The government is making a wide range of adjustments across the board for the coming year. Changes impact Medicare premiums, Social Security COLA, tax brackets, and retirement plan contribution limits. The changes could mean higher income and tax savings for some next year.
Medicare
Medicare Part B Premiums have increased. The base monthly premium for Medicare Part B enrollees will now be $202.90 for 2026. The annual deductible for all Medicare Part B beneficiaries is $283 in 2026.
Medicare premiums are adjusted based on income, meaning higher income enrollees pay $202.90 for Part B and about $35 for Part D plus the adjustment. IRMAA Brackets and adjustments for 2026 are as follows:
You may also notice a new premium table that may or may not apply to you. Since 2023, certain Medicare enrollees who are 36 months post kidney transplant, and therefore are no longer eligible for full Medicare coverage, can elect to continue Part B coverage of immunosuppressive drugs by paying a premium. For more information on this specifically, read on here.
The Medicare Part A has no premium to the extent you or your spouse qualify by having 40-quarters (10-years) of eligible work history. That said, there are deductibles and co-insurance amounts.
In terms of coverage, a big win is related to prescriptions. The cost of insulin has been capped at $35 for a 30-day supply, and most vaccines will be free. This includes the popular shingles vaccine. For a full list of capped prescriptions and background on Part D changes, read here. While mostly good news, the max Part D deductible continues to increase and is now $615/year with an out-of-pocket cap of $2,100/year.
Social Security
Approximately 73.9 million Americans will see an 2.8% cost of living adjustment to their Social Security benefit and SSI payments in 2026. “Social Security is a promise kept, and the annual cost-of-living adjustment is one way we are working to make sure benefits reflect today’s economic realities and continue to provide a foundation of security,” said Social Security Administration Commissioner Frank J. Bisignano. “The cost-of-living adjustment is a vital part of how Social Security delivers on its mission.”
On the flip side, more workers’ income will be taxed to help pay into the Social Security and Medicare programs. The same 7.65% tax rate applies to W-2 employees (x2 for self-employed), but up to $184,500 of wage will be taxed.
Another factor to note is the income threshold applicable to those taking social security prior to reaching full retirement age (FRA). In 2026, earning more than $24,480/yr while taking social security “early” will result in $1 of benefits withheld for every $2 in earnings above the $24,480 limit.
Here is Social Security’s full fact sheet for all changes.
Inherited IRAs
The SECURE Act changed distribution rules related to inherited IRAs. Starting 2020, non-spouse beneficiaries would need to distribute inherited IRAs within 10-yrs. It was unclear whether the IRAs needed to be taken out evenly, as desired, or even as a single lump in year 10. The IRS has since provided clarity on the topic, and the answer is “it depends.” If RMDs had never started by the original owner, there is flexibility for how the distribution occurs over the 10-yr period. But if they had started, it’s expected a calculated distribution is taken according to an RMD table in years 1-9, and fully cleared out in year 10. More than the calculated amount can be taken, the goal is largely to just be cleared out in year 10. Use this handy calculator to help determine your RMD.
Income Tax Brackets
The favorable changes made via the Tax Cuts and Jobs Act are set to sunset after 2025. Until then we may not see any material changes apart from normal inflation adjustments to the brackets. See chart for updated brackets, no changes to the rates.
The standard deduction for single taxpayers in 2026 will rise to $16,100, and increase for married taxpayers filing jointly to $32,200.
As for the finer points of your tax return—such as deductions and credits—refer to the chart below. Our post on The Big Beautiful Bill provides additional detail on the newer provisions, including the Enhanced Senior Deduction and the expanded SALT deduction.
Retirement Plan Contribution Limits
Updated employee benefit packages are starting to roll out, and you may be asked to make or confirm contribution elections toward retirement plans and health savings accounts. There are increases across the board in 2026 for how much can be contributed. See our chart for the most popular plans.
IRS Release on Increased Limits.
What does this mean for you?
As you can see, there are many changes happening for 2026 that impact both workers and retirees. If you have questions or are unsure of the best approach to take, give us a call. We can help you determine which strategy might be the best and most appropriate for you. Set up a time to speak with the Wingate team today.
