Author: Vawn Himmelsbach

Many hard-working Americans dream of a retirement with no stress, no daily commute and no demanding boss. Life will surely be better with the freedom to do what you want, when you want… right?

Even if you have a decent nest egg of $1 million, there are potential downsides to retirement that you’ll want to consider before heading into your golden years. Here are three of them:

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1. The IRS doesn’t retire when you do

Most retirees believe their tax rate will drop substantially in retirement, but that’s not always the case. After all, if you aim to live off 80% of your current income and your retirement income is entirely taxable, you may end up paying close to what you did in your working years. Thankfully, there are ways to avoid this.

The key to paying less tax in retirement is to incorporate tax planning into your pre- and post-retirement planning. Unfortunately, most Americans don’t do this. A 2024 survey by Northwestern Mutual found that only 30% of Americans have a plan to minimize their taxes in retirement.

Prior to retiring, work with a financial advisor to invest in a mix of traditional and Roth 401(k)s and IRAs. The right mix will depend on your current and expected tax rates, among other factors.

Withdrawals from Roth accounts are generally tax-free in retirement. If you have a high deductible health plan (HDHP), consider contributing to a healthcare savings account (HSA), which will also have tax-advantaged withdrawals.

Also talk to an advisor about permanent life insurance policies such as universal, whole or variable life. These policies build a cash value that you may be able to borrow against to provide a source of tax-free income. Annuities are another insurance product that could be part of your tax planning.

Once retired, it’s important to have a clear, tax-conscious plan for when you’ll withdraw from your various accounts. Considerations include any employment income you’ll receive in your first year of retirement, when you decide to start collecting Social Security, which accounts have required minimum distributions, which income streams are tax advantaged and which are fully taxable.

Strategies that can be used once retired include making qualified charitable distributions (QCDs) or investing in a qualified longevity annuity contract (QLAC).

With multiple sources of income and different tax treatments, some retirees find their taxes are more complex to calculate than they were during their working years.

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2. Your health may not be what you hoped

Many of us have a vision of an active retirement — spending our days playing golf, gardening, volunteering or traveling.

However, most of us will experience declines in cardiovascular health, muscle mass, bone density and cognition as we age. About 44% of people 65 and older report having a disability and about one-third of those 85+ have some form of dementia.

Deteriorating health might force us to rethink how we’ll spend our retirement days, but it could also influence how we spend some of our retirement dollars. In all, a 65-year-old may need $165,000 in after-tax savings to cover healthcare expenses — and as you age these costs will make up an increasing portion of your total expenses.

Between ages 55 and 64, healthcare costs will make up about 7% of your expenses, but this rises to 12% between ages 65 and 74 and 16% when you’re 75 or older.

A person turning 65 today has about a 70% chance of needing long-term care during their remaining years and about 20% will require care for more than five years. The costs for this can range from an annual national median cost of $26,000 for adult day care to a median of $75,504 for homemaker services — and a whopping $127,750 per year for a private room in a nursing home.

Preparing for these costs starts before you retire and may even influence when you retire. For instance, if you retire before you qualify for Medicare, you’ll need to plan for bridging the gap in healthcare coverage. A financial planner can help you estimate your expected medical costs, including premiums for Medicare and other insurance and out-of-pocket expenses. Incorporate these costs into your planning and saving.

3. You might find retirement boring

A 2019 survey of British retirees found that the “average retiree grows bored after just one year.” This is partially why 20% of retirees surveyed by T. Rowe Price in 2022 were working either full- or part-time and another 7% were looking for work. While almost half (48%) of respondents were working for financial reasons, almost as many (43%) were working “for social and emotional benefits.”

It turns out that for some people retirement can be boring and lonely. It’s a big adjustment to move from the purpose, structure and social interaction that comes with working every day. Like much else around retirement, this can be eased with some prior planning.

Before retiring, take time to think about what’s important to you and how you could incorporate this into your golden years.

For example, that might mean working part-time in a similar field or volunteering for a cause you believe in, or maybe even going back to school and studying something you’re passionate about.

It may take some trial and error, but retiring well involves more than just planning your finances — it involves planning your new life.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Have you ever been strapped for cash? Perhaps you took a payday loan, sold a long-term asset or even made an early withdrawal from your 401(k). And chances are, you’ve later regretted it.

This is the situation the City of Chicago finds itself in — and the cost may have been billions.

Privatizing public infrastructure is a growing trend among cash-strapped cities that need fast revenue. Back during the 2008 financial crisis, Chicago was broke and needed to raise money. Rather than make the unpopular move of raising property taxes, then-mayor Richard M. Daley chose to privatize public assets.

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“If we didn’t have money for a long-term debt, you’re talking about a serious economic crisis then for Chicago,” Daley said at the time, according to NBC 5 Chicago.

So, Chicago City Council struck a deal to lease the city’s 36,000 parking meters to investment consortium Chicago Parking Meters LLC, a group of global investors led by Morgan Stanley.

The investors paid nearly $1.157 billion to receive the revenue from the meters for 75 years — and the city must reimburse them whenever the parking meters are taken offline, such as for festivals or construction.

A lesson in ‘worst practices’

The deal was essentially rubber-stamped 40-5 in favor by the council, which had only a few days to review it before voting — turning out to be what the Better Government Association later called “a lesson in ‘worst practices.’”

Soon after, a report issued by the then-inspector general found the city was paid at least $974 million less than it could have made from operating the parking meters itself over the term of the deal. While an analysis done by 32nd Ward Alderperson Scott Waguespack — who voted against the deal — found the deal could have been worth $5 to $10 billion, reported NBC 5.

Now, a 2024 audit by accounting firm KPMG has found that, with another 58 years still left in the agreement, the private investors have already recouped their initial investment. In 2023, the meters generated a record $160.9 billion in income, bringing the total income from the start of the deal to $1.97 billion.

“It’s just one of those deals that I would beg people never to replicate anywhere in the United States,” Waguespack told NBC 5.

Still, many Americans can relate to the situation that faced Mayor Daley. When we’re desperate for funds, we can make rash decisions that negatively affect our long-term financial health.

Almost 4 in 10 (37%) U.S. adults would not be able to cover a $400 emergency expense with cash savings, according to the Economic Well-Being of US Households in 2024 report from the Federal Reserve Board of Governors. And while many of these people say they could cover the expense some other way, such as using a credit card, borrowing from family or friends or selling something, 13% would not be able to pay the expense by any means.

About 58% of Americans are “living paycheck to paycheck and experienced a cash emergency in the past 12 months,” according to The 2025 Cash Poor Report from peer-to-peer lending platform SoLo Funds.

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Be careful how you raise funds

These “cash-poor” Americans may not be who you think they are. Forty percent have a full-time job and one in seven cash-poor households earn more than $75,000 per year. The top unexpected expenses, according to the report, are auto repairs, medical bills and utility bills — common expenses that can happen to any of us.

To cover these expenses, some may turn to short-term financing options that could end up costing them more money in the long term. For instance, buy now pay later (BNPL) services come with an average borrowing cost of 23%, according to The 2025 Cash Poor Report, which can increase substantially if the borrower incurs repeat late fees.

Another option is a payday loan, which is one of the most expensive ways to borrow. The industry average cost of borrowing for payday loans is 35%, according to the report, but origination fees, late fees and processing fees can push this as high as 49% of the principal borrowed. Increased borrowing and missed payments can also affect your credit score, which in turn can limit your future ability to borrow.

People might also look to sell long-term assets such as stocks, bonds or mutual funds, but this too can have long-term financial costs. If you’re 30 years from retirement and sell $10,000 of an asset today that’s earning 7% per year, then you’ll have about $76,000 less when you retire due to the loss in compounding interest.

Plus, research has shown that time out of the stock market can be costly — and missing the best days in the market can be devastating to your long-term returns. And, if you make an early withdrawal from a tax-deferred account such as a 401(k), you’ll also pay a 10% tax penalty.

To avoid high-cost borrowing in an emergency or cashing out long-term investments during a downturn, start by building an emergency fund that could cover unexpected expenses. A rule of thumb is to have three to six months’ income in an accessible account, such as a high-yield savings account.

While desperate times may call for desperate measures, it’s worth consulting with a financial advisor (or a free counseling service) to discuss your options before getting saddled with debt or selling long-term assets.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

A 25% tariff on Canadian imports has left Montana farmers in limbo and worried about their livelihoods, given Canada is Montana’s largest trading partner.

“Many of our farmers, their closest supplier or their closest buyer is from Canada,” Walter Schweitzer, president of Montana Farmers Union (MFU), told NBC Montana.

“And they’ve been receiving letters telling them they don’t know if they’re going to be able to honor their contracts this year because of the tariffs.”

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Now Schweitzer’s union is taking legal action and supporting a proposed bill — The Trade Review Act of 2025 — that it hopes will offer some tariff relief.

‘Decades to rebuild’

According to the U.S.Census Bureau, Montana exports more goods to Canada ($869 million annually) than its next seven largest foreign markets.

Of those, 39% are agricultural such as live cattle, dried legumes and barley.

Meanwhile, Montana imports $6.8 billion in goods from Canada each year. In 2023, it imported $411 million in agricultural products, including canola oil, dried legumes, mustard seeds and wheat.

“Farmers and ranchers have invested decades in developing reliable markets for our products,” Schweitzer said in a statement. “Overnight, these random tariffs have destroyed markets that will take decades to rebuild.”

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While his union supports “strategic” tariffs, Schweitzer said President Donald Trump’s tariffs don’t fall in this category. He said billions of dollars are at stake for Montana’s farmers and ranchers; crop prices are already falling.

The MFU is joining members of the Blackfeet Tribe in asking a U.S. District Court judge for a court injunction to stop the implementation of tariffs on Canada.

It is also supporting a bipartisan bill currently before the House Ways and Means Committee: The Trade Review Act of 2025,

The Northern Ag Network says the bill aims to “bring stability and accountability to U.S. trade policy by reestablishing limits on the president’s ability to unilaterally impose tariffs without the approval of Congress.”

How the Trade Review Act could help

If passed, the Act would require President Donald Trump to notify Congress within 48 hours of imposing or increasing a duty on imported goods. It would also require an analysis of the economic impact of any such action.

Schweitzer said the authority to impose tariffs should reside with Congress “because it provides a forum for public debate and input and ensures the benefit outweighs the harm.”

Any new tariffs would expire after 60 days (unless the tariffs passed a joint resolution of approval) and Congress could terminate tariffs at any time (through a joint resolution of disapproval).

The Act could provide a way to review — and potentially overturn — tariffs that negatively impact agricultural exports. It could also create a possible pathway for legislative pushback, resulting in smarter, more strategic tariffs (or none at all).

By requiring congressional approval, it could reduce the volatility that farmers are currently experiencing with on-again, off-again tariffs. Stability is key for farmers, since they make long-term production decisions based on trade outlooks.

And, it could help to preserve export markets and possibly prevent retaliatory tariffs from trading partners. While Canada is Montana’s largest trading partner, Montana also trades with China, Mexico and several European nations, all subject to tariffs.

The executive branch has “overstepped its constitutional and statutory authority on these tariffs,” MFU’s Schweitzer said in the statement. “Montana farmers and ranchers can’t afford any more uncertainty or any more financial stressors — especially not random tariffs.”

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Jamie, 28, recently married her long-time boyfriend, Ben. They’ve always been careful with their money as a couple, sticking to a monthly budget and saving 15% of their salaries. They even opted for a small, simple wedding rather than racking up debt.

Jamie and Ben rented a small one-bedroom apartment when they moved in together five years ago. It made sense at the time. They were just starting out in their careers and liked to have some extra money for dining out and entertainment.

Now they’re thinking of starting a family and are not so keen on renting.

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Jamie has always wanted to own her own home and she doesn’t want to raise kids in a rental apartment.

But since current home prices and mortgage rates make it a “lousy” market for people looking for starter homes, Jamie’s wondering if it makes more sense to invest in the S&P 500 and save as much as possible while continuing to rent.

To rent or to buy?

U.S. home prices were up 1.3% in April compared to the same time last year, according to Redfin, selling for a median price of $438,108.

Mortgage rates remain relatively high, still below the 7% threshold, but averaging 6.83% in May, according to Freddie Mac.

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These factors may help explain why demand — often understood through existing home sales — “remains exceptionally low,” according to J.P. Morgan’s home price outlook for 2025,

“The U.S. housing market is likely to remain largely frozen through 2025,” J.P. Morgan Research reports. “Some growth is still expected, but at a very subdued pace of 3% or less.”

That leaves many potential homebuyers wondering when — or if — there’s going to be a good time to buy a new home.

Over the next two years, home prices may drop as housing supply grows, and mortgage rates could fall with Treasury yields, according to Morgan Stanley strategists.

But as the investment bank notes, that doesn’t necessarily mean “a return to the pre-pandemic era of more affordable mortgages and home prices.”

Meanwhile, 2025 has so far been a renter’s market, with rents falling as the supply of rental units grows. That’s thanks in part to the appearance of new units on the market as projects that started in the early days of the pandemic are completed.

However Realtor.com notes that this effect could be short-lived, as lower rent disincentivizes developers from building rental buildings. That could lead to a rental housing pinch.

And lower rent doesn’t mean “low”. Rents are still 14.4% higher than they were five years ago, according to Realtor.com.

Weighing the pros and cons

Both stocks and home equity can provide a path to wealth. Historically the stock market has provided a 10% average annual return, while the housing market has seen smaller gains.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which tracks residential real estate prices, shows a 3.4% annual return for March 2025.

There’s also a third option that combines both: real estate investment trusts (REITs), which allow you to invest in real estate like stocks.

But returns are not the only consideration. Stocks provide greater liquidity than real estate, yet the market can be volatile.

Here are some of the pros and cons of both home ownership and investing in the stock market that Jamie and Ben should consider.

Buying a home now

PROS. If Jamie and Ben buy a home now, they can start building equity immediately. If they wait to buy, housing prices and/or mortgage prices could come down, but there’s no guarantee.

Real estate comes with a number of benefits, such as property appreciation, tax advantages and the potential to bring in rental income.

Some people like the stability of owning their own home. If you rent and your landlord decides to sell, then you have to vacate your home and find another rental property.

CONS. Buying a home comes with both high initial costs (such as a down payment and closing fees) and ongoing expenses — from property taxes to utilities and unexpected repairs. These may add up to more than the cost of Jamie and Ben’s current rent.

Renting and investing in the S&P 500

PROS. If Jamie and Ben continue to rent and instead invest extra money in the S&P 500, they could see higher returns over time than with real estate.

They could put money they earn toward a large down payment for a home in the future. But the couple will need to be disciplined enough to actually invest that extra money and avoid lifestyle creep (where your spending increases as your income increases).

Renting gives them freedom and flexibility. If they want to move to another city or country, they won’t have to deal with the hassle of selling a property, and they’re not tied to a mortgage and property taxes.

CONS. The current state of stock market volatility could mean they have to delay homeownership even longer.

BOTTOM LINE. It’s a highly personal decision and there’s no ‘right’ answer. For Jamie and Ben, wanting to raise kids in a home they own may outweigh the desire to wait out the housing market.

They may want to discuss the matter with their financial advisor, as well as a mortgage broker and/or real estate agent.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Losing your life savings can be devastating, especially when you’re close to retirement. But for one Albuquerque resident, Judy Hartmann-Ortiz, it’s all the more painful because she was scammed out of the money.

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The 67-year-old has worked as a server at various restaurants for decades. She doesn’t have a lot of extra money, but over time she managed to save $32,000 for retirement. Then in March, she fell victim to a phishing scam — and now that hard-earned money is gone.

“They put the fear of God in me immediately, and I didn’t have time to think,” she told Albuquerque TV station KOB 4. Now she “can’t remake that money to retire.”

A Gofundme to help her rebuild her savings has raised over $13,700 out of a $35,000 goal.

"For over 40 years, Judy has been a familiar face amongst Nob Hill Restaurants (Yannie’s, Central Bodega & Mission Winery), serving her community with a warm smile, a kind heart, and an unwavering work ethic," it says. "The devastating loss has left her struggling to make ends meet, and despite her strength, this is a burden that no one should have to carry alone."

How phishing scams work

In 2024, phishing or spoofing scams were the most common type of cybercrime reported to the Federal Bureau of Investigation’s (FBI’s) Internet Crime Complaint Center (IC3). More than 193,000 Americans were the targets of these scams, losing a total of more than $70 million.

Phishing or spoofing scams trick you into giving away sensitive data, such as passwords or account information, sometimes through a fake, or spoofed, website. Scammers could also trick you into withdrawing your money and depositing it into a bitcoin account.

For Hartmann-Ortiz, the scam started with a text message she thought was from Apple, saying someone had used her account to make an unauthorized purchase. The text message also provided her with a number to call.

When she called, she was told her bank account had been compromised and her savings were at risk. There were no immediate red flags to alert Hartmann-Ortiz that it was a scam — she wasn’t asked for her bank account information or Social Security number.

But the person on the other end of the line told her that to protect her money, she needed to withdraw it all and put it in a newly created bitcoin account. Worried that she was about to lose her life savings, she did as she was told.

Still, something didn’t sit right with Hartmann-Ortiz. After speaking with her boss about what had happened, she realized she’d been scammed.

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“They get you so fast. I called that number and from then on it was pretty much over,” Hartmann-Ortiz told KOB 4. Afterwards, “you feel so ashamed and so stupid.”

According to the news report, her advice to others is to trust their gut — if something seems off, it probably is. She also told the news station she wishes she had called a friend first instead of panicking and calling the scammers.

The police, FBI and her bank have said there isn’t much they can do to get her money back.

What to do if it happens to you

The Federal Trade Commission (FTC) provides a helpful guide on what to do if you’ve been scammed.

By immediately reporting the crime to your financial institution, it may be possible to cancel or reverse the transaction. If you sent cash by U.S. mail, you can contact the U.S. Postal Inspection Service and ask them to intercept the package. If you paid the scammer with gift cards, contact the company that issued them, inform them of the scam and ask them to refund your money.

Unfortunately, in the case of Hartmann-Ortiz, she withdrew her money herself and sent it to a cryptocurrency wallet she doesn’t control, which makes getting the money back almost impossible.

If the scammer has your personal information, you also want to take steps to protect yourself from identity theft.

To avoid phishing scams, never click on links or open attachments in suspicious emails or texts — and never call the number provided in those emails or texts.

If the text is from your "bank," look up your bank’s phone number or go to a branch in-person to validate whether the message is real or not. Try not to give into panic — that’s what scammers are betting on.

Among the red flags the FBI says to look out for are email addresses disguised to look legitimate, errors in punctuation or grammar and requests for personal information such as passwords or bank account numbers.

Typically, scammers use a sense of urgency to induce panic and manipulate their victims into making irrational decisions. They often ask for payment in cryptocurrency or sometimes gift cards.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

With cuts to Social Security staffing and programs, rumors of privatization and an impending funding shortfall, it’s no wonder some Americans are worried about the program’s future.

Nearly one in three adults age 60 or older now doubt their retirement benefit will be there when they need it, according to a new poll from the Associated Press-NORC Center for Public Affairs Research conducted in April. That’s a jump from 2023, when only one in five older Americans felt the same.

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How you feel, though, may depend on your politics.

A partisan divide

That doubt is particularly strong among older Democrats. About half say they’re “not very” or “not at all” confident that Social Security will be there for them. Just a year ago, only one in 10 felt that way. At the time, Democratic President Joe Biden was in the White House.

Older Republicans, on the other hand, are feeling more secure. Six in 10 say they’re “extremely” or “very” confident in the program — up from just one-quarter in 2023

Younger adults show less confidence overall. About half of Americans under 30 say they don’t trust that Social Security will be there when they retire, regardless of political affiliation. But that view hasn’t shifted much since last year.

As of 2025, nearly 69 million Americans will receive a Social Security benefit each month.

Under the Department of Government Efficiency — or DOGE — launched during Donald Trump’s presidency, until recently, led by billionaire Elon Musk, the Social Security Administration was targeted for major restructuring. That included the elimination of 7,000 jobs, the downsizing or closure of field offices and a proposed cut to national phone services — a move that has since been reversed.

At the same time, the SSA is under pressure to act. Without policy changes, it won’t be able to pay full retirement benefits by 2035, according to the 2024 Social Security and Medicare trustees report. If nothing changes, recipients will only receive about 83% of their benefits.

“If anything happens to Social Security, it would really impact me,” Timothy Black, a 52-year-old Democrat from San Diego, told ClickOnDetroit. Black, who receives Social Security Disability Insurance to help manage a chronic illness, says he’s concerned about both his retirement and disability payments.

“If SSDI doesn’t keep up with the cost of living, my medical expenses are only going to grow and I could end up homeless,” he said.

Republican voter, Linda Seck, a 78-year-old retiree from Saline Township, Michigan, told ClickOnDetroit she’s confident the program will last.

“When I was in college, financial planners were telling us not to depend on Social Security,” she said. “But here we are more than 50 years later and it’s still going.”

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How to shore up your retirement savings

Fifty years ago, financial planners may have warned people like Seck not to count on Social Security — and they may have had a point. The program was never intended to be the only source of retirement income. Instead, it was designed to complement personal savings, investments and, when available, pensions.

Whether you’re worried Social Security or not, it still makes sense to take a well-rounded approach to retirement planning. Just like you wouldn’t put all your money into a single stock, you shouldn’t rely on Social Security alone.

Maximize your contributions to retirement accounts: If you have access to a 401(k), try to contribute as much as possible — especially if your employer offers a match. You can also open an individual retirement account (IRA).

A traditional IRA lets you contribute pre-tax dollars and pay taxes when you withdraw in retirement. A Roth IR A uses after-tax dollars but allows tax-free withdrawals after age 59 ½. In both cases, your money grows tax-free. If you’re 50 or older, you can make catch-up contributions too.

Diversify your investments: Don’t get too focused on one type of asset. A mix of stocks, bonds, real estate and other investments can help reduce risk — though no strategy is guaranteed. Ideally, you’ll want investments that don’t all move in the same direction, so a loss in one area might be balanced by gains in another.

Get creative: If you’re still concerned you won’t have enough to retire comfortably, consider picking up a side gig or part-time work. But if you’re collecting Social Security before full retirement age, there’s an earnings limit to keep in mind. In 2025, that limit is $23,400.

You could also explore passive income streams, like renting out a basement apartment or getting a roommate. There are plenty of ways to boost your retirement savings, so no matter what happens — or doesn’t happen — with Social Security, you’ll be better prepared for the years ahead.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

U.S. stocks had been outperforming the rest of the world for years — until a slew of tariffs and trade policies spooked investors and caused global markets to plunge in March.

Now, some foreign investors are rethinking their exposure to U.S. markets. That’s according to economic expert Rebecca Patterson, who previously served as Bridgewater’s chief investment strategist, on an episode of CNBC’s Fast Money.

After speaking with participants at the World Bank Group and International Monetary Fund meetings in Washington, D.C. last month, she found that foreign investors are losing faith in the U.S. and fear the weaponization of capital markets.

“There are a large number of foreign investors who are worried not only about tariffs, but just about America’s reliability as a partner,” Patterson told CNBC.

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The impacts of a ‘slow bleed’

As of last June, foreigners held $31 trillion of U.S. assets, according to the most recent U.S. Treasury data.

Now, foreign investors are looking at the “huge U.S. allocation that has built up over the last several years,” Patterson told CNBC. And they’re thinking maybe they should “have a little bit less, just trim off the tops,” like having a “risk premium on U.S. assets because we have so much uncertainty.”

But the impacts of trimming off the tops could be profound.

“Pretend you’re the chief investment officer of a major overseas pension fund or sovereign wealth fund. I’m going to take 2% off my U.S. stocks, 2% off my U.S. bonds, a 4% shift,” she said. “That’s $1.2 trillion that is going to be leaving the U.S. now.”

However, she said this won’t happen overnight, since investment companies “take months” to make these types of decisions. What will happen instead is “a slow bleed of support out of the U.S. markets,” which she says will go back to home markets or to new opportunities.

But it seems this slow bleed is already happening, with global investors dumping U.S. stocks at a record pace, according to BofA Global Research.

“Respondents to BofA’s monthly survey of fund managers were a net 36% underweight U.S. equities, the most in nearly two years, a number that has plunged by 53 percentage points since February, the biggest such fall on their records,” reported Reuters.

The survey also found that 73% of respondents believe U.S. exceptionalism has peaked and 61% expect the U.S. dollar to depreciate over the next 12 months.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

How can you shore up your finances?

If foreign investors lose confidence in the U.S., it could lead to a capital flight as they withdraw their investments, which could in turn lead to a depreciation in the value of the U.S. dollar. A lower dollar could increase the cost of imports — already under enormous pressure from Trump’s tariffs — which could fuel inflation.

Unease among foreign investors could also discourage new foreign investment in the country, impacting job growth. And hesitation to lend to the U.S. could also lead to higher interest rates and borrowing costs.

If you’re an American concerned about market volatility, it could be a good time to take stock of your financial situation to help weather any potential storms.

For example, you could lock in fixed-rate debts, which can protect you from higher rates in the future. It can also provide predictability in your budget, especially if you’re worried about your ability to handle variable payments.

It’s also a good time to build an emergency fund (if you don’t already have one) and aggressively pay down your high-interest debt, such as loans and credit cards. You may also want to consider fixed-income investments such as short-term bonds or Treasury Inflation-Protected Securities (TIPS).

Short-term bonds include mutual funds and exchange-traded funds (ETFs) with maturities of less than five years. They’re considered low risk and highly liquid, making them ideal for saving for short-term goals.

TIPS, on the other hand, are designed to protect against inflation by reflecting changes in the Consumer Price Index (CPI) and come with the U.S. government’s assurance that investors will never receive less than the original value of the bond at maturity.

While it’s generally advisable to avoid making rash, fear-based decisions with your investments, you may want to sit down with your financial advisor to make sure your portfolio is well diversified — and that might mean adopting a more global portfolio.

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Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

For almost a decade, Joe has worked for the county, pulling in an enviable salary of more than $100K a year. Not only does he have job security, but he also gets generous vacation time, health insurance and a pension.

His friends and family think he’s got it made. But every morning, Joe dreads going to work. He doesn’t get along with his overbearing manager, and the work environment has turned toxic. On top of that, he’s bored. The job is repetitive, and there’s no room to grow within the department.

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To get his full pension, Joe still has 30 years of work ahead of him. He can’t imagine staying in a job he hates for three more decades — but he also wonders if the money and benefits are too good to walk away from.

Joe isn’t alone. Worker engagement hit an 11-year low in early 2024, with only 30% of full- and part-time American employees saying they felt highly engaged at work, according to Gallup’s long-running workplace poll.

So why do they stay? One reason is golden handcuffs — benefits or incentives that make it financially attractive to stick around. That includes pensions, bonuses, stock options and even company cars. Often, you have to stay with an employer for a certain period before you’re eligible for those benefits, which can make some employees feel trapped, especially when they’re already unhappy.

Here are a few tips to help you financially plan an exit from a high-paying but soul-draining job.

Work out your monthly survival number

Start by calculating your bare-bones budget — the minimum you need to cover essential expenses like housing, utilities, bills, insurance, transportation, healthcare and groceries. Don’t forget minimum debt payments and regular savings, such as contributions to retirement.

Once you add it all up, you’ll have your survival number — the amount you need to earn to meet basic living expenses. That number could help Joe figure out whether a low-paying but more fulfilling job could support his lifestyle.

Audit your spending

With your survival number in hand, you can take a hard look at your current spending. That means combing through your bank and credit card statements, digital transactions and savings activity.

Where can you cut back?

Maybe it’s canceling subscriptions or limiting takeout. Or maybe you need to delay a bigger purchase like a new car or home renovation.

If your housing costs are eating up more than 30% of your gross monthly income — the standard threshold for affordability — could you downsize or take on a roommate? It might make sense to make those changes before leaving the job you hate.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

Run pension and benefit scenarios

Use free online pension calculators to estimate what you might receive based on your current salary, years of service and retirement age. Try running scenarios: What would your pension look like if you stayed another five, 10, 20 or 30 years?

Many county pension plans allow you to collect a pension even if you leave before retirement age, provided you’ve met the service requirements. Some plans let you transfer your benefits to a new employer’s plan or withdraw your contributions in a lump sum.

You can run these numbers yourself or work with a financial advisor to explore what would happen if you invested those funds on your own. You might find that managing your own retirement plan could leave you just as well off.

Every pension plan is different, so talk to your pension plan administrator before making any big moves.

Build an exit strategy and a quit fund

Even if you’re ready to leave, it’s smart to develop an exit strategy. Give yourself time to build a quit fund and line up your next opportunity.

Start networking, reach out to recruiters and apply to jobs. Depending on your qualifications and industry, it could take a while to find the right fit — but laying the groundwork now makes the transition easier.

Leaving a new job lined up can be challenging, so aim to build a quit fund that covers 6 to 12 months of living expenses. Keep it separate from retirement savings and in a highly liquid account — like a high-yield savings account — in case you need it.

Joe could also look into whether his skills are transferable to another county department or whether upskilling could help him move up. That way, he might be able to escape his toxic manager and find more fulfilling work — without giving up benefits and pension.

What to read next

• JPMorgan sees gold soaring to $6,000/ounce — use this 1 simple IRA trick to lock in those potential shiny gains (before it’s too late)
• This is how American car dealers use the ‘4-square method’ to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs
• Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?

Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.