Beginning of the Year Money Moves: 5 Strategic Steps to Start 2026 Strong

January is one of the best times to tighten up the basics, spot any new planning opportunities, and make a few targeted “money moves” that can pay off all year. The goal is not to overhaul everything. It is to take five practical steps that connect your day to day finances with the bigger picture: taxes, retirement, investments, and legacy planning.

A helpful backdrop for 2026 planning is that several key numbers and rules have updated for the new tax year, including inflation adjusted tax items and retirement plan limits.

Below are five strategic steps we often encourage clients to address early in the year, along with the most relevant 2026 updates to know.

1) Start with your tax picture for 2026, not last year’s

Most tax surprises come from good things that were not planned for: a bonus, stock compensation, a big distribution, a home sale, or higher interest income. This month is a great time for you to get proactive and keep your plan aligned.

Key 2026 tax updates to be aware of:

• The IRS inflation adjustments increased the standard deduction for 2026, including $32,200 for married filing jointly, $16,100 for single, and $24,150 for head of household.
• The IRS also released 2026 updates tied to a 2025 law the IRS refers to as the “One Big Beautiful Bill” amendments, which is part of why some numbers differ versus prior year expectations.

Checklist for this step:

• Update your income estimate for 2026 (salary, bonuses, pension, Social Security, rental income, interest, dividends, and any expected one time events).
• Review your W 4 and withholding strategy if your income changed, your household has multiple earners, or you itemize some years and not others.
• If you make quarterly estimates, confirm you are on pace early, not after you are already behind.
• If you expect significant investment income, review whether tax efficient positioning (asset location, tax loss harvesting, and gain management) still fits this year.
• If you are charitably inclined, decide early whether you may want to bunch donations or use a donor advised fund in a higher income year.

If you live or work in multiple states, it is also worth noting that many states implement tax law changes effective January 1. Even when federal rules are stable, state rules can shift.

2) Maximize the “easy wins” inside retirement plans for 2026

One of the best beginning of the year money moves is simply setting your retirement contributions correctly and letting the year do the work.

2026 retirement limit updates (important for 401(k), 403(b), 457, and TSP savers):

• The IRS increased the elective deferral limit to $24,500 for 2026.
• IRA contribution limits also increased for 2026, and the IRA catch up amount is indexed.

Action steps to take:

• Increase your payroll deferral percentage now so you are not trying to “catch up” late in the year.
• If you receive a raise in January, consider routing part of the raise to savings before lifestyle spending expands.
• If you use the TSP, review whether your contributions align with your retirement timeline and your broader household plan (especially if you also have a spouse plan, IRA, or brokerage account).
• Confirm beneficiary designations on retirement accounts match your current estate plan and family situation.
• If you are within 10 years of retirement, revisit how your contributions fit with your planned withdrawal strategy, tax bracket goals, and Social Security timing.

3) Prepare for the 2026 Roth catch up rule if you are a high earner age 50+

This is one of the most important retirement planning rule changes taking effect in 2026 because it can change the tax treatment of your catch up contributions.

What is changing:

• Starting January 1, 2026, certain higher earners who are age 50+ will be required to make catch up contributions as Roth in employer retirement plans (when eligible).
• The IRS issued final guidance for implementation, and common summaries reflect a threshold based on prior year wages (often referenced as $150,000 in prior year FICA wages, with indexing details in formal guidance).

Why this matters:

• Roth catch up contributions can increase current year taxable income compared to pretax catch up contributions.
• Roth contributions can also support longer term tax diversification, especially for households that may face higher income in retirement, higher required distributions later, or larger taxable investment income.

Checklist for this step:

• Ask your employer plan administrator whether your plan supports Roth contributions and how catch up will be handled for 2026.
• If you are near the applicable income threshold, model what this change may do to your 2026 tax bill.
• If Roth catch up is required for you, decide whether it still makes sense to contribute the full catch up amount or adjust contributions and redirect extra savings elsewhere.
• Coordinate this with other tax levers, such as charitable giving, capital gains planning, and Roth conversion planning (when appropriate).

4) Rebalance your investments and align risk to your real world timeline

Markets will do what they do. Your plan should have a process. This time of year is an ideal time to reconnect your portfolio to your goals because:

• It is easier to rebalance after year end statements settle.
• You can coordinate trades with tax planning early rather than forcing decisions in December.
• You can confirm your cash needs for the next 12 to 24 months and avoid selling long term holdings at an inopportune time.

Checklist for this step:

• Re confirm your target allocation (stocks, bonds, cash, and other diversifiers) based on your timeline, not headlines.
• Rebalance if any major category is materially off target.
• Review concentrated positions (company stock, one sector, one fund) and decide whether a multi year reduction plan makes sense.
• If you have taxable accounts, consider tax aware rebalancing techniques, such as using new contributions to rebalance, harvesting losses when available, and managing gains intentionally.
• For retirees, revisit the “where do distributions come from” plan so withdrawals remain coordinated with taxes and cash flow.

5) Update your protection planning: cash reserves, debt, and your estate basics

This step is about building stability so your investment plan does not get derailed by normal life events.

Checklist for this step:

• Cash reserve: confirm you have an appropriate emergency fund for your household and job situation (especially if income is variable).
• Insurance review: verify that life, disability, and property coverage matches your current needs, and that beneficiaries are correct.
• Debt strategy: prioritize high interest debt payoff while keeping retirement savings on track. If you refinanced or took on new debt, revisit your payoff timeline.
• Estate and beneficiary review: confirm your beneficiaries on retirement accounts, life insurance, and transfer on death registrations match your current wishes.
• If you have had a recent life change (marriage, divorce, new child, new home, job change), schedule a review of your will, powers of attorney, and healthcare documents.

Even small updates here can help keep the rest of your strategy on track.