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Higher health-care expenses forcing financial trade-offs

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9 months ago

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Krisanapong Detraphiphat | Moment | Getty Images

Rising health care expenses as part of an overall increase in the cost of living are forcing some Americans — including high earners — to make tough financial choices.

In 2026, employees could see their total health benefit cost increase by 6.7% on average, pushing the average cost per employee above $18,500, according to global consulting firm Mercer. It’s the steepest jump in 15 years, the firm said.

This year, premiums for families with employer-sponsored plans rose 6%, more than twice the rate of inflation, at 2.7%, and outpacing wage growth of 4%, according to KFF, a non-profit health policy research firm. The vast majority of Americans, about 165 million people, including employees and their dependents, obtain health insurance through their employer.

It’s not only the cost of coverage that’s going up. Consumers are also using more medical services and prescriptions, experts say, contributing to higher health care expenses.

“We’re getting older as a population. So there’s going to be ailments, there’s more heart disease, there’s more diabetes, all of those things are trending higher, hence additional usage,” said Kaleialoha Cadinha-Pua’a, CEO and chief investment officer of Cadinha & Company in Honolulu, which is ranked No. 15 on CNBC’s Financial Advisor 100 list for 2025.

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About 21% of all adults surveyed said health care and insurance are the expenses that have increased the most for them amid the rising cost of living, according to the 2026 KeyBank Financial Mobility Survey. Among high earners making $100,000 a year or more, 30% rank health care and insurance as the most impactful expense in their cost-of-living increase. 

The online survey polled over 1,000 Americans ages 18 to 70 in July, who have sole or shared responsibility for financial decisions in their household. 

As a direct result of the rising cost of living, 26% of all adults surveyed said they’ve drawn from emergency savings, and 12% have reduced retirement contributions to their 401(k) or IRA. Among top earners, 19% said they reduced retirement contributions. 

Managing the rising costs of living is “a constantly moving goal,” Cadinha-Pua’a said. “More investors now are having to worry about all these moving pieces and all these varying sizes of eggs in their baskets.”

Even as some Americans make intentional trade-offs to keep up with daily expenses, they’re still watching their savings shrink, according to the KeyBank survey. Two-thirds of those polled said they have less money in their savings in 2025 than they did last year. 

To manage increasing health care costs, experts we spoke with recommended taking these steps. 

Know your health plan costs, and what’s changing

Take time to understand all the costs of your health care plan.

“The vast majority of people I speak to — and I don’t care how well educated they are, I don’t care how much they earn — they don’t understand what’s in their health care. Until something happens,” said Mary Clements Evans, a certified financial planner and owner of Evans Wealth Strategies in Emmaus, Pennsylvania.

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Among the terms to know:

  • Copayments are fixed amounts you pay for specific services, such as a prescription or a doctor’s visit.
  • Deductibles are the amount you pay for medical expenses before insurance coverage begins.
  • Co-insurance is the portion of health costs that you share with the insurer, once you have reached your deductible.
  • Out-of-pocket maximums are a cap on the expenses you’ll pay for the plan year, but they don’t include premiums or any services not covered. 

“They might be going along, everything’s fine, and then, you know, stuff just happens, and we end up in the emergency room, or we end up with a surgery, and now all of a sudden, they’re getting a bill for $5,000 and they’re stunned,” said Evans, who is also the author of “Emotionally Invested.” 

Employers may change some of the plan terms — often, deductibles — to prevent premiums from rising further, which can result in higher out-of-pocket costs for employees, experts say. Last year, the average deductible was $4,063 for family coverage and $2,085 for an individual, according to KFF. 

Optimize health-related accounts

Momo Productions | Digitalvision | Getty Images

Add up your potential out-of-pocket costs for an idea of how much you should have in savings for a health emergency.

“I want to see that money saved and on the side, ready to go. So if something happens, you have it, and then if you have to use it, you know, you can go ahead and replenish it,” said Evans. 

One strategy that can help: Take advantage of specialty health accounts that your employer may offer:

  • A flexible spending account, or FSA, lets you pay for health care expenses, like co-pays, medications, or eyeglasses, with pre-tax dollars. In 2026, the amount set aside can be up to $3,400. But money put in for the year typically must be spent on medical expenses by the end of the year, or it is forfeited. Some employers offer a grace period to spend your prior year’s balance, or allow you to carry over a set amount to the following year.
  • A health savings account, or HSA, is a savings and investment account that offers significant tax savings. If you enroll in a qualified high-deductible health insurance plan, you can put pre-tax dollars into an HSA, see tax-free growth on those funds, and enjoy tax-free withdrawals so long as the funds are used for qualifying medical expenses. Contributions for 2026 are capped at $4,400 for individuals and $8,750 for a family. People age 55 and older can make an additional $1,000 catch-up contribution.

“If you can afford not to touch that health savings account for current medical expenses, and you let that continue to grow, that can grow to be a really meaningful source of health care coverage down the road,” said Emily Harper, a CFP with Monument Wealth Advisors in Alexandria, Virginia. 

Just make sure you can afford the worst-case out-of-pocket expenses that may come with a high-deductible plan, she said.

Identify potential trade-offs

Examine your cash flow and goals to identify potential trade-offs to manage higher health costs. With insurance, electricity, and grocery costs also increasing, it can be hard to find additional savings. Still, experts say to take a hard look at spending before cutting back on retirement or other savings. 

“Realizing that inflation is very real for all Americans, and we’re all dealing with it, I would just make sure that before people start hitting some of those levers in their personal situation, that they step back and … holistically, evaluate your budget,” said Dan Brown, executive vice president and director of consumer product management at KeyBank.

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Evaluating your paycheck tax withholding may help improve cash flow. 

“If you’re getting a tax refund, that means that you are paying too much throughout the year,” said Harper. Adjustments and new deductions in President Donald Trump’s “big beautiful bill” may result in bigger refunds for some taxpayers next year. “People’s tax situation might look very different than it did when they started the year,” she said.

Still, be sure to pay enough during the year so that you won’t have to pay a penalty. 

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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