Although you may be the sort of person who prefers to sweep their birthdays under the rug, turning 55 is a big deal. It means you're halfway through your 50s and that much closer to retirement being a reality.
If you're turning 55 in 2026, there are some important things you need to know in the context of retirement planning. Here are three to keep on your radar.
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1. You can make retirement plan catch-ups -- but the rules have changed
You're probably aware that you'll need income outside of Social Security to live comfortably in retirement. That's where your individual retirement account (IRA) or 401(k) plan comes in.
If you're turning 55 next year, it means you've been eligible to make IRA or 401(k) catch-ups for several years already, since those begin at 50. However, the rules of making 401(k) catch-ups are changing in the new year, and that shift may affect you.
Starting in 2026, higher earners are barred from making traditional, pre-tax 401(k) catch-up contributions. If you want to make a catch-up contribution to your employer's retirement plan and your income is over $145,000, you'll need to make it in a Roth.
In other words, if you're a higher earner, you may lose your up-front tax break on your 401(k) catch-up in 2026. However, it's not a totally raw deal.
Roth 401(k)s offer the benefit of tax-free investment gains and tax-free withdrawals during retirement. They also do not force savers to take required minimum distributions. So, if you're in a position to make a 401(k) catch-up, it could pay to do so, even if you lose the option to shield that extra money from taxes.
2. You can finally make catch-up contributions to your HSA
If you have an HSA, or health savings account, maxing out your contributions is one of the smartest things you can do. That's because HSAs offer three different tax benefits -- tax-free contributions, investment gains, and withdrawals, provided they're taken to pay for qualifying medical expenses.
But whereas catch-up contributions for IRAs and 401(k)s begin at age 50, with HSAs, you need to wait until age 55 to make them. If you're turning 55 in 2026, however, it means you're eligible to contribute an extra $1,000 next year.
3. You may be able to tap your 401(k) early
For a lot of people, 55 is way too young to be thinking about retirement. But it may be that you've saved well your entire life and are starting to burn out on the job. That's a combination that may spur an early retirement.
Of course, the challenge of retiring early is risking a 10% early withdrawal penalty on funds in your IRA or 401(k). That penalty typically kicks in if you take a withdrawal before turning 59 and 1/2.
But you should know that if you're turning 55 in 2026, you may be able to tap your 401(k) early and avoid a 10% penalty. However, there are rules to follow.
For one thing, you need to separate from your employer in the year you turn 55 or later to get early access to your 401(k). You can also avoid a penalty only on the 401(k) sponsored by the employer you're parting ways with.
Here's what this means. Let's say you're aiming to retire next year. You have a $1 million 401(k) with your current employer, plus a $2 million 401(k) from a previous employer you never rolled over.
If you're turning 55 in 2026, you're entitled to take penalty-free withdrawals from the $1 million 401(k) only -- not the $2 million 401(k) you have from a previous employer.
Your 55th birthday is definitely one worth celebrating. As you gear up to do that, pay attention to these important points so you can make 2026 a financially rewarding year.
