mortgage.

Let’s begin with the costs to purchase a home.

Even while carrying a mortgage, you will need to make a down payment. While there are low down payment loans, try to put down at least 20% of the purchase price. Otherwise, your loan may have a higher interest rate and you could face additional monthly costs such as mortgage insurance.

You will have closing costs, which can include things such as loan origination fees for processing and underwriting the mortgage, appraisal costs, inspection fee, title insurance, pre-paid property taxes, and first year’s homeowner’s insurance. Generally, you should expect to pay between 3-5% of the mortgage amount.

Now, you will have ongoing costs to live in your home.

Annual property taxes average about 1% of the home value nationwide, but the tax rates can vary widely depending on the city or town. Keep property taxes top of mind when you are looking at different communities.

Homeowner’s insurance is another annual cost that not only depends on the value of the home and the contents within it you are covering, but also on the state and local community. This cost generally ranges between $2,000-3,000 per year, sometimes more.

If your home is a condominium or a single family home, you should expect annual or monthly homeowner’s association fees that cover the care of common areas, the grounds, clubhouses, or pools. Depending on the number of amenities and of course the location, average fees range from $200-400 per month.

While you may be used to paying some utilities as a renter, the size of your new home could significantly increase your utility rates. Going from an 800 square-foot apartment to a 2,500 square-foot house could double or triple the costs to heat it, cool it, and to keep

the lights on. Add your local area water and sewer fees and your utilities could easily reach $600–700 per month or more.

Going from renting to homeownership also means having to maintain the new home (both inside and out). Things can be regular ongoing maintenance like lawn care and landscaping, or larger projects like painting, roof repair, furnace, and appliance replacement. Consider the tools and equipment you would need to buy or the services you would hire to do the work.

Finally, there is another hidden cost that can put a dent in your budget, filling up the house. A home with more rooms can mean more spaces that “need” furniture and other decorative touches. The costs of furnishings can be several thousands of dollars to tens of thousands of dollars. Without proper planning, it can be all too easy to rack up those credit card statements and have a mountain of debt as you move into your new home.

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Bob Ingram, and not necessarily those of Raymond James. Raymond James Financial Services, Inc. does not provide advice on mortgages. Raymond James and its financial advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified professional for your residential mortgage lending needs.

Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Q1 2026 Investment Commentary

Contributed by: Angela Palacios, CFP®, AIF®

Contributed by: Nicholas Boguth, CFA®, CFP®

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Executive Summary

• Markets faced early volatility driven by geopolitical tensions, higher oil prices, tariff uncertainty, and evolving Fed policy.

• Stocks declined modestly (S&P 500 down ~4%), while bonds were essentially flat, cushioned by higher yields.

• Oil and gold were volatile, reminding investors that even “safe haven” assets can move unexpectedly.

• The Federal Reserve held rates steady, despite market swings in rate-cut and rate-hike expectations.

• Diversification mattered—spreading risk across asset classes and sectors helped limit portfolio drawdowns.

• Long-term investors are best served by staying disciplined, maintaining liquidity needs, and avoiding emotional decisions during short-term market noise.

Volatility is a normal part of investing. A thoughtful financial plan and a diversified portfolio remain the most reliable tools for navigating uncertain markets.

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2026 is off to an eventful start, reminding us once again that volatility is a normal part of the investing journey. A wide variety of headlines, mostly geopolitical, have dominated the year so far, creating early volatility across equities, commodities, and even bonds. First, the U.S. military arrested the Venezuelan  President Nicolás Maduro and his wife, forcing a change in leadership for the country. Gold and silver surged, while defensive sectors like U.S. energy and utility stocks rallied. Shortly after, the U.S. made statements about the possibility of controlling Greenland, which strained relations with Denmark and NATO partners. Lastly, the U.S. re-entered conflict in the Middle East as war broke out in the region with Iran.  With traffic through the Strait of Hormuz restricted, global oil markets felt the impact as the price for a barrel of oil quickly spiked to well over $100 and hovered there for the remainder of the quarter.

Bonds, as measured by the Bloomberg US Aggregate Bond index, ended the quarter essentially flat at -0.05% while U.S. stocks (S&P 500) were down -4.33%. International markets and U.S. small-cap markets started the year with surprising strength, but they have given back much of those gains through March as the war escalated. Gold experienced the most volatility, rallying another 20% this year before giving nearly all of that back, and ended the quarter up only 5.7%. In our recent investment event, we discussed many of these headlines and noted that this is a midterm election year, which is usually marked by greater-than-average volatility but often ends positively.

Volatility Caused by Geopolitical Events

The above headlines can make investors want to act – maybe even sell their investments and stock up on cash under the mattress or gold bars in the safe. In times of stress, it is important to lean on history and data to guide the next best course of action. See below for stock returns 3 and 12 months after key conflicts over the past 100 years. Does the data surprise you?

Diversification and remaining invested are very important in times like these. While diversification doesn’t completely insulate you from drawdowns during the hard times, it does make them much more bearable and hopefully sets your portfolio up for a quicker recovery. Volatility is a normal part of investing. Remember, if we had no risk, there would also be no reward. It is the price we pay for long-term positive returns. Each year, volatility crops up for one reason or another, and temporary pullbacks are very normal.

2025 and 2026 have been no exception. Liberation Day (political branding of tariff policies) caused a strong market pullback around the same time last year, followed by the Iran War this year. The chart below shows the regularity of pullbacks. The blue bars (overwhelmingly positive) are calendar year returns. The orange dots show how much the market fell WITHIN each calendar year. Some years only see 3% to 10% dips. Some years see dips of 10% to 50%. The “average” intra-year drawdown since 1950 is 13.5%. Despite those dips, the S&P 500 was positive ¾ of the time and averaged 9.5% per year.

For investors with long time horizons, these moments may serve as great entry points, especially if you have additional dollars to save. For those who depend on their assets, we have an action plan in place that was developed long before this volatility began. The thoughtful planning work we do with you helps ensure you have what you need for the next 6 months, a year, or even two years, already in cash or money market, which means you don’t have to sell into market volatility.

Federal Reserve and Interest Rates

The Federal Reserve (The Fed) has faced political pressure to cut interest rates while it navigates stubborn inflation, a weakening labor market, and the economic consequences of the war in Iran. The Fed opted to hold interest rates steady at 3.5%–3.75% through its January and March meetings, even as oil‑price spikes linked to Middle East conflict complicated its inflation outlook. It is important to remember that the Fed focuses on core PCE, which strips out inflation pressures from energy and food because they are typically so volatile. Inflation fears and concerns that the Fed could raise short-term interest rates have picked up again amid the spike in oil prices. I think we all immediately remember the 1970s era of inflation when we hear that oil is getting expensive and start to worry. As of now, this spike has been short-lived, and if the Straits of Hormuz reopen soon and oil starts moving again, we should see oil prices start to come back down. Short-term spikes usually don’t flow through to core PCE inflation in a meaningful way. However, if oil remains scarce and prices remain high, you will start to see the higher energy costs leak through to other areas of the economy, which would then be reflected in higher core PCE.

The bond market immediately jumped to the conclusion in March that the latter would happen, and the Fed would be staring at rising inflation numbers, and then further assume the Fed would start raising interest rates again to combat this inflation. We think it is far too early to assume this will happen. We entered the year with bond and equity markets pricing in 1 or 2 rate cuts by the end of this year, and now the market is pricing in a rate increase before year's end. This change in expectations is why bonds have had a negative month of returns. However, it is important to note that this isn’t the start of a 2022 bond market again. Now we are starting from a place of much higher yields, and we still have a robust interest rate being paid to us every month to compensate for some volatility.

Despite market assumptions, Fed officials continue to project one rate cut later in 2026, but internal disagreement continues, and if Kevin Warsh is confirmed by the Senate to take over in May, opinions could shift. It is important to remember that no single person sets this policy. There are 12 voting members of the Federal Open Market Committee (FOMC) who determine the fate of interest rates. The Chairman is simply the public representative of this board, and the chairperson only has 1 vote like everyone else and has no veto power.

At the same time, political pressure from President Trump on the Fed continues, as he publicly called for an immediate rate cut amid market volatility driven by war. Chair Jerome Powell, nearing the end of his term, emphasized that the Fed is still assessing the impact of the Iran war, elevated oil prices, and mixed economic data, and warned that the path ahead remains deeply uncertain. With leadership transitions approaching and geopolitical risks rising, the Fed’s next move remains far from clear—fueling market anxiety and adding to the perception that 2026 has become one of the most unpredictable years for Fed policy in over a decade.

Long Term Versus Short Term Interest Rates and Mortgage Rates

While the Fed does set interest rate policy, it is important to remember that it only sets short-term rates. Intermediate and long-term interest rates are driven more by supply and demand. Many have hoped that lower short-term rates would equate to lower mortgage rates. While rates have come down over the past 9 months, they have recently (in March) drifted back upward, causing new home buyers to pause. Earlier this quarter, 30-year mortgages had fallen below 6%, but they have drifted back to the mid-6 % range, nearly halting mortgage applications.

Private Credit Fears

Over the past few years, we have gotten many questions on private credit. We are constantly kicking the tires on different investment opportunities and trying to understand if they deserve a spot in your portfolio. The allure of 10%+ interest rates and little volatility sounded very tempting, but it was the first red flag in our review. Limited liquidity also had alarm bells swirling in our heads. Usually, if something sounds too good to be true, it often is. Private credit is no exception. Many dove in, thinking there would be little volatility and a great income stream. The problem with a limited liquidity product is just that, you usually can’t access your money when you most want it. As there were notable headlines about private credit borrowers, these private credit funds faced many redemption requests that they could not fulfill. Imagine wanting to sell an investment and being told no. That fear then starts to snowball, and more investors request redemptions, snowballing the issue and the headlines. We recognized this product for what it is: for high-net-worth investors with very long time horizons who can wait out redemption limitations without needing the cash. Even then, they aren’t guaranteed to pay you a premium investment return. The headlines are likely to continue escalating around these products as barriers to selling persist and securities in the portfolios are marked down to their actual values.

Artificial Intelligence

A.I. news continues to drive headlines and move markets. Companies that are driving the technology forward continue to share new developments and innovations that can be both exciting AND nerve-wracking. There is no shortage of opinion pieces predicting what the future holds for the technology, ranging from “minor” to “world-changing”. This uncertainty has shown up in financial markets, as there is some dispersion in stock prices lately. Not everything is moving in unison…which is healthy! We would not want to see dot-com bubble-era behavior, where any stock that mentioned A.I. was immediately rewarded. Certain companies’ stock prices have fallen following announcements of large A.I. spending plans, while others have reacted positively. Demand for “chips” is driving strong earnings expectations in the semiconductor industry, but there is concern about circular spending, where companies are just paying each other back and forth, and that may not be sustainable. There has also been some major volatility among individual stock names as competitive moats come under attack from A.I. Utilities and commodities are affected as “datacenter” plans with mind-blowing power needs continue to develop.

This is a major theme that affects many parts of the market. With any innovation, uncertainty follows, and all investors can do is invest accordingly. As far as our portfolios go, we continue to monitor valuations and expectations for the stocks and bonds that are directly affected. This quarter's volatility has actually made valuations more attractive. We get the question, “Is this a bubble?” a lot…and we just don’t see it across the whole market. Sure, there might be individual companies trading at extreme valuations, but it certainly isn’t across the entire market. It might surprise you to hear that, for example, Microsoft ended the quarter in a 31% drawdown from its prior high! It is one of the largest holdings in the S&P 500, but due to performance in other sectors, the index was still only down ~4% in Q1. To us, that is yet another example of diversification (in this case, sector diversification within the S&P 500) leading to better outcomes for investors.

Tariff Update

Trump’s tariffs were another source of volatility in the first quarter. The Supreme Court ruled that a portion of Trump's tariffs, the ones imposed on specific countries, were unlawful. Trump’s initial justification for imposing those tariffs as a national “emergency” did not hold up in the Supreme Court, so those tariffs were removed. He immediately responded to this ruling by imposing new temporary tariffs of 10%, then later 15%. Ultimately, this is a fluid situation that is adding to the uncertainty in the stock and bond markets. Companies have to navigate pricing and supply chain issues arising from tariff uncertainty, and there is still the lingering question of whether tariff refunds will be paid out.

Overall, it seems we can expect tariffs to remain in place for now, which will ultimately provide another revenue stream for the U.S. government but lead to higher prices for U.S. consumers. Time will tell how these tariffs will change going forward, whether they will remain in place long-term or be used more as a bargaining chip to make deals with other countries.

Gold Crash?

Another surprising market move in Q1 came from Gold. Gold started the year continuing its growth, hitting a new all-time high of almost $5,600 near the end of January! Then it fell 20% from its high over the next month and a half, bottoming out near $4,200 on March 23rd. It rallied slightly and ended the quarter near $4,600/oz.

The market can surprise us more often than we think. Gold is often considered a “safe haven” asset, which you would expect would RALLY in the event of something like, I don’t know, the unknowns of a war in the Middle East. But that is not how gold reacted this past quarter; in fact, headlines at the very end of the quarter hinted at an off-ramp from the conflict with Iran, and gold actually rallied on the news, similarly to stocks! Not exactly the movement you would expect from a “safe haven” asset.

Gold is an uncorrelated asset for better or worse. It has been on an amazing run over the past few years and just began experiencing some volatility this past quarter. Like any asset, consider the risks before investing, and understand your unique situation and financial plan to determine if, where, and how gold might fit into your portfolio.

Thank you for taking the time to read this quarter’s investment commentary. There is a lot of noise in the markets, and we believe that a thoughtful financial plan, paired with a disciplined investment process, is more important than ever. Please don’t hesitate to reach out to your financial advisor or anyone on our team here at The Center with any questions. We’re here to help and would be delighted to have a conversation.

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.

Nicholas Boguth, CFA®, CFP® is a Senior Portfolio Manager and Associate Financial Planner at Center for Financial Planning, Inc.® He performs investment research and assists with the management of client portfolios.

Any opinions are those of Angela Palacios, CFP®, AIF® and Nick Boguth, CFA®, CFP® and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.

When a Loved One Dies: Understanding the First Steps

Contributed by: Sandra Adams, CFP®

When a spouse or partner dies, the world can shift in an instant. Even when plans are in place, the surviving partner often wonders, “What do I do first?” It’s a question we hear often, and it usually comes from a place of love, worry, and a desire to honor the person who has died.

Start with Safety and Confirmation

If the death occurs at home, your first call depends on the circumstances. If hospice is involved, call the hospice nurse—they will guide you through the pronouncement of death and the next steps. If hospice is not involved, call 911 or the local police. They will come to the home, assess the situation, and coordinate the official pronouncement.

Contact the Funeral Home or Cremation Provider

Once there is a pronouncement, your chosen funeral home or cremation provider is typically the next call. If you have a prepaid plan, they will walk you through what they need and what happens next. There is no need to rush—these professionals handle this every day and will guide you gently. *Note: the funeral home or cremation provider will notify Social Security of the death for you.

Notify Key Professionals and Gather Only What’s Essential in the First Few Days

Notify key professional advisors (financial planners, attorney, etc.)  and locate basic documents such as the will or trust, powers of attorney, and any prepaid funeral contracts. You do not need to empty safe‑deposit boxes or withdraw bank accounts immediately. Many long‑held myths about “empty it right away” no longer apply, and most accounts today pass by title or beneficiary designation. Other than cash for immediate expenses, most financial decisions can wait until you are ready to make them later.

Move at a Human Pace

Grief and logistics rarely align. Your job in the early days is simply to take the next right step. Our job is to help you sort through the financial and administrative pieces with clarity and steadiness.

If you or someone you love is navigating a recent loss, please reach out. You don’t have to do this alone. We are always here to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Carepartners Passage Through Dementia

Contributed by: Sandra Adams, CFP®

More and more of our clients and families are being impacted by dementia. What is it and how does it impact those diagnosed and those who are caring for them? 

Dementia is a general term for a decline in mental ability severe enough to interfere with daily life. While it is believed there are over 50 different types of dementia, Alzheimer’s disease remains the most prevalent type, with an estimated 7.2 million people currently living with this specific type in 2025 according to the Alzheimer’s Association.

About 1 in 8 seniors has Alzheimer’s disease, and underdiagnosis remains a major issue. There are currently medications available to slow the progression of dementia, but there is no cure. 

Most individuals with dementia are being cared for by family caregivers. Having knowledge about the signs and progression of different types of dementia can be extremely helpful to both the person with the disease and the caregiver. Planning ahead to make sure that the appropriate legal and care plans are in place in advance can relieve a tremendous amount of stress from everyone involved. 

Realizing that the person with dementia is still the same person, just with a disease, is essential. 

Dr. Paula Duren shared with us the 5 Foundational Care Concepts for Caregivers of individuals with dementia: 

1. Everyone has basic human needs 

2. You are the one with the healthy brain 

3. Be a good detective 

4. They may not remember your words but they will remember your spirit/energy 

5. Know that every behavior is an effort to communicate 

Dr. Duren of Universal Dementia Caregivers also teaches care strategies for caregivers about how to work effectively with those they are caring for. She also works with caregivers to care for themselves.  After all, if caregivers are not healthy and strong, they cannot care for their loved ones with dementia fully.  

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

This information has been obtained from sources deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Raymond James is not affiliated with Dr. Paula Duren.

The Mega Backdoor Roth Explained: A Powerful Tax Free Retirement Strategy for High Earners

Contributed by: Logan Dimitrie, CFP®

Is the Mega Backdoor Roth Worth Considering?

At Center for Financial Planning, Inc., I’m often asked how high earners can save more for retirement in a tax‑efficient way. One strategy that sometimes makes sense is the Mega Backdoor Roth. It kind of sounds like a cheat code from a 90s video game, but it’s actually a powerful tool if your employer plan allows it.

What It Is

A Mega Backdoor Roth lets you put far more into Roth savings than the normal IRA limit by using after‑tax contributions inside your 401(k) or 403(b).

How It Works

1. Max out your regular 401(k)/403(b)
   ($24,500 if under 50 & $32,500 if 50+ for tax year 2026 limits)

2. Add after‑tax contributions
   Some plans let you contribute beyond the normal limit, up to the overall $72,000 total plan limit for 2026.

3. Convert those after‑tax dollars to a Roth IRA
   Your plan needs to allow in‑service rollovers for this step.

Once converted, those dollars can grow tax‑free in a Roth IRA.

Why People Use It

• You can save much more into Roth than usual.

• Tax‑free growth and tax‑free withdrawals in retirement.

• No required minimum distributions from Roth IRAs.

Before You Jump In

This strategy isn’t available, or appropriate, for everyone. You’ll want to confirm:

• Your employer plan allows after‑tax contributions and in‑service rollovers

• You’re already maxing out regular retirement contributions

• You’re comfortable with a bit of extra complexity

Is It Right for You?

For some clients, the Mega Backdoor Roth becomes a key part of long‑term tax planning. For others, simpler strategies work just as well. If you’re curious about whether this could fit into your plan, I’m happy to walk through it with you.

Logan Dimitrie, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Logan specializes in Financial Independence, Early Retirement, Financial Planning for caregivers and Longevity Planning. Logan has been featured on the Caffeinated Conversations podcast.

Opinions expressed are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Generally, if you take a distribution from a 401k prior to age 59 ½, you may be subject to ordinary income tax and a 10% penalty on the amount that you withdraw, in addition to any relevant state income tax. Contributions to a Donor Advised Fund are irrevocable. Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Retirement Planning Challenges for Women: How to Face Them and Take Action

Contributed by: Sandra Adams, CFP®

If we are being completely honest, planning and saving for retirement seems to be more and more challenging these days – for everyone. No longer are the days of guaranteed pensions, so it’s on us to save for our own retirement. Even though we try our best to save…life happens and we accumulate more expenses along the way. Our kids grow up (and maybe not out!). Our older adult parents may need our help (both time and money). Depending on our age, grandchildren might creep into the picture.  Add it all up and the question is: how are we are supposed to retire? We need enough to potentially last 30 to 35 years (depending on our life expectancy). Ugh! 

While these issues certainly impact both men and women, the impact on women can be tenfold. Let’s take a look at some of the major issues women face when it comes to retirement planning. 

1. Women Have Fewer Years of Earned Income Than Men 

Women tend to be the caregivers for children and other family members. This ultimately means that women have longer employment gaps as they take time off work to care for their family. The result: less earned income, retirement savings, and Social Security earnings. It can also halt career trajectory.   

Action Steps 

• Attempt to save at a higher rate during the years you ARE working. It allows you to keep pace with your male counterparts.

• If you are married you may want to save in a ROTH IRA or IRA (with spousal contributions) each year, even if you are not in the workforce. 

• If you are serving as the caregiver for a family member, consider having a Paid Caregiver Contract drawn up to receive legitimate and reportable payment for your services. This could potentially help you and help your family member work towards receiving government benefits in the future, if and when needed. 

2. Women Earn Less Than Men 

For every $1 a man makes, a woman in a similar position earns 84¢ according to the Bureau of Labor Statistics. As a result, women see less in retirement savings and Social Security benefits based on earning less.  

Action Steps 

• Again, save more during the years you are working. Attempt to maximize contributions to employer plans. Also, make annual contributions to ROTH IRA/IRAs and after-tax investment accounts. 

• Invest in an appropriate allocation for your long term investment portfolio, keeping in mind your potential life expectancy. 

• Be an advocate for yourself and your women cohorts when it comes to requesting equal pay for equal work. 

3. Women Are Less Aggressive Investors Than Men 

In general, women tend to be more conservative investors than men. Analyses of 401(k) and IRA accounts of men and women of every age range show distinctly more conservative allocations for women. Especially for women, who may have longer life expectancies, it’s imperative to incorporate appropriate asset allocations with the ability for assets to outpace inflation and grow over the long term. 

Action Steps 

• Work with an advisor to determine the most appropriate long term asset allocation for your overall portfolio, keeping in mind your potential longevity, potential retirement income needs, and risk tolerance. 

• Become knowledgeable and educated on investment and financial planning topics so that you can be in control of your future financial decisions, with the help of a good financial advisor. 

4. Women Tend to Live Longer Than Men 

Women have fewer years to save and more years to save for. The average life expectancy is 82.1 for women and 77.8 for men according to the Centers for Disease Control and Prevention. Since women live longer, they must factor in the health care costs that come along with those years.   

Action Steps 

• Plan to save as much as possible. 

• Invest appropriately for a long life expectancy. 

• Work with an advisor to make smart financial decisions related to potential income sources (coordinate spousal benefits, Social Security, pensions, etc.) 

• Make sure you have a strong and updated estate plan. 

• Take care of your health to lessen the cost of future healthcare. 

• Plan early for Long Term Care (look into Long Term Care insurance, if it makes sense for you and if health allows). 

5. Women Who Are Divorced Often Face Specific Challenges and Are Less Likely to Marry After “Gray Divorce” (Divorce After 50) 

From a financial perspective, divorce tends to negatively impact women far more than it does men. The average woman’s standard of living drops 27% after divorce while the man’s increases 10% according to the American Sociological Review. That’s due to various reasons such as earnings inequalities, care of children, uneven division of assets, etc. 

The rate of divorce for the 50+ population has nearly doubled since the 1990s according to the Pew Research Center. The study also indicates that a large percentage of women who experienced a gray divorce do not remarry; these women remain in a lower income lifestyle and less likely to have support from a partner as they age. 

Action Steps 

• Work with a sound advisor during the divorce process, one who specializes in the financial side of divorce such as a Certified Divorce Financial Analyst (CDFA) (Note: attorneys often do not understand the financial implications of the divorce settlement). 

6. Women Are More Likely to Be Subject to Elder Abuse 

Women live longer and are often unmarried or alone. They may not be as sophisticated with financial issues. They may be lonely and vulnerable. New reports highlight financial exploitation as the fastest-growing form of elder abuse, disproportionately affecting older women, according to the Transamerica Institute.  

Action Items 

• If you are an older adult, put safeguards in place to protect yourself from Financial Fraud and abuse. For example: check your credit report annually and utilize credit monitoring services like EverSafe.  

• Have your estate planning documents updated, particularly your Durable Powers of Attorney documents, so that those that you trust are in charge of your affairs if you become unable to handle them yourself. 

• If you are in a position of assisting an older adult friend or relative, check in on them often. Watch for changes in their situations or behavior and do background checks on anyone providing services. 

While it is unlikely that the retirement challenges facing women will disappear anytime soon, taking action can certainly help to minimize the impact they can have on women’s overall retirement planning goals. I have no doubt that with a little extra planning, and a little help from a quality financial advisor/professional partner, women will be able to successfully meet their retirement goals.   

If you or someone you know are in need of professional guidance, please give us a call. We are always happy to help. 

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Raymond James is not affiliated with EverSafe.

The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. These policies have exclusions and/or limitations. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

Can I Afford to Buy a Second Home?

Contributed by: Robert Ingram, CFP®

It’s a dream for many Americans as they envision retirement, having a second home as a vacation getaway, a seasonal escape, or a primary residence someday. Even with the relatively mild winter we’ve just experienced in Michigan It’s easy to appreciate the idea of living away during the cold months or enjoying a summer home up North. But before you can live the dream, do your due diligence and crunch the numbers.

Retirement income expenses include the daily cost of living and the things you want to enjoy. Making a large purchase, such as buying a second home, will take a significant chunk of your savings. If you’ve underestimated the cost, it will wreak havoc on your retirement income.

So, how realistic is your second home retirement plan? Factor in our suggestions below.

Purchasing Costs

If you plan to buy the home using a mortgage, you will of course have a monthly payment. While lower mortgage rates may help with the home’s affordability, even a smaller payment adds the extra expense that your retirement income sources will need to support. Calculate your withdrawal rate (the percentage of savings needed to be withdrawn each year) and determine if it’s sustainable over your retirement years.

Now, if you’re able to purchase the property without a mortgage, yes, you would avoid paying interest and you would have no monthly payment. On the other hand, using a portion of your retirement savings to purchase the home could mean that you have fewer assets reserved for other retirement spending needs. Consider the impact it may have on the sustainability of your retirement income and whether purchasing or financing the property is more advantageous.

Don’t forget about property taxes. They’re ongoing expenses that you must factor into your budget. They vary widely depending on the state and local community. Consider any difference in tax rates; non-homestead property is taxed higher than homestead property.

Additional Costs

Unfortunately, we know that the cost of owning a home doesn’t end with the purchase. This is certainly true with a second home as well. Depending on the property type, location, and climate/environment there may be additional costs that you aren’t used to with your current home. It’s vital that your plan supports these costs as well. Some examples include:

Insurance: You’ll pay annual premiums for homeowner’s insurance on two properties. Plus, homes with higher risk (e.g. hurricane prone southern states) often require additional flood or wind damage insurance. In some cases, this more than doubles the cost of the new policy.

Condo/Association Fees: Buying a condominium or a standalone house in a community with a neighborhood association will likely mean additional monthly fees. Homeowners associations may also impose special assessments during the time you own the property for maintenance projects, community amenities, etc. Understanding the previous history of assessments and the need for future projects can help you better prepare for those potential costs.

Maintenance on two properties: Now you have two homes to maintain. If your second property is far away or you won’t visit often, you may need to hire people locally to provide the maintenance services for you.

Home security: Especially for a home that is unoccupied for long periods of time, you want to protect it from vandalism, trespassing, and burglary. That could mean investing in security systems or working with local service providers to routinely check-in on the property.

Heating and cooling year-round: Unlike cottages or houses up North that you can close down and winterize, vacation homes in warm climates may require you to run the air conditioning when you’re not there. Issues like mold and mildew can be a problem when temperatures and humidity are too high, which is another reason you may need to hire local services to make sure everything is working properly.

Insect/pest control: Your second home may be in a region with insects or other critters that require more regular/aggressive pest control. Add this to your list of monthly or annual maintenance expenses.

What if I Plan to Rent Out my Second Home?

Renting out your second home could be an excellent way to generate additional income to offset the costs of ownership. However, you could face lifestyle compromises. Here are some considerations:

Local rules on renting: It’s critical to understand any local government ordinances or homeowners’ association restrictions on using your property as a rental. In some cases, short-term rentals are not allowed or there are limits on the total number of rentals.

Property management: The farther the distance between your rental and primary properties, the greater chance you’ll need to hire a property manager to provide on-site service for your vacation guests or long-term tenants. Property managers can advertise, book renters, and manage financial transactions. The cost to outsource these services is typically between 20–30% of the rental cost, depending on market.

Additional insurance coverage: Tenants may not be covered by your insurance. Homeowners insurance often covers incidents only when the property is owner-occupied. You may need to add a form of landlord insurance, depending on factors such as the frequency and amount of days you will have the property rented. Review your policy to be sure.

Extra maintenance and repair: You may face repairs and/or need to replace furniture. Studies suggest that the cost to maintain a vacation rental is 2–3% annually of the property value each year.

The decision to buy a second home involves a combination of both lifestyle and financial considerations. Build a sound plan by balancing your priorities. Consult with your financial planner as you work through these important life goals, and if we can be a resource for you, please reach out to us!

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Bob Ingram, and not necessarily those of Raymond James. Raymond James Financial Services, Inc. does not provide advice on mortgages. Raymond James and its financial advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified professional for your residential mortgage lending needs.

The Potential Impacts of Student Loans on Your Credit Score

Contributed by: Josh Bitel, CFP®

For those entering the workface today, student loan repayment can cause a significant impact, either positive or negative, on your credit score. 

Getting Started 

Beginning to repay these loans after the standard six-month grace period has expired can affect your ability to obtain other credit if not handled properly. One way to find out how you’re being affected is to pull a copy of your credit report. There are three major credit reporting agencies (Experian, Equifax, and  TransUnion) and you should get a copy of your credit report from each one. You can request your free annual credit report at AnnualCreditReport.com, the site authorized by federal law. Student loan institutions aren’t required to report information to all three bureaus, although many do, which is important to keep in mind. If you're repaying your student loans on time, these disciplined repayments will actually help your credit score. Conversely, if you are delinquent on payments or worse, default on your loans, your credit report can take a beating, potentially crippling your chances of obtaining other credit. 

Credit Score Factors 

Many different factors are used to determine your credit score. Some of these factors are more crucial than others. Among these critical factors are: 

• Your payment history. Meaning the consistency and punctuality of payments and how long your payment history is. 

• Your outstanding debt and amounts you owe on these accounts. How close your account balances are to your defined limits is also taken into consideration. 

• How long you've had credit. How long specific accounts have been open, and how long it has been since you've used each account 

• New credit and new inquiries. This means outstanding applications for new credit as well as additional inquiries for your credit reports, whether by institutions or yourself, can impact your credit score. 

• For a deeper look at your credit score composition, check out our updated resources on credit scoring.  

How Student Loans Can Affect Your Credit Score 

If you consistently make your student loan payments on time, your credit score should not be negatively affected. A nice tip to ensure consistency is to set up an auto-pay from a bank account. Most loan institutions will allow you to set up an automatic withdraw from your bank account, eliminating the need to remember to pay each month. As an added bonus, some institutions may even offer an interest rate discount for setting this up! 

Prospective creditors may look at other factors when analyzing your debt, and student loans can make this tricky. One example of this may be if you are in a lower-paying job, this makes your debt-to-income ratio unfavorable for some creditors. Another example may be your principal balances being largely unchanged in the early stages of repayment, which is common with long term repayment schedules, and some lenders may view this as a lack of paying down debt. 

It is important to monitor your credit history from all three bureaus regularly. If you find that your repayment history is not being reported correctly, contact your lender to make this correction. 

Suggestions to Help Reduce the Burden  

Being overburdened with debt can feel suffocating, here are some suggestions to take some weight off your shoulders: 

• Pay off your student loan debt as fast as possible. Doing so will help reduce your debt-to-income ratio, even if your income doesn't increase, which can make your credit score more favorable to lenders. 

• If you're struggling to repay your student loans and are considering asking for forbearance, ask your lender about any other options you may have. If you’re struggling to repay your student loans, ask your lender about income driven repayment (IDR) plans and SAVE plan (2023), which can lower monthly payments based on your income.  

• Ask your lender about replacement options such as graduated repayment or income-driven repayment plans, which can adjust payments to your financial situation. This means making smaller payments in the early years of the loan, with larger payments coming in the later years. 

• If you're really strapped, you can explore longer term options. Much like a home, when a longer repayment term is selected, you will likely be paying more in interest over the life of the loan, but the monthly payment can be significantly reduced. 

• If all else fails, don’t ignore your student loans. While student loans are rarely discharged in bankruptcy, recent changes have made it more possible in limited hardship cases. Always consult with a legal professional before considering this option. Talk to your lender about the options available for you, this can be crucial to maintaining a favorable credit history. 

If you have any questions about refinancing your student loans or improving your credit score, please contact your Financial Planner here at The Center, we’re always happy to help! 

Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Josh Bitel and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

A History of Stock Returns During Conflict

Contributed by: Nicholas Boguth, CFA®, CFP®

Wars are an awful part of humanity. The loss and destruction that comes from them is tragic. For this reason, the thought of a war starting can make investors want to act – maybe even sell their investments and stock up on cash under the mattress or gold bars in the safe.

It can feel like things are about to take a turn for the worse when a war or a conflict breaks out, but in times of stress it is important to lean on history and data as a guide to help determine the next best course of action.

See below for stock returns 3 months and 12 months after some key conflicts of the past 100 years. Does the data surprise you?

The average 12 month return after the beginning of these conflicts is POSITIVE 8.5%. Most of these you might remember from experience, maybe some better than others, but each of these conflicts came with their own unique set of fears. Some hit close to home, some happened overseas, some felt like escalations into something bigger, but all of these were world-altering events for the coming decades.

Despite that, on average, stocks continued to climb through the turmoil. The global economy and the global stock market are HUGE and complex machines that are going to grind forward no matter what is going on in the world. Some time periods will be a slower grind than others, but there are centuries of data that show time and time again stocks persevere, problem-solve, innovate, and grow their way through time.

The only way to participate in that growth, is to participate in that growth. Selling your stock investments is giving up whatever returns are coming next, for better or worse, and often not a winning strategy. During times of fear and stress, it is a better idea to lean on the diversification of your portfolio, your cash reserves, and your financial advisor to help guide you down your financial path and LIVE YOUR PLAN. Please reach out if you have any questions about yours.

Nicholas Boguth, CFA®, CFP® is a Senior Portfolio Manager and Associate Financial Planner at Center for Financial Planning, Inc.® He performs investment research and assists with the management of client portfolios.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Center for Financial Planning, Inc is not a registered broker/dealer and is independent of Raymond James Financial Services Investment advisory services are offered through Center for Financial Planning, Inc. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Nick Boguth, CFA®, CFP® and not necessarily those of Raymond James.