News Archive

"[This alert] summarizes what you must know for your tax return in 2026 if you deferred compensation into and/or received distributions from an NQDC plan in 2025.... Changes in reporting on IRS Form 1040.... W-2 reporting still potentially unclear.... What to do if your company's NQDC plan violates section 409aA.... Mistakes to avoid with filing extensions.... Equity compensation too?"  MORE >>

"[F]or federal employees and other government workers, the decision to convert money from a Traditional TSP to Roth may require more careful timing than the headlines suggest. As 2026 approaches, Roth conversions are still allowed, but the tax planning surrounding them is becoming more complex."  MORE >>

"When Congress created the Federal Employees Retirement System (FERS) in the mid-1980s, it fundamentally changed how federal retirement works. The earlier Civil Service Retirement System (CSRS) relied almost entirely on a large government pension. FERS replaced that approach with a three-part system that resembles private-sector retirement programs. For today's federal employees, retirement planning under FERS requires careful coordination of three sources of income: the basic annuity, Social Security, and the Thrift Savings Plan (TSP)."  MORE >>

"Retirees often rely on simple, hands-off spending strategies ... These approaches require little engagement or complex decision-making and may result in suboptimal spending.... Goal-setting may be the missing driver, where retirees may need new or renewed goals in retirement to motivate more-engaged spending decisions."  MORE >>

"Employers may now allow employees to elect to have fully vested matching and nonelective contributions made to a designated Roth account under a qualified plan, or a Roth SEP IRA or Roth Simple IRA. For tax treatment and income tax purposes, the IRS treats these designated Roth employer contributions as if they were in-plan Roth rollovers ... Because of this reporting treatment, Form 1099-R must be issued for these contributions."  MORE >>

"You should have no problem if you were in only one plan during 2025. Your plan should have automatically blocked you from exceeding the deferral limit. Even if that didn't happen, the plan is responsible for fixing the problem. But you may have a problem if you were in two different plans during the year because you had two jobs at the same time or changed jobs. Since one plan could not be expected to know how much you contributed to the other plan, the burden is on you to keep track of your combined deferrals."  MORE >>

"Roth accounts are the most tax advantageous in retirement, followed by a taxable brokerage account and traditional tax-deferred assets.... Retirees should be careful if they have taxable assets with a really low cost basis. For a lot of households, postretirement, pre-Social Security, and pre-RMD years can be very low-tax years, where you can accelerate withdrawals from a traditional IRA at an advantageous tax rate."  MORE >>

"During the 2026 State of the Union address, President Trump highlighted a new federal program that will provide a government match on retirement savings for millions of Americans. The program is known as the Saver's Match, and it was enacted as part of the SECURE 2.0 Act of 2022. It applies to tax years beginning on or after January 1, 2027."  MORE >>

"When a transactional mistake is made with retirement plan or IRA assets, there is oftentimes a mechanism to correct the error.... [S]ome transactional mistakes have no corrective steps.... Such missteps can create massive tax bills and result in unintended penalties. Many of these 'fatal errors' involve rollovers.... [1] Non-spouse beneficiary rollovers.... [2] Spousal rollover.... [3] Exceeding the one-rollover-per-year rule. "  MORE >>

"Intent alone isn't enough to change beneficiaries on retirement plans.... ERISA requires strict adherence to plan documents, and courts will not honor beneficiary changes made through informal channels like faxes or verbal requests if the plan specifies a different procedure.... Review beneficiary designations after major life events, follow plan procedures exactly, obtain written confirmation, and act promptly." [Packaging Corp. of Am. Thrift Plan for Hourly Emps. v. Langdon, No. 25-1859 (7th Cir. Feb. 2, 2026)]  MORE >>

"For 2025 taxes due in 2026, the Saver's Credit is limited to $1,000 for individuals or $2,000 for married couples filing jointly whose income is less than certain thresholds and who have contributed in the previous year to a ... qualifying retirement plan.... [T]he average amount claimed by taxpayers of all filing statuses via the Saver's Credit in 2022 was $194."  MORE >>

"CPAs are in a great position during the tax filing season to remind individuals of these Roth catch-up requirements, and to remind them to ask their employers if any action is required on their behalf for making any catch-up contributions in the future. Depending on the facts and circumstances, individuals under the age of 50 who expect to have wages above the threshold in the near future may be more inclined to contribute on a pre-tax basis, knowing that the Roth option could be required on a portion of their retirement savings."  MORE >>

"[B]ecause the IRS has already done the work of calculating withdrawal tables meant to gradually deplete a portfolio throughout retirement, the RMD method presents a relatively easy-to-understand strategy that doesn't require special software or decision trees to implement. And with a few simple modifications ... advisors can help their clients customize the RMD method to meet their own needs and ultimately reduce the uncertainty around drawing down their portfolio in retirement!"  MORE >>

"Following annual portfolio loss, don't fully adjust your withdrawal rate for inflation.... Take withdrawals in line with required minimum distributions.... Implement guardrails on your portfolio.... Assume spending declines in line with historical data.... Take a fixed percentage of your portfolio each year.... Take a constant percentage of your portfolio's 10-year average value.... Apply probability-based guardrails to your withdrawals.... Use the Vanguard dynamic spending method."  MORE >>

"Individual(k) plan loans allow you to borrow from your own retirement savings and repay yourself over time without the immediate taxes or penalties associated with a standard withdrawal.... This guide explains how loans work and outlines key 401(k) loan rules and limits[.]"  MORE >>

"Typically, 401(k) withdrawals taken prior to age 59 and 1/2 are subject to an early withdrawal penalty. While some exceptions exist already, a new rule allows savers to tap their 401(k)s early to cover long-term care insurance premiums. There are still restrictions and drawbacks to keep in mind."  MORE >>

"For many retirees, spending more at the beginning of retirement is a top priority. And after spending decades working and saving, retirement can be the perfect time to enjoy the fruits of your labor. Starting with a more generous withdrawal rate can make a meaningful difference in spending early in retirement, when retirees are more likely to be healthy, active, and able to enjoy travel, dining out, concerts, and the like."  MORE >>

"Although they get less play than market shocks, spending shocks can also curb a retirement portfolio's longevity. [The authors] examined the implications of two major types of spending shocks: unanticipated early retirement and uninsured long-term care expenses at the end of life. The former may necessitate spending over a longer period, often with higher healthcare costs in the pre-Medicare years, while the latter can translate into an effective 'balloon payment' toward the end of life."  MORE >>

"[W]orking while receiving Social Security can come with a significant tax drag. If you claim before your full retirement age (currently 67), Social Security benefits are subject to the “earnings test,” a formula that temporarily withholds a portion of benefits if your wage income exceeds certain levels. You may also need to pay taxes on Social Security benefits or surcharges on Medicare premiums, or simply be pushed into higher income tax brackets."  MORE >>

"The average millennial (ages 30 to 45 in 2026) contributes 8.8% of their salary to their 401(k), and their employer contributes 4.6%. Many financial experts suggest a target of 15% in total. Median 401(k) balances for people in their 30s are about $25,000 -- $40,000, while the average, which skews higher, is over $100,000."  MORE >>

35 pages. "What's New: [1] Additional deductions for seniors.... [2] Repeal of the windfall elimination provision (WEP) and government pension offset (GPO)."  MORE >>

"In a recent dispute over a retirement plan beneficiary, the family members of a deceased employee were unable to remove his ex-spouse as the primary beneficiary of his account because he'd faxed the request to have his ex-spouse removed from his accounts to his employer's benefits center instead of following the required procedures to update his beneficiary designation.... It's an outcome that demonstrates how easily beneficiary designations can derail an otherwise thoughtful estate plan, especially for executives with significant assets in employer-sponsored plans."  MORE >>

"The risk that receives the least amount of attention is likely a cognitive decline ... Studies have shown that financial literacy peaks in the mid-50s and declines steadily thereafter, even among those without diagnosed cognitive impairment. The ability to evaluate complex financial investment decisions, recognize fraud, and manage tax-efficient withdrawals diminishes exactly when the stakes are the highest."  MORE >>

"[T]he main advantage of delaying until later in the year is a bit of extra tax-deferred compounding.... The big benefit to taking RMDs as soon as possible is to ensure that you don't forget and risk a penalty.  ... Taking distributions semiannually, quarterly, or monthly, with those distributions equaling the full-year RMD amount, helps ensure that you receive a range of prices for the assets that you sell."  MORE >>

"For the 2025 Form 1040, the IRS has added new lines 4c and 5c, which mostly contain boxes to be checked instead of having to write in a code on the form. Line 4c includes a box for 'Rollover' (Box 1), another for 'QCD' (Box 2), and a blank box (Box 3).... Line 5c includes a box for 'Rollover' (Box 1), another for 'PSO' (Box 2), and a blank box (Box 3). Box 3 should be checked and a word or code should be entered next to Box 3 if another IRS instruction requires it."  MORE >>