The end of the year has a way of sneaking up on us. Between holiday shopping, family gatherings and everything else competing for our attention, financial planning can easily get pushed to 2027. But when it comes to your money, January may be too late.
December 31st is an important deadline for several financial and tax-planning opportunities. The good news is you don’t need to completely overhaul your finances. A handful of smart moves now could save you money, lower your taxes and put you in a better position heading into 2027.
Here are five things worth checking off your financial to-do list before the year ends.
1. Make Sure You’re Getting the Most From Your Retirement Plan
If you have a 401(k), 403(b), IRA or other retirement account, take a look at how much you’ve contributed so far this year.
Could you afford to increase your contribution for the last few months of the year? Even a small increase can make a difference over time. And if your employer offers a matching contribution, make sure you’re contributing enough to receive the full match. That’s part of your compensation and free money, you don’t want to leave it behind.
If you’re 50 or older, you may also be eligible to make additional “catch-up” contributions.
The goal isn’t necessarily to max out every account. It’s to make sure you’re taking advantage of the opportunities that make sense for your budget and financial situation.
2. Look at Your Winners and Your Losers
Nobody likes seeing an investment that’s worth less than what they paid for it. But sometimes a losing investment can actually provide a tax-planning opportunity.
If you have investments in a taxable brokerage account that have declined in value, selling some of them may allow you to offset gains you’ve realized elsewhere. This strategy is commonly called ‘Tax-Loss Harvesting.’
But don’t sell something just to save taxes. The investment decision should still make sense.
Year-end is also a good time to look at investments that have done exceptionally well. Has one stock or fund become a much larger percentage of your portfolio than you intended? If so, it may be time to rebalance.
Remember: your portfolio should reflect where you’re going and not simply what has performed best recently!
3. Consider Whether a Roth Conversion Makes Sense
If you have money in a traditional IRA, you may have the option to convert some of it to a Roth IRA.
Why would you voluntarily create a tax bill today?
Because money converted to a Roth can grow ‘Tax-Free,’ and qualified withdrawals in retirement are ‘Tax-Free’ as well. A Roth conversion can be particularly attractive during a year when your taxable income is lower than usual.
But this is one area where more isn’t necessarily better. Converting too much could push you into a higher tax bracket or affect other income-related costs, including Medicare premiums.
The final months of the year are a good time to sit down with your financial and tax professionals and determine whether there is an opportunity before December 31st.
4. Don’t Forget Your Required Minimum Distribution (RMD)
If you’re in your 70s or have inherited a retirement account, make sure you know whether you’re required to take a Required Minimum Distribution (RMD) before year-end.
RMDs are minimum annual withdrawals the IRS requires from most tax-deferred retirement accounts, including Traditional IRA, SEP IRA and SIMPLE IRAs, as well as many 401(k), 403(b) and 457(b) plans. For 2026, RMDs generally begin at age 73 (eventually increasing to age 75 for younger generations). Roth accounts generally do not require RMDs during the original owner’s lifetime.
Inherited retirement accounts have different rules, and distributions may be required regardless of your age, so it’s important to check rather than assume you’re exempt.
Most RMDs must be taken by December 31st , and missing one can result in an additional tax. If you don’t need the money for living expenses, you can reinvest the after-tax proceeds, use them for other expenses or give to charity. If you’re charitably inclined and qualify, a Qualified Charitable Distribution (QCD) can count toward your RMD while potentially keeping that amount out of your taxable income.
Bottom line: If you’re 73 or older or you’ve inherited a retirement account, make checking your RMD part of your year-end financial checklist.
5. Do a Quick Financial “Housekeeping” Check
Some of the most important financial decisions have nothing to do with picking investments.
Before year-end, take 30 minutes and look at the basics.
Are the beneficiaries on your retirement accounts and life insurance policies still correct? Has your family changed this year? Do you have enough money in your emergency savings? Are you carrying expensive credit-card debt? Have you reviewed your insurance coverage recently?
Is your estate plan still consistent with your wishes?
These aren’t exciting questions, but they can be incredibly important.
One of the biggest mistakes people make with financial planning is assuming that once something is set up, they never need to look at it again.
Life changes. Your financial plan should change with it.
You Still Have Time
Good financial planning doesn’t have to mean making dramatic changes.
Sometimes it’s increasing your 401(k) contribution by a percentage point. Sometimes it’s realizing you have an outdated beneficiary. Sometimes it’s taking an RMD you’ve been putting off or having a conversation with your tax professional before making a Roth conversion.
The important thing is to be intentional.
December 31st is a real deadline for many financial and tax-planning strategies. Once the calendar changes, some opportunities disappear with it.
So, before the holiday season gets too busy, set aside a little time to review your finances. A few smart decisions today can put you in a much better position heading into the new year.
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