This is the opening sentence in a recent decision from the U.S. Court of Appeals for the Third Circuit. Fiduciaries of Quest’s 401(k) plan were sued for retaining allegedly underperforming investments—target-date funds and a global real-estate fund. Plaintiffs contended that the underperformance was so severe that retaining these investments demonstrated a failed process and was a fiduciary breach. Affirming the district court decision in favor of the plan’s fiduciaries, the court of appeals made key overarching observations:

Reviewing the facts of the Quest situation and finding the fiduciaries not liable, the court found the following to be important aspects of their process:

In Re: Quest Diagnostics ERISA Litigation (3rd Cir. 2026). This decision confirms the critical importance of having a good fiduciary process and following it. Even bad outcomes that are the product of a good process should not result in liability for plan fiduciaries.

Not Considering Indirect Recordkeeper Revenue Is a Fiduciary Breach

It is widely understood that plan fiduciaries must periodically ensure they are paying reasonable fees for recordkeeping services. We previously reported on a court of appeals decision mandating that plan fiduciaries consider all compensation received by plan recordkeepers—including indirect compensation—when evaluating the reasonableness of fees. Bugielski v. AT&T Services, Inc. (9th Cir. 2023). In this case, it was alleged that the plan’s fiduciaries did not consider indirect revenue received by Fidelity from managed accounts and from a self-directed brokerage program.

In Bugielski, the court of appeals remanded the case to the district court to evaluate whether the AT&T fiduciaries considered all the recordkeeper’s revenue when deciding whether the fees charged were reasonable. On remand, the district court concluded that:

Alas v. AT&T Inc., (C.D. Cal. 2026).

The case will proceed for a trial on the reasonableness of the fees paid to Fidelity in the aggregate, taking into consideration indirect compensation from the self-directed brokerage and managed account programs as well as the costs of the services provided.

This case from the Ninth Circuit is the first we are aware of focusing on indirect fees received by plan recordkeepers. We will track whether other courts align on this. This is a reminder that plan fiduciaries are obligated to ensure the reasonableness of fees for underlying services as well as the overall fees paid to service providers.

Individual Committee Members are Fiduciaries—Not Just the Committee

Mitsubishi Chemical America, Inc. and its administrative committee were sued alleging fiduciary breaches in the selection and retention of overpriced plan investments and overpayment of plan administration fees. After the case was filed, the plaintiff sought court permission to amend his complaint to individually name 16 members of the administrative committee as defendants. Mitsubishi objected to adding committee members as individually named defendants. 

Mitsubishi argued that its plan document vested fiduciary authority exclusively in the administrative committee, so the committee members could not be liable as individuals. The court was unpersuaded, noting that defendants were ignoring ERISA’s provision that anyone who exercises authority or control over plan assets is a fiduciary, even if that authority is not specifically granted to them. Individual committee members are functional fiduciaries, regardless of what plan documents may say. The court also cited several other court decisions from around the country where individual committee members were found to be fiduciaries. Humphries v. Mitsubishi Chemical America, Inc. (S.D. N.Y. 2026). The case was reported to have been settled in June.

Supreme Court Agrees to Hear Meaningful Benchmark Case: Anderson v. Intel Corp. Investment Policy Committee

After the great financial crisis of 2008-2009, Intel Corp. adjusted its custom target-date funds to include hedge funds and private equity to dampen future volatility of those funds. Investment results of the adjusted target-date funds lagged the investment performance of other available target-date funds, and disappointed plan participants sued the Intel plan fiduciaries. The case was dismissed by the district court because the complaint did not identify a meaningful investment benchmark that the challenged funds could be compared with in order to demonstrate underperformance.

The Ninth Circuit Court of Appeals affirmed the dismissal, saying that when an ERISA plaintiff alleges imprudence based on relative underperformance of a specific investment, an inference of imprudence is plausible “only if the complaint identifies a sound basis for comparison—a meaningful benchmark.” Anderson v. Intel Corporation Investment Policy Committee (9th Cir. 2025). Plan participants appealed to the Supreme Court, which accepted the case to address a split in the courts below. The question before the court is whether a fiduciary breach claim based on alleged underperformance of a specific investment requires allegations that the investment underperformed relative to an identified benchmark that is a sound comparator for the challenged fund.

This case is expected to be argued and decided in the Supreme Court’s next term, which begins in October. The U.S. Department of Labor has filed an amicus brief in support of the Intel plan fiduciaries, supporting the position that a meaningful benchmark is required at the initial pleading stage of litigation.

A Supreme Court decision that meaningful benchmarks must be alleged would not break new ground. Some, but not all, courts already take this position. For instance, fiduciaries of the Molson Coors Beverage Company LLC Retirement Savings Plan were sued alleging that their plan held a chronically underperforming stable-value fund. The court observed that to warrant an inference of imprudence in selecting or retaining a particular fund, a plaintiff must identify other funds that provide a sound basis for comparison and constitute a “meaningful benchmark.” Dismissing the case, the court said that a plaintiff citing a rotating cast of funds with higher crediting rates in different years is blatant cherry-picking and cannot support a claim of imprudence. Hensley v. Molson Coors Beverage Company USA LLC Governance Committee (E.D Wis. 2026).

Challenge to Plan Use of Collective Investment Trusts Dismissed—No Concrete Injury Alleged

Fiduciaries in the Centene Management Corporation Retirement Plan were sued alleging that it was a fiduciary breach for them to use collective investment trusts (CITs) in their 401(k) plan. CITs are frequently used by plan fiduciaries to reduce investment expenses. The case was dismissed by the district court, which observed that the plaintiff had not plausibly alleged that she was harmed. To survive a motion to dismiss, her complaint would have to allege an injury such as higher fees. The court went on to note that just because CITs operate differently than mutual funds, it is not reasonable to infer that higher fees were incurred or that the investment will expose plan participants to unmonitored liquidity risks.  Clark v. Centene Corporation (N.D. Ca. 2026).

Reasonable Assumptions in Calculating Actuarially Equivalent Pension Benefits—Current Developments

In the last Fiduciary Update, we reported on court decisions reaching opposite conclusions about whether plan fiduciaries are required to use reasonable assumptions when calculating alternate forms of pension benefits. Alternate forms of benefit typically include early retirement benefits or joint and several benefits for a married couple. ERISA requires that the alternate form of benefit have an actuarially equivalent financial value to that of a plan’s standard single life annuity benefit. Many plans include specific interest rate and mortality assumptions to be used in calculating alternate benefits. In some instances, the required mortality assumptions are 70 or more years old, and the interest-rate assumptions bear little relationship to today’s interest-rate environment.

One of the previously reported decisions was from the Sixth Circuit Court of Appeals, which concluded that reasonable assumptions are required, albeit in a two-to-one decision. Reichert v. Kellogg (6th Cir. 2026). Following that decision in March 2026, in May, the Eleventh Circuit Court of Appeals unanimously decided Drummond v. Southern Company Services, Inc. (11th Cir. 2026), holding that calculation of actuarially equivalent benefits requires the use of reasonable actuarial assumptions. This was also a reversal of a lower court decision. In a detailed and well-reasoned opinion, the court noted that the purpose of the calculation was to determine the present value equivalent of the standard benefit, which requires the use of reasonable current assumptions.

One of the many lawsuits challenging the use of outdated actuarial assumptions was filed against AT&T in 2020. Scott v. AT&T Inc. (N.D. Cal., filed 10-12-20). A proposed settlement was noted in court filings filed on July 9, 2026. AT&T will pay $184.1 million to resolve the case, with $149 million going to current and future retirees. $35 million will be applied to attorney’s fees and litigation costs. AT&T will update actuarial assumptions for these calculations every 10 years. Court approval of the proposed settlement is pending.

Reichert v. Kellogg and Drummond v. Southern Company Services, Inc. appear to be the only reported court of appeals decisions on this issue, both holding that reasonable assumptions must be used when calculating actuarially equivalent benefits. Although, several district court cases have decided that reasonableness is not required. If any other courts of appeal decide reasonableness is not required, the issue may find it way to the Supreme Court. In the meantime, in view of the current trend toward requiring reasonable assumptions, more settlements may be coming.

For retirement plan committees, the last few years have brought no shortage of change: new legislation, regulatory proposals, court decisions, shifting enforcement priorities, and now a broader push toward deregulation.

Amid all this change, one message stood out during CAPTRUST’s recent fiduciary training webinar: While the regulatory landscape continues to evolve, the fundamentals of fiduciary responsibility remain the same.

As Retirement Learning Center Chief Operating Officer Jennifer Kiffmeyer explained, regardless of whether the issue involves ESG investing, alternative assets, cybersecurity, fiduciary advice regulations, or SECURE 2.0 implementation, plan sponsors should follow the same guiding principle: Maintain a prudent process and document it well.

Enforcement Remains Focused on Fundamentals

Federal priorities may shift, but regulators continue to focus on protecting plan participants and ensuring plans operate prudently.

Recent Department of Labor (DOL) enforcement results have remained relatively consistent, with approximately $1.4 billion returned to plans on behalf of participants in both 2024 and 2025.[1] Despite changing headlines, the agency continues to focus on familiar issues, including fiduciary oversight, late deposits of employee deferrals, excessive fees, and cybersecurity.

The DOL also receives significant input directly from participants. Last year alone, participants submitted more than 220,000 complaints through the agency’s online portal and telephone hotline. Those complaints can lead to investigations and, in some cases, full-scale audits.

For plan committees, these figures serve as reminders that compliance isn’t just about satisfying regulators. It’s also about demonstrating a commitment to protecting participants’ interests.

Process and Documentation Matter

Regulators are generally less concerned with whether every decision turns out perfectly and more about how fiduciaries make those decisions.

When discussing fees, Kiffmeyer emphasized that regulators do not expect fiduciaries to choose the lowest-cost plan. Instead, they expect committees to understand the fees they pay, evaluate the services they receive, and determine whether those fees are reasonable.

As Kiffmeyer said, “Process is the key word these days. Is there a prudent process in place, and is it documented?”

That principle runs throughout today’s fiduciary landscape. Whether committees evaluate service providers, select investments, consider retirement income solutions, or address cybersecurity risks, regulators consistently look for evidence of a thoughtful, repeatable, and well-documented process.

Regulatory Changes Don’t Eliminate Fiduciary Responsibility

Recent regulatory developments have created uncertainty around fiduciary investment advice rules, ESG investing, and alternative investments. Regulators have withdrawn some rules, stopped enforcing others, and signaled plans to revisit or replace additional guidance in the coming months.

For plan sponsors, however, the core message remains largely unchanged.

As Kiffmeyer noted when discussing alternative investments, there is “no issue in having alternative investments in DC [defined contribution] plans as long as, again, the plan sponsor and committee follow a prudent process in selecting those investments, making sure that they are there to serve the best interest of participants.”

That responsibility requires committees to establish clear criteria, define how they will evaluate investments in the plan’s investment policy statement. and document decisions in committee meeting notes.

The takeaway is this: changing regulations may influence what committees evaluate, but they do not change how fiduciaries should approach their responsibilities.

Cybersecurity Has Become a Core Governance Issue

Cybersecurity is receiving increased scrutiny. The DOL has identified it as an enforcement priority for 2026 and increasingly requests cybersecurity information during plan audits.

Importantly, regulators are looking beyond technical safeguards. They also want evidence of strong governance. Specifically, the DOL is asking plan sponsors to demonstrate how they evaluate service providers’ cybersecurity practices.

As a result, committees should ask questions, reviewing provider controls, educate participants, and document those efforts. Once again, the focus comes back to the same fiduciary principle: prudent oversight backed by clear documentation.

The Bottom Line

Regulations will continue to change. Enforcement priorities will evolve. New legislation will emerge.

But as CAPTRUST’s Director of Retirement Plan Consulting Lisa Caito concluded, “The fundamentals remain the same. Strong governance, thoughtful documentation, and a proactive approach to fiduciary decision-making are your best tools for managing risk and driving better outcomes for participants.”

For plan sponsors, that may be the most important takeaway. Regardless of what changes in Washington, a well-documented, participant-focused process remains the foundation of effective fiduciary oversight—and the strongest defense against risk.

[1] EBSA Restores $1.4 Billion to Employee Benefit Plans, Participants, and Beneficiaries | U.S. Department of Labor

In 2025, CAPTRUST launched the CAPTRUST Wellness Advantage: Powered by Cleveland Clinic. Available to all wealth management clients, the program integrates Cleveland Clinic’s medical expertise with CAPTRUST’s concierge client-service model, offering a more coordinated approach to both physical and financial well-being.

So far, its integrated approach is resonating. As Eddie Welch, CAPTRUST managing director and head of wealth management, noted in a recent client webinar, “There’s a lot of interest in the notion of aging with intention. Longevity means something different today than it did 20 years ago. It’s about how people want to live, and how they want to age.”

The question people are asking is: How do I live well for as long as possible?

For most, the answer lies in a broad definition of healthy aging—one rooted in capacity, not just age itself. In practice, that means maintaining independence by staying mobile, preserving cognitive health, and being actively engaged in daily life. Some practitioners call this healthspan: the number of years you feel you’ve lived well.

The good news is, when it comes to healthspan, lifestyle matters more than we often assume. “A lot of the things that you can do to help you age well revolve around choices you make,” says Dr. Ronan Factora, a geriatrician at Cleveland Clinic. The goal, Dr. Factora says, is to preserve physical, mental, and social functioning, protect independence, and sustain quality of life. If you want to increase your healthspan, those are the goals that should guide your habits and routines.

Watch the full webinar here: Aging with Intention: A Smarter Approach to Living Well Longer

The Foundation: Habits That Compound

When it comes to living well, genetics and circumstance each play a role, but Dr. Factora says the strongest drivers of long-term outcomes are not predetermined—they’re behavioral. And that means they’re within individual control.

1. Movement

Physical activity remains the most reliable predictor of sustained independence. For people over 50, the threshold is fairly accessible. “The people who benefit the most from starting exercise are the ones that go from spending most of their day on the couch to walking,” says Dr. Factora.

Even moderate activity—walking, light cardio, or resistance training—supports muscle retention, balance, and mobility, all of which degrade with inactivity over time. Dr. Factora’s conclusion is blunt. Regardless of what you choose to do for exercise, “you gotta keep moving.”

2. Social Connection

Of course, healthy aging is not just physical; it’s social as well. Social interaction reinforces cognition, emotional stability, and a sense of purpose.

As we age, maintaining relationships requires more intentional effort than when we were young, particularly as social circles evolve. But research shows the effort is worthwhile.

“Socialization does take quite a bit of work,” says Dr. Factora, “But that work, that interaction, that stimulation is good for you.” Staying social keeps your brain active, and it helps you feel like part of a community where you know you matter to other people.

3. Cognitive Engagement

Cognitive health follows the same principle: use it or lose it.

Activities that require learning, focus, or skill-building help sustain neural connections. “Anything that forces you to learn also helps to build new connections in the brain,” says Dr. Factora. This includes catching up with friends, playing games, practicing a language, refining a skill, and trying different forms of exercise.

Notably, these three domains—movement, connection, and engagement—are not independent. Physical, social, and cognitive health operate as a single system where each reinforces the others. When you play pickleball with a friend, you’re getting exercise, maintaining a relationship, and learning, all at once.

“In order to remain as independent as possible, you have to maintain your mobility and your cognition,” says Dr. Factora. Declines rarely occur in isolation. Instead, reduced mobility limits social engagement; isolation affects cognition; and cognitive decline, over time, compromises independence. Outcomes are interconnected, just like the behaviors that shape them.

The Risks: What Undermines Function

Most often, the habits that erode a person’s healthspan are passive ones. Extended sedentary behavior displaces nearly every protective activity, says Dr. Factora. “If you spend a lot of time sitting, you’re not moving, you’re not socializing, and you’re not using your brain.”

High amounts of passive screen time also introduce additional hazards, including an observed association between heavy television use and increased dementia risk, plus higher levels of loneliness.

The takeaway: Inactivity and negative habits can compound just as positive habits do.

Planning for Structure Before You Need It

One of the most overlooked risks in later life is not medical; it’s structural. Many people approach retirement as a release from routine, but the absence of structure can be destabilizing over time. As Dr. Factora observes, “Once early plans fade, individuals often find they have nothing else to do.”

His advice is to start planning long before retirement begins. This includes building interests, establishing a routine, and defining exactly how your time will be spent. “Approach every day just like you’re going to work,” he says. “Make a list of things you want to do.”

Also, it’s a good idea to communicate your goals and plans with your financial advisor. After all, retirement planning means more than just financial planning. An advisor can help you define how and where you want to age, what types of care you may need, and what those decisions imply both practically and financially.

Preventive Care as Strategy

Lifestyle choices are important, but they do not replace proactive care.

Understanding your own cognitive and physical baselines can help you build a reference point for future decision-making. It also enables earlier identification of risks and decline.

In other words, don’t skip your annual physical. Make sure you see the dentist at least twice a year, the optometrist at least once a year, and follow recommended guidelines for preventive visits like mammograms, prostate checks, colonoscopies, and vaccinations.

Remember, outcomes are cumulative. Daily behaviors like movement, diet, sleep, and engagement, compound over time, and moderation matters.

The Bottom Line

Aging is inevitable, but the experience of aging is different for every person.

The most reliable prescription to extend your healthspan is both simple and demanding:

As Welch says, “The question is no longer whether you can afford to retire. The question is how you want to live in retirement.” Once you have a clear vision for your life, you can work backwards to create a plan.

CAPTRUST is not a medical provider and does not deliver health care, diagnostic, or treatment services. All medical services described herein are provided solely by Cleveland Clinic and its affiliated professionals. Participation in these services is voluntary and through a referral basis by CAPTRUST. CAPTRUST assumes no responsibility or liability for the medical advice, diagnoses, or treatments clients may receive as a result of a referral to Cleveland Clinic. 

A recent court decision may create a time-sensitive opportunity for some taxpayers to recover certain IRS penalties and interest assessed during the COVID-19 period. 

The case is under appeal, and refunds are not guaranteed. However, taxpayers who paid penalties or interest related to tax deadlines between January 20, 2020, and July 10, 2023, may want to review their situation. Many have until July 10, 2026, to preserve their rights by filing a protective claim. 

What is the Kwong case about? 

In Kwong v. United States, the court ruled that certain disaster-relief provisions enacted during the COVID-19 federal emergency may have postponed tax filing and payment deadlines beyond what the IRS recognized.  

Based on that interpretation, some penalties and interest assessed during the pandemic period may have been improperly charged. The ruling applies to deadlines between January 20, 2020, and July 10, 2023, though the government has appealed the decision. 

Why is this important for taxpayers? 

If the court’s interpretation stands, some taxpayers may be entitled to refunds or abatements of penalties and interest that were assessed during the COVID-19 period. Potentially affected taxpayers is broad in scope and includes individuals, businesses, trusts, and estates, to name a few 

However, relief will not be automatic. Taxpayers generally must take action to preserve their claims. 

Which penalties or charges might qualify for relief? 

Commonly cited items include failure-to-file penalties, failure-to-pay penalties, certain estimated tax penalties, and related interest. Eligibility depends on each taxpayer’s situation, including when returns were filed, when taxes were paid, and when penalties were assessed. 

Who should pay attention to this issue? 

Taxpayers who incurred IRS penalties or interest during the pandemic years may want to review their situation, typically for tax years 2019 through 2023. Other tax periods could also be impacted based on unique circumstances. Generally, taxpayers who were not assessed penalties or interest during the COVID-19 period are unlikely to be affected by the court’s decision. 

What is the July 10, 2026, deadline? 

July 10, 2026, is an important deadline for filing a protective claim for refund, which preserves a taxpayer’s rights while the legal issues are resolved.  

The exact deadline may vary based on filing and payment dates, so taxpayers should not assume the same date applies to everyone. Those unsure about pandemic-era tax penalties or interest should consult a CPA to determine whether filing a protective claim is appropriate. 

Will the IRS automatically send refunds? 

No. The IRS is not expected to issue refunds automatically. Taxpayer action is generally required to preserve or pursue a claim. 

What happens if the government wins its appeal? 

The outcome remains uncertain. The government has appealed the Kwong decision, and future court rulings, IRS guidance, or legislation could change how the issue is resolved.  

Filing a claim does not guarantee a refund. However, filing a protective claim may help preserve a taxpayer’s rights if the courts ultimately uphold the ruling. 

What should taxpayers do now? 

The first step is to determine whether the IRS assessed penalties or interest during the COVID-19 period. Taxpayers who identify potential exposure should consider consulting a CPA or tax advisor to evaluate eligibility and determine whether to file protective claim, refund claim, or request for penalty abatement.  

With the July 10 deadline approaching and the appeal ongoing, waiting could mean missing a limited-time opportunity. 

NOTE: This article is for informational purposes only and should not be considered tax advice. Consult your CPA or tax advisor regarding your specific circumstances. 

Every sharp market move tempts even the most disciplined investor with the same thought: if I can just get the forecast right, I can protect my portfolio, or better yet—profit.

Are oil prices coming down? Will artificial intelligence drive productivity—or displace workers? Are geopolitical risks likely to derail markets?

These are fair questions for investors. But the real challenge isn’t predicting which headline will matter most next; it’s recognizing that the range of possible outcomes is widening and then building portfolios that can withstand many potential futures, not just one.

The Problem with Prediction

Markets don’t move in straight lines. Looking backward, it’s easy to connect the dots and convince yourself that recent outcomes were inevitable. But the last three years of strong market returns represent just one path among many that could have occurred. The next five, 10, or 20 years may offer even more possible paths, especially as technological change accelerates and the complexities facing global economies rise.

This creates what investors often mistake as risk, but it more closely reflects uncertainty. In both cases, outcomes are unknown. However, risk allows for the probability of potential outcomes to be estimated, whereas uncertainty does not. When uncertainty rises, forecasts become less reliable, and confidence in a single market narrative can be costly.

Prepare, Don’t Predict

Rather than trying to outguess the market, CAPTRUST’s approach emphasizes preparation over prediction. That means acknowledging extremes—both optimistic and pessimistic—and building portfolios designed to function across them.

On one end of the spectrum lies a future where productivity gains from AI help offset demographic challenges and massive global debt, delivering growth without inflation. On the other end sits a more pessimistic scenario, where job displacement and rising geopolitical tensions stall growth and unsettle markets. The distance between these outcomes is vast, which makes positioning for any single one a gamble.

What investors can do is choose how their portfolios are constructed.

For example, imagine an investor puts $1,000 into a portfolio concentrated entirely in NASDAQ‑100 stocks—essentially a bet on large, innovation-driven companies. If the optimistic scenario materializes and technologies like AI meaningfully transform productivity and grow earnings, that $1,000 could grow to $5,000 over a few years. But the opposite outcome is also possible: if the heavy investment in AI fails to deliver on lofty expectations, that same $1,000 could fall to $300. The portfolio’s range of outcomes is just as wide as the set of circumstances.

By contrast, a broadly diversified mix of stocks, high-quality bonds, and other asset classes tends to produce more balanced results. In the positive scenario, the same $1,000 might grow to $2,000. This outcome is less dramatic, but still a solid return most investors would welcome. In the more challenging scenario, instead of severe losses, the portfolio might still rise modestly to $1,200, as diversification and bond exposure help cushion volatility. The trade-off is straightforward: concentrated portfolios offer higher potential upside, but at the cost of much greater potential downside, while diversified portfolios seek to preserve more consistent progress over time.

Diversification as Scenario Preparation

True diversification isn’t about owning more investments; it’s about owning exposure to different economic drivers. Over the past decade, portfolio returns have increasingly been driven by a narrow set of forces, particularly the largest U.S. technology companies. That concentration delivered strong results, but it also left portfolios more vulnerable as leadership began to shift.

A late-2025 market rotation highlighted why diversification matters. As parts of the technology sector came under pressure from rising capital expenditures and stretched valuations, capital moved into more cyclical sectors such as energy, infrastructure, and industrials, where valuations were more attractive. These shifts weren’t triggered by a single forecast coming true, but by markets constantly reassessing a broad set of possibilities.

A thoughtfully diversified portfolio is better positioned to adapt when leadership changes, without requiring wholesale reinvention every time sentiment shifts. At the same time, diversification does not mean standing still. Effective investors make incremental adjustments as new information emerges, evolving the portfolio at the margin while maintaining broad exposure to multiple scenarios.

Liquidity as a Stabilizer

Another structural consideration is liquidity – the share of a portfolio that can be converted to cash quickly, without selling at a discount. In periods of uncertainty, liquidity creates optionality. It helps investors avoid being forced sellers during temporary market declines and preserves flexibility when opportunities emerge. Liquidity buys time to let the market heal itself.

For individuals, this means holding enough in cash and stable assets that short-term needs don’t force a sale of long-term holdings at the wrong time.

For employers and nonprofit leaders, the principle extends beyond investments to cash‑flow planning and spending policies. Sound planning and portfolio structure reduces the pressure to react at exactly the wrong moment.

Accepting Trade‑Offs

Preparing for multiple futures isn’t about maximizing returns in a single scenario. A portfolio designed to handle uncertainty may not be optimized for any one outcome—but that balance is intentional.

The goal isn’t to win one specific bet. It’s to increase the probability of long‑term success while reducing the risk of permanent loss.

Structure Outlasts Certainty

Forecasts and predictions will always be part of investing. They help frame conversations and test assumptions. But as uncertainty grows, their usefulness declines. What endures is portfolio construction: how assets work together, how risks are balanced, and how flexibility is preserved.

In a world where the future may arrive faster—and look different—than expected, getting the structure right may matter more than being right about the prediction.

Resource by the CAPTRUST Investment Committee.

This content is provided for educational purposes only, and does not constitute an offer, solicitation, or recommendation to sell or an offer to buy securities, investment products, or investment advisory services. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Nothing contained herein constitutes financial, legal, tax, or other advice. Consult your tax and legal professional for details on your situation. 

Content does not represent any actual client or client data.Diversification and asset allocation do not ensure a profit or guarantee against loss. Investing involves risk, including possible loss of principal.

For plan sponsors, retirement plan success is usually measured in three ways: by plan participation, by overall savings behavior, and by retirement outcomes. But our recent survey of defined contribution plan fiduciaries shows they often define success differently.

The survey gathered responses from more than 470 plan fiduciaries across small (<$50 million), midsize ($50 million – $500 million), and large (>$500 million) plans.

What Success Looks Like Depends on Plan Size

When asked, “How do you best measure your retirement plan’s success?” plan sponsors most often identify either participation rates or participant retirement readiness. The importance placed on each measure varies by plan size.

For small and midsize plans, participation rates were the top signal of a plan’s success.

For many plan fiduciaries, participation rates answer a simple question: Are employees accessing and using their retirement plan benefits? However, that answer does not indicate whether employees are saving enough.

Large-plan sponsors were more likely to prioritize retirement readiness, which can be an indicator of whether employees are saving enough and moving toward a realistic retirement outcome. Among large-plan fiduciaries:

For other plan fiduciaries, retirement readiness can help answer another valuable question: Are the plan’s benefits aligned with employee needs? However, this does not necessarily indicate whether employees are invested appropriately.

Participation rates often provide a clear, easy-to-track measure of engagement, while readiness offers a broader view. Sponsors focused on long-term participant results may naturally lean more on readiness.

Other surveyed measures, such as employee feedback and cost savings, ranked well below participation and readiness across all groups.

Using More Than One Metric

Survey results do not suggest that one measure is universally better than another. Instead, they suggest that sponsors choose metrics based on their plan’s objectives. If the top challenge is getting employees into the plan, then participation may be the right lead measure. If the goal is to improve long-term outcomes, then readiness may be more useful.

In practice, many sponsors likely need both. Participation shows who is engaging. Readiness helps show whether engagement is translating into meaningful progress.

Retirement Education Still Leads

The survey also asked, “Which resource do you believe is the most engaging, or utilized, by your employees?”

Across all plan sizes, retirement planning resources topped the list. About 40 percent of sponsors in each cohort (small, medium, and large plans) chose tools focused on topics such as Social Security and withdrawal planning.

One important difference did emerge: Large plan sponsors were more likely to point to total benefits education. In that group, 34.5 percent said broader benefits education was the most engaging resource, versus about 25 percent of small and midsize sponsors. This difference likely reflects a more complex benefits environment in which employees need help connecting retirement decisions to health, wellness, and other benefits choices.

The Takeaway for Plan Sponsors

There is no one-size-fits-all formula for retirement plan success. Some sponsors are still working to improve participation; others are looking deeper at whether employees are truly on track for retirement. Both approaches are valid, and many organizations will need to track both over time. Improving these measures may require different approaches, such as targeted employee communications to non-enrolled lower-income workers who may benefit from the government’s Saver’s Match or offering a financial wellness counselor to educate employees on the drawbacks of taking distributions from a retirement plan. The practical value of this survey is to show how plan sponsors define success and how they focus their efforts to improve their plans. This can help sponsors decide which metrics matter most now and which ones may matter next.

If you missed our recent Endowment & Foundation Investment Outlook webinar, here’s the takeaway: the range of possible market outcomes is wider than usual, and that wider range could impact how nonprofit investment portfolios are constructed.

For nonprofit investment committee members, this means the primary goal has shifted. Your job is no longer to try to predict exactly what will happen next. Instead, it is to prepare for several possible futures—and make sure the organization’s portfolio can hold up in each one.

Below, read seven additional takeaways from the webinar, hosted by the CAPTRUST Investment Committee.

1. Nonprofit Investment Committees Should Focus on Preparation

In a typical market, professional investors can make educated guesses about what is most likely to happen in the economy and markets. Today, that is harder to do. Change is happening quickly, and the most likely outcome is anything but clear.

Right now, preparation matters more than prediction. In practice, that means:

As James Stenstrom, CAPTRUST senior director of institutional portfolios, explains, the goal is to create “a framework to evaluate what we do know […] rather than letting uncertainty overwhelm the decision-making process.” A solid process can help committee members stay calm and make steady, informed choices for the good of the organization, even when markets are volatile or uncertain.

2. Geopolitical Conflicts Are Raising Energy Costs

One clear shift we’re seeing is in the energy sector. For years, fairly low and steady energy costs let many countries focus on affordability and cleaner energy sources. But that picture is evolving quickly as countries put more emphasis on energy security and try to make sure they can reliably access the energy they need.

The result may be higher energy costs over the long term, and some regions will feel the difference more than others. Europe and parts of Asia, which depend more on imported energy, are likely to face the highest pressure. North America may be better protected because of its domestic energy production.

For nonprofit investment committees, an energy-sector shift could mean rethinking how much of the portfolio is invested in different regions, then adjusting portfolio growth expectations if costs stay high.

3. AI Is Both a Tailwind and a Source of Uncertainty

Economically, AI could provide a tailwind. Even a small boost in productivity can lead to stronger economic growth over time. But the future is still highly uncertain.

More optimistic views of AI point to faster growth and better efficiency, while cautious views focus on the risk of economic disruption. Jobs may be eliminated and prices in some parts of the economy could fall.

The lesson here is not that investment committees need to choose one view they believe in. It’s that the range of possible market outcomes is wider than normal, so portfolios should be built to stay resilient regardless of how the AI story unfolds.

4. Market Returns Are Becoming More Concentrated and More Uneven

So far this year, a small group of companies is driving a large share of market performance. (Consider the Magnificent Seven.) At the same time, we’re seeing more variation within the market leaders. The mega-cap companies are no longer moving in lockstep as they did a year or two ago.

For nonprofit leaders, this raises a few important points.

At this point, it is especially important to look beyond overall returns and regularly check where your organization’s portfolio may be too heavily invested or not invested enough.

5. Private Credit Headlines Don’t Tell the Full Story

Private credit has received a lot of attention lately, but the recent stress appears to be limited to certain areas, not the entire asset class.

At a high level, the basics still seem stable. Defaults, realized losses, and leverage (e.g., borrowed money used to invest) are still below long-term averages. Where stress is showing up is in semi-liquid funds designed for retail investors. These products offer limited access to cash and are sold to individuals, rather than institutions. The core institutional market (where most nonprofits invest) has not seen the same level of disruption.

Still, private investments are not something to set and forget. Areas to watch include:

6. Policy Risk Is Higher Than Usual

The Federal Reserve adds another layer of uncertainty. Inflation is still high, unemployment remains low, and leadership is being replaced. Taken together, that means there are more moving parts than usual. “This creates a formula for a potential policy error,” says Jim Underwood, CAPTRUST senior director of portfolio management.

It does not necessarily mean a mistake will happen. But it does mean nonprofit investors should pay extra attention to rate sensitivity, or how much an investment’s value may change when interest rates move, especially in longer-duration assets.

Looking ahead, several long-term changes could affect how portfolios behave, even if the underlying investments still look healthy.

One example is the expected wave of large IPOs. Another is the growing connection between public and private markets, especially as large public companies invest heavily in private AI businesses. This may blur the usual lines between those markets and change how performance appears within portfolios. These are not reasons to make immediate changes, but they are worth watching.

Final Thought: Build for Resilience, Not Precision

Across these themes, one idea stands out: the path forward is less predictable than what most investors are accustomed to. For nonprofit investment committee members, that means being more thoughtful about how risk shows up in the organization’s portfolio.

To start, investment committees should review a few core questions, such as:

For additional context behind any of these themes, revisit the full webinar recording, where we unpack each topic in greater detail.

By Roxanne Bellamy

Wind whips through New York City as Bill Kerig opens the door to an overheated East Village thrift store. 

It’s 1984, and 23-year-old Kerig needs cash to finance the first of many life-changing decisions. Despite his new finance degree, plus stints in insurance and currency trading, he knows a financial career is not for him.  

He wants to go skiing to figure things out. 

“People have been going to the mountains for centuries, looking for meaning,” says Steve Haugen, Kerig’s longtime collaborator. “For Bill, skiing isn’t just skiing. It’s where he finds answers.” 

Exit Number One 

The store smells like patchouli. Hippie music plays as Kerig lays a garment bag on the counter. The clerk thumbs through his work suits, scanning for tears, but they’re almost brand-new. She lowballs an offer. Kerig counters with conversation, and the two find common ground.  

Her hair is wild, dyed blue, she says, for a recent Rangers game. So now he knows they’re both hockey fans. The connection helps them negotiate a price that makes her happy, and it’s enough for Kerig to buy a one-way airline ticket. 

“How about you throw in that cashmere overcoat you’re wearing?” she says. 

“This I’m keeping,” says Kerig. “I’ll be back in the city one day.” 

But he never will be. And the coat—which eventually does go to a thrift store—will be one of many uniforms worn and shrugged off throughout a career that carries him across industries and identities, from athlete and journalist to filmmaker, entrepreneur, and finally to a calling that pulls all his skills together: startup mentor. 

Everyone Has a Plan Until 

Snowbird Ski Resort in Salt Lake City, Utah, stands 7,760 feet above sea level, which is why Kerig calls his next job “a high-level career move.” In truth, he’s a dishwasher, but the gig comes with nightly dinner and a season pass. He takes full advantage of both. One day, he watches skiers warming up for competition.  

“These guys were getting paid to ski, and I wondered if I could get to that level,” says Kerig. “I knew I couldn’t beat the best ones, but maybe I could make the top 20 and somehow parlay it into a living.” 

This willingness to try, and to adapt, became a lifelong theme and a key tenet of Kerig’s mentoring methodology. When something stops working, financially, physically, or psychologically, he changes direction—something he’s done repeatedly, across decades.  

The only throughline is that he’s always chosen his path by leaning into what makes him feel alive and stepping away from what doesn’t. 

Registration for the mogul-skiing contest cost him a week’s wages. But he knew it was the right move, despite what happened next.  

On his third training run, his binding fails. The ski flies up and hits him in the face. His goggles fill with blood. The next day, Kerig watches other skiers compete from behind two black eyes, a stitched-up cheek, and a broken nose. 

“In hockey, they say everyone has a plan until they get punched in the face,” says Kerig. “I was the opposite. I didn’t have a plan until I got cracked in the nose by a ski. Then I knew I wanted to be a pro skier.” 

Bill Kerig stands on a crest at Antelope Island State Park in Utah, as snowflakes fall thick around him

A Decade on Tour 

Vail, Colorado, sits even higher than Snowbird. Moving up in elevation, if not the career ladder, Kerig relocates there to be at the center of the mogul tour.  

He writes for the local newspaper, and—thanks as much to his press pass as his skiing talent—gets onto a team sponsored by K2, a popular ski brand. 

When the team captain is injured, Kerig takes over and looks beyond the usual sponsors. He negotiates a deal with a fledgling company that’s launching a new product called an energy bar.  

Kerig spends the next decade as captain of the K2 PowerBar Pro Mogul Team. He is officially a professional skier. 

The Wandering Medium 

While traveling, Kerig leverages his pro status to write and take pictures for a range of magazines. Eventually, he leaves the tour, creates his own magazine, The Wasatch Journal, and writes two books: The Snowboarder’s Total Guide to Life and Utah Underground. 

When his curiosity moves again, this time to broadcast media, Kerig again taps his strength as a skier to pursue a pivot. He hosts the show Ski Tips on the Weather Channel; provides commentary for ESPN’s X Games; and works as a producer at both the 1998 (Nagano) and 2002 (Salt Lake City) Olympics. He even makes a murder mystery for 48 Hours on CBS. 

A few years later, he uses the same strategy to transition from broadcast media to film. 

On assignment for an article, Kerig befriends ski resort owner Kenny Griswold. They partner to make a movie called Net Worth, starring Daniel Baldwin and Craig Sheffer, about a group of friends competing to earn the highest net worth in 30 days, in a new city, with no cash or connections.  

The process piques Kerig’s interest in film, but his focus shifts again, this time toward documentaries. First comes Steep, about big-mountain skiing, then Ready to Fly, about women’s ski jumping, which wins big at the Banff Film Festival. 

His most ambitious project is The Edge of Never, which Kerig writes as a book before producing and directing the feature documentary. The story centers on a teenage skier attempting the backcountry route that killed his father, guided by a group of expert ski mountaineers. 

Tech Entrances and Exits 

A Boeing 737 wings over Iowa. It’s 2011 and Kerig is traveling with Ready to Fly protagonist Lindsay Van. They’re discussing a scene in which Van and another skier are at a farmers’ market with a folding table and a salad bowl, panhandling for their chance to compete in the Olympics. 

Van recounts her humiliation at having to beg for money. Kerig commiserates. He raised a portion of the funds to produce this film through a rudimentary fundraising site he and a colleague created. “Where’s the crowdfunding platform for athletes?” Kerig asks. “Maybe I can build one.”  

A year later, he has.  

It’s called RallyMe, designed to help Olympic and amateur athletes raise money for training, travel, and competition. Van’s campaign is the first on the site. She raises almost twice her goal. Four years later, RallyMe is acquired by NBC Sports. 

Kerig works with NBC for a while but leaves to launch another new idea: Great Coach, a website and app intended to increase transparency in youth sports. As a longtime hockey coach, he sees the need firsthand.  

Great Coach makes a splash by publishing an aggregated list of coaches banned by various sports governing bodies. Then, the pandemic hits, and its revenue base vanishes almost overnight.  

A collage shows the many works of Bill Kerig, from book covers to movie posters.

Rolling with the Punches 

Kerig has to shut down a company he believes in. He loses money, including funds invested by his family and closest friends, and he’s almost 60. Most of his peers are stabilizing, not starting over. 

Kerig doesn’t describe this time as failure, but the consequences were real. Financial collapse. Personal responsibility. The weight of a business that just didn’t work.  

What stands out now is how he recalibrated. 

“I just try not to get stuck,” he says. “If I think I’m heading in that direction, I’ll start working on something creative, even if I know it’s not going anywhere. Or I’ll reach out to people who need my help. It’s a strange kind of selfishness, but really listening and helping someone else not only makes me feel good, it keeps me moving.” 

Movement is his other way to force recalibration. “Forward motion is the cure,” he says, “whether physical, creative, social, or professional.” 

On Two Wheels 

After Great Coach, Kerig takes the last of his money, buys two motorcycles, and heads north with his son on the Continental Divide Trail.  

Like mogul skiing, adventure motorcycling demands focus. It means reading terrain, managing risk, and knowing when to adjust speed or direction, skills Kerig has spent decades developing. 

He says this time on the trail freed his mind long enough to imagine finding success again. 

“When you crash your bike in the middle of nowhere, you fix it and get back on,” says Kerig. “You have to keep going and do it with focus. This helped me reframe where I really was—not starting over at 60, just adjusting course and getting on with it.”  

As for the physical risk of motorcycling, Kerig isn’t worried.  

“I can calculate risk vs. return pretty quickly,” he says. “I can look at a ski slope where, if you fall, you die, and know immediately whether it’s worth it.” 

The Risk of Retreat 

Physical risk provides immediate feedback. Emotional and financial risks unfold over time, often without clear signals. They’re harder to read and control. Yet those are the risks Kerig continues to take. 

“I think it’s a blessing to have to push through the discomfort of earning a living, because it keeps you engaged,” he says. 

That word—engaged—comes up often. For Kerig, it seems disengagement is the real risk. He works hard to avoid stagnation but isn’t particularly worried about failing.  

“Engaging with the world is sometimes really tiresome, but disengaging sounds worse,” he says. “All those skills you’ve built just atrophy and leave you weak and inconsequential.” 

This perspective keeps him involved, and it gives him a way to move through periods and pivots he isn’t quite sure about. Leap and the net will appear. 

Momentum and Reinvention 

After the motorcycle trip to Canada, Kerig got a message from a former Great Coach employee. Julie Glusker was now head of U.S. Performance Academy (USPA), an online middle and high school for student-athletes. She wondered if Kerig might take a look at its business operations.  

The school was 10 years old, sending kids to top colleges, but stuck in an unprofitable rut. Kerig met with its founder, Pete Smith, and interviewed much of the USPA team. He came on board to help scale its model, refine its offering, and navigate an exit.  

Smith says Kerig didn’t give them a formula. Instead, he offered a journalist’s talent for listening, a tech founder’s toolbox, a filmmaker’s sense of successful narrative, and a team of proven freelancers. 

“Bill won’t tell you what to do,” says Smith. “He’ll help you realize it yourself, then support you while you execute. He gave us confidence in the value of what we were doing. He kept us from compromising.” 

Smith says, in their years working together, Kerig never once flexed his résumé. “His ego is completely checked at the door,” says Smith. “He’s a hoodie-and-hat kind of guy, even in business meetings.” 

The two-way flow of trust between them led to a fourfold increase in revenue and a lucrative acquisition. 

“So many of us act out of insecurity,” says Smith. “Bill doesn’t. He trusts his own judgment, and he doesn’t outsource the work to make things happen.” 

Kerig enjoyed the experience so much he created what he says is his favorite company yet: Traction Business Accelerator. Through it, Kerig works with entrepreneurs facing personal and professional transitions, plus private equity firms looking for turnaround tactics for acquired companies. 

Watching him, it’s easy to see he’s having as much fun helping others crack the code as he once had re-engineering his own life. 

Bill Kerig smiles up at the snow in Antelope Island State Park, wearing a flannel and khakis.

Trail as Old as Time 

In 2025, Kerig had double knee-replacement surgery. Six months later, he blew out one of those knees again. For someone accustomed to constant motion, the result was debilitating.  

Pain and anxiety set in, from the injury itself and the loss of momentum.  

Kerig descended into despair. He called people to offer support, tried to write again, but wasn’t coming out of it. Confined by crutches and a doctor’s order not to put weight on the knee, he felt stuck.  

When his doctor finally gave him permission to ride a stationary bike at low resistance as a form of physical therapy, Kerig took it to the next level. He bought an e-bike with big, mountain-ready wheels and started looking for trails nearby. 

Moving on the Moon 

Accessed by a seven-mile causeway through the Great Salt Lake, Utah’s Antelope Island is a moonscape of billion-year-old metamorphic rocks. It’s a timeless chunk of land on an inland sea, where bison and antelope roam. 

Kerig grabs his crutches and walks to the back of his truck. He lifts his e-bike slowly off the tailgate. With its electronic assistance, he says, he can control the resistance of the pedals and get moving, safely, outside.  

There’s still snow on the island’s 6,500-foot Frary Peak when he tries his first ride, but the sandy trails lend traction. The effect is immediate. 

“Being able to move through this beautiful space, to feel the wind and my heart beating faster, took me out of that darkness,” he says. “I know buying a bicycle is not what most adults would consider a mental-health strategy, but it worked.” 

A Goal and a Plan 

Kerig doesn’t view his life in terms of eras or pivots. He treats it as a series of decisions made with the information available and revised as necessary.  

“To Bill, barriers are normal parts of the operating environment,” says Haugen. “He has challenges and setbacks. He doesn’t ignore them, but he doesn’t obsess about them either.” 

This keeps Kerig from becoming rigid or defensive.  

“In my experience, having a plan and rigidly sticking to it generally doesn’t work,” he says. “Having a clear goal with a loosely conceived plan has always worked better. Most of the meaningful things in my life came from taking paths I couldn’t have predicted.” 

Into the Great Wide Open 

The evening is warm with a breeze off the lake as Kerig—flushed from his bike ride and relieved to finally walk without crutches—pushes through the door of a neighborhood bistro. An aprés-adventure cocktail in hand, he reflects on a life shaped less by linear progression than by his own relentless participation.  

“So far, adventure has mostly meant moving through space and time,” he says. “But one day, it could mean taking a wild ride through a great book. The conversations I’m having with my body aren’t going to be the same in 10 years, or 20. At some point, it will tell me, ‘No, we’re not doing that.’ In the meantime, I look at aging as a gift. Not everyone gets to do it.” 

Now 64, Kerig is still in Salt Lake City, where he lives a sort of portfolio lifestyle through his 25-year-old production company, Thousand Faces Media, and his newest venture, Traction Business Accelerator. 

It’s not always stable—in fact, on the day of our photo shoot, the funding fell through for a film he’s trying to make—but still, it keeps him engaged. 

“Every time I start something new, I wonder if I can do it,” says Kerig. “Sure, I’ve pulled it off before, but I wouldn’t be human if I didn’t wonder: Will this be the time it doesn’t work out?”  

For Kerig, the question isn’t rhetorical. It’s an invitation to keep moving and find out. 

About the Author

Roxanne Bellamy is a freelance writer and editor, specializing in outdoor adventure and sustainability. In her 20-year career, she’s written for many industries, including beer, textiles, and finance. Her retirement dream is to be a National Geographic Explorer.

By John Curry

“Before I turned 50, I asked myself what I wanted to do before I died,” says Amy Mortimer, a real estate broker and business owner in Blacksburg, Virginia. “One of my answers was to become fluent in Italian.” 

Mortimer studied in Italy in college, an experience that stayed with her throughout her life. Years later, her lingering interest in Europe turned into a real question: What if I lived abroad? 

Today, Amy and her husband Michael divide their time between the U.S. and… no, not Italy, but Spain. They’re part of a wide community of Americans who have retired—or are planning to retire—abroad, and their path reflects a broader shift in how people are thinking about life, work, and place. 

The Practical Pull 

The U.S. State Department estimates that roughly 9 million American citizens live outside the country, and more than 700,000 Social Security beneficiaries receive their monthly payments outside the U.S. Typically, relocation is driven by work or by retirement. For many, it begins as a question about lifestyle. 

Most people who have moved abroad will tell you the appeal is less about romance and far more about practicality. Cost of living is a common catalyst, particularly for retirees who worry their savings won’t support the lifestyle they envisioned in the U.S. 

“Affordability is what gets people thinking about this in the first place,” says Kathleen Peddicord, founder of the resource hub Live and Invest Overseas and a longtime relocation researcher who has spent more than three decades helping Americans explore life outside America. 

A generation ago, retirees often relocated to lower-cost U.S. cities. Today, online tools make it easy to compare housing, health care, and daily expenses across borders. Places like Mexico, Panama, Costa Rica, Colombia, Portugal, and Thailand now appear regularly in retirement conversations, not as fringe ideas but as plausible options. 

For the Mortimers, extended time in Spain brought those comparisons into sharper focus. Everyday expenses—from groceries to transportation—felt more manageable, especially when they lived like locals rather than tourists. They realized their money could stretch further while supporting a lifestyle that felt fuller and more connected. 

From Dream to Due Diligence 

What begins as a financial calculation soon becomes a deeper question of identity and lifestyle. 

Peddicord, who splits her time between Panama City, Panama, and Paris, encourages people to begin by thinking about priorities instead of specific destinations. Factors such as weather, walkability, culture, cost, public services, and pace of life often matter more than national borders. Once those priorities are clear, the list of viable locations naturally narrows. 

Melissa Cella, a CAPTRUST financial advisor in Folsom, California, has helped several clients plan for and manage international lives. She says her first priority when talking with someone who wants to live internationally is to understand whether the idea is still exploratory or beginning to feel concrete. 

Few people do it all at once, she says. More often, the plan unfolds gradually through short trips, longer stays, and a growing sense of what fits and what doesn’t. They might rent apartments in different cities for a few weeks or months, shop at neighborhood markets, learn the local transit systems, or linger in public spaces long enough to observe daily rhythms. 

“Spend some time in the new country and speak with those who have already made the move,” says Cella. The goal is to experience ordinary days. 

For the Mortimers, it was Italy that sparked the idea. Extended stays in multiple countries over several years helped refine it. And over time, their firsthand experiences answered questions that cost-of-living charts and visa guides never could. 

“Somewhere along the way, we realized we wanted to be in a larger city with a lot of cultural opportunities—restaurants, shows, museums—and easy transportation to other places,” Mortimer says. “We also wanted to be on the Mediterranean and close to an international airport.” Barcelona felt like the best possible fit. 

Life Happens Locally 

Of course, choosing a country is only the beginning. Daily life doesn’t unfold at the level of national borders. It happens on specific streets, in familiar restaurants, near certain parks and stores, and along particular transit lines. As a result, relocation decisions have become increasingly granular, shifting focus from countries to neighborhoods. 

Amy and Michael Mortimer; a table full of plates of tapas; and the Barcelona skyline

“Your lifestyle is completely different depending on where you are in a country,” Peddicord says. “Living in Panama City is a totally different experience than living in Panama on the coast or in the mountains. Weather, cost, neighbors, housing—everything changes.” 

The same logic applies across Europe, South America, and Asia. In any country, different neighborhoods can feel like separate worlds. Some cater to visitors or expatriates. Others center on schools or markets. Those distinctions shape daily life and rhythms. 

For the Mortimers, the final layer of decision-making came down to neighborhood feel. They landed in Barcelona’s Eixample district, drawn by its walkability, safety, access to cafés and markets, and proximity to transportation. 

Two Buckets 

Once the emotional decision is made, the questions turn practical. This is where some people stall, as the life they imagine collides with paperwork, unfamiliar systems, and timelines that don’t conform with American hustle. 

The dream and the logistics can feel inseparable. Peddicord suggests treating them as two distinct pieces. 

One is about the life you want to live—daily rhythm, community, culture, and pace. The other focuses on the logistics required to support that lifestyle, including residency rules, banking, real estate, taxes, utilities, and documentation. Trying to solve both at once can create unnecessary friction, but separating them makes the administrative work more manageable. 

Professional guidance can help reduce confusion, especially as residency programs evolve and cross-border systems intersect. The Mortimers worked with a concierge service to coordinate identification numbers, real estate, and residency requirements. “It didn’t make the process instant, but it did make things clearer,” Mortimer says. 

For high-net-worth households, property structures, tax residency, healthcare access, and estate planning often span multiple jurisdictions and require careful coordination. Some choose to purchase real estate to anchor their presence. Others prefer renting. Some retain U.S. property for family or diversification purposes. Others choose to sell. 

Cella sees three things that create the most complexity: understanding the full cost and structure of daily life; navigating cross-border tax obligations; and ensuring that estate plans account for assets held in more than one country. 

Living abroad is both a legal and a lifestyle choice. Immigration rules vary by country, but in general, long-term residency paths fall into three broad categories. 

One common route is through income-based visas, including work permits, retirement or non-lucrative visas, and digital nomad programs. Requirements vary, but most involve providing proof of financial means, healthcare coverage, background checks, and documentation. Some of these visas can eventually lead to permanent residency or citizenship. 

Another path is residency through investment, which is typically tied to real estate purchases or government-approved investment funds. These programs have become more regulated in recent years, but they remain an option in some jurisdictions. 

Remember, visa programs are tools, not guarantees. They evolve alongside political priorities and economic conditions. The Mortimers qualified for residency through a real estate purchase under Spain’s Golden Visa program. However, in 2025, Spain phased out the real estate–linked component of that program amid concerns about housing affordability. 

A third option, called citizenship-by-descent, offers individuals with qualifying parents or grandparents a more durable legal pathway to citizenship, though documentation can be time-consuming and complex. Countries including Italy, Ireland, Poland, Portugal, Hungary, and Mexico have citizenship-by-descent programs with varying qualifications and documentation requirements. 

“Residency programs change, and tax rules evolve,” Cella says.  

“The key is building flexibility into the plan so that your lifestyle decisions don’t create unintended consequences.” 

Which route makes sense depends on your personal circumstances, including finances, family history, career plans, healthcare needs, and how permanent the move is intended to be.  

The Day After 

People tend to imagine life abroad at its most polished. What they rarely picture is how disorienting the early days can be. “When you step off the airplane, that’s when you know the least,” Peddicord says. “The first day can be the hardest.” 

Americans often arrive with expectations shaped by digital access, speed, and clear instructions. Outside the U.S., those assumptions don’t always translate. Even in places like Puerto Vallarta, Mexico, where many services cater specifically to American retirees, daily life still operates on local terms. 

Peddicord’s advice: “Leave your expectations at the border.” 

The friction between expectations and reality rarely stems from a single major problem. More often, it comes from a series of small ones. Errands may take longer than expected and require more attention than they ever did back home. 

In Cella’s experience, the challenges tend to involve interactions with everyday systems, such as communication across countries, banking, learning transportation systems, and getting used to cultural norms that don’t show up during shorter trips. 

Buying groceries, for instance, can become an exercise in both vocabulary and patience. But once you’ve done it, the mystery fades. The second visit is easier. By the third, you know where to go, what to get, and which questions to ask. 

In many parts of the world, systems run on relationships rather than efficiency. Processes happen at the pace of tradition, not convenience. 

“Nowhere in the world is as easy as the U.S.,” Peddicord says. “But easy isn’t necessarily what makes people happy.” 

What changes is your relationship to uncertainty. Over time, curiosity replaces frustration. Those who settle in learn to approach unfamiliar tasks as something to be learned, not something to be fixed. They learn that a system isn’t broken just because it doesn’t match their expectations. 

Also, not every relocation becomes permanent. 

Some people return home after a year or two, surprised by how much they miss being close to family or the comforts of cultural familiarity. But that doesn’t mean the adventure failed. Moving abroad for a trial run can clarify what matters—whether that’s a change of pace or a renewed appreciation for home. 

Tax Facts for Americans Abroad

The U.S. is one of only two countries in the world that practices citizenship-based taxation; the other is Eritrea in East Africa.

This means that as long as you hold a U.S. passport, the IRS requires you to report your worldwide income every year, regardless of where you live or where the money was earned. While foreign tax credits often mitigate double taxation, high-net-worth individuals with complex investment structures may face additional reporting and compliance obligations.

Beyond income tax, the administrative bucket includes specialized reporting for foreign assets. If the total of your foreign bank accounts exceeds $10,000 at any point in the year, you must file a Foreign Bank Account Report (FBAR). Larger assets may trigger additional requirements under the Foreign Account Tax Compliance Act (FATCA). Failure to comply with these requirements can result in significant penalties that quickly erode the cost-of-living benefits of moving abroad.

About the Author

CAPTRUST’s former chief marketing officer, John Curry is now constructing his own Second Act and adjusting to unretirement in Spain. In the finance industry since 1986, Curry was instrumental in the launch of VESTED magazine, serving as its original editor in chief.

By Eshani Gupte

What is the maximum decline you can withstand across your investment accounts before you seek a more conservative strategy? How flexible are your financial goals if your investments fall short of expectations?

These are two of the many questions a financial advisor may ask their client at the start of an advisory relationship. Although thinking about declines and shortfalls can be uncomfortable, the answers to these questions are critical in evaluating each client’s individual risk profile. 

From an investor’s perspective, the goal is straightforward: earn sufficient returns to meet future financial needs.

From an advisor’s perspective, things are more nuanced. Advisors seek to deliver returns that meet a client’s unique financial goals on specific time horizons, while also carefully managing performance to the client’s unique risk tolerance and risk capacity.

To do this, the advisor must combine a client’s risk profile (their financial and emotional capacity to endure certain investment outcomes) with risk-management practices, constructing a portfolio that is efficient, diversified, and consistent with the intended investment experience.

That’s one of the reasons investment professionals spend so much time thinking about risk: how to define it, how to explain it, and how to prudently manage it. For professional investors, the journey toward a client’s time horizon is just as important as the destination.

This article examines risk through two lenses: the client’s and the advisor’s.

How Individual Investors Define Risk

In its most basic form, risk is defined as exposure to danger and harm, or the possibility of loss. But this definition is overly simplistic because it implies that risk is unusual or avoidable, when in fact, it is both common and inevitable.

We face risk every single day—in small, almost unnoticeable ways, like sipping hot coffee while driving, and in more extreme ways, like jumping out of an airplane.

Degrees of risk vary based on the activity, the environment, and the individual involved. A skydiving instructor and a first-time jumper facing the same situation will experience it differently. For one, jumping is routine. For the other, it may be terrifying.

Whether you’re thinking about skydiving or investing, risk itself is subjective.

Investment risk is the possibility that an investment’s actual outcome will differ from expectations. This includes the potential to lose some or all invested capital.

But this definition is also simplistic. Real investment risk is complex, multifaceted, deeply personal, and frequently misunderstood. No single definition can encapsulate all investors’ tolerance or capacity.

And while there is a common misconception that investors can eliminate risk through careful selection or highly conservative strategies, the reality is that risk cannot be avoided, only managed to a level that a particular investor can reasonably and emotionally accept.

Several factors shape a person’s risk profile.

Several less apparent forms of risk can be equally impactful to an investor’s long-term plan. These include shortfall risk (when realized returns are lower than expected and leave insufficient funds to meet financial objectives), inflation risk (purchasing power erosion from the failure to keep up with inflation), and longevity risk (in which returns fail to keep pace with financial goals due to external circumstances).

Taken together, these factors underscore why risk is neither simple nor static. Because investors experience and respond to risk differently, no two investors share the same risk profile. This makes a professional investor’s task increasingly complex as they work to combine stated goals with these elements to construct resilient portfolios.

Evolution Over Time

Adding complication is the reality that each investor’s relationship with risk is not fixed. As life changes, so do financial priorities and liquidity needs. Often, multiple objectives with different time horizons must be managed at the same time.

Consider a young couple, early in their careers. They want to buy a home soon, and they want to be prepared for retirement.

Given their circumstances, they may reasonably pursue a growth-oriented investment portfolio while retaining some element of conservatism that will lend them the liquid cash they need for a down payment. As their family grows, paying for school becomes another goal. Their investment strategy must adapt to accommodate this new goal and its time horizon.

Now consider an individual in her early 60s. Her income is stable, her kids have finished college, and now, she’s almost ready to retire. An unexpected change, such as the need to fund long-term care for an aging parent, can materially alter her liquidity needs and reduce her willingness to tolerate market volatility.

These examples underscore a critical reality. Risk is not just a market concept. It is life-driven and life-determined, and must continually adapt. Over time, portfolios must be recalibrated to stay aligned with financial goals, risk capacity, and risk tolerance.

Real-World Tolerance

Risk is often reduced to, or misunderstood as, volatility. Volatility is only one dimension of risk, but it often garners the most attention because it is the most easily observed.

Volatility is better defined as short-term price fluctuation driven by economic, political, corporate, or consumer events or data.

For example, we might note that market volatility was heightened in early 2026, driven by geopolitical events in the Middle East and shifting interest-rate expectations. This led to sharp, headline-driven swings in the S&P 500 Index.

Short-term, headline-driven market swings are an inherent part of investing.

True risk emerges when a person’s natural emotional response to volatility creates the potential for permanent loss or failure to meet stated financial goals. This can happen when people get spooked by market declines and withdraw money impulsively, thereby locking in permanent losses. Investment professionals can help clients look beyond volatility to maintain decision-making discipline, particularly around long-term goals.

How much volatility or market drawdown should investors be willing to endure? The answer depends on each individual’s unique risk tolerance. Remember, risk tolerance is a subjective measure. Often, it’s defined at the start of an advisory relationship via risk-profile questionnaires or personal conversation. However, it’s difficult to understand a person’s true risk tolerance until they’re faced with real-world volatility.

The reality of assets flowing out the door can change an investor’s perspective quickly. In this way, periods of market stress can validate true tolerance. Unfortunately, a person’s risk tolerance tends to correlate with recent market environments. Perceived risk tolerance is higher in up markets and lower in more volatile markets. This could be because, as humans, we tend to feel the pain of loss more acutely than we feel the joy of gain.

What matters is recognizing whether our stated tolerance aligns with our lived experience. If not, we need to reframe accordingly. Although risk cannot be fully eliminated, the level of risk in a portfolio should be bearable enough for a person to maintain throughout periods of market stress.

This illustration shows two key contributors to risk: volatility and underperforming a benchmark. It also shows the two key types of investment risk: permanent loss of capital and failing to earn required returns.

The Investment Professional’s Perspective

The investment advisor’s role in managing risk can be just as complicated as risk itself. After all, managing risk in a portfolio is not a one-time calculation. It is a core and continuous discipline.

First, the advisor must understand their client’s risk profile and financial objectives, then construct an appropriate investment strategy aligned to these priorities. They must continue to monitor and adjust risk exposure amid ongoing market events and shifts in investment positioning. Most importantly, they must clearly communicate the role that risk plays in each client’s portfolio.

Risk should never feel accidental. It must be intentional, understood, and appropriately compensated.

For investment advisors, failure often means a permanent loss of capital or the inability to achieve the desired level of return. These types of failure can have many drivers, including market volatility, forced decisions at inopportune times, misalignment between assets and time horizons, or inadequate liquidity when cash is needed.

To avoid these circumstances, professionals build and monitor portfolios with risk always in mind.

Connecting Risk to Portfolio Construction

One key investment idea says higher returns require more risk. But if higher returns were guaranteed, would the investment truly be risky?

Within this framework, lower-return investments are assumed to have lower risk. However—as you may have guessed by now—correlation between risk and return is not the sole consideration when predicting return potential.

The choice to avoid risk by holding excess cash or overly conservative assets introduces its own, separate forms of risk, including inflation risk and shortfall risk.

Also remember that all investments inherently carry the risk of an unlikely outcome that could lead to lower returns or asset losses. You’re probably familiar with the common disclaimer: Past performance does not guarantee future results. All investment involves risks.

Investment professionals manage these trade-offs by aligning investments returns with portfolio objectives, rather than investing in the highest-returning asset just to generate gains. Prudent portfolio design aligns assets to the client’s financial goals, liquidity needs, and time horizons.

Consider the same young couple from earlier. They have a growing family and three key financial goals: home purchase, college tuition, retirement. Their portfolio would need a combination of short-term, more conservative assets to meet the first goal, plus longer-term, higher-growth assets to help meet their goals for college and retirement.

Second, reconsider the woman who is caring for an ailing parent. Given her new and elevated liquidity needs, her portfolio should not be invested in illiquid assets, such as real estate, because she won’t be able to access their value when she needs it. Instead, her advisor is more likely to consider fixed-income assets with consistent yields.

Well-constructed portfolios recognize that different objectives can and should require different levels of risk.

Preparation Breeds Confidence

One more investment principle comes into play here: prepare, don’t predict.

Even the most well-informed and well-educated investment professional cannot predict what will happen in the future. Therefore, their goal is to make sure portfolios are prepared for a wide range of potential outcomes.

Stress-testing (also called scenario planning) under different economic and financial assumptions helps the advisor understand how portfolios may behave during downturns, how assets correlate under stress, and how financial flexibility could be impacted. Then, portfolios can be diversified accordingly, not only across asset classes but also across responses to various economic drivers.

Once a portfolio is constructed, the investment professional must manage risk on an ongoing basis.

Disciplined decision-making, particularly during difficult periods in financial markets, is more critical to long-term success than maximizing returns during stronger periods.

Preparation and planning can help investors avoid the sort of knee-jerk reactions that often lead to permanent losses. Preparation also enables adjustment, allowing investors to adapt as necessary when circumstances change.

Mitigation, Not Avoidance

Risk is a natural, unavoidable part of investing—and life. Its inevitability shouldn’t scare people away but should encourage thoughtful, intentional investment approaches that manage risk appropriately.

A skilled and trusted financial advisor can be a partner in the process. By viewing risk holistically and managing it proactively, advisors help investors stay focused on what matters, achieving long-term financial objectives with clarity and composure.

About the Author

Eshani Gupte is a manager in the CAPTRUST Investment Group, where she focuses on investment strategy and communications. Gupte brings more than a decade of investment research experience, having covered the technology, consumer discretionary, and real estate sectors in her previous roles at South Texas Money Management and Bloomberg LP.