Financial Insights — Monday, May 25, 2026

IRS extends plan amendment deadlines for SECURE, CARES, and SECURE 2.0 retirement law changes

The IRS announced that employers and plan providers now have several extra years to amend 401(k), 403(b), pension, 457(b) and certain IRA documents to reflect major retirement law changes from the SECURE Act, CARES Act, Taxpayer Certainty and Disaster Tax Relief Act, and SECURE 2.0. The notice also reiterates updated required minimum distribution (RMD) rules, including the higher starting age of 73 for many retirees.

Source: Irs · Sep 12, 2026

Grace's Take

The RMD starting age jumping to 73 doesn't just delay withdrawals—it extends your window to convert traditional balances to Roth before Required Minimum Distributions kick in. If you're 50 to 15 years from retirement, those extra years between now and age 73 become prime Roth conversion territory, especially if you're in a lower-income year or taking a sabbatical. This flexibility matters most if you expect higher tax brackets later. Worth running the numbers on whether accelerating conversions before 73 arrives makes sense for your specific income pattern and tax situation.

• •Plan sponsors get extended deadlines (many to December 31, 2026 and beyond) to formally update documents for SECURE, CARES, and SECURE 2.0 changes, reducing near‑term compliance pressure.
• •The IRS reiterates that RMDs now generally start at age 73 for people born after 1950, which can affect withdrawal timing and Roth conversion strategies.
• •IRA trust and annuity contracts also have extended amendment deadlines, which may influence how custodians implement new features like higher catch‑up contributions and updated beneficiary rules.

Idaho Workplace Savings proposal highlights expanding state auto‑IRA trend for retirement security

A Pew Charitable Trusts fact sheet explains how a proposed state‑run workplace savings program in Idaho could automatically enroll hundreds of thousands of workers who currently lack access to a retirement plan at work, mirroring programs already enacted in 17 other states. The analysis underscores a broader policy trend toward auto‑IRA programs to close the retirement savings gap.

Source: Pew · May 1, 2026

Grace's Take

If you've been overlooking retirement savings because your small employer doesn't offer a 401(k), your state may soon make it frictionless to start—and that changes the catch-up math for mid-career workers. Auto-IRA programs now exist in 17 states, and they're specifically designed to reach workers without workplace plans through payroll deductions. For someone 10–15 years from retirement, this creates an unexpected pipeline to build meaningful savings during the years when catch-up contributions matter most. Worth checking whether your state has passed or is considering an auto-IRA program, and if so, understanding how those contributions would layer into your overall catch-up strategy alongside any IRA or existing retirement accounts.

• •Seventeen states have already passed legislation creating automated workplace savings programs, and Idaho is considering joining this expanding policy movement.
• •Auto‑IRA style programs are designed to help workers without 401(k)s build retirement savings through payroll deductions, with the option to opt out.
• •For mid‑career workers at small employers, these programs can create a de facto IRA pipeline that complements or substitutes for employer‑sponsored 401(k)s.

Big changes are coming for 2026 Medicare plans. What you need to know

Major insurers are cutting some Medicare Advantage and Part D plans for 2026, raising deductibles and shifting more drugs to percentage-based coinsurance, which will force many enrollees to switch coverage and potentially pay more out of pocket.

Source: Cthosp · May 22, 2026

Grace's Take

Medicare's most stable coverage option is finally cracking—and that shift happens before you're even eligible. For someone 10–15 years from retirement, this matters because Medicare Advantage enrollment is projected to shrink for the first time in 15 years, with at least 1.2 million people losing their current plans entirely. The move toward coinsurance instead of flat copays means your medication costs could become harder to predict just when you're locking in a retirement budget. Worth checking now whether your parents or in-laws are affected—their coverage disruptions can signal what the landscape looks like when you turn 65, and give you time to model different plan scenarios into your own retirement projections.

• •Enrollment in Medicare Advantage is projected to shrink in 2026 for the first time in about 15 years, as insurers drop plans and trim popular extras.
• •At least 1.2 million Medicare Advantage enrollees may lose their current plans in 2026 because those plans are being eliminated.
• •Stand‑alone Part D plans are declining in number and many plans are raising drug deductibles and replacing flat copays with coinsurance, making it critical to comparison‑shop using Medicare.gov and plan formularies.

What to Know About Medicare Part D Drug Coverage

AARP explains how Medicare Part D works, what it covers, and highlights upcoming changes including a new $2,000 annual cap on out-of-pocket drug costs starting in 2025 and expanded coverage for certain GLP‑1 medications when used for diabetes or heart disease.

Source: AARP · May 20, 2026

Grace's Take

The $2,000 annual out-of-pocket cap on Part D drugs starting in 2025 fundamentally changes how medication costs factor into your retirement budget math. If you're managing chronic conditions like diabetes or heart disease, this ceiling means your worst-case drug expenses are now predictable and capped—a meaningful shift from the open-ended costs that used to derail retirement plans. For those 10–15 years from retirement, this reduces one major variable in your healthcare expense projections. Worth running the numbers on how this cap affects your total healthcare costs in early retirement and whether it changes the case for long-term care insurance timing.

• •Part D covers outpatient prescription drugs taken at home, with coverage details varying by plan formulary, tiers, and preferred pharmacies.
• •Starting in 2025, all Part D plans must cap enrollees’ annual out‑of‑pocket costs for covered drugs at $2,000 (excluding premiums), significantly limiting catastrophic medication expenses.
• •Medicare will now cover drugs like Ozempic, Mounjaro, and Wegovy when prescribed for FDA‑approved uses such as diabetes or cardiovascular disease in people who are overweight, not just for weight loss.

Mortgage rates climb again as 30‑year fixed hits 6.60%, pressuring housing affordability for buyers and downsizers

Average 30‑year fixed mortgage rates rose to 6.60%, up from 6.46% a week earlier, as bond yields moved higher, while 15‑year fixed rates reached 5.89% and 30‑year jumbo loans averaged 6.63%.

Source: Bankrate · May 20, 2026

Grace's Take

The math on staying put just shifted in your favor—if you currently own a home with a low mortgage rate, giving it up for a new one has become genuinely expensive. For someone 10 years from retirement considering a downsize, a 6.60% rate on a new mortgage means that home equity gains no longer automatically translate into purchasing power. The gap between today's borrowing costs and a locked-in rate from years past now represents a meaningful financial headwind. Worth running the numbers on whether accelerating your current mortgage payoff or staying in your existing home makes sense versus the cost of refinancing or moving into a new property.

• •The national average 30‑year fixed mortgage rate is 6.60%, up from 6.34% four weeks ago and just below 6.95% a year ago, signaling persistent borrowing costs for homebuyers.
• •The 15‑year fixed rate, often used by late‑career homeowners planning to be mortgage‑free by retirement, averages 5.89%, making accelerated payoff strategies more expensive than in recent years.
• •Higher rates reduce what downsizers and near‑retirees can afford even when tapping large home equity gains, and they also make it less attractive to give up an existing low‑rate mortgage.

Federal funds rate holds at 3.75%, with markets expecting no near‑term cuts as inflation stays sticky

The benchmark U.S. federal funds rate remains at 3.75%, and market models expect it to stay around this level through the end of the quarter, reflecting the Fed’s reluctance to cut until inflation cools further.

Source: Tradingeconomics · May 24, 2026

Grace's Take

Higher-for-longer interest rates mean your safe-withdrawal strategy and retirement income projections may need recalculation before you stop working. If you're 10–15 years from retirement, the 3.75% environment makes this a pivotal moment: stable yields on CDs and high-yield savings accounts are currently competitive, but that window may close if cuts eventually arrive. For those doing Roth conversions or managing catch-up contributions, the tax and income landscape feels relatively predictable right now—a useful vantage point for planning. Worth running the numbers on how your projected retirement income sources (Social Security, portfolio withdrawals, interest-bearing savings) hold up if rates stay elevated versus if they decline sooner than expected.

• •A 3.75% federal funds rate keeps pressure on borrowing costs across the economy, including mortgages, credit cards, and some personal loans.
• •Stable but elevated short‑term rates continue to support relatively attractive yields on CDs and high‑yield savings accounts, benefiting savers.
• •Expectations for fewer or later rate cuts suggest higher‑for‑longer interest rate conditions, which can affect retirement income projections and safe‑withdrawal planning.

Why Clients Should Consider Roth Conversions When Stocks Drop

This article explains why market downturns can be a good time to convert traditional retirement money to a Roth IRA, because the tax bill on the converted amount may be lower. It is especially relevant for people planning taxes in retirement and trying to manage future RMDs.

Source: Irafinancial · May 21, 2026

Grace's Take

Market downturns can flip the math on one of your biggest tax-planning tools—converting traditional retirement savings to a Roth becomes cheaper when account balances are lower. For someone in their mid-50s with 10 years until retirement, a well-timed conversion during a market dip can reduce the tax bill on that conversion while also shrinking future required minimum distributions. This matters most if you're trying to manage how much you're forced to withdraw in your 70s. Worth running the numbers on whether a conversion makes sense in your specific situation and tax bracket—especially if you're in a year when income dips or the market has taken a meaningful hit.

• •A lower account balance after a market drop can reduce the tax cost of a Roth conversion.
• •Roth conversions can help reduce future required minimum distributions.
• •Timing conversions around market volatility can improve long-term tax efficiency.