As the end of the year approaches, it's the perfect time to take charge of your financial planning. While financial tasks can seem overwhelming, empowering yourself with proactive decisions can make a world of difference. Let’s explore four actionable strategies to enhance your financial well-being before December 31st.
1. Strategize Charitable Giving
Consider donation bunching or utilizing a donor-advised fund. If you’re over 70½, using a Qualified Charitable Distribution from your IRA can also fulfill your required minimum distribution when you turn 73.
2. Fund Your HSA
Take advantage of the 2025 HSA limits: $4,300 for individuals and $8,550 for families. HSAs offer triple tax benefits and are powerful tools for both short-term and long-term planning.
3. Explore Roth IRA Conversions
A lower tax bracket this year might make it the perfect time to convert. Remember, it’s not suitable for everyone, so consider it based on your individual circumstances.
4. Maximize Retirement Contributions
Don't miss out on the 2025 contribution limits: $23,500 for 401(k)s (plus $7,500 catch-up if you're over 50) and $7,000 for IRAs (plus $1,000 catch-up if over 50). These opportunities can help reduce taxable income and build future wealth.
Taking a little time now can significantly impact your financial outcomes for the year ahead. Not all strategies are suitable for everyone, so consult with a Alex & Ashley from Next Bloom Wealth for personalized advice.