Self-assessment — Start your review by reflecting on your goals and progress. How do you feel about your financial progress this past year? Are there different actions you want to take next year?
You should also assess whether there’ve been any changes in your personal, family or employment situation that could impact your goals or your progress toward achieving them. If you’ve experienced a major life event — such as a layoff, natural disaster or change in your family — your financial advisor can help you identify additional steps to take and strategies to consider.
Regardless, be sure to work with your financial advisor to ensure your goals, time horizon and any major life changes are up to date in your financial strategy.
Estimate your tax situation — Understanding your tax situation is an integral component of year-end planning. Work with your tax professional and financial advisor to estimate your taxes and identify year-end opportunities to help reduce your tax bill and meet your goals. Doing so may also help you determine which of these strategies makes sense for you. If applicable, submit your fourth-quarter estimated tax payment by Jan. 15, 2026, to avoid potential underpayment penalties.
Required minimum distributions (RMDs) — Generally, anyone age 73 or older must take an RMD from their traditional retirement account in 2025 to avoid a 25% penalty on any required amounts not withdrawn. Certain inherited IRA owners (including certain inherited Roth accounts) must also take an RMD in 2025.
Flexible spending accounts (FSAs) — FSAs are “use it or lose it” accounts, meaning you generally lose any funds unused by year-end or unclaimed by your plan’s deadline. If you have funds remaining in an FSA, understand your employer plan’s deadlines for incurring expenses and submitting claims. Do your best to use those funds before the deadlines so you’re not forfeiting them to your employer.
Roth conversions — If your marginal tax bracket is lower than usual or you expect significantly higher tax deductions compared to previous years, consider converting funds from a pretax retirement account to a Roth account. Keep in mind that a Roth conversion is a taxable event. You’ll want to consult your tax professional and financial advisor to see if this is right for you based on your goals and preferences, current savings mix, time horizon and current and future tax rates.
Tax loss harvesting — Recognizing capital losses could allow you to offset capital gains recognized throughout the year, including long-term capital gain distributions from mutual funds. Any excess capital losses are next used to reduce ordinary income by up to $3,000. Any remaining excess losses are carried into future years to offset capital gains recognized in 2026 or later.
Health Savings Account (HSA) contributions — Consider maximizing your HSA contributions for yourself and your family, especially since unused balances carry over from year to year (unlike with an FSA). Eligible contributions provide an income tax deduction, earnings will generally grow tax free, and distributions will ultimately be tax-free if used for qualified medical expenses. Given these “triple tax” benefits, we recommend using after-tax funds to pay for medical expenses while you’re still working to allow HSA assets to grow and preserve them for retirement.
Retirement contributions — Consider maximizing contributions to your retirement plan and/or IRA, including catch-up contributions if you’re 50 or older. Doing so can help you make further progress on your retirement savings and potentially save on taxes now or in retirement. If you’ve reached the limit on salary deferrals, talk with your financial advisor about a mega backdoor Roth contribution to see if it makes sense for you.
529 plan contributions — 529 distributions used for qualified education expenses are federally tax-free. Contributions may also provide you a state tax benefit. Subject to special 529 savings plan rules, you can elect to contribute up to five years’ worth of the annual exclusion in a single year without using any of your federal estate and gift tax exemption. This allows you to invest the full amount immediately while removing the assets from your taxable estate. If the beneficiary ends up not using the entire account balance, you have multiple options for these funds. Your financial advisor can review them with you.
Qualified charitable distributions (QCDs) — If you’re 70½ or older, you may be able to exclude up to $108,000 from your adjusted gross income (AGI) by donating to a qualified charity directly from your IRA. QCDs satisfy all or part of your current annual IRA RMD (if applicable). This generally results in lower taxable income regardless of whether you itemize your deductions.
Charitable donations — Your donations may qualify for a federal tax deduction if you itemize. Consider donating substantially appreciated assets to qualifying charities to avoid capital gains taxes on the sale of the assets and remove them from your gross estate. Also, be aware that new rules take effect in 2026 for itemized deductions in general and itemized deductions of charitable contributions specifically. (See “Consider tax law changes” below.) If you anticipate itemizing in 2025 and 2026, consider bunching deductions in 2025 before the new limitations take effect. A donor-advised fund can be a great way to achieve this and amplify your charitable giving impact this year.
Annual gifts — In 2025, you can make a $19,000 gift per donee without using your federal estate and gift tax exemption. If you and your spouse are eligible to gift-split, together you can gift up to $38,000 per donee per year. You can also make payments for tuition and medical expenses directly to providers on someone’s behalf without using your annual exclusion or lifetime exemption.
Understand the One Big Beautiful Bill Act — The passage of the One Big Beautiful Bill Act permanently extends many provisions of the Tax Cuts and Jobs Act (TCJA), like lower income tax rates for individuals, higher alternative minimum tax (AMT) exemptions and phaseouts, the higher estate tax exemption threshold, and the higher limit for deductions of charitable cash contributions. It also expands certain TCJA provisions while introducing several new federal tax changes, including but not limited to:
- A temporary increase in the state and local tax deduction to $40,000 for 2025, which begins phasing out for those whose income exceeds $500,000
- Greater flexibility to use 529 accounts for K-12 and postsecondary credentialing expenses, beginning in 2025
- Reductions on itemized deductions for those in the 37% tax bracket (tax benefit of deductions effectively capped at 35%), beginning in 2026
- A new floor to itemize deductions of charitable contributions in which total contributions must exceed 0.5% of the taxpayer’s adjusted gross income, beginning in 2026
Be sure to work with your financial advisor and tax professional to understand how you will be affected by these changes and when each change takes effect.
While the following actions don’t have specific deadlines, we suggest you perform them annually. These considerations are meant to help you further monitor your progress toward your long-term goals.
Portfolio balance and diversification — Your portfolio was set up to match your objectives and goals. But life, circumstances and markets change, and this can affect your progress toward your goals. Your financial advisor can help ensure your portfolio is still aligned with your objectives, time horizon and comfort with risk. If you need to rebalance or diversify, you could employ the above items, such as additional contributions, tax-loss harvesting and RMDs, to help minimize additional taxes.
Expecting the unexpected — An integral part of your financial strategy should be to prepare for unexpected twists and turns. Have you set aside at least three to six months’ worth of total expenses in an emergency fund? Are you adequately covered with insurance? Your plan isn’t complete without considering homeowners/renters, auto, health, disability, life and/or long-term care insurance.
You should also consider umbrella insurance, which can provide additional liability coverage above the limits provided by homeowners/renters and auto policies. Generally, the more assets you have, the more relevant umbrella insurance is for you.
Review your incapacity plan — One way to ensure your wishes and decisions are followed if you become incapacitated is to have the appropriate legal documents — such as a financial power of attorney, health care power of attorney and medical directive — in place and up to date. Be sure to consult your attorney, financial advisor and even a health care provider to make sure you’ve addressed all your needs.
Review your beneficiaries, asset titling and estate plan — It’s important to follow your attorney’s recommendations on how to title your assets appropriately and keep up-to-date primary and contingent beneficiaries. Generally, beneficiary designations on retirement accounts, brokerage accounts and certain types of joint accounts will supersede your will and bypass probate. For other assets, trusts can be used to pass assets to beneficiaries without going through probate. You’ll want to regularly review your plan, titling and beneficiary designations to ensure your assets pass according to your wishes. If you make significant changes to your estate plan, consider sharing them with your heirs.