Shares of Palantir Technologies sailed past previous record highs Tuesday after booking its first $1 billion sales quarter and raising its performance expectations for the year.
The stock rose above $170 on Tuesday after breaking previous records four times this year in the global artificial intelligence race. The previous high for the stock was set just over a week ago when its stock closed at $158.80.
Since going public in 2020 when it posted a $1.17 billion annual loss, the artificial intelligence software company has swung swiftly to a profit and sales are booming. Profit rose 33% to $327 million in the second quarter.
Its $1 billion quarterly revenue haul was fueled by a 53% spike in government sales, despite massive spending cuts under President Donald Trump and his Department of Government Efficiency, once led by the worlds richest man Elon Musk.
DOGE has had zero negative impact on Palantirs U.S. government business, which achieved its fastest growth rate since the second quarter of 2021, wrote William Blair analysts Louie DiPalma and Bryce Sandberg. Palantir is clearly benefiting from AI industry momentum across its government and commercial customer bases.
The company also recorded a 93% jump in business sales. Overall U.S. revenue surged 68% to $733 million.
Late Monday, Palantir raised its annual revenue expectations to between $4.14 billion and $4.15 billion. It also raised its U.S. commercial revenue guidance to more than $1.3 billion, which would mean that Palantir achieved a growth rate of at least 85%.
This was a phenomenal quarter, CEO Alex Karp said in a statement accompanying the earnings release. We continue to see the astonishing impact of AI leverage.
Karp believes AI will benefit everyone, saying during a call with industry analysts on Monday that Palantir is, bullish on all aspects of American life, including and especially people in the blue collar.”
He said Palantir wants to arm the working class or blue collar workers with AI agency enhancing skills, and said that the company will reach out to labor leaders to help familiarize workers with the technology.
People with less than a college education are creating a lot value and sometimes more value than people with a college education using our product, Karp said.
Palantir, headquartered in Denver, specializes in software platforms that pull together and analyze large amounts of data.
NASA wants to build a nuclear reactor on the surface of the moonand fast.
Transportation Secretary Sean Duffy, who is also serving as NASAs interim administrator, has issued new directives at the agency to speed up the timeline for a fission reactor designed to power human activity on the moon, even as the space agency faces deep cuts to other parts of its budget.
The plot beat is straight out of sci-fi, but its also key to unlocking humanitys future on the moon, where two weeklong long lunar night cycles make storing solar energy a challenge. To properly advance this critical technology to be able to support a future lunar economy, high power energy generation on Mars, and to strengthen our national security in space, it is imperative the agency move quickly, Duffy wrote in an agency directive sent out late last week.
Under Duffys more aggressive plan, NASA has been directed to put out a broad call encouraging private companies to craft designs for a powerful 100 kilowatt reactor that could be ready to go by 2030. Politico first reported the expedited plan for a lunar reactor, which a senior NASA official characterized as a priority for winning the second space race.
NASAs lunar fission dreams
The U.S. space agency has been working on designs for an energy source that could power lunar development for a few years now. In 2022, NASA doled out three $5 million contracts for concept designs for small nuclear fission reactors that could be used on the moon and adapted for future Mars exploration.
Those designs each weighed under six metric tons and were capable of producing 40 kilowatts of electricity, ensuring enough for demonstration purposes and additional power available for running lunar habitats, rovers, backup grids, or science experiments.
A demonstration of a nuclear power source on the Moon is required to show that it is a safe, clean, reliable option, director of Technology Demonstrations for NASA’s Space Technology Mission Directorate Trudy Kortes said of the initiative, called the Fission Surface Power Project, last year. The lunar night is challenging from a technical perspective, so having a source of power such as this nuclear reactor, which operates independent of the Sun, is an enabling option for long-term exploration and science efforts on the Moon.
Other nations plans
The U.S. isnt alone in its ambitions for a sustainable source of power on the moonnor is its timing a coincidence.
Russia and China are working together on a joint lunar program that could include building a nuclear reactor on the moons surface as soon as 2033. Russia’s former head of Roscosmos Yury Borisov said last year that Russia was seriously considering a projectsomewhere at the turn of 20332035to deliver and install a power unit on the lunar surface together with our Chinese colleagues.
The project is viewed as a precursor to lunar colonization for both countries, enabling power production greater than what a solar array could generate. While that plan appears intact, Borisov was fired from his position earlier this year. Russia maintains ambitious plans for exploring the moon with an aggressive timeline, but the countrys space program faced a devastating setback when its first moon mission in almost 50 years smashed into the lunar surface.
Beyond China, Russia is also partnering with North Korea, another U.S. adversary, when it comes to space. Former U.S. Secretary of State Antony Blinken warned in January that Russia planned to share advanced satellite and other space technology with Pyongyang, an extension of the new military alliance between the two countries.The Biden administration maneuvered to block Russian plans to place an anti-satellite nuclear weapon in orbit, though that weapons program may be derailed for now after suffering a technical failure in April.
When the coronavirus surged during President Donald Trumps first term, he called for a simple fix: Limit the amount of testing so the deadly outbreak looked less severe. When he lost the 2020 election, he had a ready-made reason: The vote count was fraudulent.
And on Friday, when the July jobs report revisions showed a distressed economy, Trump had an answer: He fired the official in charge of the data and called the report of a sharp slowdown in hiring phony.
Trump has a go-to playbook if the numbers reveal uncomfortable realities, and thats to discredit or conceal the figures and to attack the messenger all of which can hurt the president’s efforts to convince the world that America is getting stronger.
Our democratic system and the strength of our private economy depend on the honest flow of information about our economy, our government and our society, said Douglas Elmendorf, a Harvard University professor who was formerly director of the Congressional Budget Office. The Trump administration is trying to suppress honest analysis.
The Republican president’s strategy carries significant risks for his own administration and a broader economy that depends on politics-free data. His denouncements threaten to lower trust in government and erode public accountability, and any manipulation of federal data could result in policy choices made on faulty numbers, causing larger problems for both the president and the country.
The White House disputes any claims that Trump wants to hide numbers that undermine his preferred narratives. It emphasized that Goldman Sachs found that the two-month revisions on the jobs report were the largest since 1968, outside of a recession, and that should be a source of concern regarding the integrity of the data. Trump’s aides say their fundamental focus is ensuring the data accurately describes reality.
Not the first time Trump has sought to play with numbers
Trump has a long history of dismissing data when it reflects poorly on him and extolling or even fabricating more favorable numbers, a pattern that includes his net worth, his family business, election results and government figures:
Judge Arthur Engoron ruled in a lawsuit brought by the state of New York that Trump and his company deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing loans.
Trump has claimed that the 2016 and 2020 presidential elections were rigged. Trump won the 2016 presidential election by clinching the Electoral College, but he lost the popular vote to Hillary Clinton, a sore spot that led him to falsely claim that millions of immigrants living in the country illegally had cast ballots. He lost the 2020 election to Joe Biden but falsely claimed he had won it, despite multiple lawsuits failing to prove his case.
In 2019, as Hurricane Dorian neared the East Coast, Trump warned Alabama that the storm was coming its way. Forecasters pushed back, saying Alabama was not at risk. Trump later displayed a map in the Oval Office that had been altered with a black Sharpie his signature pen to include Alabama in the potential path of the storm.
Trump’s administration has stopped posting reports on climate change, canceled studies on vaccine access and removed data on gender identity from government sites.
As pandemic deaths mounted, Trump suggested that there should be less testing. When you do testing to that extent, youre going to find more people, Trump said at a June 2020 rally in Oklahoma. Youre going to find more cases. So I said to my people, Slow the testing down, please.
While Trump’s actions have drawn outcry from economists, scientists and public interest groups, Elmendorf noted that Trump’s actions regarding economic data could be tempered by Congress, which could put limits on Trump by whom he chooses to lead federal agencies, for example.
Outside observers can only do so much,” Elmendorf said. The power to push back against the president rests with the Congress. They have not exercised that power, but they could.
White House says having its own people in place will make data ‘more reliable
Kevin Hassett, director of the White House National Economic Council, took aim at the size of the downward revisions in the jobs report (a combined 258,000 reduction in May and June) to suggest that the report had credibility issues. He said Trump is focused on getting dependable numbers, despite the president linking the issue to politics by claiming the revisions were meant to make Republicans look bad.
The president wants his own people there so that when we see the numbers, theyre more transparent and more reliable, Hassett said Sunday on NBC News.
Jed Kolko, a senior fellow at the Peterson Institute for International Economics who oversaw the Census Bureau and Bureau of Economic Analysis during the Biden administration, stressed that revisions to the jobs data are standard. That’s because the numbers are published monthly, but not all surveys used are returned quickly enough to be in the initial publishing of the jobs report.
Revisions solve the tension between timeliness and accuracy, Kolko said. We want timely data because policymakers and businesses and investors need to make decisions with the best data that’s available, but we also want accuracy.
Kolko stressed the importance in ensuring that federal statistics are trustworthy not just for government policymakers but for the companies trying to gauge the overall direction of the economy when making hiring and investment choices.
Not every part of the jobs report was deemed suspect by the Trump administration.
Before Trump ordered the firing of the Bureau of Labor Statistics commissioner, Erika McEntarfer, Labor Secretary Lori Chavez-DeRemer trumpeted the findings on native-born citizens, noting on Fox Business Network’s Varney & Co. that they are accounting “for all of the job growth, and thats key.
During his first run for the presidency, Trump criticized the economic data as being fake, only to fully embrace the positive numbers shortly after he first entered the White House in 2017.
The problem is that the firing of the labor statistics commissioner might make the data even less dependable.
It is unfortunate that the BLS Commissioner is being made a scapegoat, particularly as firing her is only likely to reduce reliability as thousands of BLS employees now realize that their jobs could be at risk if they deliver bad news,” said Betsey Stevenson, a University of Michigan economist and a former chief economist at the Labor Department.
White House says transparency is a value
The challenge of reliable data goes beyond economic figures to basic information on climate change and scientific research.
In July, taxpayer-funded reports on the problems climate change is creating for America and its population disappeared from government websites. The White House initially said NASA would post the reports in compliance with a 1990 law, but the agency later said it would not because any legal obligations were already met by having reports submitted to Congress.
The White House maintains that it has operated with complete openness, posting a picture of Trump on Monday on social media with the caption, The Most Transparent President in History.
In the picture, Trump had his back to the camera and was covered in shadows, visibly blocking out most of the light in front of him.
Josh Boak, Associated Press
Associated Press writer Michelle L. Price contributed to this report.
It seems theres fresh blood pumping back into the IPO market. After a blowout initial public offering from Figma last week, investors might have another chance to get their heart rates up again soon.
Heartflow, a California-based medtech company that utilizes AI with imaging and diagnostics software to help evaluate cardiac and coronary diseases, is looking to list shares on the Nasdaq.
In paperwork filed on Friday with the Securities and Exchange Commission (SEC), Heartflow said it plans to offer 12.5 million shares, priced between $15 and $17.
That could potentially raise more than $208 million. According to Reuters, Heartflow’s target valuation could be as high as $1.3 billion. The company plans to trade under the ticker HTFL.
Personalized 3D-models of people’s hearts
Heartflow uses AI and other technology to scan patients for coronary and cardiac problems, creating three-dimensional models of patients’ hearts. The Food and Drug Administration (FDA) gave the software the green light in 2022, and its now being used in some markets to diagnose patients.
Additionally, the company got a leg up last year when the U.S. Centers for Medicare and Medicaid Services (CMS) expanded Medicare coverage to include platforms that use imaging results to look for signs of coronary disease, and the American Medical Association (AMA) issued a new Category I CPT code for those platforms. That gives doctors and clinics the go-ahead to start using the technology on a broader scale starting next year.
According to the companys SEC filing, Heartflow says that as of the end of March 2025, its been used to assess more than 400,000 patients.
Revenues are growing but profits are elusive
Heartflow generated $125.8 million in 2024, a 44% increase over the $87.2 million it made the year before, the company says. Revenue likewise grew 39% for the first quarter of 2025 to $37.2 million.
However, the company saw a net loss of $96.4 million in 2024, wider than its net loss of $95.7 million in 2023. It warns in the filing that it expects to incur “substantial losses in the foreseeable future [and] may not be able to achieve or sustain profitability.”
Bain Capital, Panorama Point Partners, and Capricorn Investment Group are among Heartflow’s backers, according to Crunchbase. Bain led its most recent fundraising round, a Series F round in 2023, which raised $215 million.
This is not the first time that Heartflow has attempted to go public. The company had planned to merge with a special purpose acquisition company during the SPAC frenzy of the early pandemic years, but it halted the plan in 2022, citing “unfavorable market conditions,” as Fierce Biotech reported.
Heartflows IPO comes on the heels of another growing medtech companys public debut. Carlsmed, which specializes in AI-driven spine surgery technology, recently went public as well, with shares trading on July 23. Since then, the stock is down around 4.5%.
Heartflow has not said when it plans to list its stock. Fast Company reached out for more details on the timeline and will update this post if we hear back.
Taiwanese authorities have detained three people for allegedly stealing technology trade secrets from Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest chip foundry, Taiwanese prosecutors said on Tuesday.
The three were detained late last month after TSMC reported that an internal investigation had shown that former and current employees had illegally obtained information from the company, the Taiwan High Prosecutors Office said in a statement. The prosecutor’s office said another two people had been released on bail, and one more had been released.
The three who have been detained – two current staff and one former employee – are suspected of violating Taiwan’s national security law, it added. It did not disclose their identities apart from saying that the former staffer was surnamed Chen.
Earlier on Tuesday, TSMC said it had launched legal proceedings and taken disciplinary action against employees involved in potential trade secret leaks after detecting unauthorised activities during routine monitoring.
It said its “comprehensive and robust monitoring mechanisms” enabled early identification of the issue, leading to internal investigations and measures against the personnel involved.
TSMC said the legal case, which is now under judicial review, prevented it from providing further details.
Nikkei Asia earlier reported that the breach involved several former employees suspected of attempting to obtain critical proprietary information on TSMC’s 2-nanometer chip technology.
There were no immediate details on the suspected motives or whether any information had been passed on, and investigations are ongoing to determine the scope of the leak and whether any others were involved, the Nikkei report said.
Taiwanese media outlet United Daily News said prosecutors and investigators had also searched the offices of Tokyo Electron, without citing where they had obtained the information. Tokyo Electron and the prosecutors’ office declined to comment.
TSMC’s 2-nanometer chip technology is the most advanced technology in the semiconductor industry in terms of both density and energy efficiency, according to the company’s website.
The contract manufacturer, which counts AI industry darling Nvidia, iPhone maker Apple, and Qualcomm among its customers, highlighted its zero-tolerance policy for trade secret violations, and said it would pursue offenders to the full extent of the law.
Bipasha Dey and Wen-Yee Lee, Reuters
When the web was established several decades ago, it was built on a number of principles. Among them was a key, overarching standard dubbed netiquette: Do unto others as youd want done unto you. Its a principle that lived on through other companies, including Google, whose motto for a period was Dont be evil.
The fundamental idea was simple: Act ethically and morally. If someone asked you to stop doing something, you stoppedor at least considered it. But Cloudflare, an IT company that protects millions of websites from hostile internet attacks, has published an eye-opening exposé suggesting that one of the leading AI tools today isnt following that principle.
Cloudflare claims Perplexity, an AI-powered answer engine, is overriding website requests not to crawl their content by spoofing its identity to hide that the requests are coming from an AI company. Cloudflare launched its investigation after receiving complaints from customers that Perplexity was ignoring directives in robots.txt files, which are used by websites to signal whether they want their content indexed by search engines or AI crawlers.
Perplexitys alleged behavior highlights what happens when the web shifts from being rooted in voluntary agreements to a more hard-nosed business environment, where commercial goals overrule moral considerations.
The code of honor around crawling and robots.txt files is a charming remnant from when the web was collaborative and based on community standards, says Eerke Boiten, a cybersecurity researcher at De Montfort University in the U.K. Cloudflares position as a market leader in web protection means that, for now at least, its still possible to preserve some remnants of that morality, Boiten says.
Boiten believes the sense of ethical cooperation online is fading fast, noting that many large AI companies show little regard for where or how they obtain their training data, often operating in murky ethical territory. While he sees OpenAI as generally respectful of the established norms, hes far less optimistic about others. Perplexity trying to scrape their way around any defenses feels like it will be the norm rather than the exception, he says.
Perplexitys alleged conduct stands out as particularly bold, especially given that the company is already facing a lawsuit over unauthorized content scraping.
Dow Jones Companythe parent of the Wall Street Journal and New York Postfiled a lawsuit in October 2024, alleging that Perplexity copies on a massive scale their content. (The case is ongoing.) The BBC also sent a letter in June to Perplexity CEO Aravind Srinivas, threatening legal action for scraping its content without permission unless the company stops and either compensates for the data already accessed or deletes it entirely. Perplexity told the Financial Times that the BBCs case was manipulative and opportunistic and reflected a fundamental misunderstanding of copyright law.
Perplexity did not respond to Fast Company‘s request for comment on this story. But Boiten, for his part, anticipates an escalating arms race between those trying to protect online content from AI-driven web scraping and the companies attempting to do just that to improve their models. Cloudflare applying machine learning to spot Perplexity’s patterns, and acknowledging that publication of all this likely means Perplexity will come up with new decoys, he says.
Cornell Law professor James Grimmelmann says the legal limits of scraping content without permissionor bypassing robots.txt filesremain unclear, but Cloudflares findings could expose Perplexity to more lawsuits.
There is a loose judicial consensus that it is okay to scrape sites when their robots.txt files allow it, says Grimmelmann, but Perplexity seems determined to fuck around and find out whether the reverse is true.
A court verdict against Tesla last week, stemming from a fatal 2019 crash of an Autopilot-equipped Model S, could hurt its plans to expand its nascent robotaxi network and intensify concerns over the safety of its autonomous vehicle technology.
A Florida jury ordered Musk’s electric vehicle company on Friday to pay about $243 million to victims of the crash, finding its Autopilot driver-assistance software defective. Tesla said the driver was solely at fault and vowed to appeal.
The verdict follows years of federal investigations and recalls related to collisions involving Tesla’s autonomous-vehicle technology, and comes as CEO Elon Musk seeks regulatory approval to rapidly expand the robotaxi service across the U.S.
“The public perception of this verdict or things like this are going to fuel pressure on regulators to say, ‘We just can’t let this stuff be launched without a lot more due diligence’,” said Mike Nelson, founder of Nelson Law and an expert on legal issues in the mobility sector.
Tesla could have a tough time convincing state regulators that its technology is road-ready, threatening Musk’s goal of offering robotaxis to half the U.S. population by year-end, legal experts and Tesla investors said.
Expanding its robotaxi service is crucial for Tesla as demand for its aging lineup of EVs has cooled amid rising global competition and a backlash against Musk’s far-right political views. Much of Tesla’s trillion-dollar market valuation hinges on his bets on robotics and artificial intelligence.
Success in the self-driving realm will require winning the confidence of regulators and potential customers on the full-self driving (FSD) software that underpins Tesla’s robotaxis, analysts said.
“The timing (of the verdict) for Tesla in light of the FSD rollouts and robotaxis is awful,” said Aaron Davis, co-managing partner at law firm Davis Goldman. “Now there’s essentially an opinion that some aspect of Tesla’s business is not safe and maybe the safety that the company advertises isn’t what it’s cracked up to be.”
The FSD is an advanced version of Autopilot.
Autopilot, which was been updated since 2019, controls speed, distance and lane centering on highways, while the FSD can operate on city streets, helping the vehicle make automatic turns and change lanes.
“This case does not have direct implications for Tesla’s FSD roll-out,” analysts at Piper Sandler said in a note on Sunday, citing the modern iterations of the software.
A spokesperson on behalf of Tesla acknowledged the company had received a request for comment from Reuters but had not provided one by the time of publication.
Regulatory road ahead
Perfecting autonomous vehicles has been harder than expected. The high costs of hardware, years of trial and error, and regulatory hurdles have forced many players to close shop or pivot, including General Motors’ Cruise unit.
Musk, however, has pursued what he calls a simpler and cheaper path, relying only on cameras and AI instead of pricey sensors such as lidars and radars used by Alphabet’s Waymo, Amazon’s Zoox and others.
After years of missed deadlines, Musk rolled out a small robotaxi trial in June with about a dozen Model Y crossover SUVs in Austin, Texas, each overseen by a human safety monitor in the front passenger seat.
While Musk has said Tesla was being “super paranoid about safety”, he has also pledged to expand the service fast and make it available for half of the U.S. population in the next five months – a stark contrast to Waymo’s cautious years-long rollout.
Until Tesla’s entry, Waymo was the only U.S. firm to operate a paid, driverless robotaxi service.
Tesla is currently awaiting approvals in several states, including California, Nevada, Arizona and Florida.
California’s department of motor vehicles declined to comment on the impact of the verdict on regulatory approval.
Nevada said it held talks with Tesla about a robotaxi program several weeks ago, while Arizona said it was still considering Tesla’s request for certification. Both did not comment on the verdict.
Florida did not respond.
Tesla has typically either won other Autopilot litigation or resolved the case with the plaintiffs out of court. The Florida verdict stands out. Several such cases are pending.
The case involved a Model S sedan that went through an intersection and hit the victims’ parked Chevrolet Tahoe as they were standing beside it. The driver had reached down to retrieve a dropped cellphone and allegedly received no alerts as he ran a stop sign before the crash.
The jury found that Tesla’s Autopilot had a defect and held the company partially responsible, despite the driver admitting fault.
“It’s going to take time to get regulators to move forward and time being more than the end of the year,” said Gene Munster, managing partner at Deepwater Asset Management, a Tesla investor. “From an image standpoint, it’s a black eye.”
Abhirup Roy, Reuters
What if the way you handle emotionsyours and othersis the difference between leading well and missing the mark? Well, that’s where emotional intelligence comes in.
But what if you had insight into saying the right things at the right moment to build stronger connections in the process? Would that be a gamne changer for you?
Emotional intelligence shows up in the way we talk to people, especially when things get tense, uncertain, or emotional.
Choosing your words with the skills of EQ
Its not about being perfect or having all the answers. Its about being aware of what you’re feeling, paying attention to how others are doing, and choosing words that connect instead of shut things down.
Hard to do for some, I know, but if you’re leading a team, the way you communicate can either build trust or quietly erode it.
Here are five core emotional intelligence skillseach with practical ways to show them through simple, everyday phrases you can start practicing today.
1. What to say to display empathy
Empathy means showing people you see what theyre going through. You dont have to solve their problem or offer advice. Just saying something like That sounds really tough. Want to talk about it? or I get why this would be frustrating tells someone theyre not alone. These small moments help people feel understoodand that matters more than we often realize.
2. What to say to show self-awareness
This crucial EQ skill is about noticing your own reactions and being honest about whats behind them. If youve snapped at someone or feel off, it can sound like Ive been a bit distracted todaytheres a lot on my plate. Or That topic gets under my skin, and Im working on that. Here’s the thing: owning your emotions doesnt make you weak; it makes you real. And real earns respect.
3. What to say to show emotional regulation
The skill of emotional regularion is staying steady when emotions run high. Its not about shutting down feelings; its about not letting them run the show. You might say, I want to respond thoughtfully, so Im going to take a minute, or Lets revisit this tomorrow when weve both had time to think. That pause gives space for better conversations and fewer regrets.
4. What to say to display relationship management
This is using emotional awareness to navigate conversations in a way that keeps people connected, even when you disagree. It sounds like I want us to be on the same pagecan we talk this through? or I appreciate your perspective. Lets figure out how to move forward together. Its about making it clear that the relationship matters as much as the issue at hand.
5. What to say to show active listening
Yes, this is definetely a skill of emotional intelligence. It’s more than nodding while you wait your turn to talk. When someones sharing something important, phrases like So what Im hearing is or Tell me more about whats behind that show youre actually engaged. People can tell when youre really listening and it builds trust faster than anything else.
By Marcel Schwantes
This article originally appeared on Fast Company’s sister publication, Inc.
Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
While most retirement portfolios include allocations to stocks and bonds in the years leading up to retirement, most retirement savers don’t hold much more than an emergency cushion in cash.Thus, an important job in the years before retirement is building up that cash cushion.The good news is that cash yields are up, meaning cash holdings aren’t the “dead money” they were a few years ago. And equity investments have performed well, tooat least until very recently. That means that most investors can build their cash stakes, at least in part, by pruning appreciated holdings.Here’s some guidance on the amount, source, and location of those liquid reserves, according to the Bucket approach to retirement portfolio planning.
Rightsizing Bucket 1
Your cash bucket should consist of one to two years’ worth of portfolio withdrawals, not living expenses.In order to set up Bucket 1 initially, think through your cash flow sources for the first few years of retirement.For example, let’s say a 66-year-old wants to retire in two years and expects that he’ll need to spend $80,000 per year, in total, from his $1.5 million portfolio, at that time. He wants to delay filing for Social Security until age 70, so all of his spending will come from his portfolio in those first few years of retirement. After that, roughly half his spending needs will come from Social Security.If he wanted to be conservative, he could build a cash cushion consisting of $160,000his years 1 and 2 portfolio withdrawals.His Bucket 2high-quality bondswould consist of eight years’ worth of portfolio withdrawals, which at that point will be $40,000 per year. The remaining $1 million and change could go into a globally diversified equity portfolio.
Where to put the money?
It’s also worth considering the “where” of your liquid reserves. To do so, consider your sequence of withdrawals in retirement.Taxable accounts are often first in the queue for retirement withdrawals because their ongoing tax costs are higher than tax-sheltered accounts.But some retirees may benefit from spending from their tax-deferred accounts early in retirement, with an eye toward reducing future required minimum distributions and tax bills. This is a good spot to get some advice from a financial or tax advisor.Armed with the knowledge of where you’ll turn for your spending in the first part of your retirement, you can then figure out where best to hold your liquid reserves.
Where to get the money?
The next step is figuring out how to build up this reserve. Ideally, you’d give yourself a couple of years to enlarge your cash position rather than having to find the money just before retirement.For preretirees who are still saving for retirement, start by directing new contributions into cash. Say, for example, the aforementioned retiree is directing a couple years’ worth of IRA and 401(k)contributions to cash. He could arrive at nearly half his target cash allocation by the time he reaches his retirement.There’s also potential bonuses and inheritances. If you’ve recently received a surprise cash injection, the assets are a logical source for bulking up cash reserves.Another solid option is to build up cash by peeling back on highly appreciated asset classes, especially US stocks. Trimming equities and adding those assets to cash and bonds reduces risk and helps cover cash flows for the first few years of retirement.Finally, you can reduce risky positions. Consider the employer stock you know you should scale back on or the individual-stock portfolio that’s duplicative of what’s in your mutual funds. Such holdings can be ideal sources when building up your cash reserves, but mind the tax consequences if you’re selling them from a taxable account.
This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-financeChristine Benz is director of personal finance for Morningstar.
Christine Benz of Morningstar
U.S. President Donald Trump is pushing China and India to stop buying oil from Russia and helping fund the Kremlin’s war against Ukraine.Trump is raising the issue as he seeks to press Russian President Vladimir Putin to agree to a ceasefire.But cheap Russian oil benefits refiners in those countries as well as meeting their needs for energy, and they’re not showing any inclination to halt the practice.
Three countries are big buyers of Russian oil
China, India and Turkey are the biggest recipients of oil that used to go to the European Union. The EU’s decision to boycott most Russian seaborne oil from January 2023 led to a massive shift in crude flows from Europe to Asia.Since then, China has been the No. 1 overall purchaser of Russian energy since the EU boycott, with some $219.5 billion worth of Russian oil, gas and coal, followed by India with $133.4 billion and Turkey with $90.3 billion. Before the invasion, India imported relatively little Russian oil.Hungary imports some Russian oil through a pipeline. Hungary is an EU member, but President Viktor Orban has been critical of sanctions against Russia.
The lure of cheaper oil
One big reason: It’s cheap. Since Russian oil trades at a lower price than international benchmark Brent, refineries can fatten their profit margins when they turn crude into usable products such as diesel fuel.
Russia’s oil earnings are substantial despite sanctions
The Kyiv School of Economics says Russia took in $12.6 billion from oil sales in June. Russia continues to earn substantial sums even as the Group of Seven leading industrialized nations has tried to limit Russia’s take by imposing an oil price cap. The cap is to be enforced by requiring shipping and insurance companies to refuse to handle oil shipments above the cap. Russia has, to a great extent, been able to evade the cap by shipping oil on a “shadow fleet” of old vessels using insurers and trading companies located in countries that are not enforcing sanctions.Russian oil exporters are predicted to take in $153 billion this year, according to the Kyiv institute. Fossil fuels are the single largest source of budget revenue. The imports support Russia’s ruble currency and help Russia to buy goods from other countries, including weapons and parts for them.
David McHugh, AP Business Writer
