As we move deeper into 2026, understanding how taxes interact with your financial plan has never been more important. Taxes can quietly erode your investment returns and retirement income — but with some proactive planning, you can keep more of what you’ve worked for.
Here are four smart tax moves to consider this year:
📊 1. Reevaluate Traditional vs. Roth strategies
Deciding where to hold your retirement assets — Traditional (tax-deferred) versus Roth (tax-free) — can have long-term implications:
- Traditional accounts reduce taxable income today, but withdrawals in retirement are taxed.
- Roth accounts don’t reduce current taxable income but allow tax-free withdrawals later.
With potential changes to tax brackets and retirement spending patterns, a mixed strategy might offer greater flexibility and tax efficiency.
💡 2. Consider Roth conversions at the right time
Strategic Roth conversions can be especially powerful if:
- You expect to be in a higher tax bracket in retirement.
- You have years with smaller taxable income.
- You want to manage RMD impacts later.
Roth conversions — done smartly — can lock in today’s rates and reduce future tax burdens.
📉 3. Use tax harvesting to smooth your gains
Tax-loss harvesting is a simple tactic with meaningful benefits. By realizing investment losses in taxable accounts, you can offset:
- Capital gains from profitable sales.
- Up to $3,000 of ordinary income per year.
- Future gains if carried forward.
It’s not about timing the market — it’s about timing your taxes.
❤️ 4. Don’t forget about health and retirement age planning
Healthcare costs can dominate retirement budgets, and timing of income matters for Medicare premiums:
- Withdrawals can increase Modified Adjusted Gross Income (MAGI) — affecting Medicare costs.
- Planning distributions to avoid IRMAA penalties can save thousands.
And remember: delaying Social Security can increase lifetime income — but tax timing needs to align with that strategy as well.
Bottom line
Taxes aren’t a short-term annoyance — they’re a long-term financial lever. Incorporating smart tax planning into your overall strategy can boost your retirement income, reduce risk, and help your legacy goals. If you’d like help navigating your own tax plan for 2026, we’re here to help.