10 financial planning tips to start the new year

Optimize for lower interest rates

With interest rates already lower than they were a year ago, and additional rate cuts expected in 2026, it’s important to align your portfolio and planning accordingly:

• Hold the right amount of cash—Lock in yields that match your time horizon and liquidity needs. We recommend having enough cash on hand to cover living expenses for one to five years, to fund large capital expenditures and/or to take advantage of sudden investment opportunities. Funds in excess of that cash amount can be invested to help you achieve your longer-term goals and help combat inflation.
• Consider funding trusts—Lower Section 7520 interest rates² increase the likelihood of your being able to pass wealth to beneficiaries free of transfer taxes with such strategies as Grantor Retained Annuity Trusts (GRATs) or Charitable Lead Annuity Trusts (CLATs). Consider funding these trusts now to gift appreciation in excess of the prevailing 7520 rate to family.
• Establish a portfolio line of credit - Having ready access to cash can help you avoid selling investments at an inopportune time or realizing capital gains unnecessarily. If you can deduct the interest paid on a loan, borrowing may even enhance your balance sheet’s tax efficiency.

Renew your portfolio’s resilience

We believe 2026 provides a constructive backdrop for markets. We expect solid returns for multi-asset portfolios and are focused on helping clients in these key areas:

• Build portfolio resilience—With increased geopolitical risk and currency volatility, we recommend focusing on gold and energy commodities as valuable hedges. Investments in infrastructure, security and energy can help bolster a portfolio focused on resilience, security and regional alignment.
• Defend against inflation—Historically, real estate, commodities and infrastructure have a different relationship to inflation than either stocks and bonds, and thereby provide even more portfolio diversification. Hedge funds and liquid alternatives can also be useful, as they provide exposure to non-traditional sources of return.
• Invest in private markets –We expect value in artificial intelligence (AI) to accrue in application and platform companies—and these could remain privately held through the end of the decade. Private markets offer the opportunity to capture the full investment potential of AI —with this caveat: Pay special attention to manager selection and access as you do.

Prioritize the principles of tax-aware wealth management

It’s important to take a holistic approach to your tax strategy. Thoughtfully considering how your assets are structured, how you invest and withdraw funds, and how you integrate planning techniques can help you maximize after-tax returns and keep more of what you earn.

Look at your balance sheet across five key areas to maximize tax efficiency. Your J.P. Mogan advisor can help you prioritize which areas to focus on most for your situation.

Additionally, if you are an executive, consider how to optimize your stock options, restricted stock units and deferred compensation. Stay informed about new awards granted, those that have vested and any nearing expiration to plan for tax implications and how your concentrated position fits into your overall balance sheet.

Consider making substantial gifts to family

Gifting wealth to future generations can offer strategic benefits, as the future appreciation on these assets should not be subject to estate tax in your estate. If you have the desire and capacity to make large gifts for the benefit of family, consider using your lifetime gift tax exclusion to give either directly to family members or to a trust.

For 2026, individuals can give up to $15 million free of transfer taxes ($30 million for a married couple). If you have already used all of your lifetime exclusion, you can still gift another $1.01 million gift-tax free this year ($2.02 million for married couples).³

Develop a charitable giving strategy

Effective philanthropy starts with having sound investment and tax-planning strategies along with a clear vision for the impact you want to make. With new tax legislation now affecting the deductibility of charitable donations, especially for those in the highest income tax bracket, it’s more important than ever to have a thoughtful gifting strategy that includes:

• Donating strategic assets, such as long-term appreciated securities or other non-cash assets to maximize tax advantages
• Partnering with your tax advisor to structure your charitable giving for optimal tax efficiency
• Regularly reviewing your giving strategy to ensure contributions and organizations align with your values and goals

Two avenues worth investigating:

• Donor-advised funds—As donors shift to more structured philanthropy, DAFs are one of the easiest ways to donate. DAFs allow you to pre-fund years of giving and in exchange, you will receive an immediate tax deduction as well as being granted the time and flexibility you need to select the organizations to support.
• Qualified Charitable Distributions (QCDs)— If you are at least 70.5 years old and have an IRA, you can donate $111,000 directly to a public charity (though not to a DAF) from your IRA and have that donation count toward your required minimum distribution. QCDs are not subject to the new limitations referred to above, making such distributions immediately more impactful. Note: While QCDs are an effective strategy, the tax savings from donating appreciated securities can often surpass those of QCDs, especially when the capital gains exposure is significant. Evaluate both with your tax advisor. Depending on your goals and capacity, it may be beneficial to use these strategies together.

Strengthen family ties

Family meetings are an effective way for members to build cohesiveness, share individual and family values and learn from each other.

Meeting with intentionality is key as such gatherings have the potential to deepen relationships across generations, build the skills and knowledge families need to manage wealth responsibly and collaboratively, and align individual members’ visions with the family’s overarching objectives.

Encourage participation by asking family members to help set the agenda, speak on a subject of personal interest, or lead a group discussion on a book covering a timely topic, such as philanthropic giving.

Protect your identity in an AI-driven world

As AI apps and digital tools proliferate, it’s critical to understand the threat they pose to personal data, privacy and identity. Keep in mind: Sensitive or private information can inadvertently be exposed or used to train large language models that support AI. To protect yourself, limit sharing sensitive information and use dedicated email accounts for each of your AI subscriptions.

It’s also critical to protect your accounts with strong, unique passwords and two-factor authentication to add essential layers of protection to your accounts.

The rise of AI-driven social engineering tactics—such as, phishing emails, SMiShing (text-based phishing), vishing (voice-based phishing) and deepfakes (synthetic media scams)—means it’s crucial you remain skeptical of unexpected requests for personal information: Always take the time to verify the identity of anyone who contacts you.

Further enhance your security by connecting to the Internet through a virtual private network (VPN), and keeping your devices and software up to date with the latest security patches.

In this rapidly evolving digital landscape, vigilance and proactive security habits are your best defense.

We can help prepare your finances for 2026

As you embrace the fresh start that 2026 offers, your J.P. Morgan team is here to guide you through every step. Together, we can help you and your family make the most of the opportunities ahead and build a path for you achieving your goals.