key tax and retirement changes fiduciaries should be planning for in 2025-2026
Fiduciary News

Welcome to the latest edition of Fiduciary Focus, Towerpoint Wealth’s newsletter created specifically for professional fiduciaries.

As fiduciaries ourselves with 27 years of combined experience, we understand the responsibility that comes with managing client assets through changing tax laws, retirement rules, and regulatory environments. Your role requires not only technical expertise, but ongoing awareness of how legislative and policy shifts impact real client outcomes.

With that in mind, this edition focuses on upcoming tax and retirement contribution changes taking effect in 2025–2026, with special attention to how these updates affect California fiduciaries managing retirement accounts, distributions, and longer-term planning strategies.

We hope you find this newsletter both informative and empowering as you continue to uphold the highest standards of fiduciary care.

Key Tax & Retirement Changes Fiduciaries Should Be Planning for in 2025–2026

Recent federal and California-specific changes will meaningfully affect retirement funding, tax strategy, and compliance. Below are the key developments professional fiduciaries should have on their radar.

Our Fiduciary Group is here to support you with customized guidance and portfolio insights tailored to your clients’ needs.

1. Higher Federal Retirement Contribution Limits

For 2026, the IRS has increased contribution limits across common retirement vehicles:

  • 401(k), 403(b), most 457 plans & Thrift Savings Plan: Contribution limit increases to $24,500 (up from $23,500 in 2025).
  • Catch-up contributions (age 50+): Increase to $8,000.
  • Super catch-up contributions (ages 60–63): Remain around $11,250 under SECURE 2.0 provisions.
  • Traditional & Roth IRAs: Contribution limit rises to $7,500, with a $1,100 catch-up for those age 50+.
  • SIMPLE IRAs: Contribution limits also increase to $17,000.
  • Roth IRA phase-outs & IRA deduction thresholds: Adjust upward for inflation.
    • For single filers (and heads of household), the Roth IRA eligibility phase-out range is $153,000 to $168,000 in 2026.
    • For married filing jointly, the phase-out range is $242,000 to $252,000 in 2026.

Higher limits directly affect annual funding strategies for clients who are still earning, especially those approaching retirement. These increases may also reopen planning conversations around Roth vs. pre-tax contributions, particularly for clients managing taxable income today versus future RMD exposure.

2. Mandatory Roth Catch-Up Contributions for High Earners

Beginning in 2026, SECURE 2.0 introduces a major change for high-income clients:

This change can alter expected tax outcomes for high earners. Clients who previously relied on pre-tax deferral will now face higher current-year tax bills on catch-up amounts. 

Fiduciaries should also confirm that employer plans offer a Roth option — otherwise, clients may lose access to catch-up contributions entirely.

3. Updated Required Minimum Distribution (RMD) Rules

SECURE 2.0 also adjusted RMD requirements:

  • RMD start age is now generally 73 for many retirement accounts.
  • Penalties for missed RMDs have been reduced from prior levels, with waiver relief available in certain cases.

Correctly coordinating RMD timing and amounts remains critical as ever. Even with lower penalties, missed RMDs can still create unnecessary tax issues, reporting complications, and client stress. Fiduciaries managing retirement distributions must remain diligent in ensuring accuracy as clients approach or surpass age 73.

If you’d like support coordinating RMD calculations, deadlines, and distribution strategies for the clients you serve, our Fiduciary Group is here as a resource. We regularly partner with professional fiduciaries to help manage the complexities of required distributions and reduce the risk of costly errors. We encourage you to reach out if we can support you or your clients.

4. California Conformity to Federal Retirement Rules (Post-2025)

Historically, California lagged behind federal retirement rules due to non-conformity. However, with changes such as SB 711, California will now generally conform to federal retirement contribution and deduction rules beginning in tax year 2025.

  • IRA deductions will often align more closely with federal treatment.
  • Catch-up contributions and indexed limits will sync with federal rules.
  • Basis tracking still matters for pre-2025 contributions, when state and federal rules differed.

Under new rules, planning becomes more streamlined going forward, but historical basis differences must be carefully documented to avoid unexpected California taxable income when distributions begin.

5. Employer-Sponsored Plans & California Retirement Mandates

CalSavers now requires nearly all employers with at least one employee to offer or register for a retirement plan by December 31, 2025.

Expanded access to payroll-deducted retirement plans will influence how clients accumulate savings. Fiduciaries should consider how employer plan access, contribution limits, and plan features interact with client cash flow, tax planning, and longer-term retirement goals.

6. Broader Tax Law Changes That Affect Retirement Planning

Federal tax law changes — including those introduced under the One Big Beautiful Bill — also shape retirement planning:

  • Adjustments to SALT deductions and new senior deductions affect overall taxable income.
  • California does not fully conform to all federal changes, so fiduciaries must coordinate federal and state retirement income planning carefully.

Retirement distributions may be taxed differently at the federal and state levels. Coordinating timing, account type, and withdrawal strategy remains essential to maintaining retirement sustainability for California clients.

AB 568 – Potential Changes for Fiduciary Practices

A recently introduced California bill, AB 586, would allow fiduciary practices to incorporate as professional fiduciary corporations.

If enacted, this change would introduce new registration, reporting, and compliance requirements — but could also offer benefits, including enhanced succession planning options and potential structural flexibility for fiduciary firms.

While still in the legislative process, this bill is worth monitoring closely as it could materially impact how fiduciary practices are structured in the future.

You can learn more about the bill and track its actions here.

“Less, but better.”

As we move into the new year, the idea of doing “less, but better” resonates deeply. Not just doing less, but doing fewer things with more intention. 

Choosing higher-quality decisions, clearer strategies, and the work that truly serves clients, while minimizing what doesn’t. For fiduciaries, that focus is often what creates the difference between unnecessary complexity and unshakeable clarity.

Towerpoint Wealth’s Fiduciary Group Updates

We’re looking forward to a full and engaging year ahead and hope you’ll join us for a few upcoming opportunities to connect, collaborate, and unwind with fellow professionals in the fiduciary community.

Spring Social Mixer: May 7, 2026

Our Spring Social Mixer is back! This gathering is designed to bring fiduciaries and other allied professionals together in a comfortable setting to connect, share insights, and strengthen relationships. Details on the venue and program will be coming soon — but for now, be sure to save the date!

Dinner Experience Following the PFAC Annual Conference: May 28, 2026

Following the PFAC Annual Conference, we’ll be hosting a curated dinner experience for a smaller group of fiduciaries. This event will offer a chance to continue meaningful conversations from the conference in a more intimate, thoughtful setting. Additional details and invitations will be shared closer to the date.

We hope you’ll plan to join us! These events are always highlights of the year, and we look forward to spending time together outside of the day-to-day work.