Investing

Typically, 401(k) catch-up contributions, which apply to workers age 50 and older, can be traditional pretax or after tax Roth, depending on what 401(k) plans allow.
But starting in 2026, 401(k) catch-up contributions generally must be after tax Roth if you earned more than $145,000 during the previous year.
The change could mean impacted workers lose an upfront tax break, but it’s important to run projections with an advisor to strategize long-term.

Kate_sept2004 | E+ | Getty Images

There’s a big change coming for 401(k) plans that could impact a popular tax break for higher earners, experts say.
For 2025, workers can defer up to $23,500 into 401(k) plans, and employees age 50 or older can save an extra $7,500, known as “catch-up contributions.” That catch-up limit jumps to $11,250 for workers age 60 to 63.    

Typically, catch-up contributions can be traditional pretax or after-tax Roth, depending on what your 401(k) plan allows. But certain higher earners soon won’t have a choice, thanks to a change enacted via the Secure 2.0 Act of 2022.
Starting in 2026, 401(k) catch-up contributions generally must be after-tax Roth if you earned more than $145,000 from your current employer during the previous year.

More from Fixed Income Strategies:

Stories for investors who are retired or are approaching retirement, and are interested in creating and managing a steady stream of income:

In the meantime, older workers can choose between traditional and Roth 401(k) catch-up contributions, assuming their plan offers both options.
While traditional deferrals offer an upfront tax break, you will pay regular income taxes on future withdrawals. By comparison, there is no tax deduction for Roth contributions, but the funds grow tax-free.
“Now is the time to work with your advisor or tax preparer to run multi-year tax projections,” said certified financial planner Patrick Huey, owner of Victory Independent Planning in Portland, Oregon. 

This could help you decide whether to accelerate pretax catch-up contributions through 2025 or embrace Roth contributions sooner, experts say.

Pick between pretax and Roth 401(k)

In 2024, nearly all retirement plans offered catch-up contributions, but only 16% of eligible workers made these deferrals, according to a 2025 Vanguard report based on more than 1,400 plans and nearly 5 million participants.
Most catch-up contribution participants earned $150,000 or more, the report found.

However, the choice between Roth vs. pretax catch-up contributions may depend on several factors, including current and expected future tax brackets, experts say. You may also consider your effective tax rate — total tax relative to earnings — in retirement or legacy planning goals.
The “key takeaway” for investors is, “do not sit on the sidelines” as the rules change, said CFP Jared Gagne, assistant vice president and private wealth manager with Claro Advisors in Boston.   More

The IRS has unveiled higher federal tax brackets for 2026 to adjust for inflation.
The standard deduction will increase to $32,200 for married couples filing together and $16,100 for single taxpayers.
There are also changes to the long-term capital gains brackets, estate tax exemption, child tax credit eligibility and more. 
The IRS announcements come a day after the agency said it would furlough nearly half its workforce due to the ongoing government shutdown. 

Pra-chid | Istock | Getty Images

The IRS has announced new federal income tax brackets and standard deductions for 2026.
In its announcement Thursday, the agency raised the income thresholds for each bracket, which apply to tax year 2026 for returns filed in 2027.

The IRS also boosted figures for other provisions, including long-term capital gains brackets, estate and gift tax exemption and eligibility for the earned income tax credit, among others.
For 2026, the top rate of 37% applies to individuals with taxable income above $640,600 and married couples filing jointly earning $768,700 or more for 2026.

Read more CNBC personal finance coverage

Federal income tax brackets show how much you owe on each part of your “taxable income,” which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
The standard deduction will also increase in 2026, rising to $32,200 for married couples filing jointly, up from $31,500 in 2025. Starting in 2026, single filers can claim $16,100, a bump up from $15,750.
The IRS announcements come a day after the agency said it would furlough nearly half its workforce due to the ongoing government shutdown.  More

Even with the government shutdown, some student loan borrowers are receiving emails from the U.S. Department of Education that their debt will soon be discharged.
Here’s what borrowers should know.

People walk in front of the the U.S. Department of Education, amid reports that U.S. President Donald Trump’s administration will take steps to defund the federal Education Department, in Washington, U.S., February 4, 2025. 
Kevin Lamarque | Reuters

Despite the government shutdown, the U.S. Department of Education is sending out notices to student loan borrowers that their debt will soon be canceled.
“You are now eligible to have some or all of your federal student loan(s) discharged because you have reached the necessary number of payments under your Income-Based Repayment (IBR) Plan,” reads an email sent to a borrower. CNBC reviewed multiple notices to borrowers.

According to the department email, the recipient’s loan discharge will be processed “over the next several months,” and borrowers have until Oct. 21 to opt out of the relief.

Read more CNBC personal finance coverage

In July, the Education Department announced it would temporarily stop forgiving the debt of borrowers enrolled in the IBR plan. Under its terms, IBR concludes in debt erasure after 20 years or 25 years of payments, depending on the age of a borrower’s loans.
The development sparked panic among borrowers. After recent court actions and Congress’ passage of President Donald Trump’s “big beautiful bill,” which phases out several existing student loan repayment plans, IBR is the only plan available at the moment that offers debt forgiveness.
The department said that it needed to pause the relief while it responded to court orders that changed which periods counted for loan forgiveness. 
With the relief on pause, many borrowers who’d been in repayment for decades were stuck carrying a debt that — according to their loan terms — they should no longer owe.

The delayed IBR loan forgiveness became a central issue in the American Federation of Teacher’s legal battle with the Education Department. The teacher’s union, which represents nearly 2 million members, filed a lawsuit against the Trump administration in March, accusing it of depriving student loan borrowers of their rights.
The union had pointed out that if the IBR loan discharges occurred after December, borrowers could be saddled with a huge tax bill.
The American Rescue Plan Act of 2021 made student loan forgiveness tax-free at the federal level through the end of 2025. Trump’s “big beautiful bill” did not extend or make permanent that broader provision. More

The IRS has announced the long-term capital gains brackets for 2026, which apply to investments owned for more than one year. 
For 2026, single filers can earn up to $49,450 in taxable income — or $98,900 for married couples filing jointly — and still pay 0% for long-term capital gains.
You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
The IRS announcements come a day after the agency said it would furlough nearly half its workforce due to the ongoing government shutdown. 

Rockaa | E+ | Getty Images

The IRS has unveiled higher capital gains tax brackets for 2026.
In its announcement Thursday, the agency boosted the taxable income limits for the long-term capital gains brackets, which apply to assets owned for more than one year.  

It also increased figures for dozens of other provisions, including federal income tax brackets, the estate and gift tax exemption, and eligibility for the earned income tax credit, among others.
The IRS announcements come a day after the agency said it would furlough nearly half its workforce due to the ongoing government shutdown. 

Read more CNBC personal finance coverage

The capital gains rate you pay is based on which bracket you fall into based on taxable income. 
You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income. For 2026, the standard deduction will rise to $16,100 for single filers and $32,200 for married couples filing jointly.
Starting in 2026, single filers will qualify for the 0% long-term capital gains rate with taxable income of $49,450 or less and married couples filing jointly are eligible with $98,900 or less.  More

Millions of Social Security beneficiaries are poised to see an inflation-adjustment to their benefits in 2026.
But the timing of the Social Security cost-of-living announcement may be delayed if the federal government shutdown continues.
Here’s what experts are watching with regard to the Social Security COLA for 2026.

Erik Isakson | Tetra Images | Getty Images

The Social Security cost-of-living adjustment for 2026 is expected to be formally announced in October. However, the federal government shutdown may affect the timing of that news.
Millions of Social Security beneficiaries are poised to get a boost to their monthly checks next year. When the Social Security COLA is announced, experts have projected the benefit increase may fall in the range of 2.7% to 2.8%, based on the most recent government inflation data.

Beneficiaries have seen several significant increases in their benefits in recent years — the largest was 8.7% in 2022 — due to higher inflation. But as the pace of inflation has come down, so have the cost-of-living adjustments.

More from Fixed Income Strategies:

Stories for investors who are retired or are approaching retirement, and are interested in creating and managing a steady stream of income:

Still, many Social Security beneficiaries continue to face higher prices for necessities.
“They’re feeling the pinch, but the inflation numbers aren’t necessarily showing it,” said Shannon Benton, executive director at The Senior Citizens League, a nonpartisan senior group.
Here are three things to watch ahead of the Social Security COLA announcement.

Shutdown may delay COLA announcement

The Social Security cost-of-living adjustment is based on third-quarter data for the consumer price index.

On Oct. 15, the Bureau of Labor Statistics is scheduled to release the final month of data for that quarter. But that announcement may be delayed, depending on how soon Washington lawmakers are able to resolve their differences and reopen the federal government.
If the CPI data is delayed, that would affect the Social Security COLA announcement, too, according to the Department of Labor’s contingency plan.
A federal shutdown has postponed the announcement of the Social Security COLA before. In 2013, a shutdown put off the CPI release, and the COLA announcement, until Oct. 30.

Average retirement benefit may go up by $54 per month

The Social Security cost-of-living adjustment for 2026 may be around 2.7% to 2.8%, according to the latest estimates from experts released last month.
“It’s almost too close to call,” Mary Johnson, an independent Social Security and Medicare policy analyst, said of the projections based on last month’s consumer price index data. “I can’t remember it ever being this close.”
Johnson estimated last month the COLA could be 2.8%, though it was very close to 2.7%, she said. That 2.8% estimated COLA would push the average retirement benefit up by about $54.70 per month, according to Johnson.
The Senior Citizens League last month projected the 2026 COLA would be 2.7%, amounting to an increase of about $54 per month for the average retirement benefit.
Even with one more month of data, the COLA may not change by much compared with those projections, Johnson said.

Experts’ estimates for next year’s COLA have steadily increased as this year progressed. In the past several months, those projections have pointed to a 2.6% to 2.8% Social Security COLA for 2026.
That range is slightly higher than the 2.5% Social Security cost-of-living adjustment beneficiaries saw in 2025. It is also in line with the average 2.6% COLA over the past 20 years, according to The Senior Citizens League.
For longtime recipients whose benefits have increased with COLAs over the years, the distinction between the 2.5% increase that went into effect this year and the slightly higher estimates for 2026 may show up more prominently in their monthly payments, according to Benton.
“When you’re accruing over years and years of retirement, a 10th of a percent can make a difference,” Benton said.

Medicare Part B premiums may cost more

Exactly how much of a COLA increase beneficiaries may see will also depend on the size of Medicare Part B premiums, which are typically deducted directly from Social Security benefit checks.
“You don’t know the bottom line until they announce the Part B premium,” Johnson said.
The standard monthly Part B premium may go up by 11.6% or $21.50 per month, to $206.50 per month from $185, according to Medicare trustees estimates.
The Part B premium rate for the following year is frequently announced in November, though some administrations have done it earlier, according to Benton. The federal government shutdown may also affect the timing of that release, she said.

How much retirees pay for their Medicare Part B premiums is based on their income, with higher earners paying income-related monthly adjustment amounts, or IRMAAs.
While Social Security beneficiaries may see their effective COLA brought down to zero due to higher Medicare Part B premiums, they will not see their benefits reduced, due to what is known as a hold harmless provision, Benton said. More

More investors are piling into gold as prices soar, in part because of the government shutdown and expectations of further interest rate cuts on the horizon.
At an economic forum on Tuesday, Bridgewater Associates founder Ray Dalio said investors should allocate as much as 15% of their portfolios to gold.
However, in terms of a long-term investment, the stock market “wins every time,” says Pat Beaird, whose firm landed on CNBC Financial Advisor 100 list for 2025. 

Investors can’t help but notice the sparkle of gold’s record run. But they may want to think twice before adding more of it to their portfolios — over the long haul, it underperforms compared to stocks and other assets.
“Gold glitters but earnings compound,” said Pat Beaird, a certified public accountant and co-founder of Beaird Harris Wealth Management in Dallas.

“Over 30 years, compounding wins every time,” he said. Beaird Harris Wealth Management is ranked No. 3 on CNBC’s Financial Advisor 100 list for 2025.

More from CNBC’s Financial Advisor 100:

Here’s a look at more coverage of CNBC’s Financial Advisor 100 list of top financial advisory firms for 2025:

Gold returns are ‘not reliable’

Gold is on a hot streak.
Spot gold is now over $4,000 per ounce for the first time. It’s also up 51.6% year-to-date, as of Tuesday’s close — and there may be more room to run amid the government shutdown, expectations of interest rate cuts and further geopolitical uncertainty, experts say.
Goldman Sachs analysts forecast prices could hit $4,900 an ounce by the end of 2026, according to a research note published Monday.
Still, over a 30-year period through September, the annualized total return for gold is 7.96%, per Morningstar Direct data. Over the same time frame, the total return of S&P 500 stocks is 10.67%, and for real estate, 8.89%.

“Historically, our view has always been that equities have more staying power as an inflation hedge,” Beaird said. While gold can “pop” during periods of turmoil and huge deficit spending, “it’s not reliable,” he added.
“If I’m going to subject a portfolio to that level of volatility, I’d rather have it in the highest returning asset class.”

Mark Mirsberger, a CPA and CEO of Dana Investment Advisors, which ranked No. 6 on CNBC’s Financial Advisor 100 list for 2025, also said other investments are more appealing than metals, even now.  
“We still see diversified balanced portfolios utilizing bonds and asset classes other than gold as more attractive and flexible than using material gold positions,” Mirsberger said.
“Equities have historically been a good hedge against inflation, and they generate earnings growth and pay dividends, something gold doesn’t do,” he said.

Why gold shines in ‘bad economic times’

Gold surged past the $3,900-an-ounce level for the first time on Monday, driven by safe-haven demand following a fall in the yen and a U.S. government shutdown, while growing expectations of additional Federal Reserve rate cuts also lent support.
Bloomberg | Bloomberg | Getty Images

Yet, at an economic forum on Tuesday, Bridgewater Associates founder Ray Dalio said investors should allocate as much as 15% of their portfolios to gold. He compared today’s environment to the 1970s, when the precious metal jumped by 100% amid geopolitical unrest, inflation, significant government spending and high debt.
“It is one asset that does very well when the typical parts of the portfolio go down,” Dalio said.

Investors regard gold as protective against “bad economic times,” according to research by the Federal Reserve Bank of Chicago.
As a safe-haven investment, gold tends to perform well in low-interest-rate environments and during periods of political and financial uncertainty, according to Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute. 
With the U.S. government shutdown now in its second week and gold prices hitting new highs, “the trend is very much intact,” he said.

How to invest in gold

Experts often recommend getting investment exposure to gold through an exchange-traded fund that tracks the price of physical gold, as part of a well-diversified portfolio, rather than buying actual gold coins or bars. “That makes the most sense for the vast majority of investors,” Samana said.
But despite the metal’s historic run, financial advisors generally recommend limiting gold exposure to a low single-digit percentage of any portfolio.
“It’s always had a position in a lot of our portfolios, but not necessarily a big one,” said John Mullen, president and CEO of Parsons Capital Management, which ranked No. 1 on CNBC’s list of the top 100 financial advisors. Mullen is also a member of CNBC’s Financial Advisor Council.
However, Mullen said gold is looking increasingly attractive and his firm’s outlook is positive: “We do think that gold can continue to move higher.”

Mullen said his position is not in line with Dalio’s recommendation of 15%, but factoring in “the fiscal mess that is Washington and the uncertainty coming out of there, we’ve become increasingly constructive,” he said.
Largely through investments in gold bullion-backed ETFs and gold miner stocks, “we’ve probably added a couple of percentage points, but still in the single digits,” he said.
Although Beaird said his firm maintains a strategic allocation — of up to 10% — in various alternative investments in the portfolios they manage for clients, “gold is just not one of them.”
Subscribe to CNBC on YouTube. More

Artificial intelligence is likely to impact jobs differently, based on the skills workers use everyday.
For example, white-collar jobs are most at risk while those requiring more physical interventions are relatively insulated, experts said.

Nitat Termmee | Moment | Getty Images

Artificial intelligence is poised to disrupt the job market — but some workers are in the crosshairs more than others, according to labor experts.
Roughly 1 in 4 (or, 26%) of the jobs posted on career site Indeed over the past year are poised to “radically transform” due to generative artificial intelligence, also known as gen AI, according to a September report by Indeed.

Gen AI — examples of which include OpenAI’s Chat GPT and Google’s Gemini — mimics human brainpower by creating original content like text, images, video, audio or software code from a user prompt.
Industries in which gen AI can supplant a human’s cognitive reasoning skills — like certain jobs in technology and finance — are most at risk, said Laura Ullrich, director of economic research for North America at Indeed.
“The jobs that are more likely to have a high degree of transformation are white-collar jobs,” Ullrich said.

By contrast, certain roles like nursing and blue-collar jobs in manufacturing or construction are more insulated, Ullrich said.
That’s because occupations that rely more heavily on physical labor or human interaction remain outside the current scope of generative AI, at least for now, according to the Indeed report.

Jobs in “higher-paying fields where a college education and analytical skills can be a plus” are most exposed to artificial intelligence, according to a 2023 Pew Research Center study. Budget analysts, data entry keyers, tax preparers, technical writers and web developers are examples of such jobs, it found.
Overall, 19% of American workers in 2022 were in jobs that are the “most exposed to AI,” whereby their most important activities may be replaced or assisted by AI, Pew found.

Agentic AI may affect even more roles

AI job market effects remain ‘largely speculative’

Xavierarnau | E+ | Getty Images

Already, some companies have hinted at workforce cuts because of AI.
For example, the CEO of Accenture, a global professional services company, recently outlined plans to lay off staff who are unable to reskill on artificial intelligence. Salesforce CEO Marc Benioff said in late August that the firm had cut 4,000 customer support roles due to AI.
“I’ve reduced it from 9,000 heads to about 5,000, because I need less heads,” Benioff said at the time.
However, economists note that the extent of change is minimal at this point.
Despite widespread anxiety over the effects of AI on today’s labor market, such worries remain “largely speculative,” according to an Oct. 1 report by the Yale University Budget Lab.
“Overall, our metrics indicate that the broader labor market has not experienced a discernible disruption since ChatGPT’s release 33 months ago, undercutting fears that AI automation is currently eroding the demand for cognitive labor across the economy,” the researchers wrote.
The technology also has some flaws, experts said. For example, AI can still hallucinate and produce inaccurate work, they said. 

So far, gen AI has had limited impact in terms of fully displacing certain skills, Indeed found.
The technology is “very likely” to fully replace just 19 job-related skills — or 0.7% of the roughly 2,900 skills Indeed analyzed. These include basic math, prompt engineering and image classification, for example, it said.
This analysis only measures the technology’s “transformational potential” — in other words, if all businesses were to fully integrate the technology into their workflows, according to Indeed.
But many businesses aren’t there yet, it said.

Augmentation, or automation?

A big debate over the job market effect of AI comes down to augmentation versus automation, said Toubia: “Is AI going to automate your job and make you obsolete, or is it going to augment your job and make you more productive?”
That answer may vary by industry. For instance, some companies may decide to completely automate their customer service or call centers with agentic AI. On the other hand, a human programmer may use AI to write and produce lines of code, boosting their productivity. 
Most industries so far are using AI in such a “hybrid” capacity, in which humans and AI co-exist, said Indeed’s Ullrich.
Almost half — 46% — of skills in a typical U.S. job posting are poised for this hybrid transformation by gen AI, according to Indeed. In this state, human oversight is essential and AI can perform a significant chunk of routine tasks, it said.
About 64% of small businesses are using or piloting AI tools to varying degrees, according to a survey by Homebase, which polled 828 “decision-makers” between May and June.

Going forward, most jobs — 54% — are likely to be “moderately” transformed by generative AI, depending on how quickly businesses adopt the technology, according to the Indeed report.
While experts agree that it’s difficult to predict what the future holds, it’s possible that a potential long-term effect from AI is the creation of new jobs and industries that do not exist yet, said Toubia.
Overall, it’s important to start finding ways to interact with AI in productive ways, he said. If you completely ignore the technology, you may “end up being obsolete very quickly,” Toubia said.  More

ETF Strategist

ETF Street
ETF Strategist

Investors worried about the fallout on markets from a government shutdown may find comfort in historical data showing that the S&P 500 tends to rise following the resolution of stalemates over funding in Washington.
It’s uncertain how stocks may perform this time. But investors usually are best off staying calm and not making financial decisions based on the political drama, experts said.

The U.S. Capitol is seen on the second day of the federal government shutdown in Washington, D.C., on Oct. 2, 2025.
Mehmet Eser | Anadolu | Getty Images

With the government shutdown nearing its one-week mark, investors may be monitoring how the stalemate in Washington is affecting their portfolios.
So far, stocks have been doing just fine. Although the S&P 500 was down slightly on Tuesday, the index returned 0.80% between Oct. 1 and Oct. 6 — and even notched several new highs.

It turns out that market gains during and following a government shutdown are not unusual.
“Historically, shutdowns themselves have rarely derailed equities,” said Cathy Curtis, a certified financial planner and the founder and CEO of Curtis Financial Planning in Oakland, California. Curtis is also a member of CNBC’s Financial Advisor Council.

Markets don’t price in ‘current noise’

The S&P 500 spiked 36% during the year after the last government shutdown, which ended in early 2019, Morningstar Direct found. One hundred days following the 1982 shutdown, the index was up 19.7%.
“Markets are forward-looking and tend to price in future conditions, not current noise,” said Andrew Hiesinger, founder and CEO of Quant Data, a market information platform.
Post-shutdown gains aren’t universal. For example, 100 days after the January 2018 shutdown, the S&P had fallen 4.5%, and was still down 3.1% at the one-year mark.

The stock market isn’t performing too poorly during the current shutdown because investors are betting on softer inflation and eventual rate cuts from the Federal Reserve, Hiesinger said.
“The market has learned to discount recurring political drama that rarely changes long-term fundamentals,” he added.

More from ETF Strategist:

Here’s a look at other stories offering insight on ETFs for investors.

That means investors can temper their reactions to the headlines, too, Curtis said.
“The best response to a shutdown is usually no reaction at all,” she said. “Staying invested through uncertainty has historically rewarded those who remain patient.”
The S&P 500 shutdown performance data also shows the benefits of investing in a diverse basket of stocks, such as through exchange-traded funds or mutual funds, rather than in any one individual company.
“In times of political gridlock, broad exposure often outperforms reactive trading,” Hiesinger said. More