Portfolio Clean-Up: Rolling Over, Reconciling, and Resetting for 2026

Portfolio Clean-Up for 2026: Rolling Over, Reconciling, and Resetting

As 2026 approaches, it’s crucial for retirement savers and plan sponsors to prepare for significant regulatory and market changes. A strategic portfolio clean-up—rolling over, reconciling, and resetting your retirement accounts—can help you maximize benefits and ensure compliance with new rules. At Target Retirement Solutions, we guide clients through these transitions, focusing on the best company retirement plans for lasting financial security.

Starting January 1, 2026, employees aged 50+ earning more than $145,000 in FICA wages will be required to make catch-up contributions to 401(k), 403(b), and 457(b) plans on an after-tax Roth basis, rather than pre-tax. This change, mandated by the SECURE 2.0 Act, means:

• Higher-income earners must use Roth contributions for catch-up, impacting taxable income and retirement tax planning.
• Employers must add or maintain a Roth option in their retirement plans to remain compliant and allow continued catch-up contributions for affected employees.
• Plan documents must be formally amended by December 31, 2026, and payroll systems updated to identify and process these contributions correctly.

Action Steps:

• Confirm your employer’s plan offers a Roth option.
• Maximize pre-tax catch-up contributions in 2025 before the rule changes.
• Consult with Target Retirement Solutions to review rollover strategies and ensure your plan ranks among the best company retirement plans.

Reconciling your retirement accounts is essential to avoid costly errors and ensure compliance with new regulations:

• Plans must include a deemed Roth election feature to automatically treat affected catch-up contributions as Roth.
• Correction methods, such as the Form W-2 Correction and In-Plan Roth Rollover, are available if contributions are misclassified.
• Employers and employees should coordinate with service providers to align plan features and operations with the new rules.

Best Practices:

• Review your 2025 W-2 wages to determine Roth eligibility.
• Ensure all contributions are correctly classified and reported.
• Work with Target Retirement Solutions for expert reconciliation and compliance support.

Resetting your portfolio means adapting to new contribution limits, income thresholds, and market realities:

• IRA and retirement plan contribution limits and income ranges will shift in 2026, affecting deductibility and savings strategies.
• The Qualified Charitable Distribution limit and pension-linked emergency savings account limits will increase.
• Market volatility and a changing tax landscape require a renewed focus on dependable income and risk management.

Reset Checklist:

• Update your retirement plan to reflect new limits and rules.
• Rebalance your portfolio for risk and income needs.
• Explore annuities and other dependable income options for stability.
• Choose the best company retirement plans that offer flexibility and robust features.

A thorough portfolio clean-up ensures you’re not only compliant but also positioned for growth and security. The best company retirement plans offer:

• Flexible Roth and pre-tax contribution options.
• Proactive compliance with regulatory changes.
• Comprehensive support for rollovers, reconciliation, and resets.

At Target Retirement Solutions, we specialize in helping businesses and individuals optimize their retirement strategies for 2026 and beyond.

Ready to Clean Up Your Portfolio for 2026?

Contact Target Retirement Solutions to review your retirement plan, ensure compliance, and secure your financial future with the best company retirement plans. Our experts are here to guide you through rolling over, reconciling, and resetting for the new era of retirement planning.