A new year is a natural checkpoint—especially in retirement. It’s a chance to step back, pressure-test what’s working, and make small adjustments before small issues turn into big ones. The decisions you make now can shape your financial confidence in the months ahead.
Between inflation, tax law changes, and age-based milestones, 2026 brings a few things worth paying attention to.
Here are four areas I’d encourage every retiree (and near-retiree) to review early in the year.
📈 1. Social Security COLA: Helpful, But Not a Strategy
Social Security benefits are getting a 2.8% Cost-of-Living Adjustment (COLA) for 2026. That’s welcome news—but it’s important to frame it correctly.
COLA is designed to keep up, not get ahead.
A few realities to keep in mind:
- COLA helps preserve buying power; it does not increase it
- Healthcare, insurance, and lifestyle costs often rise faster than COLA
- Social Security works best as a foundation, not the entire income plan
The bigger planning question isn’t “How much did my benefit increase?”
It’s “Do my income sources collectively keep pace with inflation over time?”
That usually means coordinating:
- Social Security
- Investment Withdrawals
- Pensions or annuity income
- Inflation-aware strategies built intentionally into the plan
If inflation is moving faster than your income, the distance between the two doesn’t stay small for long.
📞 Let’s talk about how to align your income with inflation. Call us at 805.570.3765 for a personalized strategy.
📜 2. New Tax & Retirement Rules: Small Changes, Real Impact
Every year brings rule tweaks that don’t sound dramatic—but quietly change how planning should be done. 2026 is no exception.
A few updates worth noting:
- Roth-Only Catch-Up Contributions: If you’re over 50 and earn $150,000+ in FICA wages, catch-up contributions must go into Roth accounts (post-tax).
- Expanded SALT Deduction Cap: Temporarily raised to $40,000, but phases out with higher income levels and reverts in 2030.
- Senior Deduction Bonus: If you’re 65 or older, you can now claim an additional $6,000 deduction ($12,000 for married couples).
Individually, none of these break the system.
Collectively, they can influence:
- Whether ROTH conversions make sense
- How withdrawals should be sourced
- Where future tax flexibility is coming from
This is where coordination matters. Rules change. Good planning adapts.
📞 Have questions about these updates? We’re here to help at 805.570.3765.
🧾 3. Retirement Budgeting Spending Plan: Boring, Powerful, Necessary
With rising costs and shifting income strategies, a clear and updated retirement spending plan. They may not be exciting, but they’re one of the most underrated tools in retirement. That isn’t because retirees overspend wildly, but because spending quietly drifts without guardrails.
Make sure to:
- ✅ Account for Inflation: Don’t let increasing prices quietly erode your savings.
- ✅ Reassess Income Sources: Are your withdrawals, pensions, or dividends aligned with your actual expenses? Are you paying taxes on more income than you need?
- ✅ Prevent Overspending: A spending plan curbs “lifestyle creep” and keeps spending intentional.
- ✅ Plan for Healthcare Costs: Medical expenses can derail even well-built plans—budget for both expected and unexpected needs.
Bottom line: Think of it less as restriction and more as clarity. A good plan should let you spend confidently.
📞 Need help building or updating your spending plan? Contact our team at 805.570.3765.
📅 4. Your Retirement Milestones and What They Mean for You
Each year, many retirees reach important age-based milestones that open doors to new options—or bring new responsibilities. Knowing them in advance gives you leverage.
Here are the key retirement ages to keep in mind:
- 50 – Catch-up contributions become available (+$8,000 annually; $11,250 for ages 60–63)
- 59½ – Penalty-free access to retirement accounts
- 62 – Earliest Social Security eligibility (dramatically reduced monthly amount)
- 65 – Eligible to enroll in Medicare (don’t forget to do it)
- 66 or 67 – Reach Full Retirement Age (depending on your birth year)
- 73 – Required Minimum Distributions (RMDs) begin from tax-deferred accounts
The goal isn’t just to know these ages—it’s to make decisions intelligently around them so you:
- Reduce taxes
- Avoid penalties
- Maximize lifetime income
Key Takeaway: Timing mistakes are often far more costly than market mistakes.
📞 Want help preparing for a retirement milestone? Give us a call at 805.570.3765.
🎯 Final Thoughts: Confidence Comes from Planning
A little attention early in the year can prevent rushed decisions later. Whether that means adjusting income sources, reviewing tax strategies, or preparing for upcoming milestones, the goal is the same:
Clarity, flexibility, and fewer financial surprises.
Your retirement plan is more than just numbers on a page—it’s your life, your goals, and your legacy.
If you’d like to walk through how these updates apply to your situation, I’m happy to help.
Call 805.570.3765 to schedule your complimentary retirement review—and start 2026 with a plan you believe in.
