What's New for Retirees in 2026

Each January the IRS resets contribution limits, brackets, and thresholds. Here is what is new for 2026 — and how to put a few of these changes to work in your plan.

• Tax brackets, the standard deduction, and contribution limits are adjusted for inflation each year.
• Catch-up contributions let those 50+ (and a larger amount in your early 60s) save more.
• Know your RMD age under the current SECURE 2.0 rules.
• A new year is the natural time for an annual plan review.

In this article

• What changes for retirees each new year?
• Are you using the current catch-up contributions?
• When do your RMDs begin now?
• How do inflation adjustments affect your tax planning?
• Is it time to revisit your plan?
• How do this year’s brackets affect Roth conversions?
• What should you review in your portfolio for the new year?
• Are there new planning opportunities under SECURE 2.0?
• How do you build a simple annual-review habit?
• What should you actually do this month?

Every January the IRS adjusts tax brackets, the standard deduction, and retirement-account contribution limits for inflation. Individually these shifts are small, but together they change the math on Roth conversion, tax-efficient withdrawal, capital gains, and gifting for the year ahead. Because so many planning decisions hinge on where your income lands relative to a threshold, it is worth a quick check each year so your plan reflects the current numbers rather than last year’s. A bracket that widened, or a threshold that moved, can open or close a window for you.

If you are still working and age 50 or older, you can contribute extra to your 401(k) and IRA beyond the standard limits. Under SECURE 2.0 there is also an enhanced "super catch-up" available in your early 60s, letting you save even more in those final working years. These years are a prime time to build up tax-diversified savings — especially Roth dollars that will be tax-free later. If your employer plan offers a Roth 401(k) option, it is worth revisiting how much you direct there versus pre-tax.

Required Minimum Distributions currently begin at age 73, rising to 75 for people born in 1960 or later under SECURE 2.0. If you are approaching that age, the years just before are valuable: planning withdrawals and conversions ahead of time can shrink the balance your future RMDs are based on. It is also worth confirming the rules for any inherited accounts you hold, which follow their own distribution timelines. Getting these dates right avoids penalties and keeps your tax picture under control.

When brackets and the standard deduction rise with inflation, a little more income can be recognized at the same rate as before. For retirees doing Roth conversions or realizing gains, that can mean slightly more "room" to act within a target bracket this year. The thresholds that govern Medicare planning IRMAA surcharges and the Social Security claiming also shift. Re-running your projections against the new numbers each year is how you make sure you are using the available room without accidentally crossing a line.

A new year is the natural moment to confirm your income plan, rebalance your portfolio after a full year of market movement, refresh your tax projections, and check that your estate documents and beneficiaries are current. Think of it as an annual physical for your finances. If you do not yet have a coordinated plan — or you are not sure yours still fits — this is a good year to put one in place. Here is what to expect when you work with us.

When tax brackets widen with inflation, you can often convert a bit more to Roth while staying within the same bracket. For retirees doing annual conversions in the gap years before RMDs, that extra room can mean converting more at today’s rate — valuable if you expect higher rates later. The flip side is the thresholds that govern Medicare IRMAA surcharges and the taxation of Social Security, which also move each year. The goal is to use the additional bracket room without crossing one of those lines, which is a calculation worth running with current-year numbers. The backdrop has also changed: the July 2025 tax law made the 2017 income tax brackets permanent, so there is no longer a scheduled rate increase to race. The case for converting now rests on comparing today’s bracket with the one you expect to be in later, including once RMDs begin.

After a full year of market movement, your allocation has almost certainly drifted from its target — winners grow into a larger share, raising your risk without your noticing. January is a natural time to rebalance back to the mix that matches your plan. It is also a good moment to review costs, confirm your cash buffer still covers your near-term spending, and check that your investments still fit your goals and risk tolerance. Small course corrections each year beat dramatic overhauls after something goes wrong. If you are retired, tie this review to your income plan: make sure the coming year’s withdrawals are coming from the right accounts in the right order. See our approach to investment management.

SECURE 2.0 introduced a range of changes that continue to phase in — later RMD ages, enhanced catch-up contributions, expanded Roth options in workplace plans, and rules around things like 529-to-Roth rollovers. Some may apply to you or your family this year for the first time. The details matter and change over time, so it is worth confirming which provisions are in effect and which are coming. A rule that did not apply last year may open a door this year. We keep an eye on these changes so clients do not have to track them — and so we can flag the ones that create a genuine opportunity for your situation rather than just noise.

The retirees who do best are rarely chasing the perfect move; they are the ones who review and adjust consistently. Put a recurring date on the calendar — early in the year for planning, mid-year for a tax check-in, and late fall for year-end execution. Keep a short, repeatable checklist: allocation, income plan, tax projection, RMDs, contributions, beneficiaries. The same handful of items, reviewed every year, prevents the slow drift that quietly derails plans. If keeping all of that coordinated sounds like more than you want to manage, that is exactly the ongoing role we play for clients — the steady cadence of review built into the relationship.

Start simple: confirm your RMD plan for the year, set or revisit your savings and Roth-contribution targets, and schedule a mid-year tax check-in so you are not scrambling in December. If you had a major change — a sale, an inheritance, a retirement date — flag it now while there is time to plan around it. Small, consistent steps in January tend to beat heroic moves in December. The households that do best are not the ones chasing the perfect call — they are the ones who review, adjust, and stay coordinated year after year.

Tax law and limits change every year; your plan should keep pace. A brief annual review ensures you are using the current rules to your advantage rather than planning with outdated numbers. Want this applied to your numbers? Schedule a complimentary introductory call with a San Diego fee-only fiduciary. Schedule a Free Call