Heading into 2026, the backdrop is anything but quiet. Geopolitical tensions, shifting trade policy, rapid advances in AI, and persistent questions around taxes and markets all add noise to financial decision-making. That kind of uncertainty isn’t new, but it does make clear one thing: retirement planning works best when it’s deliberate and regularly updated, not something you set once and revisit years later.
What 2026 offers is a clearer rulebook. Contribution limits are higher, several tax provisions are now permanent, and others create a defined planning window over the next few years. Our goal as wealth managers and financial advisors isn’t to react to headlines, but rather to stay ahead of change through proactive reviews, thoughtful adjustments, and a strategy that evolves as the rules do. Below, we’ll walk through what’s already in place for 2026 and how these updates can be used to strengthen your retirement plan and financial outlook while cutting out the noise of the 24/7 news cycle that can so easily distract us from our goals.
As always, before making any changes, it’s important to review your situation with your financial advisor and CPA to ensure each adjustment fits your broader tax picture and long-term plan.
Tax Landscape in 2026: Extended Cuts and New Deductions
Probably the best news is that 2026 arrives without the major tax hike originally slated under prior law. Earlier this year, Congress passed the “One Big Beautiful Bill Act,” which made permanent the lower income tax rates and expanded standard deduction from the 2017 Tax Cuts instead of letting them expire.¹ This means federal income tax brackets in 2026 remain at historically low rates, and the generous standard deduction stays in place for all taxpayers. High earners and business owners will continue to enjoy the same relatively low top rates on ordinary income as they did in 2025, rather than seeing a reversion to higher pre-2018 tax brackets.
Another significant perk is a temporary bonus deduction for seniors. If you’re age 65 or older, you now get an additional $6,000 deduction on your federal taxes each year from 2025 through 2028 (married couples 65+ get $12,000).² This is on top of the regular standard deduction and existing age-65+ add-on.
For example, if a married couple filing jointly is both age 65+ and takes the standard deduction, their 2025 standard deduction is $31,500 plus an additional $1,600 per qualifying spouse (total $34,700). The OBBBA’s new senior deduction can add up to $6,000 per eligible individual (up to $12,000 for a couple), subject to income phaseouts, so a qualifying couple could have up to $46,700 of deductions in 2025 before considering itemizing.
For 2026, the comparable maximum is up to $47,500 ($32,200 standard deduction + $1,650 per qualifying spouse + up to $12,000 senior deduction, subject to phaseout).
This effectively raises the income a senior household can receive before owing any taxes.
Tax Landscape in 2026:
Extended Cuts & New Deductions
Senior Bonus Deduction (Single)
$6,000
Additional deduction for taxpayers age 65+
Senior Bonus Deduction (Married)
$12,000
Combined for couples both 65+
Standard Deduction Comparison: Married Couple 65+
Senior Deduction Phase-Out Thresholds
Single Filers
Married Filing Jointly
However, the deduction is phased out for higher incomes, beginning to reduce once your modified AGI exceeds $75,000 (single) or $150,000 (joint) and phases out completely by around $175,000 (single) or $250,000 (joint).³ Therefore, many middle-income retirees stand to gain the most in terms of reducing their overall federal income tax bill.
The new senior deduction doesn’t change the formula that determines how much Social Security is included in taxable income (that calculation is based on “combined/provisional income”), but higher deductions can reduce taxable income and, in some cases, reduce or even eliminate the tax ultimately owed, even if part of Social Security is still technically taxable. Meanwhile, very high-income seniors won’t see much change (their income may be too high to qualify for the extra deduction, so up to 85% of Social Security remains taxable as before).
From a planning perspective, 2026 opens a four-year window of opportunity. With tax rates locked in at low levels, at least for now, and an expanded deduction available for many retirees, the years 2025–2028 create a favorable and time-limited environment for proactive tax planning.
Higher Contribution Limits
One concrete change for 2026 is that you can put more money than ever into tax-advantaged retirement accounts due to inflation adjustments. The IRS raised the contribution limits across the board:
401(k), 403(b), 457 plans
The standard employee deferral limit jumps to $24,500 (up from $23,500 in 2025). If you’re under 50, that’s your max salary deferral. Those 50 or above can contribute an additional $8,000 catch-up on top of that (up from $7,500).⁴ That means in 2026, most workers 50+ can sock away $32,500 of their own money into a 401(k). Employers can still contribute further via matches or profit-sharing, subject to overall plan limits (which rose to $72,000 for 2026).⁵
Notably, if you will be aged 60 to 63 in 2026, a recent rule from SECURE 2.0 gives you an even higher catch-up limit during those early 60s years: an extra $11,250 instead of $8,000.⁶ This “super” catch-up is designed to let late-career individuals accelerate savings. It was $11,250 for 2025 and remains the same for 2026 allowing a total $35,750 of employee contributions for those 60–63.
Traditional and Roth IRAs
The annual IRA contribution limit for 2026 is $7,500, up from $7,000 the year before. This applies to the combined total you can put into a traditional and/or Roth IRA for the year. If you’re 50 or older, you also get a catch-up of $1,100 (up from the long-standing $1,000; the catch-up is now indexed for inflation). Therefore, an individual over 50 can contribute up to $8,600 total to IRAs in 2026.
Keep in mind that income limits can affect how you contribute: high earners may not be eligible to deduct a traditional IRA contribution or contribute directly to a Roth IRA, depending on your modified AGI. Those phase-out ranges ticked up slightly for 2026 (for example, Roth IRA eligibility begins phasing out at $153,000 MAGI for singles, $242,000 for joint filers).
If your income is above the Roth limits, you can still do a backdoor Roth IRA (contribute to a non-deductible traditional IRA and then convert it); this strategy remains alive and well for 2026, and it’s a great way for high-income individuals to funnel $7,500 + $1,100 catch-up into tax-free Roth growth each year.
Health Savings Accounts (HSAs)
While not a retirement account per se, an HSA often plays a role in retirement planning (thanks to its triple tax advantage and ability to cover healthcare costs in later years). For 2026 the HSA contribution limits increased to $4,400 for individuals with self-only coverage and $8,750 for those with family coverage.⁷ If you’re age 55 or older, you (and your spouse, if also 55+) can each make an additional $1,000 catch-up contribution. Unlike the age-50 catch-ups in 401(k)s, the HSA catch-up still kicks in at 55, and it is not indexed, and it remains $1,000 as it has for many years.
Key 2026 Contribution Limits
| Account Type | Base Limit | Catch-Up | Max Total |
|---|---|---|---|
| 401(k), 403(b), 457 Plans | |||
|
Under Age 50
Employee deferral only
|
$24,500 | — | $24,500 |
|
Age 50+
Standard catch-up
|
$24,500 | $8,000 | $32,500 |
|
Age 60–63Super
SECURE 2.0 enhanced catch-up
|
$24,500 | $11,250 | $35,750 |
|
Overall Plan Limit
Including employer contributions
|
— | $72,000 | |
| Traditional & Roth IRAs | |||
|
Under Age 50
Combined Traditional/Roth
|
$7,500 | — | $7,500 |
|
Age 50+
Now indexed for inflation
|
$7,500 | $1,100 | $8,600 |
| Health Savings Accounts (HSAs) | |||
|
Self-Only Coverage
Individual HDHP
|
$4,400 | $1,000* | $5,400 |
|
Family Coverage
Family HDHP
|
$8,750 | $1,000* | $9,750 |
New Rules for Catch-Ups and Roth 401(k) Contributions
Beyond the dollar amounts, 2026 also brings important rule changes in how certain contributions can be made, particularly affecting higher earners around age 50 and above:
Mandatory Roth Catch-Up Contributions
Starting in 2026, if you’re eligible to make catch-up contributions (generally age 50+ by year-end) and your prior-year wages exceed the indexed “Roth catch-up” threshold (for 2026 catch-ups, the 2025 threshold is $150,000), then any catch-up contributions must be designated Roth (after-tax) contributions.⁸ As a result, for high earners, no additional pre-tax deferral is allowed beyond the standard $24,500 limit and the extra $8,000 catch-up must go into your Roth 401(k) account.
If you’re a high-income 50+ saver, plan for how this affects your 2026 contributions, your take-home pay will be a bit lower if you continue the same catch-up amount (since taxes will be taken out now), but on the bright side your catch-up dollars will grow tax-free going forward. Ensure your HR/plan administrator has your Roth 401(k) feature enabled; if your plan doesn’t offer Roth, the law technically would bar catch-ups for high earners, so most plans are adding a Roth option to comply.
60–63 Catch-Ups and Planning
As mentioned, if you’re in that age 60–63 range, you have a limited-time opportunity to contribute an extra $3,250 above the normal catch-up each year. Take advantage of that “last call” for retirement funding if you’re able. Notably, the same Roth rule applies here – high earners in this age band will be doing that $11,250 catch-up after tax. If you’d been counting on the catch-up to reduce your taxable income, you may need to revisit your strategy.
For instance, some v business owners might decide to redirect some savings into a Cash Balance Plan or SEP-IRA for the tax deduction, now that the 401(k) catch-up provides tax-free growth instead of a write-off. The best approach will depend on your tax situation and cash flow needs; it’s worth a discussion with your financial advisor or CPA to rebalance your contributions optimally under the new rules.
Roth Conversions in IRAs
While not a rule change in 2026, it’s worth noting the increased opportunities for Roth conversions given the current tax climate. Thanks to the senior deduction and high standard deduction in 2026, many retirees may find themselves in a lower effective tax bracket than anticipated, which means cheaper Roth conversion opportunities.
New Rules for Catch-Ups & Roth 401(k)s
Mandatory Roth Catch-Ups for High Earners
Super Catch-Up for Ages 60–63
Effective Timeline
Roth Conversion Opportunity
With the senior deduction and high standard deduction in 2026, many retirees may find themselves in a lower effective tax bracket—creating cheaper Roth conversion opportunities while favorable conditions last.
In Conclusion
The overarching theme of 2026 is one of flexibility: Congress has given retirees and savers a few more tools and a bit more breathing room to craft tax-efficient retirement plans, and you could likely stand to gain by proactively adjusting your strategy to these new rules. It could be as straightforward as increasing your 401(k) deferral amount, or as nuanced as restructuring your distributions and conversions to exploit a four-year tax-friendly window.
Above all, now is an ideal time to schedule a fresh look at your retirement plan and portfolio. Every person’s situation is unique, as the best mix of pre-tax vs. Roth savings, the timing of income and deductions, and the investment positioning will differ based on your goals and circumstances. As always, we’re here to help you sort through the complexity and make the most of these new rules. All you have to do is click the button below and schedule a time that works for you.
Appendix
- https://www.finance.senate.gov/chairmans-news/the-one-big-beautiful-bill-slashes-seniors-tax-burden#:~:text=,over%2090%20percent%20of%20taxpayers
- https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors#:~:text=Deduction%20for%20Seniors
- https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors#:~:text=,the%20additional%20deduction%2C%20a%20taxpayer
- https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500#:~:text=The%20limit%20on%20annual%20contributions,up%20from%20%241%2C000%20for%202025
- https://www.investopedia.com/roth-and-traditional-ira-contribution-limits-for-2021-5085118#:~:text=For%202026%2C%20the%20IRS%20increased,slightly%20from%202025%20to%202026
- https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500#:~:text=and%20the%20federal%20government%E2%80%99s%20Thrift,of%20the%20%248%2C000%20noted%20above
- https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits#:~:text=,have%20coverage%20for%20your%20family
- https://www.schwab.com/learn/story/what-to-know-about-catch-up-contributions#:~:text=,contributions%20on%20a%20Roth%20basis
