12 Ways to Wrap Up Your Finances Before the Holidays

Maximize Retirement Contributions

Contributing to tax-advantaged accounts like your 401(k), Traditional IRA, or SEP IRA is a win-win: you save for the future and reduce taxable income.

• Deadline: December 31 for workplace plans; April 15, 2025, for IRAs.
• Pro Tip: Check if your employer offers a match and aim to meet it—it’s free money!

Maximize Tax Savings with Year-End Investment Strategies

As the year wraps up, it’s a great time to review your investment portfolio and take steps to optimize your tax situation. Here’s how:

• Utilize Tax-Loss Harvesting: Offset capital gains by selling underperforming investments. You can use realized losses to reduce your taxable income and potentially save on taxes.
• Review Mutual Fund Distributions: Check for year-end capital gain distributions from mutual funds, as these can increase your taxable income. Plan ahead to manage their impact effectively.
• Tip: Look for opportunities within your portfolio to balance gains with losses and realign with your financial goals.
• Reminder: You can deduct up to $3,000 of losses against ordinary income ($1,500 if married filing separately), with any excess carried forward to future tax years.

Review Your Charitable Contributions

Giving to qualified charities is a great way to lower your taxable income while supporting causes you care about.

• Consider: Donating appreciated securities instead of cash to avoid capital gains tax.
• Keep in Mind: Retain receipts for contributions over $250.

Take Your Required Minimum Distributions
(RMDs)

If you’re 73 or older, ensure you’ve taken your RMDs from retirement accounts to avoid a hefty 25% penalty.

• New in 2024: Check if the SECURE Act 2.0 changes affect you.

Consider a Roth Conversion

If your income is lower this year, converting Traditional IRA funds to a Roth IRA could lock in a lower tax rate for future withdrawals.

• Warning: This is a taxable event, so consult with your advisor to determine if it’s right for you.

Defer Income or Accelerate Expenses

Push bonuses or other income into 2025 if possible or prepay deductible expenses such as property taxes or medical bills to reduce this year’s taxable income.

Boost Savings with Health Savings Accounts (HSAs)

If you have a high-deductible health plan, contributing to an HSA is an excellent way to save on taxes while planning for healthcare expenses.

• Limits for 2024: $4,150 for individuals, $8,300 for families, plus $1,000 catchup if you’re over 55.
• Reminder: Unlike Flexible Spending Accounts (FSAs), HSA funds roll over indefinitely.

Plan for Education with 529 Contributions

Support future education expenses while securing state tax benefits by contributing to a 529 plan.

• Pro Tip: Some states allow a deduction or credit for contributions, making this a smart move for parents, grandparents, or anyone saving for a loved one’s education.

Create or Revisit Your Annual Budget

The end of the year is the perfect time to reflect on your spending habits and prepare for the year ahead.

• Review the Past: Look at your expenses over the past 12 months to identify patterns or areas for improvement.
• Set Goals: Allocate funds for savings, investments, and big-ticket items like vacations, home improvements, or education.
• Pro Tip: Use budgeting tools or apps to make tracking easier and ensure you stick to your goals.

Set Financial Projections for 2025

Kick off the new year with a clear vision of your financial goals by creating projections for your income, expenses, and savings.

• Plan for Milestones: Consider any major expenses or life changes, such as buying a home, starting a business, or having a child.
• Track Progress: Use your projections to stay on course throughout the year, adjusting as needed to accommodate unexpected changes.
• Benefit: Projections help you stay focused and provide a roadmap for achieving long-term financial goals.

Review Your Insurance Policies

Year-end is a great time to review your coverage and ensure your insurance policies align with your current needs.

• Health Insurance: Open enrollment is your chance to evaluate your current health plan and make changes if necessary. Consider whether you’re adequately covered and if a highdeductible plan with an HSA might work better for your situation.
• Home and Auto Insurance: Check your policies to ensure you’re not underinsured or overpaying. Shop around for competitive rates if needed.
• Life Insurance: Make sure your beneficiaries are up-to-date and that your coverage reflects your family’s financial needs.

Prioritize Time with Loved Ones During the
Holiday Season

Amid the hustle and bustle of year-end responsibilities, it’s important to carve out time to enjoy the holiday season with the people who matter most.