As the year winds down, many people are thinking about holiday plans, family gatherings, and completing work projects. However, for retirees and those planning for retirement, financial deadlines carry a special urgency. Tax bills, retirement accounts, and even healthcare costs can be affected by some of these cutoffs. By missing them, you could be losing out on valuable opportunities, or worse, you may face penalties.
The good news? To stay on top of retirement-related deadlines, here are the most important ones you need to know before December 31.
- Year-End Tax Planning
The first step in year-end tax planning is to determine your total taxable income for the year, since this sets the foundation for all other planning decisions—such as deductions, credits, bracket management, Roth conversions, and capital gains strategies.
Why it matters:
Determining your total taxable income matters because it tells you which tax bracket you’re in, how close you are to entering a higher bracket, and which strategies—like Roth conversions, capital gains harvesting, or deductions—will have the greatest impact on lowering your overall tax bill.
What to do:
- Check your tax bracket — See where you stand and how much room you have before hitting the next bracket. Consult with your tax professional or accountant if you have one.
- Identify opportunities to reduce taxable income — Consider contributions to retirement accounts, HSA funding, or timing deductions.
- Evaluate strategic income moves — Decide whether to complete Roth conversions, realize capital gains or losses, or delay/accelerate income based on your bracket.
- Review deductions and credits — Make sure you’re maximizing any available tax breaks before year-end
- Plan— Use the information to create a clear year-end strategy and avoid surprises when filing your taxes.
2. Required Minimum Distributions (RMDs)
A must-do task at year-end for retirees over age 73 (or 72 if you reach that age before 2023) is to take required minimum distributions from traditional IRAs, 401(k)s, and similar tax-deferred accounts.
Why it matters:
As soon as you reach RMD age, you must withdraw a minimum amount every year. It’s a steep penalty if you don’t: 25 percent of the amount you should have withdrawn, reduced to 10 percent if you correct it quickly.
What to do:
- Confirm your RMD amount with your financial institution.
- IRA owners with multiple accounts can take their total RMDs from just one IRA. You must take distributions from each 401(k) separately, however.
- Avoid waiting until the last week of December, when hours may be reduced at banks.
3. Roth Conversions
Do you want to move money from an IRA or 401(k) to a Roth? A Roth conversion is a powerful tax-planning strategy since future withdrawals are tax-free. Conversions should be considered at the end of November or early December when earned income for the year becomes clearer.
Why it matters:
- As you enter retirement, a conversion can protect your tax rate and help diversify your tax exposure.
- When you convert the amount, however, you are subject to ordinary income taxes.
- Conversions can help beneficiaries by allowing them to inherit tax-free assets – potentially reducing their future tax burden and providing greater flexibility.
What to do:
- Analyze whether converting is worthwhile based on your current tax bracket.
- To avoid jumping into a higher tax bracket, consider breaking conversions into smaller chunks over several years.
- A tax advisor can help you with this strategy, as it requires careful planning.
4. Charitable Giving (Including Qualified Charitable Distributions)
If you want your charitable contributions to be considered for this year’s deduction, the year-end is also the deadline. With qualified charitable distributions (QCDs), retirees who are charitably inclined have even more flexibility.
Why it matters:
- If you itemize your deductions, traditional donations can reduce your taxable income.
- You can transfer up to $100,000 per year directly from your IRA to a qualified charity with a QCD for those age 70½ and older. Also, it counts towards your RMD and is not taxable.
What to do:
- Choose between giving cash, appreciated securities, or making a QCD.
- To claim the tax benefit, transfer before December 31.
5. Medicare Advantage and Prescription Drug Plan Changes
During the Medicare Open Enrollment period, which runs from October 15 through December 7, the decisions you make affect your coverage for the following year. As a result, December is an important month to confirm your choices.
Why it matters:
If you miss this deadline, you’ll be locked into your current coverage, with a few exceptions. The result could be higher premiums or prescriptions that are not covered.
What to do:
- Compare your plan’s benefits for 2025 with those of other plans.
- Don’t forget to check your insurance coverage for doctors and prescriptions.
- To avoid surprises in January, submit changes before December 7.
6. Harvesting Tax Losses (and Gains)
You can offset capital gains or ordinary income up to $3,000 if you sell investments at a loss by December 31, if you have a taxable investment account. Known as “tax-loss harvesting,” this strategy lowers your tax bill.
Why it matters:
When done properly, tax-loss harvesting reduces taxes without significantly altering your investment approach.
What to do:
- With the help of your financial advisor, review your portfolio.
- Identify investments that are underperforming and sell them.
- It’s important to be aware of the “wash sale rule,” which disallows deductions if a substantially identical security is purchased within 30 days.
7. Maximizing 401(k) and IRA Contributions
Employer-sponsored plans, such as 401(k)s, require you to contribute to your retirement accounts by December 31. Contributions to IRAs, however, can usually be made until the tax filing deadline in April.
Why it matters:
- If you contribute before year-end, you won’t miss out on employer matching.
- In traditional accounts, contributions reduce taxable income for the current year.
What to do:
- Take a look at your contributions so far this year.
- Check with your HR department or benefits department about adjusting your contributions.
8. Reviewing Beneficiaries and Estate Plans
Retirement accounts, insurance policies, and estate plans can all be reviewed at the end of the year, even if there is no specific deadline.
Why it matters: In some cases, outdated designations, like former spouses, may override your will and result in family disputes.
What to do:
- Be sure to review all policies and accounts.
- As needed, update beneficiary designations.
- If your life has changed significantly, schedule a meeting with an estate planner.
Key Takeaways
December 31 isn’t just the end of the calendar year—it’s also the end of many retirement planning opportunities. Taking RMDs, donating to charities, and reviewing Medicare coverage all have deadlines that cannot be overlooked.
https://www.schwab.com/resource/year-end-tax-planning-checklist
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