Six Tips for Retirees and Savvy Savers
This episode covers six financial planning topics for 2026, including RMDs, Roth conversions, and catch-up contributions for high earners. Chris Wagner also discuss strategies for charitable giving, beneficiary designations, and updated 401(k) and HSA contributions limits.
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This discussion is with Vector advisor Chris Wagner.
Summary
Get a head start on your financial goals for 2026! In this episode, Chris Wagner, Wealth Advisor at Vector, shares six financial planning topics for the year ahead.
Financial Planning in the New Year
1. 73+ in 2026? Plan for Required Minimum Distributions (RMDs) from pre-tax accounts
2. Maximize Giving with Qualified Charitable Distributions (QCDs)
3. Roth Conversion for tax-free growth once in a Roth IRA
4. Beneficiary Designations – Reminder to review and update
5. Fund a Donor-Advised Fund (DAF) with appreciated investments
6. Contribute to a 401(k) or HSA: Updated Limits in 2026
Plus, New Catch-Up Contribution Rule for High Earners
If you’re age 50 or older and earned more than $150,000 with the same employer last year, all of your 401(k), 403(b), or 457(b) catch-up contributions must go into a Roth 401(k) account. 2026 is a transition year for this rule, with full enforcement starting in 2027. Check with your employer or retirement account custodian to learn if your plan is eligible.
Whether you’re planning for retirement, looking to optimize your tax strategy, or simply want to stay informed about the latest changes, Vector is here to help.
Happy New Year!
Chapters
0:00 - Introduction
0:26 - Required Minimum Distributions (RMDs)
1:01 - Charitable Giving
1:45 - Roth Conversions
2:15 - Beneficiary Designations
2:43 - Gifting & Donor-Advised Funds
3:34 - 401(k) & HSA Updates for 2026
5:05 - Regulatory & Disclaimer
Contact Us or Schedule an Intro Call
These discussions aim to spark dialogue about enhancing retirement readiness and making more informed financial decisions. At Vector, we delve into the nuances of scenario planning, offer insights and guidance tailored to each client's unique circumstances. If you or someone you know is pondering their financial future or seeking clarity on their retirement plan, we're here to help.
Transcript
(adapted for readability with ai)
Introduction
I'm Chris Wagner, Wealth Advisor at Vector Wealth Management. As we look ahead to 2026, it's a great time to review key strategies to help position your finances for the year ahead. In this video, I’ll share six practical financial planning tools to consider as you start the new year.
Required Minimum Distributions (RMDs)
First, let’s talk about required minimum distributions, or RMDs. If you turn 73 in 2026, this is your first year you’ll need to take a distribution from your pre-tax retirement accounts, such as an IRA, 401(k), or SIMPLE plan. The IRS requires you to withdraw a percentage, pay tax on it, and then decide whether to spend, save, or reinvest the rest.
From 2026 onward, you’ll need to take RMDs annually. Timing matters, so consult your advisor. The deadline is December 31st, or April 15th of the following year for your first RMD.
Charitable Giving
Second, charitable giving. If you’re over 70½, you can make qualified charitable distributions (QCDs) directly from your IRA. This allows you to send funds to a charity without paying tax on that amount. While you won’t see a tax deduction, you avoid paying future taxes on those dollars since they go directly to charity. Once you’re 73 and required to take a distribution, the amount you give to charity will offset your RMD dollar for dollar.
For example, if your RMD is $25,000, you could give $12,000 to charity and only pay tax on the remaining $13,000. This is a great way to reduce taxable income while supporting causes you care about. In 2026, you can give up to $111,000 to charity via QCDs.
Roth Conversions
Third, Roth conversions. This strategy involves moving money from a traditional IRA or other pre-tax retirement account, like a 401(k), into a Roth IRA. Once converted, all qualified withdrawals from the Roth IRA are tax-free, including earnings. However, the amount converted is treated as taxable income in the year of conversion.
As always, talk to your advisor about whether this makes sense for you.
Beneficiary Designations
Fourth, review your beneficiary designations. The new year is a great time to make sure your IRA, trust, and other accounts reflect your current wishes, whether that’s family members or charitable organizations. Naming a beneficiary means those assets pass directly to that person upon your death, bypassing probate.
Account designations override the instructions in a will.
Gifting & Donor-Advised Funds
Fifth, gifting and donor-advised funds. The annual gift tax exclusion remains at $19,000 per person. If gifting is part of your strategy, this is an excellent way to transfer wealth without filing a gift tax return. If you’re not yet 70½ and not eligible to make QCDs, consider a donor-advised fund (DAF).
This lets you make a tax-deductible contribution now, in the form of cash or securities, to a DAF account and then distribute funds to charities over time. Gifting appreciated securities—like stocks, ETFs, or mutual funds with large unrealized gains—lets you avoid capital gains tax and get an immediate tax deduction, while moving assets out of your estate for future charitable gifts.
401(k) & HSA Updates for 2026
Sixth, 401(k)s and HSAs for 2026. The standard 401(k) contribution limit for employees under 50 is $24,500. If you’re 50 or older, you can add a catch-up contribution of $8,000. There’s also a special catch-up for ages 60 to 63 that allows up to $11,250 extra if your plan permits.
A big change starting January 1, 2026: high-earning participants age 50+ who made more than $150,000 in the prior year at the same employer must direct all catch-up contributions in their 401(k), 403(b), or 457(b) plan toward Roth accounts. 2026 is a transitional year, with formal compliance enforced in 2027. If your employer does not offer a Roth component, you are ineligible to make catch-up contributions, so check with your employer.
Don’t overlook health savings accounts (HSAs) in 2026. Contribution limits are $4,400 for individuals and $8,750 for families, with an additional $1,000 catch-up for those over 55.
The new year is a perfect time to review your finances, set goals, and get organized. Ready to take the next step? Connect with Vector Wealth Management to schedule a conversation or introduce yourself. Have a great year, and thanks for watching.
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