7 Financial Steps to Take in January to Start 2026 Off Right
The start of a new year brings more than resolutions; it’s the perfect time to set your financial foundation for success. January offers a unique window of opportunity to take specific financial steps that can impact your wealth throughout 2026 and beyond—especially if you itemize your taxes. Whether you’re approaching retirement, growing your business, or building your family’s legacy, these seven steps will help you begin the year with clarity and confidence. Here’s a checklist to help you follow along.
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1. Make Prior Year IRA Contributions Before the Deadline
Why it matters: You have until April 15, 2026, to make IRA contributions for the 2025 tax year—but waiting until the last minute can mean missed opportunities.
Making your prior year contributions in January gives your money more time to grow tax-deferred. It also helps you plan more strategically for your current-year contributions and provides a clearer view of your overall retirement savings trajectory.
Keep in mind that Roth IRA eligibility is subject to income limits. For 2025, the phase-out ranges are $150,000-$165,000 for single filers and $236,000-$246,000 for married couples filing jointly. If your income has grown, you may need to explore backdoor Roth strategies or traditional IRA contributions instead.
2. Understand the New Catch-Up Contribution Rules
Why it matters: Starting in 2025, a significant change will affect high earners making catch-up contributions to their employer retirement plans.
If you’re 50 or older and your wages exceeded $150,000 in the previous year, your catch-up contributions must now go into a Roth account rather than a pre-tax one. This means you’ll pay taxes on those contributions now, rather than in retirement.
It’s not necessarily bad news—it’s an opportunity to get Roth savings into your retirement plan. However, it does require planning, especially if you weren’t expecting the immediate tax impact. January is the ideal time to adjust your contribution strategy and discuss with your tax advisor how this change affects your overall tax picture.
Consider making a lump-sum contribution for the current year if cash flow allows. This maximizes your time in the market and simplifies your planning for the rest of the year.
3. Adjust Your RMD Strategy for 2026
Why it matters: Required Minimum Distributions continue to evolve, and your distribution strategy should too.
If you’re subject to RMDs, January is the time to calculate your 2026 requirement and decide on your distribution schedule. While you have until December 31 to take your full RMD, spreading distributions throughout the year can help with tax planning and cash flow management.
Recent changes have adjusted RMD ages—currently 73 for those born between 1951 and 1959, and 75 for those born in 1960 or later. If you’re approaching these milestones, now is the time to build a drawdown strategy that balances your lifestyle needs with tax efficiency.
Remember, the shift from wealth accumulation to wealth distribution isn’t just about required minimums—it’s about creating a sustainable income strategy for your retirement years.
4. Get Ahead of Tax Season
Why it matters: Waiting until tax documents arrive in February puts you behind. Proactive preparation helps you avoid stress and potentially find opportunities you’d otherwise miss.
Start by organizing your records now. Create a system for collecting tax documents as they arrive—investment income statements, 1099s, business expenses, and charitable contribution receipts. Most financial institutions won’t post year-end information or issue 1099 forms until late January or early February, but you can prepare your record-keeping system now.
If you worked with us on any tax-loss harvesting or Roth conversions in 2025, make sure those transactions are properly documented. These strategic moves require accurate reporting to capture their full benefit.
5. Review 2026 Contribution Limits and Tax Brackets
Why it matters: Contribution limits and tax brackets typically adjust for inflation each year, creating new planning opportunities.
For 2026, contribution limits have increased across most retirement accounts. Traditional and Roth IRAs have a contribution limit of $7,500 ($8,600 if you’re 50 or older). Employer retirement plans like 401(k)s allow $24,500 in elective deferrals ($32,500 with catch-up contributions for those 50+, and $36,000 for those between 60-63 years old).
Tax brackets have also adjusted for inflation, which means your effective tax rate might have changed even if your income stayed relatively stable. This is particularly relevant if you’re considering Roth conversions, timing income recognition, or making charitable contributions.
January planning gives you the full year to optimize your contributions and take advantage of any favorable tax positioning. This is especially valuable if you had a lower-income year in 2025 or expect higher income in future years.
6. Plan for Life Transitions: Turning 65, Retiring, or Changing Jobs
Why it matters: Major life transitions come with financial implications that require advance planning—not last-minute scrambling.
Turning 65? Medicare enrollment deadlines are strict, and missing them can result in permanent penalties. You’ll need to coordinate Medicare with any existing health coverage and make decisions about Parts A, B, D, and supplemental coverage. These choices affect both your healthcare access and your budget.
Retiring this year? The transition from saving to spending requires a comprehensive drawdown strategy. You’ll need to consider how to sequence withdrawals from different account types, manage healthcare costs until Medicare eligibility, and potentially time Social Security claiming. Starting these conversations in January gives you time to implement a thoughtful strategy rather than making rushed decisions.
Changing jobs or moving? This creates opportunities and considerations around your employer retirement plan, stock options, deferred compensation, and potentially state tax implications. A job transition is an ideal time to consolidate old retirement accounts and ensure your investment strategy still aligns with your goals.
If any of these transitions are on your horizon, let’s connect sooner rather than later. These decisions are too important to leave until the last minute.
7. Schedule Your Annual Financial Review
Why it matters: Your financial plan should evolve as your life evolves—and an annual review ensures you stay on track.
Think of January as your financial planning “new year.” It’s the ideal time to review what worked and what didn’t in 2025, celebrate your progress, and recalibrate your strategy for 2026.
During your annual review, we’ll examine your portfolio performance, assess whether your risk tolerance has changed, review your tax efficiency, and ensure your estate planning documents are current. We’ll also discuss any life changes—expected or unexpected—that might affect your financial picture.
This isn’t about making dramatic changes for the sake of change. It’s about staying informed, making adjustments where needed, and remaining confident in your financial future.
Take Action This January
Financial planning isn’t about perfection—it’s about making informed, intentional decisions that move you closer to your goals. These seven steps provide a framework for starting 2026 with clarity and purpose.
You’ve worked hard to build your wealth. Let’s make sure it works hard for you this year and for decades to come.
Ready to discuss your 2026 financial strategy? We’re here to help you navigate these decisions with confidence.
Complete the form below to schedule your consultation today, or call us at 602-899-2266.
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Any opinions are those of Chris Hilyer, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation
