As we move into 2026, several meaningful changes to taxes, retirement savings rules, and financial planning strategies are taking effect. Below is a summary of key developments and planning themes that may impact your financial picture this year. 

Workplace Retirement Plans

Contribution limits for employer retirement plans such as 401(k), 403(b), and 457 plans have increased again for 2026:

• Employees under age 50 may contribute up to $24,500
• Those age 50 and older can contribute $32,000, including catch-up
• The SECURE 2.0 enhanced “age 60–63 catch-up” allows up to $11,250 in additional catch-up contributions in those years, bringing total employee deferrals to $35,750
• The combined employee + employer contribution limit increases to $72,000 (not including catch-ups)

A Key Rule Change

Beginning in 2025, most catch-up contributions must now be made into the Roth portion of your workplace retirement plan if your wages with that employer exceeded $150,000 in 2025.

Action Reminder

If your contributions are set as a fixed dollar amount or a percentage that would not reach the new limits, please update your contributions for 2026 so you benefit from the higher limits. 

Individual Retirement Accounts (IRAs)

• IRA contribution limit remains $7,000
• Additional $1,000 catch-up for those age 50+
• Deductibility phases out at higher incomes if participating in a workplace plan
• Qualified Charitable Distribution (QCD) limits are rising to $111,000. QCDs continue to provide meaningful tax benefits for those age 70½ and older, especially when not itemizing. 

Health Savings Accounts (HSAs)

HSAs remain one of the most tax-efficient accounts available. The limits are increasing for 2026.

• $4,450 contribution limit for individuals
• $8,800 for families
• Additional $1,000 catch-up for age 55+ 

Estate & Gift Planning

• Annual gift tax exclusion remains $19,000 per recipient ($38,000 for a married couple)
• Beginning in 2026, under the OBBBA, the federal lifetime estate and gift tax exemption will rise to $15 million per person, or $30 million per married couple

This significantly expands opportunities for multigenerational planning and intentional legacy design. 

Key Planning Opportunities to Consider

With the exemption increasing to $15 million per person ($30 million per couple), families may want to explore: 

• “Give with Warm Hands” – Consider Lifetime Gifting:
  • For families unlikely to spend all their wealth, lifetime gifts can create tremendous joy and purpose. Many clients value watching loved ones benefit now—such as buying a first home, supporting education, funding meaningful life experiences, or launching opportunities—while also reducing uncertainty and stress around future inheritances. Lifetime giving allows you to shape your legacy and see it lived out.
• Spousal Lifetime Access Trusts (SLATs): Transfer assets out of your taxable estate while still allowing indirect family access to funds.
• Grantor Retained Annuity Trusts (GRATs): Shift future appreciation to heirs with minimal gift tax impact.
• Intrafamily Loans & Sale Strategies: Use favorable rates to help children or grandchildren with business, real estate, or investment opportunities while reducing estate exposure.
• Charitable Planning: Donor-Advised Funds, charitable trusts, and structured legacy gifting can align tax efficiency with meaningful philanthropy.

Action Reminder

Review Existing Estate Documents: Ensure wills, trusts, titling, and beneficiary designations are aligned with today’s laws and your long-term goals. 

Standard Deduction & Senior Deduction

• For 2026, the standard deduction increases to $16,100 for single filers and $32,200 for married filing jointly
• Taxpayers age 65 or older receive an additional $6,000 per person senior deduction. This is a temporary increase that will go away after the 2028 tax year.
• The senior deduction begins to phase out at $75,000 of income for single filers and $150,000 for married couples, gradually reducing as income rises
• This provides meaningful tax relief for many retirees but reinforces the importance of managing taxable income levels. 

State & Local Tax (SALT) Deduction

• The SALT deduction cap was increased from $10,000 to $40,000
• However, the enhanced deduction begins to phase out once AGI exceeds $500,000
• By $600,000 of AGI, the deduction effectively returns closer to the $10,000 level 

Why this matters for planning

Because of this phaseout band, managing your AGI around the $500,000–$600,000 range can have a big tax impact. Where possible, it may make sense to:

• Coordinate timing of bonuses, stock vesting, business income, capital gains, and Roth conversions
• Be intentional about the timing of large deductible expenses (such as state tax payments and charitable giving)
• Look at your tax situation over a multi-year window, not just a single tax year 

We strongly encourage clients in or near this income range to coordinate planning with us and their CPA to avoid landing in this SALT phaseout zone, when possible. 

Medicare & Social Security

• Social Security beneficiaries received a 2.8% cost-of-living adjustment (COLA) for 2026, increasing monthly benefits beginning January 2026
• Claiming strategy continues to meaningfully influence long-term retirement outcomes
• Modest increases in Medicare Part B premiums and deductibles
• Medicare Part D retains its $2,000 annual out-of-pocket prescription cap 

529 Plans & Education Planning

Helping children and grandchildren with education is one of the most meaningful financial gifts many families give. 529 plans remain a great tool because contributions grow tax-free and withdrawals for qualified education expenses are also tax-free. Many states even provide a state income tax deduction or credit for contributions.

• You may contribute up to $19,000 per year per beneficiary (or $38,000 for a married couple) without using the lifetime gift exemption
• Families can also “superfund” a plan by contributing up to five years’ worth at once (up to $95,000 per person or $190,000 per couple) and treat it as five years of gifts for tax purposes

529s are now even more flexible

• Plans open at least 15 years allow unused funds to be transferred to a beneficiary’s Roth IRA
• Transfers must follow annual Roth IRA contribution limits
• There is a lifetime transfer cap of $35,000 per beneficiary
• The beneficiary must have earned income 

These features help reduce the fear of “overfunding” and can turn education savings into a lifelong financial head start — supporting education today and potentially helping build retirement security tomorrow. 

What This Means for Your Financial Plan

These changes create meaningful planning opportunities. Depending on your situation, this may be a good year to:

• Confirm your retirement savings strategy and ensure you’re taking advantage of the new contribution limits
• Review Roth vs. pre-tax decisions, especially with new Roth catch-up rules
• Evaluate estate planning updates, particularly with the higher 2026 exemption on the horizon
• Coordinate tax planning if your income is near the $500,000–$600,000 SALT phaseout zone
• Consider strategic gifting to family or 529 plans to take advantage of current rules
• Review Medicare, Social Security timing, and retirement income planning to ensure long-term confidence and flexibility

If you’d like help evaluating what these changes mean for your situation, we’d love to talk. Let’s review your retirement plan, taxes, estate strategy, and gifting approach to make sure you’re positioned to take advantage of the opportunities 2026 provides. Reach out to our team and we’ll help you build a plan that feels clear, proactive, and intentional.