Your Year-End Financial Planning Checklist

As 2025 winds down, it's time to review your financial picture and make strategic moves before December 31st. Here's what families should focus on this year-end.

Maximize Tax Opportunities

Year-end offers several time-sensitive tax strategies. Start by maximizing retirement contributions—$23,500 to your 401(k) for 2025, plus $7,500 if you're 50 or older.

Consider Roth Conversions

Year-end is an ideal time to evaluate Roth conversions. By converting traditional IRA dollars to a Roth IRA, you pay taxes now at your current rate in exchange for tax-free growth and withdrawals later. This strategy makes particular sense if you've had a lower-income year, expect to be in a higher tax bracket in retirement, or want to reduce future required minimum distributions.

The key is finding the "sweet spot"—converting enough to fill up your current tax bracket without pushing yourself into the next one. You can also consider backdoor Roth conversions if you're above the income limits for direct Roth contributions. Since conversions increase your taxable income for 2025, coordinate this decision with your tax advisor to understand the full impact on your taxes, Medicare premiums, and other income-sensitive benefits.

Tax-Loss Harvesting

Tax-loss harvesting can reduce your tax bill by strategically selling investments showing losses to offset gains. You can use up to $3,000 in excess losses against ordinary income, with remaining losses carrying forward. Just avoid the wash-sale rule by waiting 30 days before repurchasing similar securities.

For charitable giving, consider bunching multiple years of donations into 2025 to exceed the standard deduction threshold. Donor-advised funds provide flexibility—you get an immediate deduction while recommending grants to charities over time. Donating appreciated stock avoids capital gains taxes while providing a full fair market value deduction.

Strategic Gifting

The 2025 annual gift tax exclusion is $19,000 per recipient ($38,000 for couples). Gift to as many people as you like without filing gift tax returns or using your lifetime exemption. This is excellent for helping adult children or funding 529 college savings plans. You can even superfund 529s with five years of contributions at once—$95,000 per grandchild, or $190,000 for couples.

Estate Planning Review

Review your estate plan if it's been more than three to five years or after major life changes. The federal estate tax exemption is $13.99 million per person in 2025 ($27.98 million for couples), but it's scheduled to drop significantly after 2025. This makes current planning especially important.

Verify all beneficiary designations on retirement accounts, life insurance, and investment accounts—these supersede your will. Update powers of attorney and healthcare directives to reflect your current wishes.

Charitable Giving with Purpose

If you're 70½ or older, qualified charitable distributions (QCDs) let you direct up to $105,000 annually from your IRA to charity. This counts toward required minimum distributions without increasing taxable income. Consider involving family members in philanthropic decisions to pass along values alongside wealth.

Don't Miss Your RMD

If you're 73 or older, take your required minimum distribution before year-end. Missing it triggers a 25% penalty. Consider satisfying your RMD through charitable contributions if that aligns with your goals.

Take Action Now

The best year-end plans are made with time to implement thoughtfully. Schedule meetings with your financial advisor and tax professional now—waiting until late December often means missed opportunities. Make 2025's final weeks count toward your family's long-term financial success.

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Questions about any of these year-end planning strategies? We're here to help. Contact us today to discuss how these opportunities apply to your specific situation and ensure you're making the most of 2025 before the calendar turns.