Author: Karen Schaeffer, CFP®

Can you hear the 2025 clock ticking more loudly each day? As the holiday season hustles us along with endless activities, do yourself a financial favor and consult this year-end checklist for opportunities to think like a financial planner and benefit from smart money decisions. Every suggestion won’t apply to you or be possible to accomplish with all your other commitments. But remember, every little bit helps. Pick at least one that resonates with you and make it a priority.  

1.  Tax Planning Moves to Consider Before December 31

Maximize Your Retirement Contributions

• TSP/401k contributions
• Consider catch-contributions if you’re 50+
• Evaluate whether pretax Traditional or after-tax Roth contributions make more sense this year

Review Capital Gains and Loses

• Harvest losses to offset gains if appropriate
• Consider rebalancing gains if you can take them in a lower tax bracket

Optimize Charitable Giving

• Donate appreciated securities for extra tax efficiency
• Consider Qualified Charitable Distributions (QCDs) if you’re over 70½
• Use donor-advised funds for flexible giving

2.  Retirement Account Distributions

Required Minimum Distributions

• Confirm RMDs are satisfied for IRAs, TSP/401(k), and inherited retirement accounts
• Review withholding elections to avoid surprises in April

Roth Conversion Opportunities

• Evaluate whether converting to Roth before year end could reduce lifetime taxes, especially if 2025 has been a low-income year

3.  Investment Portfolio Review

Reassess Risk Tolerance and Asset Allocation

• Has your capacity for risk shifted due to any life changes?
• Are you still aligned with long-term goals?
• Are you making rational rather than emotion-driven decisions?

Rebalance Your Portfolio

• Trim your overweight positions
• Reinvest in underweight areas to maintain your strategy
• Consider tax implications before making changes

4.  Insurance and Risk Management Review

• Is Life and Disability insurance coverage still appropriate and are the beneficiary designations up to date?
• What’s your plan for long term care needs?
• Have property and Casualty policies kept pace with rising values?

5.  Cash Flow and Savings Review

• Are cash reserves at reasonable levels to handle unanticipated problems or opportunities.
• Set retirement contributions and other savings levels to take effect immediately in 2026

6.  Estate and Legacy Planning

• Review your documents and update for any major life changes
• Confirm beneficiary designations on life insurance, retirement accounts and transfer on death accounts reflect your current objectives
• Assess gifting strategies to family, 529 plans, or charities

Karen Schaeffer, CFP® is the Managing Member and Co-founder of Schaeffer Financial LLC, a financial consulting firm in suburban Washington, D.C. She has been advising clients for over thirty-five years and has developed a diverse client base including professional women, Foreign Service Officers, foreign nationals, and Federal government employees. She has been presenting seminars for NITP for over 25 years. 

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