7 Smart Financial Steps to Take Before the End of the Year

As the year comes to a close, it’s the perfect time to review your finances and ensure you’re on track for long-term success. A little planning before December 31 can help you reduce taxes, strengthen your investment strategy, and start the new year with confidence.

At Next Level, our team financial planners helps clients create personalized strategies to reach their financial goals. Here are seven year-end steps that can make a big difference in your overall financial picture.

1. Review Your Retirement Contributions

If you’re still working, take a close look at your contributions to retirement accounts such as IRAs or 401(k)s. Maximizing your contributions before year-end can provide valuable tax benefits and help grow your nest egg for the future.

2. Take Required Minimum Distributions (RMDs)

If you or your spouse is age 73 or older, make sure you’ve taken your Required Minimum Distribution (RMD) by December 31. Missing the deadline can lead to a 25% penalty tax on the amount you should have withdrawn.

3. Make Charitable Contributions Before Year-End

Charitable giving is a wonderful way to support causes you care about while potentially lowering your taxable income. Donations made before December 31 can be claimed as deductions on this year’s tax return.

4. Review Your Budget and Spending

Compare your actual spending to your budget for the year. Understanding where your money went can help you identify areas for improvement and create a more accurate budget for the coming year.

5. Plan for Income Changes in the New Year

If you expect to earn more next year, consider directing part of that increase into savings or investments. Allocating funds early can help you reach your goals faster and prevent lifestyle inflation from eating up your extra income.

6. Revisit Your Investment and Asset Allocation

Market changes, inflation, and life events can shift your portfolio away from its original goals. Review your investments to ensure your asset allocation still reflects your risk tolerance and long-term objectives.

7. Set Clear Financial Goals for 2026

Take some time with your family to discuss what matters most next year.

Do you want to save more for retirement or college?
Is a particular budget category consistently over budget?
Are you anticipating large expenses such as tuition or home renovations?

Setting clear goals now gives you a plan for the months ahead and helps your financial advisor tailor strategies to your needs.

Start the New Year Financially Strong

By reviewing these key areas now, you’ll be ready to step into the new year with clarity and confidence.

At Next Level Wealth Planning, our experienced financial planners in Meridian, Idaho can help you analyze your unique situation and develop a customized plan for success.