Top Five Year-End Planning Moves to Consider
As the end of the year approaches, it's an opportune time to review your financial status and make strategic decisions that can impact your financial wellbeing in the coming year. Implementing certain financial moves before the year ends can potentially save you money, optimize your taxes, and set a solid foundation for the future.
Here are the top five financial moves you should consider before the calendar flips:
1. Maximize Retirement Contributions
Contributing to retirement accounts, such as 401 (k)s, IRAs, or Roth IRAs, before the year ends can bring several advantages. Firstly, it allows you to take advantage of tax-deferred or tax-free growth potential. Maxing out your contributions can reduce your taxable income for the year, potentially lowering your tax bill.
Moreover, funding these accounts to the maximum extent possible sets the stage for a more financially confident retirement. The power of compound interest means that the earlier you invest, the more time your money has for growth potential.
Don't miss the opportunity to contribute as much as you can before the year concludes.
2. Review and Adjust Investment Portfolios
A thorough review of your investment portfolio is crucial as the year ends. Assess whether your investments are aligned with your financial goals and risk tolerance.
Consider rebalancing your portfolio to maintain your desired asset allocation. Rebalancing involves selling some overperforming assets and reinvesting in underperforming ones to realign with your original strategy. This move not only mitigates risk but also positions your investments for potential growth in the upcoming year.
3. Take Advantage of Tax-Loss Harvesting
Tax-loss harvesting involves selling investments that have experienced a loss to offset realized gains. By strategically selling underperforming assets, you can reduce your tax liability on capital gains.
Be mindful of wash-sale rules, which prevent you from repurchasing the same or substantially identical securities within 30 days to claim the tax benefit. Tax loss harvesting can be a valuable tool for better positioning your tax situation and seeking to enhance your overall return potential.
4. Utilize Flexible Spending Accounts and Health Savings Accounts
Check your balances in FSAs and HSAs, as these accounts often have "use-it-or-lose-it" policies for funds not utilized by the end of the year. Consider using these funds for eligible medical expenses, as they can provide substantial tax advantages.
Some FSAs might have a grace period or allow a carryover of a limited amount of funds, but it's essential to understand the specific rules governing your accounts.
5. Review Insurance Coverage and Estate Planning
Evaluate your insurance policies, including health, life, and property insurance, to ensure they still meet your needs. Life changes and evolving circumstances may necessitate adjustments to coverage levels or beneficiaries. Additionally, review and update your estate planning documents, such as wills and trusts, to reflect any changes in your life or financial situation.
Taking the time to execute these financial moves before the year ends can significantly impact your financial health and set the stage to pursue a more prosperous future.
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Consider consulting with a financial advisor to tailor these strategies to your specific circumstances and goals. By making these proactive financial decisions, you can pave the way for a more independent and confident financial journey in the year ahead.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This material was prepared by Financial Media Exchange for Nate Wyatt and the Investment Service Center’s use.
Copyright © 2025 FMeX. All rights reserved.
Last Friday, U.S. consumers, hungry for deals instead of Thanksgiving food, kicked off what is expected to be a solid holiday shopping season. A recent National Retail Federation survey suggests this Thanksgiving shopping weekend could have seen a record 187mn shoppers, with holiday retail sales expected to surpass $1tn for the first time. This season also raises an important question for investors: Who benefits most from U.S. holiday spending, domestic retailers or foreign producers?
The U.S. domestically produces most of the goods and services it consumes. Last year, imports represented just 14% of U.S. GDP. However, the U.S. may be more reliant on imports than this figure suggests, especially for goods often gifted during the holiday season. This week’s chart shows the import content of different consumer goods categories, or the share of consumer spending attributable to value added abroad, as calculated by the San Francisco Fed. When U.S. households gift electronics or apparel, over 25% of that spending goes to imports, while the remaining 75% is retained domestically. The import content of recreational nondurables, which include toys, at just 17% may surprise some. However, this is because the bulk of their costs to consumers are driven by domestic expenses and markups.
Both domestic retailers and foreign producers have reason to cheer during the U.S. holiday season. That said, with a large share of our holiday dollars spent going toward imports, investors should remember two things. First, widespread tariffs could increase the cost of spreading holiday cheer this year. Second, those looking for exposure to U.S. consumerism can likely find opportunities across international markets trading at attractive discounts relative to their U.S. peers.
Chart of the Week: BEA, Census Bureau, Federal Reserve Bank of San Francisco, J.P. Morgan Asset Management. Import content data sourced from the San Francisco Fed's May 2025 report titled "The Effects of Tariffs on Inflation and Production Costs." Analysis based on 2023 data.
Thought of the Week: BEA, Census Bureau, Federal Reserve Bank of San Francisco, National Retail Federation, J.P. Morgan Asset Management.
Index: Institute for Supply Management Manufacturing Index; PCE: Personal consumption expenditures; Philly Fed Survey: Philadelphia Fed Business Outlook Survey; PMI: Purchasing Managers' Manufacturing Index; PPI: Producer Price Index; SAAR: Seasonally
Adjusted Annual Rate
MSCI EAFE is a Morgan Stanley Capital International Index that is designed to measure the performance of the developed stock markets of Europe, Australasia, and the Far East.
Bond Returns: All returns represent total return. Index: Bloomberg US Aggregate; provided by: Bloomberg Capital. Index: Bloomberg Investment Grade Credit; provided by: Bloomberg Capital. Index: Bloomberg Municipal Bond 10 Yr; provided by: Blomberg Capital. Index: Bloomberg Capital High Yield Index; provided by: Bloomberg Capital.
Key Interest Rates: 2 Year Treasury, FactSet; 10 Year Treasury, FactSet; 30 Year Treasury, FactSet; 10 Year German Bund, FactSet. 3 Month LIBOR, British Bankers’ Association; 3 Month EURIBOR, European Banking Federation; 6 Month CD, Federal Reserve; 30 Year Mortgage, Mortgage Bankers Association (MBA); Prime Rate: Federal Reserve.
Commodities: Gold, FactSet; Crude Oil (WTI), FactSet; Gasoline, FactSet; Natural Gas, FactSet; Silver, FactSet; Copper, FactSet; Corn, FactSet. Bloomberg Commodity Index (BBG Idx), Bloomberg Finance L.P.
information from FactSet's Pricing database as provided by MSCI. Russell 1000 Value Index,
Style Returns: Style box returns based on Russell Indexes with the exception of the Large-Cap Blend box, which reflects the S&P 500 Index. All values are cumulative total return for stated period including the reinvestment of dividends. The Index used from L to R,
top to bottomare: Russell 1000 Value Index (Measures the performance of those Russell 1000 companies with lower price-to book ratios and lower forecasted growth values), S&P 500 Index (Index represents the 500 Large Cap portion of the stockmarket, and
is comprised of 500 stocks as selected by the S&P Index Committee), Russell 1000 Growth Index (Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values), Russell Mid Cap Value Index (Measures
the performance of those Russell Mid Cap companies with lower price-to-book ratios and lower forecasted growth values), Russell Mid Cap Index (The Russell Midcap Index includes the smallest 800 securities in the Russell 1000), Russell Mid Cap Growth Index (Measures the performance of those Russell Mid Cap companies with higher price-to-book ratios and higher forecasted growth values), Russell 2000 Value Index (Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values), Russell 2000 Index (The Russell 2000 includes the smallest 2000 securities in the Russell 3000), Russell 2000 Growth Index (Measures the performance of those Russell
2000 companies with higher price-to-book ratios and higher forecasted growth values).
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