Within 10 Years of Retirement? 5 Financial Moves to Make in 2026

If you are within 10 to 15 years of retirement, the weeks right after Tax Day can feel like one of the few quiet stretches of the year. The return is filed. The check has cleared or the refund has landed. The question that often pops up next is some version of the same thing: am I actually on track?

It is a good question to sit with. The decade or so before retirement is when the financial decisions you make carry the most weight. Contribution limits are higher. Tax laws keep shifting. The choices you lock in now around savings, taxes, and healthcare will shape how the next 20 to 30 years feel. Below are five moves worth making this spring to keep your plan moving in the right direction.

1. Take advantage of the higher 2026 contribution limits

The IRS bumped retirement plan limits up again this year, and if you are 50 or older, the catch-up rules give you real room to accelerate. Here is what the numbers look like for 2026:

• 401(k), 403(b), and 457(b) plans: You can contribute up to $24,500.
• Age 50 and older catch-up: An extra $8,000, for a total of $32,500.
• Age 60 to 63 “super catch-up”: An extra $11,250 instead of the $8,000, for a total of $35,750.
• Traditional and Roth IRAs: $7,500, plus a $1,100 catch-up if you are 50 or older.

If you got a refund this spring or your bonus came in higher than expected, this is a natural moment to redirect some of that money toward contributions. Even bumping your 401(k) deferral up by 2% of your salary can add tens of thousands of dollars to your balance over a decade.

Quick example: if you earn $150,000 and increase your 401(k) deferral from 10% to 12%, that is an extra $3,000 a year. Over 10 years at a 7% average annual return, that single change adds roughly $42,000 to your retirement nest egg. Small adjustments early in the year compound far more than scrambling in December.

2. Know the new 2026 Roth catch-up rule before it surprises you

This is the biggest retirement plan change in 2026, and many pre-retirees do not know it is coming.

Starting January 1, 2026, if you are age 50 or older and your prior-year FICA wages (the wages reported in Box 3 of your W-2) from the employer sponsoring your plan exceeded $150,000, any catch-up contributions you make to a 401(k), 403(b), or governmental 457(b) must be made on a Roth (after-tax) basis. The standard $24,500 base contribution is unaffected, and you can still send that money in pre-tax if you choose. Only the catch-up dollars on top of the base limit have to flip to Roth.

For high earners who were counting on the pre-tax deduction for their full $32,500 or $35,750 contribution, this changes the math. The $8,000 or $11,250 catch-up amount is now taxed today rather than in retirement.

Here is the practical upshot. If you fall under this rule, you lose the up-front deduction on the catch-up portion, but you gain a bucket of money that grows tax-free and comes out tax-free in retirement. For many pre-retirees who already have large traditional 401(k) balances, this is actually a quiet win. It helps you build tax diversification (more on that next) and reduces future required minimum distributions. But it is worth modeling now so you are not surprised when your take-home pay drops in January.

One more note: this rule does not apply to IRA catch-ups, and self-employed people whose income comes through a K-1 instead of a W-2 are generally exempt because they do not have FICA wages.

3. Build tax diversification across three buckets

A common mistake pre-retirees make is concentrating too much of their savings in tax-deferred accounts like a traditional 401(k) or IRA. That feels great while you are working because every contribution lowers your tax bill. But it can backfire in retirement, when every withdrawal is taxed as ordinary income and required minimum distributions (forced withdrawals you must take starting at age 73) push you into a higher bracket than you planned for.

The fix is to build a mix of accounts with three different tax treatments:

• Tax-deferred: Traditional 401(k) and IRA. You get the deduction now and pay taxes on withdrawals in retirement.
• Tax-free: Roth 401(k) and Roth IRA. You pay taxes on contributions now, and qualified withdrawals come out tax-free.
• Taxable: Regular brokerage accounts. No tax break going in, but you only pay capital gains rates on growth (typically lower than ordinary income rates).

Having all three gives you flexibility to manage your tax bracket year by year in retirement. In a high-income year, you can pull from the Roth. In a low-income year, you can do a Roth conversion (moving money from a traditional IRA to a Roth and paying taxes now) to fill up lower tax brackets. The years between retirement and age 73 are often the best window for Roth conversions, because your income drops but RMDs have not yet started.

4. Treat your HSA as a stealth retirement account

If you have a high-deductible health plan, a Health Savings Account (HSA) is one of the most tax-efficient accounts available. It is the only account that gives you three tax breaks: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.

The 2026 limits are $4,400 for self-only coverage and $8,750 for family coverage. If you are 55 or older, you can add an extra $1,000 in catch-up contributions. So a married couple in their late 50s with family coverage can put away $9,750 between them when both spouses are 55+.

Here is what most people miss. If you can afford to pay current medical expenses out of pocket and let the HSA grow, you build a tax-free pool of money for healthcare in retirement, which Fidelity estimates will cost the average 65-year-old roughly $165,000 over the rest of their life. After age 65, HSA funds can also pay Medicare premiums and a portion of long-term care insurance premiums without tax. And if you withdraw HSA money for non-medical reasons after 65, you simply pay ordinary income tax on it, the same as a traditional IRA. That makes the HSA effectively a “stealth retirement account” with better tax treatment than almost anything else.

If you plan to retire before 65 (when Medicare kicks in), your HSA also gives you a tax-free way to cover health insurance costs during the gap years, which can otherwise be one of the most expensive parts of early retirement.

5. Run a real projection before you make big decisions

There is a meaningful difference between “I think we are on track” and “we have run the numbers.” Pre-retirement is when that difference starts to matter.

A good projection should answer a few questions in concrete terms. What will your spending actually look like in retirement, not just a round number? Which accounts should you draw from first to keep your lifetime tax bill low? When should you take Social Security based on your specific situation, not a generic rule of thumb? How does a Roth conversion strategy change your long-term tax picture? And how would a market downturn in the first few years of retirement affect your plan?

These are not questions you want to answer by gut feel. Most pre-retirees we work with are doing better than they realize on the savings side, and worse than they realize on the tax-planning side. Small adjustments now (a contribution shift, a Roth conversion, a more strategic withdrawal order) can add up to six figures of additional retirement income over a 25-year retirement.

Where this leaves you

The years right before retirement are not the time to put your plan on autopilot. They are the time to fine-tune it. Most of the moves above are not glamorous. They will not show up on your statement next month. But the pre-retirees who finish strongest are not the ones who picked the right stock or timed the market. They are the ones who quietly optimized the boring things, year after year, all the way to the finish line.

If you would like a second set of eyes on your plan, our team at ABRI helps pre-retirees in Lexington and across the country pressure-test their savings, tax, and withdrawal strategies before retirement, not after. Reach out if you want to talk it through.

Sources:
https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500 
https://www.irs.gov/pub/irs-drop/n-26-05.pdf

This information is provided as general information and is not intended to be specific financial guidance.  Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives. The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed.