As the calendar approaches its final pages, many people start thinking about resolutions for the new year. But before you look ahead, there are important financial steps to take before December 31 that can help position you for a stronger start to the coming year. Thoughtful planning in the final months can help you evaluate where you stand, make tax-efficient choices, and align your strategy with your goals.
This is not about chasing last-minute opportunities but rather about reviewing, organizing, and taking practical steps that can support your financial well-being. The professionals at Concerto Financial can help you explore these considerations and guide you through informed year-end decisions.
Why Year-End Financial Planning Matters
The final quarter of the year is a natural checkpoint for your finances. It’s a time to look at what worked, what needs adjustment, and how you can take advantage of tax deadlines or contribution windows before they close. Some key reasons to review your financial plan before year-end include:
- Tax optimization: Many tax-related actions, such as retirement contributions or charitable giving, must be completed by December 31 to apply to the current tax year.
- Goal alignment: Reviewing your plan helps ensure your actions continue to reflect your long-term priorities.
- Cash flow awareness: Understanding income and expenses now allows for more accurate planning in the new year.
- Portfolio rebalancing: Markets shift throughout the year, which can affect your investment mix and overall risk exposure.
Taking a structured approach can help you feel more organized and confident about where you stand as the year closes.
Step 1: Review Your Financial Goals and Progress
Before making tactical moves, start by reviewing your broader financial picture. Ask yourself:
- Have your goals changed this year?
- Have there been major life events such as a job change, marriage, new home, or addition to your family?
- Are you still on track to pursue your short- and long-term objectives?
A year-end review helps ensure your plan reflects current circumstances. Even small life changes can affect areas such as tax filing, insurance coverage, or investment allocations.
At Concerto Financial, clients often use this time to revisit their broader strategy, ensuring that income, savings, and investment choices are aligned with evolving priorities.
Step 2: Maximize Retirement Contributions
Retirement accounts offer powerful long-term benefits, and year-end is the deadline for many contribution opportunities.
401(k) and 403(b) Plans
If you participate in an employer-sponsored plan, check whether you have contributed the maximum allowed amount for the year. For 2025, the employee deferral limit is 23,000 dollars, with an additional 7,500 dollar catch-up for individuals aged 50 and older. Contributing more before December 31 can help lower taxable income while supporting your retirement strategy.
Traditional and Roth IRAs
Although you have until the tax filing deadline (typically April 15) to make IRA contributions, reviewing your eligibility and potential benefits now ensures you stay on track. If your income allows, consider contributing to a Traditional IRA for possible tax advantages or a Roth IRA for potential tax-free withdrawals in retirement.
SEP and SIMPLE IRAs for Business Owners
If you are self-employed or own a small business, confirm your plan deadlines and contribution amounts. Many entrepreneurs use the final quarter to estimate income and determine contribution levels that align with cash flow and long-term savings goals.
Taking full advantage of retirement contributions before year-end can help position your portfolio for long-term growth potential while keeping your strategy tax-efficient.
Step 3: Assess Your Tax Position and Plan Ahead
Taxes are one of the most important areas to evaluate before December 31. Reviewing your income, deductions, and potential credits early gives you time to make meaningful adjustments.
Evaluate Withholding and Estimated Payments
If you have experienced income changes this year, check your tax withholding or quarterly estimated payments. Adjusting now may help avoid surprises in April.
Review Capital Gains and Losses
If you have realized gains from selling investments, consider whether you also have positions with losses that could offset them. This process, known as tax-loss harvesting, can help manage your taxable income, though it should always be considered within your broader investment strategy.
Consider Charitable Giving
Charitable donations made by December 31 may qualify for a deduction if you itemize your taxes. You can also explore donor-advised funds, which allow you to make a charitable contribution now and recommend grants over time.
Check Eligibility for Credits and Deductions
Common year-end deductions include contributions to retirement accounts, health savings accounts, and certain educational expenses. Review your eligibility for credits such as the Child Tax Credit or energy efficiency incentives if applicable.
Tax laws can change frequently, so working with a professional ensures your strategy is tailored to your unique situation.
Step 4: Use Flexible Spending Accounts and Health Savings Accounts Wisely
If you participate in a Flexible Spending Account (FSA), check your balance and eligible expenses before year-end. FSAs often have “use it or lose it” provisions, meaning funds left unspent may not carry over to the next year.
Consider using remaining FSA funds for qualified medical expenses such as vision care, dental visits, or prescription refills.
If you have a Health Savings Account (HSA), remember that contributions can be made through the tax filing deadline. HSAs are especially valuable because they offer three potential tax advantages: contributions, growth, and qualified withdrawals may all be tax-advantaged.
Making full use of these accounts can help you manage healthcare costs while supporting long-term savings.
Step 5: Rebalance Your Investment Portfolio
Market movements can shift your portfolio away from its intended allocation. Reviewing your investment mix before year-end helps ensure it still aligns with your comfort level and long-term goals.
Evaluate Your Asset Allocation
Compare your current portfolio weights with your target allocation. If one asset class has grown disproportionately, consider rebalancing to maintain appropriate diversification.
Review Risk Exposure
Ask whether your current strategy still fits your timeline and financial goals. If your circumstances have changed, adjustments may be appropriate.
Consider Tax-Efficient Strategies
Rebalancing decisions can create taxable events, so it’s important to evaluate potential consequences before selling investments. Coordinating with your financial professional can help you make informed choices that consider both portfolio structure and tax impact.
Year-end rebalancing is not about predicting the markets but about maintaining balance and discipline over time.
Step 6: Review Insurance Coverage
As families grow, businesses evolve, and life events occur, insurance needs often change. Year-end is a practical time to confirm that your coverage continues to fit your situation.
Life Insurance
Review whether your current policy provides the right level of protection for your family’s needs and financial goals.
Health Insurance
Open enrollment periods often occur in late fall. Compare options and confirm whether your current plan remains cost-effective.
Home and Auto Insurance
Reassess coverage limits and deductibles to ensure they align with current property values and replacement costs.
Having appropriate insurance in place can help safeguard your financial progress and reduce exposure to unexpected setbacks.
Step 7: Examine Your Estate Plan
An up-to-date estate plan helps ensure your wishes are clearly documented and your loved ones are protected.
Review Beneficiary Designations
Check beneficiary designations on retirement accounts, life insurance policies, and transfer-on-death accounts. These designations override wills, so keeping them current is essential.
Revisit Key Documents
If it has been several years since you updated your will, power of attorney, or healthcare directive, review them now. Life changes such as marriage, divorce, or the birth of a child can warrant updates.
Discuss Gifting Opportunities
For 2025, the annual gift tax exclusion allows you to give up to 18,000 dollars per person without incurring gift taxes. Gifting before year-end can be an effective way to support family members or charitable causes.
Estate planning is not just for the wealthy. It is a cornerstone of a complete financial strategy.
Step 8: Evaluate Business Finances if You’re Self-Employed
If you own a small business or work as an independent contractor, year-end is especially critical for reviewing income, expenses, and tax considerations.
Track Income and Deductions
Ensure your records are accurate and up to date. Categorizing expenses now can make tax preparation easier later.
Consider Timing of Purchases
If you plan to make large business purchases, it may be beneficial to complete them before December 31 to claim deductions in the current year.
Review Estimated Taxes and Retirement Plans
Check that your quarterly estimated taxes align with your income, and evaluate contribution options such as SEP or Solo 401(k) plans.
Assess Cash Flow for the Coming Year
Creating a cash flow projection can help you anticipate expenses and plan for opportunities or challenges ahead.
Business owners who take time to evaluate finances in advance often enter the new year with clearer direction and fewer surprises.
Step 9: Organize Financial Documents
A strong financial foundation depends on organization. Take this opportunity to gather, review, and securely store important documents, including:
- Tax records and receipts
- Insurance policies
- Investment statements
- Estate planning documents
- Loan and mortgage information
Digital storage tools can make it easier to maintain and access these records while protecting sensitive information. Organization now saves time and reduces stress during tax season.
Step 10: Plan for the Year Ahead
Once you have reviewed your current finances, shift your focus to the future. Use what you’ve learned this year to shape your approach for the next.
Update Your Budget
Assess your spending habits and identify areas where you can save or reallocate funds toward long-term goals.
Set Clear Priorities
Whether you’re planning to buy a home, fund education, or prepare for retirement, defining your priorities helps ensure your plan remains purposeful.
Schedule Check-Ins
Financial planning is an ongoing process, not a one-time event. Schedule regular reviews throughout the year to adjust as your circumstances change.
At Concerto Financial, we believe that proactive planning helps clients approach the future with clarity and balance. Working with a professional can help you align your strategy with your values and long-term goals.
Key Takeaways
- Reviewing your financial plan before December 31 can help you identify tax-efficient opportunities and strengthen your strategy for the new year.
- Maximize retirement and health-related account contributions while verifying insurance and estate planning documents.
- Rebalance your investment portfolio to maintain appropriate risk levels and diversification.
- Business owners should track income, deductions, and cash flow to prepare for the upcoming year.
- Organization and proactive planning can make the next year less stressful and more intentional.
Final Thoughts
The close of the year offers a valuable opportunity to reflect, refine, and take action. A few thoughtful steps before December 31 can help set the tone for a more organized and purposeful year ahead.
At Concerto Financial, our team works with clients to create strategies tailored to their goals, values, and circumstances. Whether you’re preparing for retirement, optimizing your tax position, or simply aiming to feel more in control of your finances, we can help you evaluate your options and take the next step with confidence.
Schedule a consultation with Concerto Financial today to discuss your year-end planning needs and begin the new year with clarity and purpose.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
This material was prepared by NLA Media