Space Exploration Technologies (NASDAQ: SPCX), commonly referred to as SpaceX, got an initial share price bounce when it IPO'd due to enthusiasm about what it might do over the years to come -- such as building orbital data centers. It's also an Elon Musk company, which draws a lot of interest. (Tesla has averaged annual gains of 39% over the past decade.)

You might be wondering whether you should buy shares yourself or just forget about it.

I myself am forgetting about it, but every investor is different, so it's worth learning more and making your own decision. Here are some considerations.

Image source: Getty Images.

Why you might buy SpaceX

Here are reasons for buying:

• Some Wall Street analysts are bullish on it. The stock recently traded around $150 per share (as of Sept. 3), and the average one-year price target from analysts is $222, roughly 48% higher.
• SpaceX is a leader in space launches, and its Starlink leads in satellite communications. Those are areas with plenty of growth potential. It also has an artificial intelligence (AI) platform.
• It's already growing. Its second quarter featured revenue up 92% year over year to $7.8 billion.

Why you might forget SpaceX

Those may be some compelling reasons to buy, but here are some reasons to pass on SpaceX:

• While revenue is up, its bottom line is red, with a second-quarter net loss of $541 million. (That's an improvement from the year-earlier loss of $1 billion.)
• Its valuation is steep. There are no earnings, so there's no price-to-earnings (P/E) ratio. But the price-to-sales ratio is a steep 65, and the forward-looking P/E ratio was recently 194. There's no margin of safety here. If the company fumbles, the stock could fall sharply.
• More than a billion early investors' shares will be "unlocked" in September and October, allowing them to be sold -- which could send shares downward.

Think it through for yourself and do some more research. I'm steering clear based on what I'm seeing.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Moderna (NASDAQ: MRNA) is famous for developing vaccines using mRNA technology (thus, its ticker symbol) -- including its highly popular COVID-19 vaccine a few years ago. Enthusiasm over that vaccine helped propel the stock some 434% in 2020 and another 143% in 2021. Wow, right?

But what has the stock done for shareholders lately? How has it done over the past five years? Not so great. It has averaged annual losses over that period -- enough to turn a single $10,000 investment in early September 2021 into just $3,792 in early September 2026. Ouch!

Image source: Getty Images.

However, the story doesn't end there. What if you bought into the biotech stock with $10,000 just one year ago? Your stake would now be worth... $62,344. The stock has surged more than 500% over the past year!

The reason why is rather understandable: Moderna has been making some auspicious announcements. For starters, it has received regulatory approval for its updated COVID-19 vaccines. More intriguingly, it has also reported strong clinical trial results for its drug to treat melanoma, a form of skin cancer (the drug was developed in partnership with Merck). A potential vaccine against cancer is a big deal, obviously, and Moderna co-founder and board chair Noubar Afeyan has suggested that this vaccine could be a springboard for vaccines against kidney, bladder, and lung diseases, among other conditions.

Given all that, should you invest in Moderna now? Well, maybe. The company has been posting net losses instead of gains over the past few years, which isn't attractive. However, it also has far more cash than debt, which is promising. Another plus is Moderna's proprietary knowledge and technology, which isn't easy for a rival to duplicate. It has dozens of treatments in its pipeline, too.

Given Moderna's great promise, I think it's reasonable to buy a few shares now -- or wait and hope for a pullback. Research it further first, of course.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Moderna. The Motley Fool has a disclosure policy.

AMC Entertainment (NYSE: AMC) is an interesting stock. For a while, in 2021, it was a "meme stock," often in the news and surging more than 1,100% that year to more than $600 per share. The next years were different, with shares crashing 85%, 85%, 35%, and 61% in 2022, 2023, 2024, and 2025, respectively. Altogether, that's more than a 99% decline. Ouch!

Image source: Getty Images.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

So far, 2026 has been quite different, with shares up about 63% (as of Sept. 4). Still, they were recently trading for $2.67 apiece. In other words, AMC Entertainment's shares are firmly in penny-stock territory. Should you buy shares now, while they're below $3? Maybe.

Penny stocks are notoriously volatile and risky, often tied to young, unproven companies, and occasionally hyped online. They're generally to be avoided. But AMC Entertainment, while definitely not a no-brainer, blue chip stock, is not a typical penny stock. Its market value was recently $2.4 billion, for example. Its last earnings report, for its second quarter, featured revenue of $1.6 billion, up 14% year over year.

So -- should you buy into AMC Entertainment? Here are some reasons you might:

• Movie theaters are having a great year, with summer ticket sales up 26% over last year and above most recent summers.
• AMC seems to have its mojo back, with Q2 also featuring adjusted earnings in the black, not the red.
• The stock's valuation arguably looks reasonable, with a low price-to-sales ratio of 0.28, below the five-year average of 0.31.

However, keep in mind:

• Other movie stocks may be better buys, with lower valuations.
• AMC doesn't have a solid track record of profits.
• It doesn't pay a dividend.
• The company has issued many more shares, diluting the value of existing shares.
• It's carrying a lot of debt.

Overall, I'm taking a pass. But dig deeper, if you're intrigued, and see what you think.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

If you're looking to invest in dividend-paying stocks for that sweet passive income, good for you! Dividends are a great way to collect cash without having to sell any stocks -- and that cash can help support you or can be deployed to buy more shares of stock. If you're considering investing in Apple (NASDAQ: AAPL), that also seems like a good thing to do.

But what if you're hoping to get $12,000 in annual dividend income from Apple? How many shares would you need to buy -- and what would they cost you? Let's see.

Image source: The Motley Fool.

It's just a matter of some simple math. Apple was recently paying a quarterly dividend of $0.27 per share, amounting to $1.08 annually. So divide the $12,000 you're hoping for by $1.08, and you'll arrive at 11,111 -- the number of shares you'll need to own. Now multiply that by the stock's price per share -- recently $325 -- and you'll see how much those 11,111 shares will cost. You might want to sit down now. The answer is: $3,611,111.

Here are some things to consider:

• You might not want to invest in Apple right now, because its shares are, arguably, somewhat overvalued. For example, the recent forward-looking price-to-earnings (P/E) ratio is 32, a bit above the five-year average of 28.
• Apple's recent dividend yield is low, at 0.33%, but it's growing. So if you can only afford to buy, say, 100 shares, your puny dividend income from that -- $108 per year -- will grow over time. Apple's dividend has averaged annual gains of 4.2% over the past five years and 6.7% over the past decade.
• Apple may deliver much more in price appreciation over time than in dividends. Its shares have averaged annual returns of 24% over the past 15 years.
• You might just invest in Apple (when the valuation is appealing) for Apple alone, and look elsewhere for dividend income. Perhaps consider an excellent dividend-focused ETF, like the Schwab US Dividend Equity ETF (NYSEMKT: SCHD).

Selena Maranjian has positions in Apple and Schwab U.S. Dividend Equity ETF. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

If you're bullish on energy companies, perhaps due to the ongoing conflict with Iran, you might want to consider Hess Midstream LP (NYSE: HESM), which was spun off from Hess back in 2014. (Hess itself was bought by Chevron in 2025.)

A key point of interest for the stock is its dividend, which recently yielded a hefty 7.7%. Better still, the dividend has been increased quarterly for around nine years.

Image source: Getty Images.

How much might a $10,000 investment in the company be worth in 10 years? Well, here's how the stock has done recently:

Source: YCharts, as of Sept. 3, 2026. Note: Total return includes dividends reinvested.

As an investor, you can't really know how fast the stock will grow over the coming decade. Using a conservative rate of return, a $10,000 investment:

• Growing at 8% annually, your stake would double to about $21,589.
• Growing at 10% annually, it would reach about $25,937.
• Growing at 12% annually, it would triple to about $31,058.

In its own words, Hess Midstream...

owns oil, gas and produced water handling assets that are primarily located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota, one of the most prolific crude oil gathering basins in North America. HESM conducts its business through three operating segments: gathering, processing and storage and terminaling and export.

One note on the tax side: the "LP" in Hess Midstream's name is a holdover from its history and doesn't carry the usual MLP tax treatment. A 2019 restructuring converted the public company into an "Up-C" entity treated as a corporation for federal tax purposes. For you, that's simpler than owning an MLP -- distributions show up on a Form 1099-DIV instead of a Schedule K-1, and there's no obstacle to holding the stock in an IRA or another tax-deferred account.

If you're intrigued by this fat dividend, take a closer look at Hess Midstream.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.

You may not know much about Hess Midstream LP (NYSE: HESM), but if you're a fan of dividends, it's worth getting to know -- because its dividend was yielding a whopping 7.8% as of the end of August.

Hess Midstream produces and processes natural gas primarily from the Bakken and Three Forks Shale regions in North Dakota. Known, in part, as a pipeline company, it serves Hess (a wholly owned subsidiary of Chevron) and third-party customers -- and its shareholders.

Its dividend is particularly impressive not only because of the size of the yield, but also because it has been increased quarterly for lots of quarters -- going back around nine years. Better still, these are not minor increases -- the quarterly dividend paid in mid-August was fully 7% higher than the year-earlier payout, and 56% higher than the dividend five years prior.

Image source: Getty Images.

That's not all -- Hess Midstream has also been buying back shares, which rewards shareholders by making each remaining share worth more. (Imagine cutting a pizza into six pieces instead of eight -- that's the effect of buying back and essentially retiring lots of shares.)

The war with Iran has provided a tailwind to some energy companies -- with Chevron, for example, up 36% year-to-date (as of Aug. 31) and ExxonMobil up 33%. Hess Midstream is up 21%.

As you dig into Hess Midstream and consider it, keep in mind that it's a "limited partnership" (LP), not an ordinary common stock. So it's a pass-through entity, tax-wise, and doesn't pay corporate income taxes. It passes the income and losses through to its limited partners (which includes you, if you own shares), who report them on their tax returns and pay any taxes due at their own tax rate. If you own shares of any LPs, you'll receive a Schedule K-1 form from each one come tax time, and you'll use that to report your share of the business's profits or losses on your return.

If this hefty dividend yield is appealing to you, take a closer look at Hess Midstream.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.

Booking Holdings (NASDAQ: BKNG) has become an online travel powerhouse, with a recent market value of $147 billion. Its platforms include familiar names such as Booking.com, Priceline, Agoda, and OpenTable. It's also a dividend-paying stock, with its payout recently yielding 0.84%.

That may seem like a rather anemic yield, but note that management has been increasing the dividend. In 2024, Booking Holdings paid out a total of $1.40 per share, and it's now paying $1.68 per share annually. Assuming its policy of payout hikes continues, those who buy into the stock now will collect increasing sums from the stock over time, with the effective yield rising.

Image source: Getty Images.

Better still, Booking Holdings' total yield, which factors in share buybacks, was recently a hefty 7.85%, suggesting plenty of shareholder rewards beyond that 0.84%.

If you're looking for, say, $1,000 in annual income from a position in Booking Holdings, how many shares would you need to buy? A little simple math will tell you: Divide $1,000 by the current annual dividend of $1.68, and you get 595 shares. At a recent stock price of $195, that would cost you about $116,000.

But should you invest in Booking Holdings? There are some solid reasons to. It's a big player in the online travel world, and consumers are increasingly turning to apps to conduct all kinds of transactions, and Booking Holdings is ready to help them book flights, hotel rooms, restaurant reservations, and more. As more people enter the middle class globally, that will help the company grow further. There are some risks, though. For example, another pandemic could curtail travel for an extended period.

Meanwhile, the stock seems roughly fairly valued. Its recent forward price-to-earnings (P/E) ratio of 19 was on par with its five-year average.

Note, too, that there are plenty of other investments that also offer significant dividend income. A good dividend-focused ETF, for example, will offer both regular payouts and diversification.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Booking Holdings. The Motley Fool has a disclosure policy.

Anyone interested in dividend income needs to know about Realty Income (NYSE: O). It pays its dividends monthly, which can be especially nice if you're living off those dividends and would like them to arrive more often. Also, its dividend yield is generous -- recently 5.3%.

Let's say you're looking to invest $30,000 to generate dividend income. How many shares would you need to buy? Well, the stock recently traded at about $61 per share, so $30,000 would buy about 492 shares. With each share recently delivering $0.271 per month, those 484 shares would generate around $133 per month. On an annual basis, that's about $1,596. Not bad, right?

Image source: The Motley Fool.

Before you rush off to place a buy order for some shares, take some time to learn more about the company, to make sure you're confident enough about its financial health and growth prospects to devote some of your hard-earned dollars to it.

For starters, know that Realty Income is a real estate investment trust (REIT) -- a kind of company that owns many real estate properties and leases them out to tenants. Realty Income uses "triple-net leases," which means the tenants are responsible for paying real estate taxes, property insurance, and operating expenses.

The company's portfolio is rather large, featuring more than 15,500 properties leased under long-term contracts -- to around 1,800 clients. It's focused on retail, industrial, and agricultural clients and encompasses 90-plus industries. Top industries include grocery stores, convenience stores, home improvement stores, and dollar stores. (Clearly, there's a big retail focus.)

Even more impressive is that the company's overall occupancy level for its properties was recently 98.8% -- and it has never been below 96%. That reflects stability and encourages a rather dependable dividend.

The stock isn't likely to be a fast grower, but it is likely to keep generating income for you. And it's expanding in some directions that might boost its growth -- like data centers -- while inking partnerships that will deliver more capital to invest in additional properties.

Selena Maranjian has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.

It's not the best way to invest, but plenty of us invest money in this or that and then neglect to check on how those investments are doing. Many of us are invested in the S&P 500 index of America's biggest public companies, so here's a look at the past performance of one of the top exchange-traded funds (ETFs) tracking the index, the Vanguard S&P 500 ETF (NYSEMKT: VOO):

Source: Morningstar.com as of Aug. 27.

Let's put those numbers in context. For example, what if you invested a single $5,000 sum in this ETF 10 years ago? Well, given that your stake would have grown by 15.4% annually on average, you'd end up with nearly $21,000 -- pretty good, right?

But hold on. The S&P 500 has averaged annual returns close to 10% (ignoring inflation) over many decades, not 22% or 15%. So if you're wondering how quickly your dollars will grow going forward, don't have overly rosy expectations. Indeed, with the stock market having soared so much in recent years, a stock market correction or crash in the coming year isn't far-fetched.

Image source: Getty Images.

Over the long run, though, the S&P 500 has always recovered from downturns and gone on to set new highs. So if you expect to be a long-term investor -- leaving your money invested for at least five, if not 10, years -- then don't fret too much about market pullbacks.

To give you an idea of what you'll own in the Vanguard S&P 500 ETF, here are its top holdings:

Source: Vanguard.com, as of July 31, 2026.

Pretty good, right? If you're bullish on the growth prospects of these companies, take a closer look at an S&P 500 index fund.

Selena Maranjian has positions in Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

If you're looking to invest $100 a month into a low-fee index fund, how much can you expect to earn? It's a good question. You'll see recommendations to invest in a low-fee S&P 500 index fund all over the place, but you won't often see any estimates of how much you might earn investing in it. So let's take a look.

A look at the Vanguard S&P 500 ETF's (NYSEMKT: VOO) past performance offers a clue:

Source: Morningstar.com as of Aug. 27, 2026.

You might thus expect around a 15% annual return on average from this exchange-traded fund (ETF). But don't think that -- because for one thing, past performance is no guarantee of future returns. And the past 10-plus years have featured above-average gains from the stock market. It's important to understand that the S&P 500 has averaged annual returns close to 10% (ignoring inflation) over many decades.

Here, though, are some examples of how $100 per month might grow in this ETF:

Source: Calculations via Investor.gov.

Image source: Getty Images.

The truth is that no one can know how much you'll earn over time in the S&P 500 -- though we do know that you'll participate in the growth of the U.S. economy and your gains will roughly track those of the overall stock market. (The S&P 500 accounts for about 80% of the U.S. stock market's value.)

So do consider parking some of your long-term dollars in the S&P 500 via a solid index fund.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Here's an intriguing exchange-traded fund (ETF) I've recently looked at: the Vanguard U.S. Momentum Factor ETF (NYSEMKT: VFMO).

The Motley Fool often recommends index funds, and they are indeed terrific for most investors, typically featuring relatively low fees because their managers simply have to buy and hold whatever is in the index they track. Index funds often outperform their counterparts -- actively managed funds -- too. Still, some managed funds are worth investigating, such as this ETF.

Image source: Getty Images.

The ETF is primarily focused on U.S. stocks -- large, medium-sized, and small ones -- screening that universe for stocks that have been making strong moves recently, expecting them to continue doing so. It's aiming for long-term appreciation.

It recently held nearly 700 stocks, with a 100% turnover rate, meaning that it sells about 100% of its holdings, on average, each year, replacing them with other holdings. So while it aims for long-term growth, its managers are not very patient.

How will your money grow over 20 years in this ETF?

Here's how the ETF has performed, relative to its benchmark index, the Russell 3000, and to the popular market benchmark, the S&P 500 index:

Source: Vanguard.com, as of July 31, 2026.

Pretty good, right? The Vanguard U.S. Momentum Factor ETF outperformed both benchmarks in nearly every period. If you made a single $10,000 investment in it and it grew at, say, 22% on average, annually, you'd end up with $533,500 after 20 years. But it's not reasonable to expect 22% growth to continue. The stock market has averaged returns closer to 10% over long periods. If this ETF averaged, say, 12%, your $10,000 could become around $96,500 over 20 years. But, of course, it might grow more slowly -- if momentum stocks lose their momentum.

Still, it's an intriguing ETF worth a closer look.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

If you don't already own shares of semiconductor giant Nvidia (NASDAQ: NVDA), you probably wish you did. The stock has averaged annual gains of 63% over the past decade and would have turned a single $10,000 investment 15 years ago into $7.5 million (with dividends reinvested) or $6.9 million (without the reinvestment of dividends).

Is it too late to buy the stock now? I don't think it is. I've been a shareholder for only a year or two, and I'm planning to hang on -- despite the stock's having a steep price-to-sales ratio of 17 (as of Aug. 26).

Image source: The Motley Fool.

Meet Nvidia

Once known for its gaming chips, Nvidia has pivoted in a highly profitable way, now focusing on chips for data centers used in artificial intelligence (AI). Indeed, it boasts the dominant AI ecosystem.

It's also helping smaller companies afford AI infrastructure via a new financing platform. And it's broadening the scope of its offerings, such as by adding custom AI processors and partnering with an optical interconnect technology provider.

Nvidia is growing very rapidly -- with plenty of room to grow more

Stocks with lofty valuations can be worrisome but much less so if they're growing briskly. And with Nvidia, "briskly" isn't a strong enough word. The company recently reported a boffo second quarter, with revenue up 106% year over year (that's more than a doubling!) to $96 billion, and revenue from data centers up 117% to $89 billion.

Those numbers reflect the major role data centers play in the business, generating about 93% of total revenue. Another thing to appreciate is that this is a huge business, recently sporting a market capitalization of $5.5 trillion -- and it was still able to more than double its revenue. Also announced recently is a $12.9 billion acquisition of AI specialist Hugging Face.

Anyone worrying that AI has grown too much too fast can be reassured by Nvidia CEO Jensen Huang, who asserted that AI has "reached its inflection point," adding:

It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue... And demand is accelerating. This time last year, one lab alone was driving the build-out; today, we have a golden age of new AI labs and start-ups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem, and physical AI coming online -- with strong momentum across the U.S. and around the world.

The valuation is attractive

I'm likely to hang on to my Nvidia shares simply because its future looks quite rosy. And I think others buying now are likely to prosper over the long run, too -- because Nvidia shares, despite their breakneck growth, still don't seem overvalued. Yes, the price-to-sales ratio of 17 is on the steep side, but that's not so unusual for a really fast-growing technology company.

Meanwhile, the recent forward-looking price-to-earnings (P/E) ratio of 24 is well below the five-year average of 35, and the price-to-cash flow ratio, recently 29, is well below the five-year average of 51.

On top of that, Nvidia is buying back some of its own stock -- it bought $26 billion worth of its own stock in the last quarter. A responsible management will do so only when it sees its shares as undervalued.

Want more? Nvidia recently increased its dividend payout by a factor of 25 so that it now sports a dividend yield of 0.49% (as of Aug. 27). Take a closer look at Nvidia and see what you think. It's not without risks, but to me, even if there's a market downturn and it drops sharply, I would expect it to eventually recover and set new highs.

Selena Maranjian has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

If you're a retiree collecting Social Security benefits -- or you're just a Social Security enthusiast -- you're probably eagerly awaiting the announcement of the next cost-of-living adjustment (COLA) for Social Security benefits.

That announcement is expected on Oct. 14, but until then, experts are weighing in with educated predictions.

Image source: Getty Images.

Understanding Social Security COLAs

The fact that Social Security benefits get adjusted nearly annually to keep up with inflation is a very good thing, helping retirees preserve the purchasing power of this income stream. Without inflation adjustments, some retirement streams (such as, for example, some annuity payments or pensions) could lose a lot of purchasing power over time.

To set the stage, here are recent COLAs:

Data source: Social Security Administration.

The historical average COLA increase is around 2.6%.

It's worth noting that these increases are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) -- a measure that, oddly, focused on workers. It would be more logical to base increases on the Consumer Price Index for the Elderly (CPI-E), which weighs categories such as healthcare more heavily. After all, healthcare spending in retirement can be a major expense.

The upcoming COLA

So what of the upcoming COLA to be announced this year? Well, until recently, it was expected to be 3.8%, per the nonpartisan Senior Citizens League -- an organization many look to for these estimates. But now the Senior Citizens League has ratcheted down its estimate to 3.6%.

Mary Johnson, an independent Social Security and Medicare policy analyst, has lowered her prediction from 4.7% to 3.7% to 3.4% over the past few months.

Here's what a 3.5% increase (an average of those 3.4% and 3.6% predictions) will look like:

Those increases may not look huge, and they aren't, but they can still help those on fixed incomes, especially as benefits grow more and more over time.

A looming crisis

Here's a problem, though: With more people retiring early and living longer, the ratio of workers to beneficiaries has been shrinking -- and Social Security's surplus is shrinking. When the surplus that the program had long run is gone, we won't see Social Security benefits stop, but if nothing is done, they're likely to shrink.

Here's the scoop, per the Trustees of the Social Security and Medicare trust funds, in their 2026 report:

The OASI Trust Fund is projected to become depleted in the fourth quarter of 2032, one quarter earlier than projected in last year's report. Upon reserve depletion in 2032, projected income is sufficient to pay 78 percent of scheduled benefits. This percentage declines gradually to 62 percent by 2100.

So in the near future, your benefit might rise by, say, 3%, but then fall by 22%. Yikes! Fortunately, there are ways to fix Social Security, if Congress takes action.

For now, though, we can wait until Oct. 14, to see what the next COLA is.

The Motley Fool has a disclosure policy.

Bill Ackman is the Founder and CEO of the Pershing Square Capital Management hedge fund company. Many investors follow his moves, because he's pretty good at investing. Per Pershing Square, the fund's cumulative net gains since its inception in January 2004 are 2,644% as of the end of 2025 -- amounting to an average annual gain of around 16%.

That's pretty good, considering that the overall stock market averaged only about 11% over that same period, and its long-term average annual gain is around 10%. It's enough to have made Ackman a billionaire, recently worth $8.9 billion, perForbes.

Image source: Getty Images.

Pershing Square's portfolio

Ackman is also known for having a very concentrated portfolio, with only 14 holdings as of its 13-F filing for the quarter ending June 30. That kind of concentration is rare, and it reflects a lot of confidence in the fund's holdings.

Here's how the portfolio looked at the end of that quarter.

Data source: WhaleWisdom.com.

Noteworthy additions to the portfolio

Additions that may be of the most interest to investors include Netflix, Visa, and Mastercard. Why did Pershing buy them? A key factor is likely simply valuation, as Ackman likes to buy stocks at a fair or low price and hold. These companies are also highly dominant, so he's also betting that great growers will continue to grow and dominate.

Netflix

Netflix shares were recently down about 32% over the past year (as of Aug. 25). Its shares are arguably undervalued, with a recent price-to-earnings (P/E) ratio of 26, well below the five-year average of 36. The company is still growing, but at a slower clip, due to its size and dominance -- and it's facing more competition than ever. International markets are a good growth driver, though.

Visa and Mastercard

Visa's shares look more fairly valued, with a recent P/E ratio of 33, close to the five-year average of 32. Its stock has averaged annual gains of nearly 22% over the past 15 years, and it's up 17% over the past year.

Mastercard's shares also look fairly to attractively valued, with a recent P/E ratio of 33, a bit below the five-year average of 37. The stock has also averaged annual gains of 22% over the past 15 years, though it's up only 1.6% over the past year (as of Aug. 25).

Both are fintech giants, likely to keep growing as more people conduct more financial business electronically. Crypto is a new threat, however, as is the fact that these two companies are so dominant that they may attract additional regulatory oversight.

Selena Maranjian has positions in Amazon, Meta Platforms, Microsoft, Netflix, and Visa. The Motley Fool has positions in and recommends Amazon, Howard Hughes, Mastercard, Meta Platforms, Microsoft, Netflix, and Visa. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.

For best results when investing, take time to learn a lot about the stock market and about how to invest effectively. Alternatively, you can opt out of that and stick with low-fee, broad-market index funds, such as S&P 500 index funds, which can also build your wealth powerfully.

Either way, here's one key thing every investor should know about the stock market: It will crash now and then.

Image source: Getty Image.

Portfolio values don't go up in a straight line. The line will be jagged, marked by occasional corrections and occasional crashes. Corrections are drops of at least 10% from recent highs, and drops of 20% or more are considered a crash.

Here are some things to know about market pullbacks:

• They're not infrequent. According to my colleague Trevor Jennewine, "Since 2010, the S&P 500 and Nasdaq Composite have dropped into correction territory 10 times (once every 18 months) and 14 times (once every 13 months), respectively."
• Crashes, followed by bear markets, are less frequent. Bear markets happen, on average, about every 3.5 years.
• They don't necessarily last a long time. The average length of a bear market, since 1928, has been 11.4 months, according to Yardeni Research.
• The stock market has lost about 35%, on average, in bear markets, says The Hartford Funds, while bull markets have averaged gains of 111%.
• Recoveries can be strong. Jennewine writes: "Since 2010, following the S&P 500's first close in correction territory, the index has returned an average of 18% during the next year and 38% during the next two years."

What should you do?

Instead of worrying about a market crash, simply prepare for one:

• Don't keep any money in stocks that you might need within at least five years.
• Consider holding on to a bunch of healthy dividend-paying stocks and value stocks, as they can be more stable than high-flying growth stocks when there's a market pullback.
• Consider keeping a modest portion of your portfolio in cash, to take advantage of great stocks on sale after a market crash.

The Motley Fool has a disclosure policy.

Most of us have Social Security benefits to look forward to in retirement, and one of the biggest decisions you'll have to make about that is when to claim them and start the checks rolling in. We can claim our retirement benefits as early as age 62 or we can delay up to age 70.

If you're thinking of just claiming somewhere in the middle, such as age 65, only do so after you've considered the upside and downside of that decision. Here are two reasons not to claim at age 65.

Image source: Getty Images.

What difference does it make?

First, know that each of us has a "full retirement age" (FRA) at which we can collect our "full" benefits. It's 66 or 67 for most folks, and 67 for those born in 1960 or later. Consider the following table, showing how much of your full Social Security benefits you'll receive depending on when you claim them:

Data source: Social Security Administration.

While you'll clearly get bigger benefits by delaying, remember that you'll receive fewer benefit checks by doing so. Starting early means smaller checks, but many more of them.

1. You may want to claim your benefits earlier

Here's why you might claim your benefits early, such as at age 62:

• You may simply need that income as soon as possible -- perhaps due to a job loss, an early retirement, or health concerns causing you to stop working or to work less.
• Your health may be poor, suggesting that you may live a shorter-than-average life.
• You may have many relatives who died at a relatively young age.
• You may have sufficient other income and don't need to maximize your Social Security benefits.
• You're retiring early and can afford to do so.
• It's part of a coordinated strategy with your spouse.

2. It's probably best to claim your benefits later

On the other hand, you might want to delay claiming your benefits. They'll grow bigger for every year that you delay, up to age 70. There's no reason to delay beyond that age. Delaying as long as possible is smart if:

• You're the higher earner in a couple, and you're trying to maximize your benefit for whoever is the surviving spouse later on.
• You stand a good chance of living a longer-than-average life.
• You want a big benefit check, so that you'll have to rely less on your nest egg.

Various studies have concluded that most (but not all) people would collect the most, in total, from Social Security by delaying until age 70. For example, a 2022 paper from the National Bureau of Economic Research offered this:

We find that virtually all American workers age 45 to 62 should wait beyond age 65 to collect. More than 90% should wait till age 70. Only 10.2% appear to do so. The median loss for this age group in the present value of household lifetime discretionary spending is $182,370.

Each of us needs to think through when to claim for ourselves, factoring in our own situations.

The Motley Fool has a disclosure policy.

As we enter our 50s and start dreaming harder about retirement, we're also probably thinking at least a little about Social Security. If you haven't already started learning about it, this is a fine time to do so.

Here are some vital things to know about Social Security.

Image source: Getty Images.

1. Know that your benefits aren't going to match your pre-retirement income

Social Security is designed to deliver around 40% of pre-retirement income, on average, to retirees, though for higher earners it will deliver less and for lower earners, more.

Clearly, for the most comfortable retirement, each of us should be building additional income streams for retirement. Here's just one example of how that might be achieved:

Data source: author.

2. Know what to expect from Social Security

Though Social Security benefits will be an important part of your retirement, there's a good chance that they'll deliver far less income than you might have expected. As of July, for example, the average Social Security retirement benefit was only $2,086 per month, or about $25,000 per year.

Those who have had above-average earnings in their working life will receive more, but not a king's ransom more. (The maximum benefit was recently $5,181, or about $62,000 annually -- but it's impossible for most folks to qualify for it.)

To access the latest estimates of your future benefits, set up a my Social Security account at the Social Security website.

3. Know that your Social Security benefits will increase over time

It's a very wonderful thing that Social Security benefits get adjusted upward over time, via nearly annual cost of living adjustments (COLAs). The latest increase, for 2026, was 2.8%.

Those increases are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), though, a measure focused on workers. It would be more logical to base them on the Consumer Price Index for the Elderly (CPI-E), which weighs categories such as healthcare more heavily. After all, healthcare spending in retirement can be a major expense.

4. Know that you can make your future Social Security benefits bigger

There are multiple ways to increase your future benefits. For example, be strategic about when to claim your benefits. If you start collecting your benefits early, your benefit checks will be smaller -- but you'll collect many more of them. Delaying beyond your full retirement age will boost your benefit checks by about 8% for each year until age 70.

According to several studies, most people can maximize their total benefits by waiting until age 70 to claim them.

5. Know that the Social Security surplus is running dry

With more people retiring early and living longer, the ratio of workers to beneficiaries has been shrinking and Social Security's surplus is shrinking. Our benefits aren't due to go to zero, but if nothing is done, they're likely to shrink -- to around 78% of what we're due. Fortunately, there are ways to fix Social Security, if Congress takes action.

Get all this vital info under your belt, and you'll be better equipped to make savvy Social Security decisions.

Let's address my provocative headline right now. Yes, one investor amassed a Roth IRA worth $264 million. Most of us will not be that successful. But if you heed some lessons from Roth IRA millionaires, you might become one too.

1. They started early

Warren Buffett's investing lieutenant Ted Weschler grew his Roth IRA to $264 million -- in part because he began socking away money for retirement at age 22. The earlier you start, the better, too.

Image source: Getty Images.

Check out the table below, showing how your money could grow at 8% per year:

Data source: Calculations by author.

2. They invested well

It's also important to invest effectively. A great way is via a low-fee, broad-market index fund, such as one that tracks the S&P 500. Or spread your money across multiple index funds, perhaps including one or more dividend-focused ETFs.

You might also add some growth stocks to your mix, perhaps via a good growth-oriented ETF. But note that the market seems frothy these days, and growth stocks can fall harder than other stocks.

3. They kept taxes in mind

Your contributions to a traditional IRA can be deducted from your taxable income, lowering your tax bill, but withdrawals in retirement will count as taxable income. With a Roth IRA, your contributions have no immediate effect on your taxes, but withdrawals can be tax-free.

It's true that, depending on your tax bracket now versus what you expect it to be in retirement, sticking with a traditional IRA may be best for you. But traditional IRAs also feature required minimum distributions (RMDs), which might bump you into a higher tax bracket. It's also quite compelling, if you ask me, to be able to withdraw money tax-free from a Roth account in retirement.

4. They converted a traditional IRA to a Roth

Another thing many Roth IRA millionaires have done is convert money from a traditional IRA to a Roth. Part of Ted Weschler's path to a $264 million Roth IRA was that in 2012, he converted his traditional IRA, then worth around $131 million, to a Roth. (He paid about $28 million to do so.)

Converting a traditional IRA could be a savvy move for you, too. And note that to ease your tax burden, you can spread the process over multiple years.

5. They lived below their means

Finally, a key thing that most Roth IRA millionaires have likely done is live below their means. If you want to have money to sock away in retirement accounts, you have to spend less than you bring in.

If you're living above your means, or you're living from paycheck to paycheck, think about whether there's anything you can do to shrink your spending or boost your income.

These are the kinds of strategies that have helped lots of people build million-dollar-plus Roth IRA accounts. And you can probably act on a few of them yourself, improving your future financial security.

The Motley Fool has a disclosure policy.

Just about all of us have Social Security benefits to look forward to each month -- or we may already be receiving them. Indeed, as of 2024, nearly 73 million people were collecting Social Security benefits. The checks may not be as big as we'd prefer, but they're still likely to make up a significant chunk of our retirement income.

So whether we get taxed on that income is kind of important to know.

Image source: Getty Images.

Which states tax Social Security?

If you're worried about having your Social Security checks taxed by your state, you'll be happy to know that fully 42 states, plus the District of Columbia, do not tax Social Security benefits. (That number has been growing in recent years -- up from 37 in 2017, for example.)

But eight states do still tax Social Security benefits. They are:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont

That may seem like a bummer if you live in one of those states, but hold on -- because these states mostly tax Social Security benefits with a relatively light hand. For example:

• Vermont taxes no benefits for individuals with an adjusted gross income (AGI) of less than $55,000, and offers a partial exemption for incomes of $55,001 to $64,999. For married joint filers, those figures are $70,000, and $70,001 to $79,999.
• Colorado doesn't tax benefits for single filers aged 55 to 64 with an AGI less than or equal to $75,000, or for married people filing jointly with AGIs less than or equal to $95,000. People 65 and older pay no tax on Social Security.
• New Mexico doesn't tax Social Security benefits for middle- and low-income earners -- about 86% of New Mexico seniors. Single filers earning more than $100,000 annually and joint filers earning more than $150,000 do face some taxation.

Don't forget Uncle Sam

Unfortunately, while your state probably doesn't tax Social Security, the federal government does. The rate depends on your "combined income," which is your AGI plus non-taxable interest, plus half of your Social Security benefits. Here are the details:

Data source: Social Security Administration.

If you're gasping at the 85% figure, understand that it doesn't mean those folks have to fork over 85% of their benefits. It means that up to 85% of their income could be taxed, leaving 15% untaxed.

When you're assessing how taxes will affect you, you need to consider all the taxes you'll face. One state may not tax Social Security, but it might tax your property heavily or have a steep sales tax. Another state may levy significant income tax, while taxing other things lightly. Learn more about taxation in retirement as you plan for your future.

The Motley Fool has a disclosure policy.

You may not have heard of Vici Properties (NYSE: VICI), but it's an S&P 500 component and a dividend-paying stock -- with a recent whopping dividend yield of 6.8%. It's also worth your consideration for your long-term portfolio, whether you have $1,000, $100, or $100,000 to invest.

Image source: Getty Images.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

First off, know that Vici Properties is a real estate investment trust (REIT), so it's required to pay out at least 90% of its taxable earnings as dividends. REITs generally specialize in one or more parts of the real estate market, such as shopping centers, apartments, or medical properties. Vici is focused on gaming, hospitality, wellness, and entertainment and leisure properties, with premier sites including Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas.

It operates far beyond Las Vegas, too, currently owning 103 properties across the United States and Canada, totaling more than 130 million square feet and including about 66,000 hotel rooms and more than 700 restaurants, bars, nightclubs, and sportsbooks. An intriguing detail is that it owns 33 acres of undeveloped land in Las Vegas -- which could deliver a lot of value one day.

Like other REITs, Vici uses triple-net leases for all of its agreements, where the tenants pay real estate taxes, property insurance, and operating expenses. It recently sported an overall 100% occupancy rate, too, and 45% of its leases are subject to inflation-related escalation. Its average remaining lease term is around 40 years, reflecting a lot of stability.

Vici Properties may not be the fastest-growing stock, but if you're seeking substantial passive income, it's built to deliver it. Its payout has been growing at a respectable clip, too, with its recent annual payout of $1.80 up from $1.50 in 2022 and $1.17 in 2019.

Its valuation is compelling as well, with its forward-looking price-to-earnings (P/E) ratio of 9.2 well below its five-year average of 11.7. Give it a closer look.

Selena Maranjian has positions in Vici Properties. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.

Looking for a promising growth stock for your long-term portfolio? How about one that has averaged annual gains of 24% over the past 15 years and 24% over the past three years?

I'm referring to Netflix (NASDAQ: NFLX), which needs no introduction.

The stock has averaged big losses over the past three years, though, which either means it's in trouble -- or it's presenting a great buying opportunity for long-term believers.

Image source: The Motley Fool.

I think it's the latter. Netflix has actually been my best-performing investment ever, and I've been investing for decades. I'm hanging on to the stock, too, because I think it has more room to grow.

So why invest in Netflix? Well, it's one of the world's premier streaming services. It does have competition, from the likes of Amazon.com's Prime Video and, increasingly, Alphabet's YouTube. Netflix has addressed this in part by expanding its scope -- such as by offering live sports broadcasts, cloud-based games, and video podcasts. In addition, by now having an advertising-supported membership group, the company has created another significant revenue stream.

And Netflix is still growing, too. Its second quarter, reported in July, featured revenue up 13% year over year to $12.6 billion. It's offering programming in about 50 languages to more than half a billion people in more than 190 countries. It's clearly a major force in the U.S., and it can grow bigger in many other countries, too.

Netflix's valuation is another draw. Its forward-looking price-to-earnings (P/E) ratio was recently 25.4, well below the five-year average of 30.6, and its regular P/E ratio of 25.2 is also below the five-year average of 36.2.

There are indeed challenges the company is facing, but I wouldn't count it out. Management has demonstrated admirable restraint by walking away from some big deals, such as those with Warner Bros. Discovery and Roku, after choosing not to match the winning bids from Paramount Skydance and Fox, respectively. Many managements would have kept bidding, with insufficient regard for shareholder value.

Even some big investors, such as Bill Ackman, are buying Netflix.

Selena Maranjian has positions in Alphabet, Amazon, Netflix, and Warner Bros. Discovery. The Motley Fool has positions in and recommends Alphabet, Amazon, Netflix, Roku, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.

Investors give Realty Income (NYSE: O) a closer look because of its dividend income. Given the right amount of initial investment, the stock could easily generate $1,000 or more annually. But is Realty Income a high-quality stock that deserves your money? I think so.

It's important to know that Realty Income is a real estate investment trust (REIT), which is a kind of company that owns many real estate properties, leasing them out to tenants, and collects rents that it then uses to buy more properties and pay out most of its net profits to shareholders.

Realty Income does this effectively because it relies on "triple-net leases" with its tenants, where the tenants are responsible for real estate taxes, insurance, and operating expenses on the property (not the owner). Operating this way keeps things simpler for Realty Income.

Image source: The Motley Fool.

Realty Income's portfolio, meanwhile, is hefty, featuring more than 15,500 properties leased under long-term contracts to more than 1,700 clients. It's focused on retail, industrial, and agricultural clients, representing about 90-plus industries.

Here's a clear sign of its quality: The company's overall occupancy level for its properties is 98.8% and never falls below 96%. That reflects stability and helps it maintain a dependable dividend.

As for the dividend, it's paid monthly rather than quarterly. And the dividend yield at the moment is a sizeable 5.2%. For context, the S&P 500's dividend yield is only 1.04%. Realty Income's payout has been growing consistently for 31 years, too!

So, how many shares of Realty Income do you need if you're seeking $1,000 in annual income? Each share recently delivered $0.271 per month ($3.252 over the trailing 12 months), so you need about 308 shares. With shares trading around $63, you would need $19,400 to buy in now and get $1,000 annually.

The stock isn't a fast grower, but it is likely to keep delivering meaningful income to you. And it's expanding it property segments to boost its growth -- including data centers. Take a closer look if you're intrigued.

Selena Maranjian has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.

For aficionados of stock splits, it's an intriguing question: Will Eli Lilly (NYSE: LLY) be the next company to split its stock? It certainly might -- its stock price was recently $1,280 per share. But the honest answer is that no one knows (except, perhaps, Lilly's management).

Eli Lilly has split its stock four times -- twice in the 1980s and twice in the 1990s, with the last split happening in October of 1997, nearly 30 years ago. Let's see whether it might do a split again -- and what it means for investors.

Image source: The Motley Fool.

Companies generally don't have any pressing need to split their stock, but when shares seem unaffordable for average investors, splitting can make sense. (Not every investor realizes this, but these days, some brokerages permit buying fractions of shares, which can solve the problem of an unaffordable share price.)

Stock splits tend to excite many investors -- because if you own, say, 200 shares of a company, it can feel great to suddenly own, say, 400 shares (via a 2-for-1 split) or 1,000 shares (via a 5-for-1 split). But they're really mostly nothing burgers. Here's why.

Imagine that you own 10 shares of Scruffy's Chicken Shack (ticker: BUKBUK), which is trading at $1,000 per share. The total value of your holding is therefore $10,000. Let's say Scruffy's splits its stock 2-for-1. You'll own 20 shares post-split.

However, share prices are adjusted downward proportionately at the split. So a $1,000 stock becomes a $500 one -- and your 20 shares are now worth ... $10,000 (20 times $500). See? Nothing burger.

Potential stock split aside, should you invest in Eli Lilly? It's worth considering -- because it's doing quite well. Second-quarter revenue was up 48% year over year, largely due to boffo sales for its Mounjaro and Zepbound drugs, which are being used by many to lose weight.

Lilly's stock isn't super cheap right now, though, with a recent price-to-earnings (P/E) ratio of 41 -- though that's below its five-year average of 58. Still, it might serve long-term investors well.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly. The Motley Fool has a disclosure policy.

If you're not familiar with Intuitive Surgical (NASDAQ: ISRG), know this: It's a massive robotic surgical systems specialist, with a recent market value topping $135 billion. That market value was quite a bit higher not so long ago, though -- because while the stock has averaged annual gains of 17% over the past decade, it's down 33% so far in 2026.

Two key concerns about the company are competition from China and also, potentially, from OpenAI and artificial intelligence (AI). That might have caused some to sell the stock or simply to steer clear. But the new, lower price should still entice long-term believers: Intuitive Surgical's forward price-to-earnings (P/E) ratio was recently 35, well below its five-year average of nearly 54.

Image source: The Motley Fool.

The big question is where Intuitive Surgical goes from here; for investors, the future always matters much more than the past. I'd argue that Intuitive isn't going away, because it already has an installed base of more than 12,000 robotic surgery systems in more than 70 countries around the world.

Better still, while hospitals aren't buying its pricey robotic surgery systems every day, they are frequently spending money on instruments, accessories, and servicing the systems they have. That's recurring revenue, which recently made up about 75% of total revenue.

On top of that, the company isn't standing still. It keeps launching newer, improved systems, and its offerings are much more polished and proven than those of would-be competitors. For example, it's expanding into bronchoscopy, and is seeing a lot of use of its machines for emergency surgeries.

I'm not the only bullish investor (and shareholder) around. The Baron Health Care Fund recently wrote:

Medical device stocks ... broadly underperformed the market amid concerns that health care utilization trends could decelerate following the expiration of Affordable Care Act (ACA) subsidies. Concerns were further compounded by the potential impact of Medicaid work requirements expected to take effect in 2027. Despite these headwinds, we believe Intuitive [Surgical] can continue to grow revenue at a mid-teens rate for many years and [we] remain positive on the company's long-term growth outlook.

Wall Street remains generally positive on the stock, with most analysts rating it a buy. Take a closer look at this dynamic company and see what you think. For long-term, risk-tolerant investors, this could be a great buying opportunity.

Selena Maranjian has positions in Intuitive Surgical. The Motley Fool has positions in and recommends Intuitive Surgical. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.

As you develop your retirement plan, you may notice that lots of decisions and events happen at various ages. Here's a look at many of them.

1. Age 50

Beginning at age 50, you can make additional "catch-up" contributions to tax-advantaged retirement accounts such as IRAs or 401(k)s each year. For example, the contribution limit for IRAs in 2026 is $7,500, but those 50 and older can contribute an extra $1,100, for a total of $8,600. For 401(k) accounts in 2026, the regular limit is $24,500 -- plus an $8,000 catch-up contribution for those 50 and older.

Image source: Getty Images.

2. Age 55

If you leave your job during or after the year you turn 55, you can take funds from a qualified employer-sponsored retirement plan, such as a 401(k) or 403(b), without a 10% penalty. This doesn't apply to IRAs, or if you rolled a 401(k) or 403(b) into an individual IRA.

At 55, you can also start making catch-up contributions to a Health Savings Account (HSA).

3. Age 59 1/2

Beginning at 59 1/2, you can withdraw funds from an IRA without penalty. If it's a traditional IRA, the withdrawal will count as taxable income, but if it's a Roth IRA, that withdrawal will likely be tax-free.

4. Age 60

Those aged 60 to 63 can make "super catch-up contributions" to 401(k) accounts. Instead of the regular $8,000 catch-up contribution, they can contribute up to $11,250.

Starting at age 60, you may be eligible to collect Social Security survivor benefits -- if your spouse or ex-spouse has died. (If it's an ex, you'll need to have been married for at least 10 years and not to have remarried.)

5. Age 62

Age 62 is the earliest age at which you can collect your Social Security retirement benefits. They'll be smaller than if you delay for some years, but you'll receive many more checks when you claim early, so ultimately the difference isn't huge.

6. Age 65

At 65, you're eligible for Medicare! It's very important to avoid enrolling late, as there's a hefty penalty you'll be charged for the rest of your life. You can sign up in your birthday month, or in the three months before or after you turn 65. Those still working or still covered by employer-provided health insurance can generally put off signing up for Medicare, so read up on this tricky topic.

Also at age 65, you can withdraw money from your HSA for nonqualified expenses and not face a 20% penalty.

7. Age 66 or 67

Each of us has a "full retirement age" at which we can start collecting the full Social Security benefits to which we're entitled, based on our earnings record. It's 67 for those born in 1960 or later.

8. Age 70

According to various studies, delaying collecting Social Security until age 70 is the best move for most of us.

9. Age 73 or 75

At age 73, many folks with traditional retirement accounts need to start taking Required Minimum Distributions (RMDs). This age rises to 75 in 2033, for those born in 1960 or later.

Make a few notes on your calendar, so that you can make some smart moves at each of these ages.

The Motley Fool has a disclosure policy.

If you're interested in the real estate market and would like to profit from it without actually buying homes or other buildings, you might be invested in Zillow Group (NASDAQ: Z) (NASDAQ: ZG) -- or may be thinking of investing in it. The stock is down about 60% over the past year, and it dropped nearly 13% in a single day in early August, before closing down 8%.

Image source: Getty Images.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

That's a sign of concern regarding the digital real estate specialist, and it may also present a good buying opportunity. Here's a closer look at the situation.

The reason for the drop was the company's second-quarter earnings report, which featured:

• Revenue up 18% year over year
• Mortgage revenue up 75%
• Rentals revenue up 31%

So far, so good, right? The report also featured this, though:

• Traffic to Zillow's mobile apps and sites was down 2% year over year.
• Zillow's average monthly unique users declined 2% to 239 million (but this was true across the category, and Zillow fared better than average).

Perhaps the worst news is that Alphabet's Google will now display real estate listings in all 50 states, which is very likely to have an impact on Zillow.

There are some positives for Zillow, though. Per management, it's implementing artificial intelligence (AI) effectively: "Consumers who use AI mode spend more than three times as long on Zillow, view more than twice as many homes, run nearly three times as many searches -- and contact an agent at nearly three times the rate of consumers who don't use AI mode. The same pattern holds in rentals..."

Greater use of AI may be behind the company's recent layoff of 500-plus people. That's bad for those people, but investors often see layoffs positively, if they result in leaner, more profitable operations.

So, should you invest in Zillow? Well, maybe, if you're doing so for the long term and you're risk-tolerant. The real estate market is tough these days, and the company still posted a double-digit gain. Alternatively, you might consider a real estate fund, which offers greater diversification.

Selena Maranjian has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Zillow Group. The Motley Fool has a disclosure policy.

So... maybe you've been reading up on the proliferation of data centers due to the rise of artificial intelligence (AI), and you're looking to invest in companies poised to profit from it. It's a fine idea, and one company to consider is Oklo (NYSE: OKLO), which is building small-scale nuclear reactors near data centers to power them.

Image source: The Motley Fool.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

After peaking at around $193 per share, the stock was recently trading for a more attractive $48. Looking at the company's financials, it has been posting a string of zeroes for its revenue for several years -- until its last quarter, which featured revenue of $1.2 million. Because it's spending heavily on building, it's in the red. In other words, the company doesn't have a track record of profit. It's something of a speculative investment at this point.

There is reason to be optimistic about its prospects, though, beyond its newly positive revenue. It recently reported achieving "criticality" at its Groves Isotope Test Reactor site, meaning that it has a stable chain reaction of atoms splitting via fission. Oklo noted that it's "the first reactor under the program to achieve criticality on private land, built from the ground up..." and that it "establishes the operational foundation for future commercial isotope production," proving that "American nuclear deployment timelines can be measured in months rather than years."

Another plus is that while the company is posting losses -- $81.6 million year to date for its second quarter -- it also has around $3 billion in cash and marketable securities. It's financially strong.

So -- should you invest $500 in Oklo right now? I think that it depends on what that $500 is to you. If you have a portfolio worth many thousands, or better yet, tens or hundreds of thousands, then you can certainly plunk $500 into Oklo and see what happens. But if that $500 is your first foray into the stock market, or it represents 10% or 20% or more of your portfolio, perhaps hold off.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

If you're looking for a solid blue chip stock for your portfolio, consider Walmart (NASDAQ: WMT).

Why invest in Walmart? Let's start with its dividend, which recently yielded 0.9%. That may not seem huge, but it's not far from the recent yield of the S&P 500 index, and it's a payout that has been growing -- by about 6%, on average, over the past five years.

Image source: Getty Images.

It's also been a solid performer, growing fairly rapidly despite its enormous size. (Its market capitalization was recently $890 billion.) Over the past decade, its shares averaged annual gains of 17%, and over the past 15 years, 14%. In its last quarter, Walmart posted revenue up 7.3% and operating income up 5%. The company is scheduled to report its second-quarter results on Aug. 20, so it's worth considering whether you want to buy before then -- in case boffo results drive the shares up.

A robust reason to consider Walmart is that the company has been adapting to the changing times. Its global e-commerce business, featuring deliveries and at-store pickups, saw revenue surge 26% year over year in the last quarter, with membership fees growing 17%. (Costco has been raking in billions annually from its membership fees, and Walmart is following suit -- though it doesn't require membership for its shoppers.)

Another plus for the company is that it's resilient in economic downturns and is less volatile than the overall market. So should a market crash or correction occur, potentially with a recession, people will still be shopping at Walmart -- and they may do so even more.

It's not all confetti and rainbows, though. There's also a reason to not invest in Walmart right now: Its shares seem overvalued. As of early August, its price-to-sales ratio was 1.24, well above its five-year average of 0.83. And the stock's forward-looking price-to-earnings (P/E) ratio of 38 was well above its five-year average of 27. You might do well if you buy and hold for a long time, but you'll reduce your risk if you wait for a lower valuation.

Selena Maranjian has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.

Annuities can deliver regular, dependable income for part of our retirement -- or for the rest of our lives. They can even provide income for all our spouses' lives. Still, there are some pros and cons to consider before buying one.

First, understand that an annuity is a contract between you and an insurance company or bank, which promises to deliver regular income to you (or, possibly, a future lump sum amount) in exchange for your paying them a significant chunk of change.

Image source: Getty Images.

What you can get from an annuity is often tied to prevailing interest rates. The table will give you an idea of what you might expect these days for $100,000 or $200,000 with a fixed annuity that starts immediately.

Source: ImmediateAnnuities.com, as of Aug. 5, 2026.

In many cases, by paying more or receiving less, you may be able to add features such as annual inflation adjustments. Note that women will generally receive less -- because they're expected to live a little longer.

Pros and cons of annuities

Here are some things to know about annuities:

• Annuities tend to have fees that can be hard to understand. Do your homework before committing any dollars.
• Annuity payments are guaranteed only as long as the issuing company remains solvent, so buy annuities only from highly rated insurers or banks.
• There are many kinds of annuities, ranging from relatively simple fixed annuities to indexed annuities and variable annuities.

Pros

• An annuity can deliver reliable income, which, along with Social Security benefits and other income streams, can help support you in retirement.
• They can protect some of your assets from market volatility.
• Earnings in your annuity will grow on a tax-deferred basis, as they would in a traditional IRA or 401(k).
• Annuities can boost your peace of mind about your financial security.

Cons

• Fees can be high with some annuities.
• Many annuities can be very complex, so make sure you have any you're considering explained to you very clearly.
• You give up a chunk of your nest egg when you buy an annuity. (You may be able to get some of that money back later, if need be.)
• You may be able to set up a similar income stream, though a less guaranteed one, by holding a lot of dividend-paying stocks in your portfolio.
• Distributions will likely be taxable.
• Some annuities can lose value, so choose carefully.

What to do

Annuities are not for everyone, and some are better for some people than others. If you're intrigued, do some research. You may end up wanting to allocate some portion of your nest egg to one or more annuities to increase your dependable income.

The Motley Fool has a disclosure policy.

According to a recent report from the Financial Industry Regulatory Authority (FINRA), 61% of social media users and "finfluencer" followers aged 18 to 34 have made an investment decision based on recommendations from a social media personality -- and these folks also reported "substantially higher fraud exposure and victimization."

A lot of financial advice found on social media is worth what you paid for it -- nothing. Here's a look at several bits of advice I've run across that are simply wrong or misleading.

Image source: Getty Images.

Stock market expectations

One social media pontificator said: "The stock market is one of the best tools to grow your wealth." That's very true. Over decades, it beats most other alternatives. They added that a 10% return doubles your money every 7.2 years, and a 20% return doubles your money every 3.6 years. That, too, is true -- it's the classic "Rule of 72."

The problem, though, is the suggestion that you can expect stock market returns of 20% annually. The stock market has averaged annual returns of close to 10% over many decades, not 20%. There are some years with massive gains, and some with sharp drops. But overall, expectations should be tempered.

Social Security

One poster said that "Taking Social Security at 62 instead of 67 cuts your benefits by 30%. Forever." That's true, but the person went on to say: "That's $500 less per month for the rest of your life." That's not necessarily true at all, because it depends on how big your benefits are. It's also important to understand that starting at 62 instead of 67 means you're collecting five more years of benefits -- which can amount to a lot.

Investing goals

Another person asserted that a million dollars will generate $100,000 in income per year. Well, it could, but you'd probably run out of money well before you die. That's taking 10% of your assets out annually, when they might only be growing by, say, 5% or 8%. A common guideline is to take out just 4% annually, more or less, for a good chance of having your money last 30 years.

This is a good reminder that most of us need to be saving and investing in earnest for retirement. For some, retiring with $1 million in assets will suffice, while others will want to aim for more -- or less. Much depends on your expected expenses in retirement and how far away retirement is. You can invest for the long term rather effectively via a low-fee index fund such as:

• Vanguard S&P 500 ETF (NYSEMKT: VOO): S&P 500 index funds encompass the 500 biggest companies in America, which together make up around 80% of the entire U.S. market.
• Vanguard Morningstar Total Stock Market ETF (NYSEMKT: VTI): This fund includes nearly all of the U.S. stock market, spreading your money across more than 3,500 stocks, not just 500. It includes lots of small companies, too.
• Vanguard Total World Stock ETF (NYSEMKT: VT): This ETF encompasses roughly all the stocks in the world -- about 10,000 stocks -- all in one easy, low-fee investment.

For best results with your hard-earned dollars, spend some time getting smart about money, and learn from reputable sources instead of strangers online.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

If you enjoy taking quizzes, you might have stumbled upon an 11-question financial knowledge quiz from the folks at the Financial Industry Regulatory Authority (FINRA). It can be a good idea to take the quiz even if you're not a quiz aficionado to see how savvy you really are.

Here are some sample questions and possible answers.

Image source: Getty Images.

1. If you buy a company's stock...

Do you own a piece of the company, or have you lent money to the company, or will the company return your original investment to you with interest?

2. If you buy a company's bond...

Do you own a part of the company, or have you lent money to it, or are you now able to vote on shareholder resolutions?

3. In general, investments that are riskier tend to provide higher returns over time than investments with less risk.

Is that true or false?

4. You invest $500 to buy $1,000 worth of stock on margin. The value of the stock drops by 50%. You sell it. Approximately how much of your original $500 investment are you left with in the end?

5. Over the last 20 years in the U.S., the best average returns have been generated by:

Is the answer stocks or bonds or CDs or precious metals?

6. Past performance of an investment is a good indicator of future results.

True or false?

Here are the answers.

• Question 1: Buying a company's stock makes you a part-owner in the business. So as the company becomes more (or less) valuable over time, so do your shares. Shareholders also frequently have the right to vote on company matters.
• Question 2: Buying a company's bond means you're lending money to the company in exchange for interest payments and the return of your principal. This is how many companies raise funds. Bondholders don't own a part of the company.
• Question 3: It's true that higher-risk investments can deliver higher returns, and low-risk investments tend to offer low returns. The high potential returns are not guaranteed, though, while some low-risk investments such as government bonds are guaranteed by the U.S. government.
• Question 4: With the buying-stocks-on-margin question, know that you are borrowing money from your brokerage when you invest on margin. So if you invest $500 to buy $1,000 worth of stock, you've borrowed the other $500 -- and will be charged interest on it. If the investment falls in value by 50%, it will be worth $500, which is what you borrowed and will need to repay. So the stock fell by 50% but your investment fell by 100%, to zero.
• Question 5: Over long periods, stocks have outperformed just about every alternative, such as bonds, CDs, money market accounts, precious metals, and so on.
• Question 6: False. Past performance of an investment is not a good indicator of future results. An investment may simply have had an unusually good year or years, or it might be likely to fall in value.

If you didn't do very well on this quiz, take it as a wake-up call to read up a little more on investing. A good place to start is Fool.com and our "How to Invest" page.

The Motley Fool has a disclosure policy.

Any article about retirement is likely to urge you to save more for retirement -- or at least to have you thinking you should be saving and investing more.

But some people might be better advised to stop saving for retirement. Here's a look at Americans' retirement readiness and at whether you might be able to stop saving.

Image source: Getty Images.

Americans' retirement readiness

There are lots of data points showing that Americans are generally woefully unprepared for retirement. For example, check out these numbers from the 2026 Retirement Confidence Survey:

Data source: 2026 Retirement Confidence Survey.
*excluding the value of a primary home

The folks at Fidelity have found that 55% of Americans (and 81% of baby boomers) are in danger of not being able to fully cover estimated essential expenses in retirement, such as housing, healthcare, and food.

Many, if not most, Americans should be saving and investing much more -- aiming to amass a nest egg that can support them in retirement.

Might you stop saving for retirement?

How about you? Can you stop saving for retirement? Maybe -- if you've already socked away enough.

What's enough? Some estimate $1.5 million, but of course, plenty of people retire fairly successfully on much less. Here are some steps you might take to assess where you are:

• Estimate when you plan to retire. (To be more conservative, perhaps assume you'll retire a few years before you actually plan to.)
• Inventory your investment portfolio to see how big it is.
• Estimate how much it could grow to by the time you retire. (This is where things get murky, as no one knows exactly how the economy or stock market will do in the coming years.) The stock market has averaged annual gains of close to 10% over many decades, but it has averaged closer to 15% over the past 15 years. You might therefore expect a slowdown and want to estimate an average annual gain of 6%, 7%, or 8%, to be somewhat conservative. For example, according to a Motley Fool calculator, a portfolio of $500,000 growing at 6% annually should be worth around $1.6 million in 20 years. Think about whether that might be sufficient. Withdrawing 4% of that in year one, for example, would yield $64,000.
• Review various withdrawal strategies, thinking about what will suit you best. One rough guide is the 4% rule, but it's not perfect.
• Keep inflation in mind, too. It has averaged around 3% over long periods. If you're expecting 6% annual growth and 3% inflation, that results in a "real" expected growth of 3% (6 minus 3).

A different reason you might stop saving for retirement is if you don't have a ready emergency fund that's able to sustain you for at least three months. If so, fill that fund before focusing on retirement.

Most folks will want to keep socking away money, but after some number crunching, you might find you've likely saved enough.

The Motley Fool has a disclosure policy.

If you're in the market for some reliable and generous dividend income, consider Realty Income (NYSE: O). It's not only a dividend payer, recently sporting a dividend yield of 5.12%, but it's also a monthly dividend payer. (Most companies pay their dividends quarterly.) A monthly dividend can be especially attractive to anyone planning to live off of that income.

Image source: The Motley Fool.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

You can expect that dividend to grow. Realty Income's last increase, announced in June, was its 115th consecutive quarterly increase. It has paid its monthly dividend for more than 670 consecutive months -- or more than 55 years!

Realty Income is a real estate investment trust (REIT) -- a company that owns a lot of real estate and leases it to tenants. Better still, it employs "triple-net leases," which require tenants to cover real estate taxes, property insurance, and operating expenses. Its portfolio encompasses more than 15,500 properties in all 50 U.S. states and parts of Europe. It's well diversified, too, with more than 1,700 clients in more than 90 different industries. Top industries include grocery stores, convenience stores, and home improvement stores.

The company is run very well, which is evident from its portfolio occupancy level, which was recently 98.8% and has never been below 96%. That points to considerable stability and a rather dependable dividend. This is not a stock that's likely to surge in value, but it should be a reliable, long-term slow grower while delivering regular dollars into your account.

One way that it might juice its growth is via data centers. It's partnering with other companies to develop data centers -- which are growing rapidly across America.

So, how many shares of Realty Income would you need if you were seeking $1,000 in monthly income ($12,000 per year)? Well, with each share recently delivering $0.271 per month, you'd need about 3,690 shares. With shares recently trading for around $62 apiece, those shares would cost you nearly $230,000. Most of us might want to settle for perhaps $100 or less per month!

Selena Maranjian has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.

As I've matured as an investor, I've largely switched from drooling over high-flying growth stocks to drooling over dividend payers. That's because I'm appreciating more and more the value of getting regular income directly into my financial accounts without doing anything -- and especially without having to sell any shares.

An example of a wonderful dividend-paying stock is Coca-Cola (NYSE: KO). Even Warren Buffett has held it in Berkshire Hathaway's portfolio for decades. (Coca-Cola was recently Berkshire's third-largest stock holding, worth $30 billion. Indeed, Berkshire owns 9% of Coca-Cola.)

Image source: Getty Images.

So -- why Coca-Cola? Well, for starters, for its dividend -- which recently yielded 2.4%. If you were looking to generate, say, $30,000 in yearly dividends from it, you'd divide that $30,000 by the recent annual dividend amount of $2.12. That would show that you'd need 14,151 shares -- which, at the recent stock price of $87 per share, would cost you about $1.2 million.

Most of us don't have $1.2 million ready to invest, though, and if we did, we shouldn't spend it all on one stock. But that exercise does show what you might get with a $1.2 million portfolio that sports an overall dividend yield of 2.4%. You can find fatter dividends, too, and you might alternatively just opt for a simple high-quality dividend-focused exchange-traded fund (ETF).

Remember that the best dividend payers increase their payouts regularly -- and Coca-Cola has upped its payout for 64 years in a row. (The increases have been relatively modest, though.)

Coca-Cola is also attractive because it's much less volatile than the market, and during a market downturn it's likely to fall less than other stocks. And even in a recession, people won't stop buying beverages.

If you're itching to buy shares of Coca-Cola now, perhaps hold off -- because the shares seem a bit overvalued at recent levels, judging by Coca-Cola's recent forward-looking price-to-earnings (P/E) ratio of 26, which tops its five-year average of 23.

Selena Maranjian has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

One noteworthy event in 2018 was that the tech company Apple became the first to reach a trillion-dollar market capitalization.

Today, there are more than a dozen such companies. Here are the recent top 10 largest companies by market cap. See how many of them you own.

Data source: companiesmarketcap.com, as of Aug. 7, 2026.

Image source: Getty Images.

If you own any stocks or funds, there's a good chance you own at least a few of the sizable businesses above. Nearly all of the above companies, for example, are present in S&P 500 index funds, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). Most are also in growth-oriented mutual funds or exchange-traded funds.

Should you own the stock of large companies?

Looking at the table above, it's hard to argue that you shouldn't invest in large companies. After all, the ones with valuations of $3 trillion, $4 trillion, or $5 trillion were still large some years ago, with valuations of $1 trillion or $2 trillion. These massive companies have these massive valuations because they have executed their plans well and have grown their operations at a good clip.

There are pros and cons to both large- and small-company investing, though, of course. For example:

• Large companies tend to be more established and stable, with many of them considered "blue chip stocks." (They can drop sharply on occasion, though -- and this is especially true when there's a major market pullback and overvalued stocks fall hard.)
• Large companies are more likely to pay dividends, and dividends can be powerful portfolio boosters.
• Small-cap companies have the potential to grow faster than their larger counterparts, but they're often younger, sometimes not yet profitable, and often more vulnerable to economic volatility. They're generally riskier propositions than large companies.

There tend to be economic cycles when large companies outperform small ones, and vice versa. Some investors invest accordingly, but it's generally difficult to time the market.

What to do?

So what should you do? Consider owning both big and small companies. Remember that there are lots of "mid-cap," medium-sized companies, too, which can, arguably, offer the best of both worlds.

One way to own most of the U.S. stock market is through a broad index fund such as the Vanguard Morningstar Total Stock Market ETF (NYSEMKT: VTI). If you want to go broader still, consider the Vanguard Total World Stock Index Fund ETF (NYSEMKT: VT). Either way, you'll be invested in small, medium-sized, and large companies, with plenty of diversification by industry.

Selena Maranjian has positions in Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Investors considering Ford Motor Company (NYSE: F) have some pluses and minuses to weigh as they decide.

A big plus for the company is its dividend, which recently yielded a solid 4.25%. With that kind of yield, you could generate more than $1,000 in annual income if you owned around 1,700 shares. Those shares would cost you about $23,400, as of Aug. 6.

Why invest in Ford? Well, it has been working to turn around its fortunes, and management is optimistic, having recently increased its projections. The stock has averaged annual gains of roughly 5% over the past five, 10, and 15 years, but it's up around 33% over the past year.

Image source: Getty Images.

In its second quarter, announced in late July, Ford reported a decline in revenue, citing "lower wholesale volumes, including the discontinuation of products, aluminum supply constraints, and the right-sizing of Gen-1 electric vehicle volumes to customer demand..." CEO Jim Farley noted, "We delivered another strong quarter and raised our full-year guidance, but the more important story is the growing evidence that Ford is becoming a more profitable, more disciplined, and genuinely different company."

Ford has been expanding its scope, too -- offering hybrid vehicles and even expecting to offer eyes-off, hands-free vehicles in 2028, which is not very far away.

The stock's valuation is another attraction. Its price-to-sales recently was an ultra-low 0.30, and its forward-looking price-to-earnings (P/E) ratio was just 8.

Ford's continued turnaround is not guaranteed, though. As always, it faces risks such as increased competition and union demands, not to mention potential geopolitical unrest. But it appears to be on the right track, and it's set to reward long-term patient believers with a generous dividend.

And Ford isn't the only appealing dividend-paying stock out there. There are plenty with similar or higher yields and plenty with smaller yields but faster-growing payouts. A little digging will turn up some solid prospects. Or just stick with a high-quality dividend-focused exchange-traded fund (ETF) to keep things simple.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Many people are busy saving and investing for their retirement, aiming to stop working with a $1 million nest egg. Many others are busy saving and investing for their retirement knowing that they will never end up with anything close to $1 million. Are they doomed? Not necessarily.

Here's a look at whether you might need $1 million by retirement, along with why many people get by retiring with far less.

Image source: Getty Images.

Setting the stage

First, understand that millions of people have simply not saved enough, according to this table based on the 2026 Retirement Confidence Survey:

Source: 2026 Retirement Confidence Survey.
*excluding the value of a primary home

Sure, plenty of these folks are not close to retirement, but plenty are in their 40s and 50s and even 60s, with very little in the way of savings. A 2025 survey by the Transamerica Center for Retirement Studies found that the typical retiree had only $126,000 in household savings.

Is $1 million enough?

Each of us is in a different situation. For some, a $1 million nest egg is great, while for others, it may be insufficient. But many people, if not most, would agree that retiring with just $126,000 is far from enough.

But remember that for most of us, our nest egg isn't going to be providing all our retirement income. There's Social Security income, too. The average monthly retirement benefit was $2,084 as of June -- about $25,000 annually.

If your earnings have been above average, your benefits will be, too. For a much clearer estimate of your future benefits, set up a "my Social Security" account at the Social Security Administration (SSA) website.

So most of us will likely have at least two sources of income in retirement. But for the best results, you might aim to set up more sources than those. Here are examples of how you might wind up with multiple income streams:

You can get a rough idea of how much income your nest egg could provide by applying the flawed (but still helpful) 4% rule, which suggests that retirees can withdraw 4% from their nest egg in their first year of retirement and then adjust subsequent annual withdrawals for inflation. (There are other retirement withdrawal strategies to consider, as well.)

The table below shows how much you would withdraw under the 4% rule in your first year of retirement with nest eggs of various sizes:

Source: Author calculations.

How do people retire with less than $1 million?

So, how are people retiring successfully with less than $1 million? There are multiple possible explanations:

• Their expenses may be relatively low. Perhaps, for example, they now own their home and don't travel much.
• Their health may be reasonably good, not requiring major outlays for healthcare in retirement.
• They may live in an area with a low cost of living. There's a huge difference in how far your money will take you if you live in, say, Kansas vs. California.
• They may have set up sufficient income streams, such as in the example above.
• Many might have been living on relatively little before retiring, and they're doing so after.

If you're still skeptical, know this: Millions of Americans retire with relatively little in the way of savings. And despite that, a Federal Reserve study found that fully 84% of adults 60 or older said that they are "doing OK or living comfortably."

Better still, a 2026 Gallup survey found that while only 45% of non-retirees expected to have enough money to live comfortably in retirement, 82% of retirees reported having enough to live comfortably.

What to do

All that should be encouraging. It's still true, though, that around 15% to 20% of retirees are not living very comfortably, and you certainly don't want to end up in that group. So what can you do if you're behind in your saving and investing for retirement?

• Save more aggressively and invest more effectively in the time you have left before retiring -- perhaps via a low-fee S&P 500 index fund.
• Consider delaying retirement and working a few more years if you can to allow your nest egg to build up more. This will have the added benefit of reducing the number of years your savings will have to support you.
• Consider delaying claiming Social Security until age 70 if you can, because for most people, 70 is the best age at which to claim benefits to maximize them.
• You might take on a part-time job for your first few years of retirement.
• You could downsize, moving to a smaller home and perhaps selling one of your household's cars.
• You might even relocate to a region with a lower cost of living.
• Think outside the box. If you need more income during retirement, you might take in a boarder, cash in a life insurance policy, or look into a reverse mortgage.

Whatever you do, be sure to have a solid retirement plan in place and act on it. Most of us will still aim to retire with a fat nest egg, but if you don't get there, you're not necessarily doomed.

The Motley Fool has a disclosure policy.

A great way to go about investing is to focus on the long term and invest in companies that seem likely to be much bigger in a decade or more.

Many of us like to keep things simple and invest in one or more low-fee, broad-market index funds, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). So will that fund do? Well, here's some bad news and some good news.

Image source: Getty Images.

First, the bad: No one knows! The stock market is simply dynamic, and occasionally quite volatile. It could drop sharply tomorrow and stay down for years.

Here's the good news: Despite falling every few years, and despite wars, business scandals, financial crises, recessions, and more, the stock market -- including the S&P 500 -- has always eventually recovered, going on to set new high records. Indeed, over many decades, the stock market has averaged annual returns of close to 10%.

A closer look at history can help. Stock researcher Ben Carlson analyzed the rolling average returns for the S&P 500 between 1926 and 2023, saying:

The best 10-year annual return was 21.4% for the period ending toward the tail-end of 1959. That's a total return of roughly 600%. ... The worst 10-year annual return was a loss of almost 5% per year ending in the summer of 1939. That was bad enough for a 10-year total return of -40%. The 1930s were a little rough. The only other time the market experienced negative returns over 10 years was starting with the bursting of the dot-com [bubble] at the start of the 2000s followed by the Great Financial Crisis hitting toward the end of that decade.

Other than these extreme market downturns, every other 10-year period featured an overall gain from the S&P 500.

So take heart. We don't know how the stock market will perform in the short term, but over long periods, it has almost always gone up. Long-term investors will likely do well just investing and hanging on through thick and thin.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Investing in the S&P 500 (SNPINDEX: ^GSPC) is popular, especially through exchange-traded funds (ETFs) like the Vanguard S&P 500 ETF (NYSEMKT: VOO). But it includes some tradeoffs.

The S&P 500 index is made up of the 500 biggest companies in America. Together, they account for about 80% of the U.S. stock market's value. Invest in the S&P 500, and you become a part owner of 500 large businesses, instantly diversifying your portfolio.

Image source: Getty Images.

Better still, the S&P 500 has averaged annual returns close to 10% (ignoring inflation) over long periods.

So, what's the tradeoff?

While you might be a part-owner of 500 companies, you'll own very, very little of most of them, because the index is quite concentrated and top-heavy. Here are the top 10 holdings of the Vanguard S&P 500 ETF and their share of the index:

Source: Morningstar.com, as of June 30, 2026.

Since the index is market-capitalization-weighted, the biggest companies are weighted the most, wielding the most influence. These nine companies (Alphabet appears twice on the list) recently accounted for more than a third of the entire index! Indeed, the top three alone made up 18%. So if you buy into this exchange-traded fund, you'll be mostly invested in a bunch of huge tech companies.

Nike and PayPal are in the index, too, but each was recently weighted at less than 0.1%. Lululemon Athletica and Hasbro were only at 0.02%. If you're not loving this concentration, check out the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP). It's also an S&P 500 index fund, but one that weights each of the 500 companies equally and rebalances quarterly.

Don't think that it's too late to invest in the S&P 500, either. It does seem more overvalued than undervalued, but investing in it can still work out well.

Selena Maranjian has positions in Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Micron Technology, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Micron Technology, Microsoft, Nike, Nvidia, PayPal, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Hasbro and Lululemon Athletica Inc. and recommends the following options: short September 2026 $47.50 calls on PayPal. The Motley Fool has a disclosure policy.

Are you in or approaching retirement? Starting to collect Social Security benefits, or thinking about doing so soon? You may be wondering whether those benefits, which are a critical support for most retirees, will be taxed.

To answer that question, here is some good news and some possibly bad news.

Image source: Getty Images.

The good news

First, the good. Most states -- fully 42 of them, plus the District of Columbia -- don't tax Social Security benefits. Here are the eight that do:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont

Even among the states taxing Social Security benefits, though, most do so with a light touch, or exclude those of a certain age or those with relatively low incomes.

The bad news

While most states leave your Social Security alone, the federal government does tax (some) Social Security benefits. It all depends on your "combined income," which is your adjusted gross income (AGI) plus non-taxable interest, plus half of your Social Security benefits. The table below spells out the details:

Data source: Social Security Administration.

While many benefits will go untaxed, at a certain income level, up to 85% of your benefits might be taxed (and 15% would not be taxed at all).

If you're concerned about your taxes in retirement, be sure to think through all the taxes you'll likely face, because Social Security is just a part of the picture. Remember, too, that while one state might look great because it has, say, no income tax, it might make up for that lost revenue via a heavy sales tax or property tax. Every state does need to generate income one way or another.

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If you want to be a great stock investor, there are plenty of bits of advice you might follow, such as:

• Research investments so you know what you're buying.
• Have realistic expectations. (For example, the stock market's long-term average annual gain is close to 10%.)
• Diversify, so that you don't have too many eggs in one basket.
• If you're investing in individual stocks, learn to read financial statements.
• Aim to buy stocks when they're undervalued.

There's one particular bit of advice I think is most important, though -- because I credit it with having made me a millionaire.

Image source: Getty Images.

My background

I went to business school, but I learned very little there that was useful to me as a stock investor. I did learn a great deal about investing a few years later, though -- from The Motley Fool, which was then a new company, operating solely on AOL.

I started putting money in stocks when I was in my early 30s. (I wish I'd started in my early 20s, because then my money would have grown much more.) I made lots of common beginner blunders, such as:

• Chasing high-flying stocks
• Not being patient and giving my investments time to perform
• Being overconfident about my abilities
• Trading too frequently
• Not always understanding the companies I was investing in very well
• Ignoring fees (in those early days, it often cost $20 or more per trade; today, lots of good brokerages charge nothing)
• Focusing mainly on growth stocks and ignoring powerful dividend-paying stocks

I also prematurely sold my stakes in lots of great companies that would go on to soar. I left a lot of profits on the table.

Despite all that, my little portfolio grew. After all, not every investment turned out to be a regrettable one. And even when I sold good stocks too soon, I had often netted a profit already.

What I did that made me a millionaire

So what did I do that was so effective in making me a millionaire? Well, this: I stayed invested. I stuck with it. I may have moved in and out of stocks too frequently, but I never just sold them all and walked away. This persistence is what I credit with my success.

At the Motley Fool, we often advise people to be long-term investors. I believe in that -- because I've seen what it can do.

When I see new investors, I don't worry so much about them making the kinds of mistakes I did; I worry that they'll give up and walk away.

Here's how it all worked for me:

• I began investing modest sums.
• I often checked my portfolio multiple times a day (another mistake, or at least an unhelpful habit).
• In the early years, my portfolio slowly grew from a total value of around $10,000 to $50,000, then to $100,000.
• The dot-com bubble burst and stocks crashed around 1999 and 2000. I hung in there, even with my portfolio shrinking in value.
• I kept investing. I sold some stocks I no longer had a lot of confidence in, and bought stocks that seemed much more promising.
• I was disappointed by some of my investments, because they lost me a lot of money.
• In the meantime, others grew.
• In 2008, there was another major stock-market crash -- with the S&P 500 index plunging 37%. My portfolio shrank again.
• As more years went by, my portfolio grew larger and larger.
• After a decade or so, it was worth $300,000; then $400,000; then $500,000.
• I kept at it.
• I left a lot of stocks in my portfolio to just sit and grow.
• My best investment was in Netflix. I invested only $1,000, but over a decade or two, my stake grew to be worth more than $100,000.
• More years passed, and more sticking with it.
• The market swooned again in 2020 with the onset of the COVID-19 pandemic. I held on.
• And here I am now, with my portfolio worth more than $1 million.

Note that I wasn't always adding money to my portfolio; there have been many years where I added nothing. But thanks to dividend income and to having started relatively early, I have done quite well.

Could I have done even better?

I surely could have done better -- had I made some different choices, committed fewer blunders, and learned even more about investing from great investors and others.

If I'd invested even more money, especially earlier, that would have boosted my results as well.

And, honestly, I haven't been the most brilliant stock-picker. If I'd swallowed my pride, and my greed, I would probably have achieved similar results by just sticking with a simple index fund such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). That would have saved me a lot of time.

Over the past 30 years, since 1995, the S&P 500 has averaged annual gains of 10.4% with dividends reinvested. That's enough to turn a single $1,000 investment in 1996 into $19,450 in 2026. And if an investor had put in many more dollars along the way, well, they also could become a millionaire.

You can do it, too

You too can invest in the stock market in earnest, for the long term. You could simply opt for one or more good index funds, and then relax. Just be sure to not sell in a panic when the market swoons. And don't invest any money in stocks that you'll need within five (or 10, to be conservative) years.

It can be hard to stick with it, especially if you experience early losses. But over decades, your wealth can grow like gangbusters. (If you don't have decades in which to invest, maybe you can share this article with a young person you care about.)

Selena Maranjian has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Some of us might look at super-successful investors such as Warren Buffett and wonder what complex, esoteric things they must know about the stock market and about how to get rich. In many cases, though, these folks got rich in ways that we can, to a great degree, mimic.

For example, a common investing maxim is to "buy and hold." (It's better expressed as "buy to hold," meaning that you intend to be a long-term investor -- as long as the investment remains promising.) Certainly, Warren Buffett believes in that strategy. And if you want to follow suit, Vanguard offers some exchange-traded funds (ETFs) that can help you.

Image source: The Motley Fool.

Back in 2016, Buffett offered advice for investors worried about their retirement savings in an interview with CNBC:

I would tell them not to watch the market closely... The money is made in investments by investing... and by owning good companies for long periods of time. If they buy good companies, buy them over time, they're going to do fine 10, 20, 30 years from now.

How buying and holding has worked for Buffett

Warren Buffett is no longer at the helm of the company he built over 60 years, Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB), having retired at the end of 2025. But much of Berkshire's stock portfolio consists of holdings Buffett bought. Here are a few:

Coca-Cola

Buffett first bought into Coca-Cola back in 1988. In his letter to shareholders that year, he noted:

We made major purchases [including] Coca Cola. We expect to hold these securities for a long time. In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.

Look at the Berkshire portfolio today, and you'll see that Coke is the third-largest holding, recently worth around $30 billion -- about 9.3% of the company's total value. In 2022, Buffett wrote:

In August 1994 -- yes, 1994 –--Berkshire completed its seven-year purchase of 400 million shares of Coca-Cola, which we now own. The total cost was $1.3 billion -- then a very meaningful sum at Berkshire. The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million.

American Express

Buffett bought into American Express even earlier, in the 1960s. Here's what he said about it in his 2022 letter:

American Express is much the same story. Berkshire's purchases of Amex were essentially completed in 1995 and, coincidentally, also cost $1.3 billion. Annual dividends received from this investment have grown from $41 million to $302 million. Those checks, too, seem highly likely to increase.

American Express was recently Berkshire's second-largest holding, worth nearly $46 billion and representing 22% of the financial services company.

Vanguard ETFs to consider

An ETF you might buy and hold is one Buffett has long recommended: the Vanguard S&P 500 ETF (NYSEMKT: VOO). Hang on to it, and you'll own 500 of America's biggest companies. It has averaged about 15% growth annually over the past decade.

It's the kind of investment you can buy expecting to hold for decades. Any components that perform poorly over time will be removed and replaced by growing businesses. It's hard to beat.

American Express is an advertising partner of Motley Fool Money. Selena Maranjian has positions in American Express and Berkshire Hathaway. The Motley Fool has positions in and recommends American Express, Berkshire Hathaway, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

You want to make a lot of money, right? And you would like to do it quickly and easily, too, I bet. Getting rich quick isn't easy or reliable, but it can certainly be easier given enough time.

One way is to invest in a low-fee, broad-market index fund. An S&P 500 index fund is a strong option, but consider going even wider, with the Vanguard Total Stock Market ETF (NYSEMKT: VTI). It will spread your dollars across most of the U.S. stock market, including large, small, and medium-size companies -- more than 3,500 of them, in total.

Image source: Getty Images.

How might your money grow?

No one can know how much your money will grow in the Vanguard Total Stock Market ETF, but we can make educated guesses.

Consider, for starters, that the stock market has averaged annual returns of close to 10% over many decades. And the Vanguard exchanged-traded fund has averaged annual gains of 9.5% since its inception in 2001, just about 25 years ago.

So let's assume average annual gains of 9% (to be a bit conservative), and we'll also assume that you invest $6,000 annually in the ETF (that's $500 per month). In 25 years, this investment will grow to $508,205. That's pretty good, right? Keep in mind that:

• The stock market might average a higher or lower growth rate over the coming years.
• You might amass more than $1 million if you invest $1,000 per month, or $12,000 annually.
• You can consider other strong long-term investments, too, such as dividend-focused ETFs and growth ETFs. (Remember that growth stocks can be particularly overvalued at times and can retract more sharply during a market pullback. But if you hang on through thick and thin, you will likely do just fine.)

The Vanguard Total Stock Market ETF may serve you well if you're worried about a market pullback coming this year, because it's not just full of exciting growth stocks. It also encompasses moderately valued, slower growers. It even has a modest 1% dividend yield. Give it a closer look.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

It's hard not to be impressed by the Vanguard Information Technology ETF, which has averaged annual gains of about 24% over the past decade. If it can match that pace over the next 20 years, $1,000 invested in this exchange-traded fund (ETF) today will be worth nearly $74,000 in 2046!

Image source: Getty Images.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

But that's a big if. And if the stock market swoons sometime this year, it could take lots of growth stocks and growth-focused ETFs down with it, sharply. So permit me instead to suggest an ETF that I own myself, and that helps me sleep better at night: the Schwab US Dividend Equity ETF (NYSEMKT: SCHD).

I love it because it offers both price appreciation and dividend income. The S&P 500 recently had a dividend yield of merely 1%. But the Schwab ETF's yield was 3.3%, more than three times bigger. It's been a very respectable performer, too:

Source: Morningstar.com, as of July 27, 2026.

How could the Schwab US Dividend Equity ETF grow your money?

Let's say you make a single $1,000 investment in the Schwab ETF. And let's presume that it averages annual gains of 10% over the coming 20 years. (For context, the stock market has averaged annual returns of close to 10% over many decades.) If so, you'll end up with a stake worth about $6,700.

That's way less than $74,000, I know. But it should be a less volatile ride -- and during market downturns, you'll still collect dividend income.

You can improve on that $6,700 a lot, too. Simply make more than a one-time $1,000 investment. Put in $1,000 per month, or $12,000 annually, and you may end 20 years with ... $687,000!

That's not guaranteed, of course. The ETF could average more or less than 10% annually. Still, this fund is well worth considering for your hard-earned dollars. You can profit well -- without picking any stocks. Leave that work to the Schwab US Dividend Equity ETF.

Selena Maranjian has positions in Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Investors love stock splits, and lots of investors love Monster Beverage (NASDAQ: MNST), home to the Monster Energy, Reign, Predator, Fury, and other brands. It has averaged annual gains of 19% over the past 15 years.

Monster Beverage is splitting its stock 2-for-1 on Aug. 11. Here's what you need to know.

Image source: Getty Images.

The stock split was declared on July 8, but that's not when your 100 shares become 200 shares. First, to be eligible for having your shares split, you'll need to have been a shareholder on July 24, the "record date" for the split. If you qualify, the additional shares will be credited to your account on Aug. 10, the "distribution date," after the market closes. The next day, Aug. 11, is when Monster's shares will begin trading at their new price.

A key thing to understand about stock splits is that they're generally nothingburgers. Here's why I say this: As I write this, Monster shares are trading at about $95 per share. Imagine that you own 100 shares, for a total current value of $9,500. Then the stock splits 2-for-1, meaning that you will end up with two shares for every one you own.

Here's the catch: At the time of the split, the share price will be adjusted downward proportionately. So if the split happened today, the $95 stock price would be halved, to $47.50. You would now own 200 shares, but at $47.50 apiece, the total value of your stake would be... still $9,500.

This will be Monster's seventh stock split, with its first having happened in 1988 and its most recent one in 2023. When a stock's price skyrockets, it's not uncommon to see relatively frequent splits that keep the per-share price affordable to more people.

Should you buy this impressive stock now? I suggest thinking twice before doing so. The shares seem overvalued at recent levels, with a recent forward-looking price-to-earnings (P/E) ratio of 41 above the five-year ratio of 31.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monster Beverage. The Motley Fool has a disclosure policy.

If you've got $1,000 and you're looking to invest in a promising dividend-paying stock, good for you! Since 1973, average annual returns in the S&P 500 have been substantially higher for stocks that have launched or increased their annual dividend. So, you should feel pretty good about your decision.

Data source: Ned Davis Research and Hartford Funds.

But which stock should you buy? I suggest you take a closer look at Sanofi (NASDAQ: SNY), a pharmaceutical company focused on immunology, vaccines, and rare diseases. Although the French company is not in the S&P 500 (the index is restricted to companies headquartered in the U.S.), Sanofi's stock has a hefty dividend yield of 5.6%, and when you factor in the effect of substantial stock buybacks, the total yield for shareholders approaches 11%.

The stock has averaged annual gains of only 4% over the past decade, and it's down nearly 15% over the past year, pushing the stock into, arguably, bargain territory. Its forward price-to-earnings ratio is 9, well below its five-year average of 11.

Image source: Getty Images.

What matters most is where the stock goes from here, though, and that's promising. The company's top drug is Dupixent, an injection treating chronic inflammatory conditions. In its first quarter, Dupixent's sales grew by 31% year over year. Some are already worrying about the drug losing patent protection in the U.S. market in 2031. That's still some years away, though, and Sanofi has plenty of drugs in development.

Meanwhile, that first-quarter report also featured overall sales growing by 13.6% year over year and five regulatory approvals (all in immunology). Sanofi is performing well and growing -- and it will reward long-term investors well with its outsized dividend yield.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Netflix (NASDAQ: NFLX) has averaged annual gains of 21% over the past 15 years. But in 2026, shares are down 25%. Is this a good opportunity to invest in Netflix?

Image source: The Motley Fool.

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Why invest in Netflix?

Netflix is a streaming powerhouse, along with Amazon's Prime Video service. Per Evoca.tv, Netflix's recent U.S. streaming market share was 21%, vs. 22% for Amazon Prime Video. The company has boasted that "We are entertaining over half a billion people in more than 190 countries and 50 languages..."

In its second quarter, Netflix posted revenue rising 13% year over year and net income up 9%. The company has been broadening its offerings, too, with live sports broadcasts, games, and podcasts.

Netflix's shares seem reasonably valued at recent levels, with a forward-looking price-to-earnings (P/E) ratio of 22, below its five-year average of 31. Its recent price-to-sales ratio of 6.1 is also below its average of 6.5.

A final plus is management discipline, as Netflix has walked away from some big deals, such as those with Warner Bros. Discovery and Roku, after choosing not to match the winning bids from Paramount Skydance and Fox, respectively. A company with less regard for shareholder value might have kept bidding. Netflix's management has also been buying back millions of shares -- 13.5 million in the last quarter -- which rewards shareholders. Why might you not invest in Netflix?

Of course, there are some concerns to consider. There have been reports of Netflix losing viewers between seasons of various shows due to too long a wait for the next season. Also, some worry that it's relying on price increases for growth more than it should. Be sure to look at the whole picture before deciding whether to invest in Netflix.

Selena Maranjian has positions in Amazon, Netflix, and Warner Bros. Discovery. The Motley Fool has positions in and recommends Amazon, Netflix, Roku, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.

Are you planning to retire in roughly five years? If so, or even if you're a decade or more away from retiring, you might be worried that you're not going to have enough income to support yourself comfortably in your later decades.

Take heart -- because there are ways to beef up your retirement income before saying goodbye to your job.

Image source: Getty Images.

How's your retirement income situation looking?

There's the flawed, but still helpful, 4% rule that can help you get a rough idea of how much income your nest egg might produce. It suggests that retirees can withdraw 4% in their first year of retirement and then adjust subsequent annual withdrawals for inflation. (Remember to read up on its pros and cons before using this rule.)

The table below shows withdrawals for nest eggs of various sizes:

Data source: Calculations by author.

Most of us would do well to set up multiple income streams for our retirements. Social Security benefits, of course, would be one such stream. Dividend income might be another, as might any pension income you have coming.

Income-maximizing strategies

If you've added your likely income streams in retirement but the total doesn't look sufficient, take a deep breath. You have some options -- even if your retirement is only five years away. Here are a few.

• Delay Social Security: When you claim your benefits makes a big difference. People claiming early (you can claim beginning at age 62) will receive smaller checks, while those delaying will get bigger ones. Of course, claiming early means you'll collect more checks over time, so the difference isn't as huge as it might seem. For most people, delaying to age 70 will result in collecting the most in total benefits.
• Delay retiring: You won't like this one, but hear me out. If you can delay retiring by just a few years, you will reap multiple benefits: For one, you will have more time to save, invest, and build your nest egg. For another, there will be fewer years in which you will need to rely on it to support yourself. Delaying retirement will also help you delay claiming Social Security, and it may permit you to remain on your employer's health insurance plan longer as well.
• Have a side gig for a while: When you retire, you won't be clocking in and out for many hours a day anymore. But you might still work a little, at least in your initial years of retirement. Doing so can generate valuable income that could cover various living expenses, allowing you to tap less of your nest egg. You might find a low-stress part-time job, or you could take on a side gig such as driving for a ride-share service, delivering food orders, making and selling things, giving lessons, pet-sitting, or tutoring kids. As an example, working five hours a week at $20 an hour would bring in an extra $100 per week, or about $5,000 per year -- that's a helpful sum.
• Cash out a life insurance policy: Some life insurance policies let you cash them out before you die. If no one is depending on you for a death benefit, you might as well tap that income source when you need it.
• Consider a reverse mortgage: This strategy won't work for everyone. But if you qualify for a reverse mortgage, you can receive a lump sum or regular income from a lender via a loan -- with your home as collateral. Once you're no longer living in your home, the lender gets it, unless you or your heirs pay off the loan.

Whether you're five years from retiring or even longer, consider some of the strategies above to help generate a fatter income stream for yourself in retirement.

The Motley Fool has a disclosure policy.

Dividend Kings are companies that have increased their dividends for 50 or more years in a row. If you're thinking of investing in one, you might be considering AbbVie (NYSE: ABBV) or Johnson & Johnson (NYSE: JNJ) stock. There are good reasons to invest in either -- or both -- and good reasons to favor dividend-paying stocks.

Here's a quick look at the two companies.

Image source: Getty Images.

Invest in AbbVie?

AbbVie is a pharmaceutical giant with a recent market value of $258 billion and a recent dividend yield of 2.7%. It boasts a deep pipeline, with about 90 treatments in development, some 60 of which are in mid- or late stages. It's exploring a promising weight-loss formulation, too.

The company recently inked a deal to buy Apogee Therapeutics for $10.9 billion. That will bring the promising eczema drug zumilokibart under AbbVie's roof, boosting its immunology portfolio.

AbbVie's stock has averaged annual gains of 17% over the past decade. Its stock seems a bit overvalued at recent levels, with a forward-looking price-to-earnings (P/E) ratio of 18, above its five-year average of 13.

Invest in Johnson & Johnson?

Johnson & Johnson, having spun off its consumer products division (including brands such as Tylenol), is now a robust business focused on pharmaceuticals and medical devices. Indeed, J&J boasts 28 products or platforms that each generate at least $1 billion per year.

Its second-quarter report was strong, with revenue growing 6.6% year over year to $25 billion. The stock has averaged annual gains of 9% over the past decade, lower than AbbVie's returns. J&J's stock also seems overvalued at recent levels, arguably a little more so than AbbVie's. Its recent forward P/E of 22 is well above its five-year average of 16. The dividend recently yielded 2.1%.

Which is the better buy?

Neither stock seems bargain-priced at recent levels. But I think AbbVie looks a bit more enticing based on valuation metrics, and it sports a fatter dividend yield.

Selena Maranjian has positions in AbbVie. The Motley Fool has positions in and recommends AbbVie. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.