4 Essential Financial Steps Before Year-End

The end of the year is fast approaching, bringing with it a timely opportunity to take control of your financial planning. We understand that financial to-dos can sometimes feel overwhelming, but there’s a great sense of empowerment that comes from making proactive financial decisions. This article will guide you through four smart, actionable strategies to enhance your financial well-being before December 31st.

Explore Roth IRA Conversions

A Roth IRA conversion involves taking funds from a traditional IRA and converting them into a Roth IRA. This might be an ideal move if you’re in a lower tax bracket this year, as taxes will apply on the converted amount now — not later during withdrawals. However, it’s crucial to remember that Roth conversions aren't suitable for everyone and should be considered annually based on individual circumstances.

Strategize Charitable Giving

Charitable giving strategies, such as donation bunching or utilizing a donor-advised fund, are excellent ways to make a difference while being tax-savvy. If you're over age 70½, consider using a Qualified Charitable Distribution (QCD) from your IRA, a move that can also help you meet your required minimum distribution (RMD) once you reach 73.

Maximize Retirement Contributions

One of the smartest financial moves to make before the year ends is maximizing retirement contributions. For 2025, you can contribute up to $23,500 to your 401(k), with an additional $7,500 if you’re over 50. For traditional or Roth IRAs, the limit is $7,000, plus a $1,000 catch-up for those over 50. By taking advantage of these limits now, you can reduce your taxable income while boosting your future wealth.

Fund Your HSA

Health Savings Accounts (HSAs) offer incredible triple tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses. For 2025, the contribution limits are $4,300 for individuals and $8,550 for families. HSAs can be powerful tools for both short-term medical costs and long-term retirement planning.

A little financial planning now can lead to significant benefits down the road. Remember, not every strategy is suitable for everyone, so consider consulting with a financial professional or a certified public accountant (CPA). Take this moment to evaluate your options or even schedule a financial check-in. Your future self will thank you!