“What should I invest in?”

They want the best stock.
The best fund.
The best return.

But here’s the truth:

Early in your investing life, your returns matter far less than you think.

The Real Driver of Early Wealth

When you’re just getting started, your portfolio is small.

Which means: Even great investment returns don’t move the needle much.

Let’s look at a simple example:

Investor A (Early Stage)

• Portfolio: $25,000

• Annual contribution: $15,000

• 5% return = $1,250

Growth Impact:

• Contribution impact: $15,000

• Return impact: $1,250

Read that again.

You added 12x more through saving than you earned through investing.

What Actually Matters Early

In the early years, your biggest financial advantage isn’t your portfolio.

It’s your ability to save.

That’s what drives progress.

Not picking the perfect investment.
Not timing the market.
Not chasing returns.

Just consistently putting money to work.

When the Game Changes

Fast forward.

Investor B (Later Stage)

• Portfolio: $1,000,000

• Annual contribution: $15,000

• 5% return = $50,000

Growth Impact

• Contribution impact: $15,000

• Return impact: $50,000

Now the script flips and your money is doing more work than you are.

The Shift Most People Miss

There are really two phases to building wealth:

Early vs. Later: What Actually Drives Wealth

What This Means for You

If you’re early in your career:

• Focus on increasing your savings rate

• Take advantage of employer matches

• Automate contributions

• Don’t overcomplicate your investments

If you’re further along:

• Asset allocation matters more

• Risk management becomes critical

• Small changes in return can have a big impact

The best investment decision early on isn’t picking the perfect stock. It’s building the habit of saving consistently.

Final Thought

Wealth isn’t built by chasing returns.

It’s built by:

Saving consistently → investing wisely → letting compounding take over

In that order.

If you get the first part right, the rest becomes a lot easier.

• manage a paycheck

• build good financial habits

• avoid debt traps

• make smart spending decisions

• invest for their future

That gap gets expensive—fast.

Most people learn these lessons the hard way, usually after mistakes that are completely avoidable.

If I had to simplify it, there are 4 books that can give a teenager a real financial foundation early on and before costly mistakes are made.

Step 1: Learn How Money Works

Book 1: How to Money

This is the closest thing to a real-life money playbook for a teenager.

It covers:

• budgeting

• saving

• credit

• investing basics

• taxes

No jargon. No fluff. Just what you need to know before you make expensive mistakes.

👉 If they only read one book on money, make it this one.

Book 2: The Psychology of Money

This one doesn’t teach formulas—it teaches how to think about money.

Short, story-driven chapters explain:

• why smart people still make bad financial decisions

• how emotions impact investing

• why consistency beats intelligence

👉 This is the mindset that sticks for life.

Step 2: Learn How to Invest

Book 3: The Motley Fool Investment Guide for Teens

This is where things become real.

It walks through:

• what a stock actually is

• how to evaluate companies

• how to build a simple portfolio

👉 Investing explained like a normal person—not a textbook.

Book 4: The Little Book of Common Sense Investing

If there’s one investing lesson that matters most, it’s this:

You don’t need to beat the market. You just need to own it.

This book teaches:

• why most investors underperform

• why low-cost index funds win over time

• why patience is your biggest advantage

👉 This is the strategy that actually works.

What Most People Get Wrong

Parents often think: “My kid should learn about investing early.”

That’s true—but incomplete. Before investing, they need to learn:

• how to manage money

• how to avoid debt traps

• how to think long-term

Because without that foundation…

👉 Even good investments won’t save bad habits.

If You Keep It Simple

If a student reads just these four books, they’ll be ahead of most adults.

• One teaches how money works

• One teaches how to think

• One teaches how to invest

• One teaches what actually works

That combination is powerful.

Final Thought

Most people don’t fall behind financially because they lack intelligence.

They fall behind because no one ever taught them the basics early enough.

These books fix that, and start early building the foundation for your children (or grandchildren).

“The market is about to crash.”

That may be the most costly sentence in personal finance.

A 28-year-old skips contributing to their 401(k) for three years because their parents are convinced a crash is coming.

They wait.
They try to time it.
They sit in cash.

The crash never comes.

By the time they begin investing again, they’ve missed:

• 3 years of market returns

• 3 years of a 5% employer match

• 3 years of compounding

Estimated cost by their late 30s: $40,000–$55,000.

And left invested until age 65?

That decision could compound into six figures.

Not because they were reckless.

Because they listened to someone they trusted.

What Three Missed Years Can Really Cost

Imagine investing $500 per month from age 28 to 31, then simply leaving it alone to grow.

That money could potentially turn into six figures by retirement.

That’s the hidden cost of trying to wait for a “better” entry point.

The Real Risk Isn’t Volatility

As a financial planner, I see this more than you’d think.

Smart people.
Successful people.
Paralyzed by fear of what might happen next.

No one rings a bell at the bottom.
No one consistently times the top.

And the biggest long-term risk often isn’t market volatility.

It’s sitting out.

Your Greatest Asset When You’re Young

When you’re 28, your greatest asset isn’t your income.

It’s time.

Time is what turns small, boring, consistent contributions into financial independence.

Miss a few early years, and you don’t just lose returns, you lose the multiplier effect of compounding. That echo can last decades.

Wealth Is Built by Process, Not Prediction

This is why financial planning isn’t about predictions. It’s about:

• Process over panic

• Discipline over drama

• Strategy over headlines

Because the people who build real wealth usually aren’t the ones who guess right.

They’re the ones who stay invested long enough for the math to work.

A Word to Young Investors — And Their Parents

If you’re young and reading this:

Don’t let fear steal your most valuable investing advantage — time.

And if you’re a parent:

Be careful giving certainty about things no one can predict.

Well-meaning advice can be expensive, and sometimes disastrously so.

Confidence can sound convincing.
But disciplined decisions build wealth.

It’s not.

In reality, it has three different access points and most people only know one.

Before we discuss, here is some context.

What Is a Roth IRA?

A Roth IRA is one of the most powerful accounts in the tax code.

You contribute after-tax dollars, it grows tax-free, and qualified withdrawals are completely tax-free.

No future tax bill. No surprises.

And yet, most people misunderstand how flexible it actually is.

Here’s what most people miss:

Millions of Americans have a Roth IRA but many don’t fully use it.

One big reason?

They think the money is locked away until 59½.

That’s only partially true.

👇 Here’s the part most people don’t understand, there are 3 Layers to the Roth IRA:

The Real Rules: 3 Layers of Money

Think of your Roth IRA like a three-layer system.

Each layer has its own rules.

And when you take money out, the IRS forces withdrawals in a specific order—starting with the most accessible.

Layer 1 — Contributions (Most Accessible)

This is the money you put in.

Because you already paid taxes on it, you can withdraw it anytime—no taxes, no penalties, no waiting.

Whether you’re 25 or 55, your contributions are always yours.

Layer 2 — Conversions (Middle Ground)

This is money moved from a Traditional IRA or 401(k) into a Roth.

You pay taxes upfront—then it grows tax-free.

Each conversion has its own 5-year clock before it can be accessed penalty-free.

This is where strategy comes in.

Many investors build a “Roth Conversion Ladder”—unlocking funds over time so they’re available when needed.

Example:

• Convert $50,000 in 2024 → accessible in 2029

• Convert $60,000 in 2025 → accessible in 2030

• Convert $70,000 in 2026 → accessible in 2031

Layer 3 — Earnings (Most Valuable)

This is the growth and where the real power of a Roth lives.

To access it tax-free, you must be 59½ and have held the account for at least 5 years.

Wait long enough, and this could mean hundreds of thousands of dollars… completely tax-free.

Why This Matters

The IRS forces withdrawals in this order:

1. Contributions (always accessible)

2. Conversions (after 5 years)

3. Earnings (last—and most restricted)

That’s a big advantage.

It means early withdrawals typically come from the most flexible dollars first—without touching long-term growth.

The Bottom Line

Don’t let “59½” stop you from using one of the most powerful accounts available.

A Roth IRA isn’t just a retirement account.

It’s a flexibility tool. A tax strategy. A long-term wealth engine.

Used correctly, it can help fund early retirement, smooth income gaps, and create tax-free wealth for decades.

The key is simple: Understand the layers and plan around them.

Final Thought

Everyone’s situation is different.

In many cases, it still makes sense to let Roth assets grow as long as possible.

But the right strategy depends on your full financial picture.

If you’re unsure how this fits into your plan, that’s where thoughtful guidance matters.

They’re about not getting the big things wrong.

Because the truth is: A few smart decisions early can do more for your future than decades of trying to “catch up.”

Here’s what actually matters:

1. Know where your money is going

Not to restrict your life—but to control it.

Most people don’t have a spending problem.
They have an awareness problem.

Start simple:

• What’s coming in

• What’s going out

• What’s left to save

Clarity here is what creates confidence everywhere else.

2. Build a cushion before you need it

Life doesn’t send warnings.

Car repairs. Job changes. Medical bills.

An emergency fund isn’t about optimizing returns.
It’s about buying yourself options when life gets unpredictable.

A good target:
3–6 months of essential expenses

3. Capture the “free money” first

If your company offers a 401(k) match, take it.

That’s not investing.
That’s a guaranteed return.

And more importantly:
It builds the habit of paying your future self first.

4. Use credit carefully—or not at all

Credit cards aren’t bad.

But they amplify behavior.

Used well → they build your financial reputation
Used poorly → they quietly create long-term stress

If you use them:

• Pay in full

• Stay disciplined

• Keep it simple

5. Eliminate high-interest debt aggressively

A 20% interest rate isn’t just expensive.
It’s wealth destruction.

Paying that off is one of the few guaranteed wins in personal finance.

No market risk.
No uncertainty.
Just progress.

6. Take advantage of tax-efficient accounts

If available, tools like retirement accounts and HSAs can quietly become some of your most powerful assets.

Not because they’re exciting—
but because they let your money compound more efficiently over time.

7. Invest in your ability to earn

This is the one most people underestimate.

Your income in your 20s isn’t fixed.
It’s scalable.

Skills. Experience. Relationships.

A higher income doesn’t just improve your lifestyle—
it makes everything else on this list easier.

The bottom line

Financial success in your 20s isn’t about perfection.

It’s about building a foundation:

• Good habits

• Smart systems

• Fewer costly mistakes

Because the earlier you get this right,
the less you have to rely on luck later.

If you’re in your 20s (or have kids who are), this is where the real leverage is.

Rates have more than doubled.
Affordability has worsened.
And yet… prices haven’t fallen the way many expected.

Why?

Because the housing market didn’t break. It locked.

This chart tells the entire story:

• Blue line (Sub-3%) → Homeowners who locked in ultra-low rates during 2020–2021

• Orange line (6%+) → Buyers dealing with today’s higher rates

Look at the shift:

• Sub-3% mortgages surged from ~3% to ~25%

• 6%+ mortgages dropped sharply… then came roaring back

Today, we have a market split in two.

The “Golden Handcuffs” Effect

If you have a 2.75% mortgage… why would you ever give that up?

Selling your home today likely means:

• Taking on a 6–7% mortgage

• A much higher monthly payment

• Less house for the same budget

So what do people do? They stay.

Why Inventory Is So Low

This is the key dynamic:

• Millions of homeowners are locked into ultra-low rates

• They have no incentive to sell

• New listings stay limited

Even as demand cools… supply stays even tighter.

That’s why prices haven’t dropped the way many expected

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Why the Market Feels Frozen

We now have two different realities:

• Existing homeowners → sitting on historically cheap debt

• New buyers → facing today’s rates

Meanwhile:

• Refinancing has dried up

• Fewer people are moving

• Transactions are down

Higher rates didn’t crash housing. They slowed it down.

What Happens Next?

Even if rates fall:

• A homeowner at 3% isn’t rushing into 5–6%

• The lock-in effect doesn’t disappear quickly

• Supply likely stays constrained

This isn’t temporary. It’s structural.

If You Want to Go Deeper

We’ve been building this theme over time:

The Bottom Line

The housing market isn’t broken.

It’s stuck between two worlds:

• Yesterday’s ultra-low rates

• Today’s higher-rate reality

And until that gap closes… don’t expect a “normal” housing market anytime soon.

Because the difference is bigger than you’d expect.

In 2026, top state income tax rates range from 0% to 13.3% depending on where you live. That’s not a small gap.

So why such a big difference?

Because every state runs its own tax system.

• Some states like Texas and Florida have no income tax

• Others states like California and New York rely more heavily on income taxes to fund spending

There’s no right or wrong approach.

Just trade-offs.

What this actually means

First, this is a marginal tax rate, not what you pay on all your income.

It only applies to your highest dollars earned.

But even with that in mind…

For high earners, business owners, and retirees taking withdrawals:

Where you live can meaningfully impact your after-tax income.

Why this matters for planning

This isn’t about chasing the lowest tax state.

It’s about understanding how taxes fit into your overall plan:

• Retirement income strategy

• Business sales or liquidity events

• Stock compensation (RSUs, options)

• Estate and legacy planning

Because at a certain level…

Taxes become one of the biggest expenses you’ll ever manage.

The bottom line

You don’t need to move to a no-tax state.

But you should understand how your location impacts your financial plan.

And make decisions with intention, not assumptions.

If you’re thinking about a move or just want to understand how taxes impact your situation, Sandbox is here to help you think it through.

Source: Visual Capitalist — Top Marginal Income Tax Rates by State (2026)

They influence:

• How you invest

• When you sell

• How you structure income

• And ultimately… how much wealth you keep

Yet most people are making decisions based on a few half-truths.

Let’s clear up the ones I see most often.

1. Not All Your Income Is Taxed the Same

One of the biggest misconceptions:

“I don’t want to earn more because I’ll move into a higher tax bracket.”

That’s NOT how it works.

The U.S. tax system is marginal, meaning:

• Your first dollars are taxed at lower rates

• Only the income above certain thresholds gets taxed at higher rates

So earning more money doesn’t “push all your income” into a higher rate.

It just means the next dollar is taxed differently.

👉 Example:

If you move into a 24% bracket, only the income above that threshold is taxed at 24% — not everything you earn.

More income means more take-home.

2. The System Is Designed to Be Progressive

As income increases, taxes increase gradually, not all at once.

You don’t fall off a cliff into a worse outcome.

You climb a staircase.

👉 Example:

If you earn $100,000, your income is taxed in layers:

• First portion at 10%

• Next at 12%

• Next at 22%

• Next at 24% and so on

Only the income within each layer gets taxed at that rate.

Think of it like stacking blocks—not flipping a switch.

3. Time Changes How Investments Are Taxed

Not all investment gains are treated equally.

• Short-term gains (≤ 1 year) → taxed like ordinary income

• Long-term gains (> 1 year) → taxed at lower, preferential rates

And for higher earners, there’s also the 3.8% Net Investment Income Tax (NIIT) layered on top.

👉 Example:

Sell a stock after 11 months → taxed at your income rate (could be 30%+).
Sell that same stock after 13 months → potentially taxed closer to 15–20%.

Same investment. Different outcome.

Patience isn’t just a virtue—it’s a tax strategy.

4. Deductions and Credits Are Not the Same

This one trips people up all the time.

• A deduction reduces your taxable income

• A credit reduces your tax bill directly

👉 Example:

A $10,000 deduction might save you ~$2,400 if you’re in a 24% bracket.
A $10,000 credit saves you the full $10,000.

Big difference.

5. The Best Tax Move Isn’t Always the Lowest Tax Today

This is where real planning happens.

Many strategies that reduce taxes today can increase total taxes over your lifetime.

👉 Example:

Two people earn $150,000:

• One uses pre-tax accounts to save on taxes today

• The other uses Roth accounts and pays taxes now

Years later, if tax rates are higher or their income increases, the Roth investor may come out ahead long-term.

Good planning doesn’t ask: “What saves me the most this year?”

It asks: “What minimizes taxes over the next 10, 20, 30 years?”

6. Tax Savings Shouldn’t Drive Every Decision

I see this constantly—especially with business owners.

A decision gets justified with:
“But it’s a write-off.”

👉 Example:

Buy an $80,000 vehicle.
Save ~$25,000 in taxes.

You’re still down $55,000.

The tax benefit helped—but it didn’t make it a good decision.

7. Most People Don’t Actually Benefit From Itemizing

Because of today’s standard deduction, many people don’t receive additional tax benefits from:

• Mortgage interest

• Charitable giving

• State and local taxes

👉 Example:

If your deductions total $27,000 but the standard deduction is ~$29,000…

You take the standard deduction and those expenses did NOT reduce your taxes further.

The Bottom Line

Taxes matter. A lot.

For high earners and high net worth families, they’re one of the most controllable levers in a financial plan.

But here’s the key: Tax strategy should support your life, not dictate it.

The best plans don’t just minimize taxes this year.

They create clarity, flexibility, and confidence over decades.

If you’re making big decisions around income, investments, or business structure, it’s worth stepping back and looking at the full picture.

Because when it comes to taxes:

Short-term thinking is expensive.
Long-term planning is where the real value lives.

If this quarter has made you uneasy, you’re not alone.

When your portfolio drops while everyday costs stay high and headlines get louder, it’s easy to feel like something is wrong.

Maybe this time might be different? It’s not.

But it does feel that way in the moment.

What’s Actually Happening

This quarter hasn’t just been about markets going down.

It’s been about uncertainty showing up in multiple areas at once.

• Stocks are falling

• Headlines are changing quickly

• And the cost of everyday life is still elevated

You’re seeing it in small but noticeable ways.

Gas prices have pushed back above $4 in some areas, and higher interest rates are still impacting borrowing costs—from mortgages to credit cards.

Individually, these may not seem overwhelming. But together, they start to weigh on confidence. At the same time:

• AI stocks that were leading are pulling back

• Big tech leadership is starting to fade

• Interest rate expectations are shifting again

• Geopolitical risk is back in focus

That combination creates something more powerful than a market decline:

Uncertainty.

And uncertainty is what makes this feel harder than the numbers alone suggest.

What Investors Tend to Forget in Moments Like This

Markets don’t go up in a straight line. They never have.

Since 1950, the market has experienced dozens of pullbacks, corrections, and even major declines along the way.

Look at that again.

• Small drops (5–10%) happen all the time

• Larger declines (20%+) happen more often than people expect

• Even sharp drops are part of long-term investing

And yet…

Every time it happens, it feels like something is different.

Like this time might be the one that doesn’t recover.

It isn’t.

Over the past 70+ years, the market has finished positive in most years, even though declines happened along the way.

That’s why reacting to short-term drops can be so costly.

You’re often making decisions in the middle of the story… not at the end.

Why This Feels Worse Than It Is

Because investing isn’t just numbers. It’s emotions.

Look closely at that chart.

The hardest moments aren’t always when the market is at its lowest.

They’re when emotions take over:

• Feeling overly confident when things are going well

• Wanting to give up when things feel at their worst

And the biggest opportunities?

They often show up when things feel the most uncomfortable.

What Successful Investors Do Differently

They don’t avoid market drops.

They plan for them.

During periods like this, the most successful investors tend to:

• Stay invested

• Rebalance instead of react

• Add consistently—not emotionally

• Focus on long-term goals, not short-term headlines

Because they understand something most people don’t:

The market doesn’t reward panic. It rewards discipline.

What To Do Right Now

If you’re feeling uneasy, that’s normal.

But before making any decisions, ask yourself:

• Has my long-term plan changed?

• Has my time horizon changed?

• Has my need for this money changed?

If the answer is no…

Then your strategy likely shouldn’t change either.

Stepping Back Even Further

It’s easy to focus on what’s happening right now.

But zooming out even more tells a different story.

Every point on that chart represents a moment that felt uncertain at the time:

• Recessions

• Wars

• Financial crises

• Global events that dominated headlines

And yet, the long-term direction has remained the same.

Up.

Not in a straight line.

Not without setbacks.

But forward.

Final Thought

Market drops aren’t a flaw. They’re part of how long-term growth happens.

The investors who succeed aren’t the ones who avoid them.

They’re the ones who understand them and stay the course through them.

Because in moments like this, clarity matters most.

In closing, if you have questions, concerns, or just want to talk through your plan—we’re here. Send us an email or text, call us or contact us here.

It sounds simple. But most people don’t really understand why it works or what comes with it.

These three charts explain everything.

1. Time Is Your Biggest Advantage

The data is clear:

• Short-term returns are unpredictable

• Long-term returns are meaningfully higher

Since 1950:

• 1 year ≈ ~9%

• 5 years ≈ ~50%

• 10 years ≈ ~116%

• 20 years ≈ ~300%+

The longer you stay invested, the better the outcome has been.

Not because the market is easy—
but because time smooths out the noise.

Simple takeaway:
Short-term = random
Long-term = growth

2. Time Improves Your Odds

Now it gets even more powerful.

Your probability of success increases with time:

• 1 day: ~50% (a coin flip)

• 1 year: ~74%

• 5 years: ~84%

• 10 years: ~93%

• 20 years: 100%

Every 20-year period since 1950 has been positive.

That’s not luck. That’s math.

Simple takeaway:
Time doesn’t just grow returns, it increases your chances of winning.

3. The Catch: Volatility Is the Price

Here’s the part most people don’t expect.

The longer you invest, the more likely you are to experience a major decline:

• 1 year: ~31% chance of a 20% drop

• 5 years: ~78%

• 10 years: ~95%

• 15+ years: ~100%

Long-term investing improves outcomes but guarantees volatility.

Both are true.

Putting It All Together

• Time improves returns

• Time improves odds

• Time increases exposure to volatility

You don’t get one without the others.

This is the deal every investor signs whether they realize it or not.

The Mistake Most Investors Make

They want:

• Long-term returns

• Without short-term pain

That doesn’t exist. So when volatility shows up, they:

• Panic

• Pull back

• Or abandon the plan

And that’s where results break down.

The Investors Who Win

They think differently.

They don’t try to avoid volatility.

They expect it.
They plan for it.
They stay invested through it.

Because they understand that volatility isn’t the risk, behavior is.

Bottom Line

If you want better outcomes:

• Think longer

• Stay disciplined

• Accept the ride

Time in the market works but only if you can stick with it.

If you want help building a plan you can actually stick to, especially when markets get uncomfortable, Sandbox is here to help.

If you receive Restricted Stock Units (RSUs) from your employer, you might be sitting on a powerful but often underutilized opportunity.

Instead of letting those shares sit in a single stock, you can use them to build something far more valuable: tax-free retirement growth.

The Strategy at a Glance

Here’s the game plan:

• RSUs vest → you’re taxed on the value

• Sell the shares right away → turn concentrated stock into cash

• Use the cash to make after-tax contributions to your 401(k) (if your plan allows)

• Convert that money into a Roth account

• Let it grow tax-free for life

Simple. Smart. Effective.

What Are RSUs?

Restricted Stock Units (RSU) are a form of compensation. When they vest, their value is taxed as ordinary income, whether you sell the shares or not.

After that, they’re just like any other investment.

And for most people, it’s a very concentrated one, tied to the same company that pays their salary.

Why Sell Them?

Holding company stock after it vests can provide upside growth or become a concentrated risky asset.

What if the stock drops 20% next quarter? Or 50%?

Note: We have seen these declines in many technology and software stocks over the past 6 months, with many historic examples of companies that have gone out of business and seen their stocks go to zero.

By selling at the vest date, you:

• Lock in the value you’ve earned

• Reduce risk from a single stock

• Create cash to use more strategically

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Enter the Mega Backdoor Roth

Most people know about Roth IRAs but income limits prevent high earners from contributing directly. That’s where the Mega Backdoor Roth comes in.

Some 401(k) plans allow you to:

• Make after-tax contributions beyond your normal limits

• Then convert that money into a Roth account

This allows you to move significantly more money into a Roth than traditional limits allow. But not all 401(k) plans offer this.

Step-by-Step Flow

1. RSUs Vest

2. Sell Immediately → Cash in Hand

3. Contribute After-Tax to 401(k)

4. Convert to Roth account

5. Growth becomes Tax-Free

A Few Important Notes

• Not all 401(k) plans allow this strategy. Check with your plan administrator.

• RSU sales may trigger capital gains if you wait too long after vesting.

Final Thought

You worked hard for those RSUs.

Don’t let them sit in one stock or get lost in a tax-heavy strategy unless that’s part of your financial plan.

With the right approach, you can turn that compensation into a long-term, tax-free asset.

That’s the difference between just getting paid… and making your money work smarter.

The Mega Backdoor Roth is one of the most powerful strategies available to high earners and using your RSUs to fuel it is a smart financial planning strategy.

Sandbox is available to review this strategy and how it fits into your financial plan—we’re here to help you move forward with clarity and confidence. Contact us to start the conversation.

And for many retirees, it’s the one cost that quietly disrupts an otherwise well-built plan. According to recent research from Fidelity:

That’s not a worst-case scenario.
That’s the average.

Where the Money Actually Goes

What surprises most people isn’t just the total, it’s the composition.

Nearly half of healthcare costs in retirement come from general medical expenses like co-pays, coinsurance, and deductibles.

Another large portion? Medicare premiums.

And then there are prescription drug costs, which can vary widely depending on health and coverage.

But here’s what that number doesn’t include:

• Long-term care

• Most dental and vision expenses

• Unexpected or catastrophic health events

Which means the real number for many families is… higher.

The Real Risk Isn’t Just the Cost

It’s the timing.

Healthcare costs don’t show up evenly.

They tend to:

• Spike later in life

• Coincide with reduced flexibility

• Hit when portfolios are more vulnerable to withdrawals

This creates a dangerous combination: higher expenses + less time to recover.

Where Most Plans Fall Short

As a financial planner, I see this all the time:

People build thoughtful retirement plans around:

• Income

• Lifestyle

• Travel

• Legacy

But healthcare?

It’s often treated as a line item and not a risk.

And that’s where plans begin to crack.

How to Plan for It (The Right Way)

This isn’t about guessing the exact number.

It’s about building a plan that can absorb the uncertainty.

Here’s how we think about it:

1. Stress Test the Plan

Run scenarios that assume:

• Higher-than-average healthcare costs

• Earlier or more frequent withdrawals

• Inflation specifically tied to healthcare (not just CPI)

2. Use the Right Buckets

Not all dollars should be treated the same.

• Tax-free accounts (Roth) → ideal for unexpected or large healthcare costs

• HSAs (if available) → triple tax advantage, purpose-built for this

• Taxable accounts → flexibility for ongoing expenses

3. Plan for Long-Term Care

Long-term care insurance isn’t right for everyone.

But the conversation should start early.

This is something we begin discussing with clients in their 50s, when there are still options, flexibility, and time to plan intentionally.

Because by the time many people start looking into long-term care…

• It’s too late

• It’s too expensive

• Or it’s no longer available

You don’t have to buy a policy. But you do need a plan.

Whether that means:

• Self-funding

• Hybrid policies

• Or earmarking specific assets

The key is making the decision early and on your terms.

Ignoring it is still a decision, just not a good one.

4. Protect the Downside

Healthcare costs become most dangerous during:

• Market downturns

• Early retirement years (sequence risk)

This is where portfolio structure matters:

• Cash buffers

• Income layering

• Diversification beyond just stocks

5. Revisit the Plan Regularly

Healthcare is not static.

Costs, coverage, and personal health evolve.

Your plan should too.

The Bottom Line

Retirement isn’t just about having enough.

It’s about protecting what you’ve built from the risks that are hardest to predict.

Healthcare is one of them.

And for many families, it’s the difference between:

• A plan that works on paper

• And a plan that works in real life

If you’re not sure how healthcare fits into your retirement plan, it’s worth a conversation.

Because the goal isn’t just to retire.

It’s to stay retired, comfortably and confidently.

At Sandbox, we help you do exactly that, so you can live more and worry less.

Every 60 years, the Chinese zodiac brings back the Fire Horse.

The last one was 1966.
The next one is 2026.

Now, I don’t invest based on zodiac cycles.

But history doesn’t repeat, it rhymes.

And when you step back and compare the environment of 1966 to what we’re seeing today, the parallels are worth paying attention to.

What Is a “Fire Horse”?

In the Chinese zodiac, animals rotate through five elements — wood, fire, earth, metal, and water — creating a 60-year cycle.

The Horse represents:

• Energy

• Speed

• Independence

• Momentum

Add Fire, and it amplifies everything:

• Intensity

• Risk-taking

• Rapid change

• Leadership

• Volatility

Fire Horse years are traditionally described as bold, disruptive, and fast-moving.

Whether you believe in astrology or not, it’s an interesting metaphor for moments in history when things begin to accelerate and shift.

1966: A Turning Point

1966 didn’t bring a catastrophic crash.

It brought something more subtle and ultimately more important.

It marked the end of an easy market regime.

The S&P 500 peaked in early 1966 and dropped nearly 20%. But the bigger story came afterward.

From the late 1960s into the early 1980s:

• Markets largely moved sideways

• Inflation accelerated

• Valuations compressed

• Real (after-inflation) returns were weak

• Volatility increased

The environment changed.

And investors who were used to easy returns suddenly faced a much more complicated market.

2026: A Familiar Set of Pressures

Now look at the environment today.

Several structural forces look surprisingly similar.

1️⃣ Market Concentration

Recent market gains have been driven heavily by a small group of mega-cap companies.

We saw something similar in the late 1960s with the “Nifty Fifty” — a handful of dominant companies that investors believed could only go up.

History shows concentration can work… until it doesn’t.

2️⃣ Inflation Isn’t Fully Gone

After a decade of ultra-low inflation, the post-2020 period reminded everyone that inflation can return quickly.

Even now, economists expect inflation to remain above the Federal Reserve’s 2% target for some time, especially as geopolitical tensions affect energy prices.

3️⃣ Energy Shocks Are Back in the Conversation

Recent geopolitical tensions in the Middle East have pushed oil prices sharply higher and reignited fears of supply disruptions through the Strait of Hormuz — a key route for global energy markets.

Energy shocks like these have historically been one of the fastest ways inflation reenters the global economy.

It’s one reason markets become more volatile when geopolitical risks rise.

4️⃣ Technological Acceleration

1966 had the space race and industrial expansion.

2026 has AI, data centers, and massive technology investment cycles driving economic growth and market leadership.

Both periods feel transformational.

And transformational periods often create both opportunity and instability.

Then vs. Now: Nifty Fifty vs. Magnificent 7

One of the most interesting parallels between the late 1960s and today is market concentration.

In the late 1960s and early 1970s, investors believed a group of companies known as the “Nifty Fifty” were untouchable.

These included names like:

• IBM

• Coca-Cola

• McDonald’s

• Xerox

• Polaroid

They were considered “one-decision stocks.” Buy them. Hold them forever.

Sound familiar?

Today, we have the Magnificent 7:

• Apple

• Microsoft

• Nvidia

• Amazon

• Alphabet

• Meta

• Tesla

These companies are extraordinary businesses.

But history reminds us of something important:

Even great companies can become over-owned when optimism peaks.

And when leadership becomes too concentrated, markets can become fragile.

The Real Lesson

This isn’t about predicting doom.

It’s about recognizing regime shifts.

1966 wasn’t the start of disaster.

It was the start of a different investing environment, one where:

• Inflation mattered again

• Valuations mattered again

• Volatility increased

• Diversification became more important

In other words, the rules changed.

The Sandbox Lens

If the Fire Horse symbolizes acceleration and intensity, then maybe the lesson for investors is simple:

Markets don’t move in straight lines forever.

Sometimes they shift.

From:

• Easy returns → more selective opportunities

• Narrow leadership → broader rotations

• Momentum → discipline

The question isn’t whether 2026 will repeat 1966.

The real question is: If the environment changes, are you positioned for resilience or just momentum?

History doesn’t repeat. But it does rhyme.

And disciplined investors are the ones who survive these regime changes.

To review your personal financial plan or discuss any financial items in more detail, please reply to this email or contact us here to schedule a meeting.

First and foremost, this is a human tragedy. Our thoughts are with those impacted.

Markets will react. They always do.

But here’s the important context in three charts for a quick minute overview.

1-Year Forward Returns After Major Geopolitical Events

Short-term volatility? Yes.
Long-term damage? Rarely.

Historically, the S&P 500 index has averaged +14% one year after major geopolitical events.

Short-Term vs. 12-Month Returns

1-month returns are mixed.
12-month returns are positive most of the time.

Markets price in fear quickly and move forward before headlines improve.

Markets and Wars Since 1927

World War II.
Vietnam.
9/11.
Iraq.
Ukraine.

Through it all, markets have continued higher over time.

What We’re Watching Now

• Energy prices

• Inflation implications

• Global supply chain risk

• Policy responses

Expect volatility. That’s normal.

Reacting emotionally rarely rewards long-term investors.

At Sandbox, our job isn’t to predict the next headline. It’s to help you stay disciplined when headlines feel overwhelming.

If you want to talk through positioning, we’re here.

Live more. Worry less.

For many retirees, Social Security feels straightforward. Pick an age, file the paperwork, and the checks begin. In reality, it’s one of the most permanent and financially meaningful decisions you will ever make in retirement.

Once you claim, most of the decision is locked in for life. The age you choose can affect your monthly income, your spouse’s future benefits, your tax picture, and how resilient your retirement plan is over decades.

Let’s walk through how claiming at 62, 67, or 70 actually works, what the math says, and how real retirees think about the trade-offs.

The Basics: What Changes at 62, 67, and 70

Before strategy, you need clarity.

Claiming at 62 (Early Retirement Age)

• Earliest age you can claim

• Monthly benefit permanently reduced

• Roughly 25–30% lower than your full retirement benefit

• Lower checks for life, including survivor benefits for a spouse

Claiming at 67 (Full Retirement Age for most retirees today)

• You receive 100% of your earned benefit

• No early filing penalty

• Often treated as the “neutral” or baseline option

Claiming at 70 (Maximum Benefit Age)

• Benefits increase by about 8% per year after full retirement age

• Roughly 24–32% higher monthly income than claiming at 67

• Highest lifetime and survivor benefit, but fewer total years of payments

On paper, this looks like a math problem.

In practice, it’s a planning problem.

Why the “Best” Age Is Different for Everyone

There is no universally optimal claiming age. The right choice depends on how Social Security fits into the rest of your financial life.

Key variables include:

• Life expectancy and family health history

• Marital status and spousal benefits

• Other income sources, like pensions, rental income, or portfolios

• Tax brackets before and after claiming

• Need for cash flow versus desire for higher guaranteed income later

Social Security is a whole lot more than a check; it’s an inflation-adjusted, government-backed income. That makes it one of the safest assets in your retirement plan.

Anonymous Story #1: Claiming Early for Flexibility

One of our clients, David (name changed), retired at 62 after a long career in sales. He was healthy, but burned out. His portfolio was solid, and his mortgage was paid off.

David knew claiming early meant a lower monthly benefit forever. He also knew he valued flexibility more than maximizing future income.

By claiming at 62, David:

• Reduced withdrawals from his investment portfolio early in retirement

• Used Social Security as a “bridge” while markets were volatile

• Preserved optionality to delay tapping other assets

For David, the psychological benefit of steady income during the early years of retirement outweighed the higher checks he would have received later.

This was not a math-only decision.

For him, it was a lifestyle decision.

Anonymous Story #2: Delaying to Protect a Spouse

One of our couples, Susan and Mark (names changed), were both 66. Susan had earned much more over her career. Mark planned to rely on a spousal benefit.

They initially assumed they would both claim at full retirement age. After running projections, they changed course.

Susan delayed claiming until 70.

Why?

• Her higher benefit would become Mark’s survivor benefit if she passed first

• The increased monthly income reduced longevity risk for the household

• Their investment portfolio could support the delay without stress

Delaying raised Susan’s check AND strengthened the entire retirement plan.

The Breakeven Question (And Why It Is Incomplete)

You will hear about breakeven age, the point where total lifetime benefits are equal whether you claim early or late. This framing is useful, but incomplete.

That’s because a breakeven analysis:

• Ignores sequence of returns risk

• Ignores taxes

• Ignores spousal and survivor benefits

• Ignores the emotional value of guaranteed income

A higher Social Security benefit later in life can reduce pressure on retirement savings and investment portfolios during market downturns. That risk management value is hard to capture in a simple spreadsheet.

Taxes Matter More Than Most People Expect

Social Security benefits can be taxable depending on your total income.

Claiming age affects:

• Provisional income calculations

• Roth conversion opportunities before claiming

• Required minimum distributions later in retirement

In many cases, the smartest Social Security decision is coordinated with tax planning years in advance. This is where one-size-fits-all advice breaks down.

How to Think About the Decision

Instead of asking, “What age pays the most?”

Ask:

• What role does Social Security play in my retirement income?

• Do I need income now, or resilience later?

• How does this decision affect my spouse?

• How does this interact with taxes and withdrawals?

Social Security is a benefit, yes, but it’s really a foundational income asset.

Final Thought

Claiming Social Security is one of the few retirement decisions you cannot easily undo.

The right answer is not about perfection. It is about alignment with your goals, risks, and life circumstances.

A thoughtful plan can turn Social Security from a confusing government program into a powerful tool for long-term stability.

So, if you are within a few years of claiming Social Security, or already retired and unsure if you made the right choice, it is worth getting a second look.

Sandbox Financial Partners helps retirees and near-retirees evaluate Social Security decisions as part of a complete financial plan, including tax strategy, investment coordination, and spousal considerations. We also have a Social Security Expert on retainer who will provide a detailed explanation and assist with the strategy and guidance.

A short conversation today can clarify a decision that affects the rest of your life.

👉 Schedule a planning conversation with Sandbox Financial Partners to understand how Social Security fits into your bigger picture.

And this was the headline of the day:

As we frequently remind our clients — volatility is normal. It’s the price of admission for long-term growth. Our job isn’t to react to every headline. It’s to stay disciplined, focused, and aligned with your plan.

Below is an excerpt from this mornings market comments from Tony Pasquariello, Global Head of Hedge Fund Coverage for Goldman Sachs. I think this sums up mix of uncertainty and opportunity well.

Here are two recent newsletters from Blake Millard, CFA in his The Sandbox Daily.

1. The risk of NOT investing (Posted on 02.11.2026)

• Click Here to Read

• Click Here to Watch Blake on Schwab Network TV from the NYSE Floor

2. Revisiting February 19, 2020 (Posted on 02.19.2026)

• Click Here to Read

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Some Notable Posts from this Week:

We spend decades working, saving, and investing to secure our family’s future. We make spreadsheets, run projections, and update our estate documents. Yet one of the most common breakdowns in financial planning has nothing to do with numbers.

It’s silence.

Silence between parents and children, between siblings, and even silence between spouses.

For all the attention we give to growing and protecting wealth, few families devote the same care to talking about it. The results can be heartbreaking. Families that once gathered around the same table end up in conflict. Children who were meant to be cared for are left confused or divided. And advisors are forced to pick up the pieces of plans that were never discussed openly.

At Sandbox Financial Partners, we’ve seen this pattern play out across generations. The numbers might be sound, but when communication breaks down, legacy suffers.

The Real Cost of Avoiding the Conversation

When families avoid discussing money, they’re sidestepping an awkward topic and they’re risking the very stability they worked to build.

1. Financial inefficiency
Without coordination among advisors, attorneys, and family members, even a well-crafted estate plan can falter. Beneficiary designations go out of date, taxes eat into inheritances, and charitable intentions get lost in translation.

2. Emotional fallout
Money touches identity, power, and belonging. When expectations aren’t clear, emotions take over. Resentment builds, trust erodes, and siblings or in-laws can become adversaries. Over the course of decades working with families, we’ve learned that it’s rarely about greed. It’s usually about uncertainty.

3. Lost meaning
Maybe the greatest loss is purpose. When heirs don’t understand why the wealth was built, or what values guided the family’s decisions, it’s easy for money to lose direction. Studies show that roughly 70% of intergenerational wealth transfers fail by the second generation, largely because of poor communication and a lack of shared vision.

Where to Begin: Ask Better Questions

Talking about wealth doesn’t mean you need (or even should) disclose every number on a balance sheet. It means creating a shared understanding of what the wealth is for.

Here are three questions that can open that door:

1. What matters most to us as a family?
   Before deciding how to pass down assets, clarify the principles that guide your decisions: education, philanthropy, independence, security, opportunity, etc.

2. Who should we call in an emergency?
   A practical but powerful question. Who do your children contact if something happens to you? Who knows where key documents are stored? Clarity today prevents chaos tomorrow.

3. What values do we want to pass on?
   Whether it’s generosity, hard work, or stewardship, naming these values ensures your money reflects your mission.

Small steps can lead to deeper discussions about expectations, responsibilities, and the emotional side of financial planning.

Advisors as Facilitators, Not Merely Planners

This is where experienced advisors can add enormous value. At Sandbox, we say that our role extends beyond portfolio management. We’re family interpreters as much as financial planners.

We’ve seen how structured family meetings, where parents outline intentions, children ask questions, and advisors clarify logistics, transform tension into alignment. The process not only preserves wealth but also strengthens relationships.

Advisors can also serve as a neutral ground. Many clients find it easier to discuss sensitive topics with a professional present, someone who can translate financial terms into plain language and ensure everyone feels heard.

Why It Matters Now

The largest intergenerational wealth transfer in history is underway.

Over the next 20 years, more than $80 trillion is expected to pass from Baby Boomers to their heirs. The families who navigate that shift successfully will have strong portfolios, but they’ll also be the ones who communicate clearly: about intentions, values, and goals.

When you strip it down, wealth is simply a tool. Without conversation, it can divide. With communication, it can unite.

A Challenge for Every Family

If you’ve been hesitant to talk about money with your loved ones, consider this your nudge. You don’t need a grand summit, you only need a start.

Pick one topic to open up about at your next family gathering. Share one story about how your parents handled finances, or one lesson you hope your children remember. Ask them how they view money, responsibility, or opportunity.

These small exchanges compound over time.

The Bottom Line

Wealth is preserved through dialogue. The conversations you have today, however imperfect or difficult, will shape how your family lives, gives, and grows for decades to come.

At Sandbox Financial Partners, we help families bridge that gap between money and meaning. We’ve seen it with family after family: A key measure of success is how well you prepare the next generation to carry it forward.

Ready to start your family wealth conversation? Schedule a Discovery Call with the Sandbox team.

Start With the Letter K

Picture the letter K. It has two arms — one pointing up, one pointing down.

That’s the simplest way to understand what’s happening in our economy right now. Instead of everyone moving forward together, the economy has split into two groups: one that’s getting ahead, and one that’s falling behind.

Economists call this a K-shaped economy.

Two Very Different Experiences

Think about two people living in the same city.

The first person works in an office — or from home — earns a good salary, owns their home, and has some money saved in a retirement account or investments. Over the last few years, their home went up in value. Their savings grew. Life got more expensive, but their income kept pace.

The second person works in a restaurant, a store, or a warehouse. They rent their home. They don’t have investments. When prices went up for groceries, rent, and gas, their paycheck didn’t stretch as far. They may have lost work during tough economic times and came back to a job that paid roughly the same — while everything around them cost more.

Same economy. Completely different reality.

That gap — between those moving up and those falling behind — is the K-shape.

Why Is This Happening?

There’s no single cause. It’s a combination of factors that have been building for years.

Owning things grows wealth — not owning things leaves you behind. When the stock market goes up or house prices rise, the people who already own stocks or real estate see their net worth increase. If you don’t own either, you don’t see any of that benefit. In fact, rising house prices can make the situation worse because now buying a new home may feel further out of reach.

Some jobs survived the modern economy better than others. Work that can be done on a laptop from anywhere held up well through recent economic disruptions. Work that requires you to show up in person — serving food, stocking shelves, caring for people — was hit much harder. Those workers had no option to work from home. And their jobs tend to pay less, offer fewer benefits, and provide less security.

The cost of living keeps climbing, but wages haven’t kept up for everyone. Rent, groceries, healthcare, childcare — the basics of life have gotten significantly more expensive. For people in higher-paying jobs, raises and bonuses have generally kept pace. For lower-wage workers, the math just doesn’t add up the way it used to. More and more people are using credit cards or payment plans just to cover everyday expenses — not luxuries, but necessities.

New technology is widening the gap. Tools like artificial intelligence are making some workers dramatically more productive and valuable. But that benefit isn’t shared equally. It tends to flow to people who already have specialized skills and education, while doing little — or potentially causing harm — to workers in routine jobs that are easier to automate.

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You Can See It Everywhere, Once You Know What to Look For

The K-shape shows up in everyday life in obvious ways once you start noticing it.

Companies are responding to it directly. Luxury brands are posting record sales. At the same time, fast food chains are rolling out budget menus and smaller portion sizes to keep customers who are watching every dollar. Businesses are essentially designing two entirely different products for two entirely different economies.

High-end neighborhoods are booming with new restaurants and development. A few miles away, longtime residents are being priced out of homes they’ve rented for decades.

Job postings for highly skilled, well-paid roles remain competitive. Meanwhile, lower-wage workers are seeing hours cut and less job security.

Two economies, side by side.

Why It Matters

Beyond fairness, there’s a practical concern here that economists take seriously.

When the gap gets wide enough, it becomes a problem for the entire economy — not just the people at the bottom. Consumer spending is what keeps businesses running and the economy moving. If the majority of that spending is now coming from a small group of wealthy people, the whole system becomes fragile. A bad stretch in the stock market, a housing slowdown, or a dip in wealthy consumers’ confidence could ripple outward and affect everyone.

Inequality, at a certain point, stops being just a social issue and starts being an economic risk.

The Takeaway

A K-shaped economy is what happens when growth and recovery aren’t shared equally. The headline numbers say one thing. The lived experience of millions of people says something very different.

Understanding this doesn’t require a finance degree or any background in economics. It just requires looking at who the economy is actually working for — and being honest about the answer.

If you made it to the end, I’ll give the credit of this write-up to Claude AI. In the growing world of artificial intelligence, I thought it would be fun to ask a few AI engines to write me an answer and explain it so that a high school student could understand. I asked Google’s Gemini, Anthropic’s Claude AI and OpenAI’s ChatGPT for the same, have them each evaluate each others work and choose the one that I thought hit the concept the best. The time efficiency of these new tools is great, and they available to everyone.

Several stocks have posted aggressive declines, masked by index-level performance, as returns across individual stocks continue to diverge.

As of yesterday’s close, 67% of S&P 500 constituents were trading more than 5% below their 52-week highs. From there, the drawdowns deepen across a meaningful portion of the index:

• 38% are >15% off highs

• 20% are >25% off highs

• 6% are >40% off highs

This distribution of returns stands out as market performance continues to be carried by a narrow slice of stocks. Recent declines have occurred alongside earnings results and guidance that are better than price action would suggest, making the gap between fundamentals and prices worth monitoring as this unfolds.

Below are are the Top-and-Bottoming performing stocks for January 2026.

In our annual review meetings, the message to our clients has been… expect a turbulent and highly volatile year in politics and investment markets. The noise will be loud and the swings may be extreme but the end result may be an uneventful year of returns. Mid-term election years have historically provided these types of years. More to come…

Some Notable Posts from this Week:

Have a wonderful weekend and stay warm.

That’s NOT how the system works.

That misunderstanding leads to unnecessary fear around raises, bonuses, and saving more.

Let’s walk through taxes the same way we explain them to clients at Sandbox: simple, practical, and without jargon.

Step 1: Start With Your Total Income

Your total income includes things like:

• Salary or wages

• Bonuses and commissions

• Self-employment income

• Interest and dividends

This is your gross income.

But it’s not what the IRS actually taxes.

Step 2: Subtract Deductions

Certain contributions and deductions reduce how much of your income is even subject to tax:

• Traditional 401(k) contributions

• HSA contributions

• Standard deduction (or itemized deductions)

In this example, you earned $105,000 but the IRS only taxes $77,250.

That’s the difference planning.

Step 3: How Tax Brackets Actually Work

Tax brackets are layers, not a single flat rate.

Think of them like buckets stacked on top of each other:

• The first layer is taxed at 10%

• The next layer at 12%

• The next layer at 22%

• And so on

Only the dollars inside each bucket are taxed at that bucket’s rate.

Not your entire income.

Step 4: A Simple Bracket Example

Using the $77,250 taxable income example:

First $11,925 taxed at 10% → $1,192.50
Next $36,550 taxed at 12% → $4,386
Remaining $28,775 taxed at 22% → $6,330.50

Total federal tax ≈ $11,909

Even though you’re “in the 22% bracket,” most of your money is taxed at lower rates.

2026 Federal Income Tax Brackets

Under current law, several provisions from the 2018 tax cuts are scheduled to expire after 2025.

That means individual income tax brackets are expected to reset to a higher, pre-2018 structure in 2026.

What this means in plain English:

Many households may see portions of their income taxed at higher marginal rates in 2026 and beyond — even if their income doesn’t change.

Not overnight catastrophic. But meaningful over time.

Why This Matters for Planning

When future tax rates may be higher, today’s lower brackets become more valuable.

That creates opportunities to:

• Consider Roth conversions

• Re-evaluate Roth vs. Traditional contributions

• Be intentional about timing income and deductions

• Use charitable strategies more efficiently (Donor-Advised Funds, Qualified Charitable Distributions, bunching, etc.)

• Plan around employee stock compensation (RSUs, ESPPs, ISO/NSO exercise timing, withholding, and concentration risk)

• Build tax diversification across account types

The goal isn’t to predict legislation.

The goal is to avoid being trapped with all of your money in one tax bucket.

A Simple Way to Think About It

You can’t control tax law.
You can’t control markets.

But you can control:

• Where you save

• How your accounts are structured

• Which tax buckets your money lives in

That’s real planning and that’s how you keep more of what you earn.

Illustrations based on 2025 IRS standard deduction for single filers. Projected 2026 brackets assume expiration of current TCJA provisions. Income thresholds shown are estimates and for illustrative purposes only. Individual circumstances vary. Consult your tax professional.

Source: How do tax brackets work? | How do taxes work? | Fidelity