5 Trends to Watch in 2026

• Taxes are changing: higher brackets may impact RMDs and Social Security.

• Inflation is cooling but still affects fixed-income retirees.

• Healthcare costs continue to rise; proactive planning is key.

• AI tools are reshaping financial and tax decisions.

• The intergenerational wealth transfer accelerates; estate planning matters more than ever.

A Year of Opportunity

The start of a new year is always a chance to recalibrate—but 2026 is shaping up to be especially pivotal for retirees. Between evolving tax rules, market uncertainty, and emerging technology in financial planning, retirees who stay proactive will be best positioned to protect and grow their wealth.

This post covers five critical trends that could impact your retirement and actionable steps to ensure you’re ready.

1. Taxes Are Changing Again

Tax policy can dramatically alter retirement outcomes. The expiration of provisions from the 2017 Tax Cuts and Jobs Act means that some retirees could see higher marginal rates this year. Even moderate income from Social Security, pensions, and RMDs might push you into a new bracket.

Actionable Tips:

• Evaluate Roth conversions early in the year to manage taxable income.

• Time withdrawals strategically across taxable, tax-deferred, and tax-free accounts.

• Consider splitting income with a spouse to optimize household tax exposure.

Example:
John, 68, delayed his Social Security and converted $50,000 of his traditional IRA into a Roth in January. By doing so, he minimized future taxes on RMDs while increasing his tax-free income in later years.

FAQ:
Q: How much should I convert to a Roth in 2026?
A: It depends on your current and projected tax bracket, income needs, and estate strategy. Working with an advisor ensures the conversion is optimized.

2. Inflation Is Cooling, But Not Gone

After years of volatility, inflation is easing. Yet retirees relying on fixed income still face real purchasing power erosion. Essential costs such as healthcare, housing, and utilities continue to rise faster than many retirees expect.

Actionable Tips:

• Review your “real income yield” to see what your money is worth after inflation.

• Consider Treasury Inflation-Protected Securities (TIPS) or dividend-focused equities.

• Maintain a modest allocation to growth assets for long-term purchasing power.

Example:
Mary, 72, rebalanced her portfolio in January to include 15% TIPS, 20% dividend-paying equities, and 65% low-risk bonds, helping her maintain inflation-adjusted income.

FAQ:
Q: Are dividend stocks safe in retirement?
A: They provide income but carry market risk. Balancing them with bonds or TIPS can reduce volatility.

3. Healthcare Costs Continue to Rise

Medical expenses remain one of the largest threats to retirement income. Medicare Advantage and supplemental plan changes in 2026 may increase out-of-pocket costs if you don’t review your coverage.

Actionable Tips:

• Check for premium changes and benefit shifts before the next enrollment period.

• Consider long-term care insurance or hybrid policies to protect your nest egg.

• Factor in prescription drug cost increases when planning annual withdrawals.

Example:
Alan, 69, reviewed his Medicare Advantage plan in January and switched to a plan with better coverage for his medications, saving nearly $1,200 annually.

FAQ:
Q: Should I plan for healthcare costs rising faster than inflation?
A: Yes. Even moderate increases can erode retirement income, so proactive planning is critical.

4. AI Tools Are Changing Financial Planning

Artificial intelligence is no longer a buzzword; it’s integrated into tax forecasting, portfolio management, and fraud detection. While AI won’t replace your advisor, it can improve accuracy and efficiency.

Actionable Tips:

• Ask your advisor which AI tools they use to optimize your plan.

• Use AI-generated projections for different income and market scenarios.

• Stay informed on cybersecurity as AI tools handle sensitive data.

Example:
Samantha, 66, used an AI-powered tax projection tool with her advisor to model the effect of a Roth conversion combined with her RMD schedule, reducing her projected taxes by $2,000.

FAQ:
Q: Can retirees safely rely on AI for financial planning?
A: AI should complement, not replace, expert guidance. It’s most powerful when paired with human insight.

5. The Great Wealth Transfer Accelerates

The largest intergenerational wealth transfer in U.S. history continues. Estate planning, trusts, and updated beneficiary designations are more important than ever.

Actionable Tips:

• Update wills, trusts, and digital assets to reflect current intentions.

• Explore charitable giving for both impact and tax benefits.

• Discuss your plans with family to avoid confusion and conflict.

Example:
Linda, 71, updated her trust in January to include a new charitable fund and aligned her beneficiaries, protecting both her legacy and family harmony.

FAQ:
Q: What is the simplest way to review my estate plan?
A: Schedule a meeting with your financial advisor and estate attorney to walk through documents, updates, and any tax law changes.

Act Early, Stay Ahead

2026 presents opportunities and challenges. By understanding tax shifts, inflation risks, healthcare costs, AI tools, and wealth transfer trends, retirees can act strategically. Early action ensures your retirement plan remains resilient, adaptable, and aligned with your goals.