I hope you and your family had a wonderful holiday season.

I can’t believe 2025 is already behind us and 2026 is here. Before we know it, 2026 will be in our rearview mirror as well—so enjoy the year with family, friends, travel, and the things you love to do. At the same time, don’t forget to work hard, efficiently and maximize your retirement savings.

Retirement Savings for 2026

For 2026, the 401(k) contribution limit is   $24,500.

• If you are turning   50 or older, you can contribute an additional   $8,000   as a catch-up.
• If you are turning   60, 61, 62, or 63   this year, the catch-up amount increases to   $11,250   instead of $8,000.

Most 401(k) plans offer both   Pre-Tax   and   Roth (after-tax)   contribution options. Many people don’t realize that   there are no income limits for contributing to a Roth 401(k). If your plan offers it, you can contribute regardless of income.
People often confuse   Roth IRAs   with   Roth 401(k)s —income limits apply to Roth IRAs,   not   Roth 401(k)s.

IRA Contributions

For 2026, the IRA contribution limit is   $7,500.

• If you are turning   50 or older, you can make an additional   $1,100   catch-up contribution.

Whether your IRA contribution is tax-deductible depends on your income and whether you (or your spouse) participate in a workplace retirement plan.

Business Owners & Saving for Children

For our business-owner clients with children, one powerful planning strategy is hiring your children and paying them a salary. In 2026, if you pay your child   $16,100 or less, they would owe no federal income tax and could contribute up to   $7,500   to a   Roth IRA. The business owner can deduct the salary as a business expense.

There are strict rules that must be followed for this strategy to work properly, so please consult with your tax advisor. When done correctly, it can be a true win-win.

In Closing

As I wrap up our first newsletter of 2026, I want to thank all of you for another great year. One simple action item:   increase your salary deferral to your company retirement plan by at least 1%. Better yet, max it out if you can.

This is one of the easiest financial moves to make—yet most people never do it. Make it happen in 2026!

Wishing you a happy, healthy, and prosperous New Year.

 

Spencer Neal, C(k)P®, AIF®