As the year draws to a close, it’s the perfect time to evaluate your financial situation and take key steps to maximize savings, minimize taxes, and set yourself up for a successful 2025. Here are the top 10 year-end financial planning moves to consider:
Maximize Retirement Contributions
Why It Matters: Contributing the maximum allowable amount to your retirement accounts is a cornerstone of year-end financial planning. It lowers your taxable income while boosting your retirement savings.
Harvest Tax Losses
Why It Matters: Tax-loss harvesting is a vital year-end financial planning strategy to offset taxable gains and reduce your overall tax liability.
Review Charitable Contributions
Why It Matters: Incorporating charitable giving into your year-end financial planning can provide tax benefits while supporting causes you care about.
Take Required Minimum Distributions (RMDs)
Why It Matters: RMDs are an essential part of year-end financial planning for retirees, helping to avoid steep penalties and stay compliant with IRS rules.
Optimize Health Savings Accounts (HSAs)
Why It Matters: HSAs are a triple-tax-advantaged tool that should be a key consideration in your year-end financial planning.
Review Your Spending and Create a Budget for 2025
Why It Matters: Budgeting during year-end financial planning helps identify trends and set goals for the upcoming year.
Check Insurance Coverage
Why It Matters: Reviewing insurance policies is a crucial part of year-end financial planning to protect your assets and loved ones.
Prepay Deductible Expenses
Why It Matters: Prepaying certain expenses can enhance your year-end financial planning by maximizing deductions.
Review Your Investment Strategy
Why It Matters: Evaluating your portfolio ensures your investment strategy aligns with your long-term goals, a key aspect of year-end financial planning.
Set an Appointment with Your Financial Advisor for Q1 2025
Why It Matters: A proactive meeting with your financial advisor is the capstone of successful year-end financial planning.
Year-end financial planning is an opportunity to fine-tune your financial life, minimize tax liabilities, and set yourself up for a prosperous new year. By reviewing your spending habits, optimizing retirement contributions, and ensuring compliance with financial regulations, you can confidently close out the year and prepare for an even better 2025.
Wishing all of our clients, friends, and readers of this newsletter a very Merry Christmas!
Gregg Pacitti CFP®
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