2026: New year, new 401(k) limits

Let's be honest: You picked your 401(k) contribution rate years ago and haven't touched it since. Maybe it's 6%, maybe it's whatever HR auto-enrolled you at, and you've been lowkey wondering if that's actually enough. Let’s settle this once and for all in this week’s newsletter.

Here’s what’s inside:

• How much to put in your 401(k) by age

• The K-shaped holiday economy

• Why the US government killed the penny

• Your roadmap to $10,000 in savings

P.S. If you want to talk through your own finances, you can book a free 1-hour coaching call here ☎️

How much should I contribute to my 401(k)?

The short answer: 10-15% of your income.

The real answer: It depends on where you are in life.

💰 If you're in your 20s: Start with 6% and increase by 1% every year. Thanks to compound interest, money you invest now has 40+ years to grow. Even small amounts become massive.

💰 If you're in your 40s and haven't started: Aim for 15% or more. You're playing catch-up, but you're also (hopefully) earning more. This is your power decade.

💰 If you're 50+: Take advantage of catch-up contributions. In 2026, you can contribute up to $32,500 (or $35,750 if you're 60-63). These extra years matter.

What the limits actually are for 2026:

• Under 50: $24,500

• 50 and older: $32,500

• Ages 60-63: $35,750

The employer match rule: If your company matches contributions, contribute at least enough to get the full match.

Can't hit 15%? Start with what you can and use auto-escalation to bump it up 1% each year. Since contributions are pre-tax, you'll barely notice the difference in your paycheck.

Navigating your own retirement contributions? We can guide you by booking a call here.

The K-Shaped holiday season

This holiday season is shaping up weird. Not "everyone's struggling" weird. More like "half of us are struggling while the other half is barely noticing" weird.

Economists call it a "K-shaped economy". It’s where higher-income households keep spending freely while everyone else is pulling way back. And this holiday season is making that split impossible to ignore.

Here's what's actually happening:

📊 Average consumers plan to spend $1,595 this holiday season. That’s down 10% from last year. Gen Z is cutting the most, planning to spend 23% less.

📊 But not for everyone: 57% of Americans expect to spend the same or more compared to last year. These are mostly higher-income shoppers who aren't feeling the pinch.

📊 Credit cards are filling the gap: 42% of shoppers say credit cards are their preferred payment method this year (up from 38% last year). Translation: people who don't have cash are still trying to keep up.

Christmas shopping prep tips for you:

🎁 Set your budget before Black Friday - Decide what you can actually afford, not what you think you "should" spend

🎁 Be honest about your situation - If money's tight, suggest lower-cost gift exchanges or experiences instead of expensive presents

🎁 Watch for the "everyone's doing it" trap - Just because retailers are pushing $200 gift sets doesn't mean that's the new normal

🎁 If you're using credit, have a payoff plan - Carrying holiday debt into March is how small purchases become big regrets

Struggling to balance spending and saving? Let's talk through your strategy.

RIP to the penny

On November 12, 2025, the Philadelphia Mint pressed the last penny. After 233 years in circulation, the U.S. is officially done making them.

Why? Because it costs 3.69 cents to make each penny. The math wasn't mathing.

What this actually means for you:

💵 Pennies aren't disappearing overnight: They're still legal tender, and the 114 billion already in circulation will stick around for years

💵 The rounding "tax" is real (but tiny): When retailers round to the nearest nickel, consumers will pay about $6 million extra annually. Sounds big, but that's less than 50 cents per household per year.

💵 Cash users will feel it most: If you pay with cards or digital wallets, nothing changes. But if you use cash, you'll notice the rounding at checkout.

💵 Some retailers are already rounding down to avoid legal issues, which means they're eating the cost

The bigger question: is the nickel next? It costs nearly 14 cents to make a 5-cent coin. If nickels go too, we'd be rounding to the nearest dime (and that "rounding tax" jumps to $56 million a year).

What to do with your penny stash: Cash them in at your bank or a coin-counting machine before they become purely collectible.

Roadmap to $10k savings

Hitting your first $10,000 in savings isn't just about earning more, but also avoiding the three mistakes that keep most people stuck at zero.

💸 Pay yourself first, not last: Automate transfers on payday before you have a chance to spend it

💸 Separate your savings: If it's in your checking account, it's already spent. Move it somewhere you won't touch.

💸 Set a real deadline: "Someday" isn't a savings goal. Pick an actual date (like December 2026) and work backward from there.

The strategy is simple: automate, separate, and let compound interest do the heavy lifting.

If you want to start building towards $10k, here’s a free tracker you can use.

 Worth the Click This Week

💸 What to do with $100K in savings: If you've hit the six-figure savings milestone, here's your priority list: crush high-interest debt, fund emergencies, max retirement contributions. Your game plan »

🤖 Shopping with AI: 40% of holiday shoppers plan to use AI tools this year, with 3 out of 4 Gen Zers using AI for everything from product discovery to checkout. ChatGPT now has instant checkout with Etsy and Walmart, turning AI assistants into shopping destinations. See how it works »

💰 Student loan chaos continues: The Education Department restructuring has borrowers worried. Forgiveness is still happening, but the path forward is murky. If you're in repayment, now's the time to understand your options. Get informed »

💳 Gen Z's financial literacy gap: Only 38% of Gen Z can correctly answer basic personal finance questions. But there's good news: more schools are requiring financial education, and 72% of young adults are actively working to improve their financial health. See the data »