Smart Financial Moves: Year-End Planning Guide

The end of the year is fast approaching, making it an ideal moment to take control of your financial planning. We understand that those financial to-dos can feel overwhelming. However, there's a unique empowerment that comes from proactive decision-making. This article will help you identify four smart, actionable strategies to improve your financial well-being before December 31st.

Fund Your HSA

Utilizing your Health Savings Account (HSA) is one of the smartest financial moves you can make before the year's end. For 2025, the HSA contribution limits are $4,300 for individuals and $8,550 for families. These accounts not only provide a means to pay for qualified medical expenses tax-free but also offer triple tax benefits: contributions are tax-deductible, earnings grow tax-free, and withdrawals for eligible expenses are tax-free. Consider maxing out your contributions to leverage both short-term health expenses and long-term financial planning.

Strategize Charitable Giving

If you're already planning to make charitable donations, doing so strategically can amplify your financial benefits. Consider donation bunching or utilizing a donor-advised fund to potentially increase your tax deductions. For those over age 70½, using a Qualified Charitable Distribution (QCD) from an IRA can also fulfill your required minimum distribution, which kicks in at age 73, and provide tax advantages by lowering your taxable income.

Explore Roth IRA Conversions

Roth IRA conversions can be a potent financial tool, especially if this year places you in a lower tax bracket. By converting, you pay taxes now to enjoy tax-free growth and withdrawals later. This strategy is not a one-size-fits-all solution, though, and it's crucial to consider individual circumstances annually. Consulting a financial advisor will help tailor this strategy to your needs.

Maximize Retirement Contributions

It's time to capitalize on the opportunity to enhance your retirement savings. For 401(k)s in 2025, the contribution limit is $23,500, with an additional $7,500 available for individuals aged 50 and above. If you contribute to a traditional or Roth IRA, the limit is $7,000, or $8,000 if you're over 50. Maximizing your contributions now can help reduce your taxable income for the year and bolster your future financial security.

Taking a little time to strategize now can make a significant difference in your financial outcomes for the year ahead. Remember, not all strategies are suitable for everyone, so we encourage you to consult with a financial professional or a certified public accountant (CPA). Evaluate your options or schedule a financial check-in today.