Planning Ahead: Key Financial Moves Before Year's End

As we approach the end of the year, it’s the perfect opportunity to gain control of your financial planning. We understand that financial to-dos can sometimes feel overwhelming. However, there's a sense of empowerment in making proactive financial decisions. Here, we'll guide you through four smart, actionable strategies to enhance your financial well-being before December 31st.

Maximize Retirement Contributions

Consider maxing out your retirement account contributions. For 2025, the 401(k) contribution limit is set at $23,500, with an additional catch-up contribution of $7,500 if you're over 50. Similarly, for traditional or Roth IRAs, you can contribute up to $7,000, plus a $1,000 catch-up if you're over 50. By taking advantage of these opportunities, you can reduce your taxable income while building your wealth for the future.

Fund Your HSA

Think about fully funding your Health Savings Account (HSA). The 2025 HSA limits are $4,300 for individuals and $8,550 for families. HSAs offer triple tax benefits: contributions are tax-deductible, growth is tax-free, and qualified withdrawals are tax-free. They serve as powerful tools for both short-term and long-term financial planning.

Strategize Charitable Giving

Charitable giving can be an excellent method to manage your finances while supporting causes you care about. Strategies like donation bunching or using a donor-advised fund can maximize the impact of your contributions. If you’re over 70½, consider using a Qualified Charitable Distribution (QCD) from your IRA. This can also fulfill your required minimum distribution once you turn 73.

Explore Roth IRA Conversions

A Roth IRA conversion allows you to convert a traditional IRA into a Roth IRA, potentially locking in tax-free growth. If you’re in a lower tax bracket this year, it might be an ideal time to make this conversion. However, this move is not for everyone and should be assessed annually based on individual circumstances.

Taking just a little time now can pave the way for improved financial outcomes in the following year. While not all strategies may be suitable for everyone, consulting with a financial professional or CPA can help tailor these options to your specific situation. Evaluate your options or schedule a financial check-in to make the most of this year-end financial planning.