It's March: Time to Review Your Withholding Allowances and Workplace Retirement Plan Contributions

It’s March!  And you know what that means:  spring is finally in the air.  For me, it also means the finish line is in sight for the Oakland Marathon on Sunday, March 22.

How about you?  What race, competition, or personal goal are you working toward this spring?  I’d love to hear what’s challenging you lately.

I was recently interviewed for the Advice-Only Network podcast.  If you are interested in hearing more about my journey into financial planning, have a listen.  I sound amazing at 2x speed.    

Ok, on to financial matters...This month, I want to highlight two ways to check your pace and ensure you aren’t hitting the wall come December.  And to remind you to upload your 2025 tax return to your vault so that I can review it before an upcoming six-month or annual review meeting.    

1. The Paycheck Check: Review Your Withholding

Now that you’ve likely seen a few 2026 paystubs, it’s the perfect time to see if your tax withholding matches your current reality.

• The Goal: Withholding just enough so that you don't get a huge refund or have to fork over a large amount to the IRS when you file your return.

• How to Review: There are a few ways to see if you're on track:

  • Use the IRS Tax Withholding Estimator: This is a great DIY tool.  You’ll just need your most recent paystub and a copy of your last tax return.  For those of you who are self-employed, you'll need some estimates on your NET profit.  

  • Ask your Tax Preparer: If you work with a licensed tax preparer, ask them for a tax projection for 2026 based on your 2025 filing.  They will need a current paystub to give you an accurate estimate.  It is advisable to ask for this AFTER the April 15 deadline.      

• Pro Move: If your 2025 tax return showed a massive refund or a large balance due, consider adjusting your W-4 now.  Making a small change in March is much easier than trying to fix a lopsided tax bill in November.

2. 401k Pacing: Are you on track to max out?

If your goal is to max out your workplace retirement plan, you may need to nudge your contribution percentage up.

• Under Age 50: The 2026 limit is $24,500. 

• Age 50–59 or 64+: The limit is $32,500 ($24,500 + $8,000 catch-up).

• Age 60–63: You may be eligible for a "super" catch-up, bringing your total limit to $35,750 ($24,500 + $11,250 super catch-up).

Reviewing your contribution percentages now gives you plenty of time to adjust so that you hit the maximum limit for your age.  

A Reminder on the Roth Catch-Up: As we discussed in February, if you earned over $150,000 in 2025, any catch-up contributions must be designated as Roth.  

Need a second set of eyes?

If you’re looking at your paystub or 401k portal and the math isn’t adding up, let's hop on a call.  I'm happy to help review these things with you so that you can make an informed decision on your withholding and contribution rate.  Please make sure to send me your 2025 tax return in your vault.    

ON ANOTHER NOTE:  Mortgage rates have declined recently.  Go look at your mortgage rate.  If it is higher than 6.25% or so, you may want to think about refinancing.  Let me know if you questions.  

Talk soon,

Krystal

PS:  What am I reading this month?

Important Reminder: This information is intended for educational purposes and to help you think strategically about your goals.  It should not be construed as specific tax advice.  I highly recommend reviewing any potential changes to your withholding or contributions with your tax preparer to ensure they align with your specific filing situation.