Financial Intelligence Newsletter for Q1 2026

As we routinely do, this first Financial Intelligence Newsletter of the year will focus on financial and tax planning considerations for 2026. With the One Big Beautiful Bill Act (OBBBA) passed in 2025, we have been very active on the team considering how the tax law has changed and what these changes will mean for our clients. While the article included in this publication by Brent Yanagida provides universally useful financial and tax information, at Peak we always concentrate on providing planning tailored to our client’s specific situation and circumstances. Although we are not accountants, we will work closely with your outside CPA® to make sure tax planning is an integral part of our wealth management offering.

Our planning team continues to be active in the community. On February 6th, Peak was part of a panel that included 2 attorneys, a CPA®, a long-term care insurance agent, and a Medicare expert that presented on retirement community planning at Balfour in Louisville. It was a well-attended and engaging event, bringing together in one symposium various areas of expertise to answer questions and provide guidance on topics important to seniors. Peak’s specific breakout session at the event involved a case study for a retiree considering a retirement community, with a buildout that included several reports and statements that would be helpful to anyone considering whether they can afford such a move. Stay tuned for more events and activities in the future.

A Financial Planning Update (2026 Challenges and Opportunities)

By Brent Yanagida, CFP®, EA

Before this incredibly mild winter gives way to spring, and you focus more on outdoor projects and summer vacations, this may be a good time to revisit your finances and related financial goals. Any associated challenges can provide obstacles to a successful financial future, but with careful planning, financial goals can still be achieved.

2026 Challenges

2025 provided a continuous stream of news events that would make most years seem mild in comparison, and early 2026 events may make this year even more impactful. Despite all the talk and events surrounding tariffs/global trade, U.S. relations with other countries (including specifically Venezuela, and now Iran), immigration, ongoing political uncertainty, and other global events dominating the news, stock market returns in 2025 exceeded most forecasts and yields on fixed income investments exceeded inflation. As you plan for 2026 and beyond, challenges and headwinds will continue to exist that can impact the markets and your financial goals. Key considerations include: 

• Inflation remains above the Fed target and in the 12 months through December, the Consumer Price Index (CPI) increased by 2.7%. Within the index, key categories of consumer prices increased significantly such as utility (gas) prices (up 10.8%), electricity (up 6.7%), medical care (up 3.2%), and food prices (up 3.1%). On the positive side, gasoline prices and airline fares both dropped by 3.4%, although these costs are trending back up since the start of the Iran war.
• The Federal Reserve reduced interest rates three times in 2025, but further interest rate cuts are on hold pending clarity about inflation, the labor market (which has been under pressure), and policies enacted in Washington. For consumers, there has been some minor relief on interest rates, with mortgage rates and other borrowing costs reduced by a percentage point on average. With borrowing rates still ranging from 6% (30-year fixed mortgage) to 20% (credit card debt), it is still vitally important to save for future expenditures and not be heavily burdened by high interest debt.
• As always, geopolitical events, global trade, congressional or White House actions, and economic indicators will need to be monitored for potential impact on employment, consumer spending, inflation, and financial planning decisions.

2026 Planning Considerations and Opportunities

Despite the uncertainty going forward, most of the same opportunities exist as in previous years to potentially assist you in reaching your financial goals. Most opportunities include strategic saving/investing while working and tactical spending and cash withdrawals while retired or in low-income years. Working with your financial advisor and wealth management team to take advantage of the ever-changing tax laws as you go through certain stages of life will be extremely important in maximizing your financial goal attainment.

Savings and Investment opportunities. Shorter-term cash needs may continue to be best met with historically safe alternatives (e.g., money market funds, short-term Treasury bills/notes, CDs) that are still paying close to a 3.5% annualized interest rate as of the date of this publication. With the current yield curve, bond ladders can still be a key strategy to manage cash flow needs over several years.
For longer-term goals, the equity markets have historically outpaced inflation. The use of AI is allowing corporations to reduce costs, increase productivity, and improve their overall bottom line. A fixed income allocation with government, municipal, and corporate bond holdings should continue to reduce risk of stock market corrections, while also providing yields/returns that can hopefully keep pace with or even exceed inflation as well. Careful planning should be made to invest across different asset classes within the distinct types of financial accounts that provide the best overall long-term after-tax returns while staying within your risk tolerance.

Social Security and Medicare Update. For those currently taking Social Security benefits, the 2026 Cost-of-Living Adjustment (COLA) is 2.8%, which compares to a 2.5% COLA in 2025. This benefit increase can partially be offset by an increase in Medicare premiums with most Part B premiums going up by approximately 10%. For example, the lowest Part B premium is going from $185.00/month to $202.90/month, an increase of $17.90/month. For those over the lowest Marginal Adjusted Gross Income (MAGI) Medicare income bracket, Medicare Part D premiums are increasing by about 6% on average.

Regarding the future of Social Security, the 2025 OBBBA legislation has increased pressure on an already strained Social Security program. Based on the Congressional Budget Office February 2026 outlook, the Social Security trust fund is projected to be exhausted in 2032 (one year earlier than forecasted the prior year). To address this projected shortfall, certain actions or remedies will have to be considered soon, with increased wages subject to payroll taxes, and/or a higher payroll tax rate most often discussed. As of now most workers pay 12.4% of their wages into social security up to $184,500 of earnings (up from $176,100 in 2025). With the health of Medicare also uncertain, one should expect an additional increase in payroll taxes at some point to cover future Medicare obligations as well.

Despite the increased uncertainties of Social Security, for those that are considering retirement, most of the key criteria such as age, health, other sources of cash flow, possible adjustments to benefits if still working prior to full retirement age, spousal benefit considerations (including survivor benefits), and potential tax impacts, should still be the main factors for deciding when to take benefits.

Increased Retirement and Tax Advantaged Savings Opportunities. For those that have not yet reached full retirement, strategic contributions to retirement accounts over time will be most impactful in meeting retirement goals. Eligible contributions can still be made for the 2025 tax year to IRA and HSA accounts by April 15, and to Solo 401(k) and SEP IRA accounts by the date you file your tax return. For 2026, the enclosed “Key Numbers 2026” show maximum retirement account contributions and any related income restrictions. Some listed and additional 2026 key numbers include:

• Maximum 401(k), 403(b), or 457(b) employee “elective deferral” contributions are now $24,500 (up from $23,500 in 2025) for those under 50, and $32,500 (up from $31,000 in 2025) when you include the $8,000 catch-up for those 50 and older. The OBBBA legislation also introduced us to a SUPER catch-up starting in 2025, and continuing as is in 2026, that can be utilized by workers ages 60 to 63 by Dec 31. This allows one to add $11,250 to their 401(k) accounts (rather than the normal $8,000 for being 50 or older), raising their overall contribution limit to $35,750. Once participants turn 64, they revert to the standard age 50+ catch-up contribution limit discussed above. Maximum combined employee and employer contributions are $72,000 (up from $70,000 for 2025) or 100% of compensation, whichever is less. If over 50 but not between 60 and 63, the catch-up allowance brings the total contribution to $80,000 (up from $77,500 for 2025). Total maximum combined contributions for those ages 60 to 63 is $83,250 (up from $81,250 for 2025). Confusing and daunting as it all may be, Peak is happy to provide guidance and assistance tailored to your specific circumstances and contribution limits.
• SIMPLE retirement plans operate under different rules and allow employee contribution limits up to $17,000 in 2026 (up $500 from 2025), plus an additional $4,000 catch-up (up $500 from 2025) for employees age 50 and older or an additional $5,250 (same as 2025) for employees age 60 to 63.
• Eligible Traditional and Roth IRA maximum contributions increase to $7,500 if under 50 (was $7,000) and up to $8,600 if 50 or over, if including the catch-up contribution of $1,100 (was $1,000).
• Although not a retirement account, the triple tax advantaged Health Savings Account (HSA) limits are now $4,400 ($5,400 if owner is age 55 or older) for single plans (a $100 increase). Family plan limits are set at $8,750 ($9,750 if owners age 55 or older), a $200 increase. HSA plans are more available in 2026 mainly due to fewer restrictions on deductibles.

Managing Contributions Between Retirement and Other Accounts.

A critically important planning practice is to try and commit a healthy % of your gross income (we suggest 15% on average) for future retirement expenses. Increasing the % in higher earning years to possibly make up for lesser contributions in lower earning years can be a sound plan. Depending on your stage in life, cash flow needs, marginal tax bracket, and amount already invested, funding strategies can and will change, but in general, the following combination of strategies work best for most workers: 

• Contribute to your 401(k) or another qualified employer plan to at least maximize any employer match. In most cases, this will be a pre-tax contribution.
• If you and/or a spouse are eligible, contribute the maximum to an individual tax deferred IRA or Roth IRA depending on tax bracket and any income limitations.
• If you are able, contribute more to your employer plan, and depending on your earnings and/or your marginal tax bracket, allocate contributions between tax-deferred and any available Roth component.

Note: For 401(k) accounts, a law in effect for 2026 requires that all catch-up contributions for workers 50 and older that earned FICA wages shown on their W-2 of more than $150,000 (indexed for inflation) during the previous year, must be Roth contributions (if available). 403(b) and 457(b) plans have the same requirement; however, special tax-deferred catch-up contributions may still be permitted in such plans. This rule does not apply to self-employed (Schedule C) workers with a solo 401(k).

• For shorter-term goals, especially before retirement (e.g., downpayment on house, major car purchase, home renovation project), one should save and/or invest additional funds in taxable accounts such that retirement accounts do not need to be tapped early, potentially resulting in penalties and/or unexpected taxes. For future college costs, college savings (529) plans should also be funded, although if limited resources are available for funding various types of accounts, we suggest funding your retirement goals first.
• If eligible, fund the triple-tax-advantaged Health Savings Account (HSA) as well. If you have the financial capabilities of not invading the HSA principal for qualified health expenses during your earning years but instead are able to pay for healthcare expenses out of pocket, the HSA can grow tax free if utilized for future healthcare expenses in retirement.

College Savings (529) Plans. These plans remain an excellent way to save for college while providing tax benefits for qualified education withdrawals. Most states offer a state deduction for contributions, with Colorado taxpayers having the ability to deduct up to $26,200 as single filers and $39,200 as joint fillers in 2026. If giving over $19,000 per person in 2026 ($38,000 for married couples), a “gift” tax return would need to be filed, although typically no tax is due. Other incentives exist for account owners that may be offered by state-sponsored individual 529 plans. For example, CollegeInvest offers Colorado account owners a free jump-start college savings program that benefits any child born or adopted in Colorado on or after January 1, 2020. Enroll in the program and receive a $121 gift contribution to your account. For parents who enroll by December 31, 2026, CollegeInvest will also match contributions dollar-for-dollar starting in 2026, up to $500 per year for the first 3 years. For more information, see https://www.collegeinvest.org/first-step/

529 to Roth IRA Conversions. To possibly address the concern of overfunding 529 accounts, the SECURE 2.0 Act allows limited rollovers from a 529 to a Roth IRA under specific conditions: the 529 must be open for at least 15 years, contributions must be at least 5 years old, transfers must stay within annual Roth IRA limits, and the total rollover cannot exceed $35,000 per lifetime. Industry experts note that details on earned-income interaction remain under review, and Colorado legislation has not taken any action on the tax treatment of Roth rollovers. Still, these legislative changes should make 529s even more flexible in the future.

Trump Account Update. This new program created within the OBBBA legislation was summarized in our fall 2025 Newsletter, and we suggested that these accounts could complement existing savings options, such as 529 college savings plans, rather than replacing them. This is especially true if families with newborns can claim the $1,000 federal pilot contribution for children born 2025-2028. The IRS has published Form 4547 to allow for the opening of a Trump Account for a child and claim the $1,000. The easiest way to file is to include Form 4547 with one’s 2025 tax return, due April 15, 2026. Personal contributions to Trump Accounts begin July 4, 2026, and are limited to $5,000 per child in aggregate (with the $1,000 “seed” contribution by the federal government not counting against the $5,000 cap). Employers can also contribute up to $2,500 per child, which does count against this $5,000 cap. This cap will be indexed for inflation beginning in 2027. https://www.irs.gov/forms-pubs/about-form-4547

Updated Tax Planning Opportunities. Depending on your current and future sources of income and deductions, tax planning will always be in flux; however, here are some additional provisions based on current tax laws that may have the most relevance across all demographics:

Auto Loan Interest Deduction. This provision introduced in 2025 within the new tax law is a temporary, above-the-line deduction for interest paid on certain car loans, capped at $10,000. For this deduction to be taken, it must be interest on a loan for a new, personal-use vehicle with final assembly in the United States. Leased vehicles are explicitly excluded. This deduction is aimed at taxpayers with lower MAGI, starting to phase out at $200,000 for married couples and $100,000 for singles, with the deduction fully eliminated when married filers exceed $250,000 and single filers exceed $150,000 of income.

New Charitable Deduction for Non-Itemizers. This new law, also introduced last year with the OBBBA legislation, allows smaller charitable cash contributions up to $1,000 (single filer) or $2,000 (joint filer) to be deducted on a return when taking the Standard Deduction. Unlike charitable donations by itemizers, these gifts are limited to cash/credit card donations only. These donations do not reduce Adjusted Gross Income (AGI) calculations for other deductions and aren’t restricted by income. This deduction, effective in 2026, does not impact the ability for those over 70 ½ to do Qualified Charitable Contributions (QCDs), which can provide the best overall tax savings for larger charitable donations (see below).

Itemizing Deductions on Schedule A. If a tax payor has deductions that exceed the increased Standard Deduction, there are some essential expenses that can increase the overall aggregated itemized deductions on the return, thus reducing overall taxes paid. These important available deductions include the following:

• State and Local Tax (SALT) Deduction. Starting last year and through 2029, the $10,000 cap on claiming an itemized deduction for state and local (including property) taxes paid has now been increased to $40,000 for all but the wealthiest taxpayers, whether filing a joint or single return, with a 1% increase adjustment each year (the 2026 limit is $40,200). 
• Mortgage Interest Deduction. Taxpayers can continue to deduct the interest paid on qualified residences for up to $750,000 in total mortgage debt ($375,000 if filing separately). Any interest paid on first, second or home equity mortgages over this amount is not tax-deductible. Private mortgage insurance (PMI) premiums will be tax-deductible again starting in the 2026 tax year (for taxes filed in 2027); however, this deduction is only fully available for homeowners with an adjusted gross income (AGI) below$100,000 ($50,000 for married filing separately) and is phased out upon reaching $109,000 of AGI.
• Charitable Deductions. For those under 70 ½, larger donations of cash, appreciated stock, and non-cash items may assist a taxpayer in exceeding the Standard Deduction, allowing them to secure an itemized deduction for larger charitable donations. Subject to annual deduction limits, donating appreciated investments (e.g., stocks with a low basis and high current value) to a Donor Advised Fund (DAF) in select years continues to be a viable strategy to maximize charitable deductions over a multiple year timeframe. Note: There is new provision within the OBBBA, starting in 2026, that imposes a threshold on a filer’s itemized charitable contributions. For most, it disallows a donated amount that’s equal to .5% of AGI. As an example, a couple with $200,000 of AGI and planning to itemize deductions could not deduct$1,000 of their charitable donations on their schedule A.
• Healthcare expenses. You can deduct qualified, unreimbursed medical and dental expenses that exceed 7.5% of your Adjusted Gross Income (AGI) for the year. This can include payments for Medicare premiums and long-term care costs, and pre-paid healthcare expenses associated with a retirement community contract.

Other Key Planning Opportunities in Retirement.

Senior Deduction. For those 65 or older with incomes below a certain level, probably the most significant tax legislation implemented last year for 2025 returns (and continuing through 2028) is the ability to claim a $6,000 above-the-line deduction per person ($12,000 total for married filing jointly), regardless of whether the Standard Deduction is taken, or deductions are itemized. Taxpayers aged 65 or older and having modified adjusted gross income (MAGI) of less than $75,000 filing single, and $150,000 filing jointly, may claim the maximum $6,000 above-the-line deduction. This deduction is gradually phased out with higher MAGI up to $175,000 single and $250,000 joint. With this deduction set to expire in 2029, strategies should be considered to maximize this deduction if possible.

IRA to Roth IRA Conversions. During lower taxable income years, which often occur after partially or fully retiring, such conversions can have significant long-term benefits for both the owner and beneficiaries of such accounts. Working with your tax professional and financial planning advisor will be key to understanding when and to what extent conversions make sense. Knowing how a conversion may or may not impact other deductions (e.g., the new senior deduction) and costs (e.g., Medicare premiums) is important to the analysis as well.

Qualified Charitable Distributions (QCDs). For those charitably inclined over age 70 ½, and assuming other financial goals are being met, donating larger cash distributions to charity directly out of a taxable IRA account will often be the best strategy for maximizing charitable deductions, especially when needing to take Required Minimum Distributions (RMDs) without requiring the full distribution to pay for living expenses. QCDs are the only charitable strategy that reduces AGI and that are not impacted by the limitations of charitable deductions when itemizing. Other benefits may occur beyond getting a 100% deduction on your contributions. For example, QCDs may also help maximize the new $6,000 per person senior deductions, avoid the 3.8% Net Investment Income Tax on capital gains and dividends, and possibly keep Medicare premiums at a lower level. The maximum QCDs that can be taken in 2026 is $111,000; however, it is rare that such large RMDs are made. Keep in mind that QCDs from inherited IRAs after age 70 ½ can also count toward an RMD, which can be valuable for adult children inheriting IRAs from parents, who have to take annual RMDs and need to withdraw all funds within 10 years.

Estate Planning.
For those that have goals to pass along cash/assets to family or friends while living, the annual gift tax exclusion is $19,000 per person in 2026 (same as 2025). Joint filers can give up to $38,000 combined to one person by using both exclusions. The estate tax exemption has increased to $15 million per person or $30 million for married couples filing jointly.