This Week’s Takeaways:
- Self-insuring for long-term care works best when you designate and invest a specific pool of assets to provide growth, liquidity, and tax-efficient access if care is needed.
- As the Great Moderation fades, wider performance differences across investments may reward more selective portfolio construction than simply owning the broad market.
- Reducing a concentrated stock position is as much a tax-planning exercise as an investment decision, with strategies such as gain exclusions, tax deferral, coordinated tax-loss harvesting, and long-short extension investing helping investors diversify while minimizing the tax cost of doing so.
- Retiring at different times requires coordinating both financial decisions and lifestyle expectations.
- Plus, my latest book recommendation and this week’s Boston Corner.
The Best Way to Invest Money You May Need for Long-Term Care by Morningstar
While you should still consider long-term care insurance, self-insuring requires a deliberate investment strategy rather than simply relying on your overall retirement portfolio. Assets designated for future care should be invested to balance long-term growth with liquidity and stability, since care needs are unpredictable and may arise during periods of market stress. Planning in advance which accounts will be used to fund care can help reduce taxes, avoid forced asset sales, and preserve greater flexibility if care is needed.
Great Moderation Era: Drift(ing) Away by Charles Schwab Asset Management
The Great Moderation was a decades-long period marked by low inflation, steady economic growth, falling interest rates, globalization, and relatively low market volatility, creating a favorable backdrop for broad stock and bond returns. That environment is giving way to one characterized by more persistent inflation, higher interest rates, greater geopolitical and economic uncertainty, and more frequent market disruptions. As a result, the gap between investment winners and losers is likely to widen, making diversification and more selective portfolio construction increasingly important rather than simply relying on broad market exposure.
After‑Tax Strategies for Early Investors with Concentrated Stock by BlackRock
Managing a concentrated stock position is not about when to sell as much as reducing concentration risk tax-efficiently. A four-part framework includes: excluding gains if possible (such as through Qualified Small Business Stock rules), deferring taxes, offsetting gains through tax management, and gradually hedging and diversifying the position. Tax management goes beyond traditional tax-loss harvesting by coordinating gains and losses across the portfolio and using strategies such as long-short extension investing, which seeks to maintain market exposure while generating losses that can offset taxable gains from selling concentrated stock.
When Spouses Retire at Different Times: Financial and Lifestyle Considerations by Savant Wealth
When spouses retire at different times, retirement planning becomes more complex than simply replacing income. Coordinating taxes, healthcare, Social Security, and portfolio withdrawals can help improve long-term financial outcomes while one spouse continues working. Just as important, discussing expectations around lifestyle, spending, and daily routines can help ease the transition for both partners.
Book Recommendation
The Running Grave: A Cormoran Strike Novel by Robert Galbraith
In this New York Times bestselling installment of the Strike series, detective duo Cormoran and Robin must rescue a man ensnared in the trap of a dangerous cult.
Boston Corner
Massachusetts Tax Planning: What High-Income Households Often Overlook About State Taxes
The big Boston bookstore bar crawl
