The year-end checklist becomes significant for retirees as we look toward 2025. Statistics show that by 2030, all but one of these five Americans will reach retirement age. Your retirement plan consultant in Fresno CA, knows that these final months give you a great chance to review your finances and adjust your strategy before tax season arrives.
Your retirement planning includes several time-sensitive tasks that just need your attention now. To name just one example, retirees who are 73 or older must take Required Minimum Distributions (RMDs) from their tax-qualified accounts. The 2025 contribution limits can help you maximize tax benefits – $7,000 for IRAs ($8,000 if you’re 50 or older) and $23,500 for 401(k) plans.
Maximize Retirement Contributions and Meet Deadlines
You still have time to boost your retirement contributions before this year’s deadlines. Looking ahead to 2025, you can put up to $23,500 into your 401(k), 403(b), or governmental 457 plan. People who are 50 or older can add $7,500 more as a catch-up contribution, which brings the total to $31,000.
The SECURE 2.0 Act offers an exciting chance for people aged 60-63. You can make a bigger catch-up contribution of $11,250 instead of the usual $7,500, pushing your total possible contribution to $34,750.
The 2025 contribution limit for Individual Retirement Accounts (IRAs) stays at $7,000, and those 50 and older can add an extra $1,000. Your 401(k) contributions need to be in by December 31, 2025. You have more time for IRA contributions – until April 15, 2026, when taxes are due.
Take Required Distributions and Consider Roth Strategies
RMDs should be your top priority in the end-of-year checklist if you’re turning 73 this year or are older. You must withdraw RMDs from traditional IRAs, SEP IRAs, SIMPLE IRAs, and employer retirement plans. Anyone turning 73 in 2025 needs to take their first RMD by April 1, 2026.
Notwithstanding that, taking two distributions in 2026 could push you into a higher tax bracket if you wait until April—one by April 1 and another by December 31. A steep 25% penalty applies to the amount not withdrawn if you miss the deadline. This penalty can drop to 10% when corrected within two years.
Think over Roth conversion strategies to manage future tax implications. Roth IRAs don’t require RMDs during your lifetime, unlike traditional accounts. Converting traditional IRA funds to Roth means paying taxes now, but you’ll get tax-free growth and withdrawals later.
Optimize Taxes and Charitable Giving Before Year-End
Smart tax optimization opportunities await as we approach the year’s end. These opportunities should be on your retirement planning checklist. Tax planning experts have marked November 28, 2025, as the last day to use tax-loss harvesting strategies this year. You can sell underperforming investments to offset capital gains and reduce ordinary income by up to $3,000.
Charitable givers should note December 31 as their deadline for two powerful strategies. The first strategy lets those 70½ and older make Qualified Charitable Distributions (QCDs). They can donate up to $108,000 straight from their IRAs to eligible charities. This move could satisfy RMD requirements without counting the amount as taxable income.
Conclusion
We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to see how we can help you Retire ”Your Way!”
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Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.
A Roth conversion may not be suitable for your situation. The primary goal in converting retirement assets into a Roth IRA is to reduce the future tax liability on the distributions you take in retirement, or on the distributions of your beneficiaries. The information provided is to help you determine whether or not a Roth IRA conversion may be appropriate for your particular circumstances.
Tax loss harvesting is a strategy that may help minimize the amount of current taxes you have to pay on your investments by choosing to sell an investment at a loss. It is only appropriate for certain taxpayers in certain scenarios. Please review your retirement savings, tax and legacy planning strategies with your legal/tax advisor before attempting a tax loss harvesting strategy. Please review your retirement savings, tax, and legacy planning strategies with your legal/tax advisor to be sure a Roth IRA conversion and/or tax loss harvesting opportunities fits into your planning strategies.
A Qualified Charitable Distribution (“QCD”) is a direct transfer of funds from your IRA custodian, payable to a qualified charity. QCDs can be counted toward satisfying your required minimum distributions (“RMDs”) for the year, as long as certain rules are met. Some charities may not qualify for QCDs. First consult your tax advisor or the charity for its applicability.
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