As 2025 winds down, retirement planning is shifting under three big spotlights: taxes in 2026, retirement plan rule updates, and Medicare drug-cost changes. Here’s a practical, client-friendly guide you can publish — plus talking points to spark action before year-end.
1) The 2026 Tax Shift: Why “Do Nothing” Could Cost More
Unless Congress acts, many individual tax provisions from the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire after December 31, 2025. That likely means higher marginal brackets and a lower standard deduction in 2026 for many households, along with other changes (e.g., SALT cap, estate exemption reversion). Advisors should frame 2025 as a last, best window to optimize lifetime taxes. Tax Foundation+2JPMorgan Chase+2
Client conversations:
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Should we accelerate income/ROTH conversions into still-lower 2025 brackets?
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Any capital gains we want to realize before 2026?
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Are itemizing vs. standard deduction or charitable bunching strategies worthwhile this year?
2) Catch-Up Contributions: Roth Rule Hits High Earners in 2026
Starting January 1, 2026, most plans must treat catch-up contributions for age-50+ high earners (prior-year wages ≥ $145,000, indexed) as Roth (after-tax). The IRS finalized regs in 2025; the transition relief generally ends Dec. 31, 2025. (Final regs allow reasonable, good-faith implementation pre-2027, but the operative date for most plans is 2026.) Action item: audit payroll/plan readiness and coach affected clients on the cash-flow/tax impact. Federal Register+3irs.gov+3benefitslawadvisor.com+3
Client conversations:
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If you’ll be ≥50 and over the wage threshold, your 2026 catch-up will be Roth — does that change net take-home?
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For ages 60–63, confirm elevated “super catch-up” allowances and whether Roth treatment applies. Kiplinger
3) RMDs: Age, Timing & Roths
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RMD age is 73 today (rising to 75 in 2033). If a client turned 73 in 2024, their first RMD was due by April 1, 2025, second by Dec 31, 2025. Keep new 73-year cohorts on schedule. irs.gov+1
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Roth 401(k) RMDs are eliminated (while Roth IRAs never had lifetime RMDs), so consider workplace Roth vs. IRA placement when simplifying distributions. Kiplinger
Client conversations:
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Should we stage multi-year Roth conversions before higher 2026 brackets?
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Are there QCD opportunities to offset RMDs (see #4)?
4) Charitable Giving: QCDs Now Indexed
Qualified Charitable Distributions (QCDs) from IRAs (age 70½+) remain a clean way to give pre-tax, reduce AGI, and potentially lower IRMAA exposure. The QCD limit is now indexed for inflation (began in 2024) — in practice, the IRS posted $105,000 for 2024, and major custodians show higher limits for 2025 (e.g., $108,000). Confirm the current-year cap before publishing numbers on your site. irs.gov+2fftc.org+2
Client conversations:
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If itemizing is unlikely, should we use QCDs to give more tax-efficiently?
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Could QCDs offset part of an RMD?
5) Medicare Part D: Out-of-Pocket Cap Is Here — And Edges Up in 2026
The Part D annual out-of-pocket cap launched at $2,000 in 2025, then $2,100 in 2026 (per CMS draft guidance and multiple plan resources). Also note the deductible maximums ($590 in 2025; $615 in 2026). This is a big deal for retirees on high-cost meds — and it affects cash-flow planning for HSA/retirement income. Medicare+3CMS+3PAN Foundation+3
Client conversations:
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Should we re-shop Part D plans during open enrollment, given the new cap/deductible changes?
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Does the lower drug volatility change cash bucket sizing or annuities vs. bond ladder decisions?
6) Small-Biz Owners & 1099s: Watch Your 199A & Entity Choices
If TCJA sunsets on schedule, QBI (199A) treatment and thresholds become key again in 2026 planning; entity selection and wage vs. distribution splits can swing outcomes. Coordinate with CPAs before year-end 2025. irs.gov
7) A Pre-2026 Checklist You Can Use With Every Retiree
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Tax map 2025→2030: forecast brackets under TCJA-sunset assumptions; prioritize Roth conversions and gain harvesting. Tax Foundation
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Max pretax vs. Roth: decide best mix for 2025 contributions before the catch-up Roth rule starts in 2026. irs.gov
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Update RMD schedule for anyone turning 73 in 2025/2026; verify beneficiary RMDs. irs.gov
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QCD strategy for charitable clients; confirm current-year indexed cap. irs.gov
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Medicare Part D review: run plan comparisons; stress-test budgets with the $2,100 cap for 2026 and $615 deductible max. CMS+1
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Income sources: rebalance cash buckets and guaranteed income in light of lower drug-cost variability.
Compliance
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This material is for educational purposes only and not individualized tax or legal advice. Consult a qualified tax professional.
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Policy details may change through legislation or agency guidance; links current as of publication: IRS, CMS, and non-partisan policy sources cited above.
