Time's Running Out: Financial To-Dos Before 2025

THE FINANCIAL COMMUTE

On this week’s episode of THE FINANCIAL COMMUTE, host Chris Galeski and Financial Planning Advisor Amber McBride discuss year-end financial planning items to stay on top of.

Here are some key takeaways from their conversations:

- Ensure you are maximizing contributions to employer-sponsored retirement plans. The limit is $23,000 for people under 50, and $30,500 for those 50 and over with the catch-up contribution.

- Consider tax loss harvesting to offset capital gains by selling investments at a loss. Amber and Chris generally recommend listeners to monitor this strategy throughout the year for better opportunities.

- If you are subject to required minimum distributions (RMDs), it is important to take them before the end of the year. A good strategy for charitable individuals is to use Qualified Charitable Distributions (QCDs) to reduce taxable income while donating directly from your retirement account.

- Review your income and tax bracket to explore Roth IRA conversions, which can provide tax-free income in retirement and potentially benefit your children by leaving them tax-free assets.

- Max out Health Savings Account (HSA) contributions if eligible. HSAs provide a triple tax advantage: tax deductions on contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.

- For Flexible Spending Accounts (FSAs), be mindful of any remaining funds since they are “use it or lose it.”

- The end of the year is the perfect time to think about gifting. Consider making contributions to 529 plans for your children or grandchildren, which offer tax-free growth and withdrawals for educational expenses. Additionally, explore options like gifting Roth IRAs for future generations.