Your 2026 Planning Roadmap

New Rules and New Numbers to Know for a New Year

The 2026 financial landscape brings a fundamental redesign of the rules you’ve likely relied on for years. This year, “saving more” is secondary to “saving smarter,” as the IRS introduces mandatory tax treatments for high earners and significantly higher limits for retirement and education. Navigating these changes effectively means moving beyond traditional saving habits to embrace a smarter, more integrated tax strategy.

This roadmap outlines the critical numbers and rule changes you need to know to for the new year and beyond.

Higher Limits

Good news: The ceilings for retirement savings have been raised, giving you more room to grow your nest egg.

• Employer Plans (401(k), 403(b), etc.): The elective deferral limit has increased to $24,500.
• Individual Retirement Accounts (IRAs): The combined limit for Traditional and Roth IRAs is now $7,500.
• HSA Limits: The new limits are $4,400 for individuals and $8,750 for families.

Catch-Up Contributions

Catch-up contributions offer an additional opportunity for individuals nearing retirement.

• Standard Catch-Up: For those aged 50 and older, the general catch-up contribution is an additional $8,000 for employer plans and $1,100 for IRAs.
• The Super Catch-Up: As of 2025, significantly enhanced catch-up of $11,250 (instead of the $8,000 above) is available specifically for employees aged 60 to 63 who participate in employer plans. This window is a short-term opportunity to accelerate savings.

The Roth Catch-Up Mandate

This could be the most critical change for high earners. The new legislation mandates that the rules for employer catch-up contributions have changed based on your prior-year income.

If your wages in 2025 exceeded $150,000, all your 2026 catch-up contributions to your workplace plan (401(k), etc.) must be made as Roth contributions.

• The Impact: This means you will pay taxes on those catch-up dollars now, reducing your take-home pay, but in exchange, the funds will grow and be withdrawn tax-free in retirement. It shifts tax liability from the future to the present, a strategic move that favors future tax-free growth.
• Action Item: Confirm your plan offers a Roth option. If you are subject to the mandate and your plan does not offer Roth, you may be unable to make catch-up contributions until your plan is updated.

Reducing Your Adjusted Gross Income

Managing your Adjusted Gross Income is essential, and 2026 offers some levers to pull:

• For Professionals: Maximize your pre-tax contributions and fund your HSA up to the new limits. These contributions reduce your taxable income dollar-for-dollar, lowering your Adjusted Gross Income.
• For Retirees: Focus on tax-efficient charitable giving to manage your Adjusted Gross Income and required minimum distributions. Qualified Charitable Distributions enable you to donate directly from an IRA without the distribution counting as taxable income. Donor-Advised Funds can be used for strategically “bunching” charitable deductions for taxpayers who itemize deductions.
• For Business Owners: If you establish a new retirement plan in 2026 (such as a 401(k), SEP IRA, or SIMPLE IRA), you may qualify for a tax credit covering 100% of plan startup costs, capped at $5,000/year for the first 3 years. Additionally, you may be eligible for the Employer Contribution Credit, providing up to $1,000 per employee back on your taxes to help fund your team’s retirement.

For Kids and Grandkids: Expanded Flexibility for Private K-12 Education

529 plans are no longer just for college. The federal limits for K-12 private school withdrawals have doubled for 2026, and the definition of “qualified expenses” has significantly widened.

• New $20,000 Limit: You can now withdraw up to $20,000 per student, per year, for private K-12 tuition, double the previous $10,000 cap.
• Beyond Tuition: For the first time, 529 funds can be used tax-free for tutoring, standardized test fees (SAT/ACT), and even certain specialized educational therapies.
• State Conformity Caution: While these are the new federal rules, state tax treatment varies. Some states (like California or New York) may not recognize K-12 withdrawals as “qualified,” which could lead to state-level taxes or penalties.

2026 Adjustments  Your Call to Action

Are you wondering how these changes could impact you and your financial roadmap? Simply reply to this email so we can review your plan together to help ensure you are taking full advantage of these new rules.