Retirement Plan Services

What is the 401(k) employee contribution limit for 2026?

For 2026, employees can contribute up to $24,500 to their 401(k) plan — a $1,000 increase from the 2025 limit. Employees aged 50–59 or 64 and older can add an $8,000 catch-up contribution. Those ages 60–63 qualify for an enhanced "super catch-up" of $11,250 under SECURE 2.0. Figures reflect IRS limits for the 2026 plan year — confirm current figures at IRS.gov. 

Does the new SECURE 2.0 rule require my high-earning employees to make Roth catch-up contributions in 2026?

Yes. Effective January 1, 2026, employees age 50 or older who earned more than $150,000 in FICA wages from your company in 2025 must now make all catch-up contributions on an after-tax Roth basis — pre-tax catch-up contributions are no longer permitted for this group. Plan sponsors should work with their ERISA counsel and recordkeeper to confirm plan document and payroll system compliance. 

Does SECURE 2.0 require my business to automatically enroll employees in our 401(k)?

Yes, if your 401(k) or 403(b) plan was established after December 29, 2022, SECURE 2.0 requires automatic enrollment starting at a minimum 3% contribution rate, with automatic annual escalation up to at least 10%. Certain exemptions may apply — consult your plan document and ERISA counsel to confirm whether your plan qualifies. Plans that do not comply may face IRS correction requirements, making proactive plan design review the best risk management. 

How do I know if my company's 401(k) plan fees are too high?

The Department of Labor requires that plan fees be "reasonable" relative to the services provided. Larger plan assets generally create leverage for fee negotiation with recordkeepers — a benchmarking analysis will show what comparable plans are currently paying. A review of your total plan costs, including recordkeeping, investment expense ratios, and administrative fees, is the clearest way to assess value. 

What happens if my 401(k) plan fails a nondiscrimination test?

If your plan fails the ADP/ACP nondiscrimination tests, you have until 2½ months after plan year-end — typically March 15 for calendar-year plans — to issue corrective distributions, make qualified nonelective contributions (QNECs), or explore other IRS-approved correction methods. Consult your TPA for the best option for your plan. Adding a safe harbor feature to your plan design can prevent failures entirely. 

What is the difference between an ERISA 3(38) and 3(21) investment fiduciary?

A 3(38) investment manager has full discretionary authority over plan investments and assumes fiduciary liability for investment selection, removing it from the plan sponsor. A 3(21) co-fiduciary provides recommendations, but the plan sponsor retains decision-making authority and shared liability. The right arrangement depends on your plan's size, complexity, and how much investment oversight responsibility your team can manage. 

How often should I benchmark my company's retirement plan?

The DOL's fiduciary standard requires plan sponsors to prudently monitor service providers on an ongoing basis. Most compliance experts recommend a formal benchmarking review at least every three years, and after any significant change in plan assets, participant count, or service provider. Documented reviews demonstrate a prudent process, which is central to meeting your ERISA fiduciary obligations. 

What is the best retirement plan option for my small business — a 401(k), SEP-IRA, or SIMPLE IRA?

The most appropriate plan depends on your goals, workforce size, and budget. A SEP-IRA allows employer contributions up to $70,000 in 2026 and is simplest for self-employed owners. A SIMPLE IRA works well for businesses under 100 employees, while a 401(k) offers the most flexibility, highest deferrals, and Roth options — and SECURE 2.0 startup tax credits have significantly reduced the cost barrier. 

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Executive Wealth

How are my RSUs taxed when they vest?

RSUs are taxed as ordinary income at vesting — the fair market value on the vest date is included in your W-2 wages and subject to federal, state, and FICA taxes. Your employer typically withholds at the 22% supplemental rate, but executives in higher brackets often owe significantly more at tax time. Coordinating with your tax advisor before a vest date is essential to avoid unexpected year-end tax liability. 

Should I exercise my incentive stock options (ISOs) now or wait?

ISO exercise timing depends on your current income, the spread between exercise price and fair market value, AMT exposure, and holding period requirements. A strategic multi-year exercise schedule can help manage AMT exposure and long-term tax efficiency — the right approach depends on your specific grant, income, and timeline. 

How do I reduce my tax bill on a large block of company stock I have accumulated over the years?

Concentrated company stock carries both market risk and a deferred tax liability. Strategies to diversify include an exchange fund, a charitable remainder trust, or a donor-advised fund for highly appreciated shares. Each of these strategies involves legal, tax, and investment complexity — implementation requires coordination with your attorney, CPA, and financial advisor. A systematic selling plan under Rule 10b5-1 can also allow insiders to diversify in accordance with securities law requirements when properly structured. 

What is a non-qualified deferred compensation plan (NQDC) and should I participate?

An NQDC plan lets you defer a portion of your salary or bonus — often without contribution limits — into a future tax year when your income is typically lower. Unlike a 401(k), assets remain a general creditor claim against the company, so employer financial health is a key consideration. For executives in peak earning years, NQDC deferral can be a highly effective tax deferral strategy when used appropriately. 

How does a 10b5-1 plan work, and do I need one to sell my company shares?

A 10b5-1 plan is a pre-arranged, legally documented schedule for selling company shares that allows corporate insiders to sell stock at predetermined times without violating insider trading rules. SEC amendments effective in 2023 added cooling-off periods and new disclosure requirements. Proper setup and timing are critical — a 10b5-1 plan only provides protection if adopted when the executive is not in possession of material non-public information. 

Can I use my vested RSUs or company stock to fund a charitable giving strategy?

Yes. Donating appreciated company stock directly to a donor-advised fund or charitable remainder trust allows you to avoid capital gains tax entirely while claiming a fair-market-value charitable deduction. For executives with large appreciated equity positions, this strategy can significantly reduce capital gains tax liability while supporting causes you care about — the actual tax benefit depends on your specific holdings and income. 

I work in multiple states — how does that affect how my RSUs are taxed?

When RSUs vest, states where you worked during the vesting period — not just where you currently live — may claim a proportional share of the income for taxation. This multi-state apportionment is complex, especially for executives who travel frequently or relocated during a vesting period. Working alongside your CPA to identify allocation issues before filing helps ensure nothing is missed or overpaid. 

How do I avoid the Alternative Minimum Tax (AMT) when exercising incentive stock options?

The AMT is triggered when the spread between your ISO exercise price and fair market value is treated as a preference item under the alternative tax calculation. For 2026, the AMT exemption is $90,100 for single filers and $140,200 for married couples filing jointly — but phases out twice as fast as prior years under the One Big Beautiful Bill Act, starting at $500,000 and $1,000,000 of income respectively. Strategies to minimize AMT include exercising ISOs in lower-income years, staying under applicable exemption thresholds, or applying AMT credit carry-forwards in future years. Timing ISO exercises requires careful modeling of your full tax picture — work with your advisor and CPA before acting. 

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Wealth Management

How do I know if I actually need a wealth manager — and not just a financial advisor?

A wealth manager typically serves clients with $2,000,000 or more in investable assets, coordinating investments, taxes, estate planning, and cash flow as a unified strategy — not just managing a portfolio. If your financial life involves multiple income sources, a business, or an estate plan, integrated wealth management usually delivers a more coordinated financial strategy. 

How can I reduce taxes on my investment portfolio in 2026?

Several strategies can lower your 2026 tax bill: tax-loss harvesting, asset location (holding tax-inefficient investments in tax-deferred accounts), qualified opportunity zone investments, and Roth conversion ladders. With the top federal capital gains rate at 20% plus the 3.8% Net Investment Income Tax for high earners, proactive planning before year-end can be meaningful. Tax strategies should be reviewed with a qualified tax advisor for your specific situation. 

How do I pass wealth to my children without a large estate or gift tax bill?

In 2026, the annual gift tax exclusion is $19,000 per recipient, and the lifetime estate and gift tax exemption remains elevated — though it may be subject to change depending on future legislation, so reviewing your plan with an advisor now may be prudent. Strategies like 529 superfunding, irrevocable trusts, and GRATs can transfer significant wealth with minimal tax exposure. Trust strategies require coordination with a qualified estate planning attorney. 

Should I convert money to a Roth IRA in 2026 before tax rates potentially increase?

A Roth conversion in 2026 makes sense if you expect to be in a higher tax bracket in retirement or believe federal tax rates will rise. Current tax provisions may be subject to change depending on future legislation, and acting while rates remain relatively favorable could be advantageous. Whether a Roth conversion makes sense depends on your individual tax situation — consult your advisor before acting. 

What is tax-loss harvesting and when should I use it?

Tax-loss harvesting means selling investments at a loss to offset realized gains, reducing your taxable income. Losses can offset up to $3,000 of ordinary income per year, with unlimited carry-forward. Wash-sale rules and timing make this a strategy best executed with professional guidance — improper execution can disqualify the loss entirely. 

How do I protect my portfolio from a major market downturn without moving everything to cash?

Diversification, rebalancing triggers, alternative assets, and downside-protection strategies like buffer funds — each carrying their own risk profile — can help reduce portfolio drawdown without sacrificing long-term growth. Historically, investors who exit markets during downturns have missed the best recovery days, which account for a disproportionate share of long-term returns. Past market behavior does not guarantee future results. 

What is the minimum amount of money I need to work with a wealth management firm?

At Wealth(K)are Partners, we focus on clients where comprehensive financial planning — tax strategy, investment management, and estate planning — works together to create meaningful value beyond what a single-service provider can deliver. Our approach is best suited for clients with complex financial lives and significant accumulated assets. 

What is the difference between a traditional IRA and a Roth IRA, and which is better for high earners?

A traditional IRA offers a potential upfront tax deduction but requires you to pay taxes on withdrawals in retirement. A Roth IRA provides no upfront deduction, but qualified withdrawals are completely tax-free. For high earners, the Roth becomes especially valuable when future tax rates are expected to be higher — and in 2026, the Roth IRA income phase-out begins at $236,000 for married couples filing jointly, making backdoor Roth strategies increasingly relevant. 

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