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Planning Ahead: Key Financial Moves Before Year End

Tim Hudson |

The end of the year is fast approaching, and while it might feel overwhelming, this period is a perfect opportunity to take control of your financial planning. By making informed and proactive decisions, you can significantly improve your financial well-being and set yourself up for success in the upcoming year. Here are four important financial moves you should consider making before December 31st.

 

Strategize Charitable Giving

Charitable giving is more than just a benevolent act; it's a strategic financial move. Consider donation bunching or setting up a donor-advised fund to maximize tax benefits. If you're over 70½, using a Qualified Charitable Distribution (QCD) from your IRA not only supports a good cause but also helps satisfy your required minimum distribution if you are 73 or older.

 

Maximize Retirement Contributions

Boosting your retirement account contributions can significantly lower your taxable income. For 2025, the contribution limits are set to $23,500 for 401(k)s with an additional $7,500 catch-up if you're over 50, while traditional and Roth IRA limits are $7,000 plus $1,000 catch-up for those over 50. Investing in your future now can strengthen your financial security.

 

Explore Roth IRA Conversions

Roth IRA conversions could be beneficial if you expect to be in a lower tax bracket this year. This strategy involves moving funds from a traditional IRA to a Roth IRA, where future withdrawals are tax-free. However, this isn't a one-size-fits-all solution and should be reviewed annually based on personal circumstances.

 

Fund Your HSA

Health Savings Accounts (HSAs) offer triple tax benefits and are an excellent tool for financial planning. In 2025, the contribution limit stands at $4,300 for individual plans and $8,550 for families. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free, making it a wise investment for both immediate and future health expenses.

 

Taking some time to engage in these strategies can lead to significant financial benefits come year-end. Keep in mind that not every move suits everyone, so it's wise to consult with a financial professional or Certified Public Accountant (CPA) to tailor these strategies to your specific needs. Evaluate your options and consider scheduling a financial check-in as part of your year-end planning.