Five Things to Do Before the Year’s End

The end of the year is almost here, so it is a good time to take a look at your financial and planning goals to see if you have taken enough action to accomplish your goals for this year. Here are 5 steps to take before year-end that will keep you and your family on the path to financial security and give you some peace of mind.

Make additional contributions to retirement plans

For 2025, employees under 50 can contribute up to $23,500 to traditional and safe harbor 401k plans in a calendar year. For employees age 50 or over, you can also make catch-up contributions up to an additional $7,500 per year for a total of $31,000. Even if you can’t swing the full contribution limit amount for your 401k, it is always a good idea to contribute the amount that will give you a full employer match, if you have one.

IRA contributions for 2025 can be made up until April 15, 2026, up to a limit of $7,000 for those under 50 and $8,000 for those 50 or older. Be mindful that how much you can contribute to a Roth IRA depends on your income and tax filing status. Traditional IRA's do not have any income limits for making contributions, but there are income limits for deducting contibutions to a traditional IRA if you or your spouse are covered by a workplace retirement plan.

Retirement contributions not only provide potential tax benefits now and security for your retirement, but they can also be an important resource to fund any long-term care you may need in your later years, as well as security for your loved ones when you pass.

Speaking of retirement accounts, IRA’s aren’t just for adults. Setting up a custodial Roth IRA for your minor children can be a great way to get a jumpstart on their savings. Any minor with earned income is able to contribute to a custodial IRA. You remain custodian of the account until the minor reaches the age of majority (either 18 or 21) when the child takes control of the account. Anyone can contribute to the child’s IRA, as long as contributions do not exceed the child’s income for that year. You could have your child contribute some of their income and you could match it with a contribution, as long as the total contributions do not exceed their earned income for the year.

Contribute to 529 plans

In 2025, any gifts during this calendar year up to $19,000 from an individual or up to $38,000 from a couple to another person are exempt from gift tax. Any gifts above those amounts within the same year are to be reported to the IRS through a Gift Tax Return and count against the taxpayer’s lifetime gift and estate tax exemption amount. These gift tax rules apply to a parent’s or anyone else’s contributions to a child’s 529 plan. So, if you are hoping to maximize contributions to a 529 plan, make sure to make those 2025 contributions before year end.

Make charitable gifts

If charitable giving is on your mind at the end of the year, make sure to make any donations to IRS qualified organizations by December 31^st to get the tax deduction for your 2025 taxes. In order to get the tax deduction, you will need to itemize your deductions on a schedule A. Your tax professional can help you determine if itemizing deductions or taking the standard deduction makes the most sense for you. Make sure to keep documentation of your giving through any receipts or acknowledgement letters received from recipient organizations.

Make any changes to insurance coverage

The end of the year is also a good time to review all insurance you have in place for you and your family. Open enrollment for many health plans usually takes place at this time of year, so this is a great time to see if your health plan met your needs or if a change would benefit you and your family. You can also review life, homeowners, auto, and any other insurance policies to see if you have the needed coverage at premiums that make sense for you. Making sure you have adequate life insurance can be an important part of your estate planning.

If long-term care is on your mind, it may be a good idea to look into a life insurance policy that has long-term care benefits. With this policy, you can use your benefits to pay for long-term care, should you need it. If you do not end up needing long-term care, the proceeds of the life insurance go to your beneficiaries when you pass.

Make sure your estate plan is in place and up to date

With the holiday season upon us, many of us plan to take some time off to spend with family or rejuvenate before the new year. This is a great time to carve out some space to review your existing estate plan to make sure that it is up to date and carries out your wishes. If you haven’t put a plan in place yet, it is a great time to get a head start one so you can take care of your affairs and plan for your loved ones’ future.

If you want to update or set up your estate plan, book a free 15-minute consultation with me. Together, we can make sure your family’s future is more secure!