or through this free financial adviser matching tool, from our ad partner SmartAsset.<\/a><\/p>\nHere\u2019s what eight personal finance experts say investors need to know for the year ahead \u2014 and how to prepare for these changes.<\/p>\n
Retirement contribution limits are going up<\/p>\n
The IRS announced that contributions to 401(k)s, 403(b)s, Thrift Savings Plans and governmental 457 plans can be maximized to $24,500, up from $23,500 in 2025. Catch-up contributions increased to $8,000 for those aged 50 and older. <\/p>\n
Additionally, \u201ca brand-new rule for 2026 will require certain high earners to make catch-up contributions to a designated Roth account,\u201d adds Ashley Weeks, VP and wealth strategist at TD Bank. \u201cIf an employee earned over $150,000 in wages in 2025, their catch-up contributions to that employer\u2019s retirement plan in 2026 must be made on a Roth basis. While a Roth account provides tax-free growth, contributions do not yield a tax deduction, which high earners likely prefer during peak income years.\u201d<\/p>\n
David Johnston, partner and wealth management adviser at OnePoint BFG Wealth Partners, believes that this new rule will work in favor of those who qualify. \u201cIt essentially makes higher earners do what they ought to be doing already: passing on today\u2019s tax deduction to enjoy tax-free distributions tomorrow. We spend so much time talking about asset allocation \u2014 this shift adds meaningful tax diversification to a portfolio \u2014 a vital piece of a retirement income planning strategy,\u201d he says.<\/p>\n
But before maxing out retirement contributions, Devin Miller, CEO and co-founder at SecureSave, advises investors to have a strong financial foundation and emergency savings in place. \u201cWithout that buffer, unexpected expenses often lead to 401(k) loans, early withdrawals or new debt which can undo the benefit of higher limits. Emergency savings accounts help people stay invested long term by handling short-term surprises, which becomes even more important as markets and rates shift.\u201d<\/p>\n
Interest rates are expected to drop this year<\/p>\n
Pros predict that interest rates will fall in 2026. Goldman Sachs Research predicts Fed rate cuts in March and June, and TD Economics estimates that the next rate cut will be in the middle of 2026.<\/p>\n
This comes amid three rate cuts in 2025. \u201cEssentially, it has become exceedingly difficult to maintain spending power with funds placed in demand deposit products like savings accounts and money markets,\u201d says Weeks. \u201cInflation can upend the best retirement plans. Savers and retirees who have no tolerance for principal losses may need to consider products that provide a higher yield in exchange for time, like CDs, fixed annuities and even treasuries.\u201d<\/p>\n
Of course, it\u2019s hard to predict rate cuts and what exactly they might mean for consumers. \u201cOne should closely monitor the yield and curve of items, such as the 10-year treasury compared to the Fed funds rate, to consider if pricing and interest rate anticipation is already factored or not,\u201d says certified financial planner John Jones, an investment adviser representative at Heritage Financial.<\/p>\n
Elaine King, CFP and founder of the Family & Money Matters Institute, advises investing with caution instead of parking money in cash when interest rates are lower. \u201cThis means long term growth in assets that can offer a higher compounding number over time; this will come with caution due to an increased risk.\u201d<\/p>\n
For her part, Elizabeth Hale, founder of eeCPA, says, \u201cwe are already telling clients to call their lenders sooner rather than later because many loans include one-time float-down options that tend to get overlooked,\u201d she says. \u201cOn the personal side, if rates come down and housing inventory keeps improving, 2026 could be the year where continuing to rent stops making sense for some households. The common thread is simple. This is a year that favors people who stay engaged with their finances.\u201d<\/p>\n
Trump\u2019s One Big Beautiful Bill introduces a new deduction that could help some people over 65<\/p>\n
Each year, the IRS adjusts standard deductions due to inflation. For many tax-filers, this could mean a higher refund. For the 2025 tax year, the standard deduction amounts include $31,500 for married filing jointly and surviving spouses, $15,750 for single and married filing separately, and $23,625 for heads of household, all with a slight increase from last year. <\/p>\n
\u201cOne of the new and possibly more impactful deductions is for qualifying taxpayers over the age of 65,\u201d says Bernal. \u201cThere is a temporary deduction of $6,000 for you or your spouse.\u201d Introduced in Trump\u2019s Big Beautiful Bill, this provision will run through 2028 and is taken in addition to standard deductions for seniors. The maximum amount is $12,000 if married couples file jointly and are above the age of 65. But, this deduction phases out for taxpayers with incomes above $75,000 for single filers and $150,000 for joint filers. <\/p>\n
That said, \u201cfor investors, the key is understanding that tax efficiency happens at the portfolio level, not just on your tax return. Maxing out tax-advantaged accounts, being intentional about where different assets are held and planning charitable or legacy goals proactively can have a bigger impact versus chasing individual deductions,\u201d says Wendy Li, CIO and Co-Founder of Ivy Invest. <\/p>\n","protected":false},"excerpt":{"rendered":"A brand new year comes with new resolutions, new opportunities \u2014 and new changes to your finances. Aside…\n","protected":false},"author":3,"featured_media":480919,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[8392,217879,64,11890,217417,38360,12024,57,210,267,2177,216963,1269,255,3234,190263,708,5660,67,132,68],"class_list":{"0":"post-480918","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-banking","9":"tag-banking-credit","10":"tag-business","11":"tag-commentary","12":"tag-commentary-opinion","13":"tag-credit","14":"tag-economic-news","15":"tag-general-news","16":"tag-health","17":"tag-interest-rates","18":"tag-monetary-policy","19":"tag-mpsmartasset","20":"tag-opinion","21":"tag-personal-finance","22":"tag-political","23":"tag-political-general-news","24":"tag-retirement-planning","25":"tag-synd","26":"tag-united-states","27":"tag-unitedstates","28":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115810696047239338","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/480918","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=480918"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/480918\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/480919"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=480918"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=480918"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=480918"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}