At Withum Wealth, we believe that a large part of long-term financial success is planning ahead. For this year-end planning guide, we have included a list of actions to consider in this dynamic financial environment.
Year-End Planning Checklist
Budgeting
- Review and reassess your goals and priorities.
- Revisit your 2025 budget and prepare a budget for 2026.
- Be sure to include savings for your retirement and other goals.
- Calculate your net worth and see how it compares to your financial plan.
- Evaluate whether you have sufficient cash in your emergency fund (three to six months living expenses).
Portfolio Review
- Review your asset allocation and compare it to your targets.
- Review your capital gain situation for the year:
- Consider tax loss harvesting if you are in a high tax bracket.
- Consider realizing gains if you are in the 0% Long Term Capital Gains tax bracket.
Retirement Savings
- If you were born in 1952* or earlier, satisfy your RMDs by December 31, 2025.
- *People born in 1952 can defer their first RMD until April 1 of next year, but this will result in two required distributions next year.
- Consider using Qualified Charitable Distributions for your charitable donations.
- Review your 2025 retirement contributions for any IRA or 401(k) accounts.
- Make sure you are deferring enough to employer plans to receive the full amount of any employer match.
- Contribute to a Roth IRA if you have earned income and your MAGI is below the income restrictions:
2025 MAGI Limits
| Single | Married Filing Jointly |
| $150,000 – $165,000 | $236,000 – $246,000 |
- Increase your Roth retirement account holdings without increasing your current income tax.
- If your employer’s retirement plan allows after-tax contributions and in-plan conversions, take advantage of this strategy.
- If you have no pre-tax IRA accounts, do a backdoor Roth contribution.
- Participants in 401(k) or Simple IRA plans who are ages 60-63 are eligible to make a super catch-up contribution this year. The amount is $11,250 for a 401(k) or $5,250 for a Simple IRA. This is in lieu of the standard catch-up contribution.
- Make your 2026 employer benefit elections (see below):
- If you will be 50 or over during the year, then you are eligible to contribute additional “catch-up” amounts.
- If you will be 60-63 next year, then you are eligible to make a “super catch-up” contribution.
- Starting next year, catch-up contributions from employees who had FICA wages of $145,000 or more the prior year must make the catch-up contributions to a Roth account.
- If you are retired and not yet taking RMDs, consider completing some Roth conversions (filling up your current tax or IRMAA bracket).
- Review the beneficiaries for all your accounts.
Gifting
- Take advantage of the $19,000 per donee annual gift exclusion in 2025.
- Consider your gifting strategy:
- Use qualified charitable distributions if you need to take RMDs.
- Donate appreciated stock to avoid paying capital gains tax.
- Combine several years of gifting to maximize your itemized deduction.
- Consider contributing to a 529 plan.
Your Tax Strategy Simplified
With continued shifts in tax policy, staying proactive with your tax planning can help you take advantage of new opportunities and avoid unexpected liabilities. Withum’s Tax Planning Resource Center provides timely insights, planning tips and compliance reminders tailored to your needs.
Retirement Plan Contribution Limits
| Retirement Plans | 2025 | 2026 |
|---|---|---|
| 401(k), 403(b)-402(g)(1) – Maximum Employee Elective Deferral | $23,500 | $24,500 |
| Defined Contribution Plan Total Limit (Employee + Employer) | $70,000 | $72,000 |
| Solo 401k Maximum Contribution (Employee + Employer) | $70,000 | $72,000 |
| Catch-up Contribution for the Plans Above (Age 50 or Older, Above Annual Limit) | $7,500 | $8,000 |
| NEW: Catch-up Contribution Age 60-63 | $11,250 | $11,250 |
| IRA Contribution Limit | $7,000 | $7,500 |
| IRA Catch-up Contribution (Age 50 or Older, Above Annual Limit) | $1,000 | $1,100 |
| Roth IRA Contribution Limit | $7,000 | $7,500 |
| Roth IRA Catch-up Contribution (Age 50 or Older, Above Annual Limit) | $1,000 | $1,100 |
| SEP IRA Maximum Contribution | $70,000 | $72,000 |
| SIMPLE Maximum Contributions | $16,500 | $17,000 |
| SIMPLE Catch-up Contribution (Age 50 or Older, Above Annual Limit) | $3,500 | $3,600 |
| NEW: Catch-up Contribution Age 60-63 | $5,250 | $5,500 |
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Financial Planning In Uncertain Times
Establish a game plan and be opportunistic.
Many of our planning strategies can serve as an effective foundation for optimizing outcomes. During periods of market and/ or political uncertainty, it is important not to lose sight of these foundational strategies.
Roth Conversions
- Converting a regular IRA to a Roth IRA allows clients to remain in control of their marginal tax bracket while shifting resources to another financial “bucket.”
- EXAMPLE – converting investments intended for long-term growth while in an unusually low- income tax bracket can be a great way to help mitigate income tax drag on portfolios and reduce future RMDs.
Tax Loss Harvesting
- For Taxpayers who are not in the 0% long-term capital gains tax bracket – realize positions at a loss as frequently as possible. Losses can be carried forward indefinitely to offset capital gains and $3,000 of ordinary income. Some states do not allow tax loss carry-forward.
- EXAMPLE – sell a position in an ETF to realize a $2,500 loss and reinvest in a different but similar ETF to keep a similar market exposure.
Maximize & Reallocate 401(k) Contributions
- Plan to increase contributions for the year ahead.
- EXAMPLE – set a reminder to log in (or ask the appropriate payroll person) and increase your contribution percentage of pay to coincide with the first payroll of January.
Review Budget and Personal Balance Sheet
- Reducing unnecessary spending can free up cash to save and invest. Eliminate credit card debt.
- EXAMPLE – automate savings and investments into a brokerage account and reduce discretionary spending where possible. It is prudent to ensure financial stability in case economic conditions worsen.
Review your Financial Plan
- Monitor your financial plan on a recurring basis (perhaps annually) to keep your plan current.
- EXAMPLE – contact your advisor to update your plan based on changes in goals, income and any ”what-if” scenarios you would like to stress test
Disclaimer: No action should be taken without advice from a member of the Withum Wealth Management Team because tax law changes frequently, which can have a significant impact on this guide and your specific planning possibilities.