Prepaying is a bond, not a stock

Treat an extra principal payment as what it is: a risk-free investment that pays your mortgage rate.

That makes the fair comparison a risk-free investment, not the stock market. Comparing a guaranteed 7% to a hoped-for stock return mixes two different bets. Stocks belong in the long-term plan either way. The decision here is narrower: where does your safe money do the most work?

The safe benchmark is short-term Treasury debt. As of October 21, the 1-year Treasury yielded 4.52% and the 10-year 5.13%. Treasury interest also has a quiet perk: only federal tax applies, and it’s exempt from state and local income tax.

New borrowers are paying a lot more than that. Freddie Mac’s weekly survey put the average 30-year fixed rate at 7.32% for the week of October 22, 2026.

The tax wrinkle that decides it

Treasury interest is taxed. The interest you avoid by prepaying usually isn’t a deduction you were getting anyway.

Mortgage interest is only deductible if you itemize on Schedule A. Plenty of households take the standard deduction instead; for reference, the 2026 standard deduction is $16,100 for single filers and $32,200 for joint filers. If you take the standard deduction, your mortgage rate is your after-tax rate. Every dollar of interest you avoid is a full dollar.

So the math compares your full mortgage rate against the Treasury yield minus federal tax.

Two example households

Take two different households, each with $10,000 of spare safe cash. We’re using $10,000 because it’s round and the percentages carry to any amount.

Household one: single, newer loan. Taxable income lands in the 22% bracket, which for single filers runs from $50,400 to $105,700. The mortgage is from 2025, at 7%.

Put the $10,000 in a 1-year Treasury at 4.52%. That earns $452 in interest. Federal tax at 22% takes $99.44. That leaves $352.56 after tax.

Send the $10,000 to principal instead. At 7%, that avoids $700 of interest in the first year.

$700 minus $352.56 is $347.44. Prepaying wins by almost double.

Household two: married, 2021 loan. Taxable income sits in the 12% bracket, which for joint filers runs up to $100,800. The mortgage rate is 3%.

The same Treasury earns $452. Federal tax at 12% takes $54.24. That leaves $397.76 after tax.

Prepaying at 3% avoids $300 of interest.

$397.76 minus $300 is $97.76. The Treasury wins, and the cash stays reachable.

Same $10,000. Opposite answers.

Find your break-even rate

You don’t need either household’s numbers. You need one line of arithmetic.

Take the Treasury yield. Multiply it by one minus your federal bracket. That’s your break-even mortgage rate. In a spreadsheet: =0.0452*(1-0.22).

At today’s 4.52% yield:

• 12% bracket: 4.52% times 0.88 is about 3.98%.
• 22% bracket: 4.52% times 0.78 is about 3.53%.
• 24% bracket: 4.52% times 0.76 is about 3.44%.

If your mortgage rate is above your break-even, prepaying beats the safe alternative. If it’s below, park the safe money in Treasuries and let the cheap loan sit there.

A new loan at today’s average rate clears every number on that list by more than three points. A 3% loan from a few years back clears none of them.

State income tax tilts things slightly toward Treasuries, since that interest skips state tax. In a high-tax state, nudge your break-even up a little.

If you itemize

Itemizers get to deduct mortgage interest, which lowers the loan’s real cost. A 7% loan for someone in the 24% bracket costs 7% times 0.76, or 5.32%, after the deduction.

That’s still above the 3.44% break-even for that bracket. A 7% mortgage beats Treasuries even with the deduction. The deduction only flips the answer for rates already near the line.

What about the stock market?

Stocks are a separate decision, and they don’t get settled here.

Money you’d invest for twenty years belongs in a diversified index fund whether your mortgage is 3% or 7%, because the expected payoff and the risk are both larger. Draining a retirement plan to kill a mortgage trades a long-run engine for a smaller payment.

The prepay question is about the slice of money you’ve already decided shouldn’t ride the market: the cash beyond your emergency fund, a bonus you won’t risk, a house fund you stopped needing. For that slice, the only fair competitor is another safe asset.

Keep the two buckets separate and the decision stops being a philosophy argument.

What prepaying costs you

Liquidity. Money sent to principal is locked inside the house. You can’t pull it back out without selling, refinancing, or borrowing against the home, and a lender decides the terms of that last one, not you.

A Treasury matures or sells in days.

That’s why prepaying comes after the cushion is built, not instead of it. A 7% guaranteed return isn’t worth much if a job loss forces you onto a credit card at a far higher rate.

The move to make

Work out your break-even with the formula above, using the current 1-year Treasury yield and your federal bracket.

If your rate is above it, and you already have an emergency fund, take the full employer match, and carry no high-interest debt: set up a recurring extra principal payment. Tell your servicer to apply it to principal, and check the next statement to confirm it did.

If your rate is below it, leave the mortgage on schedule. Put the spare safe money in Treasuries or a Treasury fund, where it earns more after tax and stays reachable.

This isn’t for anyone still building an emergency fund, anyone with credit card balances, or anyone planning to sell within a year or two, where the cash would serve better kept liquid for the move.

Sources

1. Board of Governors of the Federal Reserve System, Selected Interest Rates (Daily), H.15, released October 22, 2026
2. TreasuryDirect, Interest Income Reporting for Marketable Treasury Securities
3. Freddie Mac, Primary Mortgage Market Survey, Mortgage Rates, week of October 22, 2026
4. Internal Revenue Service, Publication 936 (2025), Home Mortgage Interest Deduction
5. Internal Revenue Service, Rev. Proc. 2025-32 (2026 inflation adjustments)

The post Pay off your mortgage early only if your rate clears this break-even appeared first on Thousandaire.

How the number is built

The Bureau of Economic Analysis publishes a price level for every state, called a regional price parity. The national average is 100. In its latest release, covering 2024, California sits highest at 110.7 and Arkansas lowest at 86.9.

To turn that into buying power, divide your salary by the price level.

Arkansas first. 86.9 as a fraction is 0.869. $100,000 divided by 0.869 is about $115,000.

California next. 110.7 becomes 1.107. $100,000 divided by 1.107 is about $90,300.

That’s the whole method. Spreadsheet version: =100000/(86.9/100). Swap in your salary and your state’s number from the table below.

The full ranking

We pulled every state’s 2024 figure from the Federal Reserve Bank of St. Louis’s table of BEA price parities by state. The savings and years columns come from the walkthrough in the next section.

Rankings are by buying power. Savings and years assume a married couple filing jointly, the same $100,000 salary everywhere, a lifestyle that costs $65,000 a year at national-average prices, and a 6% annual return. State and local income taxes are not included.

Same salary, very different savings

Buying power is nice. Money left over is what builds wealth.

Start with what every state shares: federal taxes. For 2026, a married couple gets a $32,200 standard deduction and pays 10% on the first $24,800 of taxable income, then 12% up to $100,800.

$100,000 minus the $32,200 deduction leaves $67,800 of taxable income.

10% of the first $24,800 is $2,480.

The remaining $43,000 at 12% is $5,160.

Federal income tax: $7,640.

Payroll tax is next. Workers pay 6.2% for Social Security and 1.45% for Medicare. 6.2% of $100,000 is $6,200. 1.45% is $1,450. Together, $7,650.

$100,000 minus $7,640 in income tax leaves $92,360. $92,360 minus $7,650 in payroll tax leaves $84,710 to live on and invest.

Now the lifestyle. We picked a household that spends $65,000 a year at national-average prices. It’s a round number for a comfortable, not lavish, life on six figures; use your own.

In Arkansas, that lifestyle costs $65,000 times 0.869, or about $56,500. $84,710 minus $56,500 leaves roughly $28,200 a year to invest.

In California, the same lifestyle costs $65,000 times 1.107, or about $72,000. $84,710 minus $72,000 leaves roughly $12,700.

Same job. Same habits. More than twice the savings.

The last column asks how long that takes to reach $100,000 invested, assuming 6% a year. We’re using 6% because it’s round and modest for a stock-heavy portfolio, not because it’s a forecast. Spreadsheet: =NPER(0.06, -28200, 0, 100000) returns about 3.3 years for Arkansas. Plug in $12,700 for California and you get about 6.6.

Three years of your life. That’s the real cost of the zip code in this example.

Rent is where the gap lives

Housing swings far harder than everything else. In the same BEA release, the rent index runs from 54.2 in West Virginia to 154.3 in California. D.C. comes in even higher, at 155.0.

So the people who close the gap fastest aren’t the ones clipping coupons. They’re the ones who keep rent or a mortgage well under what the local market would let them spend.

What this ranking doesn’t tell you

Salaries aren’t fixed across states. The same job often pays differently from one state to the next. The table holds pay constant on purpose, which makes it most useful for one person: someone choosing where to live on a salary that won’t change, like a remote worker or a couple weighing two offers with similar pay.

State income tax isn’t in here. If your state has one, your savings line is lower than the table shows. Run your state’s rate on top before you trust the years column.

A state is an average. Florida’s price level is 103.4, but the Deltona-Daytona Beach-Ormond Beach metro comes in at 99.4. Where in the state matters as much as which state.

The data runs a year behind. These are 2024 prices, the most recent BEA has published. The next update is scheduled for December 10, 2026.

The move to make

If you’re comparing a move or two job offers, don’t compare salaries. Compare what’s left.

1. Divide each salary by that state’s price level (as a fraction). That’s your real buying power.
2. Subtract federal income tax and payroll tax, then your state’s income tax.
3. Multiply your current annual spending by the new state’s price level, divided by your current state’s. That’s what your life costs there.
4. Take-home minus that cost is your savings. Run =NPER(0.06, -savings, 0, 100000) to see how long the first $100,000 takes.

If the cheaper state gets you there a year or more sooner and you’d be happy living there, that’s real money. If you’d hate it, no table fixes that.

This isn’t for you if your pay would rise to match a pricier state, or if your housing costs are already locked in by a paid-off home or a low fixed mortgage. In both cases, the ranking overstates your gap.

Sources

1. U.S. Bureau of Economic Analysis, Real Personal Consumption Expenditures by State and Real Personal Income by State, 2024 (released February 19, 2026)
2. Federal Reserve Bank of St. Louis (FRED), Regional Price Parities, Annual: Regional Price Parities by State, 2024
3. Internal Revenue Service, Rev. Proc. 2025-32, Part III, Administrative, Procedural, and Miscellaneous (2026 inflation adjustments)
4. Social Security Administration, 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
5. Federal Reserve Bank of St. Louis (FRED), Regional Price Parities: All Items for Deltona-Daytona Beach-Ormond Beach, FL (MSA) (RPPALL19660)
6. U.S. Bureau of Economic Analysis, Regional Price Parities by State and Metro Area

The post What a $100,000 salary is really worth in every state appeared first on Thousandaire.

At $85,000 of household income, the honest number is closer to a hundred dollars a year. That’s still worth knowing, because the free move is easy and the expensive mistake is not.

What actually gets taxed in a brokerage account

A taxable account sends you a tax form every year whether you sold anything or not. Interest is taxable income in the year it becomes available to you (IRS Topic no. 403). A fund can also pass along taxable distributions, and that can be true even if you reinvest them (SEC Investor.gov, Fund Distributions).

Not all of it is taxed the same way. Qualified dividends are the ordinary dividends that qualify to be taxed at lower capital gain rates (IRS Topic no. 404). A broad stock index fund throws off mostly that kind of income. A bond fund throws off interest.

So the question isn’t “stocks or bonds in the taxable account.” It’s which of your two income streams gets the better tax rate, and how big the gap is at your income.

The math at $85,000

These are illustrations. Swap in your own numbers.

Start with $85,000 of household income. Take out $6,000 of pre-tax 401(k) contributions, which leaves $79,000. Subtract the $32,200 standard deduction for a married couple filing jointly in 2026, which leaves $46,800 of taxable income (Rev. Proc. 2025-32).

That sits inside the 12% bracket, which runs from $24,800 to $100,800 of taxable income for 2026 (Rev. Proc. 2025-32).

Now two funds, $20,000 each. We’ll say the bond fund pays 4% and the stock fund pays 1.5% in qualified dividends. Those are round numbers, not a forecast.

Bond fund in the taxable account. 4% of $20,000 is $800 of interest. 12% of $800 is $96 in federal tax.

Stock fund in the taxable account. 1.5% of $20,000 is $300 of qualified dividends. For 2026, the 0% capital gain rate applies up to $98,900 of taxable income for married couples filing jointly (Rev. Proc. 2025-32). Qualified dividends and capital gains are run through the same worksheet to figure the tax (Instructions for Schedule D). Your $46,800 plus $300 of dividends is far under that line, so the tax on the $300 is $0.

Now the two layouts side by side.

• Layout A. Bonds in the 401(k), stocks in the brokerage account. Tax this year: $0 plus $0, which is $0.
• Layout B. Stocks in the 401(k), bonds in the brokerage account. Tax this year: $96 plus $0, which is $96.

The gap is $96 a year on $40,000 of investments. Put it to work for 30 years at a round 5% and you get about $6,400 (=FV(0.05, 30, -96) in any spreadsheet). It’s real money. It isn’t life-changing.

Where it gets bigger, and where it doesn’t

Move the same couple into the 22% bracket, which starts above $100,800 of taxable income (Rev. Proc. 2025-32), and the picture changes a little. Qualified dividends now fall in the 15% range, which runs up to $613,700 of taxable income for married couples filing jointly (Rev. Proc. 2025-32).

Bonds in the brokerage account: 22% of $800 is $176. Stocks in the brokerage account: 15% of $300 is $45.

The swap saves $131 a year, not $131,000. Even at a higher bracket, asset location is a tidy trim, not a wealth engine.

The cost nobody puts in the pitch

Location only works if the account you’re moving into has a good version of the fund. Say your 401(k) bond option charges 0.5% a year more than the bond fund you could buy in the brokerage account. 0.5% of $20,000 is $100 a year.

$100 in extra fees beats $96 in tax savings. You’d have traded a small tax cost for a slightly larger fee cost, and the fee shows up every year whether the market is up or down. Check the expense ratios before you move anything.

Which account gets what

Roth IRA first. Money that grows tax-free forever belongs with your highest expected growth, which is stocks. Every extra dollar of growth there is a dollar you never owe tax on.

Put numbers on it. Say $20,000 of stock fund grows to $60,000, a round 3x we’re using for illustration. That’s $40,000 of gain. Inside the Roth, you owe nothing on it. In a brokerage account, in a year when those gains land in the 15% range, 15% of $40,000 is $6,000. The faster something grows, the more the Roth is worth, which is why the stock fund gets the Roth and the bond fund doesn’t.

That’s the real asset location lever. It’s about growth, not yield. The yield trick is worth $96. The growth trick is worth thousands, and it happens automatically once the Roth is full of the right fund.

The 401(k) is the home for the bond fund, if the plan offers a low-cost bond index option. Interest inside the plan isn’t taxed this year, and that’s the one kind of income that costs you the most in a brokerage account.

The brokerage account takes a broad stock index fund. It’s the account where the income is taxed lightest at your bracket and where you can sell shares later on your own schedule.

If your plan’s bond options are expensive, skip the 401(k) bond move and hold bonds in the brokerage account. The $96 isn’t worth a fee that eats it.

The move to make

If you’re married filing jointly, near $85,000 of income, with a 401(k) match, a Roth IRA, and a new brokerage account, the whole to-do list fits in four lines. Fill the match. Fill the Roth. Then, if you hold bonds at all, put the bond fund in the 401(k) when that plan offers one with an expense ratio comparable to what you could buy elsewhere. Put your stock index fund in the Roth and the brokerage account.

Don’t sell anything this year to chase a $96 tax difference. Point your next contribution at the right account instead.

This isn’t for you if you hold only stock funds and no bonds, in which case there’s nothing to locate. It’s also not for you if you’re in a high bracket with a large taxable balance of bonds or other income-heavy assets; the dollars are bigger there, and a tax pro should run your actual numbers.

Sources

1. Internal Revenue Service, Topic no. 403, Interest received
2. U.S. Securities and Exchange Commission, Investor.gov, Fund Distributions: Investor Bulletin
3. Internal Revenue Service, Topic no. 404, Dividends and other corporate distributions
4. Internal Revenue Service, Revenue Procedure 2025-32 (2026 inflation adjustments, including tax rate tables, standard deduction and capital gains amounts)
5. Internal Revenue Service, 2025 Instructions for Schedule D (Form 1040), Capital Gains and Losses

The post Asset location at $85K: Which fund goes in the 401(k), the Roth, and the Brokerage Account? appeared first on Thousandaire.

The advice everyone runs in Q4 needs a loser

Tax-loss harvesting is the year-end move you will see everywhere. It requires a position that has lost money. If your brokerage account has been a one-way trip up, you have nothing to harvest.

Tax-gain harvesting runs the other direction. It needs a winner and a low tax bill, which describes a lot of households at your stage. You sell shares that have gained, pay nothing on the gain, and buy them right back at a higher cost basis. Basis is just what the IRS counts as your cost: “an asset’s basis is its cost to the owner”.

Where your 0% room sits

The 0% rate applies to long-term gains, meaning assets you held for more than one year. Short-term gains are taxed as ordinary income, so they don’t qualify.

The ceiling is a taxable-income number, not a gain number. For 2026 it is $98,900 for married filing jointly and $49,450 for a single filer. Your ordinary income fills the space first, and gains stack on top of it.

Your standard deduction does a lot of the clearing. For 2026 it is $32,200 for joint filers and $16,100 for single filers.

Take a married couple. We’re using $80,000 of adjusted gross income because it is a round number near a typical $85,000 household after pre-tax savings; swap in your own.

• $80,000 of adjusted gross income minus the $32,200 standard deduction leaves $47,800 of taxable income.
• The 0% ceiling is $98,900.
• $98,900 minus $47,800 leaves $51,100 of room.

That $51,100 is how much gain you can realize this year at a 0% federal rate.

Fifty-one thousand dollars of free room. Easy to miss.

What the harvest does

Say you own a broad index fund in a taxable account that you bought for $30,000 more than a year ago. It is now worth $70,000.

• $70,000 of value minus $30,000 of cost leaves a $40,000 gain.
• $47,800 of taxable income plus the $40,000 gain makes $87,800 of taxable income.
• $87,800 is under the $98,900 ceiling, so the federal tax on the gain is $0.

You sell the fund and buy the same fund again the same day. Your cost basis is now $70,000, not $30,000.

The payoff comes later. Suppose you sell this fund in a future year when you are in the 15% bracket for gains. The 15% rate applies above the 0% ceiling, up to $613,700 for joint filers in 2026.

• Your basis is already $70,000, so that $40,000 will never show up as gain again.
• $40,000 times 15% equals $6,000.
• That is $6,000 of federal tax you avoid on those shares.

You pre-paid a tax bill at a 0% rate. That is the entire trick.

Why the rebuy is allowed

The wash-sale rule exists to stop you from claiming a loss while keeping the position. Publication 550 files it under “Nondeductible wash sale loss.” You are selling at a gain, so there is no loss to disallow.

The catch is the clock. The shares you rebuy start a new holding period, and a sale inside a year is a short-term gain taxed as ordinary income. Plan to hold the rebought shares for more than a year.

What overshooting costs

Overshoot, and only the excess is taxed. Take the same couple and try a $60,000 harvest.

• $60,000 of gain minus $51,100 of room leaves $8,900 above the ceiling.
• $8,900 times 15% equals $1,335 of federal tax.
• The first $51,100 of the gain is still taxed at 0%.

You still come out ahead if future basis savings exceed that, but the clean version is to stop at the ceiling.

The single-filer version

Nothing here depends on being married. Take a single filer with $50,000 of adjusted gross income.

• $50,000 minus the $16,100 standard deduction leaves $33,900 of taxable income.
• The single 0% ceiling is $49,450.
• $49,450 minus $33,900 leaves $15,550 of room.

The room is smaller, but the mechanics are identical.

What it costs you

The gain counts as income on your return even at a 0% rate, so it raises your adjusted gross income. Anything in your life that is keyed to that number can move. Check your state tax treatment, and anything income-tested on your return, before you sell.

You also report every sale. Gains and losses from selling stock go on Form 8949 and Schedule D. Your brokerage’s year-end tax form gives you the cost basis to fill them in.

Do this only in a taxable brokerage account. Gains inside a 401(k) or IRA are not taxed as you trade, so there is nothing to harvest.

The move to make

For a married couple with a taxable brokerage account and around $80,000 of adjusted gross income, the move is a ten-minute task in the first half of December.

1. Estimate your 2026 taxable income. Use your year-to-date pay stubs plus the standard deduction.
2. Subtract that number from $98,900. That is your room.
3. Subtract any qualified dividends and other gains you expect to realize this year; they use up room too.
4. Pick the fund lots you have held longer than a year with the largest gains, and sell enough to fill the room, no more.
5. Rebuy the same fund and note the new holding-period start date.

This piece is not for you if your taxable income already exceeds the ceiling, if your gains live in retirement accounts, or if you expect to need the cash from the sale and can’t rebuy.

Sources

1. Internal Revenue Service, Rev. Proc. 2025-32 (2026 inflation adjustments)
2. Internal Revenue Service, Topic no. 409, Capital gains and losses
3. Internal Revenue Service, IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill (IR-2025-103, October 9, 2025)
4. Internal Revenue Service, Publication 550 (2025), Investment Income and Expenses

The post Tax-gain Harvesting: How Much 0% Gain Room You Have Before December 31 appeared first on Thousandaire.

The decision in front of you is narrow: should you change your investments or your contributions before the vote? For someone steadily building wealth through index funds and retirement accounts, the answer is no. “Stay the course” is easy to say, though, so here is what reacting would actually cost, which money decisions are already locked in no matter who wins, and the short list of things worth watching after the results come in.

What history says (and what it doesn’t)

Midterm years have a reputation for choppy markets, and the data backs that up. Going back to 1930, the second year of a presidential term (the midterm year) has averaged an S&P 500 return of about 3.7%. That compares with about 7.0% in year one, 8.1% in the presidential election year and nearly 14% in year three [1].

The year after a midterm has historically looked very different. Since 1950, the S&P 500 has been higher one year after every midterm election, 19 in a row, with an average gain of almost 15% [2]. In the longer record, the only two negative 12-month stretches after a midterm followed the 1930 and 1938 elections [3].

Two cautions. First, 19 elections is too small a sample to bet money on, and past performance does not promise anything about this cycle. Second, the pattern does not say which party “helps” markets. Results under every combination of White House and Congress are mixed enough that sorting your portfolio by party is guessing.

What the history does support is that election-season volatility has usually been temporary. The expensive mistake is how people react to it.

The reaction tax, in dollars

Say you have $50,000 invested. On November 2 you get nervous, sell, and park the money in a high-yield savings account until things “settle down.” Three months later you buy back in.

To come out ahead, you have to be right twice: once when you sell and again when you buy back. Here is what each outcome looks like, using illustrative numbers. These are not forecasts.

If the market rises 6% while you wait:

• Market gain you missed: $50,000 × 6% = $3,000
• Interest earned in savings over three months: the top high-yield savings accounts were paying around 4.25% APY in mid-October [4], which works out to roughly 1% for three months. $50,000 × 1% = $500
• Net cost of sitting out: $3,000 − $500 = $2,500

That $2,500 doesn’t just disappear once. It is money that is no longer compounding for you. If we assume 7% a year purely to illustrate (not a promised return), $2,500 left in the market for 31 years, from age 34 to 65, grows to about:

$2,500 × 1.07³¹ ≈ $2,500 × 8.15 ≈ $20,400

Three months of nerves turns into roughly $20,000 less at retirement.

If the market falls 6% while you wait, and you buy back at exactly the right moment:

• Loss you avoided: $3,000
• Plus interest earned: $500
• Net benefit: $3,500

That is the best case, and it requires you to time the re-entry perfectly. In practice, people who sell on fear tend to wait too long to buy back, because the moment that feels safe usually comes after prices have already recovered.

Taxes make it worse. All of this assumes selling is free, and that is only true inside a 401(k) or IRA. In a taxable brokerage account, selling for more than you paid realizes a capital gain, so you could owe tax just for stepping aside. Shares held more than one year produce long-term gains, which get lower rates. Shares held one year or less produce short-term gains, which are taxed as ordinary income [5]. If you’re newer to investing, most of your taxable shares may still be in that short-term window.

In short, you would be taking a near coin flip with a historical tilt against you, plus taxes and a decades-long compounding penalty if you guess wrong. The math says keep investing.

What’s already locked in for 2027, no matter who wins

A lot of the money rules you care about next year are already set by existing law, and many adjust automatically. An election in November does not change them.

Contribution limits. The IRS adjusts 401(k) and IRA limits for cost of living each year. For 2026, the 401(k) limit is $24,500 and the IRA limit is $7,500 [6]. The IRS announced those numbers on November 13, 2025 [6], so expect the 2027 figures around the same time this year. Plan to raise your contributions when they come out.

The Saver’s Match. This is already law. It was enacted in the SECURE 2.0 Act, replaces the Saver’s Credit for retirement contributions, and begins in 2027. It matches 50% of the first $2,000 you contribute to a workplace plan or IRA, up to $1,000 a year, with the first deposits arriving in 2028 for 2027 contributions [7]. For married couples filing jointly, the match starts phasing down above $41,000 of modified AGI and disappears at $71,000 [8]. If your household is near that range, it belongs in your 2027 planning now.

Income tax brackets. The One Big Beautiful Bill Act, signed in July 2025, made the individual tax rates from the 2017 tax law permanent [9]. Bracket thresholds also adjust for inflation each year; the IRS published the 2026 adjustments in October 2025 [10].

The calendar. Under the 20th Amendment, the new Congress begins its term at noon on January 3 [11]. Any change to tax law would still have to pass both chambers and be signed. Even a decisive result does not change your 2026 tax return or the rules for your next paycheck.

The short list worth watching (but not acting on yet)

A few decisions genuinely depend on policy. For each, the right move today is to keep a note, not change your portfolio.

Roth vs. traditional. The Roth decision is a bet on whether your tax rate is higher now or in retirement. One election cannot tell you what rates will be in 30 years. Keep deciding based on your current bracket and your best estimate of your bracket in retirement. If Congress changes rates later, revisit then.

Health insurance, if you buy your own. If you’re self-employed or buy coverage on the ACA marketplace, your premiums depend partly on federal subsidy rules. The enhanced premium tax credits expired at the end of 2025 [12], and whether anything replaces them is up to future legislation. Open enrollment on HealthCare.gov for 2027 coverage runs November 1 to December 15, 2026, a month shorter than before [13]. Choose based on the actual quotes you get, not on what you think might pass.

Interest rates. Federal spending and deficits feed into interest rates, which affect your savings yield and any future mortgage. You cannot control that, and it doesn’t change where your emergency fund should sit. Keep it in the account where it is now.

What to do this month

1. Leave your automatic contributions running. If prices dip around the election, your regular contributions buy more shares at lower prices. That is the system working.
2. If volatility makes you uneasy, check your allocation rather than your news feed. If a 20% drop would genuinely make you sell, your stock-and-bond mix may be too aggressive for you. Adjust it deliberately, on a calm day, not because of an election.
3. Rebalance only on your normal schedule. If you rebalance once a year, keep that date. Don’t move it because of the election.
4. Put the 2027 limit announcement on your calendar. When the IRS publishes the new numbers, raise your contributions to match. That move is certain to help you, regardless of who wins.

The election will produce winners, losers and a lot of commentary. Your plan should keep working through all of it. If you want the 2027 limits, the Saver’s Match details and any real policy changes explained as they happen, the Thousandaire newsletter covers each one with the math, once the rules are actually final.

Sources

1. Nasdaq Dorsey Wright, Midterm Election Year Update (August 25, 2026). S&P 500 returns by year of presidential term, 1930 to 2026.
2. LPL Financial Research, Weak September Seasonals Precede Strong Midterm Trends. S&P 500 one year after midterm elections since 1950.
3. S&P Dow Jones Indices, Stocks Rocked the House Post Midterm Elections (November 10, 2018). Historical post-midterm S&P 500 performance, including 1930 and 1938.
4. The College Investor, Best High-Yield Savings Rates for October 14, 2026. Rates change frequently; check current APYs.
5. Internal Revenue Service, Topic No. 409, Capital Gains and Losses.
6. Internal Revenue Service, IR-2025-111: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (November 13, 2025).
7. Internal Revenue Service, IR-2026-89: Treasury, IRS announce intent to issue proposed regulations on Saver’s Match (August 7, 2026), and Notice 2026-48.
8. U.S. Department of the Treasury / IRS, Report to Congress on Anticipated Saver’s Match Promotion Efforts (September 28, 2026).
9. Journal of Accountancy, Tax provisions in the One Big Beautiful Bill Act (July 2025), P.L. 119-21.
10. NYSSCPA, IRS Releases 2026 Inflation Adjustments and Tax Brackets (October 10, 2025), covering Revenue Procedure 2025-32.
11. National Constitution Center, The 20th Amendment.
12. KFF, Affordable Care Act research and analysis. Expiration of the enhanced premium tax credits at the end of 2025.
13. AARP, ACA Open Enrollment: Key Dates. Dates may differ for state-run marketplaces.

The post Should You Change Your Investments Before the Midterms? Here’s the Math on Sitting Out appeared first on Thousandaire.

Both things are true at once. Whether an EV saves you money comes down to three numbers: where you charge, how far you drive, and what electricity and gas cost where you live. We ran all three for every state. Here’s who comes out ahead, and who doesn’t.

The verdict up front

• No plug at home: a new EV doesn’t save money anywhere in the country at today’s public fast-charging prices.
• Plug at home, 15,000 miles a year: a new EV beats a new gas SUV in 10 states, nearly all in the West. In the other 40, it costs more.
• Plug at home, 20,000 miles a year: a new EV wins in 43 states, though often by only a few hundred dollars a year.
• Against a hybrid: a new EV loses in most households. At 15,000 miles, it beats a hybrid only in Nevada and Washington.
• Used EV with a home plug: the strongest money case of all, because the first owner already paid for the steep depreciation.

How we ran the numbers

We started with AAA’s 2026 Your Driving Costs study, which for the first time compares electric, hybrid, and gas versions of the same vehicle classes over five years and 75,000 miles. We used the compact SUV class, the most common family-car shape. AAA’s figures at 15,000 miles a year:

AAA priced fuel at a national average of $4.152 a gallon and 18 cents per kilowatt-hour. We pulled fuel out of those totals so we could put each state’s real prices back in. That takes three efficiency assumptions, which are ours, not AAA’s: a gas compact SUV at 30 mpg, a hybrid at 36 mpg (the figure AAA’s own hybrid fuel cost implies), and an EV using 30 kilowatt-hours per 100 miles from the wall, charging losses included.

Strip out fuel and the hurdle is clear. Before it uses a single kilowatt-hour, the EV costs about $1,500 a year more to own than the gas SUV and about $1,600 more than the hybrid. Depreciation drives the gap; the EV’s lower maintenance costs claw back only part of it. Fuel savings have to clear that bar for the EV to win.

Then we priced fuel in every state, using AAA’s state gas averages from October 2, 2026, and the Energy Information Administration’s residential electricity prices for July 2026, the latest month EIA has published.

Slice 1: Where you charge decides almost everything

At home, at the national average of 18.31 cents per kWh, the EV costs about 5.5 cents a mile to fuel. A 30-mpg gas SUV at $4.40 a gallon costs about 14.7 cents.

At public fast chargers, the math flips. The national average price for DC fast charging was 53.8 cents per kWh in the second quarter of 2026, according to charging-data firm Paren. That’s about 16.1 cents a mile, more than gasoline, before the EV’s $1,500 ownership hurdle even enters the picture. Even in Nebraska, which has the cheapest fast charging in the country at 42.8 cents per kWh, fast charging saves only about 1.4 cents a mile over local gas. At 15,000 miles that’s roughly $210 a year, nowhere near $1,500.

If you would rely on public fast charging, a new EV costs more than a gas car at every mileage, in every state.

Who has a plug? As of 2021, about two-thirds of U.S. housing units had a garage or carport, according to Department of Energy analysis of Census housing survey data. That share runs from 80% in the Pacific states to 53% in New York, New Jersey, and Pennsylvania. Apartment residents fare worst: in a National Renewable Energy Laboratory survey, fewer than a quarter had electricity at their parking spot or a realistic way to add it.

Slice 2: How far you drive

With a home plug at national average prices, each mile in the EV saves about 9.2 cents over gas. Divide the $1,500 hurdle by 9.2 cents and you get the break-even: about 16,400 miles a year. Against a hybrid, which already saves on fuel, the break-even is about 23,900 miles.

Per year, national average prices, home charging.

Slice 3: Where you live

Here’s the same math with each state’s own prices. “Break-even” is the annual mileage at which a new EV with home charging matches a new gas SUV.

Three patterns stand out.

The winners pair expensive gas with cheap electricity. Nevada, Washington, Utah, Idaho, and Oregon all combine gas near or above $5 with power well below the national average. California is the odd one: electricity costs nearly twice the national rate, but $6.40 gas is expensive enough that an EV still edges ahead at 15,000 miles.

The South has cheap power but also cheap gas. Texas, Georgia, Louisiana, and Florida all have below-average electricity, but gas under $4.20 shrinks the per-mile savings, pushing break-even past 16,000 miles.

The Northeast and Hawaii lose on electricity. At 30 cents per kWh and up, the per-mile advantage shrinks to 6 cents or less, and break-even climbs past 25,000 miles a year.

Across all 50 states, the count looks like this:

• 12,000 miles a year: a new EV beats gas in 3 states (Nevada, Washington, Utah).
• 15,000 miles: 10 states (Arizona, California, Idaho, Montana, Nebraska by a hair, Nevada, Oregon, Utah, Washington, Wyoming).
• 20,000 miles: 43 states. The holdouts are Hawaii, Maine, Massachusetts, New Hampshire, New Jersey, New York, and Rhode Island. In several of the 43, including Indiana, Connecticut, Vermont, and Maryland, the margin is under $100 a year.

Against a hybrid, the list shrinks to Nevada and Washington at 15,000 miles, adding Utah, Idaho, Oregon, Arizona, Montana, and Wyoming at 20,000.

Slice 4: What happens if gas falls back

A year ago, the national average was $3.16 a gallon. At that price, the national break-even for a new EV with home charging jumps to about 29,900 miles a year.

Flip the question around: what gas price makes a new EV break even nationally? At 15,000 miles a year, about $4.66 a gallon. At 12,000 miles, about $5.41. Even this fall’s record prices don’t get a typical-mileage driver over the line, and a car is a five-to-ten-year decision. Buy for the gas price you expect over that stretch, not this month’s.

Slice 5: New vs. used

Most of the EV’s $1,500 hurdle is depreciation: $5,298 a year versus $3,568 for the gas SUV. A used-EV buyer sidesteps a lot of it, because the first owner already took the hit.

Cox Automotive data shows how far that has gone. In February 2026, the average used EV listed for $34,821, just $1,334 more than the average used gas, hybrid, or plug-in hybrid vehicle, and 18 of 26 brands had used EVs priced below their gas equivalents. New EVs, by contrast, still carried a $6,532 premium over gas, even at the lowest gap on record.

With a home plug at national prices, an EV driven 12,000 miles saves about $1,100 a year on fuel. That would recover a $1,334 price premium in roughly 15 months.

Two cautions. That payback assumes a used EV’s remaining depreciation and insurance track a comparable used gas car’s, which no data we found pins down, so get real insurance quotes before you buy. And check battery health on any used EV, because a weak pack can turn a good price into a bad car.

Slice 6: The hybrid answer

AAA found hybrids had the lowest cost per mile in every class it compared: medium sedans, compact SUVs, medium SUVs, and pickups. In the compact SUV class at national prices, a hybrid saves about $470 a year over the gas version: roughly $370 in fuel plus about $100 in lower ownership costs. It needs no plug, and it doesn’t depend on where gas goes next.

Find your slice

What the decision is worth

Take Marcus in Texas, driving 12,000 miles a year with a garage. At Texas prices, a new hybrid costs about $870 a year less to own than a new EV. Invest that difference every year for the five years AAA models, at an illustrative 5% a year after inflation, and it’s about $4,800 in today’s dollars. That’s not a guaranteed return, but it’s the scale of what’s at stake when you pick a car on the headline instead of your slice.

If an EV is the car you want, buy it. Just buy it because the numbers work for your driveway, your commute, and your state, not because gas had a record September.

How we did this

Sources

• Ownership costs: AAA, Your Driving Costs 2026, compact SUV class (five years, 75,000 miles). Electric, gas, and hybrid cost-per-mile figures as published in Kelley Blue Book’s coverage of the AAA study.
• Gas prices: AAA state gas price averages, October 2, 2026.
• Electricity prices: EIA Electric Power Monthly, Table 5.6.A, July 2026 residential averages. These spread fixed charges across usage, so your marginal rate for charging may be lower, especially on a time-of-use plan.
• Fast-charging prices: Paren, State of the Industry Report: US EV Fast Charging, Q2 2026.
• Used and new EV pricing: Cox Automotive EV Market Monitor, February 2026, as reported by Kelley Blue Book, a Cox Automotive company.
• Home parking access: U.S. Department of Energy, Fact of the Week #1268 (Census American Housing Survey, 2021) and Fact of the Week #1219, summarizing NREL report TP-5400-81065 (2021).
• Tax credits: IRS, Clean Vehicle Tax Credits. The federal clean vehicle purchase credits are not available for vehicles acquired after September 30, 2025, and the home charger credit expired June 30, 2026.

Our assumptions

We assumed 30 mpg for a gas compact SUV, 36 mpg for a hybrid, and 30 kWh per 100 miles for an EV. We held non-fuel costs at AAA’s 15,000-mile figures across all mileages, which slightly flatters high-mileage EVs, since depreciation rises with miles. We did not include home charger installation or state EV registration fees beyond AAA’s national average; both would raise the EV’s cost. Investment figures are illustrative, not guaranteed.

Last reviewed October 12, 2026.

The post Do Electric Cars Save Money? We Ran the Numbers for All 50 States appeared first on Thousandaire.