loader from loading.io

Major Changes Coming To 401K, 403B, and 457 Retirement Plans in 2026, #280

Retire With Ryan

Release Date: 11/18/2025

What Order Should I Start Withdrawing From My Investment Accounts In Retirement, #318 show art What Order Should I Start Withdrawing From My Investment Accounts In Retirement, #318

Retire With Ryan

When you’re moving into retirement, you’re most likely to be starting to ask yourself which investment accounts you should start drawing from first. There’s really no universal answer—retirement withdrawal strategies are deeply personal and situation-dependent. But understanding the implications of each account type and the factors that influence withdrawal order can have a massive impact on your tax burden and the longevity of your assets.    You will want to hear this episode if you are interested in... [00:00] Retirement withdrawal strategy options [06:37] Roth IRA and...

info_outline 3 Ways To Make The Most of Your Restricted Stock Units, #317 show art 3 Ways To Make The Most of Your Restricted Stock Units, #317

Retire With Ryan

On the show this week, I answer a listener question about restricted stock units, or RSUs—what they are, how they're taxed, and the best strategies for managing them as they vest. I'll take an in-depth look at different types of vesting schedules, tax implications, and the practical choices you have when your RSUs become available. This episode is all about giving you clear guidance to help you make informed decisions about RSUs and making sure your retirement strategy is on the right financial track.   You will want to hear this episode if you are interested in... 00:00 Explanation of...

info_outline Accessing Your 401k Early With The Rule of 55, #316 show art Accessing Your 401k Early With The Rule of 55, #316

Retire With Ryan

For many Americans, the idea of retiring before age 59 and a half often seems out of reach, particularly when the bulk of their savings sits in an employer-sponsored 401(k) or 403(b) plan. Traditionally, the tax code penalizes early withdrawals from these accounts. However, the Rule of 55 could open the door to a more flexible, penalty-free early retirement. On this episode, I’ll share more about this IRS provision, who qualifies, how to use it wisely, and potential hazards to avoid.   You will want to hear this episode if you are interested in... [00:00] Overview of the Rule of 55 and...

info_outline How To Avoid Taxes On The Sale Of Your Primary Residence, #315 show art How To Avoid Taxes On The Sale Of Your Primary Residence, #315

Retire With Ryan

For many retirees, their home isn't just a place of comfort, it’s one of the largest assets on their balance sheet. However, beyond the emotional value and the years of accumulated equity, there's an often-overlooked reality: selling your primary residence can bring an unexpected tax bill. If you’re contemplating a sale or want to ensure you’re planning wisely, understanding the IRS’s primary residence capital gains exclusion is essential. On the show this week, I break down what this exclusion means, who qualifies, how to maximize its benefits, and the critical planning steps to avoid...

info_outline Give Your Child or Grandchild A Head Start On Retirement With a Trump Account, #314 show art Give Your Child or Grandchild A Head Start On Retirement With a Trump Account, #314

Retire With Ryan

On July 4, 2026, a groundbreaking opportunity opened for parents and guardians aiming to give their children a head start on their financial journey: Trump Accounts. Created as part of the OBBA Tax Act (“One Big Beautiful Bill” Tax Act) of 2025, these tax-advantaged investment vehicles provide a unique way to grow wealth for minors. In this episode, I break down what Trump Accounts are, who’s eligible for generous bonuses, how to get started, and how they compare to other common savings options like 529 plans.   You will want to hear this episode if you are interested in... [00:00]...

info_outline Avoid These 7 Scenarios to Keep Your Medicare Premiums Lower In Retirement, #313 show art Avoid These 7 Scenarios to Keep Your Medicare Premiums Lower In Retirement, #313

Retire With Ryan

Medicare brings peace of mind to millions of retirees, but for those with higher incomes, there’s an added layer of complexity called IRMAA—the Income Related Monthly Adjustment Amount. If your modified adjusted gross income (MAGI) crosses certain thresholds, you may end up paying substantially more for your Medicare Part B and Part D coverage. In this article, we break down how IRMAA works, outline common scenarios that may unexpectedly raise your premiums, and offer actionable strategies to help you avoid unnecessary costs during your retirement years.   You will want to hear this...

info_outline Do Actively Managed Funds Perform Better Than Index Funds In Volatile Markets? #312 show art Do Actively Managed Funds Perform Better Than Index Funds In Volatile Markets? #312

Retire With Ryan

When it comes to planning for retirement, one of the most commonly faced decisions is how to invest for long-term growth and stability. In turbulent times, market volatility often generates renewed debate on whether index funds, or their actively managed counterparts, offer the better path for accumulating wealth. On this episode of the show, I’m unpacking what index funds are, how they stack up against actively managed funds, and what the latest data reveals about performance during both quiet and volatile markets.   You will want to hear this episode if you are interested in... ...

info_outline Is Your Money Safe With Schwab or Fidelity? #311 show art Is Your Money Safe With Schwab or Fidelity? #311

Retire With Ryan

This week, I’m tackling a question that’s on the minds of many investors: How safe is your money with major brokerage firms like Fidelity and Charles Schwab? In light of recent high-profile bank collapses and widespread concerns about financial security, I discuss how banks and brokerage firms operate differently, what protections exist for your investments, and what would happen if a major brokerage firm were to collapse. Whether you’re considering how best to safeguard your assets or wondering about the real risks of brokerage failures, this episode will provide the clarity and peace...

info_outline How To Make Your Brokerage Account Work Like A Roth IRA, #310 show art How To Make Your Brokerage Account Work Like A Roth IRA, #310

Retire With Ryan

When it comes to planning for retirement, Roth IRAs have gained widespread attention for their tax-advantaged status and the promise of tax-free withdrawals in retirement. Financial experts, YouTubers, and podcasters have been touting the benefits of contributing to or converting assets into Roth accounts for years. But an often-overlooked vehicle could empower you to manage your investments just as efficiently: the humble taxable brokerage account. Surprisingly, with the right strategy, you can even pay 0% capital gains tax, mirroring one of the biggest appeals of a Roth.    You...

info_outline 5 Reasons To Not Invest Your Retirement Savings In Variable Annuities, #309 show art 5 Reasons To Not Invest Your Retirement Savings In Variable Annuities, #309

Retire With Ryan

Variable annuities are often promoted as a secure way to generate guaranteed income during retirement, drawing the attention of retirees seeking stability for their nest eggs. But beneath the surface, these products frequently come with complications and costs that can erode your savings and limit your financial flexibility. In this episode, I share the details of the often-overlooked downsides of variable annuities and give you some important insights every investor should consider.   You will want to hear this episode if you are interested in... [03:14] What is a Variable Annuity?...

info_outline
 
More Episodes

There are important changes coming to 401 (k), 403 (b), and 457 retirement plans in 2026, so I’m focusing on how these updates may impact catch-up contributions for individuals over age 50. With the Secure Act 2.0 on the horizon, higher earners will soon have to make their catch-up contributions as Roth (post-tax) rather than pre-tax contributions, potentially affecting their take-home pay and tax strategies.

Tune in as I walk you through what you need to know, how to prepare for these new rules, and actionable steps to make the most of your retirement savings. 

You will want to hear this episode if you are interested in...

  • [00:00] 2025 retirement contribution limits.
  • [05:26] Roth 401(k) catch-up contribution.
  • [08:05] 2026 salary tax example analysis.
  • [11:37] Tax impact on pre/post contributions.
  • [14:20] Tax-free Roth options.

Navigating the 2026 Catch-Up Contribution Changes

Employer-sponsored retirement plans, such as 401(k), 403(b), and 457, have long offered “catch-up contributions” for participants aged 50 and above. These extra contributions serve as a valuable tool for bolstering retirement savings during peak earning years.

The catch-up contribution limits for 2025 will allow participants to contribute an additional $7,500 on top of the standard $23,500 annual maximum, totaling $31,000. There’s also a “super catch-up” for those aged 60-63, which jumps to $11,250.

But starting in 2026, the Secure Act 2.0 introduces a pivotal change:

If you earned over $145,000 in 2025: You’ll be required to make catch-up (and super catch-up) contributions after tax to Roth accounts, not as pre-tax traditional contributions. For those earning under $145,000, it’s business as usual; you can still make catch-up contributions pre-tax if you choose.

How These Changes Impact Retirement Savers

The biggest impact? High-income earners will see an immediate difference in their take-home pay. Traditional pre-tax contributions typically reduce taxable income in the year made, lowering both federal and state taxes. Roth contributions, however, do not offer this upfront tax savings; instead, they provide tax-free withdrawals in retirement. This means that someone earning $170,000 could see their annual tax bill rise by nearly $2,300 when $8,000 of their retirement saving shifts from pre-tax to post-tax Roth dollars.

If you earn even more, say, $300,000, the annual difference climbs above $3,500, all while saving the same amount. The tax diversification benefit of Roth accounts remains, but the immediate budget hit is real.

Preparing for the 2026 Transition

These are my top tips for getting ready for 2026:

1. Check Your Plan’s Roth Options:

Verify with your HR or retirement plan administrator whether your employer plan supports Roth 401(k) (or equivalent) contributions. If it doesn’t, advocate for plan amendments, employers have until 2026 to comply.

2. Assess Payroll Impact:

Use online paycheck calculators to estimate your net pay under the new rules..

3. Consider Alternatives if Roth Isn’t Available:

If your employer doesn’t offer Roth options, you can still open a Roth IRA, though income limits may apply. Those exceeding these limits can explore the “backdoor” Roth IRA strategy or even simply invest in a taxable brokerage account with tax-efficient ETFs.

The Long-Term Upside of Roth Savings

While losing the immediate tax break feels like a setback, forced Roth contributions offer unique advantages:

Tax-Free Growth: Money in Roth accounts grows tax-free, and withdrawals are also tax-free.

Estate Planning Boost: Funds left in Roth accounts can pass to heirs with minimal tax consequences.

Retirement Flexibility: Roth assets aren’t subject to required minimum distributions (RMDs) during the account owner’s lifetime.

A consistent series of $8,000 annual Roth catch-up contributions, invested over a decade at 6-8% returns, could grow to $105,000 - $115,000 tax-free, with possible doubling over the next two decades if left untouched.

Change is coming to catch-up contributions for high earners, beginning in 2026. By understanding these new rules and taking proactive steps now, you can minimize disruption and position yourself for long-term retirement success. The road to retirement is always evolving, make sure your strategy evolves with it.

Resources Mentioned

Connect With Morrissey Wealth Management 

www.MorrisseyWealthManagement.com/contact

 

Subscribe to Retire With Ryan