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Vol. 80, No. 2, March 2026

FEATURED ARTICLES

Strategies for Spousal Carve-Out Plans and HSA Contribution Decisions
Stephen Avila, PhD, CPCU
This paper analyzes the decisions involved in choosing health care plans due to spousal carve-out. Scenarios are provided to illustrate strategies for choosing plans for the family. Participants are shown methods to optimize Health Savings Account contributions with the goal of maximizing overall family contributions. Special situations are discussed for families when a child is eligible to remain on the employee-plus-child plan but is not eligible to use their parents’ HSA accounts. Also, if a dependent has access to health care coverage through their own employer, families should carefully evaluate the potential savings by switching that child onto their own plan.

The Backdoor Roth IRA: A Powerful Tax Strategy for High Income Executives
Paul J. Schneider, JD, LLM
Congress has imposed income limits on the ability to make annual Roth IRA contributions while at the same time allowing unlimited amounts to be transferred into Roth IRAs by way of conversions. These two provisions have prompted clever financial planners to devise a workaround strategy, enabling individuals over the applicable Roth IRA income threshold to deposit new money into a Roth IRA annually. This strategy is referred to as a backdoor Roth IRA. The mechanics of implementing the backdoor Roth IRA are straightforward. The potential risks of this strategy are controllable, and the potential benefits can be significant.

Decoding Household Portfolio Risk: The Interplay of Knowledge, Tolerance, and Aversion
John E. Grable, PhD, CFP
Wookjae Heo, PhD
Abed Rabbani, PhD, CFP
This study aimed to determine whether financial knowledge is related to risk-taking behavior after controlling for a financial decision-maker’s degree of risk aversion and risk tolerance. A secondary aim was to identify variables that are important when describing the amount of portfolio risk taken at the household level. It was determined that higher levels of financial knowledge and risk tolerance were associated with greater downside portfolio risk. Risk aversion was related to lower downside portfolio risk. Additionally, financial knowledge was found to be inversely related to risk aversion but positively associated with risk tolerance. It was further determined that risk tolerance had the greatest effect in describing portfolio risk. Financial knowledge ranked second in importance, whereas risk aversion was the least important in describing portfolio risk.

DEPARTMENTS

Editor’s View
By the Numbers: The 2026 Indexed Retirement and Social Security Numbers
Kenn Beam Tacchino, JD, LLM
We present the 2026 indexed retirement and Social Security numbers in an easy-to-read table. Feel free to print this table and keep it handy.

Estate Planning
Generosity Still Counts—It Just Counts a Little Less: Advisor Strategies in 2026
Mark R. Parthemer, JD, AEP, ACTEC Fellow
A new tax era has begun, and with it, a new calculus for charitable planning. The mission remains generosity — but now, timing and structure matter more than ever. We take a look at the new rules for 2026 and several strategies that should be considered.

Financial Gerontology
Banks Aren’t the Only Place Where the Money Is: A Red Flag for Financial Professionals and Their Clients
John N. Migliaccio, PhD, RFG, FGSA, MEd
Financial exploitation is escalating at an unprecedented rate, inflicting multibillion-dollar losses on clients and institutions alike. Adults over 50 are primary targets, suffering devastating impacts on their mental, physical, and economic health due to increasingly sophisticated technological scams. This crisis also burdens financial professionals, who face lost revenue and rising costs for monitoring and prevention. In response, federal agencies and organizations are mobilizing, supported by new legislation aimed at coordinating a national defense. Financial advisors occupy a vital frontline position; their direct relationships with clients allow them to identify specific vulnerabilities. By better understanding these threats, professionals can protect client assets and organizational stability, turning their unique vantage point into a powerful tool for mutual security against evolving financial crimes.

In the Client’s Best Interest
The Answer, Dear Brutus, Lies Not in the Life Insurance Products… But in Policy Illustrations
Richard M. Weber, MBA, CLU, AEP (Distinguished)
Gerard J. Vanderzanden, CLU, ChFC, CLTC
While life insurance illustrations may not have been a concern in Brutus’s era, a common frustration today is that estimating sufficient premiums and/or the potential account value growth in flexible-premium universal life policies depends solely on policy illustrations. However, the illustration is not the policy, and the actual long-term costs and benefits may differ significantly from those projected at the time of purchase.

Insurance and Risk Management
Sequence of Return Risk in Variable Universal Life and the Role of Allocated Charges
James P. Karthaus, CFP, CLU, ChFC
Chia-Li Chien, PhD, CFP, PMP
Sequence-of-return risk (SOR) affects variable universal life (VUL) when policy charges are withdrawn from market-exposed subaccounts, forcing distribution-style behavior within a vehicle commonly intended for long-term accumulation. Allocated charges—structures that allow policy deductions to be withdrawn from designated low-volatility accounts—fundamentally alter this dynamic by isolating mandatory withdrawals from growth assets. By reframing policy charges as a sequence-sensitive withdrawal mechanism, this structural change clarifies when variable universal life functions as an accumulation vehicle rather than a distribution structure, and under what conditions higher equity allocations may be structurally appropriate.

Social Security Planning
Social Security’s COLA and Other Automatic Adjustments for 2026
Bruce D. Schobel, FSA, MAAA, CLU, CEBS
Understanding the changes to Social Security will enable the planner to better explain the Social Security system to clients. We present a comprehensive discussion of how and why the numbers work.