Taxes, Retirement and What’s Rolling Our Way in 2026

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We bid a fond farewell to our 2025 tax returns. Filed, extended, or amened, may your returns and schedules find a landing place within the hallowed halls of the Internal Revenue Service. This time of year reminds us of two persistent quotes.

“In this world nothing can be said to be certain, except death and taxes”

  • Benjamin Franklin in his 1790 letter to Jean-Baptiste

And less famous, though equally poignant:

“I thought happiness was Lubbock in my rear-view mirror”

  • Mac Davis in a 1980 coming of age classic

Both tell a tale of persistence, moving on, and what comes next. Spend August in a west Texas dust storm and Mac’s words will resonate with the wisdom of a founding father. With 2025 returns setting out the back window, current tax year and retirement plan changes are rising in front of us.

Tax Law Provision Changes: A Quick History

2026 is a year of implementation of a myriad of tax law changes, from both the 2022 Secure Act 2.0 and the 2025 One Big Beautiful Bill Act (OBBBA). While OBBBA lies more freshly in our minds, the Secure Act 2.0 was passed four years ago and we thought it would be helpful to revisit some of the key provisions that are now in front of us for 2026.

The Secure Act 2.0 included ninety provisions incentivizing saving for retirement. These provisions have been implemented gradually since 2023, building a ladder of increased savings options, deferral limits, raising the age retirees are forced to begin retirement benefits and more.

What’s in store the 2026 tax filing year?

The OBBBA provides:

  • Slightly higher standard deductions for Single taxpayers ($16,100), those Married Filing Jointly ($32,200) and Head of Household Filers ($24,150).
  • Increased estate and gift basic exclusion amount of 15 million (from 13.9 million) and continued spousal portability this exclusion.
  • A significant increase of an employer childcare credit, from $150,000 to $500,000 for large businesses and $600,000 for eligible small businesses)[1].
  • The Introduction of TRUMP accounts, a new type of tax deferred child savings account, rolling out in July of this year.
  • Indexed and cost of living adjustments to several other accounts, credits and exclusions.

The Secure Act 2.0 Updates

  • Secure Act 2.0 follows prior provision implementations with additional increases to savings limits, a new rule regarding paper statements and additional coverage in ABLE accounts. This year also changes how high-income savers can make “catchup” retirement plan contributions. Before diving into this year’s changes, one 2025 Secure Act 2.0 element helps kick off a deeper analysis:
  • 2025 Secure Act Auto Enrollment & Auto Escalation Feature –
    • For newer (post 2022) employer retirement plans that allow an employee to contribute towards their own retirement savings (401k and 403b plans) employees are now automatically enrolled in the plan. Prior to this feature, employees were required to choose to participate and fill out enrollment paperwork to participate in their workplace retirement plan. Auto-enrollment requires employees to defer at least 3% of their compensation, increased by 1% annually until deferrals reach 10%.
    • The auto enrollment feature creates an easier onramp for employees, and the auto escalation feature better prepares employees for tomorrow. Requiring employees to “opt out” of a plan rather than “opt into” a plan helps overcome inertia and provides a needed behavioral nudge towards retirement security.

2026 Increased Retirement Savings Limits by Type of Retirement Accounts

Type of Retirement Account Elective Deferral Limit Catch-up Contribution (Age 50-59 or 64+) Super Catch-up Contribution (Age 60-63) Other Contribution
401(k) $24,500 $8,000 $11,250
403(b) $24,500 $8,000 $11,250 $15,000 (lifetime maximum)
457(b) $24,500 $8,000 $11,250 $24,500 (Available three years before plan retirement age – unused amounts from prior years. Can not use with catch-up contributions)
SIMPLE IRA $17,000
($18,100 for small employers)		 $4,000 $5,250
IRA $7,500 $1,100 (No super-catchup contribution)

 

In addition to the above increased employee deferral amounts, employer funded plans such as SEPs, Defined Benefit and Defined Contribution Plans are also subject to higher funding limits[2].  

New 401(k) and 403(b) Roth Catch-up Rules for 2026

Alongside the ability to contribute more into retirement plans, 2026 brings meaningful changes to how high-earning savers can make catchup and super-catchup contributions. Beginning this year, employees who earned more than $150,000 of FICA taxable earnings through their employer in the prior year (2025) are only allowed to make Roth catchup and super-catchup contributions into their employer retirement plans. Employees who earned less than $150,000 are still able to choose between traditional deferred retirement plan contributions and Roth contributions.

There are both rosy and less sweet outcomes of this change. Forcing high-earning savers into Roth accounts eliminates their ability to make above the elective deferral limit tax deductible contributions into a plan. Less tax-deductible contributions will increase current tax burdens. However, assets held within retirement plan Roth accounts are much more tax efficient and flexible than their traditional deferred counterparts.

Example:

In 2025 Kale (59) participated in a 401(k) plan through his employer. Kale earned $300,000 in 2025 and deferred $31,000 into the plan. Kale maximized his 2025 elective deferral contribution of $23,500 and made an additional $7,500 in catch-up contributions.

In 2026 Kale is now 60 and continues to participate in the plan. Kale plans on taking advantage of the super-catch-up provision this year and will maximize his elective deferral of $24,500 and contribute $11,250.

Kale can only deduct the $24,500 elective deferral contribution. He will not be able to defer the additional $11,250, and the $11,250 will be included in Kale’s taxable compensation for the year. However, $11,250 will be contributed as a Roth contribution into the plan.

Both Kale’s 2026 deferred ($24,500) and Roth ($11,250) balances will grow tax deferred. However, after being open for five years, future distributions from Kale’s Roth account will be tax free and not subject to any future Required Minimum Distributions.

Annual Paper Statements

Beginning in 2026, retirement plans are required to provide a paper benefit statement. Statements for defined contribution plans, such as 401(k) and 403(b) plans are required at least once annually. Statements for defined benefit pension plans are required to be mailed once every three years. Providing non-electronic statements is intended to encourage additional employee plan participation and hopefully kickstart conversations around retirement.

Increased ABLE Account Disability Start Date Age

ABLE accounts help eligible individuals with disabilities save for qualified expenses without risking eligibility to certain federal benefits. Beginning in 2026, an ABLE account can be opened for an individual who had a disability begin before age 46. This is a meaningful increase to prior rules around ABLE accounts limiting eligibility to individuals whose disabilities began before 26. An estimated six million additional Americans should now be eligible for ABLE accounts[3].

2026 provides more options for savers. Expanded ABLE qualification, new TRUMP accounts and expanded retirement savings limits set the stage for families setting more money aside for the future. Roth catchup rules could create more tax for high-income pre-retirees today, but additional Roth dollars in retirement pave the way for more elegant tax planning in the future.

We are always ready to help you save for the road ahead. If you want to talk about your retirement plan, ABLE accounts, the new TRUMP account options, or finding a balance between increasing contributions and other financial goals, please don’t ever hesitate to reach out. We are honored to be your financial partner and excited to work with you to face the challenges and opportunities of 2026.

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[1] https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
[2] https://www.irs.gov/pub/irs-drop/n-25-67.pdf
[3] https://www.ablenrc.org/wp-content/uploads/2025/10/ABLECaseSummary-ExpansionOfABLEeligibility.pdf
This article is for informational purposes only and does not constitute investment advice. Past performance is not a guarantee of future results. All investments involve risk, including possible loss of principal. International investments involve additional risks, including currency fluctuations and political instability.