As the year draws to a close, it’s the perfect time to take proactive steps to reduce taxes and strengthen your retirement readiness. Small adjustments now can lead to big savings later. Consider these five smart moves before December 31.
1. Max Out Retirement Contributions: If you’re not contributing the maximum to your 401(k) or IRA, now’s the time to increase your contributions. This can lower your taxable income while boosting your retirement savings.
2. Review Required Minimum Distributions (RMDs): If you’re age 73 or older, you must take RMDs from retirement accounts to avoid penalties. Double-check calculations to ensure accuracy.
3. Make Charitable Gifts: Consider donating appreciated securities to qualified charities. You’ll support causes you care about and potentially reduce your tax bill.
4. Harvest Tax Losses: Selling underperforming investments can offset capital gains and reduce taxable income.
5. Evaluate Roth Conversions: Converting traditional IRA funds to a Roth IRA can be beneficial in lower-income years, setting you up for tax-free withdrawals later.
Year-end is the ideal time to get your finances in order before the holidays and tax season arrive. Taking these steps can put you in a stronger position heading into the new year.
Contact us to schedule your year-end financial review and ensure you’re making the most of every opportunity before the end of the year. We’ll help you enter 2026 on your best possible financial footing.