This week I want to follow up on a couple of points from my post about the One Big Beautiful Bill recently signed into law. There were meaningful changes to the 529 plan landscape and a new type of savings account created for kids, the so-called Trump account.

I’m repurposing an article from SavingforCollege.com about these two topics and adding some notes of my own. This website is a good resource for 529 plan information but the bill’s recent passage has created some ambiguity. I expect this will clear up as the months go by. However, it’s good to delve into what we know now so you can keep applicable items on your radar.

Here’s the article I mentioned. My notes are italicized.

The newly enacted “Big Beautiful Bill” (H.R. 1, the 2025 budget reconciliation bill) significantly reshapes the landscape of education savings plans. With expansions for 529 plans, ABLE accounts, and the introduction of Trump accounts, families and financial planners must understand these important changes.

Changes to 529 Plans: Expanded Flexibility

Credentialing, Licensing, and Continuing Education Programs

Families can now use 529 plans for credentialing programs such as welding, aviation mechanics, and other trade certifications. Covered expenses include tuition, testing fees, and costs for books, equipment, and continuing education required to obtain or maintain a professional credential.

This includes not only initial program costs but also exam fees and continuing education required to obtain or maintain certification. For example, you can use 529 funds for:

Preparation and exam fees for professional licenses and certifications, including CPA exam prep and fees, bar exam review and registration costs, and licensing exams for fields like law, accounting, and finance

Training and certification for skilled trades and vocational careers, such as commercial Driver’s License (CDL) training, plumbing, electrical work, welding, HVAC, or cosmetology

These programs are often listed under state Workforce Innovation and Opportunity Act (WIOA) directories or the federal WEAMS (Web Enabled Approval Management System) database maintained by the U.S. Department of Veterans Affairs.

I’ve found these sites difficult to navigate. They also illustrate an important question: If you’re trying to pay for a credential program from 529 plan savings, can you enroll with the provider directly or must you enroll with a qualified institution.

For example, let’s assume I want to leverage unused 529 plan money to pay for an industry program for myself, such as the Charted Financial Analyst designation. This could easily cost $9,000 including exam fees, study materials, and exam prep courses. I could simply pay cash for this but wouldn’t it be better to fund this from an education account? Now we can, or at least it seems like it!

People typically enroll with the CFA Institute directly. However, this organization isn’t a Title IV school that shows up on the lists referenced in the links above. Institutions partnering with the CFA Institute do show up, but that could mean enrolling in a larger program, such as a university in this case, with all the extra cost and hassle that entails.

Ultimately the CFA credential, like the CFP credential I already have, should qualify as eligible expenses for 529 plan money, based on a statement from the CFP Board and Section 3 of the Workforce Innovation and Opportunity Act. It’s probably going to be like other 529 expenses where you incur the expense (keep your receipts!) and then reimburse yourself from the 529 plan account. Assuming so, this will be a big help for young people because of broader access to education, but also for parents and grandparents who, for whatever reason, find themselves with excess 529 plan money.

Credentialing programs must meet certain criteria to be considered qualified, typically recognized under the WIOA or similar federal/state programs. Be sure to check whether a specific program appears on your state’s WIOA list or the WEAMS database to confirm it qualifies for 529 usage.

This expands the scope of 529 savings to cover programs critical to skilled trades and high-demand technical careers, supporting individuals who choose alternative educational pathways.

When it applies: Distributions after July 4, 2025. My understanding is that eligible expenses could have taken place this year prior to July 4^th, but the distribution to reimburse yourself would have to be taken after that date.

Broader K-12 Expenses

Previously limited to tuition, 529 plan funds can now cover an extensive range of additional K-12 costs. Families now have more flexibility to pay for:

Curriculum materials (including textbooks, workbooks, and digital learning tools)

Tutoring services (must meet certain requirements)

Online education platforms or subscriptions

Educational therapies for students with disabilities

Standardized test fees (e.g., SAT, ACT, AP exams)

Dual-enrollment tuition for college courses taken during high school

These changes reflect the growing diversity of educational models and the support services students often need to succeed.

When it applies: Distributions after July 4, 2025.

Higher Annual K-12 Limit

The annual per-child distribution cap for K-12 expenses has doubled from $10,000 to $20,000. This significant increase allows parents greater latitude in covering comprehensive education expenses for private, religious, or eligible public schools.

Families who prefer private or specialized education options will particularly benefit, as the expanded cap allows for a broader financial cushion to address tuition and the newly included academic and support-related expenses.

When it applies: Tax years starting in 2026.

What are Trump Accounts?

Trump accounts are essentially starter IRAs for children. While families can contribute up to $5,000 annually (indexed for inflation), additional contributions may come from employers, state programs, or nonprofit organizations, and certain types, like the federal seed deposit, don’t count toward the limit.

Key features:

Federal Seed Contribution: Eligible children born between 2025 and 2028 receive a one-time $1,000 government deposit. This must be elected by parents but the mechanism for doing so is unclear at this time.

Investment Restrictions: Funds must be invested in low-cost U.S. equity index funds until the beneficiary reaches 18. Broad-market funds, nothing related to specific sectors and no leverage can be used – simple and cheap is the idea.

Withdrawal Rules: No withdrawals before the child turns 18, except rollovers to ABLE accounts. Post-18, normal traditional IRA withdrawal rules apply. Withdrawals before age 59.5 come with penalties but there are some exceptions. However, as with typical Roth IRAs, contributions could be distributed tax free – just the gains would be taxed and have an early withdrawal penalty.

I don’t think Trump accounts will be a replacement for 529 plans. Instead, the accounts will be useful for parents, grandparents, even entities, to start putting money away for long-term savings/retirement for kids who don’t have earned income and couldn’t contribute to a retirement account. Otherwise, if these same people want to save non-specifically for the kids in their life, currently available account types like UTMA or UGMA seem much simpler and have fewer strings attached.

When it applies: Accounts established from January 1, 2026, with contributions beginning July 4, 2026.

Have questions? Ask us. We can help.

Before I start this week’s post, as of this writing there are more than 100 confirmed fatalities from flooding on the Guadalupe River in Texas over the holiday weekend. Dozens are still missing. The news reports and images are horrific, although stories of selfless acts and heroism are bright spots amid tragedy. Our hearts and prayers go out to the families who lost loved ones during this event.

Okay, on to this week’s post. The “One Big Beautiful Bill” is now law. It was a huge bill though much of its content is beyond the scope of these posts. However, there were lots of updates on the personal tax side so let’s stick to that portion.

Much of this goes back to the Tax Cuts and Jobs Act signed into law by President Trump in 2017. Major provisions contained in that law were set to expire at the end of this year and were extended with the new law, so getting some clarity here was important for taxpayers.

Here are several points of interest.

The limit on the state and local tax deduction, known as the SALT cap, will now be $40,000 versus $10,000. The higher cap starts phasing out for joint filers who have incomes over $500,000 or $250,000 for those filing solo. The higher cap increases slightly each year through 2029 before reverting to $10,000 for everyone in 2030 unless/until Congress changes the law.

The deduction for mortgage interest will be permanently capped at interest on $750,000 ($375,000 for solo filers) of home mortgage acquisition debt.

The higher standard deduction of $15,750 for solo filers and $31,500 for joint filers is made permanent and will be indexed for inflation starting this year.

The doubling of the child tax credit in 2017 was made permanent and raised to $2,200 per child starting this year.

The seven tax brackets will remain, with the bottom bracket at 10% and the top at 37%. The law adds an extra year of inflation adjustment to the lower three brackets, expanding the income included in each.

Tips and overtime wages won’t be taxable up to $25,000 per year, while solo filers will have a $12,500 cap on the overtime portion. Both provisions start phasing out as solo filers make more than $150,000 or $300,000 for joint filers. This is a temporary provision lasting just four years.

Folks who are 65 or older will get an extra $6,000 tax deduction beyond the current senior deduction. The deduction starts phasing out at $75,000 of income for solo filers and $150,000 for joint filers. This is also a temporary provision lasting just four years.

Interest on a new car loan can be deductible if the vehicle’s “final assembly” was in the US and you earn less than $100,00 and file solo or $200,000 when filing jointly. This is another temporary provision lasting just four years.

New “Trump Accounts” can be opened for children. Up to $5,000 can be contributed per year by family, friends, or “taxable entities”, such as employers or even governments. There’s no tax deduction when contributing but there are no income limitations. My understanding is that there can be no distributions before age 18, then half the money could come out for certain specified reasons, then the other half at age 25 for the same reasons, or the full balance could be withdrawn at age 30. Taxation and other details are a bit sketchy but it’s an interesting development in any case. More to come on this in the weeks ahead.

The usage of HSA and 529 plan money has been expanded. 529 plans, for example, could now be used to fund “recognized postsecondary credential programs”, although it’s not immediately clear what programs that would apply to. 529 money can also be used for tutoring, testing fees, and educational therapies for disabled students. But this is good news if you have either type of account. More to come on this as well.

The estate tax limit will now be $30mil if filing jointly, will be permanent, and will be indexed for inflation.

There’s also a new above-the-line charitable deduction of $1,000 for solo filers and $2,000 for joint filers.

Ultimately, this new law provides certainty for some while adding layers of complexity for others. Different deductions and phaseouts can make your situation complicated. You should talk with your tax preparer before year-end to clarify how these provisions might impact you and to see if there’s anything you could/should be doing now.

Additionally, the various provisions are updated in my planning software so we could use your 2024 return to run forecasts based on these changes. Either way and as always, try to leverage the rules of the game as much as possible.

Have questions? Ask us. We can help.

As I typed this post yesterday (Monday) morning the stock market was set to open up a bit, which was surprising given news over the weekend of the US jumping into the most recent Middle East conflict with both feet.

As you’re no doubt aware, this past weekend we hit three of Iran’s nuclear facilities with 14 Massive Ordinance Penetrator bombs, or “bunker busters”. How much of an impact the strikes had on Iran’s nuclear program and what Iran’s response will be isn’t clear yet. Iran suggested it might block the Strait of Hormuz, but they hedged the statement with no major development since. The Strait sees 20% of the world’s petroleum consumption passing through daily, according to the US Energy Information Administration. Oil prices opened down about half a percent yesterday, a subdued response nearly as surprising as the ho-hum response of the stock market.

Again, this is an evolving situation that at least for the time being is having a muted market impact. Fast forward to the market close yesterday and major stock indexes had risen nearly 1%, even after news of Iranian escalation at midday. Read to the end and it’s no wonder why the market is so far brushing off the conflict.

I don’t want to get too far out of my lane in these posts, but here are a few paragraphs from an update I received yesterday morning from my research partners at Bespoke Investment Group. Bespoke does a lot really well and one of those things is providing objective context. Maybe this helps answer some of your questions, especially given the rise of near-apocalyptic stuff surfacing online.

From Bespoke…

It remains unclear how much effect the [US bombing] attack had. First, the International Atomic Energy Agency (IAEA) Director General said late last week that the ~400kg of highly enriched uranium (HEU) that was stored underground at the Isfahan facility hasn’t been seen by inspectors since a week before Israel launched its attacks. 400kg of HEU could be moved around in less than a dozen small sedans if necessary, so it’s entirely possible it was removed and dispersed early in the war; it also may still be sitting at Natanz and not have been damaged. There have been no major radiation signatures from the US or Israeli strikes on Iranian nuclear facilities, so that stockpile is unlikely to have been destroyed. Beyond that, the material damage to Iranian facilities is unclear at this point, especially given DoD damage assessments are incomplete. It’s possible that the strikes dealt a massive blow to Iran’s ability to enrich uranium and build a fission device, and it’s possible that the raid was all light and no heat. Only time will tell.

For the markets and global economy, the key question now is how Iran will respond. As-of this writing 36 hours after the strike, there had been no military response against US assets […] Iran’s military performance in response to Israel’s attacks has been abysmal, with very limited abilities to beat Israeli defenses using ballistic missiles and drones as well as abject failure at controlling its own airspace. While hitting back at US bases in the Persian Gulf would be much easier than striking Israel given the distances involved, the actual ability to do so from Iran is unclear. Similarly, it should be relatively easy for Iran to make the Strait of Hormuz basically impassable for civilian traffic, but given how badly they have failed to live up to expectations in other areas it wouldn’t be a surprise to learn they cannot. In addition to conventional military responses like strikes against US bases or closing Hormuz, unconventional responses are of course a possibility but not a likely one. Those would include stochastic attacks inside the US or the use of a “dirty bomb” (conventional explosives combined with enriched uranium or related byproducts to use radiation as a weapon rather than fission) against the US or Israel. Finally, it’s possible Iran is now in a “sprint” to a true nuclear weapon for use in response; this is also possible but would take at least a time of months if not longer to achieve based on their known capabilities.

In terms of likelihood, we view the stochastic attack/dirty bomb unconventional response as the least likely by far. While that approach is possible we don’t see it as easy to achieve or likely to stop attacks in Iran (if anything, the opposite) and therefore is very unlikely. Similarly, while achieving a fission bomb is certainly possible, doing so under a barrage from the sky would be very difficult; this outcome is more likely than the prior set but is still very unlikely by any measure. More conventional responses including closing Hormuz remain a possibility, but that would also impact Iran’s ability to export oil. On Sunday, Iran’s parliament reportedly endorsed a plan to close that vital oil supply line, but with the caveat that any decision to do so rests with Iran’s Supreme National Security Council.

[…] Global oil markets are of course fungible, but by far the largest destination for these [petroleum] flows is China. In other words, closing Hormuz would have the most direct negative impact on one of two countries most likely to back Iran in a war against the US and Israel. Both China and Iran’s other major power relationship (Russia) have condemned the attacks but otherwise stayed out of the war and we see little reason for that to change near-term. While there are risks of Iran lashing out globally in response to this war, a broader conflagration is not one.

Given Iran’s relatively weak capacity compared to expectations since the original strikes by Israel, we see a massive response against US bases or the Strait of Hormuz as less likely than not at this stage. It remains an open question whether Iran can execute that kind of response at all. We also see an American invasion of Iran as extremely unlikely by any measure. Polling is clear on this issue: bombing Iran is not popular (-19 net approval per YouGov) and a June 16 poll by that same outlet found a -44 margin for the idea of getting involved in the war at all. While opinion polling is not an inevitable driver of what happens next, the President’s coalition contains a range of non-interventionists and it’s a generally unpopular policy, both worth keeping in mind when mulling what happens next. In short, the odds of this conflict fizzling out are much higher than might meet the eye, even if there are a range of lower-probability risks that have much more negative outcomes.

Have questions? Ask us. We can help.

I’ve written before about being selective in the voices I pay attention to when it comes to the economy, markets, and so forth. These days we need beacons of rationality in what can otherwise be a sea of disfunction. Anyway, two of these are Bespoke Investment Group and certain analysis and information from JPMorgan. Bespoke is a subscription service I’ve been using for years that provides all manner of analysis but really shines when providing broader context. JPMorgan offers macroeconomic commentary from its investment management arm for free to investment advisors.

Both shops had good commentary yesterday regarding the end of the 90-day tariff pause that helped markets recover so quickly from the April lows. That they’re both echoing essentially the same concern about the outlook for tariffs is interesting.

You probably heard about the Trump administration engaging in more rhetoric and a letter writing campaign with our trading partners last week. That caused volatility to perk up again in the markets although investors, at least on average, still assume that tariff numbers being bandied about won’t actually come to fruition. Regardless, real-world tariffs (our effective-rate referenced below) have been rising and will eventually impact corporate profits and inflation, although recent reports have been solid and Consumer Price Index readings have been coming in below consensus estimates.

Maybe actual tariff impacts are just being pushed down the road several months. Are investors being overly optimistic about this, and perhaps also about the likelihood that larger tariffs will actually stick? It’s entirely possible that markets will continue to grind higher from here. But prices are relatively high so it seems best to plan for more market volatility in the weeks and months ahead while all this gets sorted out. Along those lines, let us know if your situation has changed because that could mean adjustments to your investment portfolio. Otherwise, your first approach should be leveraging your plan and trying to ride out volatility.

Here are the notes I mentioned. First from Bespoke and then from JPMorgan.

Consistent with the decisions released so far in July, after the close Friday, the Trump Administration announced a 30% tariff rate for the European Union and Mexico. That rate of course assumes that the tariffs actually go into effect on August 1. […] the market currently prices the odds of full implementation of the August 1 tariffs at less than 10%.

In the background, Friday saw the release of the Monthly Treasury Statement which showed tariff collections of $26.6bn NSA ($320bn annualized) in June. When compared to US International Trade Commission data on the realized effective tariff rate data current through May, we can see that realized tariff collections for the month likely exceeded 10% of imports. We also note that Daily Treasury Statement data current through July 10 is consistent with monthly collections up 15% versus June, which would take the effective rate on imports closer to 12% based on recent history. Again, this is all before the recent wave of letters for new rates effective August 1 (theoretically).

The market will stay at elevated levels as long as marginal buyers are convinced that the rates set out in the letters won’t be the rates that take effect. There is no plausible way the market can trade at 6250 [the S&P 500’s level as of a few days ago] with 30%+ tariffs on Canada, Mexico, and the EU as well as 20%+ tariffs on all other major trading partners. But for those rates not to play out, either a deal needs to be reached or the market would need to sell off; it was market declines that forced a change in approach during April, and it will be market declines that force a change in approach on August 1 as well of no deals can be reached.

We see many investors apply a “it’s all rhetoric” approach to Trump administration policy, and it’s understandable why they do so. Trump himself, let alone other members of his administration, says so much that it’s tempting to discount all the rhetoric as irrelevant. On the other hand, many proposals advocated by Trump in the lead up to the last election that some argued wouldn’t take effect have been borne out. Regardless of whether you think his policies on regulation, taxes, immigration are good or bad, the President has followed through on many that a lot of people assumed he wouldn’t.

The above does not mean that Trump is assured to follow through on his plans to hike tariffs to an effective rate well above 20% on August 1. But the market’s confidence that he won’t is potentially misplaced based on prior experience and is also a signal to Trump that he should follow through. For long-term investors, this is yet another example of why staying invested is so important; there’s no way to model this interplay and over a timescale of years it’s mostly irrelevant. For more tactically oriented investors, the President has created more volatility, but good luck trying to anticipate when and to which sectors the next tape bomb will drop.

From JPMorgan…

Economic forecasting has been an increasingly tough job due to the ever-evolving tariff landscape. A major source of confusion has been the difference between statutory (or announced) and effective tariff rates. For example, the tariff paid by importers may be 25%, but when you calculate the effective rate by dividing tariff revenues by import values, it often appears lower. This happens due to real-world complexities such as exemptions, quotas, shipping delays, and product mix shifts.

This week's chart illustrates the significant changes in both statutory and effective tariff rates since the start of the year. The gap between these rates is wide due to implementation delays and a dramatic shift in import share composition, both by product and country. Imports from China, which are subject to the highest tariffs at an estimated effective rate of 40%, have plummeted, decreasing by 24% y/y from March to May 2025. In contrast, imports from the Eurozone, now facing an effective tariff of approximately 10%, have surged, largely driven by the frontloading of products like pharmaceuticals.

The data show that importers are actively seeking substitutes from other countries to circumvent these tariffs. The terminal tariff rate is still uncertain, but a rate in the high teens is becoming more likely. The Section 232 [national security-related tariffs] investigations are almost complete, indicating more sectoral tariffs could be introduced, along with the already announced 50% copper tariff. Also, recent negotiations with Vietnam, which initially raised hopes for lower rates, ended with a 20% tariff on products originating in Vietnam, higher than the previously announced 10% during the 90-day pause. This outcome makes other negotiations look less promising. As a result, investors may need to be more cautious and actively manage their exposure to affected companies.

Have questions? Ask us. We can help.

What a few months it has been! The first quarter of 2025 ended in a stock market slump with US investor confidence at extremely low levels. Then the second quarter (Q2) began with a thud heard around the world as major tariff announcements on “Liberation Day” shocked just about everyone. Global markets sank and within a week we were looking at a bear market. Then markets recovered… quickly, to a record high at quarter’s end. Incredible. At least from a market perspective, there was a sigh of relief as Q2 closed.

Here's a summary of how major market indexes performed during the quarter and year-to-date, respectively.

• US Large Cap Stocks: up 9.3% and up 6.1%
• US Small Cap Stocks: up 5.8% and down 1.8%
• US Core Bonds: up 2.1% and 4%
• Developed Foreign Markets: up 10.8% and 20.7%
• Emerging Markets: up 7.6% and 12.7%

Tariffs were easily the biggest issue that investors faced during Q2. On April 2^nd the Trump Administration announced plans for new tariffs on nearly every US trading partner in what many worried was an incoherent strategy. New tariffs as high as 145% on imports from foundational trading partners like China, for example, immediately roiled markets. It was too much way too fast for investors to digest. Understandably, many indiscriminately sold stocks in the face of tremendous uncertainty. Volaitlity shot through the roof. Within days major US stock indexes like the S&P 500 were down double digits. The Russell 2,000, a proxy for US small cap stocks, hit a bear market by dropping over 20%. Foreign stocks dropped less but the pain of instant uncertainty was felt by all.

One can only imagine the closed-door conversations happening within the White House during the first weeks of April. Reports of the markets being an important barometer for the President were confirmed by a pause to the tariff plan shortly after the initial rollout. That turned things around quickly for investors. Further pauses and renegotiations fueled a surge of optimism, as did solid corporate earnings reports from companies that might not be hammered by tariff uncertainty after all. Just one example was market-darling NVIDIA. The stock was down over 30% for the year during the lows but ended Q2 up over 17%. Other “Magnificent Seven” stocks, such as Meta and Microsoft, also roared back since early April while others, including Apple and Alphabet, are still down for the year.

Across sectors, Technology and Consumer Discretionary took the hardest hits, each down over 20% during early April. Most of the eleven sectors that make up the US stock market dropped by double digits during that timeframe but a few, specifically Utilities, Healthcare, and Consumer Staples, were only down around 3%. However, the subsequent market recovery was broad-based with eight of eleven sectors finishing Q2 positive year-to-date. Industrials were up 11% while Utilities and Financials were each up over 7%. This is good to see after quite a while of broad market performance being dominated by a handful of popular stocks.

Core bond prices held their ground during April and have performed well so far this year. The Barclays Aggregate Bond Index, comprised mostly of Treasurys but also of investment-grade corporate and mortgage-backed bonds, was up nearly 4% year-to-date. Riskier parts of the bond market, such as preferred stocks and longer-term Treasurys, didn’t fare as well and finished Q2 down nearly 4% and 2% so far this year, respectively. The primary reason for the good performance from core bonds is that inflation has continued to come under control and investors are coming to grips with a “higher for longer” interest rate policy from the Federal Reserve. Investors expressed fears about how an inflation spike and a tariff-induced recession this year could impact bond prices, but those concerns largely evaporated along with the administration’s initial tariff plans. The bond market was stable enough to look through the final member of the “Big Three” ratings agencies downgrading the US’s credit rating in May. The yield on the benchmark 10yr Treasury Note began the year at roughly 4.8% before declining to 4% immediately following “Liberation Day”. The yield rose subsequently to 4.6% around the debt downgrade before settling in at about 4.3% as Q2 ended. Bond prices move opposite yields so this relative stability helped performance during the quarter. “Cash” investments like money market funds and bank CDs paid at roughly a 4% annual rate during Q2. That cash yield is expected to remain perhaps until this Fall assuming the Fed lowers interest rates then, but that isn’t a given.

The market volatility we experienced during Q2 was painful but brief, of course only in hindsight. Outcomes could have been much worse and there were several “are the wheels coming off?” moments along the way. Market analysts I’ve been following for years were dumbfounded first by the administration’s plans and then by the market’s response; it all happened so quickly and keeping up with everything proved difficult, even for seasoned pros with a deep bench. What’s an individual investor to do in that sort of environment? Ultimately, the quarter was another lesson in the importance of having a plan and sticking to it, a strategy that’s easier to follow in theory than in practice.

That said, there’s still uncertainty around tariffs and now tax and spending policy as we go into the second half of the year. There’s bound to be more volatility so just be ready for it. Let us know if your plans have fundamentally changed. And as always, if you have questions please ask them.

Have questions? Ask us. We can help.

Good morning and Happy Tuesday! It’s another week with a ton going on in the world but let’s look at something from the WSJ in recent days about personal cybersecurity.

The article offered a warning to think twice before clicking on the standard “unsubscribe” link at the bottom of marketing emails we receive. If you’re inbox is like mine you’re getting at least several each day. Maybe a few are relevant but most aren’t even close and leave me wondering how this person or business even got my email address. I understand how that can work but receiving boatloads of unsolicited email is annoying. It’s nice to be able to remove myself from the sender’s list and I try to be diligent about unsubscribing. But now even that might not be safe anymore. It’s sort of a sad commentary on how much risk we unwittingly accept in trade for convenience.

The article says a recent study found that a small but meaningful portion of unsubscribe links were actually sending people to malicious sites for various fraudulent reasons. Sometimes the links are phishing attempts to test which email addresses have a live person on the other end. That person could be a good target for a social engineering scam and extortion. Yikes!

I’ll provide a link to the full article below but here are my notes.

“Trust is relative”, according to a cybersecurity expert quoted in the article. You might trust your email provider but then distrust a specific email. This might sound paranoid but a little paranoia goes a long way. Clicking on anything within an email, such as an unsubscribe link, takes you outside of your trusted email environment and into the wild west of the internet. Do you know the sender? Does the sender’s email address look valid when hovering over it with your cursor? Are there minor misspellings? The clues can be subtle.

Often an unsubscribe link takes you to a third-party site to finish the process. This can be legitimate but the third-party site shouldn’t ask you to log in – asking for your password is a red flag and experts suggest not doing it. Instead, close that page and go directly to the company’s site and log in if needed to update your marketing preferences.

While it’s possible for an unsubscribe link to expose your system to malware, apparently that’s less of an issue than your click confirming that a live person is on the other end of the email. I first heard of this problem years ago with robocalls – a real person picking up the phone makes your number more valuable and would often mean more calls from more companies, even if you told the original company to remove you from their list.

Beyond simply not clicking on anything anymore, which is a reasonable response but not very practical, experts suggest using tools built into your existing email to opt out within a header of some kind. This lets you unsubscribe without clicking on a link in the body of an email. That sounds good in theory but I don’t see that as an option in my Outlook. Gmail offers this so I’m guessing this capability is out there, just buried a bit. Third-party providers like Trimbox offer to make this process easier and help with security, but then you’re hooking them up to your email account which has its own risks, so you’ll want to do some due diligence.

Experts also suggest assigning an email sender to your junk folder, blocking the sender, or otherwise automatically shoving potential spam into a drawer and forgetting about it. You can also simply delete the email and then delete it entirely as a batch by emptying your trash folder every so often.

Beyond that, it’s possible to create and use multiple email addresses as some people might use a burner cell phone. Maybe one address for personal email, one for business, another for online subscriptions and one for financial transactions. Doing so helps compartmentalize email risk, again at least in theory. The problem with this approach is we already have enough miscellaneous stuff to manage and now we’d have to add multiple email accounts to the list?

Ultimately and unfortunately this is yet another thing to worry about when it comes to leveraging technology. Risk is everywhere but addressing it doesn’t have to be overly complicated. Just be extra careful, even a little paranoid, when working within your email and be mindful of what you’re clicking on. Mistakes can still happen but they’ll be much less likely.

Here’s a link to the article. Let me know if you hit the WSJ paywall and I can send it to you from my account.

https://www.wsj.com/tech/cybersecurity/unsubscribe-email-security-38b40abf?mod=trending_now_news_2

Have questions? Ask us. We can help.