Year-end financial checklist

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As the calendar winds down and the holidays approach here on the Treasure Coast, it’s easy to get swept up in family gatherings, golf games, and gorgeous sunsets over the St. Lucie River — and let important money tasks slip through the cracks. But December is one of the most financially consequential months of the year, and having a solid year-end financial checklist can mean the difference between a smooth transition into the new year and a scramble to catch up come January. Whether you’re already retired and drawing down your savings or still in those final working years leading up to retirement, the steps below can help you finish strong, reduce unnecessary taxes, and set yourself up for a more confident financial future.

Review Your Income and Tax Situation Before December 31

One of the most powerful items on any year-end financial checklist is a thorough review of your current year’s income and tax picture. For retirees and pre-retirees on the Treasure Coast, this is especially important because Florida has no state income tax — but federal taxes still very much apply to Social Security benefits, IRA withdrawals, investment income, and pension payments. Taking stock of where you stand now gives you a window of opportunity to take action before the clock runs out on December 31. The earlier in December you do this review, the more time you have to implement strategies that could reduce what you owe next April.

Start by pulling together your year-to-date income from all sources: Social Security, pensions, part-time work, rental income, dividends, and any withdrawals you’ve taken from retirement accounts. Then compare that number to where you were at the same point last year. Have you had any unusual income events — a home sale, an inheritance, a large Roth conversion, or a distribution from a trust? These kinds of one-time income spikes can push you into a higher tax bracket or trigger the Medicare Income-Related Monthly Adjustment Amount (IRMAA), so it’s worth knowing about them now rather than in February when it’s too late to do much about them. Your year-end financial checklist should always include a tax projection, even a rough one, so surprises don’t ambush you.

If your projected income looks higher than expected, consider whether you can defer income into next year or accelerate deductions into this year. For example, if you’re charitably inclined, bunching multiple years of charitable contributions into a single year using a donor-advised fund might allow you to itemize deductions this year and take the standard deduction next year. On the flip side, if your income is lower than usual this year — perhaps you retired mid-year or had fewer capital gains — this might be a great time to recognize some additional income at a lower rate, such as through a Roth conversion. The IRS website offers helpful resources on retirement plan rules and tax obligations that can guide your thinking here.

Make the Right Retirement Account Moves Before the Deadline

Retirement accounts come with some hard deadlines, and your year-end financial checklist needs to address them directly. For those who are still working and contributing to a 401(k), 403(b), or similar workplace plan, December 31 is the last day to have contributions counted for the current tax year — though you generally have until your tax filing deadline to make IRA contributions. If you haven’t maxed out your contributions and you have the financial flexibility to do so, now is a great time to bump up those deferrals for your final few paychecks of the year. For 2024, the 401(k) contribution limit is $23,000, with an additional $7,500 catch-up contribution allowed for those 50 and older.

Roth conversions are another item that belongs on your year-end financial checklist, particularly if you’re in that sweet spot between retirement and when Social Security or Required Minimum Distributions (RMDs) kick in — sometimes called the “conversion window.” During this period, your taxable income may be temporarily lower, which can make it advantageous to convert some traditional IRA funds to a Roth IRA. The converted amount is taxed as ordinary income in the year of conversion, but future qualified withdrawals from the Roth will be tax-free. Converting now, especially in a low-income year, can reduce future RMDs, lower lifetime taxes, and potentially leave a more tax-efficient legacy for your heirs. Just be careful not to convert so much that you spike into a higher bracket or trigger IRMAA surcharges on your Medicare premiums.

Tax-loss harvesting is another year-end strategy worth exploring in your taxable brokerage accounts. If you have investments that have declined in value, selling them before December 31 allows you to realize those losses, which can offset capital gains you’ve recognized elsewhere during the year. You can also use up to $3,000 of excess losses to offset ordinary income, with any remaining losses carried forward into future years. Just be mindful of the IRS “wash-sale rule,” which disallows the loss deduction if you buy the same or substantially identical security within 30 days before or after the sale. Working through these details is exactly the kind of thing a comprehensive year-end financial checklist helps you stay on top of each year.

Don’t Forget Required Minimum Distributions

If you’ve reached age 73 — or will before year-end — and you have traditional IRAs, 401(k)s, 403(b)s, or other pre-tax retirement accounts, taking your Required Minimum Distribution (RMD) is not optional. The IRS requires these annual withdrawals, and failing to take your full RMD by December 31 results in a hefty excise tax — currently 25% of the amount you should have withdrawn (reduced to 10% if corrected within two years). This is one of the most urgent items on a year-end financial checklist for retirees, and yet it’s one that can easily be overlooked in the holiday rush. Many financial custodians offer automatic RMD services, but it’s still your responsibility to confirm that the correct amount has been distributed.

For those who are charitably inclined, a Qualified Charitable Distribution (QCD) is a powerful strategy worth knowing about. If you’re 70½ or older, you can direct up to $105,000 per year (indexed for inflation) directly from your IRA to a qualified charity, and that distribution counts toward your RMD without being included in your taxable income. This is particularly advantageous for retirees on the Treasure Coast who may not itemize deductions due to the higher standard deduction, because the QCD effectively delivers a tax benefit even without itemizing. Including the QCD option in your year-end financial checklist each year ensures you never miss this opportunity to give generously while keeping your tax bill lower. Just be sure the transfer goes directly from the IRA custodian to the charity — you cannot receive the funds yourself first.

If you have multiple IRA accounts, remember that while your total RMD is calculated across all of them, you can withdraw the total amount from any one or combination of your IRAs — you don’t have to take a proportional amount from each account. This gives you some flexibility to strategically choose which accounts to draw from based on investment performance, account balances, or your overall estate plan. For inherited IRAs, the rules have changed significantly under the SECURE 2.0 Act, so if you’ve recently inherited a retirement account from someone other than a spouse, make sure you understand your distribution requirements, as they differ meaningfully from the traditional RMD framework. Keeping your year-end financial checklist current with regulatory changes like these is essential.

Review Your Medicare and Insurance Coverage

Medicare’s Annual Enrollment Period (AEP) runs from October 15 through December 7 each year, which means that if you haven’t already reviewed your Medicare Advantage or Part D prescription drug plan, you’re working against the clock. Even if you’ve been happy with your current plan, it’s worth comparing options annually because plan formularies, premiums, provider networks, and drug coverage can all change from one year to the next. For retirees on the Treasure Coast in Martin and St. Lucie counties, plan availability and local network doctors can vary significantly from what might be offered in other parts of Florida. Reviewing your Medicare coverage is a cornerstone of any thoughtful year-end financial checklist. The official Medicare Plan Finder at Medicare.gov is an excellent, free tool to compare plans side by side in your ZIP code.

Beyond Medicare, your year-end review should also include a look at other insurance policies you carry: homeowners, auto, umbrella liability, and any long-term care coverage. Florida’s insurance market has been particularly dynamic in recent years, with changes in premiums and carrier availability affecting many Treasure Coast residents. If your homeowners insurance premium has increased significantly or your carrier has changed, it may be worth shopping for alternatives or reviewing your coverage limits to ensure they still reflect your home’s current replacement value — especially given rising construction costs. Many people set their insurance policies on autopilot and forget to revisit them, but including this step in your year-end financial checklist ensures your protection keeps pace with your actual needs.

Estate Planning and Annual Gift Exclusions

Year-end is also an ideal time to revisit your estate planning documents and take advantage of annual gifting strategies. The IRS annual gift tax exclusion allows you to give up to $18,000 per person in 2024 (or $36,000 per couple, when gift-splitting) without triggering gift tax or eating into your lifetime exemption. These gifts must be made by December 31 to count for the current year. Gifting can be a wonderful way to support children, grandchildren, or other loved ones during your lifetime while also reducing the size of your taxable estate — and including it in your year-end financial checklist ensures you never let a year go by without taking full advantage of this opportunity if it makes sense for your situation.

While you have estate planning on your mind, take a few minutes to review the beneficiary designations on your retirement accounts, life insurance policies, and annuities. These designations supersede whatever your will says, which means an outdated beneficiary form could direct assets to the wrong person — an ex-spouse, a deceased relative, or simply someone whose circumstances have changed significantly. Major life events like marriages, divorces, births, and deaths should prompt a beneficiary review, but even in quieter years, an annual checkup as part of your year-end financial checklist is a smart habit. Also review your durable power of attorney, healthcare surrogate designation, and living will to make sure they reflect your current wishes and that your named agents are still willing and able to serve in those roles.

For those with more complex estates, now is a good time to consult with an estate planning attorney or your financial advisor about whether any trust structures, charitable remainder trusts, or other strategies might be worth exploring before year-end. The current federal estate tax exemption is historically high — over $13 million per individual in 2024 — but it’s scheduled to sunset at the end of 2025, potentially dropping significantly. If your estate might be affected by this change, having a conversation now rather than waiting is wise. Your year-end financial checklist should flag this as an ongoing planning consideration, not just a one-time task.

Use Your Year-End Financial Checklist to Set Goals for Next Year

A truly effective year-end financial checklist doesn’t just look backward — it also sets the stage for the year ahead. Once you’ve addressed the tax, account, Medicare, and estate planning items above, take some time to write down two or three specific financial goals for the coming year. Maybe you want to fully fund your IRA by March instead of scrambling in April. Perhaps you’ve been putting off a conversation about Social Security timing or whether to downsize your Treasure Coast home. Or maybe you’d like to build a more detailed withdrawal strategy so you’re not making ad hoc decisions each year about which accounts to tap first. Setting these goals in writing — even briefly — dramatically increases the likelihood that you’ll follow through on them.

Part of setting good goals is reviewing your overall financial picture honestly. Look at your net worth statement: did it grow or shrink this year, and why? Review your spending from the past 12 months and ask whether it aligned with what you actually value. Many retirees are surprised to find that their spending patterns don’t always match their stated priorities — and year-end is the perfect time to recalibrate. The team at The 1715 Podcast regularly explores these kinds of big-picture financial wellness topics in ways that are practical and relevant to Treasure Coast retirees, and catching up on recent episodes can be a great way to spark new ideas as you plan for the year ahead.

Finally, consider scheduling a formal financial review meeting with your advisor in January — but use your year-end financial checklist to gather the information you’ll need for that meeting now, while it’s fresh. Bring your most recent account statements, a summary of this year’s income and distributions, your insurance renewal notices, and any questions that came up as you worked through this checklist. The more prepared you are going into that conversation, the more productive it will be. A well-organized year-end financial checklist, used consistently each December, is one of the simplest and most effective habits you can build to protect your financial wellbeing in retirement.

Take the Next Step Toward a Confident New Year

Working through a comprehensive year-end financial checklist each December isn’t just about checking boxes — it’s about giving yourself the peace of mind that comes from knowing you haven’t left money on the table or missed important deadlines. From tax planning and RMDs to Medicare reviews and estate housekeeping, each of these steps plays a role in keeping your overall financial plan on track. The Treasure Coast is a wonderful place to live out your retirement years, and a little financial diligence now can go a long way toward ensuring those years are as worry-free as possible.

If you’d like to go deeper on any of these topics, we invite you to listen to The 1715 Podcast, where we break down complex financial topics in plain English for retirees and pre-retirees right here in the Stuart, FL area. And if you’d like a personalized conversation about your own situation, consider reaching out to schedule a consultation. The end of the year is a busy time, but taking even a few hours to work through your year-end financial checklist could be one of the most valuable things you do all December.

This content is for educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Please consult a qualified financial professional before making any financial decisions.

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