Retirement account strategies for 2026

A new year means new contribution limits and fresh opportunities to optimize your retirement accounts. Whether you're just starting out or approaching retirement, 2025 offers several strategic moves worth considering.

Updated contribution limits

The IRS adjusts retirement account limits annually to account for inflation. For 2025, 401(k) contributions are capped at $23,500, up from $23,000 in 2024. IRA contributions remain at $7,000, with a $1,000 catch-up option for those 50 and older.

Maximizing these limits is one of the most reliable ways to reduce your current tax burden while building long-term wealth.

Traditional vs. Roth: The 2025 calculus

The choice between Traditional and Roth accounts depends heavily on your current and expected future tax bracket. If you're in a high bracket now, Traditional contributions offer immediate tax relief. If you expect to be in a higher bracket during retirement, Roth contributions become more attractive.

In 2025, with potential tax policy changes on the horizon, many advisors suggest a blended approach—contributing to both account types to hedge against future uncertainty.

The power of early contribution

When you contribute matters almost as much as how much you contribute. Money invested in January has a full year to compound, while December contributions miss nearly 12 months of growth. Front-loading your contributions when possible can meaningfully impact long-term returns.

Don't ignore employer matching

If your employer offers 401(k) matching, contributing at least enough to capture the full match is essentially free money. This should be your first priority before considering any other investment strategy.

Rebalancing after the holidays

Year-end market movements often shift your allocation away from target. Early 2025 is a good time to review and rebalance, ensuring your retirement portfolio stays aligned with your timeline and risk tolerance.

Automate and forget

Setting up automatic contributions removes emotion and decision fatigue from the equation. Combined with AI-powered monitoring, your retirement strategy can run smoothly in the background—adjusting only when your goals change.

2025 is a fresh start. Small, strategic moves in your retirement accounts today can compound into significant wealth over time.