Seven Financial Moves to Make Before the Year Ends  

Key Takeaways: 

• Taking a few steps now will help you increase your chances of financial success in 2025. 
• This is the time to fully fund your HSA – or, for most employees who have FSAs, use their remaining balances. 
• Set key 2025 goals now to get a head start on plans and financing. 

With the holiday season fully underway, it’s easy to forget – or neglect – some important year-end financial tasks. Yet taking care of them in the next few weeks can help you finish out 2024 on the best possible note and up the chances of financial success in 2025. Here, we take a look at seven key areas to consider as you close out your year. 

1. Maximize benefits from qualified medical plans. If you have a Health Savings Account (HSA), this is the time to fully fund it. Most contributions will be tax-deductible on your federal tax form, and withdrawals for qualifying expenses are tax-free. Most states recognize HSA funds as tax-free, too. (Consult a tax advisor to confirm for your state).
   If you have a Flexible Spending Account (FSA), check your balance – and the dates of your plan year. It’s important to know because employees who do not use the money in their accounts by the end of their FSA year lose that money. Many FSAs expire at year-end, while others operate on a different calendar year or offer a few weeks’ grace period if you haven’t used all your funds. Check with your employer, then make plans to use any remaining funds for FSA-qualifying expenses. You can use these funds for many different types of products and services, ranging from doctors’ appointments to prescription and over-the-counter medications, and day-care and elder-care expenses. Even purchases of hand sanitizer and sunscreen can apply. To learn more about FSA-qualifying expenses check out the full list the IRS provides. 
2. If you are itemizing deductions, plan donations and organize receipts. Taxpayers who itemize deductions may be able to reduce taxes due by claiming charitable contributions. Important note: Even if you do not itemize on your federal tax return, you may be able to receive a tax deduction for some contributions on your state return. Check with a tax advisor for details in your state. 
   Make donations before Dec. 31 and always be sure to get a receipt. Along with cash and household items, potential donations include unneeded or unused vehicles, and stocks and investments. Free online tools, such as Goodwill’s Donation Value Guide, can help calculate the value of non-cash donations. Talk with a tax adviser if you are unsure of a donation’s value.
3. Check your credit reports. If you haven’t done so within the past few months, year-end is a good time to review your credit reports. You now can obtain reports up to once a week at no charge from each of the major credit agencies (Experian, TransUnion, and Equifax) at  www.annualcreditreport.com. Review the reports carefully. If you spot any inaccuracies, correct them according to the directions on each agency’s website.
4. Contribute to tax-benefited retirement plans. If you don’t already have a plan in place, this is the time to work with a tax accountant or financial advisor/consultant on how to plan for your future, and determine which savings vehicles are best for you. Many retirement plan contributions for the 2024 tax year can be made until April 15, 2025.
5. Determine if you’ll need to take an RMD. A required minimum distribution (RMD) is the minimum amount you must withdraw from your retirement accounts each year, per IRS guidelines. Most people must start taking withdrawals from traditional IRAs, SEP IRAs, SIMPLE IRAs, and retirement plan accounts when they reach age 72 or 73 if they reached age 72 after Dec. 31, 2022. 
   However, there are exceptions. Many account owners in a 401(k) or other workplace retirement plan can delay taking RMDs until the year they retire, for example. Roth IRAs require no withdrawals until after the account owner passes away. Because of the complexities, it is a good idea to check with a tax accountant for your individual requirements.
6. Review investments. Whether you have money invested in a 401(k), mutual fund, individual stocks and bonds, or other securities, your portfolio deserves a closer look at the end of the year. You want to make sure your investments are aligned with your goals and your level of risk (which can change year to year). There also may be changes to make to optimize your tax situation for the year. If you have any questions, it’s best to review with a tax advisor and/or financial planning professional.
7. Update and document passwords for financial accounts. While this is a task worth doing any time, year-end is an ideal time to make sure you have an up-to-date list of accounts. Be sure to let loved ones know how to find it, in case of emergency. Manage passwords for online accounts on paper or in an online vault for security. 

Finally, as you reflect back on 2024, take a moment to set financial goals for the coming year. Maybe you want to pay off debt once and for all, build your emergency savings, build a budget for the first time or make some home renovations. Also consider how to tackle any big expenses you know are coming up.  

If you are a homeowner, you may want to consider tapping your home equity to help you meet your financial goals and expenses. A home equity agreement (HEA) can be a valuable tool for homeowners who want to access their equity without taking on another monthly payment.