November hits differently when you're within a few years of retirement.
While everyone else is arguing about whether Die Hard is a Christmas movie (it is), you're probably thinking about RMDs, tax brackets, and whether you remembered to update your 401(k) contributions. Fun stuff.
But here's the thing: the weeks between Thanksgiving and New Year's aren't just about holiday shopping and bowl games. If you're nearing retirement or already there, the end of the year comes with actual financial deadlines that can impact your taxes, retirement income, and long-term plan.
Let's walk through five financial moves you might want to consider before the clock strikes midnight on December 31st.
1. Max Out Those Catch-Up Contributions
If you're 50 or older, you get a gift from the IRS: catch-up contributions.
For 2025, you can contribute up to $23,500 to your 401(k). If you're 50 or older, you can add another $7,500 in catch-up contributions for a total of $31,000. And here's something new: if you're between 60-63, you get an even higher catch-up limit of $11,250 (bringing your total to $34,750) thanks to the SECURE 2.0 Act. If you haven't maxed out yet and you have the cash flow to do it, this is one of the simplest ways to reduce your taxable income before year-end.
Think of it like this: every dollar you contribute is a dollar that doesn't get taxed this year. And if you're in your peak earning years before retirement, you're likely in a higher tax bracket now than you will be when you're withdrawing in retirement.
What to consider: Check your last paystub. See where you're at. If you've got room and the budget allows, you might consider bumping up your contribution percentage for your last few paychecks of the year. Talk to your HR or payroll department. They can usually make changes quickly.
2. Consider a Roth Conversion (Before It's Too Late)
Here's a strategy that doesn't get enough attention: Roth conversions.
If you've got money sitting in a traditional IRA or 401(k), you can convert some (or all) of it to a Roth IRA. You'll pay taxes on the conversion now, but then that money grows tax-free forever. No required minimum distributions. No taxes when you withdraw it in retirement.
Why does year-end matter? Because once January 1st hits, you've lost the opportunity to manage your 2025 tax situation.
When this makes sense:
- You're recently retired but haven't started Social Security yet (lower income year)
- You had a down year in the market (convert more shares at a lower tax cost)
- You're 60-72 and want to reduce future RMDs
- You want to leave tax-free money to heirs
When to be careful:
- It could bump you into a higher tax bracket
- It might affect Medicare premiums (IRMAA) two years down the road and/or reduce or eliminate your ACA subsidies
- You don't have cash outside the IRA to pay the taxes
This one's nuanced. It's worth running the numbers with someone who understands your full picture. The IRS has details on Roth conversions here.
3. Double-Check Your Tax Withholding
Nobody likes surprises in April. Especially not the kind that come with a four-figure tax bill.
If you're recently retired or semi-retired, your tax situation probably changed this year. Maybe you:
- Started taking Social Security
- Rolled over a 401(k) and took a distribution
- Sold some investments
- Had less withheld because you're no longer getting a W-2 paycheck
What to consider: Pull up your last few pay stubs (if you're still working part-time) or check your 1099s from IRA distributions. Use the IRS Tax Withholding Estimator to see if you're on track.
If you're short, you've still got time to make an estimated tax payment or adjust withholding before December 31st. Think of it like this: paying the IRS now (on your terms) beats paying penalties and interest later (on theirs).
4. Don't Forget Your RMD (If You're 73+)
If you turned 73 this year (or you're older), you've got a required minimum distribution (RMD) to take from your traditional IRA and 401(k) accounts.
Miss the deadline? The IRS hits you with a penalty. It used to be a brutal 50%, but recent law changes dropped it to 25% (or 10% if you fix it quickly). Stil, not a bill you want.
The deadline: December 31st. No extensions. No excuses.
One exception: If you turned 73 in 2025, this is your first RMD year. You can delay your first distribution until April 1, 2026. But be careful, if you do that, you'll have to take two RMDs next year (the delayed 2025 one and your regular 2026 one). That could push you into a higher tax bracket. For most people, it's cleaner to just take it in 2025.
Check the IRS RMD guidelines if you want the full details.
5. Use a QCD If You're Charitably Inclined
Here's a move that makes you feel good and saves on taxes: the Qualified Charitable Distribution (QCD).
If you're 70½ or older, you can donate up to $108,000 (for 2025) directly from your IRA to a qualified charity. The best part? It counts toward your RMD, but it's not included in your taxable income.
Think of it like this: instead of taking your RMD, paying taxes on it, and then writing a check to charity, you just send the money straight from your IRA to the charity. Same impact, way better tax outcome.
The catch:
- It has to go directly from your IRA to the charity (no middleman)
- It has to be a qualified 501(c)(3) organization
- You don't get a charitable deduction (because you're already excluding it from income)
If you're someone who gives to church, local nonprofits here in Orlando, or other causes you care about, this is worth exploring. More info on QCDs here.
Bonus: Two Quick Housekeeping Items
While you're in year-end mode, knock these out too:
Review your beneficiaries. When's the last time you checked your IRA, 401(k), and life insurance beneficiaries? If it's been more than a couple years (or if you've had major life changes), take 10 minutes and make sure they're up to date.
Don’t forget your taxable brokerage accounts too! They typically allow for beneficiaries through a TOD (transfer on death) provision.
Consider tax-loss harvesting. If you've got investments in a taxable brokerage account that are down, you can sell them to realize the loss and offset gains elsewhere. You can then buy something similar (just not identical, watch the wash-sale rule) to stay invested. It's like a tax deduction hiding in your portfolio.
The Bottom Line
Year-end financial planning isn't glamorous. There's no champagne toast when you nail your RMD or optimize your Roth conversion.
But here's what you do get: confidence. Peace of mind. The knowledge that you've taken care of the details so you can actually enjoy retirement instead of stressing about it.
And if you're realizing this stuff is more complicated than you thought? That's exactly why people hire a fiduciary financial advisor. Someone who can look at your full picture, run the numbers, and help you make smart moves before the deadlines hit.
Frequently Asked Questions
Q: What happens if I miss my RMD deadline?
A: The IRS penalty is 25% of the amount you should have withdrawn (or 10% if you correct it quickly). You'll also still owe income tax on the distribution. Bottom line: don't miss it.
Q: Can I do a Roth conversion if I'm still working?
A: Absolutely. In fact, if you're in a lower-income year (maybe you're semi-retired or took time off), it can be a great strategy. Just make sure you understand the tax impact before you pull the trigger.
Q: How do I know if I'm withholding enough in taxes?
A: Use the IRS Tax Withholding Estimator. Plug in your income sources, deductions, and what you've already paid. It'll tell you if you're on track or if you need to adjust.
Q: Do I need to take an RMD from my Roth IRA?
A: Nope. Roth IRAs don't have RMDs during your lifetime. That's one of the big benefits. Your heirs will eventually have to take distributions, but you don't.
Q: What's the deadline for a Qualified Charitable Distribution?
A: December 31st. The donation has to be completed by year-end to count for this tax year.
Q: I'm 72. Do I need to take an RMD this year?
A: Not if you turned 72 in 2025. The SECURE 2.0 Act moved the RMD age to 73. If you turned 73 (or older) in 2025, then yes, you need to take your RMD by December 31st (or April 1st of ’26 if you turned 73 in ’25).
Important Disclosure: The information provided in this article is for general educational purposes only and should not be considered personalized financial advice. Every individual's financial situation is unique, and what may be appropriate for one person may not be suitable for another. Before making any financial decisions, you should consult with a qualified financial advisor who can review your specific circumstances. This content does not create a client-advisor relationship.
