Financial Planning Checklist for Year-End 2025

As we head toward the end of the year, December 31 remains one of the most important deadlines in personal finance. If you want to start 2026 in a stronger financial position, now is the time to make a few key moves.

Below are several groups who should pay special attention to year-end planning.

1. Employees contributing to an employer retirement plan (401(k), 403(b), 457, or workplace IRA)

Are you trying to maximize your contributions to your retirement plan for 2025? You can contribute to an IRA up to the April tax deadline, but most employer plans require contributions to be made through payroll by December 31. You usually can’t deposit money directly into these accounts on your own.

John’s top tip: If you still have a paycheck or two left for the year, you may be able to increase your contribution. Contact HR to see what’s possible. If you miss the window, use it as motivation to set your 2026 savings level early.

2. Individuals age 73 or older

If you turned 73 this year, or if you are already past 73 and own traditional IRA or pre-tax employer plan assets, you likely need to take a required minimum distribution (RMD) this year.

John’s top tip: If you do not need the RMD for living expenses, you can send part or all of it directly to a qualified charity as a Qualified Charitable Distribution. This keeps the amount out of your taxable income rather than simply giving you a deduction. In many cases this is the most tax-efficient way to support the causes you care about (this is not tax advice, though, so please talk to a tax professional about your situation). The rules can get technical, so talk to us if you think this applies to you.

3. Individuals who inherited retirement assets from a non-spouse

If you inherited an IRA or employer plan from someone other than a spouse, you may need to take a distribution form that account each year. If the person passed away in 2020 or later, the SECURE Act requires the entire account to be emptied by the end of the tenth year after their death. Failing to withdraw the required amount can lead to penalties.

John’s top tip: If possible, set up automatic distributions for these RMDs so you don’t run into a missed deadline. If your inherited account is subject to the ten-year rule, distributing more than the required amount each year can help reduce a large tax hit later.

4. Households with abnormally low income this year

If your household had lower income this year than you know you’ll have over the next several years (either due to maternity/paternity leave, unpaid sabbatical, or disability), you might want to consider a Roth conversion. For anyone who doesn’t know, this is a strategy where you move money from a pre-tax IRA or employer-sponsored plan into a Roth version of that account. You pay tax on the amount converted when you pay your 2025 taxes, but the funds grow tax-free going forward.

Why would anyone voluntarily create a tax bill? Because it helps you lock in a potentially low tax bracket on those dollars converted. In certain situations this strategy can reduce lifetime taxes and maximize long-term flexibility.

John’s top tip: If you know your 2025 income will be unusually low, or you are a retiree not yet subject to RMDs, a conversion may be worth exploring. A qualified tax professional can help you figure out how much to convert.

5. Households preparing for a large expense in 2026

If you expect a major cost next year and you regularly take withdrawals from retirement accounts, it may make sense to take part of the distribution before December 31. Doing so can spread the tax impact across two years instead of one.

John’s top tip: Work with your planner and your tax professional to determine a withdrawal amount that prevents an unnecessary jump in your tax bracket.

6. Individuals making year-end financial gifts

The annual gift exclusion for 2025 is $19,000 per recipient. You can give up to that amount to any individual without filing a gift tax return. Married couples can combine their exclusions. Gifts above the annual limit simply reduce your lifetime estate and gift tax exemption. Keep in mind that contributions to a 529 account count as a gift.

John’s top tip: If you’re concerned about balancing your gifting plan and minimizing the estate taxes you’ll need to pay, it’s a complex process that likely requires multi-year planning with qualified professionals. There’s a lot to know, so reach out sooner rather than later.

Final Thoughts

If any of this made your head spin, you’re not alone. Year-end planning is one of the easiest ways to improve both your financial health and your peace of mind. If you want help sorting out your next steps, reach out to me and I’ll walk you through it.

Do you have your own year-end financial checklist? Email me at jhowe@gencapmgmt.com and let me know.

John Howe-Wemett, CFP®, AEP®, MSFP