5 Smart Retirement Planning Moves to Make Before Year-End
As the end of the year draws closer, it is a natural time to reflect and prepare, for the year ahead. Thoughtful year-end planning can help you feel confident about your financial future.
Here are some steps you can take this year to make the most of your retirement planning.
- Boost Your Retirement Contributions Before Year-End
If you are still working, consider maximizing contributions to your 401(k), IRA, or other retirement accounts.
This year’s maximum contribution limits for 401(k)s are $23,000 if you are under 50, or $30,500 if 50 or older. IRAs allow up to $7,000 if you are under 50, and $8,000 if you are 50+.
- Consider a Roth Conversion
Converting some traditional IRA or 401(k) funds to a Roth IRA can help reduce future required minimum distributions (RMDs) and potentially lower your tax bill down the road. However, it will increase your current year income, so it typically only makes sense to convert an IRA to Roth if you are in a low tax bracket this year.
- Make Tax-Smart Charitable Gifts
Strategic Charitable Gifts: Accelerating some of next year’s charitable gifts into this year may be beneficial for your taxes. This is for two reasons:
The temporary increase in state and local tax (SALT) deductions may make “bunching” deductions (including charitable deductions) more impactful. In 2026, a new OBBBA change affecting charitable deductions will take effect: a “floor” on charitable deductions of 0.5 percent of adjusted gross income (AGI) for itemizers.
- Use Tax-Loss Harvesting to Your Advantage
Reviewing your investment portfolio for opportunities to sell investments with losses can offset gains elsewhere, lowering your tax bill. However, the rules about replacing the sold investments can be tricky, so it makes sense to have your investment advisor handle this task for you.
- Smart Health Insurance Moves
If you are eligible to contribute to a Health Savings Account (HSA), consider contributing by year-end. HSAs offer triple tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
If you are approaching Medicare eligibility, avoid penalties and ensure you have the coverage that fits your needs. Review enrollment deadlines and coverage options and apply for benefits within the applicable timelines.
If you are already on Medicare, you can make certain changes during the Open Enrollment period that runs from October 15 to December 7 each year. During this time, beneficiaries can switch between Medicare Part D prescription plans and Medicare Advantage plans without underwriting. It’s essential to review and compare available plans to ensure they meet your needs and budget.
The end of the year is an excellent opportunity to review your retirement, tax, and healthcare plans. Assessing them now allows you to make calendar-based adjustments to help ease your tax load, protect your legacy, and support your health and income for the years ahead.
This column is prepared by Rick Brooks, CFA®, CFP®. Brooks is an owner and senior financial advisor at Blankinship & Foster, LLC, a wealth advisory firm specializing in financial planning and investment management for people preparing for retirement. Brooks can be reached at (858) 755-5166, or by email at rbrooks@bfadvisors.com.
Category: Finance
