The end of 2024 is around the corner, and the hustle and bustle of holiday festivities, family gatherings, and year-end deadlines can make it easy to overlook your finances. However, this often chaotic time shouldn’t mean neglecting your financial well-being. Taking a step back to evaluate your financial situation is essential to set yourself up for success in the upcoming year.

To help you navigate this busy season, we’ve put together a comprehensive year-end financial planning checklist. These actionable steps will help you finish the year strong and set you up for a successful 2025. 

Evaluate Your Investment Portfolio

As market fluctuations occur throughout the year, the proportions of assets in your portfolio can shift away from your intended allocation. Reviewing it at year-end allows you to correct course and prepare for the next year. 

  • Review asset allocation: Ensure your current mix of stocks, bonds, and other investments aligns with your long-term goals and risk tolerance. Has your portfolio drifted from its target allocation? 
  • Rebalance your portfolio: If your portfolio has shifted, rebalancing can bring your investments back in line with your financial goals. This might involve selling some assets that have appreciated in value and reallocating those proceeds into underperforming areas of your portfolio.
  • Tax-loss harvesting: If some of those lagging areas no longer align with your goals, consider selling them to offset gains elsewhere in your portfolio. This strategy can help reduce your tax burden while keeping your portfolio balanced.

Review Your Retirement Plan

The end of the year is an excellent time to ensure that your retirement plan is on track. Whether you’re nearing retirement or still several years away, making key adjustments now can maximize your savings potential and help secure your financial future.

  • Maximize retirement contributions: Check whether you’ve made the maximum allowable contributions to your retirement accounts. The 2024 limit is $23,000 for 401(k)s and $7,000 for IRA owners under 50 years of age. 
  • Roth IRA conversions: If you’re in a lower tax bracket this year, you might consider converting some of your traditional IRA into a Roth IRA. This could reduce future tax liabilities, as Roth IRA withdrawals are typically tax-free in retirement. 
  • Take required minimum distributions (RMD): If you’re 73 or older, ensure you’ve taken your RMDs from traditional retirement accounts to avoid steep penalties. Missing your RMD could incur a 25% penalty on the amount that should have been withdrawn. 

Consider Charitable Giving

The holiday season is not just about giving gifts but also about giving back, especially since your charitable giving must be done by December 31st to count for the 2024 tax year. Planning now ensures you can support your favorite organizations and take advantage of the tax benefits. 

  • Donate appreciated assets: Instead of giving cash, consider donating appreciated assets, like stocks or real estate, to avoid capital gains taxes while receiving a charitable deduction. 
  • Qualified charitable distributions (QCD): If you’re 70 ½ or older, you can donate up to $100,000 annually directly from your IRA to charity. These QCDs count toward your RMD and are not considered taxable income. 
  • Use a donor-advised fund (DAF): If you’re unsure where to donate right now, a DAF allows you to make a tax-deductible contribution this year and decide later which charities will receive the funds. 

Other Items to Check Off Your List

As the year draws to a close, it’s a perfect time to revisit other critical aspects of your financial life. Taking care of these important details now can ensure you’re well-prepared for whatever the new year brings.

  • Review your health insurance coverage: The end of the year is often when companies have open healthcare enrollment. If you have employer-provided health benefits, check for policy changes and that your plan still meets your needs. Medicare open enrollment runs until December 7, so retirees should also review their plans. 
  • Maximize HSA contributions: If you have a high-deductible health plan, maxing out your health savings account (HSA) contributions can offer triple tax benefits; contributions, growth, and withdrawals for qualified expenses are all tax-free. 
  • Update your estate plan: If there have been major life events, such as marriage, divorce, or the birth of a child, review and update your estate planning details, such as your beneficiaries and powers of attorney. 
  • Review insurance policies: Ensure your life, disability, and long-term care insurance policies are sufficient for your current needs. As you age, adjusting coverage levels may be necessary. 

Consulting a Financial Advisor

As you tackle this checklist, consider the benefits of comprehensive financial planning services. Our advisors at Ironwood Wealth Management can help you refine your investment portfolio, uncover valuable tax-saving strategies, and achieve your financial goals. Reach out to us today to finish the year strong and kick off the next one with confidence.Â