Experts share ways to get your retirement savings prepared for the new year.
Key Takeaways by Bloomberg AI
- Experts say there are simple ways to up your retirement savings game, such as fine-tuning taxes, adding to your mix of investment accounts, and exploring other financial planning strategies.
- To revamp your savings strategies for 2026, consider steps like making "catch-up" contributions to an IRA or 401(k), adding to your mix of investment accounts, and doing a cost audit to be aware of fees.
- For 2026, note new "catch-up" rules, plan for Roth conversions, and beef up cash reserves to keep from needing to take on credit card debt or borrow from a 401(k) in case of a job loss.
There’s still time to make smart retirement moves before the end of the year — and revamp your savings strategies for 2026.
Whether you’re just entering the workforce or nearing the end of your career, experts say there are simple ways to up your retirement savings game. That could range from fine-tuning taxes to adding to your mix of investment accounts to exploring other financial planning strategies.
Here are steps you can take before the end of the year and ways to prepare for 2026:
Savings Moves
‘Catch-up’ on contributions. Those who will be 50 or older by year-end can make extra “catch-up” contributions to an IRA or 401(k). With an IRA, older workers can add an extra $1,000 on top of the regular limit of $7,000 in 2025. With 401(k)-type plans, savers can contribute an extra $7,500 in addition to the standard 2025 limit of $23,500. If a 401(k) saver is between age 60 and 63, they can add up to $11,250 in catch-up contributions in 2025. There’s not a ton of time to take advantage of this, but in the remaining pay periods before year-end, workers could jack up their 401(k) savings rate significantly to get more into the account.
Add to your mix. Many investors think about having a range of asset classes like stocks and bonds, but diversification can also involve investment accounts with different tax treatments. Having a taxable brokerage account, a pre-tax 401(k) or IRA and an after-tax Roth account makes a lot of sense, experts say. To open a Roth, you must fall within certain income limits. The accounts are funded with after-tax money, so you don’t pay tax when you withdraw your contributions. Roths are particularly useful for younger savers who can watch stocks grow tax-free over decades. And later in life, when pulling money from a pre-tax 401(k) or IRA contributes to a big tax bill, being able to draw money from a Roth instead can be helpful.
Do a cost audit. Many people aren’t aware of the fees they pay for funds in workplace retirement savings plans. If you invest in actively managed mutual funds, there may be a lower-cost index fund in the plan that follows a similar strategy. “Ideally, most holdings in your 401(k)’s menu would have fees of 0.50% or less,” said Christine Benz, director of personal finance and retirement planning at Morningstar. “Fund costs of more than 1% are a red flag that you’ve got a high-cost plan.”
Douglas Boneparth, founder of Bone Fide Wealth, tells clients that costs are like friction, and “the less friction, the farther your money travels.” Another thing to be aware of is opportunity cost. If you let dividend payments and other cash sit uninvested in your brokerage account’s cash option, you could be earning next to nothing.
Tax Tips
Harvest losses. Anyone who took gains on mega-cap tech stocks they’ve held for a few years is sure to have big profits — which means capital gains taxes. Capital gains rates are 0%, 15% or 20%, depending on your income level. Most people pay 15%, which applies to those with incomes between $48,351 and $533,400. For married couples filing jointly, the range is $96,701 to $600,050.
Tax-loss harvesting is a way to offset capital gains by booking portfolio losses. You just need to make sure you don’t run afoul of the wash-sale rule, which requires that the same security, or what the IRS calls “a substantially similar” security, not be bought within 30 days before or after the sale.
If you run afoul of that rule, your loss will be disallowed. There are ways around this — if you are selling a health-care stock, say, and want to maintain exposure to the sector via a diversified health-care exchange-traded fund, you can do that.
Tax-loss harvesting lets you offset your gains dollar for dollar. If there are more losses than gains, those losses can offset $3,000 of ordinary income and the rest can be used in a future tax year. Ideally, investors or their advisers would do tax-loss harvesting throughout the year, but for those who haven’t, there’s no time like the present.
Use a donor-advised fund. Being charitable can bring big tax benefits. One way that happens is through donating appreciated securities directly to a donor-advised fund (DAF) where you have an account. DAF accounts are like charitable investment accounts — you get a tax write-off for what you put into them, avoid paying capital gains tax and can invest the DAF money largely as you see fit and watch it grow tax-free while you decide where to send it.
A gift of appreciated stock to DAF can also help reduce your concentration in any individual stock position. “Employer stock is a perfect candidate for a donor-advised fund contribution,” Benz said.
To donate appreciated long-term holdings, you request that securities be transferred directly to the DAF company — many major financial services firms have non-profit DAF arms. The DAF sells the security and credits your account. You can deduct the full market value of the shares on the date of the transfer, for up to 30% of adjusted gross income. If the value is more than that, you can carry it forward for five tax years.
To do this, act soon. The transaction has to settle before year-end, and the high volume of transactions could mean delays. DAF sponsors such as Fidelity Charitable, Vanguard Charitable and Schwab Charitable list cutoff dates for transactions to be sure they fall in 2025. If your brokerage account and the DAF company you use are related, you may be able to transfer online as late as Dec. 31.
Moves for 2026
Note new ‘catch-up’ rules. In 2025, 401(k) catch-up contributions by workers 50 and over could go into traditional pre-tax 401(k) accounts and lower taxable income, no matter their income level. In 2026, workers with income exceeding $150,000 in the prior year will see catch-up amounts go into after-tax Roth accounts, so they will lose that tax shelter.
Plan for Roth conversions. These conversions let you turn some or all of a traditional pre-tax account into an after-tax Roth account. The rub is the income tax you have to pay on the conversion, which can push you into a higher tax bracket. It can be risky to do conversions close to the wire, since they must be settled by Dec. 31. Once you do your taxes and see how far your income is from the next bracket, you’ll have a better idea of whether a conversion makes sense — assuming your 2026 income is likely to be similar to 2025. These transactions can be tricky, so it might be smart to consult a financial adviser or accountant.
Beef up cash reserves. Private sector job creation flat-lined in 2025’s second half, and private employers reported 32,000 fewer jobs in November, according to the ADP National Employment Report. Adding to emergency savings can keep you from needing to take on credit card debt or borrow from a 401(k) if you suffer a job loss. High-yield savings accounts from Marcus by Goldman Sachs and Synchrony offer a 3.65% rate.
© 2025 Bloomberg L.P. This Bloomberg content was legally licensed by AdvisorStream