What’s New for 2026?
Key Points – What’s New for 2026?
- Goodbye 2025, Hello 2026!
- 2026 Retirement Contribution Limits
- Cost-of-Living Adjustment for 2026
- 2026 Medicare Changes
- 2026 Inflation-Adjusted Tax Brackets
- OBBBA Provisions for 2026
- 6-Minute Read | 39-Minute Watch
Goodbye 2025, Hello 2026!
Happy new year! We hope you had a great year in 2025 and are ready to help you with reaching your financial goals for 2026 and beyond. In case you missed it, we just shared some financial planning takeaways from 2025 that can hopefully help you prepare for the new year. Additionally, there are several things that are new for 2026 from a financial planning perspective that we want to make sure you’re aware of. Let’s review what’s new for 2026.
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2026 Retirement Contribution Limits
If you’re still working, how much did you save to your workplace retirement plan in 2025? If you feel like you’re behind on saving for retirement, take note of the contribution limits for workplace retirements plans and IRAs for 2026.
In 2026, 401(k), 403(b), governmental 457, and Thrift Savings plan participants who are younger than 50 years old are eligible to contribute up $24,500. That’s up $1,000 from 2025.
Catch-up and Super Catch-up Contribution Limits
If you’re 50 or older, you’re eligible to save beyond that $24,500 limit in 2026 by utilizing catch-up contributions. The catch-up contribution limit for 2026 is $8,000. But wait! If you turn 60, 61, 62, or 63 in 2026, you can exceed that $32,500 limit as well by taking advantage of super catch-up contributions. Super catch-up contributions were introduced as a provision of the SECURE Act 2.0 in 2025, allowing plan participants ages 60-63 to contribute an additional $11,250. The super catch-up contribution limit is still $11,250 for 2026.
Check out Figure 1 below, which illustrates the impact of maximizing retirement plan contributions, including catch-up and super catch-up contributions.
FIGURE 1 – Maxing Out 401(k) Contributions with Catch-up Contributions
Additionally, there’s another SECURE 2.0 provision regarding catch-up and super catch-up contributions that went into effect on January 1, 2026. If your FICA wages exceeded $150,000 in 2025, your catch-up and super catch-up contributions must be made to Roth accounts.1
IRA and Roth IRA Contribution Limits
The contribution limit for IRAs and Roth IRAs also increased in 2026 to $7,500. If you’re 50 or older, you can make a maximum catch-up contribution to your IRA/Roth IRA of $1,100 in 2026.
Roth IRA Income Limits
However, there are certain income limits to keep in mind if you want to contribute to a Roth IRA in 2026. For single filers, your Modified Adjusted Gross Income must be less than $153,000 to make a maximum contribution. Single filers with MAGI between $153,000-$168,000 will be eligible to make a partial contribution. If you’re married and filing jointly, the phase-out range to contribute to a Roth IRA is $242,000-$252,000 in 2026.
Traditional IRA Deduction Limits
Traditional IRA deduction limits are contingent on whether you and your spouse have workplace retirement plans. There are no income limits for single filers who don’t have a workplace retirement plan or for married couples if neither spouse has a workplace retirement plan. If you don’t fall into either of those categories, take note of the following phase-out ranges for traditional IRA deductions.
- Single filers covered by workplace retirement plan: $81,000-$91,000
- MFJ filers if you’re covered by a workplace retirement plan, but your spouse isn’t: $129,000-$149,000
- MFJ filers if you’re not covered by a workplace retirement plan, but your spouse is: $242,000-$252,000
Cost-of-Living Adjustment for 2026
Speaking of retirement income, let’s shift gears to Social Security. In 2026, nearly 75 million Social Security beneficiaries will receive a 2.8% cost-of-living adjustment to their benefits. Before you get excited about your average monthly benefit increasing, it’s important to remember this cost-of-living adjustment is designed to keep up with inflation.
2026 Medicare Changes
While Social Security and Medicare are two different programs, they are closely connected. Notably, they work together on Medicare enrollment and collecting Medicare premiums. For a full breakdown of Medicare changes for 2026, download a copy of U.S. government’s Medicare handbook, Medicare & You 2026.2
What Is IRMAA?
One component of Medicare that many people don’t realize or understand is IRMAA, which stands for Income-Related Monthly Adjustment Amount. In 2026, Medicare Part B beneficiaries will pay a base rate of $202.90 per month if their income was $109,000 or less for single filers or $218,000 or less for joint filers for 2024. Yes, your Medicare Part B and D premiums are based on your income from two years prior. You can review the 2026 Medicare IRMAA Brackets for Parts B and D in Figures 2 and 3.3
FIGURE 2 – Medicare Part B – CMS.gov
FIGURE 3 – Medicare Part D – CMS.gov
In 2025, the base for Medicare Part B was $185 per month, so the standard premium went up nearly $23 per month even without IRMAA factoring into the equation. IRMAA is an example of a stealth tax. Don’t let IRMAA or any other stealth taxes catch you off guard. Make sure you’re working with a tax professional who understands IRMAA and focuses on forward-looking tax planning rather than focusing solely on tax preparation each year.
2026 Inflation-Adjusted Federal Income Tax Brackets
That leads us right into our next topic for what’s new in 2026. While the tax rates remain unchanged from 2025 to 2026, federal income tax brackets are adjusted annually for inflation. The 2026 tax brackets and other inflation adjustments were announced in October 2025, but remember that you’ll reference the 2025 tax brackets when filing your tax return for the 2025 tax year prior to April 15, 2026.
Initially, the current tax rates from the Tax Cuts and Jobs Act were scheduled to sunset after December 31, 2025, as well. Tax rates would’ve reverted to the pre-TCJA tax rates, which were 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.4 However, they were extended when the One Big Beautiful Bill Act became law on July 4, 2025. So, tax rates will remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Check out the 2026 tax brackets below in Figure 4.
FIGURE 4 – 2026 Tax Brackets – IRS/Nerd Wallet5
2026 Standard Deduction
While tax rates were “permanently” extended — meaning they have no sunset date, but can be changed in the future — there were some provisions of the OBBBA that were temporary. One of the temporary provisions is a bonus standard deduction of $6,000 per individual for taxpayers 65 and older through 2028. The standard deduction amounts for 2026 are $16,100 for single filers, $32,200 for joint filers, and $24,150 for heads of households, so add $6,000 per individual for taxpayers 65 and older).6
FIGURE 5 – Standard Deduction Amounts – IRS
SALT Cap Lifted to $40,000
One other temporary OBBBA provision that we want to make sure you’re aware of is that the SALT cap was temporarily lifted from $10,000 to $40,000 for 2025. It’s set to increase 1% each year until it goes back to $10,000 after 2029. If you’re a high-income earner, there is an income phase-out limit for the SALT Cap that could impact you. You will start to see a decreased SALT deduction limit if your Modified Adjusted Gross Income is more than $500,000.
2026 Estate and Gift Tax Exemption
Effective January 1, 2026, the One Big Beautiful Bill Act increased the federal estate and gift tax exemption to $15 million per individual.
529 Plans and Trump Accounts
529 plans also expanded as a part of OBBBA. There is now a $20,000 annual limit that families can withdrawal from a 529 plan for elementary or secondary education. It was $10,000 prior to OBBBA.
The One Big Beautiful Bill Act also introduced Trump accounts, which are tax-advantaged savings accounts for children under the age of 18. Contributions to Trump accounts can begin being made on July 4, 2026. Up to $5,000 of after-tax contributions can be made to Trump accounts each year until the beneficiary turns 18. Once the beneficiary turns 18, the Trump account becomes subject to IRA withdrawal rules.
What Are Your Financial Goals for 2026?
As you can see, there is a lot that’s new for 2026! While some of these planning opportunities may be exciting depending on your situation, we understand that it can also be overwhelming. It doesn’t have to be overwhelming, though. We’re here to help!
We have prepared a few other resources for you as you strive to reach your financial goals for 2026 and beyond. For 2026 specifically, make sure to review our 2026 Financial Planning Calendar. Additionally, don’t forget to download two of our most popular white papers, our Retirement Plan Checklist and Tax Reduction Strategies (which was just updated for OBBBA).
Stay tuned for more financial education throughout 2026. Whether you have questions about what’s new for 2026 or just want a second opinion about where you stand financially to begin the new year, start a conversation with our team below. Our goal for 2026 is to help you enjoy today with confidence for tomorrow — connecting you with the people and causes you care about most.
Resources Mentioned in This Article
- 10 Steps to Reach Financial Goals
- 7 Financial Planning Takeaways from 2025
- Strategies to Maximize Your 401(k)
- 2026 401(k) and IRA Contribution Limits
- Catch-up Contributions for Your Retirement Plan
- Super Catch-up Contributions: Are You Eligible to Make Them?
- What Is Modified Adjusted Gross Income (MAGI)?
- What Is a Good Monthly Retirement Income?
- Claiming Social Security at 62 vs. 67 vs. 70
- Social Security Administration Announces 2.8% COLA Increase for 2026
- What Is IRMAA? Medicare Income-Related Monthly Adjustment Amount
- 2025 IRMAA Brackets
- 5 Stealth Taxes to Watch Out for
- 2026 Tax Brackets: IRS Makes Inflation Adjustments
- 2025 Tax Brackets: IRS Makes Inflation Adjustments
- The One Big Beautiful Bill Act: What You Need to Know
- New Tax Provisions in the One Big Beautiful Bill Act
- 5 Important Estate Planning Items to Address
- 529 Plans and Planning for Your Family’s Future
- The New “Trump Account:” A Tax-Advantaged Savings Guide
- 2026 Financial Planning Calendar
Downloads
Other Sources
[2] https://www.medicare.gov/publications/10050-medicare-and-you.pdf
[3] https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
[4] https://taxfoundation.org/data/all/federal/2017-tax-brackets/
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.