Roth Conversions and Tax-Loss Harvesting Among Top Wealth Strategies for 2026

Financial advisers are highlighting Roth IRA conversions and tax-loss harvesting as two of the most effective strategies for building and protecting wealth in 2026, as new tax rules and higher contribution limits open up planning opportunities.

A Roth conversion involves moving money from a traditional IRA to a Roth IRA and paying taxes on the amount converted now, rather than later. Advisers say this makes sense for people in lower-income years, since future withdrawals from a Roth account are tax-free. It also reduces future Required Minimum Distributions, which can push retirees into higher tax brackets.

Tax-loss harvesting involves selling investments that have lost value to offset gains elsewhere in a portfolio. Advisers caution investors to watch the IRS "wash sale" rule, which prevents claiming a loss if you buy back the same or a substantially identical investment within 30 days.

The 401(k) contribution limit for 2026 rose to $24,500, up from $23,500 in 2025. People aged 50 and older can contribute an additional $8,000 as a catch-up contribution. Those aged 60 to 63 have an even higher catch-up limit of $11,250. IRA contribution limits rose to $7,500.

The federal estate tax exemption is now $15 million per individual, or $30 million for married couples, starting in 2026. This gives families more room to transfer wealth without triggering estate taxes.

Advisers also recommend reviewing asset location, which means placing investments in the accounts where they will be taxed most favorably. Tax-efficient investments like index funds work well in taxable accounts, while bonds and other income-generating assets are better suited to tax-deferred accounts.

JP Morgan Private Bank and other wealth management firms are advising clients to review their full financial picture now, rather than waiting until year-end.