Knowledge & Insights

It’s hard to believe another year is coming to a close. The final months of the year offer a great opportunity to review your financial picture and take advantage of strategies that can reduce your tax bill and strengthen your long-term plan. A few thoughtful moves now can make a meaningful long-term impact.

Below are five strategies to consider before year-end:

1. Maximize Retirement Contributions

If you participate in an employer-sponsored retirement plan, confirm you’re contributing as much as possible before year-end. In 2025, the contribution limit for 401(k) plans is $23,500, with an additional $7,500 catch-up contribution for those age 50 and older. Those between ages 60 and 63 can make a special catch-up contribution of $11,250.

If your employer offers both traditional and Roth options, consider shifting all or part of your contributions to a Roth 401(k).  This can help build your tax-free assets.

An added bonus! Some employers offer the option to make additional deferrals beyond the yearly limits, which would allow up to an additional $46k per year.  These additional after-tax contributions would eventually roll into a Roth IRA, which would also add to your tax-free assets.

Action: Check your current deferral rate and increase it if you can before the last payroll of the year.

2. Make a Spousal IRA Contribution

This strategy is useful when either you or your spouse does not have access to an employer-sponsored retirement plan. It’s rare, but sometimes employers don’t offer retirement plans, or maybe you have your own business, and no retirement plan is set up. This strategy is also useful when one spouse is not working, which can limit them from saving towards retirement

A spousal IRA is a great way to keep saving. Usually, the rule for contributing to an IRA is that you must have some type of earned income. The spousal IRA strategy allows you to use your or your spouse’s income to bypass that rule on behalf of the other person. Your spouse can contribute $7,000 to the spousal IRA or $8,000 if you’re over the age of 50.

Action: If you qualify, consider contributing to each spouse’s IRA before the April 2026 deadline for 2025 contributions.

3. Explore a Backdoor Roth IRA

High earners who exceed the Roth IRA income limits ($230,000–$246,000 for joint filers) can still build tax-free retirement savings through a backdoor Roth.

This involves making a non-deductible contribution to a traditional IRA and then converting those funds to a Roth IRA. Once in the Roth, the funds can grow and be withdrawn tax-free in retirement. This approach can be especially effective for those without existing traditional IRA balances. If a traditional IRA already exists, this conversion could trigger a taxable event and should be discussed with your accountant.

Action: Review your current IRA holdings and speak with your advisor and accountant about whether this strategy fits your situation.

4. Spend Remaining FSA Dollars

If you participate in a health care or dependent care flexible spending account (FSA), now’s the time to check your balance. Because FSAs are “use it or lose it” accounts, any unspent funds may be forfeited after year-end unless your plan allows a limited carryover. Eligible expenses often include prescriptions, dental care, glasses, and child care.

Action: Review your plan rules and schedule any last-minute appointments or purchases before December 31.

5. Review Charitable Giving Plans

Year-end giving can be both personally meaningful and tax-efficient. One option to consider is donating appreciated securities rather than cash. By gifting investments that have increased in value, you can avoid paying capital gains tax while still receiving a deduction for the full fair market value of the donation.

Another effective strategy is contributing to a donor-advised fund (DAF). A DAF allows you to make a charitable contribution, receive an immediate tax deduction, and then recommend grants to your favorite charities over time. This can be especially useful in higher-income years or when you want to “bunch” multiple years of charitable giving into one tax year to maximize itemized deductions.

Action: Coordinate with your advisor or CPA to determine how charitable giving fits into your overall tax plan.

Year-end is an ideal time to make small adjustments that can have a lasting impact on your financial plan. Before the calendar turns, coordinate with your team of professionals to confirm you’re taking full advantage of available opportunities.