As the year winds down and the holiday season approaches, December brings a natural opportunity to pause, reflect, and realign. For retirees, this season is a perfect time to give your financial life a little attention before the calendar flips to a new year. Many financial rules reset on January 1, so December is a key time to take advantage of opportunities that can benefit both your 2025 and 2026 finances.

Here are five timely and thoughtful financial actions to consider during the holiday season:

1. Review Your Required Minimum Distributions (RMDs)

If you’re 73 or older, the IRS requires you to take minimum distributions from certain retirement accounts, such as traditional IRAs or 401(k)s. The deadline to take your RMD is December 31^st, and missing it can result in penalties.

If you haven’t taken your RMD yet, this is a good time to review your plan or put one in place. If you’re a donator, you may also want to explore Qualified Charitable Distributions (QCDs), which allow you to transfer up to $108,000 (in 2025) directly from an IRA to a qualified charity. The transferred amount can satisfy all or part of your Required Minimum Distribution, and it is excluded from taxable income.¹

2. Assess Tax-Loss Harvesting Opportunities

If you have taxable investment accounts, this time of year can be ideal for reviewing your portfolio to take advantage of unrealized losses before the year ends. Selling investments at a loss to offset gains (known as tax-loss harvesting) may reduce your capital gains tax liability. This strategy isn’t right for everyone and must be handled carefully to avoid IRS wash-sale rules. It’s best to review it with your advisor before making changes.

3. Update Beneficiaries and Estate Documents

The holiday season often brings families together, which can make it a good time to revisit your estate plan and beneficiary designations and talk about your wishes. You can ensure your will, trust, powers of attorney and beneficiary designations are updated and reflect your intentions. Life changes in your family like the birth of grandchildren, loss of a loved one, or a change in relationships may prompt updates.

4. Give Within Your Family

Supporting your family financially isn’t something you have to leave until your estate plan is executed. There are many ways to support loved ones now that can help build a foundation for generational wealth.

Whether it’s helping with education costs, starting a 529 plan for a grandchild, or offering guidance in their own financial journey, assisting your family financially can be both rewarding and may help serve you in your own legacy planning.

5. Maximize Your Retirement Savings

If you’re still contributing to your 401(k) and you intend to maximize your contributions, make sure you’ve completed this by December 31^st. For 2025, the annual contribution limit is $23,500. You can add an additional $7,500 in catch-up contributions for those over the age of 50 or $11,250 if you’re between the ages of 60-63.²

If you’ve already maxed out your 401(k) contributions, and you want to add more to your retirement savings, you may want to consider adding contributions to an IRA as well. These also allow for tax-deferred growth and have a maximum contribution limit of $7,000 for the year or $8,000 if you are 50 or older.²

The Importance of Year-End Planning

Amid the lights, laughter, and holiday traditions, don’t overlook the financial opportunities of this season. A few thoughtful steps in December can set you up for a stronger financial start to the new year.

And remember: you don’t have to navigate it alone. A year-end conversation with your financial advisor can help clarify your priorities and help give you confidence that the following year’s finances will continue to support the retirement you’ve worked so hard for. Reach out to us today for a review.

TLDR (Too Long; Didn’t Read)

December is the ideal time for retirees to tidy up their financial plans before year-end resets take effect. Review your RMDs, update estate documents, consider family gifting strategies, and maximize retirement contributions. A quick year-end check-in can help position your finances for a smoother start to 2026.

FAQ: Common Social Security Questions

1. What year-end financial steps should retirees take?

Retirees could review RMDs, update estate documents, consider family gifting, and maximize retirement contributions before December 31.

2. Why is December a good time for financial planning?

Many tax rules and contribution limits reset on January 1, so year-end planning helps you capture opportunities that may not be available once the new year begins.

3. How do I avoid penalties on RMDs?

Take your RMD by December 31. If unsure how much you need to withdraw, consult your advisor to avoid IRS penalties.

4. What documents should I review at year-end?

Wills, trusts, powers of attorney, healthcare directives, and beneficiary designations could all be reviewed for accuracy and updated after major life changes.