- Max out those retirement contributions!
Make sure you’re taking full advantage of your retirement accounts. For 401(k)s, the contribution limit for 2024 is $23,000, plus a $7,500 catch-up if you’re 50 or older. And starting in 2025, people aged 60-63 will get an extra boost with a special catch-up option that’s up to $10,000, or 150% of the standard limit. For IRAs, you can contribute up to $7,000, with an additional $1,000 catch-up if you’re 50 or older. It’s a great way to lower your taxable income and save for the future! - Give your investment portfolio a once-over.
Year-end is a great time to review your investments and make sure they still match your goals. If you’d like, let’s set up some time in the new year to chat about your portfolio, risk tolerance, and any life changes that might affect your financial picture. - Create a financial inventory.
Take a moment to list out your assets, debts, and any other important financial info. It’s like taking a snapshot of your financial health — and it’ll help keep things organized moving forward. - Plan for those required minimum distributions (RMDs).
If you turned 73 this year, remember that your first RMD is due by April 1, 2025, and your second by December 31, 2025. After that, RMDs are due by December 31 each year. The good news is, if you’re still working and have a 401(k) or similar workplace plan, you may be able to delay your RMDs until you retire (unless you own 5% or more of the business). A little planning now can help you avoid penalties and stay on the IRS’s good side. - Get a head start on tax season.
Now’s the time to start gathering your financial documents for tax season next year. It’ll make the process a lot easier! Also, keep an eye out for any changes in tax law for 2025 that might affect your planning. - Explore tax-saving strategies.
Consider ways to reduce your tax bill, like charitable donations. If you’re 70½ or older, you can donate up to $100,000 directly to charity each year, tax-free! If you’re 73 or older, that same donation can also count toward your RMD, which could help reduce your taxable income. - Review your insurance coverage.
Life changes, so make sure your insurance policies still meet your needs. Did you get married, have a baby, or buy a home recently? It might be time to update your coverage. - Check your estate plan.
Take a look at your will, trusts, and beneficiary designations to make sure everything is up to date. With potential changes to estate tax laws coming down the pipeline, it might be a good idea to touch base with an estate planning professional to make sure you’re on track.
Remember, keeping your financial health in check is an ongoing process, so it’s important to keep things updated regularly. If you have any questions or need help with any of these steps, feel free to reach out!
To download a checklist to help you with your preparations, fill out the form below.