It’s that time of year again to try and check off a few financial “to-do’s” in-between all the holiday festivities. As we look forward to 2026, below are a few end of year items to review and consider before ringing in the New Year.
- Portfolio Review – Even with all the ups and downs in the first part of the year, 2025 has turned out to be a strong performing year so far for both stocks and bonds overall. It may be time to consider a formal review and rebalance of your portfolio. A financial professional can help you determine if rebalancing may make sense given your individual situation and discuss any potential tax implications that you may incur by rebalancing. They can also help you assess whether you may be able to take advantage of a strategy called tax loss harvesting (taking a tax loss to potentially offset realized tax gains) in taxable investment accounts. The rules around tax loss harvesting can be complex and a misstep may negate what you were intending to accomplish. That is why it’s important to work with a qualified financial professional who can help strategize and guide you through the process.
- Review Retirement Plan Contributions – Try your best to maximize contributions to your employer sponsored retirement accounts between now and the end of the year. “Maximizing contributions” may mean different things to different people. For some, it may mean contributing the annual maximum contribution allowed under current IRS guidelines. For others, it may mean contributing enough to take full advantage of an employer match. Everyone’s situation is different, and you should aim to save what your budget will allow for.
- Take Your Required Minimum Distributions - If you are 73 or older, be sure you are taking out your Required Minimum Distributions (“RMDs”) from various retirement accounts as needed before the end of the year to avoid penalties. Keep in mind that waiting until the last minute can put you at risk of the custodian that holds your account not processing your distribution request by the required year-end deadline. Also, consider a Qualified Charitable Distribution (QCD) if you don’t need the money from your Required Minimum Distributions for living expenses and you’re charitably inclined. A financial professional can explain how a QCD works and how to qualify.
- Review Debt Repayment Goals and Adjust Payments – Utilize December to review your annual budget and actual spending so far in 2025. Was your actual spending more or less than what you were budgeting for? Are there areas you could cut back or cut out completely? Also, do you have a payoff plan in place for consumer debts like credit cards or other debts that may have a variable interest rate? After reviewing your budget, decide if there is room to potentially start paying down certain debts more aggressively in 2026 and adjust your debt payments accordingly.
- Use Up FSA Money – Do you need a new pair of glasses or box of contacts? If you have money that you’ve been putting into an FSA (Flexible Spending Account), consider using up the account before year end with qualifying expenses. Be sure to check with your benefits department first, however, FSA dollars typically don’t carry forward into the new year (some companies have an exception and allow up to $660 to be carried forward or they have a small grace period of 2.5 months generally). It’s important to pay attention to deadlines with FSA accounts because they are typically “use it or lose it” accounts.
Wishing everyone a happy holiday season and a prosperous 2026.
Securities and Advisory Services offered through LPL Financial, member FINRA/SIPC, a Registered Investment Advisor. LPL Financial and Croxall Capital Planning do not provide tax or legal advice. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.