Author: support@seostats.com

One of the most common questions our clients ask is, “How much should I be saving?” Just like so many other financial questions, the answer to this is most often, “It depends.” The right savings rate for you depends on your age, income, current financial situation, expenses, lifestyle expectations, debt and future goals. However, there are some key factors and practical benchmarks that can help you establish a target savings rate. The following tips can help.

1 – Start with Common Saving Strategies

While it’s important to adopt a custom savings strategy based on your specific needs and goals, it can be helpful to start with generally accepted guidelines.

• Emergency savings – An emergency savings reserve is an important foundation for most financial plans. We typically recommend our clients maintain three to six months’ worth of living expenses in a liquid, low-risk account. This helps ensure you have enough assets available to cover unexpected expenses, such as a job loss, medical event, accident, etc.

• Retirement savings – Establish an appropriate emergency reserve while also taking advantage of important retirement-saving opportunities, such as an employer retirement-plan match. As a general starting point, some financial professionals suggest saving roughly 10% to 15% of gross income for retirement, including employer contributions. Your appropriate savings rate may be higher or lower depending on your age, existing assets, retirement goals and other factors. However, if you’re getting a late start, you may need to save 20% or more to catch up.

• Overall savings – The 50/30/20 framework provides a general rule of thumb to guide your overall savings and spending targets. Using this rule, you would allocate approximately 50% of your take-home pay to pay for needs, such as housing, groceries, utility bills, etc. 30% of your income would be allocated to wants, such as entertainment and travel, and the remaining 20% would be saved for the future.

2 – Consider What Other Factors Impact Your Savings Rate

Using the above strategies as a starting point, consider what factors may impact your savings approach, such as:

• Time horizon – The earlier you start saving, the more opportunity you have to capitalize on the power of compounding. Because savings have more time to potentially compound, money invested earlier can have significantly more opportunity to grow than money invested later. If you’re late to the savings game, you will likely need to set aside a higher percentage of your income to meet your long-term goals.

• Lifestyle and spending needs – Your savings needs are largely driven by both your current and future lifestyle goals. Your current spending can provide an important indication of the lifestyle you may want to maintain in the future. Be sure to carefully track your spending versus savings to make sure you’re setting aside enough to meet your needs.

• Current financial situation – When determining your savings target, it’s important to consider your current financial situation. Existing savings and investments, pension benefits and, depending on your plans, home equity can reduce the amount you may need to accumulate. However, student loans, a mortgage balance and other debts can add to your required savings rate.

• Long-term goals – You may need to save more if your long-term goals include large expenses such as college tuition for a child or grandchild, a second home, significant travel or early retirement.

3 – Ask Yourself Key Questions

To determine your personal target savings rate, consider your answers to questions beyond just, “How much should I save?” The following questions can help you determine a savings strategy that’s right for you.

• What standard of living do I hope to achieve, and at what age?

• What resources do I already have, and what gaps remain?

• How much risk am I willing to take on with the money I save and invest?

The answers to these questions can help you turn a target savings rate into a focused, long-term strategy. Working backward from your goals can help you envision a path forward and remain focused on your long-term vision.

4 – Make Saving as Easy as Possible

The best way to remain consistent is to remove as much friction from the process of saving as possible. The following tips can help.

• Automate contributions to retirement and savings accounts to ensure you’re saving before you spend on discretionary purchases.

• Carefully manage lifestyle creep by ensuring your rate of savings increases with every raise or bonus.

• Regularly review your discretionary spending, including subscription services. Small recurring expenses can add up over time.

• Save unexpected windfalls, such as an inheritance, tax refund or equity compensation, toward your long-term goals, rather than spending.

• Revisit your savings plan on a regular basis and any time you experience a major life event, such as a marriage, divorce, birth of a child, job change, inheritance, a significant change in your health, family or employment, etc.

5 – Have a Plan in Place

While generic rules of thumb can serve as a helpful starting point, they cannot account for the full picture of your unique financial situation, tax exposure, family dynamics and long-term goals. It’s important to have a financial plan in place to guide your decision making and establish a personalized savings target that meets your needs.

At Freedom Wealth Management, we’re here to help you establish a personalized financial plan to help you pursue your long-term goals. If you could use some help determining how much you should be saving, we would love to have a conversation. Please schedule a call with a member of our team.

Disclosure:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

If you’re like many people, buying a home may be the largest purchase you make in your life. Decisions related to your home purchase can significantly impact your future financial security, shaping factors such as cash flow, savings rate and your overall financial flexibility.

Two key questions sit at the center of your home buying decision: “What is a mortgage rate?” and, “How Much House Can I Afford?” Understanding the answers to these questions can help you make informed decisions that align with your overall financial values and long-term priorities.

What is a Mortgage Rate?

A mortgage rate refers to the rate of interest a lender charges when you borrow money to purchase a home. It is expressed as an annual percentage of the loan amount, and it determines how much interest you will pay over the life of the loan.

It’s important to be aware of the difference between the interest rate and the annual percentage rate (APR).

• The interest rate is the pure cost of borrowing.

• The APR includes the interest rate plus most upfront fees and costs, which gives you a more complete picture of the loan’s true cost.

There are two main ways most borrowers structure mortgage rates.

1. Fixed-rate mortgages maintain the same interest rate for the entire term of the loan. This makes budgeting easy because your principal and interest payments remain predictable. However, you may end up paying a premium for this certainty because fixed rates are often higher than initial adjustable rates.

2. Adjustable-rate mortgages (ARMs) typically begin with a lower introductory rate for a set period of time, often between five to 10 years. After that period, the rate periodically readjusts based on a market index plus a margin. The lower starting rate can help increase your purchasing power, but you run the risk that future payments will raise if rates increase. ARMs often make the most sense for homebuyers who plan to sell or refinance before the adjustment period begins.

Mortgage rates are not the same for everyone. They fluctuate with broader economic conditions, such as Federal Reserve policy, inflation expectations and other Treasury yields. They are also impacted by your personal financial characteristics, including the following.

• Credit score – A higher credit score can result in a more favorable mortgage rate.

• Down payment – The amount you put down determines your loan-to-value ratio. A higher down payment may improve your mortgage rate.

• Loan term – 15-year loans typically have lower rates than 30-year loans.

• Debt-to-income ratio – Lenders favor borrowers who have low debt in other areas.

• Loan type – Different types of loans have different rates.

Even a small rate difference can have a big financial impact over time. For example, on a $500,000 loan, a 0.5% higher rate can cost tens of thousands of dollars more over 30 years.

How Much House Can I Afford?

There are two ways to look at this question. Many people view this as, “What is the biggest loan a bank will approve?” However, that’s generally not the best approach. A more financially healthy perspective is, “What monthly payment will help me maintain a healthy overall financial life?”

Most lenders are pleased to approve high mortgage amounts (especially for strong borrowers), as they are paid more interest on bigger loans. However, this does not mean you should stretch to the maximum. A payment that seems manageable on paper can quickly stress your budget when you factor in other home expenses, such as maintenance, furniture, utilities, appliances, upgrades, etc. Keep in mind that you must continue paying for other non-home expenses while also saving for future goals, such as retirement.

The following process can help you determine how much house you can reasonably afford.

1. Calculate your true gross monthly income, including only reliable recurring sources.

2. List all existing monthly debt payments.

3. Decide on a comfortable monthly housing payment target. A general rule of thumb is that your housing costs – including principal, interest, property tax and insurance – should not exceed 28% of your gross monthly income.

4. Subtract your estimated property taxes, homeowner’s insurance and any HOA fees from your target payment to isolate the principal-and-interest portion.

5. Use the number from Step 4, along with your expected down payment and mortgage rate, to back into a maximum purchase price.

6. Stress-test the payment under different circumstances. For example, consider whether you would be able to continue paying your mortgage if you were out of work for several months or needed to make significant repairs a few years after purchasing the home.

7. Confirm that you will still have adequate emergency savings and be able to continue contributing to your retirement savings accounts after closing on your home.

The Bottom Line

A mortgage rate is simply the cost of borrowed money, which can be impacted by both the market and your personal financial situation. How much house you can afford is a more personal question that must balance your current finances with your future goals.

As you consider your options, remember that the right home should enhance your lifestyle, not constrain it. Taking time to understand mortgage rates and how much home you can afford allows you to align your home purchase with your broader financial plan in order to remain on track toward your other financial goals.

If you could use some help determining how your home purchase may impact your financial future, we would love to have a conversation. Please schedule a call with a member of our team.

Retirement is the single largest expense most people face in their lifetime, and saving for it can feel like an overwhelming task. As you plan for this next chapter, you may wonder, “How much do I really need to save?” The answer is highly personal and depends on your vision for retirement, current situation and future goals.

Following are four steps to help you determine how much you should save.

Step 1 – Consider Your Lifestyle Goals

The first step in determining a retirement savings strategy is to establish your retirement lifestyle goals. Will you travel extensively? Pursue new hobbies? Spend more time with family? Downsize your home or purchase a second home? Work part time? Volunteer? Donate to charities?

It’s important to be honest and detailed, as your retirement vision informs all other retirement planning decisions, including how much to save, how to invest, the rate at which you withdraw funds, your tax planning strategies, etc.

Once you have a clear vision of your desired lifestyle, consider how that lifestyle impacts:

• The cost to maintain that lifestyle, such as housing, entertainment, travel, etc.
• Your potential healthcare and long-term care needs
• Gifts, family support and legacy goals
• Inflation-adjusted costs over 20-30+ years

Step 2 – Establish a Target Monthly Income

Once you’ve defined your desired retirement lifestyle, quantify it. A common strategy among retirees is to replace 70% to 80% of pre-retirement income, but your number may vary based on the goals you outlined in Step 1.

A great place to start is by reviewing your current monthly spending and adjusting for retirement changes. For example, once you’re retired, you’ll likely pay less in payroll taxes and commuting expenses, but more in healthcare and entertainment/leisure expenses. When determining your monthly income target, it’s also important to factor in inflation and taxes, as these expenses can have a significant impact on your retirement savings over time.

Once you have an idea of your monthly income target, you can work backward to calculate the amount of savings you may need to support that income.

Step 3 – Understand Your Potential Income Streams

The good news is, your savings likely won’t need to carry the full load. To understand the gap your savings must fill, take time to understand what other sources of income can help support your retirement needs.

Common income streams include:

• Social Security
• Pensions and annuities
• Employer benefits, such as deferred compensation or continued health coverage
• Income related to rental properties, business interests, part-time work, inheritances, etc.

Subtract these reliable income streams from your target monthly income to determine your income gap. For example, if your income target is $10,000 per month and other sources cover $4,000, your savings will need to generate an additional $6,000.

Step 4 – Stress Test Your Plan

This step helps ensure your savings target holds up under real-world circumstances. Your retirement savings can be highly impacted by market volatility, inflation spikes, unexpected healthcare expenses, a long lifespan, changes in tax laws and more. Running a stress test can help you anticipate how these factors may impact your long-term retirement security.

Your financial advisor can help you run various projections and adjust your income strategy based on the specific risks you face.

How an Advisor Can Help

When it comes to saving for retirement, you only have one chance to get it right. That’s why it’s important to seek the guidance of an experienced financial advisor who has navigated the transition before. In addition to helping you establish a savings target, your advisor can provide holistic retirement planning support by integrating tax planning strategies, investment allocation, estate planning and ongoing monitoring to keep your plan on track as your life evolves.

If you could use some help planning for your retirement, we would love to have a conversation. Please schedule a call with a member of our team.

In a world of robo-advisors, free budgeting apps and endless social media investment advice, some people begin to wonder if hiring a financial advisor is worth the cost. This is a valid question, as annual advisory fees can range from 0.5% to 2% of assets under management (AUM). For a household with $1 million in investable assets, that could result in $10,000 to $20,0000 in fees per year, not an insignificant amount!

However, many clients are surprised to learn that an experienced financial advisor can actually save you money in the long run. Let’s consider how hiring a financial advisor may be worth the cost.

What You’re Paying For

A financial advisor who takes a comprehensive approach does far more than pick stocks or encourage you to save more for the future. Comprehensive advisors provide:

• Holistic financial planning services – Retirement projections, cash-flow analysis, debt management strategies, large purchase planning, goal setting and more

• Investment management – Portfolio construction, risk management, tax-loss harvesting, asset location, periodic rebalancing¹

• Retirement planning – Tax-diversified retirement savings strategies, tax-efficient retirement withdrawal strategies, retirement income planning, Social Security and Medicare timing

• Tax planning – Roth conversions, tax-loss harvesting, charitable giving, credit and deduction optimization²

• Estate and legacy planning – Wills, trusts, beneficiary coordination, estate tax minimization, special needs planning³

• Behavioral support – Preventing costly emotion-driven decisions during periods of market volatility

• Life transition support – Guidance to help navigate significant milestones such as marriage, birth of a child, divorce, inheritance or other sudden wealth, death of a spouse, career change, retirement, business sale, etc.

Potential Cost Benefit

Several recent studies have shown there’s significant value in working with a financial advisor, including:

• Russell Investments’ 2026 Value of an Advisor study found the potential added value of an advisor in the United States to be 4.92%.

• TIAA Institute’s 2026 research found that professional advice delivers the equivalent of 1.4% to 2.4% higher annual returns without the need to save more, thanks to better asset allocation, tax-efficient strategies and optimized investor behavior.⁴

• SmartAsset reports that investors who work with an advisor achieve a 2.39% to 2.78% performance premium over those without advisors (after accounting for 2.56% annual inflation and 0.75% or 1% in AUM-based fees).

Following are just a few examples of the long-term benefits of working with an advisor.

• Tax savings – Tax savings alone can significantly offset much of your advisory fee, as a proactive tax planning strategy can save you thousands of dollars in taxes each year.

• Informed decision making – A financial advisor can help you establish an investment portfolio that can withstand volatility and help you avoid making fear- or greed-driven investment decisions.

• Retirement income optimization – Your advisor can help optimize your retirement income and tax savings opportunities through Social Security timing, tax-efficient withdrawal strategies, pension optimization, etc.

Who Benefits Most?

The benefits of working with a qualified financial advisor are generally greatest for the following types of clients.

• Pre-retirees and retirees who qualify as “mass affluent” (generally between $300,000 and $3 million in assets)

• Business owners preparing for an exit

• Families with complex situations such as blended families, those with special needs loved ones, etc.

• Corporate executives with complex compensation arrangements (restricted stock units, stock options, etc.)

• High earners who lack the time or interest in managing their finances

• People looking for the confidence a financial advisor can provide

Bottom Line

Hiring a financial advisor is an investment, not an expense. A financial advisor serves as the quarterback of your financial life, coordinating the various aspects of your finances and enlisting the support of other experienced professionals, such as an estate planning attorney, accountant, insurance professional and more. The right advisor can help streamline your financial life, with a goal of achieving better results with less effort and fewer mistakes. The “cost” of this advice often pays for itself as a result of more informed decisions, tax savings, optimized investments and avoided mistakes.

If your financial life feels too complex to manage on your own or you’re approaching a major life transition and want to get it right, the real question is not, “Can I afford an advisor?” but, “Can I afford not to have one?”

For more information about how an experienced financial advisor can support your financial life, please reach out to schedule a call with a member of our team.

¹Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. (28-LPL)

²Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. (22-LPL)

³LPL Financial representatives offer access to Trust Services through The Private Trust Company N.A. an affiliate of LPL Financial. (154-LPL)

⁴Asset allocation does not ensure a profit or protect against a loss. (34-LPL)

As you plan for your future, it’s important to be aware of market forces that could impact your long-term financial health. One such force is rising oil prices, which impact a wide range of expenses, including gasoline and diesel costs, home heating and utilities, air and ground transportation, groceries, consumer goods, shipping costs, food production and overall inflation. As households are forced to allocate a higher percentage of their income to these rising expenses, Americans have fewer dollars available for saving and discretionary spending.

While the recent volatility in oil prices is concerning, we’ve experienced similar periods of volatility in the past. How does past volatility compare to today’s? Let’s consider a few key time periods.

The 1970s Oil Crises

For some historical context, let’s compare today’s oil situation with that of the 1970s. In 1973, the Arab oil embargo, which was tied to the Yom Kippur War, removed approximately 4.5 million barrels per day (mb/d), or around 7% of global supply. This resulted in a rise of nominal oil prices from $3 per barrel to more than $12 within months. Adjusted for inflation, this equals an increase from approximately $22 to $80 today.

Oil prices were further impacted by the 1979 Iranian Revolution, which slashed output and pushed the price per barrel to $40 nominal, or more than $160 inflation-adjusted.

The impacts of this oil volatility included oil rationing, double-digit inflation and a severe recession that defined the era. Because the United States was heavily dependent on oil imports with limited domestic production capabilities, the Organization of the Petroleum Exporting Countries (OPEC) wielded outsized power over our oil supply. These shocks amplified “stagflation,” or the simultaneous combination of high inflation and unemployment, which prompted aggressive Fed interest rate hikes and long-term policy shifts toward energy efficiency and diversification.

What’s Happening Today

The impact of the war in Iran and disruptions to the Strait of Hormuz are reminding many economists of the turbulence experienced in the 1970s. The closing of the strait represents the largest oil supply disruption in history, with global oil distribution dropping by 10.1 mb/d in March 2026 alone. As of mid-April, crude oil hovers around $97 per barrel, with recent swings reaching as high as $130. This represents a greater than 50% increase over pre-conflict levels of approximately $66 per barrel. Volatility remains high as talks of a potential ceasefire circulate.

However, one positive is that the United States is currently a net exporter of crude and petroleum products, producing approximately 13.5 mb/d.

Lessons From Other Key Time Periods

As we speculate about the potential long-term impact of today’s oil price volatility, it’s helpful to consider lessons learned from other periods of volatility, including the following.

• 2008 – Speculative demand surge combined with the financial crisis drove oil prices to $147 nominal, $189 inflation-adjusted. The subsequent market crash amplified an already precarious situation, resulting in a recession. The lesson learned from this time period is that oil spikes can coincide with, but not necessarily cause, broader market stress.

• 2014-2016 – During this time period, OPEC flooded the market in an effort to counter U.S. shale production. As a result, prices collapsed to less than $30 per barrel. From this situation, we learned that oversupply punishes producers.

• 2020 – During the COVID era, global demand for oil evaporated as lockdowns halted travel and economic activity. At the same time, plenty of oil was still being produced, which led to storage shortages and caused the futures price to drop below zero, briefly reaching -$37 per barrel. This was the first time in history that oil futures prices went negative. This situation highlighted that extreme demand shocks, combined with physical constraints such as a lack of storage, can create chaotic market conditions.

• 2022 – During the height of the Russia-Ukraine conflict, supply fears pushed oil prices to $139 per barrel. Markets quickly adjusted with increased diversification, which allowed prices to settle. This situation illustrates that geopolitical shocks can be shorter-lived than anticipated if alternative sources of oil exist.

How We’re Supporting Our Clients Through Oil Price Volatility

At Freedom Wealth Management, we believe the current environment highlights the importance of using selective energy exposure in upstream producers and midstream infrastructure as a hedge against volatility. However, we seek to avoid over-concentration in energy, as this can expose our clients’ portfolios to unnecessary risk. We strive to use commodities, inflation-protected securities and diversified alternatives to help buffer the effects of broad inflation. We’re also carefully monitoring strategic petroleum reserves, OPEC moves and ceasefire developments in order to proactively respond to potential sharp price reversals.

Unlike in the 1970s, we believe recent shocks in oil prices are unlikely to trigger sustained stagflation or force drastic policy changes. Although prolonged disruption could impact global growth, markets have historically rewarded patience through periods of oil volatility. While we will be carefully monitoring future developments, we continue to believe that a properly diversified investment portfolio can help buffer the long-term impact of oil volatility.

If you’re interested in stress-testing your portfolio against various scenarios, please schedule a call with a member of our team.

As we move through 2026, we wanted to provide an update on how President Trump’s trade policies are impacting American consumers.

While the news media is no longer publishing daily headlines about Trump’s trade policy, we continue to experience price pressure in key sectors such as manufacturing and consumer goods. And, although inflation has cooled since its highest levels, consumers, businesses and investors continue to experience uncertainty. Aware of these pressures, the Federal Reserve has kept the fed funds rate steady at 3.5% to 3.75%, even as markets price in potential cuts later this year.

The Impact of Tariffs

In 2025, the Trump Administration enacted broad tariffs, including a minimum 10% rate on many global imports, higher country-specific rates and sector-targeted levies on specific goods such as steel, lumber and consumer products. The objectives of these tariffs are to protect U.S.-based industry, reduce trade deficits and generate revenue. And it’s working to a certain extent, as some customs collections are estimated to have tripled when compared to previous years.

The average effective U.S. tariff rate in early 2026 reached as high as 15% to 17% and remains significantly elevated, with current rates ranging between approximately 10% to 13%. This continues to be a significant increase over pre-2025 levels of 2% to 3%. As a result, manufacturers and retailers face higher costs, which they often pass on to consumers. Also, sectors that rely on global supply chains, such as apparel, appliances, vehicles, electronics and building materials, continue to face pressure.

Inflation Trends

Recent inflation data reflects a mixed picture.

• Headline Consumer Price Index (CPI) eased to 2.4% year-over-year in January, down from 2.7% in December 2025. This marks the lowest CPI since mid-2025, and was likely supported by lessening energy prices, favorable base effects and certain seasonal factors.

• Core CPI, which excludes food and energy, held steady near 2.5%, its lowest level in several years but still above the Fed’s long-term 2% target. Persistent drivers of this rate include shelter expenses, which have increased by approximately 3% annually, and higher costs for certain services.

This “stickiness” in core measures suggests that while inflation has cooled toward the Fed’s goal, underlying pressures persist. Tariffs add to this by elevating the price of goods, which counteracts other disinflationary forces.

The Fed’s Cautious Approach

Following its meeting in March, the Federal Open Market Committee held the federal funds rate steady at 3.5% to 3.75%. The decision was made based on the Fed’s assessment of steady economic growth alongside somewhat elevated inflation, as well as ongoing uncertainty from both geopolitical developments and trade policy. However, markets seem to be pricing in the possibility of rate cuts later in the year, especially if inflation trends continue to moderate and the labor market remains stable.

What This Could Mean for You

The combination of tariff-driven price pressures and sticky core inflation could continue creating challenges for Americans, including:

• Higher costs for goods – Particularly for items that rely on global supply chains, such as apparel, appliances, vehicles, electronics and building materials

• Investment ramifications – The potential for greater portfolio volatility due to uncertainty

• Retirement income challenges – Ongoing inflation that exceeds 2% means that retirement withdrawals must stretch further, while fixed income investments could face reinvestment risk if rates eventually fall.  

The good news is that headline inflation is meaningfully lower than it was, and many companies are bringing down costs by diversifying suppliers.

If tariffs, inflation or interest-rate uncertainty are keeping you up at night, we’d love to have a conversation about how we can help improve your financial confidence. Please reach out to schedule a call with a member of our team.

When planning for retirement, it’s important to remain up-to-date with changing regulations, updated limits and new policies that could impact you, and 2026 brings several key updates. Here, we offer an at-a-glance summary to keep you informed and on track.

Retirement Account Contribution Limits

The IRS has raised 2026 contribution limits to keep up with inflation.

• Employer-sponsored retirement plans – The employee contribution limit for 401(k)s, 403(b)s and 457 plans has increased to $24,500 in 2026, up from $23,500 in 2025.

• Catch-up contributions – Those aged 50 and older can make an additional catch-up contribution of $8,000 to their employer-sponsored retirement plan, for a total contribution of $32,500 in 2026.

• Super catch-up contributions – Plan participants between the ages of 60 and 63 are eligible for a super catch-up contribution of up to $11,250 to an employer-sponsored retirement plan, for a total contribution of $35,750 in 2026.

• IRAs – IRA limits increased to $7,5000 in 2026.

• IRA catch-up contributions – Those aged 50 and older can contribute an extra $1,100 catch-up contribution, for a total IRA contribution of $8,600.

Social Security Updates

The following changes impact Social Security in 2026.

• Full retirement age (FRA) – FRA, or the age at which an individual can begin receiving full Social Security benefits, has increased to 67 for those born in 1960 or later.

• Cost-of-living adjustment (COLA) – Social Security benefits received a 2.8% COLA boost, which adds approximately $56 per month to the average retiree’s check.

• Earnings limit – The earnings limit for those younger than FRA who work while receiving Social Security benefits has increased to $24,480 in 2026, up from $23,400 in 2025. The earnings limit for those who reach FRA in 2026 is $65,160. The earnings limit no longer applies once an individual reaches full retirement age.

• Social Security tax threshold – The maximum amount of income subject to Social Security tax has increased to $184,500 in 2026, up from $176,100 in 2025.

New Rules for High Earners

Effective in 2026, employees participating in an employer-sponsored retirement who earned more than $150,000 in the previous year must make catch-up contributions to a Roth account using after-tax funds. This means they can no longer use pre-tax contributions to reduce their taxable income in the current year.

Healthcare Savings Updates

Both Medicare and health savings accounts (HSAs) a subject to a cost-of-living increase in 2026.

• Medicare Part B premiums – The standard monthly premium has increased to $202.90 in 2026, up from $185 in 2025, and the annual deductible has increased to $283.

• HSA contribution limits – HSA limits have increased to $4,400 for individuals and $8,750 for families in 2026.

New “Senior Deduction”

As part of President Trump’s One Big Beautiful Bill Act (OBBBA), individuals aged 65 and older with income below $75,000 (or $150,000 for married couples filing jointly) may qualify for a $6,000 to $12,000 tax deduction to help offset federal taxes on Social Security and other retirement income.

If you could use some help determining how these updated retirement planning numbers may impact your financial strategies, we would love to have a conversation. Please reach out to schedule a call with a member of our team.

President Trump signed the much-anticipated “One Big Beautiful Bill Act” (OBBBA) into law on July 4, 2025. The massive piece of legislation includes a wide range of provisions that span multiple aspects of Americans’ lives. How could this legislation impact your financial plan? I’ll start by summarizing some of the bill’s provisions, then address what these changes could mean for you.

Tax provisions

The OBBBA includes the following changes to tax provisions.

• Permanent extension of the 2017 Tax Cuts and Jobs Act (TCJA) – President Trump’s administration passed the TCJA during his first term, yet many of its provisions were scheduled to sunset at the end of 2025. OBBBA makes those provisions permanent. Sources estimate that if TCJA had expired as scheduled, 62% of Americans would have faced a tax increase.¹

• Higher standard deduction threshold – OBBBA makes TCJA’s higher standard deduction permanent. In 2026, the deduction will increase to $16,000 per individual or $32,000 for married couples filing jointly.

• Child tax credit increase – OBBBA increased the child tax credit from $2,000 to $2,200, effective in 2025. Beginning in 2026, this amount will be indexed for inflation.

• Reduced tax on overtime and tips – Through 2028, taxpayers can deduct up to $25,000 of qualifying tip income and overtime pay, with phase-outs for higher-income earners.

• Car loan interest deduction – OBBBA allows a deduction of up to $10,000 of auto loan interest for U.S.-made vehicles. This provision expires in 2029.

• Higher state and local tax (SALT) deduction – OBBBA increases the maximum SALT deduction from $10,000 to $40,000, with gradual phase outs for taxpayers with adjusted gross incomes between $500,000 and $600,000.

• Phase out of clean energy tax credits – The bill phases out incentives for electric cars, wind and solar energy.

• Savings accounts for newborns – OBBBA allows each newborn to receive up to $1,000 as a government-funded contribution to a newborn savings account. Parents can contribute an extra $5,000 per year in after-tax contributions.

• Small business deduction – OBBA expands the Section 199A small business deduction from 20% to 23% of qualified business income.

• Immediate expensing for businesses – The bill reinstates businesses’ ability to immediately expense 100% of machinery, equipment and R&D costs.

• Expensing for new factories – In an effort to encourage domestic manufacturing, OBBBA allows full expensing for new factories.

Spending cuts

In addition to modified tax provisions, the OBBBA implements the following spending cuts.

• Medicaid – The bill includes nearly $1 trillion in Medicaid funding cuts over 10 years and implements new work requirements for Medicaid eligibility, including a minimum 80 hours per month of work, education or service for able-bodied adults with no dependents (beginning in 2026).

• Supplemental Nutrition Assistance Program (SNAP) – OBBBA reduces SNAP spending by $267 billion over 10 years and expands work requirements for parents with children under age 7. It also shifts 5% of benefit costs and 75% of administrative costs to states (beginning in 2028).

• Affordable Care Act (ACA) – OBBBA ends automatic reenrollment and requires annual verification of each individual’s immigration status and annual income (beginning in 2028). It also shortens the open enrollment period to December 15 and allows certain premium subsidies to expire.

How the provisions of OBBBA may impact you

The provisions above are the ones most likely to impact Americans’ financial plans, yet they are just the tip of the iceberg when it comes to the legislation included in the OBBBA. It’s wise to review the following aspects of your financial plan to determine how OBBBA may impact your strategies.

• Investment portfolio – If you anticipate higher income due to OBBBA’s tax cuts, consider growing these additional assets by investing them in a diversified portfolio. Consult with your financial advisor to identify any necessary changes to your asset allocation and ensure your investment strategies continue to meet your changing needs.

• Tax planning – In light of OBBBA’s significant tax law changes, it’s vital that you review your current tax planning strategies to ensure they continue minimizing your tax exposure while optimizing your wealth-building potential. Work with your wealth and tax advisor to assess the potential impact of the new standard deduction, small business deductions, child tax credit, business incentives, SALT threshold and more.

• Education planning – OBBBA now allows nonprofit organizations to award scholarships to pay for the cost of private and charter schools. It also expands 529 qualified expenses to include K-12^th grade expenses, such as textbooks, test preparation and online learning. 529 funds can now also be used to pay for special education expenses, such as speech and occupational therapy. Consult with your financial advisor to determine if any of these changes can benefit your family.

• Estate planning – TCJA included a significant increase to the lifetime gift and estate tax exemption, which was scheduled to sunset at the end of 2025 had Congress not taken action. OBBA made the higher exemption amount permanent and expanded it to $15 million per individual, $30 million per married couple filing jointly, beginning on January 1, 2026. If you made changes to your estate plan in anticipation of the exemption dropping significantly, be sure to work with your financial advisor and estate planning attorney to readjust your strategies.

If you could use some help determining how the provisions of the OBBBA may impact your financial planning strategies, we would love to have a conversation. Please reach out to schedule a call with a member of our team.

VOLATILITY, AS DEFINED by Merriam-Webster, is “a tendency to change quickly and unpredictably” — a fitting description of the economic and market environment in 2025. A significant portion of this market turbulence originated