2025 Year End Financial Planning Checklist
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by Brian McGeough, CFP® Senior Relationship Manager
As we approach the last month of the year, it’s always a good time to check on your finances and make sure that you have maximized any tax deferral opportunities that are available, as well as, check on your financial plan and portfolios to see if any adjustments are needed.
Tax Advantage Accounts:
For Employer plans: Make sure that you are maximizing the contributions to your employer’s retirement plan. The maximum contribution for 2025 is $23,500.
Employees over 50 years old can add an additional $7,500.
Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60 - 63 who participate in these plans. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500.
At a minimum, try to contribute up to the maximum company match percentage (if your company has a match).
ROTH Conversion - By year-end, you have a clearer understanding of your total income for the year from all sources (salary, bonuses, etc.), which is crucial for determining the optimal amount to convert to minimize your tax burden.
IRA maximum contribution for 2025 is $7,000. If over 50 the max is $8,000.
Traditional IRA deduction limits are based on your modified adjusted gross income (MAGI), depending on tax-filing status, and whether you or your spouse are covered by a retirement plan at work.
Keep in mind: If your earned income exceeds the limit to make a partial or fully deductible contribution to a traditional IRA, you can still make a non-deductible contribution up to the annual limit.
Below are tables that show the phase out levels depending on whether or not you participate in an employer sponsored retirement plan.
Source: Fidelity
Fidelity
Health Savings Account (HSA):
To be eligible for a Health Saving Account, you must be covered by a qualified high deductible health plan, not have other disqualifying health coverage, not be enrolled in Medicare, and not be claimed as a dependent on someone else’s tax return. The HDHP must also meet specific minimum deductibles and maximum out-of-pocket limits for the year.
The maximum contribution is $4,300 for an individual and $8,550.
Funds in an HSA will carry over from year-to-year.
Asset Allocation:
The S&P 500 had another big year in 2025. A lot of the gains in the stock market are attributed to the performance of the artificial intelligence (AI) and the “Mag 7” stocks (TSLA, META, AMZN, AAPL, MSFT, NVDA, GOOGL).
The rise in the S&P 500 this year has likely move your asset allocation out of your target zone, thus increasing the risk in your portfolio.
Check to make sure one stock does have an oversized allocation in your portfolio.
Take profits from winners and use proceeds to re-balance your portfolio.
Diversification is key in managing your portfolios.
You should be looking to re-balance your portfolio to match your risk tolerance and asset allocation target.
Manage Taxes Before December 31:
Offset capital gains with investment losses in like titled accounts
If you donate to charities and have to take a required minimum distribution (RMD), consider donating RMD directly to the charity.
Your RMD will not count as taxable income and the charity will not have to pay taxes on the donation either
Estimate your tax liability and make estimated payments if needed to avoid a penalty.
Please contact us if you would like to discuss your financial plans and check to see if adjustments need to be made.
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Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.
