The 2026 Financial Guide: Save Smarter & Plan Better
New Year and New Rules for Retirement, Social Security, Taxes & More
Retirement Contribution Limits, Social Security COLA, Charitable Giving Changes, HSA Updates & What’s Ahead
As we move into 2026, several important updates are taking effect that directly impact how families save, invest, give, and plan. Below is your streamlined guide to what’s changing — and what it means for your financial life in the coming year.
1. 2026 IRS Retirement & Savings Contribution Limits
Contribution limits across multiple accounts are increasing in 2026, giving families more space to save with tax advantages — a win for long-term flexibility and peace of mind.
401(k), 403(b), and 457(b) Plans
Employee contribution limit increases to $24,500 (up from $23,500).
Catch-up contribution (age 50+) increases to $8,000.
Traditional & Roth IRAs
Contribution limit rises to $7,500 (up from $7,000).
IRA catch-up (age 50+) remains $1,100.
Health Savings Accounts (HSAs)
Individual coverage: $4,550
Family coverage: $8,300
Catch-up (age 55+): $1,000 (unchanged)
HSAs remain one of the most valuable savings tools available: contributions are tax-deductible, growth is tax-free, and qualified withdrawals are tax-free. With healthcare often one of the largest expenses in retirement, increasing HSA contributions is a smart planning move for 2026.
Planning Takeaways
Update your 2026 contributions now, especially if you usually “max out.”
For families with high-deductible health plans, the HSA should be a core part of your long-term strategy.
Use the higher limits as a chance to revisit your tax diversification (Pre-Tax vs. Roth vs. Taxable).
2. Social Security COLA for 2026
Social Security benefits will increase by 2.8% beginning in January 2026.
Here’s what this means:
The average retiree benefit increases by roughly $56 per month.
The wage base subject to Social Security payroll taxes rises to $184,500.
A 2.8% adjustment helps offset inflation, but it won’t fully match rising costs — particularly in healthcare, insurance, and housing.
Planning Takeaways
Update retirement cash-flow projections to reflect the new benefit amount.
If you’re close to claiming, run updated scenarios: claiming early vs. delaying vs. coordinating benefits with a spouse.
For younger clients: use this reminder to reinforce self-reliance — Social Security should complement (and not define) retirement income.
3. New IRS Reporting Code for Charitable IRA Gifts (QCDs)
Beginning with 2025 distributions (reported on 2026 tax forms), custodians must now use Code Y on Form 1099-R to identify Qualified Charitable Distributions (QCDs).
A QCD is a direct transfer from an IRA to a charity for individuals age 70½ or older. This strategy can satisfy RMDs and reduce taxable income — a highly efficient way to align giving with tax planning.
Why This Matters
QCDs remain one of the best tools for tax-efficient charitable giving.
The new reporting code adds clarity but means taxpayers and advisors must double-check 1099-R forms more closely.
Planning Takeaways
Verify proper reporting if you make QCDs in 2025 or 2026.
For clients entering RMD age, explore whether QCDs should be included in their philanthropic and tax-reduction strategy.
4. New in 2026: Roth-Only Catch-Up Contributions for High Earners
As part of the SECURE 2.0 Act, beginning January 1, 2026:
If you are age 50+ and earned more than $145,000 in wages from your employer in the prior year… then all catch-up contributions must be made on a Roth (after-tax) basis.
That $145,000 threshold is indexed for inflation, so it may increase slightly for 2026.
Why This Is Important
High earners lose the ability to take a deduction for catch-up contributions.
More savings will now land in tax-free Roth buckets — which changes long-term tax planning.
Plans must allow Roth contributions or no one in the plan can make catch-ups, regardless of income.
Planning Takeaways
If you’re 50+ and above the wage threshold, expect a higher tax bill for 2026 contributions.
Reassess your mix of Pre-Tax, Roth, and Taxable savings.
This may also be an ideal time to revisit Roth conversions or multi-year tax planning.
5. Additional Items to Watch Going Into 2026
Tax Brackets, Deductions & Gift Exclusion Adjustments
IRS thresholds are shifting for 2026, including:
Annual gift tax exclusion remaining at $19,000 per person
Adjustments to standard deductions, FSA limits, and income thresholds
These changes influence everything from year-end gifting to tax withholding strategies.
The Interest Rate & Cashflow Landscape
Borrowing costs, mortgage rates, and short-term interest rates remain important variables heading into 2026. Maintaining liquidity for family goals, big purchases, and flexibility remains essential.
Final Thoughts
The year ahead brings meaningful changes to retirement savings, Social Security benefits, tax rules, and charitable giving. Understanding these shifts — and adjusting early — can create more clarity, more control, and more confidence for your financial plan.
If you’d like a personalized review of your 2026 savings strategy, tax planning, or retirement projections, our team is here to help you Live More and Worry Less.