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“Income, your income is the highest level that it’s ever been.”
That’s President Donald Trump at a rally in Fort Myers, Florida, on Oct. 23, according to a Roll Call Factba.se transcript (1). Moments earlier, he put it this way: “But income for hard-working Americans has soared to the highest level in the history of our country.” (1)
I’ve been a CPA since 1981, and on this one, the latest official annual data backs him up.
The Census Bureau reported in September that real median household income was $87,460 in 2025, up 2.6% from 2024 (2). That’s the highest on record since 1967, when the Census Bureau began tracking it (3).
So by the Census Bureau’s measure, he’s right. But a record for the median household isn’t a deposit in your bank account.
If you’re in your 50s or early 60s and having a good year, what you do with it before Dec. 31 matters a lot more than any number from a rally.
Here are 4 moves I’d make with a good income year.
1. Max out your 401(k), including the catch-up
For 2026, the IRS lets you put up to $24,500 into a 401(k). If you’re 50 or older, you can add a catch-up contribution of $8,000, for a total of $32,500 (4).
If you’re 60 to 63, it gets better. Your catch-up limit is $11,250 instead of $8,000, so you can put in as much as $35,750 this year (4).
Here’s why it’s worth the effort. Say your top federal bracket is 24%. Every extra $5,000 in pretax contributions to a traditional 401(k) can trim about $1,200 off this year’s federal tax bill. That money still gets taxed when you withdraw it, but it grows in the meantime.
Your 401(k) contributions generally come out of your paycheck, so you only have the paychecks left this year to do it. If you want to bump your contribution, call HR or log into your plan this week.
2. Don’t forget the IRA
The 2026 IRA limit is $7,500, and people 50 and older can add $1,100, for a total of $8,600 (4).
Whether a traditional IRA contribution is deductible depends on your income and filing status if you or your spouse have a retirement plan at work. The deduction can be reduced or phased out entirely, according to the IRS (4).
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
3. A big earnings year can raise your Social Security
Social Security uses up to 35 years of your earnings to figure your benefit, choosing the years with the highest indexed earnings, according to the Social Security Administration (5). Those earnings are adjusted to reflect changes in general wage levels (5).
That’s why a strong year late in your career can matter. If it beats one of the weaker years in your top 35, it can raise your benefit.
Juggling 401(k) limits, IRA deductions and Social Security timing all at once is where it’s easy to leave money on the table. Another great idea, especially if the money involved is significant, is to work with an expert.
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4. Don’t let the extra income disappear into your bills
The fastest way to waste a good year is to let it quietly turn into bigger monthly bills. Before you raise your spending, find out where the money is already going.
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My honest take
When a politician cites a record, it’s worth checking. This time, the Census numbers say Trump is right about median household income.
But a median is a midpoint, and midpoints don’t pay your bills. By definition, half of households had less than $87,460 in income.
If you did have a good year, though, don’t just enjoy it. Lock some of it away where it’ll still be working for you in 10 or 20 years.
A record is something to talk about at a rally. What you do with yours is something you’ll live with for the rest of your retirement.
Sources: 1. Roll Call Factba.se; 2. U.S. Census Bureau; 3. U.S. Census Bureau; 4. IRS; 5. Social Security Administration
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