Before the Year Ends: 7 Smart Financial Moves to Make Now
Vice President, Wealth Management Advisor
As we enter the final stretch of the year, it’s easy for financial priorities to take a back seat to the busyness of the season. Between family gatherings, travel, and the holidays, the fourth quarter can pass quickly — and so can opportunities to make smart financial adjustments before December 31.
A few intentional steps now can make a meaningful difference for your tax situation, retirement readiness, and overall financial confidence heading into 2026. Here are seven key areas to review before the year ends.
1. Maximize Retirement Contributions
If you participate in a workplace retirement plan, now is the time to confirm how much you’ve contributed this year and whether you can do a little more. For 2025, employees can contribute up to $23,000 to a 401(k), 403(b), or similar plan, plus an additional $7,500 catch-up contribution if you’re age 50 or older.
Even small increases to your contribution rate in these final pay periods can make a noticeable difference over time — and help lower your taxable income for the year. If you contribute to a traditional or Roth IRA, the limits are $7,000 (or $8,000 if you’re 50+).
2. Consider a Roth Conversion
If your income has been lower this year or your portfolio value has temporarily dipped, a partial Roth conversion might make sense. Converting a portion of pre-tax IRA funds to a Roth IRA means paying taxes now, but it can create tax-free income in retirement — especially valuable if you expect to be in a higher bracket later.
This strategy requires coordination with your tax professional, but year-end is the ideal time to explore whether it fits your long-term plan.
3. Review Your Investment Allocation
Markets have had no shortage of headlines this year — from inflation data to interest rate changes. While it’s tempting to react, most investors benefit from staying the course rather than trying to time the market.
That said, your financial plan should evolve as your life does. Rebalancing your portfolio ensures your investments still align with your goals, time horizon, and comfort with risk. A quick review now can set you up for a smoother start to the new year.
4. Take Required Minimum Distributions (RMDs)
If you’re age 73 or older, don’t forget to take your Required Minimum Distribution (RMD) before year-end to avoid penalties. If you inherited an IRA or other qualified account, your RMD rules may differ under the SECURE 2.0 Act, so double-check your requirements.
For those who don’t need the income, consider directing your RMD to charity through a Qualified Charitable Distribution (QCD) — it can satisfy your RMD while reducing your taxable income.
5. Harvest Losses (or Trim Gains)
For investors with taxable accounts, the end of the year is a good time to review realized gains and losses. Selling investments at a loss can help offset capital gains elsewhere — a strategy known as tax-loss harvesting.
Just be mindful of the wash-sale rule, which disallows the deduction if you repurchase a “substantially identical” security within 30 days. This is a nuanced area where your advisor can coordinate with your CPA to keep things compliant and efficient.
6. Review Insurance and Health Benefits
October and November often coincide with open enrollment season for health and employer benefits. That makes now a perfect time to confirm your coverage and ensure your benefits fit your family’s current needs.
If you have a Flexible Spending Account (FSA), check your balance — unused funds may expire at year-end. This is also a good opportunity to review life, disability, and long-term care coverage to make sure everything aligns with your current financial situation and goals.
7. Revisit Your Financial Plan
Life changes quickly — and your financial plan should reflect those changes. Have your goals, income, or family circumstances shifted this year? Have you welcomed a new grandchild, purchased property, or started thinking about retirement dates?
Revisiting your plan ensures your savings, investments, and estate documents still match your long-term vision. Even if everything is on track, an annual review can bring fresh insight and renewed confidence heading into the new year.
Final Thoughts
Financial planning isn’t just about reacting to what markets do — it’s about proactively managing what you can control. The weeks ahead offer an excellent window to make meaningful adjustments that can strengthen your financial foundation for years to come.
If you’d like help reviewing your plan or identifying opportunities before year-end, our team at WealthSouth in Bowling Green, Danville, and Lexington are here to help. Schedule a conversation today to make sure your 2026 starts off on the right foot.
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