4 Smart Financial Moves to Make Before Year-End

The end of the year is fast approaching, making it an ideal moment to take control of your financial planning. While it’s understandable to feel overwhelmed by financial to-dos, remember that taking proactive steps now can empower you and improve your financial well-being.

Strategize Charitable Giving

If you've been contemplating making a difference, now is the perfect time to strategize your charitable donations. Consider donation bunching, where you consolidate charitable gifts into a single year to maximize tax benefits. You might also explore a donor-advised fund to streamline your giving process. For readers over age 70½, using a Qualified Charitable Distribution (QCD) from an IRA can fulfill required minimum distributions once you turn 73.

Maximize Retirement Contributions

Have you topped up your retirement account contributions yet? For 2025, the contribution limits are $23,500 for 401(k)s, with an additional $7,500 catch-up if you're over 50. Traditional or Roth IRA limits stand at $7,000, plus a $1,000 catch-up if you're over 50. By maximizing these contributions, you can reduce your taxable income while bolstering your future wealth.

Fund Your HSA

Health Savings Accounts (HSAs) offer a golden opportunity for tax savings and future health expense planning. For 2025, you can contribute up to $4,300 as an individual or $8,550 for a family. HSAs provide triple tax benefits—they’re tax-deductible, your earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free, making them a powerful financial tool.

Explore Roth IRA Conversions

Considering a Roth IRA conversion? It might be a savvy move, especially if you're in a lower tax bracket this year. A conversion allows you to convert part or all of your traditional IRA into a Roth IRA, potentially leading to significant tax savings long-term. However, proceed with caution, as this may not be suitable for everyone. Consider discussing it with a financial advisor annually based on your unique circumstances.

Taking just a little time now can make a substantial difference in your financial outcomes for the coming year. Remember, not all strategies are suitable for everyone, so it’s wise to consult with a financial professional or a certified public accountant (CPA) for personalized advice. Now’s the time to evaluate your options or schedule a financial check-in.