11 End-Of-Year Financial Moves To Consider

The holiday season seems to roll in quickly after Thanksgiving, with many shifting focus to travel, family, shopping, and other seasonal commitments. But while holiday plans fill the calendar, it’s important not to let financial goals slide. Here are 11 valuable year-end financial moves to help keep finances on track.

1. Maximize Retirement Contributions

If contributing to a 401(k), IRA, 403(b), or other retirement plans, check the IRS maximums for the year. Adjust contributions if possible to reach the allowable maximum. For those over 50, remember that catch-up contributions allow even higher savings limits.

2. Fully Fund Health Savings Accounts (HSAs)

For those with an HSA, this is a great time to increase contributions as much as possible. HSAs offer triple tax benefits and don’t have a “use-it-or-lose-it” policy like FSAs. Every dollar added can continue to grow tax-free, making it a smart year-end move.

3. Make Charitable Contributions

Year-end giving can reduce taxable income. Charitable donations can still be made up until December 31, even by credit card, which allows for the deduction in the current year while delaying payment until next year. Donor-Advised Funds are also an option for those in high-earning years, providing a tax deduction now while allowing time to decide on specific charities. Consider donating appreciated stock to reduce capital gains taxes as well.

4. Review Insurance Policies

From life and disability to property and long-term care insurance, it’s worth taking an inventory. Confirm that policies meet current needs and that premiums remain competitive. An annual review keeps policies aligned with goals and helps avoid costly oversights.

5. Draft a Budget for 2025

Now is the time to review 2024 expenses and plan for changes in 2025. Building a realistic budget includes not only regular monthly costs but also planning for larger expenses, like vacations, home improvements, or education costs. This strategy can make next year’s spending more predictable and manageable.

6. Adjust Savings Goals for 2025

Part of budgeting includes fine-tuning savings goals to reflect any changes in contribution limits or savings strategies. Setting goals early helps spread savings efforts across the entire year and can lead to better consistency in hitting targets.

7. Contribute to College Savings Accounts

Year-end is an ideal time to assess and add to college savings accounts. With college costs continuing to rise, every contribution helps offset future expenses, bringing a bit more peace of mind to long-term education planning.

8. Review Financial Models with a Planner

This is an excellent time of year to meet with a financial planner to assess progress toward long-term goals. Running financial projections and reviewing the past year’s performance can provide valuable insights and the motivation to stay on track.

9. Rebalance Investments

Investment allocations often shift over time, so year-end is a good time to rebalance. This ensures that portfolios remain aligned with personal risk tolerance and long-term goals, reducing exposure to unwanted risk.

10. Finalize Estate Planning Documents

If estate planning documents like wills or powers of attorney have been delayed, now is a great time to complete them. These documents can spare loved ones from a difficult legal process and provide peace of mind that wishes are clearly outlined.

11. Consider Tax Loss Harvesting

Year-end tax loss harvesting can help offset capital gains in the portfolio, potentially lowering the overall tax bill. By reviewing gains and losses, it’s possible to craft a strategic plan to maximize tax efficiency in the portfolio.

With these strategies, there’s a lot that can be done to strengthen financial health before ringing in the new year.