As 2026 approaches, tax planning is becoming more important not less. Whether you are still working, recently retired, or planning to retire soon, the decisions you make before the end of 2025 can significantly affect how much you pay in taxes in 2026 and beyond.
Taxes are one of the largest expenses most households will face in retirement. The good news is that many tax issues are manageable with proactive planning.
- The Impact of Income Timing
One of the most overlooked aspects of tax planning is when income is received.
In 2026, your taxable income may come from multiple sources:
- Wages or self-employment income
- Social Security benefits
- IRA and 401(k) withdrawals
- Pension income
- Investment interest and capital gains
The timing and coordination of these income streams can push you into higher tax brackets or increase taxes on Social Security benefits if not planned properly.
- Social Security and Taxes
Many people are surprised to learn that up to 85% of Social Security benefits can be taxable, depending on total income.
Key considerations:
- When you claim Social Security matters
- Other income sources can increase how much your benefit is taxed
- Coordinating withdrawals from retirement accounts can help reduce the tax impact
A thoughtful strategy can help preserve more of your benefits.
- Retirement Account Withdrawals
Withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income. Without a strategy, retirees often withdraw funds in a way that creates unnecessary taxes.
Planning questions to address:
- Which accounts should be tapped first?
- How much should be withdrawn each year?
- How withdrawals affect Medicare premiums and tax brackets
The goal is not just income, it’s tax-efficient income.
- Roth Conversions
For some individuals, Roth conversions can be a powerful planning tool in 2026.
Why consider them?
- Convert pre-tax dollars at known tax rates
- Reduce future required minimum distributions (RMDs)
- Create tax-free income later in retirement
Roth conversions are highly individualized, but when done correctly, they can provide long-term tax flexibility.
- Medicare Premiums and IRMAA
Your income does not just affect taxes it can also affect Medicare premiums.
Higher income can trigger Income-Related Monthly Adjustment Amounts (IRMAA), increasing Medicare Part B and Part D premiums.
Since Medicare looks at income from two years prior, decisions made now can impact healthcare costs in 2026 and beyond.
- Capital Gains and Investment Taxes
If you plan to sell investments, real estate, or a business, capital gains planning is critical.
Things to consider:
- Long-term vs. short-term capital gains
- Timing sales across tax years
- Coordinating gains with other income
Strategic planning can help manage or sometimes reduce capital gains exposure.
- Why 2026 Planning Should Start Now
Tax planning is most effective before income is realized not after returns are filed.
Waiting until tax season often means missed opportunities, while proactive planning allows for:
- Greater control over income levels
- Better coordination with retirement and Medicare planning
- Fewer surprises and more predictability
Let’s Review Your 2026 Tax Strategy
If you want clarity around how taxes will impact your retirement income, investments, or Medicare costs, now is the time to review your plan.
👉 Schedule a complimentary planning conversation here:
https://go.oncehub.com/AdamMHogue
We’ll walk through your income sources, tax exposure, and identify strategies that make sense for your situation.
Please Share This With Someone Who Needs It
If you know someone who is approaching retirement or concerned about rising taxes, please consider sharing this article. Many tax issues are avoidable — but only if they are addressed early.