As the year winds down, it’s a great time to take a step back and evaluate your financial situation. Whether you’re aiming to reduce your tax bill, maximize savings, or align your investments with your goals, a few thoughtful moves before December 31 can help position you for success in the new year.
Why Year-End Planning Matters
Many financial deadlines occur at the end of the year. Missing them can mean lost opportunities, such as paying more in taxes than necessary or leaving money on the table in your retirement accounts. Taking time now to check in on your finances can help you start the new year with more clarity and control.
Year-End Planning Essentials
As the end of the year approaches, it’s a good time to revisit key areas of your finances that can benefit from timely attention, especially when it comes to taxes. For example, maximizing your retirement contributions before December 31 could help reduce your current-year tax liability while boosting long-term savings. Review how much you’ve already contributed to your 401(k), IRA, or other accounts, and see if there’s room to increase it before the deadline. Contributions to traditional retirement accounts may be deductible, depending on your income and participation in a workplace plan.
If your income is unusually low this year, it might be worth evaluating whether a Roth conversion makes sense, especially if you expect to be in a higher tax bracket later. This strategy involves moving funds from a traditional IRA to a Roth IRA, paying taxes now in exchange for tax-free withdrawals in retirement. By converting in a low-income year, you may be able to take advantage of lower tax brackets while reducing future required minimum distributions.
Some accounts, like FSAs, have use-it-or-lose-it rules. Check your balance and make sure to schedule medical appointments or purchase eligible health items before the deadline if needed. Similarly, investors may consider tax-loss harvesting-selling underperforming investments to offset gains elsewhere. This strategy can reduce your taxable income and rebalance your portfolio at the same time, and any unused losses can often be carried forward to future tax years.
Charitable giving is another powerful year-end strategy with tax implications. Donations made before year-end may be deductible if you itemize, and gifting appreciated stock rather than cash can offer additional tax efficiency by avoiding capital gains taxes. For those taking required minimum distributions, qualified charitable distributions (QCDs) from an IRA can satisfy RMD requirements without increasing taxable income.
Changes in income throughout the year-such as raises, bonuses, or freelance work-might affect your tax withholding or estimated payments. Adjusting now can help avoid a surprise tax bill in April or reduce the risk of penalties for underpayment. Reviewing your most recent pay stub or consulting a tax advisor can help you determine if you’re on track.
And finally, the year-end is an ideal moment to reflect on your broader financial goals. Whether you’re planning for retirement, saving for college, or preparing for a major purchase, reviewing your budget and savings plan now can give you a head start on next year and may uncover opportunities to make smarter tax decisions going forward.
How We Help
Year-end financial planning doesn’t have to be overwhelming. We help clients evaluate their current position, identify tax-efficient strategies, and build plans tailored to their goals, timelines, and overall financial picture.
The Bottom Line
The closure of the year is more than just a date; it’s a deadline for many important financial choices. A few proactive steps now can help you feel more organized, reduce stress at tax time, and stay on track for your long-term goals. If you’d like to review your year-end checklist or explore planning ideas, we’re here to support you.
Securities offered through Valmark Securities, Inc., a member of FINRA/SIPC. Investment Advisory Services offered through Valmark Advisers, Inc., a SEC Registered Investment Advisor, 130 Springside Drive, Suite 300 Akron, Ohio 44333-2431, 1-800-765-5201.
Velekei Giles Financial Advisors is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.
This material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual, nor does it take into account the particular investment objectives, financial situation, or needs of individual investors. This information is not intended for use as tax advice. Persons should consult with their own tax advisors for specific tax advice.