The Formynder Field Manual

January 2026

From the Field

Happy New Year and welcome to 2026!!! I hope you're as excited as I am to see what is in store for the year! We've already had two snow storms here in Northern Virginia before we even hit the Winter solstice and so I'm wondering, what's February, our usual snowy month, going to bring? I really do love this weather and look forward to more snow this year. There's something about sitting around the house with a warm cup of coffee, enjoying a fire, while getting to work, reading a new book, listening to a favorite podcast, or watching an episode of a favorite show. Don't get me wrong - I'll equally love it when Spring comes around but for now, I'm content. I hope you are also enjoying time around a warm home with family, friends, and your favorite things to do as we kick off 2026!

The BLUF

I know you'll want to read the entire newsletter, but here's a preview of what's included in this month's edition.

✅ Feel Good Moment. Home sweet home.

✅ The Teeth-Sucking Credit Card Bill. We've all had those moments. Here's some ways to avoid them this time next year.

✅ Setting Goals You Can Stick With. There's a quitters day?!

✅ New Year, new limits. 2026 comes with a few changes to your retirement savings contributions. Let's have a look!

✅ 'Bear' with me. What might we be thinking about in the current bull market?

✅ In plain site. Some of the other places you'll find my musings.

Feel Good Moment

My wife and I grew up in the mountains of California, in a small town called Sonora. It's just a short drive from Yosemite and that was my backyard for almost the entirety of my young life before I joined the Marine Corps. If you're thinking, "Wow, Yosemite! That must have been idyllic!", it really was. Megan and I have thought about moving back but there's one thing that stops us at the moment: community. We love it here in Fredericksburg and further, we love our home. We anticipated that upon retirement, we might need a "transition" home to give us the time we wanted to really find a place we loved. Having lived in a dozen or so homes over the years, our preference list has been through some refinement. We looked and looked and looked, but just couldn't find a home that struck us as one we'd want to settle in. Just about the time we'd given up on a home purchase, the one we currently live in, popped up on the market. Everything about this home spoke to us. The best part, however, is the backyard. Just a bit of land flowing down to the neighborhood pond. It is a nature lover's dream. We have Harold and Henrietta the Herron, hawks, owls, ducks, geese, and all other assortment of birds. On occasion a few deer might cross. We've even seen a fox or two (Nick the fox, naturally.) And in the winter, we have Ollie the river otter. The two best purchases we have ever made are the his and hers rockers that sit on our back porch. This past month, with those early snows, I was simply struck by God's beauty. I just had to take a picture of how idyllic and how blessed we really are. I felt like I was 12 years old, back in Sonora - even for a moment.

Your January Credit Card Statement - That might leave a mark!

I only say this half-jokingly, but there are many people who dread their credit card statement in January. It's hard, right? You want to give gifts in December and you make a plan to "stay in the budget". But then you remember the teachers, and the post person, and your pastor. As you get closer to Christmas and all the adverts are hot and heavy, your kids start to change their minds about what they really want. If you're anything like me, I love giving my kids gifts so I might go purchase those items, too. You think to yourself, I'll just put in on the credit card and take care of it next month. And then you do it again. And again. Before you know it, you don't want to know how many times you've repeated the cycle, but you also just can't stop. (I might have been there before.)

I'm assuming that if this is you, I'm speaking to someone who loves to give. And if that is you, first, there's nothing wrong with you! Second, there's hope. There's always hope. Every year, there are these non-monthly, but somewhat costly events. Christmas is one, but so are birthdays, anniversaries, and an assortment of other holidays. You know these are coming and you don't have to be scared of them.

What if each month, you saved an additional $200, $300, or 400 to put towards gifts each year? That's $2,400, $3,600, or $4,800 respectively that you could freely use to bless others. You don't have to use those specific amounts, but it may be worth having a look at what you spent on gifts last year and make that your target amount divided by how ever many paychecks you get.

Think about that for just a minute. No more guilt, shame, and buyers remorse in January. Permission to spend money you saved for a specific purpose to bless others. No more dreading your January credit card bill. Reduced stress and anxiety. That's what I call, values and resource alignment.

January 9th, 2026 - A.K.A "Quitters Day"

9 days. That's all society thinks we've got when we make New Year resolutions to be healthier, stronger, give something up, try a new hobby, or be kinder. Is that really the best we can do?

Most habits, good or bad, are difficult to change because they are programed into the very fabric of our being, whether psychologically, neurologically, habitually, etc. Our human nature is the size of a large ship and large ships are hard to turn. If you attempt to turn one quickly, you'd face an incredible amount of resistance as the ship's own weight vigorously disagrees with your decision. It would no doubt be exhausting and there's a good change you'd break something. It's no wonder that when we try to do something big and sudden, our body says, "that's ok... I choose life." Hence, quitters day.

Turning large ships, however, is not impossible. It takes time and a constant amount of turning energy. Unfortunately, in a society where we want immediate changes, small time-consuming tweaks don't bode well. Worse, when we face resistance to even the small changes we make, we tend not to like that. For instance, if we said we were going to save $200 per paycheck for gifts, you're likely to encounter resistance by means of the unplanned washer or dryer replacement. Now instead of saving for gifts, you are refilling your emergency fund. It happens. If you step back though, what is the habit you are developing? It is that consistent application of putting $200 per paycheck aside. Perhaps it's not all going to go to gifts and you may end up reducing your own expectations for gift giving, but you've just turned the ship a few degrees and every paycheck, you are diverting $200 into a savings account. Perhaps next year, it's $300 per paycheck. The same principle applies to becoming more healthy or getting more sleep. Small tweaks, made consistently over time is the key to success.

You can make all the changes in the world to your life, but if you don't understand why you are making these changes, they aren't likely to stick. What I mean by this is that society can pressure you into making changes in your life that don't align with your values - they're just "trendy". What you should look like, how much money you should have, what you should drive, how strong or fast you should be, are all examples of you, 'shoulding' on yourself. Don't should on yourself. There are a number of spiritual and intellectual ways to determine your own purpose. With whatever changes you implement this year, align them with your own purpose which makes implementation more meaningful; not always simple or easy, but meaningful. Now that's something you can stick with.

New Year, New Limits.

The year 2026 comes with some new IRS-defined limits for savings and giving that are worth noting here. If one of the changes you're making in your life is to max out your retirement accounts, you'll definitely want to pay attention.

• Qualified Workplace Plan Deferrals. These are your plans such as 401(k), TSP, 403(b) or 457(b). In 2026, the increased limit is $24,500, with a catch-up of $8,000 at age 50+, and my favorite, a super catch-up when you are ages 60-63 of $11,250.
  • Be sure to check with your employer if you plan to utilize the catch-up or super catch-up deferrals as those are required to be Roth deferrals as of 2026. I could think of worse things, but if you are deferring $32,500, chances are you are already in a higher marginal tax bracket so deferring into Roth isn't necessarily ideal.
  • If you are a reservist or someone else who may have access to multiple workplace plans, be sure to coordinate your total contributions so that they are not over the aggregate limits stated above. Your plans will not coordinate so that is completely on you. Give particular care and planning if you are attempting to maximize an employer match in each plan. The only exception to this rule is if you have a 457(b) account. These accounts do not aggregate giving the owner a significant tax-friendly savings opportunity.
• Traditional and Roth IRAs. These individual accounts are limited to $7,500 in 2026 with a $1,100 catch-up contribution available to those ages 50+.
  • Keep in mind that you can contribute to your IRA and your workplace plan simultaneously and can maximize savings in both accounts.
  • If you contribute to your traditional IRA and your income stays below a modified adjusted gross income (MAGI) that is defined by your tax filing status and availability of a workplace plan for one or both spouses, you may have the option to deduct your contributions from your taxes. Your tax professional or tax software will be able to tell you which MAGI you are subject to and whether you are under it. Just remember that even if you deduct contributions to your IRA now, you'll eventually pay taxes on that income when you begin to distribute the income.
  • Once your income is above the MAGI for deducting traditional IRA contributions, it's likely that you are quickly approaching the MAGI phase out for the ability to contribute directly to your Roth IRA. Again, this is based on your tax filing status, but in 2026 for single filers, the phase out is $153k-$163k and for married filers, it is $242k-$252k. Once you are in the phase-out, you are limited to how much you can contribute directly to a Roth IRA and once out of the upper limit, you cannot have contributed to your Roth IRA at all. If you did, you must remove all contributions and earnings by the tax filing deadline in 2027. If this is you or close to being you, congratulations - you've reached the point at which you may consider backdoor Roth conversions! That is, contribute to your Traditional, non-deductible IRA and then convert it to your Roth IRA. I'll get into the mechanics of a backdoor Roth in a future newsletter. However, if you think your income will be close to, in, or over the phase-out, I would encourage you to speak to your financial professional to ensure it's executed correctly.
• Other limit changes for 2026.
  • Annual gift exclusion: still $19,000
  • Car loan interest deduction limit: $10,000 (if you qualify, you can claim this on your 2025 return)
  • Trump account contribution: $5,000 (begins 4 July)
  • Qualified Charitable Distribution: $111,000 per person

'Bear' with me and my thoughts on the market.

If you are a client, we've talked through this (or are about to). I am not a market predictor, but rather a market reminder(er). Having been through a few market corrections, I feel it prudent to remind you that market corrections can come at any point for any reason. What is a market correction? In short, it is the point at which the market prices get too hot, too fast, for too long, and begin to settle. The results could be a temporary, but sudden drop by 10% to 20% in the overall market. It happens. It's normal. That doesn't mean people like it very much.

It's noteworthy that many people have referred to 2025 as the year that seems to have defied market norms. It's been a really strong year! Please hear me - I am not predicting when a correction might happen next - this isn't that kind of newsletter. This is simply a reminder that the amount of investment risk you choose to take should already take into account how you would feel about and could cushion a market correction. Every once in awhile, probably at least once per year, you should revisit your portfolio to ensure you're still taking an appropriate level of risk. Remember that investment risk comes in three flavors; tolerance, capacity, and need.

• Tolerance: you have the emotional fortitude to remain invested even when on the market rollercoaster. Bonus points for taking the stance of buy low, sell high!
• Capacity: even if you did lose 20% of your portfolio, it wouldn't significantly prevent you from accomplishing your goals.
• Need: how much risk do your goals require you to take and is that requirement lesser or greater than your tolerance and capacity?

Whether you've never checked or you haven't checked in awhile, now would be a great time to determine how much risk you are taking and is it appropriate for you. A portfolio that is 90% in equities and 10% in fixed income is likely to have lower lows, but potentially higher highs - more risk for more reward. This kind of portfolio may be more appropriate for those with a 10+ years until they need that money and/or have a significant capacity, e.g. have a pension, disability, and/or social security income that already covers their expenses. Alternatively, a portfolio that is 50/50 probably feels fairly tame, but it also feels more secure for those who need the money now - there's less risk of a market low impacting your investment when you need it most. In either case, determine what's most appropriate for you, make your portfolio changes, and then ignore the noise having made your decision for the next quarter, 6 months, or even a year!

In Plain Site

Check out my latest article: I Have A Pension: Do I Still Need An Emergency Fund? ​

Have I mentioned Rob Moore and I have a podcast now?

In our latest episodes of the Fiscal Foxhole, Rob and I reflect over the month of December with themed shows on gifting, our favorite Christmas memories, and our New Year predictions.

Listen, subscribe, review, share! We're out every Wednesday morning!

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Disclaimer: This newsletter is provided for educational, general information, and illustration purposes only. Nothing contained in this material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation.