Tax season creates stress for a lot of people. It often starts with tracking down documents from multiple places, turns into uncertainty about what might be missing, and ends with concern about an unexpected tax bill at exactly the wrong time.

As a financial advisor at a firm that prepares taxes in house, I get a unique view behind the scenes. Each year, I see which situations go smoothly and which ones lead to stress, surprises, and last‑minute scrambling.

With another tax season behind us, here are five ways to make the next one more predictable and far less stressful.

1) Eliminate any surprises

One of the biggest drivers of tax stress is uncertainty. 

The best way to create more certainty is to complete Tax Planning Projections during the prior year. Not only do they help identify tax‑saving opportunities while there is still time to act, but they also do something just as important, which is to set expectations and eliminate the surprises.

A good projection can answer questions like:

• Will you owe or receive a refund and approximately how much will it be?

• Do you need to set aside cash or plan where funds will come from?

• Are there any estimated tax payments that I should make before the end of year to increase my deductions or minimize any interest or penalties?

When you understand the likely outcome ahead of time, April becomes about execution, instead of a scramble.

2) capture tax savings before the windows close

Capturing tax savings requires planning ahead of time and acting before specific deadlines.  If you wait too long, you can miss out on the available opportunities.

Some strategies that often help clients reduce taxes now and in future years include:

• Bunching charitable contributions using appreciated stock

• Using Oregon tax credits funded with appreciated securities

• Contributing to Deferred Compensation Plans

• Roth conversions in lower‑income years

• Strategically realizing capital gains in the 0 percent federal bracket

• Tax loss harvesting

• Managing income to qualify for ACA premium tax credits while avoiding Medicaid or the Oregon Health Plan

• Funding self‑employed retirement accounts such as Solo 401(k)s and SEP IRAs

It is also easy to overlook contributions that can still be made right up until April 15:

• Traditional or Roth IRA

• Health Savings Accounts

• Solo 401(k)s or SEP IRAs

• Oregon 529 plan contributions

Planning ahead helps ensure these opportunities do not get missed simply because the deadline arrives quickly.

3) tackle your tax season in waves, not all at once

Tax season does not unfold evenly, it comes in waves so doing a small amount of work during each wave is helpful.

The First Wave: Late January through mid‑February is when the first wave of core documents arrives, including W‑2s, mortgage, and bank interest documents.  I would recommend beginning to gather these documents as they arrive.

The Second + Final Wave: Mid-Late February: The second and typically last wave is Final investment 1099s for dividends, interest and capital gains from custodians like Schwab or Fidelity generally arrive later, and revisions are common. If you already have your first wave documents ready and submit those with your second wave of documents early enough you can often get to the front of the line for preparation.

As deadlines approach, CPAs and tax preparers experience capacity constraints. Submitting everything right before spring travel or just ahead of April 15 often means landing at the back of the line. If the goal is to wrap up your return earlier, having information ready before the surge makes a real difference.

Even if you plan to file an extension, these timelines still matter—an extension doesn’t eliminate penalties or interest if taxes aren’t paid on time.

4) make a proactive plan for your tax bill

Often the most stressful part of filing taxes is owing taxes. There can be a mental pain of parting with cash, which can be compounded by the question of where to get the funds.  Is it going to come from your checking account, savings account or high yield savings account? If you don’t have enough cash, should you sell investments (which can create even more tax for future years) or should you take a temporary loan on your investment portfolio or your home via a home equity line of credit?

Other common challenges include:

• Payment to one jurisdiction like the IRS while waiting for a refund from another like the state of Oregon.

• Finding liquidity when funds are not readily available.

• Making sure payments are applied to the correct tax year rather than misclassified as estimates for a different tax year.

Mistakes here can cause payments to be misapplied or returned, creating the frustrating experience of being told you never paid.

Having a professional help you determine the best funding source and even facilitating tax payments on your behalf can remove much of this complexity and significantly reduce the risk of error.

5) Remember that april 15th is two tax deadlines, not one

April 15th marks both the end of one tax year and the beginning of another deadline, which is Quarter 1 estimated taxes.

First‑quarter estimated tax payments are due on the same day. Many people default to a safe‑harbor approach based on the prior year’s income. This can help avoid penalties, but it is not always the most efficient option.

• If last year’s income was unusually high, your estimates may require overpayment and effectively give the IRS an interest‑free loan.

• If income is similar year to year, this can be an effective approach.

• If income is rising, the safe harbor approach may keep you penalty free but still result in a large bill the following April that requires planning.

The right approach depends on where your income is headed in the next year, not just what tax software defaults to from the previous year.

These estimated taxes can add to the already painful tax bill due from the previous year, making proactive Tax Planning Projections even more important.

Bringing it all together

Most people will not execute all five of these steps perfectly, and that is okay. Even doing a few of them consistently can meaningfully reduce stress and improve outcomes.

Because these decisions span timing, tax strategy, cash management, and coordination, many people find greater value in having a partner help integrate the process rather than managing everything alone.

If you are evaluating tax preparation services, it is worth considering how well planning, execution, and follow‑through are connected, and whether you are realistically set up to do this on your own.

Tax strategy isn't a standalone service for us, it's woven into every financial plan we build. If you're ready to be more proactive about your taxes, our team at Human Investing is here to help.

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Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and are subject to change. There is no guarantee that these views will be realized. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes (including the S&P 500 and blended stock/bond allocations) are for illustrative purposes only, are unmanaged, and do not reflect the performance of any specific investment or client account. Index returns do not reflect the deduction of fees or expenses. Historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Asset allocation and diversification strategies do not ensure a profit or protect against loss. Advisory services offered through Human Investing, an SEC-registered investment adviser.

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It’s no secret that Nike has been going through a tough time with the recent rounds of layoffs. This can create concern and uneasiness around a Nike employee’s livelihood and how it may affect their financial picture. As we have been actively guiding our Nike clients through this season, we wanted to share things to consider if you were or will be impacted by these layoffs.

Understand Your Severance Package

Nike has a standard severance agreement and package that includes a one-time payout of cash based on your level and tenure at Nike. This can range from 4 weeks to 48 weeks of salary.

In addition, there is often a continuation of health insurance through COBRA that includes a subsidy of the cost for around 6 months. This provides some time to transition to a different health insurance plan if that is right for you.

If you have any accrued PTO that you haven’t used, this will be paid out to you in cash after officially leaving Nike. This is often extra cash that people are not expecting and can help create some comfort during an uncomfortable time.

Lastly, you may still be eligible for the PSP bonus paid out in August as long as you are still employed anytime in May (the last month of the Fiscal Year).

Create a Strategy for Deferred Comp Distributions

If you contributed to the Nike Deferred Compensation Plan, leaving Nike will typically trigger distributions according to the schedule you designated when enrolling. This can range from a one-time lump sum or installments over 5, 10, or 15 years. For some, this can be a way to supplement income. However, for others who don’t need the funds, these distributions can create a tax issue to strategize around. These payments are sent out quarterly, so if this is needed for cash flow you should plan accordingly.

Plan for your Stock Options and RSUs

Any vested but unexercised stock options typically need to be exercised within 90 days of leaving Nike, unless you qualify for the special retirement benefits at age 55 or age 60 (you keep unvested options and can sell for lesser of expiration or 4 years). At this time, you typically will lose any unvested options or RSUs.

During larger layoffs, there can be enhanced vesting of options and RSUs, where upcoming vests within a year will accelerate and vest. In addition, Nike can also provide you with more time to exercise your stock options like up to 1 year instead of 90 days. When Nike stock price is struggling like it is now, it makes your exercise decisions in a small window difficult. We would recommend working with your financial advisor to determine a defined strategy to maximize the benefit and minimize taxes.

Keep track of your PSUs and ESPP

Normally, you need to be employed at Nike at the vest date to receive your PSUs. In a situation of Reduction in workforce (larger layoffs), you can still receive any PSUs if the vesting date is within one year of termination.

Any ESPP that has been contributed but not purchased yet will be refunded to you. In addition, you have more control over your ESPP shares that you have purchased previously as these can be held as long as you want. This provides an opportunity to be patient and strategic on any sale of this stock.

Prepare to mitigate tax liability

All the benefits outlined above come with tax implications that are not always easy to see. These items can quickly add up to large amounts of taxable income, which can push your income into high tax brackets. In addition, the tax is often under-withheld (22% Federal and 8% State), which can lead to a significant tax bill in April if not accounted for properly.

Know your 401K options

This recommendation depends on each person’s situation. Nike has a strong investment fund lineup, and you should compare that to any other place that would replace it. However, leaving your 401(k) at Nike requires more activity and maintenance since it does not have an auto-rebalancing feature, which would periodically sell funds that drift from their target allocation. For example, if the large company stock fund was targeted at 60% and grew to 64%, you should periodically bring that back to the 60% target to maintain the proper risk/return mix. Another factor to consider is the desire to make Backdoor Roth IRA contributions if you have extra funds for retirement savings.

Support when transitioning into the next job

The cash you receive from benefits like severance, PTO payout, and stock sales can help provide some comfort to your situation. While you are in transition with your job, we recommend creating a system to feel like you are receiving a paycheck replacement with your cash to reduce anxiety and bring normalcy to your day-to-day financial life. An example of this system would be taking your net benefits payout and depositing it in a savings account, then setting up bi-weekly transfers to your checking account to simulate your paychecks.

All these considerations are tied to a person’s long-term financial plan. Through financial planning projections and scenario planning, you can help determine what the next job needs to look like to achieve your goals for retirement, kids’ education, and lifestyle. It can provide you with the information to know if you need a comparable compensation package to Nike or if you could take a job with lesser pay that could be more fun or less stressful.

Being laid off from any job often creates much uncertainty, stress, and concern. With the right preparation, planning, and advice, it can be a smoother transition, and you may end up in an even better place than where you started.

If you have questions about preparing for or navigating a current layoff at Nike, please feel free to contact us at nike@humaninvesting.com or schedule time with us below.  

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The media offers plenty of reasons to worry. The ongoing conflict in the Middle East, AI rendering human workers obsolete, rising energy costs, the list goes on and on. If you’re investing for the long run, know that headlines will consistently try to pull you off course. Remember why you’re investing: You’re aiming to grow your dollars today to ensure you can maintain (or even grow) your spending power in the future. The rollercoaster of owning equities is rewarded with greater returns and spending power in the future.

Understanding the risk and reward of investing can be challenging. The finance industry likes to use terms like Beta or Standard Deviation. While these are statistically sound measures, most people would be hard-pressed to provide a clean and clear definition of what they mean, or how they’re calculated. Even most advisors would struggle to provide accurate definitions on the spot.

We try to communicate in Human terms with our clients, and we’ve built some charts and graphs to help communicate that. Given the current concerns and headlines, I think this is a great time to showcase some of our favorite graphs.

This is one of our favorite graphs. It's always easier to see that yesterday's worries weren't as scary once they're in the rearview mirror. Even through the Dot-Com bubble bursting, the 07-08 global financial crisis, and the COVID-19 global pandemic, stocks have risen. While we may not know the length or extent of a given market downturn, we do know companies have historically navigated challenges and delivered positive returns to long-term investors. We expect that resiliency to continue.

Introducing Intra-Year Declines

Markets rarely move in a straight line. Even in strong years, there’s almost always at least one significant drop along the way — what we call an intra-year decline. It measures how far the market fell from its highest point before it started recovering. As you can see in the chart below, intra-year declines have occurred every single year in the S&P 500 since 1990.

As I’ve written previously, the stock market is biased towards delivering positive returns. Most calendar years, stocks are up. This graph speaks to the lived experience of investors: every year has a downturn, no exceptions. I’m sure each downturn felt reasonable but worried investors at the time. No investor from 1990-2025 was immune from seeing their portfolio go down. Those who stuck with it saw positive returns in over 80% of those years.

Even amidst recent headlines, the market’s behavior has been typical. The S&P 500 dropped roughly 9% from its January peak to its March low. This is well within the normal range of market volatility where intra-year declines of 10% or more are common.

Most investors don’t own 100% equities, so it’s important to understand how introducing bonds can reduce risk. 60% equity and 40% bonds (60/40) is a common allocation because it tends to be a sweet spot between positioning your portfolio to grow and reducing risk enough to weather the volatility. Knowing where your asset allocation should be and when is an important, personal, complicated conversation that should involve a financial planner.

As you can see, while shifting from stocks to bonds doesn’t eliminate downturns, it certainly lessens them. Higher returns tend to come with more ups and downs, while smoother rides usually mean lower long-term growth. There’s no perfectly safe way to grow your dollars faster than inflation, so risk is always going to be part of your investment strategy. The key is finding the right balance between how much risk you’re comfortable with and how much risk you actually need to take to reach your financial goals.

Making plans that last

Anytime we’re designing a portfolio at Human Investing, we’re trying to make decisions we’d be okay with over the timeframe that matters for YOUR goals. That doesn’t mean we don’t revisit or adjust, but we’re not trying to make short-term tactical moves. We know outsmarting the market is incredibly difficult to achieve. We’re planning for our clients’ lifetime, not the next 6 months. We want to ensure our clients are positioned in a way where they are capturing the growth necessary to reach their financial goals, while having enough safety they don’t panic because of a temporary downturn.

No matter how you think about risk, there are a few enduring truths. Stocks are a volatile investment, but they’ve historically been a great growth engine in the long run. Whatever headline or concern today will feel much smaller in the rearview mirror.  

Your financial plan and investments are meant to serve you over your entire life, not the current news cycle. There will be times when it makes sense to revisit your allocation, especially when your personal circumstances change. Those decisions should be driven by your goals, not the headline of the week.

We’re always happy to have conversations to help you understand how your allocation is set to fit your needs. Call us at 503-905-3100, or email hi@humaninvesting.com.

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Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and are subject to change. There is no guarantee that these views will be realized. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes (including the S&P 500 and blended stock/bond allocations) are for illustrative purposes only, are unmanaged, and do not reflect the performance of any specific investment or client account. Index returns do not reflect the deduction of fees or expenses. Historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Asset allocation and diversification strategies do not ensure a profit or protect against loss. Advisory services offered through Human Investing, an SEC-registered investment adviser.

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Recent developments in the Middle East have once again drawn attention to oil markets. When tensions rise in regions responsible for a meaningful share of global energy production, investors naturally begin to ask how higher oil prices might influence the broader economy and financial markets.

Before discussing the financial implications, it is important to acknowledge the human side of these events. Conflicts like this affect families and communities around the world in ways that extend far beyond markets and economics.

Still, it’s natural for investors to wonder how disruptions in energy markets might affect their investments. Our aim is to provide context that can help frame those concerns.

Why do oil prices matter so much?

Energy plays a central role in the global economy because oil sits near the beginning of the production chain for many industries. It powers transportation networks, supports manufacturing, and is embedded in the production of everyday goods ranging from food to plastics and chemicals. When oil prices rise quickly, those higher costs move through supply chains and eventually reach businesses and households in the form of higher prices.

History shows that sharp oil spikes have often coincided with periods of economic stress, though they are rarely the sole cause.

It is understandable that headlines often focus on oil during geopolitical conflicts. When energy costs rise quickly, pressure on the broader economy can follow.

Geopolitical conflicts often bring uncertainty to both energy markets and financial markets. We explored how markets historically respond to war and global conflict in a previous piece, which you can read here: War and the Market: What Does History Teach Us?.

Why today’s energy landscape is more resilient

Looking at several decades of data provides helpful perspective when considering why the economy may respond differently to oil shocks today.

There is useful context when looking at global oil supply. The United States now produces roughly 20% of the world’s oil, while Iran accounts for about 3–5%. That balance looked different during earlier oil shocks. In 1979, Iran produced close to 10% of global supply, while the United States accounted for roughly 15%. This shift means the global energy system is more diversified and less dependent on any single region than it was during past crises.

Households also appear to have more buffer against rising fuel prices than in earlier periods. One measure economist often watch is how much households spend on gasoline relative to their income.

Historically, economic stress has tended to increase when gasoline spending rises above about 5% of household income. Today that figure sits closer to 2–3%, suggesting households, broadly, have more room to absorb fluctuations in energy prices than during past oil shocks.

The chart below illustrates how gasoline spending as a percentage of household income has changed over time and why economists often watch this measure during periods of rising oil prices.

Shaded areas indicate U.S. recessions.
Source: U.S. Energy Information Administration, Bureau of Economic Analysis, Federal Reserve Bank of St. Louis

Finding Your Footing During Energy Market Volatility

Periods of geopolitical uncertainty often bring volatility to both energy markets and financial markets. Oil prices can move quickly as investors react to changing expectations about supply and demand.

For investors, the more relevant question is how these developments influence their financial plan.

At Human Investing, portfolios are designed with a range of economic environments in mind. Energy price shocks, while disruptive in the short term, represent only one of many forces that influence markets over time. Diversified portfolios allow different parts of the market to respond differently as economic conditions change.

For example, companies that rely heavily on fuel may face higher costs when energy prices rise, while energy producers may benefit from stronger prices. These adjustments tend to occur within the market rather than outside it.

Because of this, our focus for investors remain on their broader financial plan, investment timeline, and overall diversification.

Oil markets may move quickly in response to geopolitical events, yet long-term investment outcomes are shaped by many forces over time.

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Disclosure:
This material is for informational and educational purposes only and is not investment, legal, or tax advice. References to historical events or market trends are illustrative and do not guarantee future results. Investing involves risk, including possible loss of principal. This commentary does not constitute a recommendation to buy or sell any security or adopt any investment strategy. Human Investing, LLC is a registered investment adviser; registration does not imply a certain level of skill or training.

Sources
Energy Institute. (2024). Statistical review of world energy 2024.
Graefe, L. (n.d.). Oil shock of 1978–79. Federal Reserve History.
U.S. Bureau of Economic Analysis. (2026). Disposable personal income (DSPI). Retrieved from FRED, Federal Reserve Bank of St. Louis.
U.S. Bureau of Labor Statistics. (n.d.). U.S. Bureau of Labor Statistics.
U.S. Energy Information Administration. (2026).U.S. product supplied of finished motor gasoline (thousand barrels per day).

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Elite performance isn’t about doing everything at once; it’s about prioritizing the right moves at the right time. Your finances deserve that same level of intentionality. You probably have many competing goals and need to find the best way to prioritize spending, debt pay down, and saving for the future, among other things.

Selecting the optimal avenue for your dollars can be challenging when you have access to Nike’s unique savings avenues. It is important to fill the most beneficial buckets first. The order we have detailed below is not a “one size fits all” approach. Building your financial plan around your goals and unique circumstances will help determine the savings opportunities that will be the most impactful for you.

1. Contribute enough to get your Nike employer match on your 401k

Deferring 5% of your income to your Nike 401k is a strategic way to maximize free dollars. This helps grow your retirement savings and amplifies the long-term benefits of your investment. Additionally, you have the option to save pre-tax dollars or Roth dollars, allowing you to choose when you pay tax on your contributions. Whether to contribute via Roth or pre-tax is best determined by your unique financial plan.

2. Enroll and maximize your HSA contributions

One benefit of participating in Nike’s healthcare coverage is the opportunity to utilize the Health Savings Account (HSA). Those covered by the high-deductible healthcare plan (HDHP) can take advantage of tax-deductible contributions along with tax free earnings and withdrawals when used for qualified medical expenses.

Being covered under the high-deductible health care plan (HDHP) is not for everyone. It depends on your health needs and financial flexibility. Each person is unique and should consult a professional for their specific circumstances. 

3. Save extra into your 401k via Mega Backdoor Roth contributions

If you have filled all the prior buckets and still have additional cash flow, consider putting extra money into your 401k through Mega Backdoor Roth contributions. This savings vehicle allows you to go above and beyond traditional 401k contribution limits. You pay taxes on these dollars now and withdraw them tax-free in retirement. Contributions can be made up to 3% of your compensation, limited to a maximum of $360,000 of eligible compensation. This is a great savings opportunity to contribute extra funds, up to $10,800 on top of the standard $24,500 standard deferral limit, to your Nike 401k account.

4. Maximize ESPP Deferrals

Saving into the ESPP bucket is a way to purchase Nike shares at a 15% discount. You can contribute up to $21,250 through salary deferrals. If you have a steady cash flow, saving into your ESPP can feel like instant growth on Nike stock if you sell the shares right after they’re purchased. This strategy to immediately sell allows you to capture the discount and supplement cash flow when the shares are purchased every six months. There are no taxes until the shares are sold, but the taxes on the discount and any gains can be complicated and should be reviewed by a tax or financial professional. 

5. Utilize Deferred Compensation savings

If you are eligible for Nike’s deferred compensation plan, utilizing this plan can help reduce your current taxable income while setting aside and investing funds for your retirement. Contributing to the Deferred Compensation plan defers Federal and state taxes and can help keep your taxable income below thresholds for local taxes. This plan requires precision to set up and maintain and will help optimize your retirement savings in your financial plan.

6. Execute a Backdoor Roth IRA Contribution

In 2026, you can contribute up to $7,500 to a traditional IRA, with an additional $1,100 catch-up contribution available for those over age 50. Making a tax-deductible contribution is subject to income phaseouts. If you don’t have an existing IRA balance, you could make a backdoor Roth IRA contribution even if your income is above these phaseout levels or above the income phaseouts for Roth IRA contributions. This is done by contributing after-tax dollars to a traditional IRA and converting those funds into a Roth IRA.

7. Open a taxable brokerage account

If you still have cash flow to save after filling all the previous buckets, using a taxable brokerage account to make additional investments can help fund your future financial goals. Saving into a taxable brokerage account can be especially helpful if funds will be used soon, such as if you are considering a new home purchase or paying for college. These accounts allow you to withdraw funds at tax-advantaged capital gains rates at any time. In particular, the flexibility of this account can be advantageous for those considering retiring early since there is no penalty for withdrawing funds before age 59½.

Want to see this in action?

Building a strong roadmap to reach your goals includes thoughtfully utilizing Nike’s employee benefits and prioritizing ways to save through ways that are the most beneficial for your unique needs. The various options you have available at Nike each have their own unique contribution limits, tax advantages, and benefits. Having a coordinated strategy allows you to create a game plan that suits your unique needs and supports your needs for today and ambitions for tomorrow.

The most effective savings hierarchy is one that is thoughtfully aligned with your broader financial picture. A comprehensive financial plan can help bring clarity to competing priorities and ensure your savings decisions are aligned with your short-term needs and long-term goals. Working with a financial advisor can help you sift through these buckets and determine the best way to optimize each dollar saved to secure a successful financial future.

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Disclosure: This content is for informational and educational purposes only and is not intended as investment, legal, or tax advice. The strategies and steps outlined—such as building an emergency fund, contributing to employer-sponsored plans, paying down debt, or using HSAs, IRAs, and taxable accounts—are general in nature and may not be appropriate for every individual. You should consult a qualified financial or tax professional before making decisions based on your personal circumstances. There is no guarantee that following any financial strategy will achieve your goals or protect against loss. References to interest rates, contribution limits, or tax rules reflect information available at the time of publication and may change. Past performance is not indicative of future results. Advisory services are offered through Human Investing, an SEC-registered investment adviser.

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Investing isn’t just about numbers. For many, it’s about making choices that reflect personal values while still aiming for long-term investment growth.

One of the more common questions we hear from both clients and prospective clients is, “How can my portfolio better reflect what I care about?” Often, that means avoiding certain industries or intentionally supporting companies with similar values, essentially “voting with your dollars” through your investments. Enter ESG investing: a way to invest while considering Environmental, Social, and Governance (ESG) factors.

Because ESG investing is relatively new and can look differently depending on the investor’s approach, let’s break down what ESG is, how it works (including common misconceptions), and whether it might make sense for you.

What ESG Investments are (and are not)

ESG investing considers how companies operate beyond profits. ESG is a metric that measures impact in the following areas:

• Environmental: How a company navigates environmental issues like climate impact and sustainability practices

• Social: How a company supports and interacts with the people and communities it impacts, from its workforce to suppliers to local communities

• Governance: How it’s run through board diversity, executive pay, and transparency

Although ESG is designed to align investments with values, ESG is not charity. These portfolios still aim for returns and ESG ratings vary widely, so it should not be assumed every “ESG” fund is equal.

How did ESG Investing begin?

Although popular ESG index funds (such as ESGV and VFTAX) were launched just in the last 10 years, the intention of aligning money with values has been present for centuries.

As early as the 1700s, religious groups such as the Quakers practiced forms of values based investing by avoiding businesses involved in activities they believed caused harm, including weapons, slavery, and exploitative labor. These early decisions reflected a belief that how money is earned matters.

Socially Responsible Investing (SRI) gained traction in the 1960s and 1970s with the anti-war movement, as investors sought to divest from companies connected to the Vietnam War and apartheid in South Africa.

The early 2000s were marked by a desire from investors to have more structured ways to evaluate non-financial risks that could impact long-term performance.

In 2004, the United Nations published the report Who Cares Wins, formally introducing the term ESG to describe factors such as environmental impact, labor practices, and corporate oversight.

Today, ESG is widely used by both individual and institutional investors. However, because ESG developed across multiple frameworks over time, its ratings and methodologies are not standardized.

How does ESG Investing work?

ESG investing can take several forms:

• Screening: Excluding companies that don’t meet certain standards (e.g., defense contracts, tobacco, weapons, fossil fuels, alcohol, gambling).

• Positive selection: Choosing companies that actively perform well on ESG metrics such as greenhouse gas emissions, workforce diversity and inclusion, and human rights protections.

• Shareholder advocacy: Investors upholding companies to improve their ESG practices.

What are the benefits of ESG Investing?

• Values alignment: You invest in companies that reflect what matters to you.

• Long-term risk management: Companies with strong ESG practices may be better prepared for future regulations or reputational risks.

• Growing demand: ESG investing is becoming more mainstream, with more selections and better data.

• Competitive returns: Although long-term data is still developing, several established ESG funds have delivered returns comparable to traditional index funds over the past 5–9 years.

Data courtesy of YCharts. From 1/1/2019 to 12/31/2025, Vanguard ESG US Stock ETF (ESGV) delivered similar returns to Vanguard’s Total Stock Market Index Fund ETF (VTI), while also experiencing higher volatility due to a heavier tech concentration. Past performance is not indicative of future results.

Navigating the trade-offs in ESG investing

While ESG investments can improve alignment with your values, it is not a comprehensive or perfect solution. Some companies you think should be screened may not.

For example, Walmart may still be an investment despite their firearms and tobacco sales, as they derive the majority of their profit from groceries and home goods.

Additionally, Tesla may also be included as an investment in an ESG portfolio due to its sustainable energy focus, despite the controversy around some senior leadership of the company.

Here are some other considerations and common misconceptions with ESG investments:

• Inconsistent ratings: ESG scores aren’t standardized, so one company might be rated differently by different agencies.

• Limited diversification: ESG funds may exclude certain sectors, which can make the resultant investment less diverse.

• Greenwashing: Some companies may appear ESG-friendly without meaningful action.

• Higher fees: ESG funds can sometimes carry slightly higher expense ratios.

Five essentials for your ESG strategy

1. Define your values: What issues matter most to you – climate change, human rights, corporate ethics, etc.?

2. Explore ESG funds: Look for mutual funds or ETFs with ESG or SRI (Socially Responsible Investing) labels.

3. Check your current investments: You may already be invested in funds with ESG screens.

4. Talk to an advisor: A financial advisor can help you align your portfolio with your values.

5. Start small: You don’t have to overhaul everything. Try allocating a portion of your portfolio to ESG choices.

Final thoughts

Although ESG portfolios offer a way of value-driven investing, every portfolio has its limitations. With the right approach, you can align your money with your values, while still aiming for financial success.

Want help exploring ESG investments in your portfolio? Let’s talk!

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Disclosure:This content is for informational and educational purposes only and is not intended as investment, legal, or tax advice. The strategies and steps outlined—such as building an emergency fund, contributing to employer-sponsored plans, paying down debt, or using HSAs, IRAs, and taxable accounts—are general in nature and may not be appropriate for every individual. You should consult a qualified financial or tax professional before making decisions based on your personal circumstances. There is no guarantee that following any financial strategy will achieve your goals or protect against loss. References to interest rates, contribution limits, or tax rules reflect information available at the time of publication and may change. Past performance is not indicative of future results. Advisory services are offered through Human Investing, an SEC-registered investment adviser.

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One of the persistent temptations in investing is the belief that the future can be known, rather than simply estimated or viewed through a lens of probability.

Every so often, markets appear to reinforce this belief. It can happen when an analyst makes a sweeping economic call, a television personality highlights a stock, or an investor acts on a strong conviction about a single event. When such a call lands correctly, an investor’s confidence tends to grow much faster than their actual wisdom. This creates a unique brand of risk where the danger isn't being wrong but rather being "right" in a way that encourages all the wrong lessons.

Experience has taught me to treat these moments with caution, as a successful forecast can lead to increased activity, narrower positioning, and a reduced tolerance for uncertainty.

The pull of prediction

We currently live in an environment where market commentary often comes with an air of certainty. Forecasts with clean narratives and specific numbers can create the impression that the future is more orderly and manageable than it actually is. In this context, investing can begin to resemble wagering on specific outcomes rather than planning for inherent unpredictability.

The reality is that markets are complex adaptive systems shaped by a mix of fundamentals, incentives, psychology, policy decisions, and randomness.

Consequently, when a prediction proves accurate, it is rarely clear whether the result stemmed from genuine insight or mere circumstance. Because markets largely reward outcomes without distinguishing between skill and luck, investors are often left to conclude that their success was due to brilliance rather than chance.

Famous calls and their aftermath

History is generous in celebrating bold forecasts. Michael Burry, for instance, is rightly remembered for identifying the housing market excesses before the Global Financial Crisis. It was a significant call that required immense conviction and a high tolerance for sustained discomfort. However, what receives less attention is what happens after such a call is made. Since that episode, Burry has repeatedly warned of impending market downturns; while some concerns were thoughtful, many were premature, and others have been incorrect.  

We see a similar dynamic in the warnings issued by public figures. Robert Kiyosaki, for example, has repeatedly forecasted systemic collapse. The chart aligns several of those warnings with the path of the S&P 500, which over that period moved materially higher.

With enough attempts, even low-probability calls will eventually intersect with actual outcomes.

The common thread in both examples is that forecasting is rarely a single bet. One successful prediction often creates pressure to make another, or to double down on a view even after the market has moved on. This pattern reveals a fundamental distinction for investors: the difference between trying to be "right" and actually making a prudent decision. 

The danger of fixating on outcomes

That difference becomes unavoidable when we examine how outcomes are derived.

As professional poker player and author Annie Duke has observed “We are too quick to treat outcomes as a referendum on decision quality, when luck plays a much larger role than we are comfortable admitting.” This insight sits at the core of disciplined investing.

Outcomes, on their own, are an unreliable measure of decision-making. Well-reasoned decisions can lead to disappointing results. Poorly reasoned decisions can occasionally be rewarded. Over short periods of time, randomness can obscure the underlying quality of the process.

The challenge is that investors are wired to equate results with decision quality. If we judge our strategy solely by whether it was correct in the short term, we reinforce behaviors like excessive conviction and a refusal to reassess our positions. A more durable standard is required, one where the most important question is not whether a view proved correct, but whether the plan was robust enough to withstand being wrong.

The high cost of being too certain

When outcomes are mistaken for skill, the resulting overconfidence can quickly become destructive. Investors who believe they can forecast the market often increase their trading activity, bet too heavily on one specific direction, and abandon the protection of diversification in favor of short-term signals.

The irony is that the more certain an investor becomes, the more fragile their strategy tends to be. Portfolios built on specific predictions only work if those predictions come true, which provides a dangerously narrow margin of safety.

A different standard

From a fiduciary perspective, the objective is not to anticipate each market event correctly. It’s to build resilient plans that remain viable across a wide range of outcomes. This requires accepting uncertainty as a permanent feature of the landscape and prioritizing asset allocation, tax awareness, and emotional resilience over the allure of the next big forecast. While a prediction may be correct, any approach that depends on it’s success is fundamentally fragile.

Why I hope you’re wrong

Ultimately, when I hear a confident market prediction, my internal response is often, “I hope you’re wrong.”

My reaction is not born out of cynicism or a desire to see someone fail. Rather, it reflects an awareness of how slippery the slope can be once a prediction proves correct. Being wrong, while uncomfortable, serves an important purpose of reinforcing humility and preserving discipline.

Markets have a long history of humbling those who claim certainty. The investors who truly succeed over decades are those who respect that history, choosing to build financial plans that remain intact across a wide range of outcomes, including those they did not anticipate.

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Disclosure: This commentary is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are based on current market conditions and are subject to change without notice. Past performance is not indicative of future results, and no investment strategy can guarantee success or protect against loss. References to specific companies are for illustrative purposes only and do not constitute a recommendation to buy or sell any security. Investors should consult with a qualified financial professional before making any investment decisions. Human Investing is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training.

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After a great run, what should investors expect next?

Every year starts the same way. A fresh set of market forecasts arrives, confidently predicting what stocks will do next. And every year, markets remind us how unreliable those predictions can be.

Even professionals struggle to get it right. In both 2023 and 2024, most Wall Street forecasts underestimated the actual returns of the S&P 500. Markets have a long track record of defying expectations.

This is why long-term investors shouldn’t build portfolios around short-term predictions. Markets move faster than forecasts can adapt. Instead, focus on building portfolios that can compound through a wide range of environments. Still, expectations matter. When investors have a reasonable sense of what outcomes are possible, it’s easier to stay invested when markets don’t behave the way headlines suggest they should.

So as we look ahead to 2026, the useful question isn’t “Will the market keep rallying?”, It’s “What’s reasonable to expect after a strong run?”

The last few years were not normal

It’s hard to overstate how unusual the period from 2020 through 2025 has been. 

A global pandemic shut down large parts of the economy. Inflation surged to levels not seen since the early 1980s. The S&P 500 suffered its worst calendar year since 2008 in 2022. Trade policy and geopolitics added ongoing uncertainty.

And yet, by the end of 2025, the S&P 500 was up nearly 18% for the year. 

When you zoom out, recent returns stand well above long-term averages. Over the past 1, 5, and 10 years, the market has delivered results that are meaningfully better than its 50-year history.

That’s great news for investors. But it also creates a subtle challenge. Strong recent returns have a way of adjusting expectations. What was once exceptional can start to feel normal, even when it isn’t.

Historically, periods of above-average returns are often followed by more moderate ones. Not because markets “owe” us anything, but because starting valuations matter. After a great run, future returns tend to look more ordinary.

The return expectations shown above are derived from publicly available third-party capital market outlooks and represent long-term estimates, not predictions or guarantees. These assumptions are not specific to any individual investor, do not reflect advisory fees, taxes, or other costs, and may differ materially from actual future market results.
[1] Vanguard, Vanguard Capital Markets Model Forecasts, January 22, 2026
[2] Schwab, What’s the 10-Year Outlook for Major Asset Classes?, June 6, 2025
[3] Fidelity, Capital Market Assumptions: A Comprehensive Global Approach for the Next 20 Years, August 2023
[4} BlackRock, Capital Market Assumptions, November 13, 2025

Why “lower” returns aren’t a bad outcome

Many long-term forecasts for U.S. stocks over the next decade fall in the mid–single-digit range. Compared to recent experience, that sounds disappointing. Compared to history, it’s typical.

This is an important distinction. Lower-than-exceptional returns are not the same thing as poor returns. Compounding still works at 5%–6% per year. It just doesn’t feel as exciting when you’re coming off a stretch of double-digit gains.

Experiencing more typical equity returns isn’t inherently an issue. It’s planning as though the unusually strong results of the past decade will repeat that can cause problems.

Why planning matters more than forecasting

For investors saving toward retirement or already retired, expectations matter because small differences compound over time. When returns are more typical, the margin for error narrows. This is exactly where comprehensive planning becomes most valuable.

At Human Investing, we don’t try to outguess markets or build portfolios around forecasts. That means emphasizing diversification, discipline, and resilience rather than reacting to short-term narratives. Our focus is helping clients make better decisions around the things they can control, including how investments interact with taxes, cash flow, retirement timing, and spending choices.

When returns are strong, almost any strategy can feel successful. A well-built financial plan shows which levers impact results, how much flexibility you have, and what adjustments are worth making if conditions change.

Markets will always surprise us. A good plan is designed so those surprises don’t derail long-term goals. That’s the role planning plays in our work, not as a prediction tool, but as a framework for making sound decisions across many possible market outcomes.

Sometimes having a sense of what may be coming can help stay calm during tumultuous times. Lets take some time to review some of the major topics that could cause investors stress in 2026. Good or bad, some version of these topics and the uncertainty around them is reflected in the market today. As more information comes out as time passes, that uncertainty converting into knowledge will cause prices to update. It’s unlikely these will be unforeseen surprises that cause major market movement.

Major 2026 topics we’re watching

Can The Fed maintain its independence?

The Federal Reserve (aka “The Fed”) is in interesting territory. With the attempted dismissal of Fed Governor Lisa Cook, and Department of Justice Investigation, The Fed’s independence is being challenged in new ways. The administration has made their desire for lower rates faster clear. The Fed’s challenge is ensuring rates don’t get too low and stoke inflation.

As unpleasant as it can feel at times, an Independent Fed is a healthy influence on the US economy in the long run. Being willing to raise rates to slow economic activity in the short term to control inflation is an important and painful process. The great challenge of high inflation is it makes any cost today for gains in the future incredibly difficult to make feasible. The lowered investment eventually drags on an economy’s long term growth prospects.

What will AI do to the economy?

No matter where you look, the biggest question for markets and the economy all center around AI. We recently wrote about why the AI boom is different than the dot-com bubble. We do know the upfront costs to build the infrastructure necessary for AI are large. The big concern for investors is the payoff of these AI related investments. If the costs are never fully recovered by increased revenue, companies that are booming today because of their AI investments may end up falling.

What does a modern workplace look like?

Another theme looking at 2026 forecasts: The labor market is going to be an area to watch. With immigration slowing and the aging of the baby boomer generation into retirement, the workforce size is expected to hold relatively steady. The uncertainty of the tariff environment has made long-term decisions outside of AI difficult for companies to navigate. The promise of AI is to enable workers to do more, and so in theory a given company will need fewer people to accomplish a similar amount of work. All this has led to employers generally being less motivated to hire. There aren’t necessarily large layoffs incoming, but hiring may slow enough to increase unemployment slightly.

Staying invested still matters most

The past several years have been exceptionally good for investors. After a run like that, it’s reasonable to expect a more typical environment going forward.

There will always be reasons to sell. There will always be headlines that make staying invested feel uncomfortable. But investing has never required perfect conditions to work.

If you’ve stayed invested through the last 5 to 10 years, you’ve already benefited from an unusually strong period. The next chapter may look different, but the discipline required doesn’t change.

The goal isn’t to predict what 2026 will bring. It’s to own a portfolio that doesn’t need predictions to succeed.

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Disclosure: This material is provided for informational and educational purposes only. It should not be construed as investment, legal, or tax advice, nor does it constitute a recommendation or solicitation to buy or sell any security. Any market commentary, forward-looking statements, projections, or return expectations discussed are based on assumptions and current information and may not materialize. Investors should consult with a qualified financial professional before making any investment decisions. There is no guarantee that any investment strategy will achieve its objectives, and investing involves risk, including the potential loss of principal. References to market indexes, historical returns, projections, or economic conditions are illustrative only and should not be considered indicative of future results. Past performance is not a guarantee of future outcomes. Advisory services offered through Human Investing, an SEC-registered investment adviser.

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There is a growing chorus calling today’s AI surge the next dot-com bubble. Even well-known voices like Michael Burry, who predicted the 2008 housing crisis, have drawn the comparison. It sounds convincing at first, but the comparison breaks down quickly. And for long-term investors, understanding the difference is critical.

Here is the simple truth. This is not another 1999. The foundations are different. The companies are stronger. The sentiment is almost the opposite. If we misunderstand the environment, we risk reacting emotionally rather than investing with discipline and clarity.

FIRST, Valuations Then Were Built on Hope. Today They’re Built on Earnings

During the dot-com era, prices surged with little connection to actual business performance. Cisco is the clearest example. The stock price raced higher while projected earnings stayed relatively flat. That disconnect is one of the clearest signs of a bubble. Investors were buying possibility instead of profitability.

Now look at today’s AI leader, Nvidia. Its stock price has risen but so have its forward earnings per share. Revenue is expanding. Demand is accelerating. Profitability is growing at a historic pace. The price is being pulled higher by fundamentals, not by wishful thinking.

This distinction matters.

In the dot-com era, prices broke away from earnings.

In the AI cycle, prices and earnings rise together.

For long-term investors, this is not a minor detail. It is the difference between speculation and substance. When prices run ahead of earnings, gravity eventually pulls them back. The two lines always reconnect. Prices can sprint or stumble in the short term, but fundamentals set the pace over time. When prices rise because earnings rise, it is the fundamentals doing the work.

NEXT, The Nature of the Companies Is Entirely Different

The second difference is straightforward. The companies simply are not comparable.

During the dot-com era, a clever idea and a domain name were often enough to attract enormous capital. Pets.com is the classic example. It raised over $82 million during its IPO despite having no profits and no evidence that its model worked. It became famous before it became viable. Nine months later, Pets.com closed their virtual doors.

Now compare that with today.

The AI landscape today is nothing like that. The Magnificent Seven leading AI investment are among the most profitable companies ever created. Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla operate with financial strength that rivals entire industries. Together they have acquired more than 846 companies. Their revenue is diversified. Their moats are wide. Their infrastructure spans the globe. Their cash flow is massive.

This difference is not trivial.

Startups with untested ideas tend to burn cash, chase growth at any cost, and rely on investor optimism to stay alive. Established multi-trillion-dollar companies generate consistent profits, fund their own innovation, and can withstand economic shocks. They behave very differently.

The risks, opportunities, and outcomes are not comparable.

FINALLY, Sentiment Today Is Cautious, Not Euphoric

The most important difference may be psychological.

In the late 1990s, consumer sentiment reached historic highs. The University of Michigan index moved above 110. Confidence was overflowing. People believed prosperity would continue indefinitely. Alan Greenspan described the mood as irrational exuberance, and even that felt modest.

A 1999 Time magazine article reported workers quitting stable jobs to day-trade technology stocks. One story described a plumber who refused to fix a leaking pipe because he was too busy trading. That was the climate. Excitement replaced caution. Greed replaced discipline.

Today tells a different story

Consumer sentiment recently sat near 51, weaker than readings during the 2008 financial crisis. It reflects fear and uncertainty, not optimism. In hundreds of conversations advising investors during this season, not one person has pushed to increase equity exposure because of excitement about AI. Most express caution, not confidence.

This matters. Investor psychology often explains more about cycles than spreadsheets do.

Bubbles form when confidence outruns reality. Today, reality is outrunning confidence.

What we see today is not exuberance. It is skepticism.

What Investors Should Take Away

None of this means AI is risk-free. Markets never are. Technologies evolve. Leaders change. Expectations adjust. Some companies will thrive and others will fade. That is the natural rhythm of progress.

Some believe AI will reshape entire industries. Others expect only incremental change. No one knows for sure, and investors do not need perfect foresight to succeed. What they need is discipline, patience, and a strategy that holds up across many possible futures.

Periods like this tend to reward investors who rely on a thoughtful financial plan and avoid emotional decision making. Resiliency matters more than reaction.

At Human Investing, we help clients make clear, confident decisions in moments like this. We separate signal from noise. We keep your strategy rooted in your goals, not the market’s mood.

The biggest mistakes rarely come from missing a prediction. They come from acting too quickly. Our role is to walk with you through uncertainty and ensure your plan remains strong, thoughtful, and centered on what matters most to you.

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Sources:

https://www.cnbc.com/2025/11/25/michael-burrys-next-big-short-an-inside-look-at-his-analysis-showing-ai-is-a-bubble.html

https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/emea-investment-outlook-2025.pdf

https://www.nytimes.com/2000/11/08/business/technology-petscom-sock-puppet-s-home-will-close.html

Eric Balchunas

https://time.com/archive/6736122/day-trading-its-a-brutal-world/

Disclosure: This commentary is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are based on current market conditions and are subject to change without notice. Past performance is not indicative of future results, and no investment strategy can guarantee success or protect against loss. References to specific companies are for illustrative purposes only and do not constitute a recommendation to buy or sell any security. Investors should consult with a qualified financial professional before making any investment decisions. Human Investing is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training.

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There is more good news for retirement accounts this year. The IRS has released the updated contribution limits for 2026, and several of the adjustments will allow investors to save even more. As you can see below, these new limits continue the trend of expanding opportunities for retirement savers.

Last year, we highlighted the new SECURE 2.0 rule introducing a higher catch-up contribution for employees aged 60, 61, 62 and 63. For 2026, that enhanced “super” catch-up window remains in place, giving late-career savers another year to take advantage of the increased limit.

How do these changes impact your savings in the upcoming year? Are there any changes you should be making? Schedule a time to meet one-on-one with our team. We look forward to working with you in 2026!

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Benjamin Franklin’s quote applies to many choices we make, including personal finances. If we don’t take his message to heart, then a lack of planning can be costly.

There are traditionally two paths one will take when preparing for a large expense. They will either build a plan ahead of time to achieve a financial goal, or the more common path, wait until the expense arises and deal with it then. It’s important to consider the hidden cost of financing a large future purchase instead of planning for it in advance.

NOT PLANNING AHEAD MAY COST YOU MORE THAN YOU THINK

Let’s take the example of a future expense of $25,000 for any situation:

Fill in the blank: year of college for a child, down payment for a home, wedding, car purchase, or a dream vacation.

How do you pay for the $25,000 future expense?

(A) Make a monthly investment over the next 10 years, or
(B) Borrow the $25,000 and make monthly payments to pay off the debt over the next 10 years.

Note: This is for illustrative purposes only. Investment returns, interest rates, and loan periods will vary.

SO WHAT ARE YOU PLANNING FOR TOMORROW?

Building a savings plan and starting early provides around 27% in savings over 10 years, with a total out-of-pocket cost of approximately $18,240 (assuming a 6% annual investment return).

Conversely, the cost of convenience by borrowing adds more than 33% to the overall cost, raising the total to about $33,360 (assuming a 6% interest rate).

Unfortunately, much consumer debt is financed on credit cards, where the average APR in 2025 is over 21% according to the Federal Reserve. At that rate, the total cost of financing a one-time $25,000 purchase could more than double over 10 years, pushing the total cost well past $50,000.

This illustration provides a two-sided lesson. As shown above, building a financial plan can save thousands of dollars over time. On the other hand, procrastinating and choosing to borrow rather than plan can just as easily cost thousands.

Either way, the takeaway is clear: it’s important to understand the real cost of any financial decision in order to make a well-informed choice for your future.

Our team at Human Investing is available if you have questions or would like help building a financial plan that fits your goals.

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Disclosure: This material is for informational and educational purposes only and should not be considered personalized tax, legal, or investment advice. You should consult your own qualified tax, legal, and financial professionals before making any decisions based on this information. The examples provided are hypothetical and are intended to illustrate general financial concepts such as saving versus borrowing; they do not represent any specific investment performance or loan terms. Interest rates, returns, and inflation assumptions are subject to change and may vary based on individual circumstances. Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Advisory services are offered through Human Investing, LLC, an SEC-registered investment adviser.

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If you’re 50 or older and use catch-up contributions to bulk up your retirement savings, or you help run a plan that offers them, there’s a rule change that should be on your radar.

In mid-September, the IRS and Treasury finalized how a piece of the SECURE 2.0 Act will work. The short version: starting in 2026, certain higher-earning workers will only be able to make their catch-up contributions as Roth (after-tax) dollars.

Getting ahead of the change now will make 2026 a lot less painful.

First, What Are Catch-Up Contributions and Why Do THey Matter?

Once you hit age 50, you can put extra money into your 401(k), 403(b), or similar plan, above the standard IRS limit. That’s been true for years.

Here is the breakdown for 2026:

• Under age 50: $24,500

• Ages 50–59 and 64+: $32,500 (includes a $8,000 catch-up)

• Ages 60–63: $35,750 (includes an $11,250 “super” catch-up)

SECURE 2.0 added another layer on top: starting in 2025, workers ages 60–63 get access to “super” catch-up contributions, up to 150% of the regular catch-up limit (or 110% for SIMPLE plans).

It is possible that catch-up contribution may be required to be made as a Roth contribution, especially if your income exceeds certain thresholds.

For employees, the downside is giving up the upfront tax break on catch-up contributions. The upside? Tax-free withdrawals later.

For employers, the stakes are higher: if the plan isn’t set up to handle Roth catch-ups, some employees could lose access to them entirely.

Diving Into the New Rule: Roth Required for Some

Here’s the key change:

If you make more than $150,000 in FICA wages in 2026 (adjusted annually), all your catch-up dollars will have to go in as Roth contributions, after tax dollars, starting January 1, 2026.

This means if you fall into the higher-income category, your Roth catch-up will be automatically applied to your eligible contributions once you hit age 50.

A few quick clarifications:

• This does not apply to SIMPLE IRAs or SEP plans.

• Wages are measured using Box 3 on your W-2.

• If your plan does not include a Roth deferral option, catch-up contributions won’t be permitted in your plan regardless of income.

Congress delayed this rule once (from 2024 to 2026) to give employers time to adjust. That grace period is ending soon.

Two Types of Catch-Up Contributions

Depending on your age and plan setup, catch-ups may fall into these buckets:

1. Standard age-50 catch-ups
   These are the usual “extra” contributions, and the ones subject to the Roth rule if you’re over the wage limit.

2. “Super” catch-ups at ages 60–63
   Optional, but attractive for late-career savers (and yes, Roth rule applies to these as well).

If You Sponsor a Plan, Start Here

A survey from the Plan Sponsor Council of America says only 5% of plan sponsors feel fully ready.

Payroll providers will bear the heavy lifting here. Plan sponsors should lean on their payroll providers and ensure that there is clarity on how catch-up contributions are being made.

To facilitate administration of this new rule and employee experience, we suggest permitting “Deemed” Roth contributions. This means that there is an assumption that catch-up contributions will be considered Roth, even if an employee has elected pre-tax deferrals for their base contribution. Deemed Roth feature is typically setup as a function of payroll and must be included in your governing plan documents.

To avoid last-minute scrambling, here’s what employers should be doing in 2025 and into 2026:

• Check whether your plan even offer Roth - this is a great deferral option for all employees, regardless of income.

• Talk to payroll and your recordkeeper about tracking who’s subject to the rule.

• Permit “Deemed” Roth contributions and amend plan document(s).  

• Review catch-up provisions for ages 60–63 and for 403(b) service-based rules.

• Create employee communications, especially for those over the wage limit.

• Work with your Recordkeeper or TPA on plan amendments.

What’s the Timeline?

Here’s how the rollout shakes out:

• Now — Setup a call with payroll and recordkeeper.

• December 31, 2025 — New catch-up limits kick in.

• January 1, 2026 — Roth requirement becomes real.

• Late 2026 — Formal plan amendments are due.

We’re here to help

For the workers affected, the downside is giving up the upfront tax break on catch-up contributions. The upside? Tax-free withdrawals later.

For employers, the stakes are higher: if the plan isn’t set up to handle Roth catch-ups, some employees could lose access to them entirely.

Bottom line: Roth is about to move from optional to unavoidable for a lot of savers. Getting ahead of the change now will make 2026 less stressful. If you or someone you know may need assistance, let’s meet!

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Disclosure: This material is for informational and educational purposes only and should not be considered personalized tax, legal, or investment advice. You should consult your own qualified tax, legal, and financial professionals before making any decisions based on this information. Tax laws and regulations, including those discussed here, may change and can vary based on individual circumstances. The examples and explanations provided are for general understanding and should not be relied upon to predict or guarantee outcomes. Investing and retirement planning involve risk, including possible loss of principal. Past performance does not guarantee future results. Advisory services are offered through Human Investing, LLC, an SEC-registered investment adviser.

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