Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker dealer, member, FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors, Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. Well, this is Nate Kreinbrink bringing you today’s show. Middle of February, and I think we’re all in agreement that we will take this weather up until, I guess you would call it whenever we get to spring. So again, nice little change from what we went through the last probably week and a half, two weeks ago and 60, 70 degree temperature swing from negative 20, 30s up to hitting the 30s, 40s, and if you look at the extended forecast, possibly a 50 in there. So again, it feels nice. Enjoy it. I think we’re all ready for that change of winter weather over to a little bit of warmer time, but obviously we know we are still mid-February and we never know what we’re going to get and obviously we’re probably not out of the woods yet.
But again, exciting time of the year though as we start that transition period. A lot going on in the local communities. Big congratulations to the area. Bowling team’s out of state just recently, again, representing our area well in that area. Girls wrestling this past week, boys wrestling coming up, high school girls and boys basketball, either ending their season or getting really close to that end of the year where we transition to the tournament time where it just kind of ramps things up a little bit and that win or go home mentality. So best of luck to all the area athletes, activities and then everything going on. Definitely exciting time and love seeing the success stories and all that from kids in our area as they do great things.
So again, as we get into today’s show, I know David was on last week for the half hour live program. Spent a lot of time kind of talking current events, economy, where things are going and things along those lines as far as what you need to be looking at and how things have kind of transitioned from 2025, where overall it was another kind of positive year. But then again as we transition to 2026, obviously a lot of the key terms are still in the headlines, whether it’s interest rates, inflation, tariffs and jobs reports and growth and everything. So again, be mindful, be ready to react when things would happen to change. But again, we’ll continue to cover some of those topics as they become more prevalent on the show.
What I wanted to kind of touch on today is, again, starting a new year, it does bring on some changes and some concepts that we need to continue to look at as we transition to the new year. No two years are exactly the same, and as we get into 2026, obviously the third week of the year, I always talk taxes with Andy and Mike from the tax side of our office there. With it being tax season, a lot of you are either one, already have gotten all of your tax documents or just waiting on those last stragglers to work themselves through the mail and to you.
Again, one thing with that is if you do have an online account for anything that you may have, be very mindful of checking that online account for the tax forms. It’s becoming more and more common for those entities to not necessarily physically mail those 1099s, W-2s, whatever it may be out to you, they post it on your online portal. You have to physically go in, save it, send it to your tax preparer, go in, print it yourself, put it in your file. So if you’re having trouble locating one, and if you do have an online portal, maybe check there before you get too worried because it’s a lot of times we find that they’re in your inbox in that online portal.
So when you get that, and again, just another general rule of thumb as you continue to get stuff, Andy always says it and I’ll continue to harp it for him, is that if you have a question as to whether or not you should bring this document to your tax preparer, put it in there. Let them be the one to decide that they don’t need it, and if you are kindly enough to take everything out of the envelopes. Again, little housekeeping things that he always says. But again, when you think about these tax preparers and these accountants as they’re going through hundreds and hundreds and hundreds and thousands of pieces of paper on a daily basis, any little bit to speed that up for them, they will be extremely thankful for when you’re doing that.
So when we look at new years, especially this year, we want to look at if you’re making any ongoing contributions to say a Roth account, an IRA account that maybe are just coming out on a monthly basis. The limit for 2025 was $7,000 if you were under the age of 50. It was $8,000 if you were over the age of 50, assuming you met income requirements for each of those. So if you had it set up where you were putting a flat amount in each month to max that out, you may want to look at upping that for 2026. Now it’s up February, so you may be a month or so behind on making this change. But the income or the contribution limits for a Roth account or an IRA account went up in 2026. So if you’re under age 50, last year was $7,000. This year for 2026, it’s $7,500. So it went up an extra 500 bucks. So if you’re looking at maxing that out, you’re going to want to change your monthly contributions to reflect that increase in limits that you’re able to put into it.
If you’re over age 50 and you meet again those income requirements to be able to put money into a Roth account or into an IRA account, your contribution limits for those over age 50 went up to $8,600 a year. Okay, so an extra $600 from what you were able to do last year. So again, if you are maxing it out each month to hit those marks from 2025, those income or those contribution limits that you’re able to put in for 2026 increase. So you’re going to want to look at increasing that if you’re still wanting to max those out in any given year. Obviously, the contribution limits since they went up with the IRAs, did go up with retirement plans 401Ks, 403(b)s as well. So again, if you’re maxing it out, if you’re putting a certain percentage to get you to that max, you’re going to want to look at that and see again what your income is. If that went up and your percentage stayed the same, obviously you’re going to have more going into it, which may put you up to that limit already. But again, something to keep in mind.
One other big change that we’re starting to see people get notifications from their employers if it applies to them is one of the changes in the tax law was that if you are over the age of 50 and you are able to make a catch-up contribution into your retirement plan at work, so you’re able to put in roughly the $24,000 to max it out, you have that catch-up contribution for anybody that is over age 50. The change for the tax law this year is that if you are over the age of 50 and eligible for that catch-up contribution where your income comes in, may have an impact on how you can contribute that money.
Now I say how you can contribute that money, it’s what account you’re able to put that into in your 401k. There’s a lot of people that are realizing that the pre-tax contribution that they’re doing for that catch-up, because they’re over the age of 50, can no longer go into the pre-tax side of their 401k account. That catch-up contribution has to go into your Roth 401k that you have at your employer. Again, this is individuals that are over age 50 that are eligible for that catch-up contribution. A lot of them are going to have to go into their Roth 401k side.
So if you’ve got questions with that, if you’re looking to max out. Now dollar one up until the regular max, the $24,000, that can still go into pre-tax, that does not change. It’s for those individuals that are eligible for that catch-up contribution that has to go into the Roth side of your 401k, 404(b), anything. So again, if you’ve got questions, again, this is where we want to sit down, take a look and see where things are going. And again, as you over the next month or two as you’re getting your taxes done, and if they’re changed from where they were last year, if they’re not coming out to where you were, you’re getting a huge refund back and you’d rather not, if you’re having to pay in, and obviously you’d rather not do that as well, again, ask questions to your tax preparer.
Let them give you a little guidance as to what you can do now to make it so 12 months from now, you’re not having that same outcome and it works a little bit more favorable in your way that you want it to turn out. Obviously, with being tax season, they’re not going to sit down and have a huge planning session with you, but they’re going to be able to look at what is causing that tax or what is causing that extra withholding to get that huge refund back and be able to adjust it. We still have, again, 10 months of the year to go yet. So again, we’re looking at making changes to have them go into effect to have an impact on what those outcomes would be going forward. So that could be withholding, that could be adding more, adding less withholding. If income has drastically changed or drastically been reduced, you may want to look at doing a lot of those things.
So questions as always, give us a holler. Again, new years bring new changes, new laws, new impacts to where things are going to impact you at. Again, give us a call, we’d be happy to sit down with you. Did want to mention before we run out of time here, that every month NelsonCorp is featuring a charity of the month? The charity for February is the Clinton Women’s Club here in Clinton. Again, this is Nate Kreinbrink, bringing you this week’s financial focus. Thanks for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in the show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors, incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.NelsonCorp.com.