2026 Guide to Financial Planning for High-Income Individuals

“It’s not how much money you make, but how much money you keep.” This popular saying from author/investor Robert Kiyosaki emphasizes that wealth management and retention are just as important as accumulation.  Those in the upper federal tax bracket lose a significant portion of their gross income to taxes unless they implement strategies to counter the impact and adapt to changing legislation. A well-designed financial plan that adapts to legislative changes such as the One Big Beautiful Bill Act (OBBBA) and SECURE Act 2.0 can help high-net-worth individuals (HNWIs) and households preserve substantially more of their earnings and compound their wealth more efficiently.

New Tax Rules Every Affluent Earner Should Note

• Permanent Tax Brackets: The Tax Cuts and Jobs Act (TCJA) of 2017 established marginal tax rates of 10%, 12%, 22%, 24% 32%. 35%, and 37%. The passing of OBBBA on July 4, 2025, made these temporary provisions permanent.
• Temporary SALT Cap Increase: For those who itemize on their taxes, the limit on state and local tax deductions (SALT) increased from $10,000 to $40,000 for individual filers for tax years 2025 through 2029 (and taxpayers earning less than $500,000).
• Estate and Gift Tax Exemptions Increase: Starting in 2026, the estate, gift, and generation-skipping transfer tax exemptions rise to $15 million per individual (indexed for inflation thereafter).  For married couples, that doubles to $30 million.
• Charitable Giving Rules Change: Starting January 1, 2026, a 0.5% “deduction floor” on charitable giving applies, meaning a portion of contributions will no longer be deductible.
• Mandatory Roth Treatment for Certain Catch-Up Contributions: Beginning in 2026, SECURE 2.0 (2022) establishes that catch-up contributions by employees aged 50 and over who earned more than $145,000 during the previous year (indexed) must happen on an after-tax Roth basis. Regular catch-up contributions remain, but catch-ups for high earners cannot be pre-tax. 

Planning Strategies That Can Leverage These Developments

HWNIs and high-earning households can employ several strategies to take advantage of favorable provisions and help reduce future tax burdens while managing retirement income, estate obligations, and charitable goals.

• Max Out Tax-Favored Retirement Vehicles: With OBBBA making today’s tax brackets permanent, HNWIs have a window to defer taxes in peak-earning years through pre-tax 401(k) and traditional IRA contributions, while strategically using Roth conversions during lower-income years in the future.  Since SECURE 2.0 requires high-earner catch-up contributions to be Roth only starting in 2026, maximizing traditional contributions before that rule takes effect is prudent.   
• Take Advantage of the Expanded SALT Deduction: Households in high-tax states with income below $500,000 annually can benefit from OBBBA’s temporary expansion of the SALT cap. Since the provision expires in 2029, strategies such as bunching property tax payments into a single year can help maximize deductions, especially for those who alternate between itemizing and claiming the standard deduction.
• Assess Estate and Gifting Moves Before 2026: Since the higher estate and gift tax exemption takes effect in 2026, individuals with larger estates will want to evaluate whether gifting or setting up trusts now or in early 2026 can leverage the full exemption. Accurate appraisals and proper structure are vital to valuations, which become more important as exemption levels rise.
• Adjust Charitable-Giving Structures and Stack Contributions: With OBBBA’s 0.5% AGI (adjusted gross income) floor on charitable deductions beginning in 2026, 2025 is a favorable year to bunch gifts. HNW households can front-load contributions into donor-advised funds (DAFs), pair them with prepaid property taxes under the $40,000 SALT cap (if they fall under the threshold), or align large gifts with Roth conversions to maximize deductions before the floor applies.  
• Tax Treatment Flexibility via Diversified Account Types: High earners often accumulate retirement assets predominantly in pre-tax accounts. Relying solely on pre-tax savings can lead to large taxable distributions later (including required minimum distributions). Maintaining some Roth exposure, taxable brokerage accounts, and other after-tax vehicles provides flexibility in retirement income management and tax control.

Quantitative Considerations

HNW families and individuals face unique tax dynamics under the new rules, especially when managing retirement withdrawals, deductions, and contribution strategies. Here are some factors to consider.

• Permanent 37% Bracket: For those with a modified adjusted gross income (MAGI) above $600,000, significant withdrawals from pre-tax accounts such as IRAs and 401(k)s are taxed at the top rates, creating a lasting drag on after-tax wealth.
• SALT Deduction Limitations: The $40,000 cap provides relief in high-tax states but phases out above $500,000 of income, leaving many households closer to the $10,000 limit.
• Mandatory Roth Catch-Ups: Beginning in 2026, catch-up contributions for earners above $145,000 must be Roth, resulting in more taxable income upfront but offering tax-free growth in retirement.

At SHP Financial, we understand that navigating the complexities of wealth management and tax strategy is particularly crucial for high-income earners. Our team stays informed about legislative changes to design tax-efficient strategies that protect and preserve your wealth, aligning with your long-term goals. Whether you are planning for retirement, managing estate considerations, or optimizing your investment portfolio, SHP Financial can provide personalized guidance to help you make smart financial moves. Contact an SHP Financial advisor today to schedule a complimentary portfolio review.