Welcome to December! The last month of the year always feels a bit overwhelming doesn’t it? The combination of a sharp turn in the weather, holiday to-do’s, and the looming change of the calendar does something to our nervous systems!

One way I help soothe my overwhelm is to make lists (there are quite a few of them!) I’ve been working with clients on their year-end financial to-do lists the past few weeks and thought it was worth outlining some common action items below.

Read on – then grab a pen, make your own list, and start checking items off so you can fully enjoy the upcoming holidays!  (and rest assured, if you are a Windermere client, we will be working on the applicable items with you very soon (unless they’ve already been addressed!)

1.) Finalize contributions to employer plans – Employer plans (like 401ks and 403Bs) follow calendar year schedules for contributions. As a result, the annual limits are “use it or lose it” by December 31 of each year. For 2025, the max contribution $23,500 (with a $7,500 catch-up if you are over the age of 50) – so if you wish to reach that level and have yet to do so this year, ramp up that contribution amount for the final month

2.) Make (or plan for) contributions to individual retirement accounts – you have until tax filing deadline in April 2026 to fund individual retirement accounts (such as IRAs, Roth IRAs, Self-employed IRAs). However, now is a great time to evaluate your eligibility (based on 2024 income) and if you qualify, make plans to have the cash on hand early in the new year

3.) Process any Required Minimums Distributions (RMDs) – I’ve written about RMDs in the past (general information here and the change to RMD rules here). In short, they are amounts you must withdraw from pre-tax retirement accounts per tax regulations. Penalties if you fail to do so by 12/31 are very steep so if you are subject to these rules, be sure to get your distributions processed

4.) Review realized gains/losses and harvest as needed – Taxable (ie: non retirement) accounts generate taxable items such as dividends, interest, and capital gains/losses (difference between what you paid for an investment and what you sold it for). Every year, it is worth taking a close look at taxable accounts and perhaps realizing some losses (that can be partially used to offset income or future capital gains). See more on tax loss harvesting here. Also pay close attention to the impact of mutual fund distributions (learn more here)

5.) Give back – It is an excellent time of year to give to those in need. But beyond that, there may be tax strategies that give you added motivation to donate. Consult your tax advisor – or proceed with gifting no matter the tax impact. A donor advised fund may be worth considering as well, as it allows you to strategically increase your charitable tax deduction in a given year (and make the gifts in future year(s)). Please also note that tax laws related to charitable contributions are set to change in 2026 so review those changes and consider adjusting the timing of your donations

6.) Fund health savings accounts and spend Flex Spending  – You can read more about these accounts here. If you have a health insurance plan that allows for contributions to a Health Savings Account, review your YTD contributions (be sure to pick up employer portion as well). If you have yet to max out, you may wish to consider adding more. These are very beneficial from a tax perspective – both now and in the future. You have until April 2026 to fund for 2025 – but make a plan now as that will be here before we know it! And if you have a Flex Spend account, be sure to spend that balance before 12/31 (use it or lose it!)

7.) Refine your 2025 tax estimate – With all the changes in Federal and some state tax laws during 2025, now is a great time to check in on your 2025 estimated taxes owed vs. withholdings/payments. There may also be some tax strategies you could employ between now and year end to optimize your situation (such as “filing up” a lower tax bracket with another IRA distribution or Roth conversion, giving to charity, processing business expenses in this calendar year, etc.), so as always, consider reaching out to your tax and financial advisor to review your own situation. Once 1/1/2026 hits, there is little you can do to change your tax picture for 2025

8.) Give to family and friends– the current annual gifting exemption for 2025 is $19,000 per person per calendar year. As a result, if you are feeling generous, now is a great time to make those gifts and take advantage of the annual exemption (another “use it or lose it” limit) And you can give more, a gift tax return will just be required. You can read more here

9.) Business financial review – if you are a business owner, you should have pretty good sightline to 2025 results at this stage. Work with your tax advisor to determine how your current year tax picture is looking and make plans to take any actions prior to year-end as appropriate

10.) Review cash levels – After all of the above are done, you will likely have a better idea on what cash balances are earmarked (for taxes, retirement savings, etc) and which are possibly available for investment, addition to near-term reserves, or other uses. Now more than ever, proper allocation of cash is important as yields on money market funds remain over 3.5%, despite recent rate cuts. Don’t overlook the power and stability of this asset!

11.) Make a savings plan for 2026 – one of the most powerful inputs to the long term compounding of wealth is your savings rate. Set a plan now for the upcoming year – and see what impact that has on your overall financial plan

I fully appreciate there are quite a few items on this financial to-do list but with any luck, you have already tackled many (if not all) of the ones that apply to you and your specific situation. And if not, you still have time so just take them in stride. Afterall, if you’ve read this far, you are clearly a dedicated steward of your financial journey so you are more than capable of tackling a few more items before the new year arrives.

Here’s to a successful end to 2025 and all the good that awaits in the new year!