Year End Financial Checklist

As 2024 draws to a close, it’s an opportune time to assess your financial strategies to help align them with your long-term wealth and retirement goals. Year-end planning can help you prepare for 2025. Here are a few considerations to focus on:

Maximize retirement contributions, if possible.

Contributing to retirement accounts can help reduce the amount of overall taxes you owe on earnings. For 2024, the contribution limits are:

• IRA: Up to $7,000, with an additional $1,000 catch-up contribution if you’re 50 or older.
• 401(k): Up to $23,000, plus an extra $7,500 for those aged 50 and above.

Ensure your 401(k) contributions are made by December 31, 2024, while IRA contributions for the 2024 tax year can be made until April 15, 2025.

Take Required Minimum Distributions (RMDs) to avoid penalties.

For those aged 73 or older, RMDs are mandatory from qualified retirement accounts, including IRAs and 401(k)s. The RMD deadline is December 31, 2024, and failing to take these distributions can lead to penalties. It’s helpful to calculate the correct amount and withdraw it timely. Get answers to commonly asked questions about required minimum distributions (RMDs) here.

Plan charitable contributions.

Charitable giving can be both fulfilling and tax-efficient. Consider making donations by December 31 to qualify for deductions on your 2024 tax return.

• Qualified Charitable Distributions (QCDs): For those aged 70.5 or older, QCDs allow you to make direct transfers from your IRA to a charity, satisfying RMDs without increasing taxable income.
• Donor-Advised Funds (DAFs): By contributing to a DAF, you can receive an immediate tax deduction while spreading out your donations over time, providing flexibility in your charitable planning.

Utilize Flexible Spending Accounts (FSAs) before funds expire.

If you participate in an employer-sponsored FSA, remember that these accounts often operate on a “use it or lose it” basis. Review your FSA balance to ensure funds are used on eligible expenses—such as medical expenses, prescriptions, or other approved items—before the end of the year. Some plans may offer a grace period or carryover option, so check with your employer for specific deadlines. To learn more about an FSA, click here.

Consider Roth Conversions.

A Roth IRA conversion involves moving funds from a traditional IRA into a Roth IRA, paying taxes on the converted amount now in exchange for potential tax-free withdrawals in the future. If 2024 has been a lower-income year or if you anticipate being in a higher tax bracket in the future, a Roth conversion might be beneficial. Check with our team at any of our offices in Dubuque, IA, Lake Geneva, WI, Marquette, MI, or Rockford, IL, to see whether this strategy fits your broader financial goals.

Plan for 2025.

A year-end financial plan provides an opportunity to assess your financial health, evaluate life changes, and refine your goals. Taking these steps now sets a foundation for the coming year, allowing you to approach 2025 with clarity, confidence, and financial security.

For more ideas on a Year-End Checklist, click here.