As the year winds down, it’s a great time to pause, take stock, and make sure your financial plan is in good shape before the calendar flips. A few thoughtful steps now can help you start the new year with confidence — and maybe even save on taxes along the way.
Here are some key things to look at before December 31:
1. Review Your Medicare Coverage
If you’re on Medicare, open enrollment runs through December 7, and it’s worth taking a few minutes to compare your current plan to other options. Even if you like your coverage, premiums, prescriptions, and provider networks can change from year to year — so it pays to double-check.
2. Update Beneficiaries and Estate Documents
Life doesn’t stand still, and neither should your estate plan. Take a quick look at your will, powers of attorney, and beneficiary designations on retirement accounts and insurance policies. Make sure they still reflect your wishes — especially if you’ve had any major life changes like a new grandchild, marriage, or loss in the family.
3. Wrap Up Charitable Giving
If you plan to make year-end charitable contributions, doing so before December 31 can provide a nice tax benefit if you itemize. You might also consider:
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Donating appreciated stock instead of cash to avoid capital gains taxes.
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Using a donor-advised fund to make one large gift now and spread donations to charities over time.
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“Bunching” donations into one tax year to get over the standard deduction threshold.
Giving back feels good — and a little tax efficiency doesn’t hurt either.
4. Think About a Roth Conversion
If your income is lower this year or markets have been volatile, it could be a good time to look at converting part of a traditional IRA or 401(k) to a Roth IRA. You’ll pay taxes on the amount you convert now, but future withdrawals can be tax-free. This can be a great long-term move, especially if you expect to be in a higher tax bracket later on.
5. Max Out Your Contributions
- If you have a Health Savings Account (HSA), double-check that you’ve contributed up to the limit for 2025:
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$4,150 for individuals
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$8,300 for families
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Plus a $1,000 catch-up if you’re 55 or older
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HSAs are one of the few accounts that give you three tax benefits — tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
- Retirement Account contribution limits for 2025 are:
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Traditional IRA ($7,000; $8,000 if age 50+)
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Roth IRA (subject to income limits)
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401(k) / 403(b) plans ($23,000; $30,500 if age 50+)
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6. Don’t Forget Your RMDs
If you’re 73 or older (or 75 if you turn that age after 2032), you’ll need to take your Required Minimum Distributions (RMDs) from any traditional IRAs, inherited IRAs and most employer-sponsored retirement plans. Missing your RMD can lead to hefty penalties — up to 25% of the amount you should have withdrawn. So be sure to take your RMD by December 31 (or April 1 of the following year if it’s your first). Not sure how much to withdraw? Your financial advisor can help you calculate the right amount.
A Little Planning Goes a Long Way
Year-end is the perfect time to tidy up your finances and make sure everything is aligned with your goals. A quick review of your coverage, accounts, and contributions can make a big difference heading into the new year.
And as always, it’s a good idea to check in with your financial advisor, tax professional, or estate attorney before making any big changes.
