Managing New Tax Changes to Optimize Your Financial Plan
Taxes are always complicated — but 2026 adds a few important new twists.
Several tax law changes are taking effect at the same time, and together they can influence how much you save, how much you deduct, and how much of your income is taxed in retirement. The goal isn’t to memorize every rule, but to understand where the changes may affect you and your financial plan.
Catch-Up Contributions: More Savings, Different Timing
If you’re age 50 or older, catch-up contributions remain a valuable way to boost retirement savings. However, for higher earners, the rules have shifted.
Beginning in 2026, workers with wages of $150,000 or more must make catch-up contributions as Roth contributions rather than pre-tax. While contribution limits are higher, Roth contributions don’t provide an immediate tax deduction. Instead, they offer tax-free growth and withdrawals later in retirement.
For those approaching retirement, this creates a tradeoff: higher taxable income today, but potentially more flexibility and lower taxes in the future. This makes it especially important to coordinate retirement savings decisions with overall tax and income planning.
The SALT Deduction: A Meaningful Change for Many Households
One of the most impactful changes for many taxpayers is the expansion of the state and local tax (SALT) deduction.
After being capped at $10,000 for several years, the SALT deduction limit has increased to over $40,000 for 2026, with scheduled increases through 2029. For many households — particularly those in higher-tax states — this may make itemizing deductions worthwhile again.
This is where the chart comes in. The chart illustrates just how dramatic this change is, showing the sharp increase in the SALT cap compared to prior years. Seeing the numbers side by side helps explain why more people may benefit from itemizing instead of taking the standard deduction.
The SALT deduction is much larger than it’s been in years. This increase may allow more households to benefit from itemizing deductions again.
Social Security and Retirement Income: Small Changes, Big Effects
For retirees, tax changes don’t happen in isolation. Income decisions can affect how much of your Social Security benefits are taxable, since those thresholds haven’t been adjusted in decades.
In addition, a temporary “senior bonus” deduction is available for certain older taxpayers, but it phases out as income rises. That means decisions that increase taxable income — even for good reasons — can reduce or eliminate this benefit.
This is why retirement tax planning often requires a more holistic view. A change meant to help in one area can unintentionally affect another.
What This Means for You
- If you’re still working and over 50, review how the new Roth-only catch-up rule affects your current tax situation
- If you live in a high-tax state, consider whether itemizing deductions makes sense again under the higher SALT cap
- If you’re retired or collecting Social Security, be mindful of income changes that could increase the taxable portion of your benefits
- If you’re charitably inclined, the higher SALT cap may create opportunities to be more strategic with deductions
- Remember that some of these changes are temporary, creating a limited window for planning
The Bottom Line
The 2026 tax changes add complexity, but they also reward thoughtful planning. By looking at how these rules work together — rather than reacting to them one at a time — investors and retirees can reduce surprises and make more informed decisions about their financial future.
Copyright (c) 2026 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.
Interested in Working with Us?
If reading this sparked questions about your own portfolio or whether your current allocation is positioned for 2026, let’s talk. You can schedule a 👉PersonalPath Intro Call here now. It’s a simple, no-pressure conversation designed to help you understand where you stand — and what steps may support your goals in the year ahead.
