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2026 Year-Ahead Planning Guide

New Opportunities to Help Preserve and Grow Your Assets

Our last few outlooks have focused on planning for the seemingly unplannable, but 2026 strikes us as different in several ways, including:

    • Tax laws that were supposed to expire this year have been given new life.

    • New rules may enhance your ability to reduce tax liability and accumulate assets for specific purposes like retirement and your children’s education. 

    Of course, there are still questions to consider when planning your finances. Will the stock market continue to show the strength it has enjoyed in recent years? What about inflation and the issue of affordability that continues to plague consumers?

    Still, 2026 may offer a more solid footing for some financial decision making. Here are a few reasons why. 

    The Lifetime Federal Gift and Estate Tax Exemption was supposed to decrease to $5.6 million per individual and $11.2 million per married couple in 2026. Instead, it was actually increased to $15 million per individual and $30 million for married couples. What’s more, the exemption will be adjusted for inflation each year.

    What You Should Think About Doing

    These numbers are big enough to convince many families that they will not be affected by estate tax in the future, but that is still no reason to neglect this important area of your finances.

    • Depending on where you live, you may be subject to estate tax at the state level. For example: 

        • New York imposes a tax on estates valued at more than $7.49 million.
        • Massachusetts’ threshold for estate tax is only $2 million.
        • A number of other states also impose estate tax with exemptions that don’t equal the increased federal exemption.

    • Avoiding unnecessary taxation is not the only reason to plan your estate or revisit your estate plan.

        • Are you concerned that one or more of your heirs may not have the financial acumen to manage their inheritance prudently?
        • Is there a child with special needs in your family who will require ongoing care for an indeterminate period of time?
        • Do you own a successful business that you’re planning to leave to one of your children? What about his or her siblings? Will they resent your decision, and is there anything you can do to provide them with an equally significant legacy?

    • Estate planning can address a wide variety of concerns and ensure that your assets will be used as you intend them to be. Through the judicious use of trusts, beneficiary designations, lifetime giving programs, and other techniques, you can increase gifts to charitable organizations, reduce family turmoil and family rifts, and provide for heirs who may not have the experience or inclination to manage assets.

    • Probate is another significant factor you should consider. Imagine you or your spouse has a financial account that is not owned jointly. If the owner of the account passes, their state’s probate process could hold up transfer of assets to heirs for months. To avoid these delays, consider establishing what is called a revocable trust. With this approach, you appoint a trustee to manage assets for the benefit of your beneficiaries. Assets in these trusts pass directly to beneficiaries without passing through the probate process.

      In addition, these trusts are portable. In other words, they transfer to surviving spouses upon the passing of the original grantor.

    • One more note: Once you establish a revocable trust, don’t neglect to place your assets in it. These may include your home, as well as your investments.

    Finally, consider consulting with your attorney, accountant, and advisory team to establish or revise your estate plan so that it reflects your objectives, minimizes taxes, and accounts for changing legal requirements.

    Income Tax rates were supposed to revert to 2017 levels. Instead, they will remain the same as last year, with a top tax rate of 37%. In addition, you should be aware of the following changes to the tax code:

    • The standard deduction has been increased to $16,100 for individuals and $32,200 for married couples filing jointly.

    • Taxpayers over age 65 can add an additional $2,050 to their standard deduction for tax ($1,650 if filing jointly).

    • Deductibility of state and local taxes has been raised from a maximum of $10,000 in 2025 to $40,000 in 2026. This cap will increase by 1% each year through 2029, but in 2030 it is scheduled to reset back to the $10,000 limit.

    • Charitable donations will now be deductible, regardless of whether you take the standard deduction or itemize.

        • If you take the standard deduction, you will be able to deduct up to $1,000 in donations for single taxpayers and $2,000 if you file jointly.
        • If you itemize, your charitable contributions are deductible once they exceed 0.5% of your adjusted gross income.

    What You Should Think About Doing

    • An increase in the standard deduction is good news for taxpayers, especially those who live in high-tax states like New York and New Jersey. Now that deductibility of state and local taxes has been increased, however, you might consider foregoing the standard deduction in favor of itemizing expenses on your tax return. With this approach, you might also be able to deduct a greater amount of charitable contributions, once they exceed 0.5% of your adjusted gross income.

    • To maximize charitable contributions, even if your contributions do not exceed 0.5% of your adjusted gross income, consider bunching several years’ worth of contributions in a donor-advised fund. By doing so, you may achieve a larger deduction to help offset the income you earned in banner years for your career and investment portfolio.

    These examples are for general informational use only. You should discuss any strategies you are contemplating with your accountant and advisory team to determine whether they are viable, given your overall financial situation.

    401(k), 403(b), IRA, and Roth IRA contribution limits have been increased.

    Contribution Type

    2026 Limits

    2025 Limits

    401(k) and 403(b) plans

    $24,500

    $23,500

    IRAs and Roth IRAs

    $7,500

    $7,000

    Catch-up contributions (for participants who are age 50+)

    $8,000

    $7,500

    Catch-up contributions (for participants who are age 60-63)

    $11,250

    $7,000

    529 Plans can help you pay for education expenses beyond college tuition now. Key updates include:

    • The amount of 529 Plan funds you can use to meet elementary and secondary school expenses has been increased from $10,000 to $20,000 a year. Qualified withdrawals are tax-free when used for qualified expenses as defined by federal law.

    • These funds can be used to pay not only for tuition, but also for expenses such as books, tutoring fees, online learning materials, and standardized testing fees.

    If you participate in a Health Savings Account (HSA), you should be aware that you will be able to make a larger contribution in 2026. Specifically, you may now contribute as much as:

    • $4,400 if you participate in a qualifying individual high-deductible health insurance plan

    • $8,750 if you participate in a qualifying family high-deductible health insurance plan

    Participation in an HSA is only available to those who participate in high-deductible health insurance plans. The definition of what constitutes a high-deductible plan has changed this year. To qualify, the plan must have a deductible of $1,650 or more for individual plans and $3,300 or more for family plans.

    Take advantage of HSA increased contribution limits as funds are allowed to accumulate tax-free and withdrawals for medical expenses are exempt from federal, state, and local taxes.

    The Trump administration has established a pilot program for Trump Accounts.

    • Children who are U.S. citizens born between January 1, 2025, and December 30, 2028 qualify for a one-time government payment of $1,000.

    • Children not born within that timeframe but under the age of 18 may participate in Trump Accounts, albeit without the one-time gift. Families may contribute up to $5,000 annually.

    • Contributions are allowed to accumulate tax-deferred but are taxable upon withdrawal.

    The program details described above reflect current federal guidance and are subject to change. To learn more, consult with your advisory team.

    2025 marked the third consecutive year of double-digit stock market returns. Are we poised for higher highs or a dramatic downturn?

    Whatever you believe (or turns out to be true), diversification is an important element of any investment strategy. Diversification is most effective when investing in asset classes that offer uncorrelated returns. In other words, when one asset class declines in value, another may perform positively. The asset allocation attempting to achieve maximum diversification includes stocks, bonds or other fixed income securities, and cash. It may also include:

    • Index funds or index-based securities
      These strategies seek to track the performance of a market index although returns may not replicate the exact performance of that index.

    • Gold or other hard assets
      This category of alternative investments has often proven popular during periods of uncertainty in traditional markets.

    Reach out to your advisory team to determine if these investment types are a good fit with your current asset allocation and risk tolerance. You should also realize that asset allocation does not guarantee a profit or protect against loss in declining markets. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio or that diversification among asset classes will reduce risk.

    • It's not what you make, its what you keep.

    It's an old investment adage that rings especially true for investors in high tax brackets. To increase after-tax returns, talk with your advisory team about such strategies as:

    • Tax-loss harvesting
      With this approach, you can use the unrealized losses in your portfolio to your advantage. By selling a losing position, you realize a loss that can be used to offset any gains you realized elsewhere in your portfolio for tax purposes. In addition to reducing your tax liability, tax loss harvesting offers the opportunity to liquidate holdings that don’t appear favorable and replace them with positions that offer more potential.

    • Capital gains management
      When investors decide to take gains, they often have choices to make. Which positions should they liquidate? Some people simply employ a first-in, first-out approach. They sell the stock that was purchased initially. Consider taking a more discriminating approach by reviewing all the lots of the security in question. By selling the position with the highest cost basis, for example, you may realize a smaller gain but also trigger a lesser tax rate.  As a result, you may enhance your after-tax return.

    Online fraud, climate change – today’s environment is marked by risks that may not have concerned consumers in the past. That’s why a number of property and casualty insurance companies have developed products and programs that can offer such protections as:

    • Cyber Insurance
      This coverage can protect you against losses due to identity theft, online scammers, and ransomware. Business owners are especially vulnerable to these threats, but programs now exist that can not only cover losses, but prevent them before they occur through security training and network vulnerability testing.

    • Parametric Insurance
      As high-tech as it seems, parametric insurance can offer a known degree of protection from such non-high-tech threats as hurricanes, earthquakes, and other natural disasters. Parametric insurance is a type of insurance that provides payouts based on predefined parameters or triggers, such as weather conditions or natural disasters. Rather than indemnifying you against a specific loss, this type of coverage offers payouts based on predefined triggers. Payouts are established when you purchase your policy, and unlike traditional property and casualty insurance, you will typically receive your payout in a more expedited manner following the trigger event.

    Whether these new types of coverage are right for you or not, you should review your overall insurance portfolio annually to make certain it reflects your current concerns and financial status. For example:

    • Check to make certain that you don’t have any gaps in your property and casualty coverage and that coverage limits are adequate. You should also consult with your advisory team to determine whether there might be better options in the marketplace for improving coverage and/or reducing price. We are pleased to report that pricing has stabilized in many parts of the country and that underwriting guidelines have been relaxed in some cases. Florida residents, for example, are seeing a reduction in auto insurance premiums on some products and greater availability of coverage.

    • If you are covered by health and/or disability insurance at work, be aware that many employers are adjusting their group policies in an effort to reduce costs. These adjustments may include higher deductibles and out-of-pocket maximums for employees. If you find you’re affected adversely, take a look at the supplemental voluntary benefits offered by your employer. They may include cost-effective solutions to fill in any gaps in your coverage. In addition, those solutions may be portable. In other words, you can retain them even if you leave your employer.

    • Finally, re-examine any life, health, or disability policies that you’ve purchased on your own. The benefits paid by these policies may have been adequate when you first purchased them, but have they kept pace with current costs? Will they cover not only income replacement but also college tuition for your children and other major expenses?

    Your advisory team is always available to help you determine whether any changes to your holdings might warrant consideration. Property & Casualty insurance is offered through a variety of quality insurance companies that are not affiliated with MML Investors Services, LLC.

    While you may now have opportunities that weren’t available to you in the past, it’s important to understand how to take full advantage of them within the context of your overall finances.

    That’s where your advisory team comes in.

    Your team can help you determine whether any of the developments discussed in this guide might have a place in your financial future and, if so, how to implement them successfully. In addition, your team is available to work with your attorney and accountant on complex tax and estate-planning issues so you have the guidance you need to pursue your goals with greater clarity and confidence.

    This material is for informational purposes only and is not intended to provide, nor should it be relied upon for tax, legal, or investment advice. Tax laws are subject to change, and their application can vary based on individual circumstances. Investment products involve risk, including possible loss of principal. Consult your tax advisor, attorney, or financial professional before making any decisions.

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