EPISODE 122 – Social Security Pay Raise? The Gotchas You Need to Know

Social Security's 2026 Pay Raise: What You Gain—and What You Might Lose

As retirees gear up for a 2.8% Social Security increase in 2026, it’s tempting to view it as a long-overdue raise. But before you celebrate, it’s crucial to understand how much of that bump might get clawed back by taxes, rising Medicare premiums, and inflation.

In Episode 122 of The Last Paycheck Podcast, CFP® professionals Rob and Archie Hoxton pull back the curtain on how the Social Security COLA (Cost of Living Adjustment) is actually calculated—and why it’s not as intuitive as most people think. Unlike standard year-over-year inflation comparisons, the COLA is based on third-quarter changes in a very specific inflation measure: the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers).

This year’s COLA is 2.8%, translating to:

  • $56 more per month for the average individual
  • $88 more per month for the average couple

But here’s the catch: Medicare premiums are also rising.

The base Medicare Part B premium is expected to jump from about $185 to $206/month. That means as much as half—or more—of your “raise” could go straight toward healthcare costs. For higher-income retirees, the IRMAA surcharge can make premiums even steeper.

Then there’s the issue of tax thresholds. Social Security benefits are subject to taxation once your income exceeds $25,000 (single) or $32,000 (married). But those thresholds haven’t budged in years. As your benefits rise, so does your chance of triggering the “tax torpedo”—where 50% to 85% of your benefit becomes taxable income.

And for high earners still in the workforce, the FICA wage cap is rising to $184,500 in 2026. That means you’ll pay more in payroll taxes—while still receiving the same capped benefit later in life.

Take Control of What You Can

Despite these complexities, there’s good news: With smart planning, you can reduce the impact of taxes, Medicare premiums, and inflation on your retirement income.

Re-evaluate your Social Security claiming strategy
Consider income shifting or Roth conversions
Review your Medicare premium brackets
Update your retirement projections using realistic inflation rates

Want help understanding how these changes affect you?

Download the Social Security + Medicare Planning Audit

Use our free worksheet to estimate your real net benefit after taxes and Medicare deductions, and plan your next steps.
Download The Audit Now
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

EPISODE 121 – The Geography of Retirement: Why Your State Matters More Than You Think

When most people picture retirement, they imagine beach towns, warmer weather, or a slower pace of life. But there’s one factor that often gets overlooked—and it could drastically change your financial future: the tax implications of where you live.

In this episode of The Last Paycheck Podcast, CFP® professionals Rob and Archie Hoxton walk listeners through how your choice of state impacts your finances in retirement. From Social Security taxes to property levies, they make the case for why your zip code matters just as much as your income level.

The Tax Breakdown: Not All States Are Created Equal

There are 50 states—and 50 different tax structures. Some states (like Florida and Texas) have no income tax. Others (like California and New York) can significantly reduce your take-home income through higher income, property, or sales taxes.

Rob and Archie discuss:

  • Social Security taxation: Most states don’t tax it, but a few—including West Virginia (until 2026)—still do.
  • IRA and 401(k) withdrawals: Even if your federal taxes are consistent, state tax rules vary widely.
  • Property taxes: The difference between paying $700/year (Alabama) and $9,300/year (New Jersey) can blow a hole in your retirement plan.
  • Sales taxes: Some states trade low income taxes for higher consumption taxes. Be prepared.

Don’t Forget Estate and Inheritance Taxes

Twelve states still levy estate taxes—and six have inheritance taxes. If you live in Maryland, you’re hit with both. The federal exemption may not apply at the state level, so planning ahead is crucial if you’re hoping to preserve generational wealth.

Why Geography Isn’t Just About Lifestyle

Sure, you want to love where you live. But what if moving a few miles over the state line could save you thousands per year? The Hoxton’s highlight simple geographic tax-saving strategies, like:

  • Moving from Maryland to West Virginia
  • Swapping New Jersey for Pennsylvania
  • Buying in Delaware to avoid sales tax

These moves may sound small, but they can significantly reduce retirement expenses without requiring major sacrifices in lifestyle.

Your Financial Takeaway

Retirement planning isn’t just about how much you’ve saved—it’s also about where you spend it. By considering state taxes, property values, and cost of living, you can stretch your dollars further and avoid nasty surprises later on.

Download our Retirement Relocation Readiness Audit to assess whether your move is truly saving—or costing—you.

Thinking about relocating for retirement?

Make sure you’re not trading sunshine for higher taxes. Download our free Retirement Relocation Readiness Audit to compare costs and tax impacts before you move.
Download The Audit Now
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

EPISODE 120 – The Retirement Money You Forgot About – And How to Find It

What if you had $67,000 sitting in an old account and didn’t even know it?

In Episode 120 of The Last Paycheck Podcast, CFP® professionals Rob and Archie Hoxton sound the alarm on a shocking statistic: over 32 million 401(k) accounts are forgotten—totaling nearly $2 trillion in unclaimed retirement savings.

As more Americans change jobs—an average of 12 times over their careers—it’s increasingly easy to lose track of old retirement accounts. A new job, a move, a forgotten login, or awkward exit from a former employer can cause retirement savings to be misplaced or abandoned altogether.

Why 401(k)s Get Lost

  • You change jobs and forget about the old plan.
  • HR doesn’t communicate rollover steps clearly.
  • Your mailing address or email changes.
  • The employer switches plan custodians.
  • You mistakenly think you rolled everything over.

And because statements may have been mailed to your old address or sent to a now-defunct work email, it’s easy to miss the clues.

The High Cost of Forgetting

Leaving retirement accounts unmanaged can result in:

  • Poor investment returns (some old accounts default to low-interest cash funds).
  • Missed employer contributions due after your departure.
  • Outdated beneficiary designations—an ex-spouse or deceased parent could still be listed.
  • Higher management fees after you leave the employer.
  • Unclaimed checks mailed to the wrong address and never received.

In short, forgotten accounts can cost you significantly—both in dollars and in missed opportunity.

How to Reclaim Lost 401(k)s

Rob and Archie share several actionable steps:

  1. Make a list of all former employers. If they offered a 401(k), track it down.
  2. Search the DOL’s Retirement Savings Lost & Found
  3. Check state unclaimed property websites and com.
  4. Contact former HR departments, even if it’s awkward.
  5. Request recent account statements and update your beneficiary details.

What to Do Next

If you find an old 401(k), you have several options:

  • Roll it into your current employer’s plan for consolidation.
  • Roll it into an IRA for broader investment choices.
  • Leave it where it is, but only if you’re actively monitoring it.
  • Cash it out, though this is usually the least favorable due to taxes and penalties.

Rob and Archie emphasize: Don’t wait. Make recovering and consolidating your retirement funds part of your job transition checklist. The longer you delay, the higher the risk of forgetfulness, lost funds, or poor investment performance.

Need Help Finding Yours?

If you think you might have a forgotten retirement account—or simply want to ensure your retirement savings are properly managed—start with our Lost 401(k) Recovery Checklist and schedule a consultation today.

Download the checklist now:
Lost 401(k) Recovery Checklist

Think you’ve forgotten a 401(k)?

Don’t leave money on the table. Use our Lost 401(k) Recovery Checklist to track down every account and secure your financial future.
Download The Checklist Now
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

EPISODE 119 – Year-End Tax Planning Tips You Can’t Afford to Miss

As the final quarter of the year begins, it’s the perfect time to focus on one of the most powerful ways to influence your financial future—year-end tax planning.

In Episode 119 of The Last Paycheck Podcast, CFP® professionals Rob and Archie Hoxton outline key moves you can make before December 31 to potentially lower your tax bill, boost your retirement savings, and finish the year with confidence.

Why Timing Matters

Many tax-saving strategies have hard cutoffs on December 31—not April 15—making the fourth quarter your last chance to act. Starting now gives you time to collaborate with your advisor or CPA and make thoughtful decisions instead of scrambling at the last minute.

Retirement Moves to Consider

  • Required Minimum Distributions (RMDs): If you’re age 73 or older, you must take RMDs from retirement accounts like IRAs or 401(k)s. Delaying this can lead to steep penalties and higher taxable income.
  • Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can donate part or all of your RMD directly to charity—reducing your taxable income.
  • Roth Conversions: Converting funds from a traditional IRA to a Roth IRA can lock in today’s lower tax rates and grow your money tax-free in the future. This must be completed by December 31.

Make the Most of Contributions

  • You have until April 15 to contribute to IRAs, but contributing before year-end maximizes market exposure and simplifies record-keeping.
  • Over 50? Don’t forget catch-up contributions: $1,000 extra for IRAs and $7,500 for 401(k)s in 2025.

Capital Gains & Loss Harvesting

  • Review your investment performance and consider harvesting losses to offset gains or even regular income.
  • If you’re in the 0% long-term capital gains bracket, you may want to harvest gains tax-free while you can.
  • Own mutual funds? Be aware of year-end capital gain distributions—they could add to your tax bill even if you haven’t sold anything.

Smart Giving Strategies

  • Donor-Advised Funds (DAFs): Make a large donation this year, take the deduction, and distribute funds to charities over time.
  • Appreciated Securities: Donating these instead of cash avoids capital gains and provides a full deduction.
  • Annual Gift Exclusion: In 2025, you can gift up to $19,000 per recipient ($38,000 for couples using gift-splitting) without triggering gift tax filings.

Healthcare Planning

  • Flexible Spending Accounts (FSAs): Use it or lose it. Unused funds often expire at year-end.
  • Health Savings Accounts (HSAs): If you have a high-deductible health plan, max out your HSA for triple tax benefits.

Review Beneficiaries

Tax planning is also about protecting your legacy. Now is a great time to double-check that your beneficiaries are up to date across IRAs, 401(k)s, life insurance, and brokerage accounts.

Don’t Wait Until the Last Minute

Most of these strategies must be in place before December 31. Start planning now with your advisor or tax professional—and use our tools to get organized and avoid costly mistakes.

Want help wrapping up your year with confidence?

Use our free Tax Strategy Planning Calendar to stay organized—and then schedule a judgment-free meeting with a fiduciary advisor to put your plan into motion.
Download The Calendar
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 112 – Should You Trust Financial Rules of Thumb? Here’s What to Know

When it comes to managing your money, simple advice is appealing. Save 10%. Pay off all your debt. Take Social Security at 70. But are these “rules of thumb” really helping—or could they be steering you off course?

In Episode 112 of Last Paycheck, Archie and Rob Hoxton dive into the most common financial shortcuts and challenge their usefulness in real-world scenarios.

The Truth Behind 6 Common Rules of Thumb

Let’s walk through the popular rules discussed—and why they may or may not work for your situation.

1. Save 10% of Your Income

This is often the first bit of advice people hear when starting a new job. And for someone just getting started, it’s not bad. But for someone playing catch-up or approaching retirement? 10% likely won’t cut it. You may need 15% or more, especially if you didn’t start saving in your 20s.

Bottom line: A good starting point, but not a long-term strategy.

2. You’ll Need 80% of Your Income in Retirement

Rob and Archie caution that this rule may be outdated. Many retirees end up needing closer to 100%—especially in the early, active years of retirement filled with travel and new experiences. Later, healthcare costs often rise, adding more pressure to retirement budgets.

Bottom line: Don’t underestimate your lifestyle or medical expenses.

3. The 4% Withdrawal Rule

The 4% rule assumes you can withdraw 4% of your portfolio annually (adjusted for inflation) for 30 years without running out of money. But markets fluctuate. Emergencies happen. Needs change.

Bottom line: It’s a guide—not a guarantee. Your plan should adapt to your life.

4. Be Debt-Free Before Retirement

This one feels good—but may not always be the smartest financial move. If you have a 2% mortgage and your investments earn more, paying off that mortgage early could cost you in long-term growth. The key is balance.

Bottom line: Don’t sacrifice future wealth for short-term comfort.

5. Keep 3–6 Months in an Emergency Fund

Archie and Rob agree this is situational. A business owner with unpredictable income may need more than six months saved. A risk-tolerant investor with ample liquidity elsewhere might be fine with less.

Bottom line: Customize your emergency fund to your lifestyle and risks.

6. Delay Social Security Until 70

While waiting can increase your monthly benefit, it’s not always the best move. Health concerns, family longevity, and income needs all play a role. For some, claiming early might be a better fit—even if it’s not “optimal” on paper.

Bottom line: When to claim Social Security should be a personal decision, not a rule.

The Takeaway: Rules Are Just a Starting Point

Financial rules of thumb exist for a reason—they offer simplicity and can be helpful in the absence of a plan. But life isn’t one-size-fits-all, and neither is your money.

If you’ve been relying on quick shortcuts or conventional wisdom, now is the time to upgrade from “general advice” to a personalized plan that reflects your unique life, goals, and risks.

Want to stress-test your assumptions?

Download our Are You Relying on the Right Rules? Self-Audit Tool or schedule a call with Hoxton Planning & Management to start building a custom strategy that actually works for you.
Download The Audit Tool
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 111 – Tax Law Changes for 2025 – What Retirees and Charitable Givers Need to Know

If you’re nearing retirement, living on a fixed income, or focused on charitable giving, the 2025 tax law changes may affect you more than you realize. In Episode 111 of the Last Paycheck podcast, Archie Hoxton and advisor Emily Leslie explain what you need to know—and what to do now to prepare.

1. Overtime Deduction: A Win for Middle-Income Earners

If you’re working overtime to boost savings or pay off debt, there’s good news: from 2025 to 2028, up to $25,000 of overtime income will qualify for an above-the-line deduction. This benefit begins to phase out at $300,000 of household income (MFJ).

Action Step: If you expect to earn overtime in the coming years, adjust your tax planning to take advantage of this short-term window

2. The Senior Deduction: A Modest but Meaningful Break

While headlines claimed “No More Taxes on Social Security,” the reality is more nuanced. Instead of eliminating Social Security taxes, the new law introduces a $6,000 deduction for Americans age 65+ with income under $150,000 (MFJ). It’s available from 2025 to 2028 and doesn’t apply if you’ve already started benefits before age 65.

Who Benefits Most?

  • Retirees aged 65+ with modest income
  • Those delaying Social Security to full retirement age or beyond

3. Estate Tax Made (More) Predictable

For high-net-worth individuals and business owners, the estate tax threshold has been solidified. Now, individuals can pass on up to $15 million—and couples up to $30 million—without triggering estate tax liability. This change removes the previous uncertainty around sunset provisions.

If your estate is below that amount: No changes needed.
If it exceeds the threshold: Consider trusts, gifting strategies, or business succession plans.

4. SALT Deduction Expansion: Relief for High-Tax States

Taxpayers in states like New York, New Jersey, or California may benefit from the raised state and local tax (SALT) deduction cap—now $40,000 instead of $10,000. This provision begins phasing out at $500K income and reverts in 5 years.

Be cautious: Roth conversions or large IRA withdrawals could inadvertently push you over the $500K income limit, disqualifying you from the higher deduction.

5. Charitable Giving: More Options, More Rules

For donors, the new rules include:

  • Above-the-line deduction: Up to $2,000 for charitable gifts without itemizing
  • 0.5% AGI floor: You must give at least this amount before deductions kick in
  • $1,700 SGO credit: Donations to Scholarship Granting Organizations (SGOs) offer a dollar-for-dollar reduction in your tax bill

Pro Tip: Combining these strategies may reduce your taxable income while supporting causes you care about.

Final Thought

Tax laws are always changing—but the next few years offer unique planning opportunities. Whether you’re still working, recently retired, or managing a large estate, it’s important to understand how these changes affect your financial picture.

Want a quick way to review where you stand?

Download our free 2025 Tax Change Readiness Checklist to uncover what benefits you qualify for—and what steps you might want to take next. Schedule a free consultation to build a strategy that takes full advantage of the new law.
Download The Checklist
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 110 – What the “One Big Beautiful Bill” Means for Your Taxes (2025–2028)

The recently passed legislation known as the “One Big Beautiful Bill” is about to reshape the personal finance landscape—and in Episode 110 of Last Paycheck, advisors Archie Hoxton and Emily Leslie walk you through what matters most for everyday families, retirees, and business owners.

Here’s what you need to know—and how to prepare.

Making the Tax Cuts and Jobs Act Permanent

The biggest headline is the permanent extension of the 2017 Tax Cuts and Jobs Act. That means the doubled standard deduction and reduced tax brackets are here to stay. For most households, this helps avoid a major tax increase that was originally expected if the law expired.

However, the flip side is the continued loss of many itemized deductions, especially those in the miscellaneous category. If you were expecting a return to the old deduction system, that’s no longer on the table.

Boosts to the Child Tax Credit

Families will see a modest but helpful increase in the Child Tax Credit—from $2,000 to $2,200 per child, with $1,700 of that amount refundable. Households earning up to $400,000 (married filing jointly) remain eligible, but you must owe federal taxes to receive the refundable portion.

Big Win for Service Workers: Tip Income Deduction

One of the most surprising—and generous—changes is a new above-the-line deduction for tip income. Starting in 2025, eligible workers can deduct up to $25,000 of tip-based income from their taxable income. This is especially helpful for servers, bartenders, delivery drivers, and others who now earn tips through credit card transactions.

The IRS and Treasury will release additional guidance about which professions qualify, but the basic test appears to be “customary and voluntary” tipping.

Auto Loan Interest Becomes Deductible (With Conditions)

For vehicles assembled in the U.S., borrowers can deduct up to $10,000 in interest on auto loans. This deduction applies from 2025 to 2028 and begins phasing out above $200,000 in household income. Buyers will need to verify final assembly location, but for many Americans, this change will offer substantial tax savings on a necessary expense.

A New Tax-Advantaged Account for Babies: The Trump Account

A new savings vehicle—informally dubbed the “Trump Account”—will give newborns a $1,000 federal contribution if they’re born between 2025 and 2028. Parents can contribute $5,000 annually, and employers can add $2,500 per year.

But there are caveats:

  • Only U.S. stocks are allowed as investments
  • Withdrawals for education, first-time home buying, or small business use are allowed after age 18—but earnings will be taxed
  • Early withdrawals come with penalties

This account blends elements of a Roth IRA and 529 plan but comes with unique restrictions that families must consider carefully.

Final Thoughts

While the “One Big Beautiful Bill” offers tax relief and new savings tools, it also brings complexity and confusion. Many of the provisions are time-limited (2025–2028), and several will require additional IRS clarification.

If you’re a tip-based worker, expecting a child, considering a new vehicle, or simply trying to make sense of these changes—now is the time to act.

Evaluate your own risk comfort and investment goals.

Download our 2025 Tax Change Readiness Checklist to audit your situation—and schedule a free consultation to build a strategy that takes full advantage of the new law.
Download The Checklist
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 109 – How to Protect Your Portfolio Without Missing the Market

When markets rise, we celebrate. When they fall, panic sets in.

This emotional rollercoaster becomes especially intense once you retire and the paychecks stop. In Episode 109 of the Last Paycheck Podcast, CERTIFIED FINANCIAL PLANNER® professionals Archie and Rob Hoxton break down two options for reducing portfolio anxiety while staying invested: buffer ETFs and fixed indexed annuities.

The Problem: Fear of Loss vs. Need for Growth

Rob shares a common scenario—retirees threatening to cash out entirely when markets dip. The instinct is understandable, but the consequences can be costly. Cash and CDs often don’t outpace inflation, which means your retirement savings could lose purchasing power over time.

Most retirees still need growth—but also want stability. That’s where buffer ETFs and fixed indexed annuities come in.

What Are Buffer ETFs?

Buffer ETFs are exchange-traded funds that offer a unique tradeoff:

  • Upside capped (e.g., 15%)
  • Downside protection (e.g., first 10% loss absorbed)
  • One-year holding periods

These investments use options strategies to deliver a portion of market gains while softening some losses. They’re liquid like any ETF, but to benefit fully, you must hold for a full cycle.

Key Pros:

  • Limited downside exposure
  • Lower cost than annuities
  • Market-based structure

Key Cons:

  • Gain limits in strong years
  • Still some risk if market drops steeply
  • Reset annually—timing matters

What Are Fixed Indexed Annuities?

These are insurance products that link your returns to a market index (like the S&P 500) but protect you from losses entirely.

  • No market losses (your worst year = 0% return)
  • Capped growth (e.g., 12%)
  • Tax deferral on gains (non-IRA assets)

Archie and Rob stress that not all annuities are created equal. The best ones are low-cost, non-commissioned, and provide liquidity after a short lock-in period. But they can still have market value adjustments, limited upside, and tax consequences on withdrawal.

Key Pros:

  • Full downside protection
  • Growth potential
  • Tax-deferred (in non-qualified accounts)

Key Cons:

  • Complex structures
  • Income taxed as ordinary income
  • Limited liquidity depending on contract

Should You Use One of These Tools?

It depends on your retirement needs, timeline, and risk tolerance. If you’re the type to lose sleep during market drops—or already considering shifting everything to cash—these vehicles might offer a happy medium.

But they’re not one-size-fits-all. Rob and Archie recommend working with a fiduciary to evaluate whether these fit your broader plan.

Final Takeaway

Buffer ETFs and fixed indexed annuities are designed to offer peace of mind for cautious investors. They trade full market gains for some downside protection—and can help nervous retirees stay invested for the long haul.

But every financial decision comes with tradeoffs. Make sure you understand the mechanics, risks, and rewards before jumping in.

Evaluate your own risk comfort and investment goals.

Download the Market Participation Strategy Audit, then schedule a no-pressure consultation to get personalized advice on whether these tools are a good fit for your plan.
Download The Audit
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 108 – How to Take a Sabbatical Without Derailing Your Financial Plan

Have you ever dreamed of pressing pause on your career to travel, care for a loved one, learn something new, or simply catch your breath?

Sabbaticals—or extended career breaks—are becoming more common across professions. But they’re often under planned. Without a strategy, taking a sabbatical can lead to lost income, reduced retirement savings, gaps in health coverage, and financial stress.

In Episode 108 of Last Paycheck, CFP® professionals Rob and Archie Hoxton explore the logistics and consequences of taking a sabbatical, and how smart financial planning can turn your dream pause into a sustainable reality.

Why People Take Sabbaticals

Rob and Archie highlight a range of reasons:

  • Burnout or mental fatigue
  • Desire to explore personal growth or education
  • Career change or exploration
  • Family caregiving responsibilities
  • Mission trips or long-term travel

While these motivations are valid, the implications of stepping away from work—especially without a plan—can be far-reaching.

The #1 Rule: Know Your Timeframe

Before taking any financial action, estimate the length of your sabbatical. Is it three months? One year? Indefinite?

Your timeframe determines how much you’ll need in savings and how to structure your withdrawal plan. Without clarity, it’s easy to drain your emergency fund or disrupt long-term goals.

What You’ll Miss (and Need to Replace)

During a career pause, most people lose:

  • A steady paycheck
  • Employer-provided health insurance
  • Retirement contributions
  • Life and disability insurance
  • Social Security earnings quarters

Rob and Archie encourage listeners to think beyond just the paycheck. For example, if your employer pays $1,000/month toward your health plan, you’ll need to budget that amount separately—or risk going uninsured.

How a Sabbatical Affects Retirement

Even a short sabbatical can delay your retirement date or reduce your retirement income if you’re no longer contributing to savings. Gaps in your Social Security earnings record may also affect your benefit.

This is where financial modeling matters. As Rob explains, “You need to see your plan up on the big screen. What happens if you pause income, increase expenses, and stop saving for a year? Can your plan still hold up?”

A good financial planner can help stress-test your plan for these “what if” scenarios—before you make the leap.

Pretirement, Not Retirement

Archie introduces the idea of “pretirement”—where a sabbatical is a softer on-ramp to a new career or a different kind of work-life balance. It’s part of a broader movement toward flexible careers and personalized financial lives.

The key? Planning. Whether you negotiate a formal sabbatical or are forced into a pause by life circumstances, understanding the risks and planning for them makes all the difference.

Final Thought

Taking a sabbatical doesn’t have to be a financial setback. With preparation, it can be a powerful part of your personal and professional evolution.

Use the Sabbatical Readiness Planning Tool (linked below) to see where you stand and let a fiduciary advisor help you evaluate the impact before you hit pause.

Thinking about a sabbatical? Make sure your finances are ready.

Download Our Sabbatical Readiness Planning Tool
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 107 – Why Beneficiary Designations Matter More Than You Think

When you think about estate planning, your mind probably goes to wills, trusts, and powers of attorney. But there’s a silent hero of the estate planning world—beneficiary designations. They’re simple, often set-and-forget, but they can be one of the most powerful tools in your financial toolkit.

In Episode 107 of The Last Paycheck Podcast, Archie and Jimmy walk listeners through the role of beneficiaries, how they bypass probate, and why failing to update them can lead to major (and expensive) problems.

Probate: The Process You Want to Avoid

Probate is the legal process of settling an estate when someone dies. It can involve court time, attorney fees, asset inventorying, creditor notification, and a lot of stress. Worse yet, it’s a public process, meaning anyone can look up the details of your estate, your debts, and your heirs.

But here’s the good news: any asset that has a properly named beneficiary avoids probate entirely.

Where You Should Assign Beneficiaries

You might already have beneficiaries listed on your 401(k)—but what about these other accounts?

  • IRAs or Roth IRAs
  • Life insurance policies
  • Bank accounts (POD designations)
  • Brokerage accounts (TOD designations)
  • Real estate (with TOD deed in some states)
  • Annuities and pensions

When you name a beneficiary (or better yet, a primary and a contingent), that asset transfers directly to the person you’ve named upon your death—no courts, no delays.

The Common Mistakes People Make

  • Leaving old beneficiaries on old accounts: Think ex-spouses, estranged relatives, or outdated family dynamics.
  • Failing to update after life changes: A marriage, divorce, or new child should always trigger a review.
  • Not naming contingent beneficiaries: If your primary passes away before you do, the asset could still wind up in probate.

Archie and Jimmy have seen too many people unintentionally leave retirement assets to a former spouse simply because they forgot to update an old form.

Why Consolidation Helps

Fewer accounts means fewer places to update. Consolidating retirement accounts and investment assets not only simplifies your portfolio—it reduces the chance that one forgotten form causes major issues later. It also makes things easier for your heirs, who won’t have to chase down half a dozen institutions in a difficult time.

Final Advice

Beneficiary designations are not a replacement for a full estate plan, but they are one of the most important pieces. Even if you don’t have a will or trust yet, you can still do this now—and it can make a world of difference.

Take five minutes to check your accounts today. Future you (and your loved ones) will thank you.

Think your beneficiaries are up to date?

Download our Beneficiary Check-Up & Estate Prep Guide to review every account—and every name—so your wishes are carried out smoothly.
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Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.