2025 year-end checklist for your financial strategy

Daniel Ladd, CFP® • Senior Analyst, Client Needs Research
Katherine Tierney, CFA, CFP® • Senior Strategist, Client Needs Research

From tariffs to new tax laws, layoffs to natural disasters, 2025 has brought some significant changes. While it’s not always easy, focusing on what you can control is key to navigating the uncertainty that inevitably comes with change. This year-end checklist highlights actions you can consider to help keep your financial strategy on track.

If you’re considering any of the following opportunities, speak with your financial advisor to determine if a plan of action is right for you. These actions should align with what’s most important to you so your financial advisor can provide more direction and clarity. In addition, since many of the following items involve taxes, be sure to discuss them with your tax professional.

If you have annual income of $400,000 or more or investable assets of $5 million or more, review additional strategies and tax law changes that may be applicable to you.

1. Year-end review 

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? It may help to break down your goals into smaller milestones, especially if trying to progress toward multiple goals at the same time.

You should also assess whether there have 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.

2. Year-end tax considerations

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 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 and 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 to be in a higher bracket in retirement, 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.

3. Continue to make progress toward your goals

Health savings account (HSA) contributions — Consider increasing contributions to your HSA 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. These “triple tax” benefits make an HSA an incredibly valuable addition to your financial tool kit.

Retirement contributions — Consider increasing contributions to your retirement plan and/or IRA. Doing so can help you make further progress on your retirement savings and potentially save on taxes now or in retirement. If your employer plan allows, consider setting up your contributions to automatically increase each year.

529 plan contributions — Distributions from a 529 used for qualified education expenses are federally tax-free. Contributions may also provide you a state tax benefit. If the beneficiary ends up with an account balance, you have multiple options for these funds. Your financial advisor can review them with you.

4. Maximize your impact

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. A donor-advised fund can help you itemize your deductions while amplifying your charitable giving impact.

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 the annual exclusion or lifetime exemption.

5. Consider tax law changes

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), such as lower income tax rates for individuals, a higher standard deduction and the elimination of personal exemptions. It also expands certain TCJA provisions while introducing several new federal tax changes, including but not limited to:

• New temporary deductions through 2028 for individuals age 65 and older, qualified tips, overtime pay and qualified passenger-vehicle loan interest for those with income below a certain threshold
• An expansion and increase of the enhanced child tax credit of up to $2,200 per qualifying child, plus up to $500 per other qualifying dependent in 2025
• Greater flexibility to use 529 accounts for K-12 and postsecondary credentialing expenses, beginning in 2025
• An increase in the state and local tax deductions to $40,000 maximum for 2025, which begins phasing out for those whose income exceeds $500,000
• Reinstatement and expansion of a charitable contribution deduction for non-itemizers ($1,000 for single filers, $2,000 for joint filers), beginning in 2026 

Be sure to work with your financial advisor and tax professional to understand how you’ll be affected by these changes and when each change takes effect.

Monitor your long-term strategy

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 portfolio and 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 three to six months’ worth of total expenses in an emergency fund? Are you adequately covered with insurance? Your strategy isn’t complete without considering homeowners/renters, auto, health, disability, life and long-term care insurance and/or an umbrella policy.

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 — Do your beneficiaries and asset titling still align with your estate plan? Generally, beneficiary designations on retirement accounts, brokerage accounts and certain types of joint accounts will supersede your will or trusts. It’s important to follow your attorney’s recommendations on how to appropriately title your assets and keep up-to-date primary and contingent beneficiary designations to ensure your assets pass according to your wishes.

Important deadlines to note

Many of these actions must be completed by certain dates. Please note, it may take time to process requests and changes, so plan to act sooner rather than later.

The amounts shown in the following table apply per person, unless otherwise indicated.

^{1 Additional service-based catch-up contributions may be permitted. Consult your plan administrator.
2 Limit applies to combined employee and employer contributions.
3 Certain plans can contribute 110% of contribution limits. Consult your plan administrator.}