Month: November 2025

IRS Releases 2026 Tax Brackets, Contribution Limits, Other Tax Updates

Posted on by Kurt Sevits

The IRS recently announced adjustments to marginal tax rates, retirement plan contribution limits, and other provisions that will be helpful for financial planning in the new year.

2025 0BBBA updates

While most of the changes below apply to tax year 2026, the federal tax and spending bill known as the One Big Beautiful Bill Act (OBBBA) made some important changes that apply to tax year 2025.

Notably, the standard deduction for 2025 increased to $15,750 for single tax filers and $31,500 for married couples filing jointly.

The OBBBA also established a new tax deduction for taxpayers who are at least 65 years old. For tax years 2025 through 2028, eligible seniors can deduct an additional $6,000 from their taxable income. The deduction phases out for individuals with modified adjusted gross income over $75,000.

2026 retirement plan contribution limits

In the new year, employees will be able to set aside more money in defined contribution retirement accounts such as 401(k), 403(b), and 457 plans.

The maximum amount a person can contribute to those plans is $24,500 for 2026, an increase of $1,000 from 2025. The catch-up contribution limit for most employees who are 50 or older will increase to $8,000.

Under the SECURE 2.0 Act, workers who are 60, 61, 62, or 63 have a higher catch-up contribution limit. That limit remains unchanged for 2026 at $11,250.

For individual retirement accounts (IRAs), the annual contribution limit will increase to $7,500 in 2026 and the catch-up contribution limit will be $1,100.

2026 HSA/FSA contribution limits

The amount of money workers can contribute to medical savings accounts also will increase in 2026.

  • HSA: Individuals enrolled in a high deductible health plan (HDHP) with a health savings account (HSA) will be able to contribute up to $4,400, and those with family coverage will be able to save a maximum of $8,750.
  • FSA: For workers who don’t have an HDHP with an HSA and instead use a flexible spending account (FSA), the maximum contribution for 2026 is $3,400. For plans that allow unused balances to roll over, the maximum amount that can be rolled over will increase to $680.

2026 tax rates

Below are updated marginal tax rates for single taxpayers and married couples filing jointly. Visit the IRS website for more tax tables and additional details.

Note that since these changes are for tax year 2026, they will generally apply to tax returns filed in 2027; 2025 tax rates will apply to returns filed in 2026.

  • 37% for incomes over $640,600 ($768,700 for married couples filing jointly)
  • 35% for incomes over $256,225 ($512,450 for married couples filing jointly)
  • 32% for incomes over $201,775 ($403,550 for married couples filing jointly)
  • 24% for incomes over $105,700 ($211,400 for married couples filing jointly)
  • 22% for incomes over $50,400 ($100,800 for married couples filing jointly)
  • 12% for incomes over $12,400 ($24,800 for married couples filing jointly)
  • 10% for incomes of $12,400 or less ($24,800 for married couples filing jointly)

2026 standard deduction

The standard deduction for 2026 will increase to $16,100 for single tax filers and $32,200 for married couples filing jointly.

Taxpayers who are 65 or older can take an additional standard deduction, which is also adjusted for inflation. For tax year 2026, that amount is $2,050 for single taxpayers and $1,650 for married taxpayers or surviving spouses.

Visit the IRS website for more information on these and other tax changes.

PERA benefits and taxes

Colorado PERA benefits are subject to federal income tax, as well as applicable state and local taxes. PERA retirees who would like to update their tax withholding can do so by logging in to their secure member account or completing a paper Form W-4P.

Retirees and benefit recipients can expect to receive their 1099-R tax forms for tax year 2025 in January 2026.

Learn more at copera.org/taxes-on-benefits.

News You Should Know: Drugmaker Suing Colorado Over Price Cap

Posted on by Morgan

Amgen Sues Colorado Prescription Drug Board Over Enbrel Price Cap | The Colorado Sun

The fight over Colorado’s first-ever price cap on a prescription drug continues. Amgen, the company that makes Enbrel, is suing over the Prescription Drug Affordability Review Board’s decision to put an upper limit on the price of the rheumatoid arthritis drug. The case is expected to go to court next year, while the price cap is set to go into effect in 2027.

IRS Direct File Won’t be Available Next Year. Here’s What That Means for Taxpayers | ABC News

Tax season will be here before you know it, but taxpayers hoping to save money by filing directly with the IRS this time around are out of luck. Direct File started out as a test program in 2024 and the federal government had planned to make it permanent, but the IRS now says the service will no longer be available.

Curious About Retirement Spending? Here’s What The Average Monthly Expenses Are For Retirees | Investopedia

When preparing for retirement, it’s important to estimate not just your income but also how much you’ll spend. According to the most recent government data, Americans ages 65 and older spend about $60,000 a year, on average. Housing is the biggest expense for that age group, followed by transportation, health care, and food.

CU Denver Program Helps Older Adults Find Purpose After Retirement | Denver7

Finding meaning after decades of working can be a challenge for many retirees. A relatively new adult education program at the University of Colorado Denver aims to help by providing pre-retirees and retirees with the opportunity to audit courses and connect with peers who are also seeking inspiration, meaning, and direction.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

How Are Public Pensions Doing?

Posted on by Morgan

A recent assessment finds the funding levels of public pension plans across the United States have generally improved in recent years despite market volatility and other challenges.

It’s a positive sign that while access to defined benefit pensions in the private sector has dwindled, many states remain committed to providing their public employees with a secure retirement.

Assessing the financial health of public pensions

Pew Research Center, a nonpartisan research firm, keeps track of the financial health of public pensions in all 50 states. Its latest report focuses on plans’ funded ratios, which provide a comparison between a plan’s assets and its future obligations to members. For example, if a plan is 70% funded, that means the plan currently has 70% of the money it would need to pay out all benefits its retirees and working members have earned to date.

In 2023, the most recent year for which Pew has data for each plan, the overall funded ratio for public pensions was 74%. Thirty-five out of 50 states reported funding ratios in 2023 that were higher than in 2022, according to Pew.

A key factor Pew examined is net amortization, a measure of whether a plan receives enough funding and income from investments to reduce its unfunded liabilities—the portion of benefit obligations for which the plan does not have money on hand—while also paying benefits. A positive net amortization trend means the fund is bringing in enough money to pay down debt. Pew found most plans, including Colorado PERA, showed positive amortization from 2019 to 2023.

PERA’s funded status

Thanks to the reforms included in Senate Bill 200 in 2018, PERA is on a path to full funding by 2048. As of December 31, 2024, the combined funded ratio for the five Division Trust Funds (State, School, Local Government, Judicial, and DPS) was 69.2%. In 2018, that number was only 59.8%. Senate Bill 200’s Automatic Adjustment Provision (AAP), which adjusts member and employer contributions, retiree annual increases, and the State’s direct distribution to PERA based on our funding progress, has been an important part of that improvement. The AAP is assessed every year so adjustments can be made as needed without requiring legislative intervention.

As of the end of 2024, PERA remains on track and adjustments via the AAP will not be necessary in 2026.

With budget discussions now underway at the State Capitol, PERA CEO/Executive Director Andrew Roth and Board Chair Hon. Rebecca R. Freyre recently wrote a guest opinion explaining the importance of consistent contributions in keeping PERA on track to reach its funding goal.

“While PERA is on a path to full funding by 2048, it’s important that we stay on that path and follow the plan laid out in SB18-200,” they wrote. “While we’re making progress, we need the General Assembly’s support to keep that momentum going. We all owe it to our members and retirees to stay the course.”

Read more on the Colorado Politics website.