Episode 305: Seven Financial Planning Themes to Guide Your Money in 2026

As the new year begins, Melissa Joy, CFP®, helps listeners slow down and reset before diving into financial to-do lists.

In this solo episode, Melissa lays out seven financial planning themes to help guide decisions in 2026. After an intense year of headlines, market shifts, and economic noise, this conversation offers perspective and grounding for those navigating what she calls the “messy money middle.”

Rather than reacting to the news cycle or trying to predict the future, Melissa focuses on practical planning themes — from diversification and human capital to tax changes, estate planning, and lifestyle pressures — all designed to help listeners approach the year ahead with clarity and flexibility.

This episode is meant to level-set expectations and provide a thoughtful framework for anticipating a successful year with your money.

In this episode, Melissa explores:

• Why diversification and rebalancing matter after a strong year for markets
• How international stocks, alternatives, and AI are shaping investment conversations
• Protecting your human capital and preparing for potential job disruptions
• Evaluating the return on investment when spending on skills and career development
• Key tax law changes and what they may mean for planning in the year ahead
• Updates to retirement catch-up contributions and charitable giving rules
• Why estate planning still matters, even when estate taxes may not apply
• How declining interest rates affect cash, savings, and investment decisions
• Determining how much cash to keep versus invest
• Navigating lifestyle inflation and the financial realities of the sandwich generation

The previous presentation by PEARL PLANNING was intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. A copy of PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https:...

Chapters

• 0:00 New Year, New Money Focus
• 1:42 The Great Broadening In Portfolios
• 9:10 Guarding Your Human Capital
• 16:55 2025 Tax Law Changes Unpacked

Transcript

SPEAKER_01: 0:00

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and the founder of Perl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence, and be strategic in order to grow your wealth. As a woman, you work hard for your money, and I'm here to help you make the most of it. Now let's get into the show. If you guys are like me, I am still in shock that we're already in a new year. Time seems to go faster and faster, which is just the reality. You know, when you're in the messy money middle, life is busy, um, time moves faster and faster. And here we are, laying out the groundwork for anticipating a successful year when it comes to your money and your finances. I am so excited to do this episode. I really want to lay out seven potential financial planning themes for you for 2026. I feel like the news cycle was so intense when it came to um news that impacts your money in 2025 that probably many of you are kind of sitting here a little bit stunned, thinking, I still have a to-do list, I have a lot to be thinking about. And so just know that you're not alone when it comes to that. But hopefully these themes will be kind of a level set, um, give you some context for things that you can be focusing on, and perhaps they'll give you a few good ideas for um how to think about the coming year. So, theme number one is about the great broadening when it comes to your investment portfolio. Um, what I want to start with is just mentioning that 2025 was a year where we really saw a lot of um promising investment results when it came comes to diversification. So, first of all, um almost across the board, investment asset categories had positive returns. Um, of course, there still is a potential for loss with any investment portfolio. But you saw bonds with bond-like returns. Um, the returns on cash are actually diminishing a little bit as yields have fallen, um, but still positive, of course. Um, stocks were strong, but interestingly, international stocks were stronger than US stocks, and emerging stocks were emerging market and developing market stocks were even stronger than that. Um, so a lot of interesting details. Also, alternative investments like um gold had very strong returns as well. Um, so interesting themes and shifts there. The other dominant conversation um that just we don't see any signs of abating is the impact of AI on investments in the economy. So artificial intelligence is just the biggest theme. Um, what every company CEO is trying to, you know, pack into their um conversations on their quarterly investment calls. And so um there will be over time likely winners and losers when it comes to this. But for now, um, we see that theme continuing to play out. But there could be either potential kind of backlash and um, you know, uh like considerations for investments um that are not as heavy on AI and also kind of win of winners or losers when it comes to this space. So as you think about your investment portfolio, I think it's worth kind worth taking a peek and seeing if you have become over concentrated in a few particular stocks or a few areas of investment portfolios. So if you only own US tech companies, it might be worth considering a rebalance if you used to have more bonds than you do today, because bonds have had fewer, lower returns and stocks over the last um period of time. Then all of these may be reasons for you to reevaluate and reconsider, or most importantly, rebalance, which means you go back to your intended allocation instead of straying based on the momentum of the market. Number two, um, I would mention is that this is a financial planning theme. Um, human capital is essentially um such an important part of most of our excuse me. Human capital is such an important part of most of our um kind of investment and financial planning results. Um, our ability to save money is often typically based on our ability to earn money. And so when we look into 2026, we can just see both in employment numbers, which seem to be getting um a little bit less good across the board throughout 2025. Um, we have an unemployment rate that is um uh uh above 4% and hasn't been this high, unfortunately, um, in at least four years. And so um the numbers are seeming to indicate that there may be job interruptions, disruptions. And I would just encourage people to think about with a flexible mindset when it comes to their work and also be prepared for anything. So when you have a solid financial plan, you are often very well suited to kind of dealing with the bumps in the road. But if you've neglected to build up cash reserves, have a good um solid idea of how you're spending money, all of those things, then um you can be more vulnerable when it comes to an unexpected layoff or something like that. So protect your human capital at all costs. Um when you think about your career going forward, then do approach things with a flexible and open mindset and also be keeping your skills up to date, but don't overinvest. Um, I talked with a client, a prospective client, who mentioned they'd spent a lot of money on training and then found out um the career they were training for was not very lucrative. So you need to really be thinking about the return return on investment when you decide to invest in skills and training. Number three is we have um a new law when it comes to taxes. The One Big Beautiful Bill Act was passed in July of 2025. And there are a bunch of changes that came in with this new legislation that are really being unleashed this year. First of all, I'll just mention that because some of the things in the bill were new, we won't really see their impact unless you've done some intensive analysis until you get started doing your tax return. So some of the things that came in, the ability to um borrow for car loans and have a deduction, no taxes on tips, lower taxes on social security, lower taxes on overtime, those will not be kind of seen if they meet the requirements of the law, which aren't as simple as some people might think, until later this year when you have your tax return in hand. And then there's are some new things that are rolling out in 2026. So one of those things is that for those of you who are higher earners earning more than$150,000 on your paycheck through your W-2, you will not be eligible to put your catch up contribution to your 401k or 403B or retirement plan into tax-free or into tax-deferred amounts. So you don't get a tax break for that catch up amount. Instead, you are being asked, or if you want to put money in, you can put it into a Roth and you don't get a tax break, but you also don't pay taxes on these funds when you take them out down the road and they grow tax free as well. So that's one new thing coming. If you're getting communications from your employer saying, hey, you need to elect that you're doing a Roth ketchup, that is why, and that is important. And um, be prepared for that. Other people who are impacted, if you typically itemize with your charitable deductions included, then part of those charitable deductions, about half percent of your reportable income, will not be able to be deducted. But those of you who are non-itemizers now have the opportunity to get a small deduction for your charitable giving. So changes all around and keep your ears out and eyes peeled when you are thinking about how to approach taxes. We still see people that are understandably confused when it comes to their withholding calculators. And if you end up getting a big refund or you end up owing a lot, then it is definitely worth it to investigate and adjust your withholdings for your paychecks so that they are on track to be kind of right about good as to what you owe. So do a little tax planning when it comes to that. Number four, I would just mention, I already mentioned that charitable giving is being changed, and you may want to have a barbell strategy where you get more bang for your buck when you itemize in certain years, if you're giving, you know, kind of a medium amount when it comes to charities. So for high income itemizers, you may want to bundle your gifts and get a donor-advised gift in certain years. Um, you also want to make sure you report your charitable gifts if you are a non-itemizer. Number five is about estate planning. I think so many people are focused on estate planning when income taxes are in the spotlight and it's there's a potential for a tax law change that could impact more people with an estate tax. Nowadays, you would need to have many, many millions of dollars in order to be subject to an estate tax. And so that may reduce your interest in adjusting your um estate plan. And yet, estate planning is so important in terms of making a game plan for what happens if you pass away or something goes wrong. So do be very careful when it comes to refreshing your estate plan if it's been a long time since you've reviewed it. We've done a lot of episodes with about some of the benefits of estate planning and considerations for having a trust or not having a trust. Do look at all of your accounts and make sure that you have beneficiary designations for the accounts that aren't kind of included in your estate plan or might leave you subject to probate. And then pay attention to the particulars when it comes to being very organized, knowing where assets are, not leaving assets all over the place, and just, you know, primarily keeping things up to date. If you had one of the old school estate plans that was really built for when estate taxes impacted people around an estate of a million dollars, then it may make sense to visit with an estate planner and simplify your estate plan to something that's a little different. Um, and so as always, every three to five years, unless something changes, and then more frequently, if if things are constantly changing, it's worth it to talk with an estate planner about exactly what you need. Number six theme for 2026 is that interest rates for cash are coming down. That's not to say that they're not still worth it, but we had kind of a high watermark in the high fives or sixes when it came to money market yields, as interest rates really vaulted upward after the high inflation of the early part of this decade. And now they're back to kind of a more normalized place. And if you'll recall, we had started with a zero interest rate environment where you got paid almost nothing for your money market accounts. And so, gosh, when interest rates were paying five and a half or six percent on yields on money markets, that sure felt good. And it felt so big that people really loaded up on cash and let that be kind of a savings instrument that bled into their investment portfolio as being safe money. But now we're seeing lower returns. And I certainly think that money market yields and high, high yield savings, you know, kind of interest rates are valuable when it comes to your emergency reserves. You shouldn't put the that portion of your investment portfolio or of your balance sheet at risk. And you want that money to be evergreen, kind of ready for when you need it all the time. But when it comes to if you just have piles and piles of cash and you are really happy getting that stable income, but aren't quite as pleased as your interest and yield has been declining when it's paid each month, then it may be time to reassess exactly how much money you should keep in cash versus what portion of your funds should be invested. And that would be a conversation with someone like me who's a financial planner or an assessment with yourself to determine, you know, what's my targeted amount of emergency reserves? I love having a range. So it might be a$50,000 target, and it's great as long as it doesn't go below$40,000, in which case you might need to save back or assess your savings strategy. And then if it gets above$60,000, then that would be a signal to invest a little bit more, give a higher um savings rate to your$401 or retirement account, and make plans to kind of have funds that are kind of set aside for more long-term if you don't have some immediate projects. Now, if you that money is spoken for and you're going to be using it in the next six to 12 months, then certainly I would encourage you to keep that money in very stable cash or cash reserves or something close to it, like short-term bonds. Um, but I'm talking about funds that aren't necessarily spoken for. Um, some of our listeners would be surprised, but some people tend to really pile up cash. And so this is this is conversation that's for you. And then number seven, finally, um, two themes that I see people experiencing so frequently in the messy money middle, as I like to term it, are either lifestyle creep, lifestyle inflation, um, as well as just being having a sandwich squeeze where you're caught in the middle between emerging adults who have more and more needs and very real and very consequential dollar signs attached to those needs, as well as an older generation that you may be kind of earmarked to be a caretaker for who really needs help as well. And so what I encourage people to do who are kind of nodding and saying, yes, this is me. I'm a part of the sandwich generation, which also typically and often coincides with a time in your life where, and probably necessarily because of some of these reasons, but also because you've been working really darn hard for a long time and you're thinking, you know, we deserve to do the things that are a priority for ourselves, is your own um needs may have an inflating, be inflating higher than our typical inflation. And certainly also you can have unexpected um expectations from family members, um, need for caregiving, et cetera. So, whenever possible, um, it's great to communicate effectively with both the younger and older generation about understanding what their potential needs may be. Also having realistic conversations with the kids about money and starting to introduce bigger money concepts, um, you know, the adult or emerging adult version of money doesn't grow on trees, really emphasizing their own human capital, et cetera. Um, this would be an important theme, I think, for the new year with your parents' generation really talking through, you know, what if something goes wrong? What if you need help? Um, are accounts organized? Are you doing estate planning? Do you have your beneficiary designations? Who would I call if you were in the hospital and I needed to understand about your financial situation? Are there things that you want to share with me or someone else? Um, who do you want to kind of help you out if you have extra needs? And then for those that are standwiched in the middle, I think um making time for yourself, prioritizing your financial plan, especially if you haven't kind of had the urgent call and are sitting in a mess where you're you're navigating um the needs of yourself and others, simplify as much as possible. Keep yourself organized. Um, be, you know, kind of striving for retirement readiness, because this certainly helps you, whether you have a job interruption or the need to take time off to help others. Um, so just really pay attention to your own financial needs and communicate effectively about the needs of others so that you are kind of putting your best foot forward when it comes to this point in your life. So, as I wrap up, I would encourage you to make that list of to-dos. You don't have to make a plan for when you're going to do all of them. But if there are ideas that are floating through your head or anxieties, like I need to do this, I just need to get that done, now is the time to kind of scrap them down. If you're someone who's not sure where to start, or you kind of achieved the basics of um personal finance and you're ready to graduate to some areas that might have more complexity, or you're just finding your own financial circumstances or getting more and more um complex and less basic, then it may be time to talk to a financial planner like the team at Pearl Planning to make a game plan and get some assistance with really navigating um all the moving parts because we know that there is so much under that hood of personal finance, um, so many opportunities and possibilities, but also um so many decisions to be made and often um not enough time to do them. So we'll keep bringing the topical conversations to 2026. Looking forward to another great year with the podcast and you as listeners. Um, happy new year and have a great start to this first week of the year. Thank you.

SPEAKER_00: 19:55

Thank you for listening to the Women's Money Wisdom podcast. If you found value in this episode, The best way that you can support the podcast is to forward an episode to a friend or leave a review. Go to ProPlan.com and the podcast link to get all the resources and links mentioned. This presentation by Pro Planning is intended for general information purposes only. No portion of this presentation serves as a receipt of or substitute for personal investment advice from Pro Planning or any other investment professional of your choosing. Copies of Pro Planning's current rent and disclosure brochure and Form CRS discussing our advisory services and fees are available upon request or on our website platform at PerlPlan.com. The information that we share is meant to educate and inspire, not serve as personalized financial advice. Everyone's situation is unique, so be sure to consult with your own financial professional for guidance that fits your life. And just so you know, the opinions shared in this podcast are Melissa's own and those of her guest. They don't necessarily represent any organizations with which Melissa is affiliated. For more important disclosures, please go to our webpage at proplan.com.