Your Year-End Financial Checklist
Maximize Your Retirement Contributions
You still have a few weeks to boost your 2025 retirement savings. The 401(k) contribution limit is $23,500 this year. If you're 50-59 or 64+, you can contribute an additional $7,500 in catch-up contributions ($31,000 total). If you're age 60-63, the catch-up limit is even higher at $11,250 ($34,750 total). If you're not on pace to hit these limits, contact your HR department now about increasing your final paychecks' deferrals.
For those eligible, traditional and Roth IRA contributions can be made until April 15, 2026, with a $7,000 limit ($8,000 if 50+). But if you're planning to contribute, doing it before year-end gives your money more time to grow.
Required Minimum Distributions
If you're 73 or older, make sure you've taken your required minimum distribution from your IRA or 401(k) before December 31. The penalty for missing an RMD is steep: 50% of the amount you should have withdrawn. If you're uncertain about your RMD amount or timing, reach out now.
Review Your Tax Situation
Had a high-income year? Consider accelerating deductions into 2025 or deferring income to 2026. If you received a bonus or sold investments at a gain, tax-loss harvesting might help offset those gains. These strategies work best when implemented before year-end, not after.
Strategic Charitable Giving Before December 31
If charitable giving is part of your financial plan, how you give can be just as important as how much you give.
Gifting Appreciated Stock
If you hold appreciated securities and are planning charitable gifts, consider donating the stock directly rather than selling it first. You avoid capital gains tax while still receiving the full charitable deduction. For securities you've held more than a year, this strategy can significantly increase the impact of your gift.
Qualified Charitable Distributions (QCDs)
If you're taking required minimum distributions, qualified charitable distributions allow you to direct up to $105,000 annually from your IRA directly to charity. This counts toward your RMD requirement while avoiding income tax on the distribution. QCDs must be completed by December 31 to count for 2025.
Donor-Advised Funds
These allow you to make a large charitable contribution this year for an immediate tax deduction, then distribute the funds to charities over time. This strategy works particularly well in high-income years when you want to bunch deductions. You can fund the donor-advised fund before December 31 and take your time deciding which charities to support.
What's Changing in 2026
Several contribution limits are increasing for 2026. If you're not already maxing out these accounts, consider increasing your contributions when the new year hits:
Retirement Accounts (401(k), 403(b), IRAs)
- 401(k)/403(b)/457 elective deferrals: Increasing to $24,500 (from $23,500)
- Catch-up contributions for ages 50-59 and 64+: Increasing to $8,000 (from $7,500)
- Enhanced catch-up for ages 60-63: Increasing to $11,500 (from $11,250)
- IRA/Roth IRA: Increasing to $7,500 (from $7,000)
- IRA catch-up for ages 50+: Increasing to $1,100 (from $1,000)
Health Savings Accounts
- Individual coverage: Increasing to $4,400 (from $4,300)
- Family coverage: Increasing to $8,750 (from $8,550)
Important Change for High Earners
Starting in 2026, if you earned more than $145,000 in the prior year, catch-up contributions to your 401(k) must go into the Roth portion of your plan. This is a meaningful shift that may affect your tax planning strategy. If this applies to you, we should discuss how to adjust your approach.
A Moment to Reflect
As we close out another year, I'm reminded that the work we do together is never just about the numbers. It's about the confidence to make decisions aligned with what uniquely matters to you, the peace of mind that comes from having a plan, and the freedom to focus on what's important during the holiday season.
If you have questions about year-end moves or want to discuss your 2026 strategy, reach out. We're here to help you navigate these decisions with clarity.
Wishing you and yours a wonderful holiday season.
