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Financial Insights — Thursday, February 12, 2026

News that affects your money, your health, and your future — explained by Grace AI.

Retirement Planning · Tax Strategy

SECURE 2.0 Enhanced Catch-Up Contributions Now Fully in Effect for Ages 60-63

The SECURE 2.0 Act's enhanced catch-up contribution provisions are now fully operational in 2026, allowing individuals ages 60-63 to contribute significantly more to retirement plans than standard age-50 catch-up limits. High-income earners must make these catch-up contributions on a Roth basis, shifting the focus toward tax diversification in retirement accounts.

Source: BMF CPA ·

Grace AI Grace's Take

Good news for those near retirement! Starting in 2026, if you’re between 60 and 63, you can contribute more to your retirement accounts, which can help boost your savings. If you earn a higher income, you'll be making these contributions in a way that allows for tax-free growth later on, helping you manage your taxes better in retirement. This is a great opportunity to strengthen your financial position as you approach retirement!

  • •Ages 60-63 can now make substantially higher catch-up contributions indexed for inflation
  • •High-income earners must use Roth basis for catch-up contributions, providing tax-free growth in retirement
  • •Coordinating Roth and pre-tax balances is increasingly critical for tax flexibility in retirement
Retirement Impact

For those 1-5 years from retirement, this is a critical window to maximize tax-advantaged savings. If you're 60-63, you can contribute significantly more than younger workers.

Retirement Income · Dividend Stocks · Tax Planning

CPP and OAS Insufficient for Most Canadians—Dividend-Growth Strategy Recommended for Income Gap

Analysis shows that Canada Pension Plan (CPP) and Old Age Security (OAS) benefits alone won't cover retirement expenses for most Canadians, particularly with rising housing, food, and healthcare costs. Experts recommend building supplemental income through dividend-growth stocks in TFSAs and non-registered accounts to bridge the gap and outpace inflation.

Source: Motley Fool Canada ·

Grace AI Grace's Take

The news highlights that the government benefits many Canadians rely on for retirement often won’t be enough to cover living expenses, especially with rising costs. To help fill this income gap, experts suggest investing in dividend-paying stocks, which can provide a steady income that grows over time. As you approach retirement, it’s important to consider these strategies to ensure you have the financial support you need before Medicare kicks in at 65.

  • •Government benefits are designed as a foundation, not a complete retirement plan
  • •Dividend-growth stocks can generate rising income that keeps pace with inflation
  • •TFSA withdrawals don't trigger tax brackets or OAS clawbacks, providing strategic income flexibility
Retirement Impact

This addresses concerns about running out of money by building a portfolio of quality dividend-growth stocks to supplement government benefits.

Social Security/CPP · Retirement Timing

Delayed CPP and OAS Claiming Now Offers Up to 42% Payment Increase for Canadians Deferring to Age 70

For Canadians turning 65 in 2026, deferring CPP and OAS claims until age 70 now results in enhanced payment increases of up to 42%, compared to early access at age 60 which carries greater monthly reductions. Private pensions are also adding flexible retirement thresholds to align with federal changes.

Source: Bury Leaders ·

Grace AI Grace's Take

Good news for Canadians approaching retirement! If you're turning 65 in 2026, waiting until age 70 to claim your Canada Pension Plan (CPP) and Old Age Security (OAS) can boost your monthly payments by as much as 42% compared to claiming early at age 60. This extra income can be crucial for maintaining your financial independence during retirement, so it might be worth considering a delay if you're able to manage your finances in the meantime.

  • •Deferring CPP to age 70 increases monthly payments by up to 42% versus claiming at 60
  • •OAS payments have been adjusted to reward delayed retirement
  • •Delaying retirement helps seniors maintain financial independence
Retirement Impact

Deferring CPP/OAS to 70 dramatically increases lifetime benefits, protecting against longevity risk.

Retirement Planning · Financial Advisory

Comprehensive Financial Planning Essential for Retirement Income Decumulation Strategy

With the decline of traditional pension plans, comprehensive financial planning has become critical for determining proper retirement income distribution. Experts emphasize that retirees need professional guidance to forecast retirement income and design effective income strategies.

Source: Fiducient Advisors ·

Grace AI Grace's Take

With traditional pensions fading away, it's more important than ever to have a solid plan for handling your retirement income. As you get closer to retirement, consider working with a financial advisor to map out how and when to tap into your Social Security, adjust your investment strategy for less risk, and find ways to cover healthcare costs before Medicare kicks in at 65. Remember, having a clear plan can help you navigate potential market ups and downs, ensuring you have the income you need when you need it.

  • •Strategic decumulation is essential as retirees move beyond simple accumulation
  • •Forecasting retirement income is crucial for proper funding
  • •Retirees need guidance for effective asset allocation and income strategy
Retirement Impact

A comprehensive decumulation strategy helps ensure enough income throughout retirement amid the decline of traditional pensions.

Market Overview

Key Trends

  • Increased catch-up contributions for late-stage savers
  • Importance of tax diversification strategies with Roth conversions
  • Benefits of deferring Social Security benefits for increased lifetime payouts
  • Need for comprehensive financial planning for decumulation strategies

What This Means for You

  • Capitalize on enhanced catch-up contributions to maximize tax-advantaged savings if you're 60-63.
  • Consider strategic Roth conversions before RMDs to reduce future tax burdens and improve cash flow in retirement.
  • Evaluate the benefits of delaying Social Security or similar pensions until age 70 to secure higher monthly payments and counter longevity risk.
  • Construct a diversified portfolio with a focus on dividend-growth stocks and essential sector equities to ensure inflation protection and consistent income.

Risk Factors to Watch

  • Market volatility may negatively impact asset values, potentially affecting retirement timing and withdrawal strategies.
  • Healthcare costs continue to rise and may exceed budget expectations, especially before Medicare eligibility.
  • Interest rate changes can affect bond performance, leading to lower returns and income stability.
  • Tax policy changes in the future may impact current retirement strategies and investment decisions.

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