As the year ends, it's important to take a moment to ensure your financial strategy is well-positioned for the new year. Whether you're already enjoying retirement or close to it, making a few strategic adjustments now can set the stage for continued financial security and peace of mind. November is the perfect time to wrap up any year-end tasks, so you can relax and enjoy the holiday season knowing your finances are in good shape.

Here’s a checklist of actionable steps to take before the year ends:

1. Consider a Roth Conversion

If you’re nearing or in retirement, now may be a good time to consider a Roth conversion. By converting part of your traditional IRA to a Roth IRA, you can pay taxes on those funds at today’s rates and enjoy tax-free withdrawals in the future. This strategy can be particularly effective if you expect to be in a higher tax bracket later or want to reduce the tax burden on your heirs.

Keep in mind that a Roth conversion must be completed by December 31 to count for the current tax year. Discuss with a financial advisor whether this strategy aligns with your broader retirement and tax planning goals.

2. Make the Most of Charitable Giving

For many people, the holiday season is a time for generosity and giving back. If charitable giving is part of your financial plan, November is an ideal time to review your contributions and consider making additional donations before year-end to maximize tax benefits.

Here are a few strategies to consider:

• Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can make charitable donations directly from your IRA and avoid paying taxes on the withdrawal. This can also count toward your required minimum distribution (RMD), reducing your taxable income.
• Donor-Advised Funds (DAFs): DAFs offer the flexibility to contribute now, receive an immediate tax deduction, and decide which charities to support later. This is a great way to maximize your giving in a tax-efficient manner while supporting causes that matter to you.

3. Review Your Required Minimum Distributions (RMDs)

If you’re 73 or older, you’re likely required to take RMDs from your tax-deferred accounts, such as IRAs or 401(k)s. Missing an RMD can result in significant penalties—50% of the amount you failed to withdraw—so it’s crucial to ensure you’ve met this requirement before year-end.

If you haven't taken your RMD yet, now is the time to review your accounts and ensure the proper amount has been withdrawn. You can also work with your financial advisor to coordinate RMDs with your broader income strategy to minimize taxes.

4. Tax-Loss Harvesting Opportunities

If you’ve experienced any losses in your taxable investment accounts this year, tax-loss harvesting can be a smart strategy to consider before year-end. By selling investments that have lost value, you can use the capital losses to offset any gains and reduce your overall tax liability. You can also deduct up to $3,000 in losses against your regular income.

However, be mindful of the wash-sale rule, which prevents you from repurchasing the same or a substantially identical investment within 30 days. Your HFG advisor can guide you through the process and help you make the most of this tax-saving opportunity.

5. Review and Update Your Estate Plan

If it's been a while since you've reviewed your estate plan, November is the perfect time to revisit it. This is especially important if you've experienced major life changes in recent years, such as the birth of a grandchild, the passing of a loved one, or changes to your financial situation.

The holiday season, when families often gather, can be an ideal time to have open discussions about your estate plan. These conversations ensure that everyone understands your wishes and reduces the potential for misunderstandings down the line.

Key areas to review include:

• Beneficiary Designations: Ensure that all beneficiary designations on your retirement accounts, insurance policies, and other assets are current.
• Wills and Trusts: Confirm that your will and any trusts accurately reflect your wishes.
• Health Care and Financial Powers of Attorney: Make sure these important documents are up-to-date, giving trusted individuals the authority to make decisions on your behalf if needed.

Taking the time now to update your estate plan will give you and your family peace of mind knowing everything is in order for the future.

By addressing these important financial steps now, you can finish the year on strong financial footing and enjoy the holiday season with peace of mind. At HFG Wealth Management, we’re here to help guide you through these decisions and ensure your financial strategy aligns with your goals.

Ready to make sure you’ve covered all the bases before year-end? Schedule a quick check-in with our team today, and we’ll walk through your personalized checklist to ensure everything is in place for a smooth transition into 2025.

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