Wise Choices

The recently enacted tax bill contains good news for workers who have income from tips and overtime pay. One provision in the bill allows for a federal income tax deduction of up to $25,000 for qualified income from tips for single filers with income up to $150,000 and for joint filers with income up to $300,000. Taxpayers must meet other qualifications to be eligible for this provision.

In addition, the new law provides a significant benefit for individuals who work overtime hours. The new tax law allows a deduction of up to $12,500 for single filers with income up to $150,000 and a deduction of up to $25,000 for joint filers with income up to $300,000 for qualified overtime pay.

If it is likely that you will have income from these two sources, you may want to think about putting some or all of the tax savings into your retirement plan. It makes sense. You won’t owe income taxes on what you contribute until you start receiving money from your plan when you retire. In addition, any income your plan contributions earn is also tax-deferred. Your contributions and earnings will compound over time. All else being equal, the more you contribute to your plan, the better your chances of reaching a financially secure retirement.

The beginning of a new year is always a good time to look at your progress toward achieving your goals. That’s true for your career and your personal goals. It’s particularly true when it comes to your financial goals. Take a look at your overall financial situation and see where you can make improvements in 2026.

Plan contributions—Are you adding enough to your retirement plan? Compounding over many years can potentially turn even a small increase in the amount you contribute into a higher account balance at retirement.

Investments—Variations in investment performance can cause your portfolio’s asset allocation to shift.* Moreover, your tolerance for investment risk may have changed. Either situation may be a reason for you to reevaluate and possibly modify your portfolio.

Your income—If you want to boost your income, look for ways you can further your skills or education to increase your earning capacity. Consider the gig economy or part-time work. The bottom line is that boosting earnings can add to your overall financial security.

Your budget—Changes in your personal situation might impact your budget. For example, if you are planning to marry, buy a home, or have a child, you’ll need to adjust certain budget categories. If you are expecting a bonus or a pay increase, figure out how you can use that money for maximum benefit.

Debt burden—Spending a large portion of your income on debt is a red flag. Make 2026 the year you pay down your debts.

* While an asset allocation program can help manage risk, it does not guarantee a profit or protect against all losses.

4.4% Personal savings rate—percentage of disposable personal income saved by US households in July 2025
Source: US Bureau of Economic Analysis

$11,594 Average balance per US consumer in unsecured personal loans in February 2025 (credit cards, personal loans, student debt)
Source: TransUnion—Credit Industry Snapshot, February 2025

7.7% Average 401(k) deferral rate for 2024
Source: Vanguard Investment Company, How America Saves

This article was produced solely by SS&C Technologies, Inc. The opinions expressed herein do not necessarily reflect the views and opinions of UBS Financial Services Inc. or any of its affiliates (together, “UBS”). Neither UBS nor any of its directors, officers, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this article or reliance upon any information contained herein. No relationship, association, sponsorship, endorsement or affiliation is made, suggested or implied between SS&C Technologies, Inc. and its employees and UBS and/or our products or services.

This publication is provided for informational purposes only, contains a brief summary of select topics and certain recent legislative and regulatory developments, and is not intended as a complete summary of the topics discussed or considerations necessary for making effective decisions.

Please note that it is important that you evaluate this material and exercise independent judgment when making investment decisions. This information, including any description of specific investment services or products, is marketing material and is solely for the purposes of discussion and for your independent consideration. It should not be viewed as a suggestion or recommendation that you take a particular course of action or as the advice of an impartial fiduciary.

This publication is not intended as an offer, or a solicitation of an offer, to buy or sell any investment or other specific product. You should seek appropriate professional advice regarding the matters discussed in this publication in light of your specific situation. The information contained in this publication is based on information provided from third-party sources, and its accuracy cannot be guaranteed.

UBS Financial Services Inc., its affiliates and its employees are not in the business of providing tax or legal advice. Clients should seek advice based on their particular circumstances from an independent tax advisor.

Important information about advisory and brokerage services
As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment advisor and brokerage services in its capacity as an SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that you understand the ways in which we conduct business, and that you carefully read the agreements and disclosures that we provide to you about the products or services we offer. For more information, please review the client relationship summary provided at ubs.com/relationshipsummary, or ask your UBS Financial Advisor for a copy.

UBS’s Retirement Plan Consulting Services, Retirement Plan Advisor and Retirement Plan Manager are investment advisory programs. Details regarding each program, including fees, services, features and suitability are provided in the Form ADV Disclosure, available from your Advisor or at ubs.com/accountdisclosures.

Copyright 2025 by SS&C Technologies, Inc. Used with permission from SS&C Technologies, Inc. and provided by UBS Financial Services Inc. for use by its Financial Advisors.

SS&C Technologies, Inc. and its employees are not affiliated with UBS Financial Services Inc. or its affiliates.

© 2025 SS&C Technologies, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Proprietary and confidential.

© UBS 2025. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS Group AG. Member FINRA/SIPC. Review Code: 20251119-5003623. Expiration: 11/19/2026. 2025-2095850