By Resurgent Financial Advisors
December often feels more like a season of wrapping things up than planning ahead. Calendars fill. Travel picks up. Conversations shift toward holidays instead of tax strategies. It’s easy to assume that planning can wait until January.
That assumption might cost more than it seems.
Many of the most impactful financial moves must be made before the calendar year ends. Miss those windows, and you could be leaving value on the table or facing unnecessary tax surprises.
There’s still time to act. These six moves can help you close out the year with clarity and confidence.
1. Review Your Retirement Contributions
If you have a workplace plan like a 401(k), 403(b), or SIMPLE IRA, December 31st is the deadline to make contributions for 2025. That makes this the perfect time to check your deferrals.
For 2025, the limit for 401(k) contributions is $23,500. If you’re age 50 or older, you can contribute an additional $7,500. Even a small increase before year-end could help you take full advantage of your employer’s match or reduce your taxable income.
Traditional and Roth IRA contributions follow a different deadline, typically in April, but reviewing your strategy now keeps you ahead of the curve.
2. Confirm Your Required Minimum Distributions (RMDs)
If you’re 73 or older, or if you’ve inherited a retirement account, the IRS requires that you take minimum withdrawals by year-end. Missing the deadline can result in penalties of up to 25 percent of the amount you were required to take.
It’s important to double-check even if you’ve set up automatic withdrawals. Make sure you’ve withdrawn the full amount from the correct account. If you don’t need the funds, consider a Qualified Charitable Distribution. This allows you to give directly to a charity and reduce your taxable income at the same time.
3. Use Remaining FSA Funds
Health and dependent care Flexible Spending Accounts often have a “use-it-or-lose-it” policy. Unless your plan allows for a grace period or small rollover, unspent funds may disappear when the year ends.
Check your balance and make a plan. Eligible expenses could include eye exams, dental care, prescriptions, or medical equipment. It’s a simple step that ensures your dollars don’t go to waste.
4. Evaluate a Roth Conversion
A Roth conversion allows you to move funds from a Traditional IRA to a Roth IRA. You’ll pay taxes now on the converted amount, but qualified withdrawals later will be tax-free.
This can be a smart move if your income is lower than usual, if you’re in a temporarily lower tax bracket, or if you want to reduce future RMDs. However, timing and tax implications matter. Work with your advisor and tax professional to evaluate whether it makes sense in your situation.
5. Review Investment Gains and Losses
In taxable investment accounts, this is the right time to consider tax-loss harvesting. Selling investments that have declined in value can help offset capital gains and reduce your taxable income.
You can also harvest gains intentionally in a lower-income year. This can help reset your cost basis while keeping your tax bill manageable. Just be careful of the wash-sale rule, which prevents you from buying the same investment within 30 days of selling it.
This strategy works best with guidance from an advisor who understands both your goals and your tax position.
6. Maximize Charitable Giving
Charitable giving in December isn’t just a holiday tradition. It’s also a powerful planning strategy.
If you itemize deductions, donating appreciated securities can help you avoid capital gains tax while still receiving the full deduction. You might also consider a Donor-Advised Fund, which allows you to take the deduction now and decide later how to distribute the funds.
If you’re age 70½ or older, Qualified Charitable Distributions from IRAs are another option. These distributions count toward your RMD and are excluded from your taxable income.
Planning Now Brings Freedom Later
Year-end planning doesn’t need to be perfect. It just needs to be intentional. Small steps taken today can create clarity and flexibility in the months ahead.
If you’re not sure what applies to your situation, reach out to your advisor. There’s still time to make smart moves that benefit your future.
