Finish Strong: 3 Smart Financial Moves to Make Before Year-End

As 2025 enters its final quarter, the holiday rush and end-of-year deadlines can make it easy to put financial planning on the back burner. However, these last few months offer a critical window to make impactful decisions that can bolster your savings, reduce your tax bill, and set a stronger foundation for the year ahead. Here are three essential items for your financial checklist.

1. Supercharge Your Retirement Accounts

Before the calendar flips, ensure you’ve squeezed every advantage out of your tax-sheltered retirement plans.

• Maximize Your 401(k) or 403(b): For 2025, you can contribute up to $23,500 to your employer-sponsored plan. If you haven’t hit this limit, consider increasing your contribution percentage for the final pay periods of the year. Most importantly, contribute at least enough to receive your full employer match—it’s an immediate return on your investment.

• Leverage Catch-Up Contributions: If you are age 50 or over, you can contribute an additional $7,500 to your 401(k). Furthermore, a provision in the SECURE 2.0 Act allows those aged 60 to 63 to make a higher catch-up contribution of $11,250, if their plan allows.

• Fund Your IRA: You have until the tax filing deadline in April 2026 to contribute to an IRA for 2025, but the sooner you contribute, the more time your money has to grow. The 2025 limit for Traditional and Roth IRAs is $7,000, with an additional $1,000 catch-up for those 50 and older.

2. Get Strategic with Taxes and Investments

Proactive tax planning in the fourth quarter can yield significant savings. Look at your taxable investment accounts for opportunities.

• Harvest Your Losses: If you have investments that have decreased in value, selling them can be a smart move. This strategy, known as tax-loss harvesting, allows you to use those capital losses to offset capital gains you’ve realized during the year. If your losses exceed your gains, you can use up to $3,000 to offset your ordinary income.

• Rebalance Your Portfolio: The year’s market shifts may have pushed your portfolio out of alignment with your long-term goals. For instance, a strong run in stocks might mean you are now holding a higher percentage in equities than your risk tolerance dictates. Selling some winners and reallocating the funds to underperforming asset classes is a disciplined way to manage risk.

3. Optimize Your Health and Benefit Elections

Fall is typically open enrollment season for employee benefits—a crucial time to make choices that impact your financial and physical well-being.

• Review Your Health Plan: Don’t just default to your current coverage. Assess whether your health plan still meets your needs and is the most cost-effective option.

• Fund Your Health Savings Account (HSA): If you are enrolled in a high-deductible health plan, the HSA is a powerful tool. It offers a triple tax advantage: contributions are tax-deductible, the funds grow tax-free, and withdrawals for qualified medical expenses are tax-free. For 2025, the HSA contribution limits are $4,300 for self-only coverage and $8,550 for family coverage, with an extra $1,000 catch-up for those 55 and older.

• Use Your Flexible Spending Account (FSA): Check your FSA balance. Most plans operate on a “use-it-or-lose-it” basis, so now is the time to schedule appointments or purchase eligible healthcare items to avoid forfeiting your funds.

By dedicating a few hours to these key areas, you can end 2025 on a high note and step into the new year with greater financial confidence. As always, be sure to discuss any changes you make with your financial and tax advisors to help ensure they’re the right strategy for you.

Stephen Kyne, CFP® is a Partner at Sterling Manor Financial, LLC in Saratoga Springs.

Sterling Manor Financial, LLC is an SEC Registered Investment Advisor and does not provide tax or legal advice, nor is it a third-party administrator. Consult your attorney or accountant prior to implementing any tax or legal strategies.