By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel consensus is bearish, highlighting fragile underpinnings of headline market strength due to tax drag on long-term returns, rising home insurer denial rates, and labor's shrinking income share. They warn about unpriced risks in current return assumptions and potential regime shifts in tax policy.
Risk: Labor's shrinking income share and potential demand destruction ahead.
Opportunity: None explicitly stated.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
In this episode of Motley Fool Hidden Gems Investing, Motley Fool personal finance expert Robert Brokamp and Motley Fool employee Stephanie Marini discuss the following topics:
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This podcast was recorded on June 6, 2026.
Robert Brokamp: How to calculate the amount you need to save for your financial goals and how much taxes are taking from your investments. That and more on this Saturday’s personal finance edition of The Motley Fool Hidden Gems Investing podcast. I'm Robert Brokamp. This week, I'm joined by my Foolish colleague, Stephanie Marini, as we suggest ways to prioritize and quantify your goals and highlight some tools that will help crunch the numbers for you.
But first, some headlines from the past week or so, starting with an article from the Wall Street Journal's Jason Zweig, who wrote about a recent study from Andrew Ang, former managing director at BlackRock. According to Ang, if you owned a total U.S. stock market index fund for the 30 years ending in 2025, you earned 9.9% a year before taxes. Not bad. But if you own that fund in a taxable brokerage account, you earn just 8.5% annually after taxes, mostly due to owing taxes on the dividends and the fund’s capital gains distributions.
Now, that may not sound like a big difference, but if you invested $100,000 and earned 9.9% annually for 30 years, you'd have almost $1.7 million. But if you instead earned 8.25%, you'd have less than $1.1 million. In other words, you lost more than a third of your total return to taxes. This is from a total market index fund. It would have been worse if it weren’t a high-turnover actively managed fund or an index fund that invested in an asset class that had a higher yield, such as a fund that invests in value stocks or a real estate investment trust. Even if you don’t invest in funds, your after-tax returns could be significantly curtailed by active trading and/or holding higher-yielding investments in your taxable brokerage account. The takeaway here is to give some thought to asset location, which is the science and art of deciding which investment should go in which accounts. Keep your most tax-inefficient investments in your IRAs and 401(k)s and use your brokerage account for investments that pay little to no dividends and that you plan to hold onto for many years, perhaps even decades.
For our next item from the news, we turn once again to the Wall Street Journal for an article with the headline the home insurance coin flip. Nearly half of claims result in zero payout. According to the Journal's analysis, the five largest home insurers didn't pay out on more than 44% of claims last year, up from 36% a decade earlier. The article cited various reasons, including higher deductibles for specific risks such as hurricanes and hail, and tighter criteria on paying for expensive claims such as roof repair. More damage from disasters caused in part by climate change and more development in vulnerable areas are resulting in claims that are excluded from policies, particularly flood damage. Also, to cope with the cost of rising homeowners’ insurance, consumers have been choosing policies with higher deductibles, and the assessed damage from the claims are often below those deductibles. Adding insult to injury, many homeowners who have a claim denied still see their premiums go up or their policies canceled because the insurer sees them as a greater risk.
What should you do? Well, first off, read your policy to understand what is and isn't covered and make sure that you have enough coverage to protect your home and everything in it. Document the current condition of your home and the stuff you own with a video or pictures so you can prove to the insurance company that future damage or loss was due to a disaster and not just regular wear and tear. Consider a high-deductible policy and have a sufficient emergency fund to cover that deductible if necessary, and don't file a claim unless you're reasonably confident that you'll get a payout. If you do suffer a loss, document everything related to the claim with pictures, videos, assessments from professionals, keep every communication you have with the insurance company, and if your claim is denied, get a detailed report about the reasons. You can file an appeal, and if that doesn't work, submit a complaint to your state's insurance regulator. You can also get professional help from a public adjuster or attorney, perhaps by visiting the website of the National Association of Public Insurance Adjusters. Just know that they will get a percentage of any payout you receive.
Now for the number of the week, which is 16.7%. That is the share of national income that comes from corporate profits, an all-time high, according to data from the U.S. Bureau of Economic Analysis and highlighted in a recent episode of the Moody's Inside Economics podcast. This partially explains why the stock market just keeps going up, at least for now. Meanwhile, the share of national income that comes from labor is going down, which is likely one of the reasons that consumer sentiment keeps dropping while stocks keep rising. Of course, we don't own stocks just to see the numbers on our brokerage statements go up. We invest today in order to pay for a financial goal in the future, which is our next topic of conversation when the Motley Fool Hidden Gems Investing podcast continues.
Believe it or not, we're halfway through our 2026 financial planning challenge, which we're calling a year well planned. So far, we've covered a lot of ground, coming up with a way to monitor your cash flow, net worth, and portfolio, tackling your debt, building an emergency fund, thinking about your risk tolerance and asset allocation, and how that leads to the type of investments you should own and in which accounts to own them. This month, we're going to talk about crunching the numbers behind your goals, figuring out where you are, where you want to be, and what you have to do to get there. Joining me once again is my Foolish colleague and Certified Financial Planner® Stephanie Marini. Welcome back, Stephanie.
Stephanie Marini: Thanks for having me.
Robert Brokamp: Before we get to the goals and all the math, I want to start off by pointing out that this type of challenge is like making a New Year's resolution. You start off fine, but then maybe fall off the wagon a few months into the year. Stephanie, I just thought I'd ask you, for those who perhaps haven't been following along since the beginning or have maybe lost a little steam, what do you recommend they should do now?
Stephanie Marini: I think understanding your individual starting point is crucial. Knowing what today's numbers look like, even at a high level, just balances of your accounts, of debts, knowing what your starting point is is the best way to start to be able to move forward.
Robert Brokamp: Yeah, I agree. If you haven't yet, coming up with a way to see your overall view of what you own and what you owe is a crucial starting point, as well as fully understanding how much after-tax income you can spend and where it's getting spent. As we've mentioned a few times over the past five months, there are various tools you can use to do this, including services like Empower, Monarch Money, Quicken, Tiller, YNAB, or just your own spreadsheets. Knowing that information is important for this month of our 2026 challenge, because knowing how much you spend tells you how much you have leftover to save for goals. Stephanie, let's move on to goals. How should people figure out how much they need for a goal and how much they need to save to get there?
Stephanie Marini: I think even before that, the important decisions of what are your goals and then prioritizing them is the first step because is retirement year the most important? I want to retire when I'm 62, or is it I want to spend $100,000 in retirement. Knowing which of those is more important is going to factor in in terms of how much you need to save or how long you can keep working. Then outside of retirement is paying for college for kids or grandkids a top priority or something that might just be nice to have, if you're trying to get to warmer weather in the winter does having a second home a top priority, or yeah, it would be great. But if it doesn't work, I'd rather stick to retirement at 62. Understanding what your goals are is first for me because that helps impact the decisions going forward.
And then figuring out where and how to save. Then I guess I'll keep going. If we're talking about retirement, in terms of how to get to a specific figure, everyone knows the 4% rule, or works out to 25 times income or 25 times that savings number. I know you talked last week about whether that can be adjusted with today's numbers. If you're closer to retirement or retiring right now, maybe could be pushed to 5.5% or so. But for me, I think I'm a bit farther from retirement. I think using that 4% is a good number as a conservative figure, especially not knowing what Social Security is going to look like down the road. Having a more conservative baseline is only going to be more helpful. I think that goes back to where knowing your baseline numbers is crucial because how much are you spending or how much are you going to need annually in retirement is the first step in plugging into those calculators.
For me, I like calculator.net as a resource. They have a plethora of calculators to use. But I also really like the defaults that they include for things like inflation and returns. I think they're on the more conservative side, so no shooting for the stars. I know people love to use 10% — feels a bit aggressive for me. I like the baseline numbers that calculator.net uses. Then, again, going back to that, understanding what your goal is, for me, something personal is, I'd like to retire in my 50s in a perfect world. But knowing that and knowing that I'm not going to be able to touch any qualified funds until I'm at 59.5 or about 60, I need to be saving in a separate account to fund that bridge time. I think knowing what your goal is will also dictate not just how much but where you're saving in what type of accounts and making decisions. If that's my plan, then it opens up a ton of tax strategy options in my 50s before those required minimum distributions kick in.
Robert Brokamp: Regarding that 25 times rule, I'll repeat what I said last week, and that 25 times annual spending comes from the 4% rule. It's the multiplicative inverse, as the mathematicians would say, and it could be significantly overstating how much someone needs to save before they retire because it doesn't factor in Social Security. However, that rule of thumb really became more well-known over the past several years as it’s been popularized by the FIRE movement, FIRE being financial independence, retire early, people who want to retire in their 30s or 40s, so that 25 times rule perhaps makes more sense, since for them, they won't be getting Social Security for many years, and who knows what kind of shape it'll be in once they reach that age. But for those who are currently in or near retirement, I don't think they're going to need nearly that much.
I agree with calculator.net being a good recommendation. It does have tons of calculators, even beyond financial calculators as health calculators and things like that. I will also point out The Fool’s calculators. You go to fool.com/calculators. There are more than 100 calculators there covering just about everything. Cash flow, debt, home and mortgage, insurance, retirement taxes, you name it. You'll find some good ones there. Another one to highlight is dinkytown.net. Also, plenty of calculators. I would highlight there are 1,040 calculators. So if you're looking for a rough estimate of how much your taxes will be this year, that's one to consider. Then, again, mention the three premium retirement planning tools that I often highlight those being Maxify, Projection Lab, and Bolden and Motley Fool Adventures, the sister company, The Motley Fool has an investment in Bolden. These will cost a little bit money, but they are more sophisticated tools than what you'll find for free on the Internet. I think when it comes to retirement planning, it's worth the investment.
Let's move on to using the calculators, and you touched on this a little bit, Stephanie, because when you use these calculators, you have to make some assumptions about the future. Things about what is your portfolio going to return? What's inflation going to look like? So what do you think people should input when they have to make these assumptions?
Stephanie Marini: Now, I'll start off by saying I tend to lean on the more conservative side. I am fortunate to say I've still got 25 plus years, so we're not even thinking about retirement. Then I've got grandparents. My husband has grandparents that lived into their 90s. We have longevity on our side that we're factoring into our plan. With that long time horizon, I like to use an 8% return for my working years and lowering that down when I hit my 60s to about 5%. Again, numbers, I know a lot of people use that 10% number, 3% for inflation. I find it just easier to use a little bit lower number. If it returns 10, great. I'll be happy, but at least I'm prepared if it doesn't. I think, again, I would highlight I am using even a higher 8 because I have that long time until I'm going to be needing these funds. I think if I were working with clients in their 50s or getting closer to that retirement number, I would be even more conservative and use something closer to 5 or 6%. I t
Four leading AI models discuss this article
"Record 16.7% profit share risks reversal if falling labor income keeps suppressing consumer spending and corporate revenue growth."
The piece underscores taxes slicing over a third from 30-year index returns in taxable accounts, pushing asset location strategies, while 16.7% corporate profit share explains equity gains. Yet the concurrent drop in labor's income slice signals consumer weakness that could cap future earnings growth. Rising home-insurer denial rates add balance-sheet risk for households. Recommended calculators assume 8% returns and 3% inflation, but these may overstate outcomes amid longevity and policy uncertainty. Overall, the data point to fragile underpinnings beneath headline market strength.
High profit margins could reflect durable tech-driven productivity that eventually lifts wages and sustains demand, allowing multiples to hold even if sentiment stays soft.
"After-tax return drag and structural headwinds imply that upside from a profits-heavy market may be less reliable than headline figures suggest; focus on tax-efficient, risk-managed allocations rather than assuming continued multiple expansion."
Today's headlines bundle tax drag on after-tax investment returns, rising insurer claim-denial rates, and a record-high corporate profits share with retirement-planning tools and AI hype. The obvious take is bullish for equities because profits support multiples. A stronger, more cautious read: the long-run risk/return equation is less forgiving than the headline numbers imply. Tax efficiency, policy-rate trajectories, and insurance-cost dynamics aren’t baked into ‘all-time highs.’ Crucial context missing includes actual implementation of tax-location strategies, durability of the profits share, and how climate/underwriting cycles affect growth and consumption. The prudent stance is disciplined planning and hedges, not blind upside chasing.
The strongest counter is that tax drag can be materially mitigated for many investors through tax-advantaged accounts, tax-loss harvesting, and lower-turnover strategies, so the after-tax gap may not be as large as suggested. Also, insurer denial rates may reflect policy design (higher deductibles) rather than systemic risk; if rates stabilize, the pressure could ease.
"The current record-high corporate profit share as a percentage of national income is unsustainable and creates a long-term consumption risk that will eventually pressure equity valuations."
The discussion correctly highlights the tax drag on long-term returns, but it misses a critical systemic shift: the 'all-time high' corporate profit share at 16.7% of national income is a double-edged sword. While it fuels market indices, it likely signals peak margins. If labor’s share of income continues to decline, we face a long-term consumption cliff that could compress P/E multiples. Furthermore, the insurance 'claim denial' trend is a hidden tax on the middle class, effectively forcing households to hold higher cash buffers, which drags on overall investment efficiency. Investors should pivot toward tax-advantaged structures and avoid over-leveraging on the assumption that historical equity risk premiums will persist without wage growth.
The record corporate profit share might not be a ceiling, but rather a permanent structural shift driven by AI-driven productivity gains that allow firms to decouple revenue growth from headcount expansion.
"Rising corporate profit share with falling labor income share is a warning signal, not a bull flag, if it reflects demand weakness rather than productivity gains."
This is a personal finance primer masquerading as financial news. The substantive claims are three: (1) taxes erode ~33% of long-term stock returns in taxable accounts—mathematically sound but well-known; (2) home insurers deny 44% of claims, up from 36%—a real deterioration but driven by rational underwriting tightening post-climate losses, not fraud; (3) corporate profits hit 16.7% of national income—true, but the article conflates this with stock upside without acknowledging valuations have already re-rated sharply. The real insight buried here: labor's shrinking income share should concern equity bulls if it signals demand destruction ahead.
The article treats 16.7% corporate profit share as inherently bullish for stocks, but peak profit margins historically precede mean reversion. If labor income continues falling, consumer spending—70% of GDP—faces headwinds that could compress those margins faster than multiple expansion can offset.
"Insurance denial trends and shrinking labor share create a self-reinforcing drag on middle-class saving that exceeds the isolated tax or margin concerns raised so far."
Claude correctly flags that valuations have already re-rated on the 16.7% profit share, yet the panel underplays how rising denial rates compound labor-income erosion. Higher household cash buffers needed for insurance gaps reduce taxable-account contributions, amplifying the 33% tax drag on future compounding. This feedback loop between underwriting tightening and consumption capacity is unpriced in the 8% return assumptions still embedded in most planners.
"Labor-income erosion and slower consumer demand threaten earnings growth more than buffers and tax-location tricks can offset."
Grok, your link between underwriting tightness and tax drag is plausible but overstated. Households can mitigate drag via tax-advantaged accounts, harvesting, and strategic location; the bigger risk is sustained labor-income erosion depressing consumption and earnings growth, not just cash buffers. If wage growth stalls and policy paths shift, multiple support may crack sooner than the 8%/3% baseline implies. Cash buffers help, but they won't grease a faltering demand cycle.
"The long-term decline in labor's income share will likely force a populist-driven tax overhaul that directly threatens the sustainability of current corporate profit margins."
ChatGPT and Grok are debating the mechanics of household liquidity, but both ignore the fiscal reality: if labor's share of income continues to compress, the government will inevitably shift the tax burden toward capital gains and corporate levies to fund social safety nets. This isn't just about 'tax drag' on individual portfolios; it is a systemic risk to the 16.7% profit share. We are looking at a potential regime shift where capital-friendly tax policy undergoes a painful, necessary reversal.
"Regime-shift taxation is a tail risk; near-term equity headwinds hinge on whether labor-income erosion translates to demand destruction before margins mean-revert."
Gemini's fiscal regime-shift argument is underspecified. Yes, labor-income compression creates political pressure for capital taxation, but the timing and magnitude are speculative. More immediate: if insurers' 44% denial rate reflects rational underwriting, not systemic failure, then Grok's 'feedback loop' between denials and consumption drag assumes households can't self-insure or switch carriers—testable but unproven. The real constraint on equity returns remains wage stagnation eroding the 70% consumption base, not tax policy reversals that may take a decade.
The panel consensus is bearish, highlighting fragile underpinnings of headline market strength due to tax drag on long-term returns, rising home insurer denial rates, and labor's shrinking income share. They warn about unpriced risks in current return assumptions and potential regime shifts in tax policy.
None explicitly stated.
Labor's shrinking income share and potential demand destruction ahead.