As the year draws to a close, now is the perfect time to revisit your financial plan and make smart, intentional moves that can strengthen your financial wellbeing for the year ahead. Many strategies—especially tax-related ones—must be completed before December 31 to count for the current tax year. Here are the most important steps Minnesota families and individuals should consider.
✅ 1. Maximize Your Retirement Contributions
Year-end is your last chance to contribute to employer plans like 401(k)s and 403(b)s.
2025 contribution limits:
401(k)/403(b): $23,000 (plus $7,500 catch-up for age 50+)
IRA: $7,000 ($8,000 for age 50+) — you have until April 15, but planning now reduces last-minute stress
Increasing retirement contributions not only boosts long-term savings, it also may reduce taxable income—something especially valuable for Minnesotans in higher tax brackets.
✅ 2. Review Your Tax Efficiency
Minnesota taxpayers can benefit from year-end tax planning strategies such as:
• Tax-Loss Harvesting
If you have investments with losses, you may be able to offset capital gains elsewhere in your portfolio.
• Charitable Contributions
Donating appreciated securities, making Qualified Charitable Distributions (QCDs) from IRAs, or contributing to donor-advised funds can all reduce your taxable burden.
• Minnesota Tax Withholding Check
Ensure your state withholding aligns with your 2025 income expectations so you’re not surprised at tax time.
✅ 3. Consider a Roth Conversion
If you are in a lower tax bracket this year or expect higher income in the future, converting traditional IRA dollars to Roth IRA may make sense.
Roth conversions must be completed by December 31, and Minnesota does tax these conversions—so thoughtful planning is essential.
✅ 4. Use Your FSA, HSA, and Health Benefits Before They Expire
Flexible Spending Accounts (FSAs): Many are “use it or lose it.”
Health Savings Accounts (HSAs): Contribute up to the annual limit and let funds grow tax-free.
Schedule doctor, dental, or vision appointments now before schedules fill.
✅ 5. Check Your Required Minimum Distributions (RMDs)
If you're age 73+ (or inherited certain accounts), you must take RMDs before year-end to avoid steep penalties.
A Roth conversion strategy may also interplay with RMD requirements—your advisor can help determine the best approach.
✅ 6. Revisit Your Portfolio and Risk Level
Market conditions shift every year. Now is the right time to:
Rebalance your portfolio
Review performance vs. goals
Ensure risk exposure still matches your age, timeline, and comfort level
✅ 7. Review Your Insurance and Estate Planning Documents
Life changes fast—make sure your plans reflect today’s reality:
Beneficiary designations
Life insurance coverage
Wills and trusts
Long-term care planning
Disability coverage
Small adjustments now can prevent larger issues later.
✅ 8. Start Financial Planning for 2026 Early
If one of your goals includes retirement, a home purchase, education funding, or planning for a major life transition (such as divorce, business sale, or downsizing), early strategy makes all the difference.
Final Thoughts
Year-end is one of the most impactful times to review your financial picture. Small actions taken now can help reduce taxes, strengthen your portfolio, and position you for a confident start to 2026.
If you'd like help reviewing your year-end financial opportunities, Wealth Planning Group LLC is here to support you with clarity, strategy, and a plan tailored to your goals.