Employee Stock Options: What Really Matters from Grant to Sale

Contributed by: Robert Ingram, CFP®

Non-qualified stock options (NQSOs) are a form of employer compensation that gives an employee the right to purchase a specific number of company shares at a predetermined price within a defined time period. Unlike direct stock grants Restricted Stock Units (RSUs), which provide actual shares of stock, NQSOs offer the option, but not the obligation, to buy shares in the future.

If you have access to these stock options, they can be one of the most valuable opportunities to build wealth through your employer—but they are also frequently misunderstood. On the surface, it might seem straightforward: you can buy your company’s stock at a set price and benefit from future growth. In practice, stock options involve a series of decisions that can have financial and tax consequences that unfold over time. From grant and vesting to exercise and eventual sale, each stage in the lifecycle of these NQSOs carries its own rules and implications for the value you ultimately realize.

Grant: It Starts with a Promise (Not Ownership)

When your company grants you stock options, you don’t actually receive stock. You receive something much more subtle: the right to buy stock later at a fixed price.

You’re told:

• How many options you have (number of shares you could buy)

• At what price you’ll be able to buy them (exercise price)

• When you’ll be allowed to use that right (the vesting schedule)

• And when the opportunity expires

As a hypothetical example, let’s say you were granted 4,000 options on May 1st, 2026, with an exercise price of $20 per share. The vesting schedule is that 25% of the total options vest after one year, and the remaining 75% of the options vest quarterly over the next three years. Finally, the expiration date is May 1st, 2036 (10 years from the grant date). Whoa! There’s a lot there. Let’s tackle it in stages.

At this stage, nothing has happened financially. No cash or value is exchanged. There are no actionable steps, and there is no taxation. There is just the potential opportunity that begins when your options vest.

Vesting: You Earn the Right to Act

Over time, those options that were granted “vest.” This means that the options become exercisable. The option becomes “yours,” and you can choose to exercise (or not exercise) the options (i.e., purchase shares with some or all of the vested options).

In most employee stock option plans, vesting is gradual, often spread out over a few years.

In our example above, the first 1,000 options vest one year from the grant date, so they would be exercisable on May 1st, 2027. From there, portions of the unvested shares vest each quarter for the next three years.

The following table illustrates how a vesting schedule might look, where each quarter an equal number of options vest from the end of year 1 until the end of year 4.

While this is a common type of vesting schedule, it is very important to understand your own employer’s specific vesting plan and to know when your options will be available to exercise. Until the options vest, they are not truly “yours,” and you may forfeit any future right to exercise them if you leave the employer, for example.

But here’s a key point about each vesting date: at vesting, still nothing happens financially. Vesting does not trigger taxes.

This is different from other types of equity compensation, such as Restricted Stock Units (RSUs). When RSUs vest and you receive shares, the total value of the shares at that time is considered income and would be reported and taxed as ordinary income.

When non-qualified stock options vest, there is still no action taken, and you haven’t received the value of any options, so there is no reported income or associated taxes. But now, your planning and decision-making start.

Exercising: When You Buy—and Taxes Kick In

Eventually, you reach the first decision point: do you exercise your options?

The value of stock options comes from the difference between what you’re allowed to pay for the stock and what it’s actually worth in the market.

So, from our example, let’s say you have options that have vested, and the value of the stock in the market is $45 per share. Because your options have an exercise price of $20 and you could purchase shares for $20, there is a gain of $25 per share ($45 - $20). The options allow you the opportunity to build that value without having to buy the shares outright (yet!).

Now, when you do exercise options (i.e., buy the shares) at any time up until the expiration date, this is where things change and taxes come into play.

At the time you exercise, the difference between the market value of the shares and the price you are able to pay to buy them is considered income and is reported to the IRS. In our example, if the value at the time of exercise is $45 per share and your purchase price is $20, you would have ordinary income of $25 per share.

If you exercised 1,000 shares, that would be 1,000 × $25 → $25,000 in taxable income.

Many people assume taxes happen when they sell the shares. While sales can and often do occur around the same time as the exercise, the exercise itself often triggers the biggest tax impact.

If you choose to exercise options in a high-income year, the extra income may push you into higher tax brackets. Another scenario is waiting to exercise large groups of options all at once. This could also dramatically change your overall income in that year and therefore impact your tax liability. This is why careful tax planning is an important part of managing your stock options.

Quick Note on Taxes at Exercise (and How They’re Paid)

Taxes here aren’t just reported and owed—they’re typically withheld. Employers are generally required to withhold taxes at the time of exercise. This usually includes federal taxes, state income tax, Social Security, and Medicare (FICA taxes). How is the withholding paid?

Methods for covering taxes:

• Cash payment (out of pocket) – sending payment from your bank or wire transfer to cover the taxes

• Selling shares to cover – the plan sells a portion of exercised shares to cover the taxes

  • This is the most common approach used

• Withholding shares – the plan withholds a number of shares equal in value to the taxes instead of selling shares on the market

  • This is less common for public company stock option plans

Selling Shares: Turning the Value into Cash

To fully realize the usable value of the options and shares, you would sell the shares for cash as the final financial outcome and decision.

Taxes may come into play again after you exercise and sell your shares (as capital gains or losses).

Remember, at exercise, the difference between the market value and the exercise price is already taxed as income, so the cost basis of the exercised shares becomes the market value at the time of exercise.

Cost basis in our example: if exercising shares when market value was $45 → cost basis = $45

If you were to sell those shares for $55, for example → you would have a $10 capital gain.

If, on the other hand, you sold the shares at $35 → you would have a $10 capital loss.

Depending on when you choose to sell your exercised shares, you could have a short-term capital gain or loss (if held for less than one year) or a long-term capital gain or loss (if held for more than one year). With the tax treatment differences between short-term and long-term capital gains, this again adds further tax planning considerations to your decisions.

Note: You are typically responsible for any taxes associated with these capital gains or losses, as they are not withheld by the employer plan.

From Exercise to Ownership to Selling: (How You Get There)

When you exercise your options, you’re no longer holding an option—you now own stock. There is generally no maximum holding period before having to sell, and there is no risk of losing rights to the shares if you leave the employer, retire, etc.

But there are a few methods for exercising options and turning them into real value.

• Pay in cash (hold all shares) – covering the cost of the share purchases and usually the tax withholding by writing a check or transferring funds to the plan administrator. You retain all of the shares until you decide to sell some or all of them.

At this point, you might be asking, “What if I don’t have the cash, or I don’t want to use my funds to exercise the options?”

Cashless Exercise:

• Sell some shares at exercise (hold some shares) – a portion of shares is sold immediately to cover the cost of the shares exercised (and usually the tax withholding). You retain the remaining shares.

You would then hold the remaining shares for investment until you decide to sell them.

The other type of cashless exercise is one of the most common methods for using options and converting them into usable value:

• Cashless exercise (sell everything) – you exercise options, and all the shares are sold immediately, covering the cost of shares and taxes, leaving you with cash proceeds instead of stock.

This full cashless exercise allows you to turn the value of your options into cash in one step with no out-of-pocket cost and avoids the ongoing risk of holding the stock. That can be very advantageous for many people.

However, there may be cases where exercising options to hold shares makes sense. One advantage is that potential future growth may be taxed at capital gains rates, which could be lower than ordinary income rates. Depending on your current income and expected future income, this difference may significantly impact your overall outcome.

Bottom Line

Stock options are more than just a one-time benefit. They involve a process and decisions based on many factors over several years (even a decade or longer). Small differences in timing, taxes, and personal choices at each step add up to shape your results.

As with many complex financial decisions that have tax and other implications, you should consult with your financial planner and tax advisor.

If you’ve received stock options and aren’t completely confident in how they fit into your overall plan, we’re happy to have a conversation.

Please don’t hesitate to contact us!

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Bob Ingram, CFP® and are not necessarily those of RJFS or Raymond James. Raymond James Financial Services, Inc. and its advisors do not provide advice on tax issues, these matters should be discussed with the appropriate professional.

The Social Security Sweet Spot – Claiming Too Early Could Cost You Thousands

Contributed by: Josh Bitel, CFP®

When it comes to retirement planning, few decisions are as consequential as when to claim Social Security benefits. I’ve heard it dozens of times: “my paycheck has been funding this benefit for decades, it’s my money and I want it as soon as I can get it!” While I can sympathize with this, the drawback of claiming your benefits too soon could cost you thousands of dollars over your lifetime and could even impact spousal financial security.

Understanding the Claiming Window

The earliest you can claim Social Security benefits is age 62. However, taking this offer immediately comes at a significant cost – your monthly benefit will be permanently reduced by roughly 30% for folks who have a full retirement age (FRA) of 67. On the other hand, you can delay receiving your benefits beyond your FRA, up to age 70. The benefit of doing so is an increase of 8% per year for every year you delay beyond your FRA.

The mathematical difference between claiming at age 62 and delaying until age 70 results in a benefit that is 70%-80% higher for those who delay. This increased benefit is locked in for life and adjusts for inflation annually. Additionally, an often-overlooked part of this decision is that a surviving spouse can take over this larger benefit if their own benefit is lower.

Longevity Risk and Break-Even Analysis

Whenever I am asked “when should I file for Social Security?” I jokingly reply – tell me exactly how long you will live, and I will tell you exactly when to claim! Afterall, a key consideration for timing your benefits is longevity – something we can only predict. In a nutshell, if you expect to live well into your 80s or beyond, delaying your benefit will yield higher lifetime income. However, if you don’t expect to be around that long – claiming earl can result in receiving more total benefits. When we apply math to this equation, we calculate a “break-even age”, or the age at which your total benefits from delaying will equal your total benefits if claiming early. This age typically falls in your late 70s or early 80s. Therefore, if you expect to live longer than age 80 – delaying your benefits would make mathematical sense.

Spousal and Survivor Considerations

An often-overlooked factor when claiming Social Security is the effect on spouses and survivors. Benefits received by spouses and survivors are directly tied to the higher earner’s claiming age. If the higher-earning spouse delays benefits, it not only increases their own benefit but also boosts the survivor benefit the other spouse may rely on later. For married couples, coordinating claiming strategies can add significant value over time. For example, one spouse may claim earlier to provide income while the higher earner delays to maximize long-term benefits. This can be especially impactful if one spouse lives much longer than the other.

Making the “Right” Decision

While the financial math is important, the “right” time to claim Social Security is not purely a numbers decision. Health status, employment plans, lifestyle goals, and risk tolerance all play a role. Someone in poor health or with immediate income needs may benefit from claiming early, while those with longevity in their family and sufficient savings might benefit from waiting.

Importantly, Social Security is not a one-size-fits-all decision. The optimal strategy balances financial efficiency with personal priorities.

The timing of claiming Social Security benefits is one of the most impactful and irreversible decisions in retirement planning. It affects not only how much you receive each month, but also how long your assets last, your tax exposure, and the financial well-being of your spouse and survivors.

By carefully evaluating your options and considering both financial and personal factors, you can turn Social Security into a strategic advantage—one that supports a more secure and confident retirement. If you or someone you care about is struggling to put these pieces together, our team is here to help!

Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Josh Bitel, CFP® and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

What to Understand About “Trump Accounts”

Contributed by: Michael Brocavich, CFP®, MBA

With the passage of “The One Big Beautiful Bill” in 2025, one of the more talked-about provisions is the introduction of Trump Accounts— a new type of savings and investment account designed specifically for children.

As we continue reviewing the details and thinking through how these may fit into our clients’ overall financial plans, we wanted to provide an overview of what you need to know. Like our previous updates, this highlights the provisions we believe are most relevant and will continue to evolve as additional IRS guidance is released.

What is a Trump Account?

A Trump Account is a tax-advantaged investment account for children under age 18. Think of it as a hybrid between a traditional IRA and a custodial account designed to give kids a long-term financial head start. The account is owned by the child, with a parent or guardian acting as custodian until age 18.

The Headline Feature: $1,000 Government Contribution

Children born between January 1, 2025, and December 31, 2028, are eligible for a one-time $1,000 contribution from the U.S. Treasury. Families must elect into the program to receive this benefit. This seed money is designed to give every eligible child a starting point for long-term investing.

Contribution Rules

Families and others can contribute up to $5,000 per year. Employers may contribute up to $2,500 annually, and these contributions are not taxable to the employee. Contributions are made with after-tax dollars.

How the Money is Invested

Funds must be invested in low-cost, diversified U.S. stock index funds or ETFs. Fees are capped, and the structure is designed to prioritize long-term growth and simplicity.

Accessing the Funds

Funds are generally not accessible before age 18. After that point, the account transitions to a structure similar to a traditional IRA, reinforcing the long-term nature of the strategy.

Tax Treatment

Contributions are made with after-tax dollars and grow tax-deferred. Withdrawals are generally taxable, which places these accounts somewhere between traditional retirement accounts and taxable brokerage accounts.

Who Should Consider a Trump Account?

These accounts may make sense for families looking to start investing early for children or take advantage of the initial government contribution. However, they are not a replacement for other tools such as 529 plans, custodial accounts, or Roth IRAs.

Key Planning Considerations

As we evaluate how these fit into broader plans, we are watching how they interact with financial aid rules, future tax treatment, coordination with existing strategies, and overall funding priorities.

Final Thoughts

Trump Accounts introduce a new way to build wealth for the next generation. The concept is simple: start early, invest consistently, and allow compounding to do the heavy lifting. As always, the right strategy will depend on your individual situation and overall financial goals. Please talk with our Financial Planners to see if a Trump account is the right savings vehicle for your family.

Michael Brocavich, CFP®, MBA is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He has an extensive background in both personal and corporate finance.

Every investor's situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

You should discuss any tax or legal matters with the appropriate professional. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Michael Brocavich, CFP® and not necessarily those of Raymond James.

Finding the Perfect Mix: How to Build the Right Asset Allocation for You

Contributed by: Center Investment Department

Most delicious meals start with a great recipe. A recipe tells you which ingredients to use — and how much of each — to create something satisfying. In the same way, successful investing begins with understanding the right mix of assets that can help you reach your goals and stay comfortable along the way. Just as tastes and ingredients change or are tweaked over time, markets are ever evolving, so what has worked in the past may need periodic adjustments and thoughtful updates.

Determining the Right Mix

Asset allocation remains one of the most important drivers of long‑term investment outcomes and one of the few things investors can influence. It’s the foundational blend of stocks, bonds, and cash that shapes how your portfolio behaves, so choosing the right mix matters. This concept is perfectly depicted in the chart below, created by my colleague, Nick Boguth, CFA®, CFP®. This chart illustrates different asset allocation mixes and how they have historically produced varying ranges of outcomes. Portfolios with higher stock allocations have experienced higher best‑year returns but also greater drawdowns in worst‑year periods, while more conservative allocations (those with higher bond allocations) have shown narrower return ranges. This really highlights the trade‑off between risk and return that investors should consider when constructing a portfolio.

Now, choosing that mix may look different today than it did several years ago—it’s not static. And it might look different again in the future. To determine what will work best for you, start by answering three core questions:

1. What are my financial goals?

2. When do I need to achieve them?

3. How much will I be investing now — and over time — to support those goals?

Seasoning to Taste: Understanding Your Risk Tolerance

Even the perfect recipe can fall flat if it doesn’t match your palate. The same is true with investing. Imagine the equity market falls 20%. Would you feel tempted to sell stocks and flee to bonds or cash? Whether we like it or not, volatility has become a constant feature of today’s market environment, driven by changes in inflation, Federal Reserve policy shifts, and global uncertainty. We need to take these factors along with others, into consideration, and this is where risk tolerance comes into play. Understanding your comfort level with volatility and loss helps you select an allocation you can stick with, especially during challenging periods. When evaluating your tolerance, consider the risks and rewards associated with different investment types, how you react to market stress, how much loss you could tolerate for long term gains, and whether your emotions align with your strategy. Your feelings and behaviors matter just as much as the math.

Following the Recipe: Staying Disciplined

Just like sticking closely to a recipe produces more consistent results, staying committed to your asset allocation greatly increases your chances of long‑term success. But don’t get me wrong—it isn’t always easy!

Temptations to chase performance, react to alarming headlines, or invest in the “next big thing” are always present. Emotional responses to market swings, fear of missing out, and short‑term noise can all pull investors away from a thoughtfully designed plan, and often at exactly the wrong time. Over time, these small deviations can meaningfully change the risk and return profile of a portfolio. Several basic practices can help reinforce discipline and keep your plan on track:

• Diversification: Spreading investments across asset classes and regions can help manage risk‑adjusted returns and potentially reduce reliance on any single outcome.

• Regular Rebalancing: Periodically resetting your portfolio helps manage risk, maintain alignment with your goals, trim positions that have grown too large, and add to areas with future potential.

• Dollar‑Cost Averaging: Investing consistently over time can help reduce the impact of market volatility and remove the pressure of timing decisions.

Bringing It All Together

We believe finding the right asset allocation is one of the most important steps in building a sound investment plan. By clarifying your goals, timeline, resources, and risk tolerance, you can create a mix that works for you.

Markets will continue to change, but the fundamentals don’t. Define your recipe, understand your palate, and follow the process with discipline. A consistent approach may help support long term investment objectives.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of the author and are not necessarily those of RJFS or Raymond James. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment or investment decision. Investing involves risk, investors may incur a profit or loss regardless of strategy or strategies employed. Asset allocation does not ensure a profit or guarantee against a loss.

Dollar-cost averaging cannot guarantee a profit or protect against a loss, and you should consider your financial ability to continue purchases through periods of low price levels.

Do I Need Life Insurance? How Much?

Contributed by: Josh Bitel, CFP®

As your life changes, so do your needs for life insurance. You may not need it when you are young and single. However, as you take on more responsibility and your family grows, your life insurance needs may grow as well. Below are a few rules of thumb I like to use to start the conversation.

Estimating Your Life Insurance Need - There are several methods that you can use to estimate your life insurance needs. While the actual calculation may be much more involved, these tricks can be used as somewhat of a starting point when having a conversation with an insurance professional.

Income Rule - My favorite rule of thumb is the income rule, which states that your insurance coverage should be equal to 10-15 times your gross annual income. (Other professionals may have other ranges, I like 7-10). For example, a person earning a gross annual income of $60,000 should have between $420,000 (7 x $60,000) and $600,000 (10 x $60,000) in life insurance coverage.

Income Plus Expenses - This rule considers your insurance needs to be equal to 5x your gross annual income plus the total of any mortgage, personal debt, final expenses, and special funding needs (college, charities, etc.). For example, assume that you earn a gross annual income of $60,000 and have expenses that total $250,000. Your insurance need would be equal to $550,000 ($60,000 x 5 + $250,000).

Family Needs Approach - The family needs approach asks you to purchase enough life insurance to allow your family to meet its various expenses in the event of your untimely death. Under the family needs approach, you divide your needs into three categories:

• Immediate needs at death (cash needed for funeral and other expenses)

• Ongoing needs (income needed to maintain your family's lifestyle, such as a mortgage payment)

• Special funding needs (college funding, bequests to charity and children, etc.)

Once you determine the total amount of your family's needs, you purchase enough life insurance, also important is taking into consideration the possible accumulating of interest in your life insurance policy over a given time frame.

These calculations will merely scratch the surface on determining your proper amount of coverage. Several other factors, such as your line of work, size of family, post-mortem desires, among other things, may trump any of the other rules listed above. For this reason, your best bet is to have a conversation with an insurance professional to understand your own unique needs.

Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

These policies have exclusions and/or limitations. The cost and availability of life insurance depend on factors such as age, health and the type and amount of insurance purchased. There are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Guarantees are based on the claims paying ability of the insurance company. The hypothetical examples presented are for illustration purposes only. Actual investor results will vary. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

The One Mistake You Don’t Want to Make with Your Long Term Care Insurance

Contributed by: Sandra Adams, CFP®

If you’re reading this, you are likely among the few people who have planned ahead and purchased Long Term Care insurance. By doing this, you intend to protect yourself and your family and hedge your assets against the possible threat of a long-term care event (need for care in your home, assisted living or nursing home).

Given that only about 7-10% of Americans own Long Term Care insurance (AALTCI 2025 data) and 60-65% of Americans over the age of 65 will need some form of long-term care services (ConsumerAffairs 2025 data), you will likely need the insurance you’ve purchased. The question is, will you use your Long Term Care insurance when the time comes?

I have had several client experiences that looked like this: The client was at or near a point of qualifying for benefits under their Long Term Care insurance for either physical or cognitive reasons.

The client and/or the family made the decision to not begin the claim process. Why? They wanted to wait a while longer, continue to try to care for the client on their own, save the Long Term Care insurance benefits for later, when they really needed them.

The results in nearly all of these cases? The clients either never filed a claim or filed far too late, ended up in a long-term care facility, and ultimately passed away without ever receiving the policy benefits for which they had made years – even decades – of payments.

In my experience as a financial advisor, I have never had a client run out of a Long Term Care benefit pool. I am not here to tell you that it does not happen – it certainly can. But I am here to tell you that I do not believe it happens often. I have searched far and wide for statistics that would show how often it happens and cannot find a number!

Although your Long Term Care insurance company would prefer that you wait to put in your claim, I recommend that you consider doing so as soon as you are eligible. You can always stop the benefits if you no longer need them, then restart later. And if you max out your benefits, you have the satisfaction of knowing that you received 100% of your benefits and protected your assets to the greatest possible degree. Don’t lose out (or let your parents lose out) on the Long Term Care insurance benefits they have purchased!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Long term care policies have exclusions and/or limitations. Guarantees are based on the claims paying ability of the insurance company.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

3 Types of Practical Disability Coverage You Should Know

Contributed by: Josh Bitel, CFP®

According to the Social Security Administration, studies have shown close to 1 in 4 20-year-olds, will become disabled at some point before reaching age 67. Wow! This is a pretty staggering statistic – these odds are far greater than a premature death, which is what life insurance is typically purchased to protect against. However, often when we discuss disability insurance with clients, we find that it’s an area of confusion. Many aren’t even sure if they have coverage or they may believe that Social Security will kick in and be enough. For most of us, especially if you’re in the early stages of the “accumulation mode” of your career, your earnings power is most likely your largest asset both now and into the foreseeable future. A disability can wreak havoc on this “asset” which is essentially why disability insurance is purchased. Let’s look at the basic types of coverage:

1.  Short-Term Vs. Long-Term Disability

Long-term disability typically has what’s known as an “elimination period” of how many days must pass before benefits begin. This is often called the “time deductible” of the policy which in many cases is 90 days, though ranges can vary. Benefits can payout up until Normal Retirement Age, which can be 67 (depending on birth year), however, most policies have a stated period of time where benefits would be payable. To help bridge this gap of coverage, a short-term disability policy can come in handy because benefits will usually begin within a week or two of disability and continue for up to one year, although benefits typically last between three to six months. Short-term disability policies can be a great tool to preserve your emergency cash fund, typically at a somewhat reasonable cost.

2.  Group Coverage

As with life insurance, many employers offer a form of disability insurance to their employees as part of their benefits package. Sometimes the employer will pay for the premium in full and other times the employee will have the option to pay for premiums (fully or partially). You may be asking yourself, “Why would an employee want to pay for the group coverage instead of having the employer foot the bill?” Great question, with very important ramifications! If the employer pays your premiums in full, the entire amount of your benefit if needed (typically between 50% and 60% of your pay, some employers offering up to 70% coverage, up to certain limits) would be taxable. If you as the employee were paying for the premiums in full and you needed the coverage, benefits paid out would NOT be taxable. If you were only paying a portion of the total premium, say 20%, only 20% of the benefits paid would be non-taxable to you as the employee. The tax treatment of benefits will have a large impact on the net amount of benefit that hits your bank account so it’s important to understand who’s paying for what if you have access to a group disability policy at work.

3.  Individual Coverage

As the name implies, individual coverage is purchased by you through an insurance company – the policy is not offered through your employer. A major benefit of purchasing an individual policy is that the coverage is portable, meaning you can take it with you if you change jobs because it’s not tied to your company’s benefits package (most group policies are non-portable). Another advantage (or disadvantage depending on how you look at it), is that you are paying for the coverage in full so if benefits are needed, they will not be taxable to you. With an individual policy, you have control over selecting the definition of disability that your policy uses (any occupation, own occupation, etc.) and you’d also have the option to add any additional features to the policy, usually at an additional cost.

In this blog, we’ve merely scratched the surface on disability coverage. As I mentioned, it is often one of the most overlooked parts of a client’s financial plan and coverage types, despite its high probability and significant risk of long-term financial loss. At a minimum, check with your employer to see if group coverage is offered (both long-term and short-term) and consult with your financial planner on whether or not it is sufficient or if additional coverage would be recommended.

Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.

What are The Hidden Costs of Buying a Home?

Contributed by: Robert Ingram, CFP®

When buying a home within your budget, it’s important to consider the costs beyond the mortgage.

Let’s begin with the costs to purchase a home.

Even while carrying a mortgage, you will need to make a down payment. While there are low down payment loans, try to put down at least 20% of the purchase price. Otherwise, your loan may have a higher interest rate and you could face additional monthly costs such as mortgage insurance.

You will have closing costs, which can include things such as loan origination fees for processing and underwriting the mortgage, appraisal costs, inspection fee, title insurance, pre-paid property taxes, and first year’s homeowner’s insurance. Generally, you should expect to pay between 3-5% of the mortgage amount.

Now, you will have ongoing costs to live in your home.

Annual property taxes average about 1% of the home value nationwide, but the tax rates can vary widely depending on the city or town. Keep property taxes top of mind when you are looking at different communities.

Homeowner’s insurance is another annual cost that not only depends on the value of the home and the contents within it you are covering, but also on the state and local community. This cost generally ranges between $2,000-3,000 per year, sometimes more.

If your home is a condominium or a single family home, you should expect annual or monthly homeowner’s association fees that cover the care of common areas, the grounds, clubhouses, or pools. Depending on the number of amenities and of course the location, average fees range from $200-400 per month.

While you may be used to paying some utilities as a renter, the size of your new home could significantly increase your utility rates. Going from an 800 square-foot apartment to a 2,500 square-foot house could double or triple the costs to heat it, cool it, and to keep

the lights on. Add your local area water and sewer fees and your utilities could easily reach $600–700 per month or more.

Going from renting to homeownership also means having to maintain the new home (both inside and out). Things can be regular ongoing maintenance like lawn care and landscaping, or larger projects like painting, roof repair, furnace, and appliance replacement. Consider the tools and equipment you would need to buy or the services you would hire to do the work.

Finally, there is another hidden cost that can put a dent in your budget, filling up the house. A home with more rooms can mean more spaces that “need” furniture and other decorative touches. The costs of furnishings can be several thousands of dollars to tens of thousands of dollars. Without proper planning, it can be all too easy to rack up those credit card statements and have a mountain of debt as you move into your new home.

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Bob Ingram, and not necessarily those of Raymond James. Raymond James Financial Services, Inc. does not provide advice on mortgages. Raymond James and its financial advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified professional for your residential mortgage lending needs.

Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Q1 2026 Investment Commentary

Contributed by: Angela Palacios, CFP®, AIF®

Contributed by: Nicholas Boguth, CFA®, CFP®

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Executive Summary

• Markets faced early volatility driven by geopolitical tensions, higher oil prices, tariff uncertainty, and evolving Fed policy.

• Stocks declined modestly (S&P 500 down ~4%), while bonds were essentially flat, cushioned by higher yields.

• Oil and gold were volatile, reminding investors that even “safe haven” assets can move unexpectedly.

• The Federal Reserve held rates steady, despite market swings in rate-cut and rate-hike expectations.

• Diversification mattered—spreading risk across asset classes and sectors helped limit portfolio drawdowns.

• Long-term investors are best served by staying disciplined, maintaining liquidity needs, and avoiding emotional decisions during short-term market noise.

Volatility is a normal part of investing. A thoughtful financial plan and a diversified portfolio remain the most reliable tools for navigating uncertain markets.

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2026 is off to an eventful start, reminding us once again that volatility is a normal part of the investing journey. A wide variety of headlines, mostly geopolitical, have dominated the year so far, creating early volatility across equities, commodities, and even bonds. First, the U.S. military arrested the Venezuelan  President Nicolás Maduro and his wife, forcing a change in leadership for the country. Gold and silver surged, while defensive sectors like U.S. energy and utility stocks rallied. Shortly after, the U.S. made statements about the possibility of controlling Greenland, which strained relations with Denmark and NATO partners. Lastly, the U.S. re-entered conflict in the Middle East as war broke out in the region with Iran.  With traffic through the Strait of Hormuz restricted, global oil markets felt the impact as the price for a barrel of oil quickly spiked to well over $100 and hovered there for the remainder of the quarter.

Bonds, as measured by the Bloomberg US Aggregate Bond index, ended the quarter essentially flat at -0.05% while U.S. stocks (S&P 500) were down -4.33%. International markets and U.S. small-cap markets started the year with surprising strength, but they have given back much of those gains through March as the war escalated. Gold experienced the most volatility, rallying another 20% this year before giving nearly all of that back, and ended the quarter up only 5.7%. In our recent investment event, we discussed many of these headlines and noted that this is a midterm election year, which is usually marked by greater-than-average volatility but often ends positively.

Volatility Caused by Geopolitical Events

The above headlines can make investors want to act – maybe even sell their investments and stock up on cash under the mattress or gold bars in the safe. In times of stress, it is important to lean on history and data to guide the next best course of action. See below for stock returns 3 and 12 months after key conflicts over the past 100 years. Does the data surprise you?

Diversification and remaining invested are very important in times like these. While diversification doesn’t completely insulate you from drawdowns during the hard times, it does make them much more bearable and hopefully sets your portfolio up for a quicker recovery. Volatility is a normal part of investing. Remember, if we had no risk, there would also be no reward. It is the price we pay for long-term positive returns. Each year, volatility crops up for one reason or another, and temporary pullbacks are very normal.

2025 and 2026 have been no exception. Liberation Day (political branding of tariff policies) caused a strong market pullback around the same time last year, followed by the Iran War this year. The chart below shows the regularity of pullbacks. The blue bars (overwhelmingly positive) are calendar year returns. The orange dots show how much the market fell WITHIN each calendar year. Some years only see 3% to 10% dips. Some years see dips of 10% to 50%. The “average” intra-year drawdown since 1950 is 13.5%. Despite those dips, the S&P 500 was positive ¾ of the time and averaged 9.5% per year.

For investors with long time horizons, these moments may serve as great entry points, especially if you have additional dollars to save. For those who depend on their assets, we have an action plan in place that was developed long before this volatility began. The thoughtful planning work we do with you helps ensure you have what you need for the next 6 months, a year, or even two years, already in cash or money market, which means you don’t have to sell into market volatility.

Federal Reserve and Interest Rates

The Federal Reserve (The Fed) has faced political pressure to cut interest rates while it navigates stubborn inflation, a weakening labor market, and the economic consequences of the war in Iran. The Fed opted to hold interest rates steady at 3.5%–3.75% through its January and March meetings, even as oil‑price spikes linked to Middle East conflict complicated its inflation outlook. It is important to remember that the Fed focuses on core PCE, which strips out inflation pressures from energy and food because they are typically so volatile. Inflation fears and concerns that the Fed could raise short-term interest rates have picked up again amid the spike in oil prices. I think we all immediately remember the 1970s era of inflation when we hear that oil is getting expensive and start to worry. As of now, this spike has been short-lived, and if the Straits of Hormuz reopen soon and oil starts moving again, we should see oil prices start to come back down. Short-term spikes usually don’t flow through to core PCE inflation in a meaningful way. However, if oil remains scarce and prices remain high, you will start to see the higher energy costs leak through to other areas of the economy, which would then be reflected in higher core PCE.

The bond market immediately jumped to the conclusion in March that the latter would happen, and the Fed would be staring at rising inflation numbers, and then further assume the Fed would start raising interest rates again to combat this inflation. We think it is far too early to assume this will happen. We entered the year with bond and equity markets pricing in 1 or 2 rate cuts by the end of this year, and now the market is pricing in a rate increase before year's end. This change in expectations is why bonds have had a negative month of returns. However, it is important to note that this isn’t the start of a 2022 bond market again. Now we are starting from a place of much higher yields, and we still have a robust interest rate being paid to us every month to compensate for some volatility.

Despite market assumptions, Fed officials continue to project one rate cut later in 2026, but internal disagreement continues, and if Kevin Warsh is confirmed by the Senate to take over in May, opinions could shift. It is important to remember that no single person sets this policy. There are 12 voting members of the Federal Open Market Committee (FOMC) who determine the fate of interest rates. The Chairman is simply the public representative of this board, and the chairperson only has 1 vote like everyone else and has no veto power.

At the same time, political pressure from President Trump on the Fed continues, as he publicly called for an immediate rate cut amid market volatility driven by war. Chair Jerome Powell, nearing the end of his term, emphasized that the Fed is still assessing the impact of the Iran war, elevated oil prices, and mixed economic data, and warned that the path ahead remains deeply uncertain. With leadership transitions approaching and geopolitical risks rising, the Fed’s next move remains far from clear—fueling market anxiety and adding to the perception that 2026 has become one of the most unpredictable years for Fed policy in over a decade.

Long Term Versus Short Term Interest Rates and Mortgage Rates

While the Fed does set interest rate policy, it is important to remember that it only sets short-term rates. Intermediate and long-term interest rates are driven more by supply and demand. Many have hoped that lower short-term rates would equate to lower mortgage rates. While rates have come down over the past 9 months, they have recently (in March) drifted back upward, causing new home buyers to pause. Earlier this quarter, 30-year mortgages had fallen below 6%, but they have drifted back to the mid-6 % range, nearly halting mortgage applications.

Private Credit Fears

Over the past few years, we have gotten many questions on private credit. We are constantly kicking the tires on different investment opportunities and trying to understand if they deserve a spot in your portfolio. The allure of 10%+ interest rates and little volatility sounded very tempting, but it was the first red flag in our review. Limited liquidity also had alarm bells swirling in our heads. Usually, if something sounds too good to be true, it often is. Private credit is no exception. Many dove in, thinking there would be little volatility and a great income stream. The problem with a limited liquidity product is just that, you usually can’t access your money when you most want it. As there were notable headlines about private credit borrowers, these private credit funds faced many redemption requests that they could not fulfill. Imagine wanting to sell an investment and being told no. That fear then starts to snowball, and more investors request redemptions, snowballing the issue and the headlines. We recognized this product for what it is: for high-net-worth investors with very long time horizons who can wait out redemption limitations without needing the cash. Even then, they aren’t guaranteed to pay you a premium investment return. The headlines are likely to continue escalating around these products as barriers to selling persist and securities in the portfolios are marked down to their actual values.

Artificial Intelligence

A.I. news continues to drive headlines and move markets. Companies that are driving the technology forward continue to share new developments and innovations that can be both exciting AND nerve-wracking. There is no shortage of opinion pieces predicting what the future holds for the technology, ranging from “minor” to “world-changing”. This uncertainty has shown up in financial markets, as there is some dispersion in stock prices lately. Not everything is moving in unison…which is healthy! We would not want to see dot-com bubble-era behavior, where any stock that mentioned A.I. was immediately rewarded. Certain companies’ stock prices have fallen following announcements of large A.I. spending plans, while others have reacted positively. Demand for “chips” is driving strong earnings expectations in the semiconductor industry, but there is concern about circular spending, where companies are just paying each other back and forth, and that may not be sustainable. There has also been some major volatility among individual stock names as competitive moats come under attack from A.I. Utilities and commodities are affected as “datacenter” plans with mind-blowing power needs continue to develop.

This is a major theme that affects many parts of the market. With any innovation, uncertainty follows, and all investors can do is invest accordingly. As far as our portfolios go, we continue to monitor valuations and expectations for the stocks and bonds that are directly affected. This quarter's volatility has actually made valuations more attractive. We get the question, “Is this a bubble?” a lot…and we just don’t see it across the whole market. Sure, there might be individual companies trading at extreme valuations, but it certainly isn’t across the entire market. It might surprise you to hear that, for example, Microsoft ended the quarter in a 31% drawdown from its prior high! It is one of the largest holdings in the S&P 500, but due to performance in other sectors, the index was still only down ~4% in Q1. To us, that is yet another example of diversification (in this case, sector diversification within the S&P 500) leading to better outcomes for investors.

Tariff Update

Trump’s tariffs were another source of volatility in the first quarter. The Supreme Court ruled that a portion of Trump's tariffs, the ones imposed on specific countries, were unlawful. Trump’s initial justification for imposing those tariffs as a national “emergency” did not hold up in the Supreme Court, so those tariffs were removed. He immediately responded to this ruling by imposing new temporary tariffs of 10%, then later 15%. Ultimately, this is a fluid situation that is adding to the uncertainty in the stock and bond markets. Companies have to navigate pricing and supply chain issues arising from tariff uncertainty, and there is still the lingering question of whether tariff refunds will be paid out.

Overall, it seems we can expect tariffs to remain in place for now, which will ultimately provide another revenue stream for the U.S. government but lead to higher prices for U.S. consumers. Time will tell how these tariffs will change going forward, whether they will remain in place long-term or be used more as a bargaining chip to make deals with other countries.

Gold Crash?

Another surprising market move in Q1 came from Gold. Gold started the year continuing its growth, hitting a new all-time high of almost $5,600 near the end of January! Then it fell 20% from its high over the next month and a half, bottoming out near $4,200 on March 23rd. It rallied slightly and ended the quarter near $4,600/oz.

The market can surprise us more often than we think. Gold is often considered a “safe haven” asset, which you would expect would RALLY in the event of something like, I don’t know, the unknowns of a war in the Middle East. But that is not how gold reacted this past quarter; in fact, headlines at the very end of the quarter hinted at an off-ramp from the conflict with Iran, and gold actually rallied on the news, similarly to stocks! Not exactly the movement you would expect from a “safe haven” asset.

Gold is an uncorrelated asset for better or worse. It has been on an amazing run over the past few years and just began experiencing some volatility this past quarter. Like any asset, consider the risks before investing, and understand your unique situation and financial plan to determine if, where, and how gold might fit into your portfolio.

Thank you for taking the time to read this quarter’s investment commentary. There is a lot of noise in the markets, and we believe that a thoughtful financial plan, paired with a disciplined investment process, is more important than ever. Please don’t hesitate to reach out to your financial advisor or anyone on our team here at The Center with any questions. We’re here to help and would be delighted to have a conversation.

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.

Nicholas Boguth, CFA®, CFP® is a Senior Portfolio Manager and Associate Financial Planner at Center for Financial Planning, Inc.® He performs investment research and assists with the management of client portfolios.

Any opinions are those of Angela Palacios, CFP®, AIF® and Nick Boguth, CFA®, CFP® and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.

When a Loved One Dies: Understanding the First Steps

Contributed by: Sandra Adams, CFP®

When a spouse or partner dies, the world can shift in an instant. Even when plans are in place, the surviving partner often wonders, “What do I do first?” It’s a question we hear often, and it usually comes from a place of love, worry, and a desire to honor the person who has died.

Start with Safety and Confirmation

If the death occurs at home, your first call depends on the circumstances. If hospice is involved, call the hospice nurse—they will guide you through the pronouncement of death and the next steps. If hospice is not involved, call 911 or the local police. They will come to the home, assess the situation, and coordinate the official pronouncement.

Contact the Funeral Home or Cremation Provider

Once there is a pronouncement, your chosen funeral home or cremation provider is typically the next call. If you have a prepaid plan, they will walk you through what they need and what happens next. There is no need to rush—these professionals handle this every day and will guide you gently. *Note: the funeral home or cremation provider will notify Social Security of the death for you.

Notify Key Professionals and Gather Only What’s Essential in the First Few Days

Notify key professional advisors (financial planners, attorney, etc.)  and locate basic documents such as the will or trust, powers of attorney, and any prepaid funeral contracts. You do not need to empty safe‑deposit boxes or withdraw bank accounts immediately. Many long‑held myths about “empty it right away” no longer apply, and most accounts today pass by title or beneficiary designation. Other than cash for immediate expenses, most financial decisions can wait until you are ready to make them later.

Move at a Human Pace

Grief and logistics rarely align. Your job in the early days is simply to take the next right step. Our job is to help you sort through the financial and administrative pieces with clarity and steadiness.

If you or someone you love is navigating a recent loss, please reach out. You don’t have to do this alone. We are always here to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.