Wow… it’s hard to believe December is already here! Between holiday excitement and wrapping up year-end initiatives, it’s easy to set your personal finances aside. However, there are several year-end planning opportunities that can make a meaningful impact on your financial picture. These opportunities range from tax strategies and retirement preparation to charitable giving and even goal setting. A year-end review before the ball drops could position you for a strong start in 2026. Throughout this article, we’ll explore a few of these opportunities that might make sense for you.
One of the most important areas to review before year-end is tax planning. For accounts such as 401(k)s, Roth IRAs, and Health Savings Accounts that have contribution limits, it’s wise to check how much you’ve contributed and whether you can maximize the remaining amount. If you’ve earned a high income and want to reduce your overall taxable income, increasing your pre-tax 401(k) contributions before year-end can help lower your tax bill. Another strategy for those looking to make larger gifts to individuals is to take full advantage of the annual gift tax exclusion. A common year-end tactic is tax-loss harvesting, which involves selling investments at a loss to offset capital gains. Finally, if you have a Flexible Spending Account through your employer and it’s a “use-it-or-lose-it” plan, be sure to use those funds before they expire.
Another key area to review at year-end is charitable giving and legacy strategies. A Qualified Charitable Distribution (QCD) is often used by individuals age 70½ or older with a Traditional IRA who want to give in a tax-efficient way. This approach allows you to donate funds directly from your IRA to a qualified charity, and neither you nor the charity pays tax on the amount. If you’re required to take a minimum distribution, the amount you donate through a QCD can count toward that requirement. Another charitable strategy is to review your portfolio for highly appreciated securities. If you hold investments with significant unrealized gains, you can gift those shares to a charity, avoid capital gains tax, and receive a deduction, up to certain limits, based on the fair market value of the investment. The legacy component of year-end planning often involves a family conversation. The holidays, when loved ones gather, can be an ideal time to intentionally discuss family stories, core values, and review estate plans to ensure they’re up to date.
The final year-end planning opportunities focus on the big picture. If you’ve experienced major life changes such as a birth, marriage, or loss, this may signal the need to update beneficiaries on accounts like IRAs and life insurance policies. It’s also wise to review estate documents to ensure they reflect these changes. Consider your investment allocation as well: if you anticipate a significant purchase next year, you may want to set aside funds so they’re liquid, safe, and available when needed. Additionally, if your portfolio has drifted from its original asset allocation due to market volatility, year-end is an ideal time to rebalance. Many people set goals at the start of the year but don’t evaluate their progress before year-end. I encourage you to conduct a self-audit now – review the goals you set, measure your progress, and identify adjustments that will help you achieve or exceed them in the coming year.
Financial planning isn’t about rushing into decisions, it’s about preparation, reflection, and making intentional choices that align with your goals. Year-end is the perfect time to pause, review, and adjust so your plan evolves as your life does. Whether it’s maximizing tax benefits, revisiting your investment strategy, or having meaningful family conversations, these steps can set the stage for a stronger financial future. Take time now to reflect on what matters most and position yourself for success in the year ahead.
-by Jacob Young, AAMS®, Financial Advisor, RJFS
313 East 10th Ave. • Bowling Green, KY 42101 • Phone: 270-846-2656
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