The end of the year has a way of sneaking up on us. Between the holidays, family gatherings, and the rush to finish things up at work, your finances can easily slide down the priority list. But taking the time in December to do some year-end financial planning can make a big difference once January rolls around.
What Should You Do Before the End of the Year?
As the year winds down, take a moment to look at what’s changed — maybe your income, spending, or family situation looks different than it did in January. These changes can affect how you save and plan for next year. Make sure what you’re doing still aligns with your goals and make adjustments when it doesn’t.
š” Tip: Review your online banking and retirement account statements to spot patterns or surprises that might guide your 2026 plan.
š Explore our Financial Planning services.
What Should You Review in Your Retirement Accounts Before 2026?
If you’re contributing to a 401(k) or another workplace plan, check that you’re adding enough to get the full employer match. Even a small bump can make a difference over time.
For IRAs or other personal accounts, look at how much you’ve saved this year and decide if your approach still fits your goals. If your income or tax situation has changed, it might be time for a quick review. And if you’re nearing retirement, ask about catch-up contributions.
If you’re 73 or older, remember to take your Required Minimum Distribution (RMD) from your tax-deferred retirement accounts before December 31. Missing your RMD can lead to IRS penalties, so make sure it’s taken care of before the end of the year.
š Reminder: If this is your first year taking an RMD, you have until April 1 of the following year to take it, but that may mean taking two RMDs in the same year, so it’s worth talking through the timing with your tax or financial professional.
You might also consider a Roth conversion — moving money from a traditional IRA into a Roth IRA and paying taxes now so future withdrawals can be tax-free. Because conversions must be completed by year-end, this is a good time to review whether it makes sense for you.
š Read our blog post - Traditional IRA vs. Roth IRA: What’s the Difference?
What Happens to Your FSA or HSA at the End of the Year?
It’s easy to forget about your health accounts until December rolls around. If you have a Flexible Spending Account (FSA), see if any funds will expire or if they can be rolled into 2026. Rules vary by employer, so it’s worth checking.
If you use a Health Savings Account (HSA), review how much you’ve contributed and spent. HSAs can be great long-term tools for future medical costs.
š” Tip: If you’ve already met your deductible, try to schedule any last-minute appointments before it resets in January.
š Read our blog post – Balancing Health and Wealth in Financial Planning.
Why Is December a Good Time to Review Your Investments and Taxes?
After a year of market ups and downs, your investments may no longer match your risk tolerance. Reviewing it before year-end gives you a chance to rebalance — bringing your investments back in line with your comfort level and long-term goals.
It’s also a good time to look at the tax side of things. If some investments lost value, tax-loss harvesting could help offset gains elsewhere. Or, if you’ve had a strong year, tax-gain harvesting might make sense while rates are still favorable.
š” Tip: Before making any changes, check how they might affect your 2025 taxes and overall plan.
š Explore our Investment Planning and Tax Planning services.
How Can Charitable Giving Fit into Your Year-End Financial Plan?
If you like to give to charity around the holidays, try to make your donations before December 31 so they count towards your 2025 tax return. You may also want to discuss IRA charitable distributions or family gifts with your financial advisor to see how they align with your broader financial goals.
š Read our blog post – Charitable Gifting Made Easy: Strategies for the Season of Giving.
When Was the Last Time You Reviewed Your Insurance or Estate Plan?
Big life changes — a new job, a move, marriage, or divorce — can all affect your insurance and estate plans. Take a few minutes to check that your coverage still meets your needs and that your beneficiaries are up to date.
If it’s been a few years since you last looked at your estate plan, this is a good time to meet with your attorney to review your will, powers of attorney, and healthcare directives — and to take a fresh look at your life and long-term care insurance coverage.
š Read our blog post – Are You Changing Jobs? Don't Overlook These Key Financial Moves.
What Else Belongs on Your Year-End Financial Checklist?
Here are a few other financial items to address before the year ends:
- Emergency fund: Make sure you have a few months of living expenses set aside in an account that you can easily access.
- Debt review: Focus on paying down high-interest balances and consider refinancing if interest rates have dropped.
- Subscriptions: Review your statements for auto-renewals or services you no longer use — they can add up quickly.
- Credit check: You can get a free credit report each year. It’s a good way to catch errors or signs of fraud early.
- Budget reset: Use what you learned this year to build a more realistic 2026 plan.
- 529 plans: Review contributions and investment options and consider adding funds or updating beneficiaries before the year-end deadline.
š Read our blog post – Prepare for Life's Unexpected Surprises with an Emergency Fund.
Looking Ahead to 2026
A new year often brings updates to tax laws and contribution limits that could affect your income or giving plans. It’s a good time to connect with your financial or tax professional to see how those updates fit into your overall strategy.
You don’t have to tackle everything before December 31, but reviewing the bigger items now can help you start 2026 feeling more organized and ready. Schedule a complimentary introductory meeting with our team in Glastonbury and Wilton, Connecticut, to get started.
Michael Nicoletti is a CERTIFIED FINANCIAL PLANNER® professional and works with clients throughout Connecticut and nationwide, offering financial planning and wealth management services. Based in Glastonbury and Wilton, CT, Michael helps families and individuals plan for their financial, insurance, investment, and retirement goals. Schedule a complimentary introductory meeting with Michael.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. It is not a statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.
Please note, changes in tax laws may occur at any time and could have a substantial impact on each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of Raymond James, we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
Every investor’s situation is unique; you should consider your investment goals, risk tolerance, and time horizon before making any investment or withdrawal decision. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision.
RMDs are generally subject to federal income tax and may be subject to state taxes. Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10% federal tax penalty. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. 401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59½, may be subject to a 10% federal tax penalty.
529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits, as tax implications can vary significantly from state to state.
Donors are urged to consult their attorneys, accountants, or tax advisors regarding the deductibility of contributions to a Donor-Advised Fund for federal and state tax purposes.
These policies have exclusions and/or limitations. The cost and availability of life or long-term care insurance depend on factors such as age, health, and the type and amount of coverage purchased. Surrender charges may apply for early withdrawals, and if made prior to age 59½, may be subject to a 10% federal tax penalty in addition to any gains being taxed as ordinary income. Guarantees are based on the claims-paying ability of the issuing company.