Tax season creates stress for a lot of people. It often starts with tracking down documents from multiple places, turns into uncertainty about what might be missing, and ends with concern about an unexpected tax bill at exactly the wrong time.

As a financial advisor at a firm that prepares taxes in house, I get a unique view behind the scenes. Each year, I see which situations go smoothly and which ones lead to stress, surprises, and last‑minute scrambling.

With another tax season behind us, here are five ways to make the next one more predictable and far less stressful.

1) Eliminate any surprises

One of the biggest drivers of tax stress is uncertainty. 

The best way to create more certainty is to complete Tax Planning Projections during the prior year. Not only do they help identify tax‑saving opportunities while there is still time to act, but they also do something just as important, which is to set expectations and eliminate the surprises.

A good projection can answer questions like:

• Will you owe or receive a refund and approximately how much will it be?

• Do you need to set aside cash or plan where funds will come from?

• Are there any estimated tax payments that I should make before the end of year to increase my deductions or minimize any interest or penalties?

When you understand the likely outcome ahead of time, April becomes about execution, instead of a scramble.

2) capture tax savings before the windows close

Capturing tax savings requires planning ahead of time and acting before specific deadlines.  If you wait too long, you can miss out on the available opportunities.

Some strategies that often help clients reduce taxes now and in future years include:

• Bunching charitable contributions using appreciated stock

• Using Oregon tax credits funded with appreciated securities

• Contributing to Deferred Compensation Plans

• Roth conversions in lower‑income years

• Strategically realizing capital gains in the 0 percent federal bracket

• Tax loss harvesting

• Managing income to qualify for ACA premium tax credits while avoiding Medicaid or the Oregon Health Plan

• Funding self‑employed retirement accounts such as Solo 401(k)s and SEP IRAs

It is also easy to overlook contributions that can still be made right up until April 15:

• Traditional or Roth IRA

• Health Savings Accounts

• Solo 401(k)s or SEP IRAs

• Oregon 529 plan contributions

Planning ahead helps ensure these opportunities do not get missed simply because the deadline arrives quickly.

3) tackle your tax season in waves, not all at once

Tax season does not unfold evenly, it comes in waves so doing a small amount of work during each wave is helpful.

The First Wave: Late January through mid‑February is when the first wave of core documents arrives, including W‑2s, mortgage, and bank interest documents.  I would recommend beginning to gather these documents as they arrive.

The Second + Final Wave: Mid-Late February: The second and typically last wave is Final investment 1099s for dividends, interest and capital gains from custodians like Schwab or Fidelity generally arrive later, and revisions are common. If you already have your first wave documents ready and submit those with your second wave of documents early enough you can often get to the front of the line for preparation.

As deadlines approach, CPAs and tax preparers experience capacity constraints. Submitting everything right before spring travel or just ahead of April 15 often means landing at the back of the line. If the goal is to wrap up your return earlier, having information ready before the surge makes a real difference.

Even if you plan to file an extension, these timelines still matter—an extension doesn’t eliminate penalties or interest if taxes aren’t paid on time.

4) make a proactive plan for your tax bill

Often the most stressful part of filing taxes is owing taxes. There can be a mental pain of parting with cash, which can be compounded by the question of where to get the funds.  Is it going to come from your checking account, savings account or high yield savings account? If you don’t have enough cash, should you sell investments (which can create even more tax for future years) or should you take a temporary loan on your investment portfolio or your home via a home equity line of credit?

Other common challenges include:

• Payment to one jurisdiction like the IRS while waiting for a refund from another like the state of Oregon.

• Finding liquidity when funds are not readily available.

• Making sure payments are applied to the correct tax year rather than misclassified as estimates for a different tax year.

Mistakes here can cause payments to be misapplied or returned, creating the frustrating experience of being told you never paid.

Having a professional help you determine the best funding source and even facilitating tax payments on your behalf can remove much of this complexity and significantly reduce the risk of error.

5) Remember that april 15th is two tax deadlines, not one

April 15th marks both the end of one tax year and the beginning of another deadline, which is Quarter 1 estimated taxes.

First‑quarter estimated tax payments are due on the same day. Many people default to a safe‑harbor approach based on the prior year’s income. This can help avoid penalties, but it is not always the most efficient option.

• If last year’s income was unusually high, your estimates may require overpayment and effectively give the IRS an interest‑free loan.

• If income is similar year to year, this can be an effective approach.

• If income is rising, the safe harbor approach may keep you penalty free but still result in a large bill the following April that requires planning.

The right approach depends on where your income is headed in the next year, not just what tax software defaults to from the previous year.

These estimated taxes can add to the already painful tax bill due from the previous year, making proactive Tax Planning Projections even more important.

Bringing it all together

Most people will not execute all five of these steps perfectly, and that is okay. Even doing a few of them consistently can meaningfully reduce stress and improve outcomes.

Because these decisions span timing, tax strategy, cash management, and coordination, many people find greater value in having a partner help integrate the process rather than managing everything alone.

If you are evaluating tax preparation services, it is worth considering how well planning, execution, and follow‑through are connected, and whether you are realistically set up to do this on your own.

Tax strategy isn't a standalone service for us, it's woven into every financial plan we build. If you're ready to be more proactive about your taxes, our team at Human Investing is here to help.

---

Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and are subject to change. There is no guarantee that these views will be realized. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes (including the S&P 500 and blended stock/bond allocations) are for illustrative purposes only, are unmanaged, and do not reflect the performance of any specific investment or client account. Index returns do not reflect the deduction of fees or expenses. Historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Asset allocation and diversification strategies do not ensure a profit or protect against loss. Advisory services offered through Human Investing, an SEC-registered investment adviser.

---

Related Articles

The media offers plenty of reasons to worry. The ongoing conflict in the Middle East, AI rendering human workers obsolete, rising energy costs, the list goes on and on. If you’re investing for the long run, know that headlines will consistently try to pull you off course. Remember why you’re investing: You’re aiming to grow your dollars today to ensure you can maintain (or even grow) your spending power in the future. The rollercoaster of owning equities is rewarded with greater returns and spending power in the future.

Understanding the risk and reward of investing can be challenging. The finance industry likes to use terms like Beta or Standard Deviation. While these are statistically sound measures, most people would be hard-pressed to provide a clean and clear definition of what they mean, or how they’re calculated. Even most advisors would struggle to provide accurate definitions on the spot.

We try to communicate in Human terms with our clients, and we’ve built some charts and graphs to help communicate that. Given the current concerns and headlines, I think this is a great time to showcase some of our favorite graphs.

This is one of our favorite graphs. It's always easier to see that yesterday's worries weren't as scary once they're in the rearview mirror. Even through the Dot-Com bubble bursting, the 07-08 global financial crisis, and the COVID-19 global pandemic, stocks have risen. While we may not know the length or extent of a given market downturn, we do know companies have historically navigated challenges and delivered positive returns to long-term investors. We expect that resiliency to continue.

Introducing Intra-Year Declines

Markets rarely move in a straight line. Even in strong years, there’s almost always at least one significant drop along the way — what we call an intra-year decline. It measures how far the market fell from its highest point before it started recovering. As you can see in the chart below, intra-year declines have occurred every single year in the S&P 500 since 1990.

As I’ve written previously, the stock market is biased towards delivering positive returns. Most calendar years, stocks are up. This graph speaks to the lived experience of investors: every year has a downturn, no exceptions. I’m sure each downturn felt reasonable but worried investors at the time. No investor from 1990-2025 was immune from seeing their portfolio go down. Those who stuck with it saw positive returns in over 80% of those years.

Even amidst recent headlines, the market’s behavior has been typical. The S&P 500 dropped roughly 9% from its January peak to its March low. This is well within the normal range of market volatility where intra-year declines of 10% or more are common.

Most investors don’t own 100% equities, so it’s important to understand how introducing bonds can reduce risk. 60% equity and 40% bonds (60/40) is a common allocation because it tends to be a sweet spot between positioning your portfolio to grow and reducing risk enough to weather the volatility. Knowing where your asset allocation should be and when is an important, personal, complicated conversation that should involve a financial planner.

As you can see, while shifting from stocks to bonds doesn’t eliminate downturns, it certainly lessens them. Higher returns tend to come with more ups and downs, while smoother rides usually mean lower long-term growth. There’s no perfectly safe way to grow your dollars faster than inflation, so risk is always going to be part of your investment strategy. The key is finding the right balance between how much risk you’re comfortable with and how much risk you actually need to take to reach your financial goals.

Making plans that last

Anytime we’re designing a portfolio at Human Investing, we’re trying to make decisions we’d be okay with over the timeframe that matters for YOUR goals. That doesn’t mean we don’t revisit or adjust, but we’re not trying to make short-term tactical moves. We know outsmarting the market is incredibly difficult to achieve. We’re planning for our clients’ lifetime, not the next 6 months. We want to ensure our clients are positioned in a way where they are capturing the growth necessary to reach their financial goals, while having enough safety they don’t panic because of a temporary downturn.

No matter how you think about risk, there are a few enduring truths. Stocks are a volatile investment, but they’ve historically been a great growth engine in the long run. Whatever headline or concern today will feel much smaller in the rearview mirror.  

Your financial plan and investments are meant to serve you over your entire life, not the current news cycle. There will be times when it makes sense to revisit your allocation, especially when your personal circumstances change. Those decisions should be driven by your goals, not the headline of the week.

We’re always happy to have conversations to help you understand how your allocation is set to fit your needs. Call us at 503-905-3100, or email hi@humaninvesting.com.

---

Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and are subject to change. There is no guarantee that these views will be realized. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes (including the S&P 500 and blended stock/bond allocations) are for illustrative purposes only, are unmanaged, and do not reflect the performance of any specific investment or client account. Index returns do not reflect the deduction of fees or expenses. Historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Asset allocation and diversification strategies do not ensure a profit or protect against loss. Advisory services offered through Human Investing, an SEC-registered investment adviser.

---

Related Articles

Investing isn’t just about numbers. For many, it’s about making choices that reflect personal values while still aiming for long-term investment growth.

One of the more common questions we hear from both clients and prospective clients is, “How can my portfolio better reflect what I care about?” Often, that means avoiding certain industries or intentionally supporting companies with similar values, essentially “voting with your dollars” through your investments. Enter ESG investing: a way to invest while considering Environmental, Social, and Governance (ESG) factors.

Because ESG investing is relatively new and can look differently depending on the investor’s approach, let’s break down what ESG is, how it works (including common misconceptions), and whether it might make sense for you.

What ESG Investments are (and are not)

ESG investing considers how companies operate beyond profits. ESG is a metric that measures impact in the following areas:

• Environmental: How a company navigates environmental issues like climate impact and sustainability practices

• Social: How a company supports and interacts with the people and communities it impacts, from its workforce to suppliers to local communities

• Governance: How it’s run through board diversity, executive pay, and transparency

Although ESG is designed to align investments with values, ESG is not charity. These portfolios still aim for returns and ESG ratings vary widely, so it should not be assumed every “ESG” fund is equal.

How did ESG Investing begin?

Although popular ESG index funds (such as ESGV and VFTAX) were launched just in the last 10 years, the intention of aligning money with values has been present for centuries.

As early as the 1700s, religious groups such as the Quakers practiced forms of values based investing by avoiding businesses involved in activities they believed caused harm, including weapons, slavery, and exploitative labor. These early decisions reflected a belief that how money is earned matters.

Socially Responsible Investing (SRI) gained traction in the 1960s and 1970s with the anti-war movement, as investors sought to divest from companies connected to the Vietnam War and apartheid in South Africa.

The early 2000s were marked by a desire from investors to have more structured ways to evaluate non-financial risks that could impact long-term performance.

In 2004, the United Nations published the report Who Cares Wins, formally introducing the term ESG to describe factors such as environmental impact, labor practices, and corporate oversight.

Today, ESG is widely used by both individual and institutional investors. However, because ESG developed across multiple frameworks over time, its ratings and methodologies are not standardized.

How does ESG Investing work?

ESG investing can take several forms:

• Screening: Excluding companies that don’t meet certain standards (e.g., defense contracts, tobacco, weapons, fossil fuels, alcohol, gambling).

• Positive selection: Choosing companies that actively perform well on ESG metrics such as greenhouse gas emissions, workforce diversity and inclusion, and human rights protections.

• Shareholder advocacy: Investors upholding companies to improve their ESG practices.

What are the benefits of ESG Investing?

• Values alignment: You invest in companies that reflect what matters to you.

• Long-term risk management: Companies with strong ESG practices may be better prepared for future regulations or reputational risks.

• Growing demand: ESG investing is becoming more mainstream, with more selections and better data.

• Competitive returns: Although long-term data is still developing, several established ESG funds have delivered returns comparable to traditional index funds over the past 5–9 years.

Data courtesy of YCharts. From 1/1/2019 to 12/31/2025, Vanguard ESG US Stock ETF (ESGV) delivered similar returns to Vanguard’s Total Stock Market Index Fund ETF (VTI), while also experiencing higher volatility due to a heavier tech concentration. Past performance is not indicative of future results.

Navigating the trade-offs in ESG investing

While ESG investments can improve alignment with your values, it is not a comprehensive or perfect solution. Some companies you think should be screened may not.

For example, Walmart may still be an investment despite their firearms and tobacco sales, as they derive the majority of their profit from groceries and home goods.

Additionally, Tesla may also be included as an investment in an ESG portfolio due to its sustainable energy focus, despite the controversy around some senior leadership of the company.

Here are some other considerations and common misconceptions with ESG investments:

• Inconsistent ratings: ESG scores aren’t standardized, so one company might be rated differently by different agencies.

• Limited diversification: ESG funds may exclude certain sectors, which can make the resultant investment less diverse.

• Greenwashing: Some companies may appear ESG-friendly without meaningful action.

• Higher fees: ESG funds can sometimes carry slightly higher expense ratios.

Five essentials for your ESG strategy

1. Define your values: What issues matter most to you – climate change, human rights, corporate ethics, etc.?

2. Explore ESG funds: Look for mutual funds or ETFs with ESG or SRI (Socially Responsible Investing) labels.

3. Check your current investments: You may already be invested in funds with ESG screens.

4. Talk to an advisor: A financial advisor can help you align your portfolio with your values.

5. Start small: You don’t have to overhaul everything. Try allocating a portion of your portfolio to ESG choices.

Final thoughts

Although ESG portfolios offer a way of value-driven investing, every portfolio has its limitations. With the right approach, you can align your money with your values, while still aiming for financial success.

Want help exploring ESG investments in your portfolio? Let’s talk!

---

Disclosure:This content is for informational and educational purposes only and is not intended as investment, legal, or tax advice. The strategies and steps outlined—such as building an emergency fund, contributing to employer-sponsored plans, paying down debt, or using HSAs, IRAs, and taxable accounts—are general in nature and may not be appropriate for every individual. You should consult a qualified financial or tax professional before making decisions based on your personal circumstances. There is no guarantee that following any financial strategy will achieve your goals or protect against loss. References to interest rates, contribution limits, or tax rules reflect information available at the time of publication and may change. Past performance is not indicative of future results. Advisory services are offered through Human Investing, an SEC-registered investment adviser.

---

Related Articles

After a great run, what should investors expect next?

Every year starts the same way. A fresh set of market forecasts arrives, confidently predicting what stocks will do next. And every year, markets remind us how unreliable those predictions can be.

Even professionals struggle to get it right. In both 2023 and 2024, most Wall Street forecasts underestimated the actual returns of the S&P 500. Markets have a long track record of defying expectations.

This is why long-term investors shouldn’t build portfolios around short-term predictions. Markets move faster than forecasts can adapt. Instead, focus on building portfolios that can compound through a wide range of environments. Still, expectations matter. When investors have a reasonable sense of what outcomes are possible, it’s easier to stay invested when markets don’t behave the way headlines suggest they should.

So as we look ahead to 2026, the useful question isn’t “Will the market keep rallying?”, It’s “What’s reasonable to expect after a strong run?”

The last few years were not normal

It’s hard to overstate how unusual the period from 2020 through 2025 has been. 

A global pandemic shut down large parts of the economy. Inflation surged to levels not seen since the early 1980s. The S&P 500 suffered its worst calendar year since 2008 in 2022. Trade policy and geopolitics added ongoing uncertainty.

And yet, by the end of 2025, the S&P 500 was up nearly 18% for the year. 

When you zoom out, recent returns stand well above long-term averages. Over the past 1, 5, and 10 years, the market has delivered results that are meaningfully better than its 50-year history.

That’s great news for investors. But it also creates a subtle challenge. Strong recent returns have a way of adjusting expectations. What was once exceptional can start to feel normal, even when it isn’t.

Historically, periods of above-average returns are often followed by more moderate ones. Not because markets “owe” us anything, but because starting valuations matter. After a great run, future returns tend to look more ordinary.

The return expectations shown above are derived from publicly available third-party capital market outlooks and represent long-term estimates, not predictions or guarantees. These assumptions are not specific to any individual investor, do not reflect advisory fees, taxes, or other costs, and may differ materially from actual future market results.
[1] Vanguard, Vanguard Capital Markets Model Forecasts, January 22, 2026
[2] Schwab, What’s the 10-Year Outlook for Major Asset Classes?, June 6, 2025
[3] Fidelity, Capital Market Assumptions: A Comprehensive Global Approach for the Next 20 Years, August 2023
[4} BlackRock, Capital Market Assumptions, November 13, 2025

Why “lower” returns aren’t a bad outcome

Many long-term forecasts for U.S. stocks over the next decade fall in the mid–single-digit range. Compared to recent experience, that sounds disappointing. Compared to history, it’s typical.

This is an important distinction. Lower-than-exceptional returns are not the same thing as poor returns. Compounding still works at 5%–6% per year. It just doesn’t feel as exciting when you’re coming off a stretch of double-digit gains.

Experiencing more typical equity returns isn’t inherently an issue. It’s planning as though the unusually strong results of the past decade will repeat that can cause problems.

Why planning matters more than forecasting

For investors saving toward retirement or already retired, expectations matter because small differences compound over time. When returns are more typical, the margin for error narrows. This is exactly where comprehensive planning becomes most valuable.

At Human Investing, we don’t try to outguess markets or build portfolios around forecasts. That means emphasizing diversification, discipline, and resilience rather than reacting to short-term narratives. Our focus is helping clients make better decisions around the things they can control, including how investments interact with taxes, cash flow, retirement timing, and spending choices.

When returns are strong, almost any strategy can feel successful. A well-built financial plan shows which levers impact results, how much flexibility you have, and what adjustments are worth making if conditions change.

Markets will always surprise us. A good plan is designed so those surprises don’t derail long-term goals. That’s the role planning plays in our work, not as a prediction tool, but as a framework for making sound decisions across many possible market outcomes.

Sometimes having a sense of what may be coming can help stay calm during tumultuous times. Lets take some time to review some of the major topics that could cause investors stress in 2026. Good or bad, some version of these topics and the uncertainty around them is reflected in the market today. As more information comes out as time passes, that uncertainty converting into knowledge will cause prices to update. It’s unlikely these will be unforeseen surprises that cause major market movement.

Major 2026 topics we’re watching

Can The Fed maintain its independence?

The Federal Reserve (aka “The Fed”) is in interesting territory. With the attempted dismissal of Fed Governor Lisa Cook, and Department of Justice Investigation, The Fed’s independence is being challenged in new ways. The administration has made their desire for lower rates faster clear. The Fed’s challenge is ensuring rates don’t get too low and stoke inflation.

As unpleasant as it can feel at times, an Independent Fed is a healthy influence on the US economy in the long run. Being willing to raise rates to slow economic activity in the short term to control inflation is an important and painful process. The great challenge of high inflation is it makes any cost today for gains in the future incredibly difficult to make feasible. The lowered investment eventually drags on an economy’s long term growth prospects.

What will AI do to the economy?

No matter where you look, the biggest question for markets and the economy all center around AI. We recently wrote about why the AI boom is different than the dot-com bubble. We do know the upfront costs to build the infrastructure necessary for AI are large. The big concern for investors is the payoff of these AI related investments. If the costs are never fully recovered by increased revenue, companies that are booming today because of their AI investments may end up falling.

What does a modern workplace look like?

Another theme looking at 2026 forecasts: The labor market is going to be an area to watch. With immigration slowing and the aging of the baby boomer generation into retirement, the workforce size is expected to hold relatively steady. The uncertainty of the tariff environment has made long-term decisions outside of AI difficult for companies to navigate. The promise of AI is to enable workers to do more, and so in theory a given company will need fewer people to accomplish a similar amount of work. All this has led to employers generally being less motivated to hire. There aren’t necessarily large layoffs incoming, but hiring may slow enough to increase unemployment slightly.

Staying invested still matters most

The past several years have been exceptionally good for investors. After a run like that, it’s reasonable to expect a more typical environment going forward.

There will always be reasons to sell. There will always be headlines that make staying invested feel uncomfortable. But investing has never required perfect conditions to work.

If you’ve stayed invested through the last 5 to 10 years, you’ve already benefited from an unusually strong period. The next chapter may look different, but the discipline required doesn’t change.

The goal isn’t to predict what 2026 will bring. It’s to own a portfolio that doesn’t need predictions to succeed.

---

Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and may not materialize. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes, historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Advisory services offered through Human Investing, an SEC-registered investment adviser.

---

Related Articles

New Tax Breaks and Rules for Charitable Donations

People give because they care. That’s the heart of generosity. Yet the rhythm of giving is often set by the tax code. It can make giving feel natural and rewarding, or it can add friction that makes it harder.

When the One Big Beautiful Bill Act was signed on July 4, 2025, the headlines focused on spending and tax rates. Less noticed were the provisions that quietly change how Americans give.

Starting in 2026, millions of households, high-income donors, and businesses will face new incentives and new hurdles when they decide how much to give.

The details are technical, but the story is simple: with the right strategy, you can give more, save more, and make sure your money tells the story you want it to.

A Universal Deduction for a Majority of Taxpayers

For years, most families gave to charity without any tax benefit. Unless you itemized, your generosity was invisible to the IRS. You gave because it mattered, not because it saved you money.

That changes in 2026. Under the new law, taxpayers who claim the standard deduction will also be able to deduct charitable contributions. This is no longer a benefit limited to those who itemize. According to the Tax Foundation, a nonpartisan research group, roughly 85% of taxpayers take the standard deduction, making this one of the broadest incentives for charitable giving.

Here is how it works: taxpayers who claim the standard deduction can now also deduct up to $1,000 in cash contributions each year, or $2,000 for married couples. The gifts must be made in cash, not appreciated assets, and they must go directly to eligible charities.

Why it matters: After 2025, everyday giving like your monthly tithe, your holiday donation, or your support of a local nonprofit will show up on your tax return. The small checks you were already writing now carry extra weight.

What this means for you: For illustrative purposes, take a family who does not itemize and donate $100 each month to charity. That is $1,200 over the year. Beginning in 2026, that full amount can be deducted from their taxable income, up to the $2,000 limit for married couples, $1,000 single filers. A family in the 22% bracket giving $1,200 saves about $264 in taxes.

Note: The figures here represent Federal tax savings. For Oregonians, there may be an extra layer of benefit. If the state aligns with the new Federal rules, that same $1,200 donation could also reduce state taxes by up to 10%, or $120. States are currently evaluating whether to adopt these provisions, so this piece is still unfolding.

The catch is that families used to the standard deduction often don’t track their giving. It never mattered before. Starting in 2026, it will. The habit of generosity now comes with a second habit: record keeping.

‘Bunching’ and a New Hurdle for Itemizers

Beginning in 2026, all itemizers will also face a new rule. Charitable contributions will only be deductible above 0.5% of your adjusted gross income (AGI).

Here is how it works: Suppose your AGI is $200,000 and you itemize deductions. If you give $10,000 to charity, the first $1,000 ($200,000 x 0.5% = $1,000) does not count. Only $9,000 reduces your taxable income. Any 0.5% disallowed amount will be suspended and carried forward for up to 5 years, to hopefully be deducted in a future year when eligible.

Why it matters: On paper, half a percent sounds small. But in practice, this will likely shift how people give. Smaller, steady donations may no longer deliver the same benefit, nudging families to think more strategically about timing and structure.

What this means for you: It is not the size of your gift that changes, but the rhythm. Two larger checks can sometimes be more effective than four smaller ones. Instead of giving the same amount every year, consider making larger gifts less often, a strategy often called “bunching.”

For example, donating $20,000 every two years rather than $10,000 annually. In the larger year, your gift clears the new floor and provides a stronger deduction. In the smaller year, you take the standard deduction and still come out ahead. A $20,000 gift, above the 0.5% AGI floor, in the bunching year may yield roughly $6,400 in tax savings (assuming 32% bracket).

The increased State & Local Tax (SALT) deduction in 2026 can make this even more attractive. Take a household with $25,000 in SALT deductions and $20,000 in charitable giving every other year. That totals $45,000 of deductions, easily clearing the standard deduction and ensuring the charitable contribution counts well above the 0.5% threshold. In the off years, they simply return to the standard deduction.

Donor-advised funds (DAFs) make this easier. You can contribute a larger amount in one year, capture the deduction, and then spread your giving out over time so your favorite causes don’t feel the gap. Many DAFs even allow you to invest the balance, which means your dollars can grow before they’re granted. In that sense, a DAF turns one act of generosity today into even more generosity tomorrow. 

A 37% Deduction, Now 35%

If you itemize deductions and are in the top tax bracket, another change arrives in 2026. The maximum tax benefit you can receive from charitable deductions is limited to the equivalent of a 35% tax rate.

Here is how it works: Charitable gifts must first clear the new 0.5% of AGI floor. On top of that, the benefit of any eligible gifts above that floor will be limited to 35% rather than today’s 37%.

For example, with an AGI of $1,000,000 and a gift of $100,000, the first $5,000 provides no tax benefit today because of the 0.5% floor. The remaining $95,000 is deductible, producing a maximum tax savings of $33,250 in 2026. Under the current rates, a $95,000 gift would save $35,150.

The 0.5% floor can carry forward, but the difference between the 35% and 37% deduction rates does not.

Why it matters: For wealthy donors, the change is modest in dollars but meaningful in psychology. Even small shifts in after-tax cost can alter behavior at the margins, which is why thinking ahead about timing and tools matters more than ever.

What this means for you: For wealthy donors, every dollar still counts, but in 2026, each one counts a little less. It may make sense to accelerate some giving into 2025 before the new rules take effect.

C-Corp Business Owners and the New 1% Floor

Starting in 2026, C Corporations (C-Corp) will also face a new threshold. Charitable giving will only be deductible once it exceeds 1% of taxable income.

Here is how it works: If your company is a C-Corp and earns $1,000,000 and donates $8,000 (0.8% of income), you’ll no longer get a tax deduction for that gift. But if you give $15,000, you’ve crossed the 1% threshold, and the portion above $10,000 (the first 1%) is deductible.

The long-standing 10% cap on corporate deductions still stands, along with the five-year carryforward. The key difference is that smaller contributions that once carried a tax benefit may no longer qualify.

Why it matters: This rule discourages token giving and pushes companies toward more intentional generosity. Businesses that want their contributions to count, for both taxes and impact, will need to plan gifts as part of a larger strategy rather than as one-off gestures.

What this means for you: For C-Corp business owners, this change means smaller charitable gifts may no longer have a tax benefit. To maximize impact, you may choose to either increase your giving to clear the 1% threshold or bunch donations in certain years to secure the deduction.

A Special Planning Window in 2025

Before the new rules take effect, 2025 offers a unique chance to be more strategic with your generosity. The changes do not begin until 2026, which means as an itemizer you can still give under today’s more favorable framework: there is no 0.5% AGI floor for individuals, no 1% floor for corporations, and top-bracket donors can still receive up to a 37% deduction.

Why it matters: 2025 is one of the most favorable years in recent memory for charitable giving for itemizers. Acting before the rules change can mean more tax savings and more dollars flowing to the causes you care about.

What this means for you:

• A family giving $20,000 in 2025 can deduct the full amount. In 2026, with a $200,000 AGI, only $19,000 would count toward a deduction.

• A high-income donor with an AGI of $1,000,000 giving $100,000 in 2025 could reduce their taxable income by up to $37,000. The same gift in 2026 would shrink to $33,250 in savings, raising the after-tax cost of generosity.

• C Corporations who typically make smaller annual gifts may want to accelerate donations into 2025 before the 1% corporate threshold applies.

For those who want to keep supporting their favorite charities steadily, donor-advised funds can be especially effective. By contributing a larger amount in 2025, your secure today’s tax benefits while giving yourself flexibility to distribute grants to nonprofits over time.

Bringing It All Together

The new law will change how taxpayers experience charitable giving. Some will gain new opportunities, while others will need to be more intentional to keep their giving tax efficient.

1. Individuals & Families who do not itemize will now enjoy a tax break for giving.

2. Itemizers will need to plan gifts to rise above the new floor.

3. High-income donors will face a slightly smaller size tax benefit.

4. C Corporations will need to give more intentionally to secure deductions.

5. 2025 offers a last-chance window to maximize giving before the new rules take hold.

Why it matters: These rules will shape how generosity shows up, but not why we give. With planning, your giving can still tell the story of what matters most to you. The new law will not change the reasons we give, but it will change the timing, structure, and strategy that make generosity as efficient as possible.

At Human Investing, we see our job as more than managing investments. We help align your values with your financial life so that every dollar reflects what matters most. That way, your giving becomes not only a tax-smart decision, but a lasting legacy.

---

Tax Foundation. (2025). FAQ: The One Big Beautiful Bill Act tax changes. Retrieved from https://taxfoundation.org/research/all/federal/one-big-beautiful-bill-act-tax-changes/ Tax Foundation

Government Publishing Office. (2025). Public Law 119-21: One Big Beautiful Bill Act. Retrieved from https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf

Kitces, M. (2025, July). Breaking down the “One Big Beautiful Bill Act” (OBBBA): Tax planning, SALT cap, senior deduction, QBI deduction, Tax Cuts and Jobs Act (TCJA), AMT, “Trump Accounts”. Nerd’s Eye View. Retrieved from https://www.kitces.com/blog/obbba-one-big-beautiful-bill-act-tax-planning-salt-cap-senior-deduction-qbi-deduction-tax-cut-and-jobs-act-tcja-amt-trump-accounts/

Disclosure: This material is provided for informational and educational purposes only and should not be construed as tax, legal, or investment advice. Examples are hypothetical and for illustration purposes only; actual results will vary. Tax laws are subject to change, and their application may vary depending on individual circumstances. Clients should consult their own tax and legal advisors before making any charitable giving decisions. Advisory services offered through Human Investing, LLC, an SEC registered investment adviser.

---

Related Articles

Rebalancing is the idea that you are bringing your investment portfolio back to its targets. For example, if you invest your account as 60% stocks and 40% bonds (60/40) and never trade, in ten years your account will not be 60% stocks. Because stocks have historically tended to perform better than bonds over most ten-year periods, you will likely have a higher weight of stocks than bonds after ten years. If you don’t rebalance, your portfolio may not align with your intended allocation, which could change the risk and return characteristics.

WHY is it NECESSARY

Deciding how much to invest in various asset classes is a critical determinant of long-term performance[1]. Since asset allocation matters, maintaining it through rebalancing matters. As we’ve written previously, over time stocks typically outperform bonds[2]. There are also certainly times bonds outperform stocks, usually in recessions. The logic of rebalancing boosting returns is simple: You are selling what has relatively outperformed and buying what has underperformed (buy low, sell high). Especially in today’s world, where most ETFs are commission free, making the transaction costs of rebalancing minimal. Taxable investors should consider the tax implications of rebalancing, and also consider the change in risk and return of not rebalancing.

TWO APPROACHES

In financial theory, there are two main approaches to rebalancing: calendar-based and tolerance-based.

Calendar-based rebalancing ensures the long-term risk-return profile of your portfolio is consistent. This gets implemented on a set frequency (monthly, quarterly, annually) and ensures a consistent cadence.

Tolerance-based rebalancing takes advantage of buy low, sell high opportunities as they arise. This assumes you rebalance only if you hit certain thresholds of one asset class over or under performing. For example, say your target is 60/40, and you set a 3% absolute tolerance; if the equities drift to 64%, that prompts a rebalance back to 60/40. The alternative is relative tolerances, the same percentage of the target for each piece of the model. So, if a 60/40 portfolio had a 20% relative tolerance, the equities would be rebalanced if off by a relative 20% (20% of 60% target = 12% tolerance) and the bonds would have a 4% tolerance for rebalancing. There has been research suggesting tolerance-based rebalancing is more beneficial for long-term performance[3].

OUR PROCESS

At Human Investing, we combine both calendar-based and tolerance-based rebalancing to give our clients the best of both worlds. Tolerance rebalancing allows us to take advantage of market dips and rallies as they happen, while our annual reviews ensure no portfolio drifts too far off course. This approach keeps every account aligned with the level of risk and return our clients expect and provides discipline, consistency, and confidence over the long run.

While rebalancing can sometimes feel counter intuitive, like selling bonds and buying stocks in March 2020, it is a helpful practice for any investor. It both keeps your portfolio consistent in the long run, and may improve risk-adjusted returns over time.

---

[1] Ibbotson, R. G., & Kaplan, P. D. (2000). Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance? Financial Analysts Journal, 56(1), 26–33. https://doi.org/10.2469/faj.v56.n1.2327

[2] https://www.humaninvesting.com/450-journal/equity-risk-premium

[3] Daryanani, Gobind (2008). Opportunistic Rebalancing: A New Paradigm for Wealth Managers. FPA Journal. January 2008.

Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Investors should consult with a qualified financial professional before making any investment decisions. Rebalancing and asset allocation strategies do not ensure a profit or protect against loss in declining markets. There is no guarantee that any investment strategy will achieve its objectives. Any references to historical performance, academic studies, or research are based on past data and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Advisory services offered through Human Investing, an SEC-registered investment adviser.

---

Related Articles

On July 4, the One Big Beautiful Bill Act (OBBBA) became law, as a broad tax and spending package aimed at easing inflation and delivering financial relief to Americans. One of the most notable provisions for retirees is a new $6,000 “senior bonus deduction” for individuals age 65 and older.

The $6,000 bonus deduction is available to all eligible seniors, whether they take the standard deduction or choose to itemize. This is different from the age-based standard deduction, which is only allowed if you take the standard deduction.

Unlike the age-based standard deduction, this new bonus stacks on top of your existing deductions, making it one of the most generous tax breaks retirees have seen in years.

Here’s what’s changing and how to take advantage of it in your retirement plan.

How the stacked tax deduction will work

Starting for tax year 2025, taxpayers age 65 and older will be able to combine:

• A standard deduction of $15,750 (single) or $31,500 (married filing jointly), with

• An age-based addition of $2,000 (single) or $1,600 per spouse if married, and

• A new $6,000 senior bonus deduction under the OBBBA.

That means a single filer over 65 could deduct up to $23,750(previously $16,550). A married couple where both spouses are 65 or older could deduct $46,700 (previously $32,300).

The catch?

Eligibility is income-based. The full deduction is available to those with modified adjusted gross income (MAGI) up to $75,000 for single filers or $150,000 for joint filers. The deduction begins to phase out once above those thresholds and is fully phased out at $175,000 for single filers and $250,000 for joint filers.

It’s also worth noting that this senior bonus deduction is temporary. As of now, it only applies for the 2025 through 2028 tax years. It’s possible Congress could extend it further, but we likely know until 2028.

Why It Matters: Five Planning Opportunities Worth Exploring

This deduction will reduce taxes for many retirees. But its real value lies in the doors it opens for proactive planning. Here are several strategies we’re helping clients explore:

1. Rethinking Roth Conversions

Roth conversions allow you to shift money from traditional IRAs to Roth IRAs, paying tax now to enjoy tax-free withdrawals later. The bonus deduction gives retirees more room to convert IRA dollars at lower effective tax rates.

By combining the standard deduction, the age-based addition, and this new $6,000 bonus, some retirees may be able to convert dollars each year with minimal tax impact. This can lower future required minimum distributions (RMDs), reduce lifetime taxes, and create more income flexibility down the road.

There’s a sweet spot between retirement and RMDs where this approach can have the most impact.

2. Smoothing Income Over Multiple Years

Retirees often experience uneven income from asset sales, business wind-downs, or large IRA distributions. With this senior bonus deduction in place for four years, now is the time to think about spreading income more evenly across tax years, so you can qualify for this deduction while it’s available.

To make the most of the deduction each year from 2025–2028, consider ways to spread income more evenly across those years:

• Delaying large sales or distributions to avoid spiking above the income threshold in a single year.

• Accelerating income from future high-tax years into lower-income years.

• Using multi-year tax projections to identify the optimal path.

This smoothing strategy can help avoid unnecessary spikes in tax liability while making full use of the available deduction each year.

Same Income, Different Results - This chart compares two retirees, each with an average annual income of $160,000 over four years.

• Uneven Income: Income spikes in 2026 and 2028 push this retiree above the $175,000 phaseout limit, causing them to miss out on the $6,000 deduction in two years. Total lost deductions: $12,000

• Smoothed Income: By spreading income more evenly across all four years, this retiree stays under the threshold and qualifies for the full $6,000 deduction every year.  Total deductions preserved: $24,000

Strategic income timing can preserve valuable deductions, even when total income stays the same.

3. Funding the Cashflow Gap Before Claiming Social Security

Delaying Social Security often results in higher lifetime benefits. The challenge is funding those interim years. The senior bonus deduction provides a helpful cushion, allowing retirees to generate income from taxable or IRA accounts without incurring as much tax.

This deduction could help bridge the gap, making it easier to delay Social Security while keeping tax costs under control.

4. Revisiting Withdrawal Order

The traditional guidance suggests pulling from taxable accounts first, then IRAs, and Roth accounts last. But with this expanded deduction, it may be worth adjusting that sequence.

You might instead:

• Draw more from IRAs early, taking advantage of low tax rates and the temporary senior deduction. You’re essentially using the government’s tax break to convert IRA assets into spending money at a low cost. This can also reduce future IRA balances (and future taxable RMDs).

• Reserve taxable accounts for later, especially after the senior bonus deduction expires.

• Preserve Roth assets for high-income years or future tax flexibility.

Coordinating withdrawals across all account types with the new deduction in mind can improve long-term tax efficiency.

5. Aligning With Charitable Giving

If you’re charitably inclined, this is a good time to revisit your giving strategy.

Qualified Charitable Distributions (QCDs) from IRAs remain a powerful tool to give directly to charity without increasing taxable income. This also keeps your MAGI lower, which may help you stay under the $250k Joint/$175k Single threshold to qualify for the senior bonus deduction.

For others, donor-advised funds can be used to bunch gifts in one year to claim a high itemized deduction, then take advantage of the standard deduction in the next. In both cases, retirees can still benefit from the new $6,000 bonus deduction each year they qualify.

This new deduction adds flexibility, helping you give with greater intention and less tax friction.

Bottom Line

If you’re 65 or older, the next few years offer a unique window of opportunity. From 2025 through 2028, this new deduction can help lower your tax bill today and create long-term planning advantages that stretch well into the future.

It’s a reminder that good tax laws are only as valuable as the plans they inspire. Used thoughtfully, this expanded deduction can help you reduce lifetime taxes, generate tax-efficient income, and leave a stronger legacy.

The next four years offer a rare opportunity to rethink how you generate income in retirement. Whether you're considering a Roth conversion, adjusting withdrawal strategies, or supporting causes you care about, we’re here to help you build a plan that puts this deduction to work.

---

Disclosure: This material is for informational and educational purposes only and is not intended as personalized tax, legal, or investment advice. You should consult your own tax, legal, and financial professionals before making any decisions based on the information provided. Tax laws and regulations are subject to change, and their application can vary based on your individual circumstances. While the strategies discussed may be appropriate for some individuals, there is no guarantee that any specific tax outcome or investment result will be achieved. Any examples, scenarios, or case studies are hypothetical and for illustrative purposes only. They do not represent actual client situations and should not be relied upon to predict or project results. Investing involves risk, including the potential loss of principal. Past performance does not guarantee future results. All investments and tax strategies carry certain risks and may not be suitable for all investors. Advisory services offered through Human Investing, LLC, an SEC registered investment adviser.

---

Related Articles

Every few years, a familiar worry resurfaces: Can we still trust U.S. Treasuries?

It’s a fair one. Fiscal deficits are rising. Government debt dominates the headlines. Political theatrics are hard to ignore. These concerns are understandable.

But this piece is not a dismissal of those worries. It aims to weigh them against the steady role Treasuries continue to play in global markets and in investors’ portfolios.

Because the key, as always, is to separate signal from noise. And noise is never in short supply.

U.S. Treasuries are often described as “risk-free.” Of course, no investment truly is, but no other assets have earned that reputation as convincingly. Their strength is structural: deep markets, global demand, and the dollar’s central role in international finance. These aren’t passing features. They’re foundational pillars of a system that continues to hold.

WE’VE BEEN HERE BEFORE

Concerns about the national debt are nothing new. In the mid-1980s, Congress passed the Gramm-Rudman-Hollings Act in response to growing fears of a looming fiscal cliff.¹

That was nearly 40 years ago.

Since then, warnings have echoed: interest rates would skyrocket, the dollar would collapse, foreign buyers would flee. But none of those predictions played out in a sustained way. Interest rates stayed low for decades. The dollar remained strong. Treasuries continued to anchor global portfolios.

THE OTHER SIDE OF THE LEDGER

Most debt conversations focus on the total amount owed, but it would be wise to consider both sides of the ledger. An equally important story is the government’s ability to repay what it owes.

The United States has a broad and resilient tax base, drawing revenue from some of the world’s most profitable corporations and wealthiest individuals. In 2024, over 94 percent of federal revenue came from income, payroll, and corporate taxes.²

That revenue base gives the government something that matters more than the size of its debt: flexibility. The capacity to raise more if needed. This is a critical ingredient in maintaining trust and stability in U.S. Treasuries.

That doesn’t make debt a non-issue. But it puts the conversation in better context.

THERE IS NO SUBSTITUTE

Some point to shifting foreign ownership of Treasuries as a sign of trouble. But the truth is, global capital needs a home that is safe, liquid, and capable of absorbing trillions in flows. There are few alternatives.

That’s why central banks, sovereign wealth funds, and even the U.S. tri-party repo market continue to rely on Treasuries. ³,⁴ It is not because of short-term politics. It is because no other asset plays the role as effectively or as consistently.

Foreign holdings may ebb and flow with trade dynamics or currency shifts. But the long-term, strategic demand? It’s still there.

HIGH DEBT DOES NOT GUARANTEE CRISIS

Japan offers an interesting counterpoint. With a debt-to-GDP ratio over 250%, more than double that of the United States.⁵,⁶ And yet, its financial system remains stable, and interest rates are close to zero.

This is not to suggest that debt is irrelevant, but it serves as a useful reminder that high debt levels, on their own, do not lead to crisis. The surrounding structure, including credibility, strong institutions, and consistent demand, matters just as much, if not more.

Could Treasuries someday lose their special status? In theory, yes. Anything is possible. But if that day ever comes, it will likely coincide with a much broader breakdown in global order. In that kind of environment, the safety of any asset would be in doubt.

That’s not a prediction. It’s simply an observation about the scale of disruption required to unseat the U.S. Treasury market.

A WARNING FROM ‘THE BOND KING’

Not everyone views Treasuries as the unshakable anchor they once were. Even some of the most seasoned investors are questioning the long-term role of U.S. Treasuries.

Jeffrey Gundlach, CEO of DoubleLine Capital and one of the most influential fixed income investors of the past two decades, has voiced serious concerns. In a June 2025 interview, he offered this warning:

“There is an awareness that the long-term Treasury bond is not a legitimate flight-to-quality asset.”⁷

He points to shifting dynamics: the dollar falling during selloffs, long bond yields rising after rate cuts, and growing concern over rising interest costs. As low-yield bonds mature, they are being replaced by debt with much higher yields. According to Gundlach:

“The interest expense for the United States is untenable if we continue running this budget deficit and continue to have sticky interest rates.”

Gundlach raises legitimate questions. But even he stops short of calling Treasuries broken. His concern is about strain, not collapse. The system is being tested, not undone.

While the pressures are real, rising interest rates and persistent deficits, they are not set in stone. Policy can change. Priorities can shift. The system still has tools it can use.

And this is where perspective matters.

Markets are noisy. Bad news sells. Loud warnings travel further than quiet resilience. But alarm does not erase the quiet strength of systems that continue to function.

Even Gundlach points to stress, not failure.

Which brings us back to what still works.

STILL DOING THEIR JOB

Treasuries aren’t immune to worry, however they continue to serve their purpose. They provide liquidity, offer stability, and act as a counterbalance in times of uncertainty.

We’re seeing that play out again in real time. Renewed tensions with Iran have reminded investors what uncertainty feels like. Once more, yields have dropped and the dollar has strengthened. These are clear signs of a flight to safety.

Even amid rising deficits and political noise, Treasuries continue doing what they’ve always done: deliver reliability in a world that often falls short.

References:

1. U.S. Congress. Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act). Public Law 99–177, 99th Congress, December 12, 1985.

2. U.S. Department of the Treasury. “Government Revenue.” Fiscal Data – America’s Finance Guide.Accessed June 20, 2025.

3. Board of Governors of the Federal Reserve System (U.S.). “Rest of the World; Treasury Securities Held by Foreign Official Institutions; Asset, Level [BOGZ1FL263061130Q].” FRED, Federal Reserve Bank of St. Louis. Accessed June 20, 2025.

4. Federal Reserve Bank of New York. “Tri-Party Repo Data Visualization.” Federal Reserve Bank of New York. Accessed June 20, 2025.

5. U.S. Department of the Treasury. “National Debt and Debt-to-GDP Ratio.” Fiscal Data – America’s Finance Guide. Accessed June 20, 2025.

6. World Economics. “Debt-to-GDP Ratio: Japan.” World Economics. Accessed June 20, 2025.

7. Jeffrey Gundlach, interview with Bloomberg, “Gundlach on Treasuries, Gold, Fed, AI, Private Credit, Trump,” June 11, 2025.

---

Disclosure: Advisory services offered through Human Investing, an SEC registered investment adviser. This material is for informational and educational purposes only and is not intended as investment advice, an offer, or a solicitation to buy or sell any securities. Past performance is not indicative of future results. All investments involve risk, including the potential loss of principal. Any third-party opinions or sources cited are believed to be reliable but are not guaranteed for accuracy or completeness. Please consult your financial professional before making any investment decisions.

---

Related Articles

We live in a world where money feels more complicated than ever. There are more choices, more opinions, and more pressure to get it right. And because money is personal and often emotional, and it can be hard to know where to begin.

After working with hundreds of families, one thing stands out: the people who feel most confident about their finances aren’t the ones with the highest returns. They’re the ones with a system. A simple, repeatable process for managing cash flow, expenses, and uncertainty.

And for most people, that system starts with how you hold cash. The key is giving it structure.

That’s why I use a three-bucket approach:

1. One bucket for the everyday—bills, groceries, and life’s basics.

2. One for the unexpected—emergencies, repairs, and surprises.

3. And one for the future—a place for your cash to grow and outpace inflation.

It’s not flashy. But it works. And in a world full of noise, systems that work quietly are often the ones that matter most.

Bucket One: Daily Life

This is your foundation. The money that pays for groceries, gas, the electric bill, subscriptions and everything else that keeps your life moving. It’s not meant to grow. It is meant to flow—steady, predictable, and low stress.

Purpose: Keep life steady. Pay your bills without stress.
Where to keep it: A checking account you trust.
What to keep in mind:

• Aim to match your monthly spending – money in and money out, with a small buffer.

• Enough to avoid dipping into savings or taking on credit card debt for the basics.

• Not so much that you’re leaving money idle for no reason.

Too much in this account means money is sitting still and losing ground to inflation. Too little, and small surprises can throw everything off.

Cash in this bucket is like oxygen: you don’t think about it when it’s there, but when it’s not, nothing else works.

Bucket Two: The Buffer

No one plans for a broken transmission. Or a surprise tax bill. Or a layoff. But those things happen. That’s why this bucket exists not to help you get ahead, but to keep you from losing ground when life doesn’t go to plan.

It also covers the bigger, less frequent expenses you can anticipate. Things like replacing your car, covering a major home repair, or helping a child with college or a wedding. If it’s a larger expense and you expect it within the next five years, it belongs here. Planning for these ahead of time keeps them from becoming financial emergencies when they arrive.

Purpose: Provide breathing room when the unexpected shows up.
Where to keep it: High-yield savings, money market funds, or short-term Treasuries. These are safe places where your money is still accessible and earning more than a checking account.
What to keep in mind:

• Cover 3 to 6 months of essential expenses.

• Add extra for planned one-time costs like a new roof, tuition, or a car.

• Focus on after-tax interest. Earning a bit more here helps these dollars avoid quietly shrinking under the pressure of inflation.

This is the bucket where it makes sense to look for a little more yield. That might come with a small sacrifice in liquidity. Your money may take an extra step or a day or two to access. But that added friction can be useful. It creates a natural pause that gives you a moment to think before reacting. Sometimes, having to slow down is exactly what protects you from making a decision you might regret.

This bucket may not make headlines, but it builds resilience. It helps turn unpredictable moments into manageable ones and keeps you moving forward with confidence.

Calculating the right amount is important. But holding too much here can also create risks. Cash that sits for years without a purpose slowly loses value. That is where the third bucket comes in.

Bucket Three: The Future

If Bucket One is about staying afloat and Bucket Two is about staying safe, Bucket Three is about moving forward. This is where your cash begins working toward the future, whether that is your own retirement, future generations, or a lasting legacy. It is not for today, and probably not for next year. It is for the life you are building over the long run.

Purpose: Grow your money in a way that keeps up with, and ideally outpaces, inflation.
Where to keep it: A diversified investment portfolio aligned with your goals and timeline, whether growth, income, or a mix of both.
What to keep in mind:

• Time in the market is more powerful than trying to time the market.

• There can be periods where the market goes down, but in the end the market is undefeated. 

• Emotional decisions often cause more harm than poor performance ever will.

This is also a place where working with a fiduciary financial advisor can be especially helpful. An advisor can help you figure out how much to invest, how often to do it, and which types of accounts are the best fit for your goals. They provide structure, help you stay focused, especially when the market makes it tempting to second-guess your plan.

Final Thought: The Real Goal

Getting your financial life in order starts with building a system that makes the rest of your decisions easier. A system that keeps you steady when things get noisy. A system that gives every dollar a job.

The three-bucket approach is simple by design. One bucket to keep life running. One to absorb the unexpected. One to grow for the future.

As author James Clear puts it, “You do not rise to the level of your goals. You fall to the level of your systems.” The families who feel most confident about money aren’t the ones with the biggest portfolios. They’re the ones with a clear, repeatable system they trust, especially when things get hard.

This isn’t about wringing the highest return out of every dollar. It’s about creating margin, building structure, and letting consistency do the heavy lifting. In personal finance, small steady steps beat frantic leaps.

Start with where you are. Build a system that fits your life. And trust that simple, well-built plans often lead to the strongest outcome.

---

Disclosure: Investment advisory services offered through Human Investing, an SEC registered investment adviser. Investments involve risk, including the potential loss of principal. Diversification does not ensure a profit or guarantee against loss. Past performance is no guarantee of future results. This material is for informational purposes only and is not intended as individualized investment advice. Any references to market trends or economic conditions are for illustrative purposes and may not reflect future developments. Consult with a qualified fiduciary advisor before making financial decisions.

---

Related Articles

This article explores how financial headlines influence investor behavior, often exacerbating emotional decision-making and undermining long-term investment outcomes. Drawing from behavioral finance research and investor psychology, the article argues that investors should adhere to a written investment plan rather than respond impulsively in the face of uncertainty and sensational news. Selected headlines from Bloomberg and CNBC illustrate the impact of the modern media environment on perception and behavior. The insights of Peter Lynch, Jack Bogle, and Warren Buffett are used to contextualize the long-standing wisdom of patience and discipline in investing.

The rise of financial anxiety

Today’s investors are inundated with a 24/7 news cycle that thrives on urgency. While access to information has never been easier, clarity has never been harder to maintain. Financial headlines are designed to capture attention, often through alarming or emotionally charged language. This reality presents a challenge for investors: distinguishing between signal and noise and avoiding making decisions rooted in emotion rather than logic or planning.

The emotional power of headlines

A review of today’s (4/24/25) major financial media illustrates the challenge. From CNBC, headlines such as:

Bridgewater hedge fund warns Trump policies could induce a recession
The S&P 500 formed an ominous ‘death cross.’ What history says happens next

frame the economic outlook in dramatic, even catastrophic terms. Similarly, Bloomberg ran with:

Odd Lots: Why the Real Tariff Pain Hasn’t Even Begun
One of Wall Street’s Biggest Bulls Slashes View as Tariffs Bite

Despite these headlines, the S&P 500 rose nearly 2% today, and tech stocks surged on strong earnings reports. This disconnect between the emotional tone of news coverage and actual market behavior is a classic example of availability bias—a cognitive distortion where individuals give undue weight to recent, vivid, or emotionally charged information (Tversky & Kahneman, 1973).

This behavioral response, driven by the availability of alarming headlines, often leads investors to abandon sound strategies in favor of reactive decisions. Yet history and experience warn us against this trap. As the following insights from some of the most respected minds in investing make clear, enduring success comes not from responding to noise but from adhering to a disciplined, long-term approach.

Wisdom from the investment greats

The dangers of reactionary investing are not new. Legendary investor Peter Lynch warned:

“Far more money has been lost by investors trying to anticipate corrections than lost in the corrections themselves.”

Jack Bogle, the founder of Vanguard, put it more bluntly:

“The idea that a bell rings to signal when to get into or out of the stock market is simply not credible.”

And Warren Buffett offered perhaps the most elegant summation:

“The stock market is a device to transfer money from the impatient to the patient.”

These insights underscore the importance of focusing not on media narratives but on long-term goals and rational portfolio construction.

Recognizing the wisdom of these investment luminaries is a critical first step—but applying it consistently requires more than agreement; it requires structure. Investors need more than memorable quotes to overcome the behavioral impulses triggered by market volatility.

They need a written financial plan that serves as a behavioral compass, grounding decisions in clearly defined goals, timelines, and risk tolerance. Translating timeless investment principles into practical, repeatable actions makes the financial plan a vital tool for staying the course when emotions run high.

The role of a written financial plan

The antidote to reactionary behavior is a well-crafted financial plan that clearly articulates an investor’s purpose, time horizon, risk tolerance, and rebalancing strategy. Far from being a static worksheet, the plan functions as a behavioral anchor, offering clarity during periods of uncertainty and helping investors resist the temptation to respond emotionally to sensational headlines.

A thoughtfully structured financial plan does more than outline investment choices and target allocations. It proactively defines how to respond to market volatility, eliminating guesswork when clarity is most needed. Doing so transforms abstract wisdom into actionable discipline—bridging the gap between intention and execution.

Planning over panic

In a media landscape dominated by noise, fear, and speculation, the most effective investor response is not reaction—but preparation. Rather than chase headlines, successful investors rely on a carefully constructed financial plan and the discipline to follow it. Behavioral economics and decades of market data affirm that patience, consistency, and structure drive long-term success.

So, when the next wave of headlines warns of crisis or collapse, the wise investor doesn’t panic. They return to the plan—and stay the course.

For more information about our financial planning services, please call (503) 905-3100 or contact us.

References:

Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124–1131.

---

A BOOK FOR THE SAVER IN ALL OF US

Becoming a 401(k) Millionaire isn’t your typical retirement guide. With 30 years in finance, Dr. Peter Fisher shares personal insights and real stories to help you plan with confidence.

Learn more

Disclosures: These market returns are based on past performance of an index for illustrative purposes only. Past performance does not guarantee future results. All investing involves risk, including the loss of principal.  Index performance is provided for illustrative purposes only and does not reflect the performance of an actual investment. Investors cannot invest directly in an index.

The information provided in this communication is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities. Market conditions can change at any time, and there is no assurance that any investment strategy will be successful.

Diversification does not guarantee a profit or protect against a loss in declining markets. Asset allocation and portfolio strategies do not ensure a profit or guarantee against loss.

The opinions expressed in this communication reflect our best judgment at the time of publication and are subject to change without notice. Any references to specific securities, asset classes, or financial strategies are for illustrative purposes only and should not be considered individualized recommendations.

Human Investing is a SEC Registered Investment Adviser. Registration as an investment adviser does not imply any level of skill or training and does not constitute an endorsement by the Comission. Please consult with your financial advisor to determine the appropriateness of any investment strategy based on your individual circumstances.

---

Related Articles

Markets have been moving fast lately — in both directions

Down 10% in two days. Up almost the same the next. Three trading days: A full year’s worth of returns gone, and then mostly back again. 

Looking at the S&P 500 last week feels disorienting. And in a way, that’s the point.

View fullsize

This kind of movement makes people wonder if the system is broken. But this is exactly how markets work. They are brutally efficient at processing new information, whether it’s political, economic, or emotional.

Markets don’t wait for clarity. They move quickly on possibility, repricing risk in real time, regardless of how ready you feel. And when things are uncertain—when leadership seems unpredictable, policy is in flux, or the narrative changes overnight—the swings can be dramatic.

Fast drops, slow climbs — that’s the deal

Volatility is the price of admission for long-term growth. There’s a reason people say, “Markets take the stairs up and the elevator down.” Even looking at the last few years, gains usually build gradually, while losses often arrive quickly and unexpectedly.

Yet, over the decades, the odds have been in your favor. On average, the S&P 500 has risen in 52% of trading days, 73% of calendar years, and 94% of decades. (Source: Capital Group)

Three days of outliers over the last 25 years

New York Times

The sharp losses of April 3rd and 4th, followed by the rebound on April 9th, are outliers in magnitude but not in pattern. The biggest gains and losses tend to cluster together, and they often show up when they’re least expected. Selling after a big drop means missing the potential surge that follows. Buying after a big rally means forgetting what preceded it.

This isn’t a timing game. It’s a discipline game

Discipline doesn’t mean knowing what happens next. It means staying in the game when it feels like the rules are changing. It means resisting the urge to flinch when the noise gets loud.

The headlines will keep coming, and volatility will return. But the most reliable part of markets is that they change. The market may take the stairs up and the elevator down — but over time, it remains one of the most reliable places to grow long-term wealth.

Hold fast to your financial plan. Stay invested.

---

Disclosures: These market returns are based on past performance of an index for illustrative purposes only. Past performance does not guarantee future results. All investing involves risk, including the loss of principal.  Index performance is provided for illustrative purposes only and does not reflect the performance of an actual investment. Investors cannot invest directly in an index.

The information provided in this communication is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities. Market conditions can change at any time, and there is no assurance that any investment strategy will be successful.

Diversification does not guarantee a profit or protect against a loss in declining markets. Asset allocation and portfolio strategies do not ensure a profit or guarantee against loss.

The opinions expressed in this communication reflect our best judgment at the time of publication and are subject to change without notice. Any references to specific securities, asset classes, or financial strategies are for illustrative purposes only and should not be considered individualized recommendations.

Human Investing is a SEC Registered Investment Adviser. Registration as an investment adviser does not imply any level of skill or training and does not constitute an endorsement by the Comission. Please consult with your financial advisor to determine the appropriateness of any investment strategy based on your individual circumstances.

---

Related Articles

We live in a world of complex economic forces, but at the heart of many of today’s big-picture challenges lies a simple truth: a country cannot indefinitely consume more than it produces. That is precisely what the United States has been doing for decades through the persistent and growing trade deficit.

This article is meant to educate, not alarm. To help all investors, professionals, and citizens better understand what is happening behind the scenes, why it matters to our long-term prosperity, and how thoughtful policy tools, including modernized tariffs, might help correct course.

Let us start with the core issue.

What is a trade deficit? 

A trade deficit occurs when a country imports more goods and services than it exports. Imagine your household spending more every month than it earns—you would need to make up the difference by drawing down savings or selling off parts of your home. That is essentially what the U.S. does year after year. We purchase foreign goods (such as cars, electronics, and clothing) in excess of what we sell abroad and must finance this gap by issuing debt or selling U.S. assets.

These assets include U.S. Treasury bonds, commercial real estate, stocks in American companies, and ownership stakes in U.S. businesses. That means other countries, such as China, Japan, Germany, and many others, are gradually gaining greater ownership of our economy.

 “Our net worth is being transferred abroad”

Legendary investor Warren Buffett put it bluntly over 20 years ago:

“Our country’s ‘net worth,’ so to speak, is now being transferred abroad at an alarming rate” (Fortune, 2003).

This quote deserves close attention.

Buffett does not talk about some abstract notion of wealth. He is referring to the tangible ownership of American assets—the land, companies, infrastructure, and financial instruments that make up our nation’s economic engine. When we finance our trade deficits, we are often doing so by selling these assets to foreigners or issuing IOUs (bonds) that must be repaid with interest over time.

Imagine a wealthy family that owns a large estate. Every year, to fund vacations and a high standard of living, they sell a few acres of land or take out a bigger mortgage. At first, it seems manageable. But over time, they no longer own the home outright. Their income now goes to paying interest, rent, or dividends to outsiders who bought what used to belong to them.

That is the picture Buffett (and others) paint of America’s trade behavior.

In real terms, this means future generations of Americans will be working to sustain themselves and sending investment returns overseas—to countries that now hold claims on our assets. As foreign ownership increases, so does the investment income flowing out of the U.S., thereby reducing our ability to reinvest in our own future.

The role of tariffs in correcting imbalances

This is where tariffs, when carefully designed and wisely implemented, can play a role—not as a weapon or political cudgel, but as a tool of balance.

Buffett originally proposed a market-based mechanism called Import Certificates, but the underlying principle is simple: If you want to buy more than you sell, you have to fund it—and at some point, that model breaks. A modest, broad-based tariff system could help bring trade into equilibrium, nudging us back toward producing more of what we consume and consuming more of what we produce.

This is not about isolating ourselves from the world. It is about aligning our consumption with our production, and ensuring that we do not gradually erode our national wealth through unchecked deficits.

Yes, tariffs raise prices—especially on imported goods. That is a cost worth recognizing. However, Buffett warns us not to be short-sighted:

“The pain of higher prices on goods imported today dims beside the pain we will eventually suffer if we drift along and trade away ever larger portions of our country’s net worth” (Fortune, 2003).

In other words, the bill comes due. The longer we delay, the more painful it will be to unwind the imbalance.

What does the modern data say?

Recent academic research offers critical insights into how tariffs function in today’s economy.

One study by Furceri, Hannan, Ostry, and Rose (2019) reminds us that, although economists overwhelmingly oppose protectionism, the public is less convinced, possibly because much research on tariffs is outdated or overly theoretical.

Their research examines the macroeconomic effects of tariffs using data from 151 countries over a 50-year period and finds that tariff increases reduce output, productivity, and consumption while increasing unemployment and inequality. These adverse effects are worse in advanced economies and during economic booms.

Tariffs have a limited impact on improving trade balances and can even lead to an appreciation of the exchange rate, offsetting their intended benefits. Overall, tariffs appear to be detrimental to economic welfare.

In another research article by Amiti, Redding, and Weinstein (2019), the authors conclude that in 2018, U.S. tariffs were almost entirely borne by American consumers and importers, rather than foreign exporters. Prices rose for many U.S.-made goods tied to these tariffs, and supply chains were disrupted. Consumers faced fewer product choices, and the overall economic cost was substantial, amounting to approximately $8.2 billion in lost efficiency and an additional $14 billion in costs passed on to consumers. These impacts aligned with basic supply and demand predictions.

The researchers believe their estimates are conservative, as they did not include other significant costs, such as lost product variety, companies reorganizing their supply chains, or the uncertainty caused by changing trade policies. Surprisingly, foreign exporters did not lower their prices to stay competitive, meaning Americans bore nearly all the costs of these tariffs. Why this happened remains a puzzle for future research.

So what do we make of this? Tariffs are not magic bullets. They are levers. Furthermore, like all levers, they require precise calibration. Used strategically and modestly—within a broader framework of trade policy—they may help correct imbalances, such as the persistent U.S. trade deficit. Used carelessly or punitively, they may do more harm than good.

Conclusion: Looking ahead

Warren Buffett’s warning in 2003 was not about politics—it was about sustainability. He argued that a nation cannot afford to consume more than it produces forever without losing control of its financial destiny. His solution was not isolationist, but strategic: to implement mechanisms, such as import certificates or well-designed tariffs, that could restore balance without undermining prosperity.

Today, academic research provides a clearer understanding of the costs and consequences of acting on that vision. Furceri et al. (2019) provide comprehensive macroeconomic evidence: tariffs tend to lower GDP, harm productivity, increase unemployment and inequality, and have little impact on improving trade balances. Amiti et al. (2019) demonstrate, in the U.S. context, that tariffs in 2018 were almost entirely borne by domestic consumers and importers, resulting in billions of dollars in lost efficiency and rising prices. Their conclusion? Tariffs reshaped supply chains and reduced product variety, ultimately burdening American consumers.

Together, these insights remind us that tariffs are not moral judgments—they are instruments. When used bluntly or reactively, they carry real costs. But used surgically, as part of a broader policy framework, they can still serve a purpose.

As we confront record trade deficits and rising foreign ownership of American assets, we are left with essential questions:

• Are we prepared to prioritize long-term national resilience over short-term consumer convenience?

• Can we modernize trade policy without repeating past mistakes?

• If not tariffs, what levers are we willing to pull to protect our economic independence?

Buffett’s voice echoes still: action is required. But today, that action must be informed by data, guided by principle, and measured by impact, not ideology.

References:

Amiti, M., Redding, S. J., & Weinstein, D. E. (2019). The impact of the 2018 tariffs on prices and welfare. Journal of Economic Perspectives, 33(4), 187–210.

Buffett, W. E. (2003, November 10). America's growing trade deficit is selling the nation out from under us. Fortune.

Furceri, D., Hannan, S. A., Ostry, J. D., & Rose, A. K. (2018). Macroeconomic consequences of tariffs (No. w25402). National Bureau of Economic Research.

---

A BOOK FOR THE SAVER IN ALL OF US

Becoming a 401(k) Millionaire isn’t your typical retirement guide. With 30 years in finance, Dr. Peter Fisher shares personal insights and real stories to help you plan with confidence.

Learn more

---

Related Articles