A Pre-Retiree’s Year-End Tax Planning Checklist: 5 Strategic Moves

While the last few months of the year are dedicated to holiday shopping, family gatherings, and time spent with loved ones, consider making room in your schedule to check on your finances. As you prepare for retirement, these last several weeks of the year present a critical opportunity to adjust contributions, rebalance accounts, and fine tune your strategy before December 31st. For pre-retirees in their peak earning years, here is a year-end tax planning checklist offering five tax-focused moves.   

If you’re 50 or older, catch-up contributions offer one of the most effective ways to boost retirement savings before the end of the year — assuming you have the cash flow. 

New in 2025, taxpayers between 60 and 63 will have the ability to make “super” catch-up contributions — meaning you can save even more during these final high-earning years. In 2025, eligible plan participants can contribute a total of $34,750 to their 401(k), which is $11,250 more than the standard contribution limit. Other workplace plans, including SIMPLE IRAs and 403(b)s, have super catch-up contributions available, but traditional IRAs do not.¹  

Before ramping up contributions, keep in mind that your retirement savings strategy should reflect your anticipated retirement timeline. The “Rule of 55” allows for penalty-free withdrawals from a 401(k) for those who choose to retire from their employer at age 55 or later. Otherwise, the standard withdrawal age is 59.5.² If you’d like to retire before age 55, you may want to balance your tax-advantaged accounts with more flexible and liquid options, such as taxable accounts. Since you won’t be able to access your retirement accounts before 59.5 without penalty, increasing funds in more accessible accounts can help bridge the gap. 

Always consult a financial professional before beginning withdrawals from a retirement account to ensure you aren’t incurring penalties and are optimizing your withdrawal strategy.   

The next thing to consider on your year-end tax planning checklist is your HSA. Health savings accounts are available to those with high-deductible health insurance policies, as determined by the IRS each year. If you are offered an HSA, consider contributing the maximum annual limit to make the most of its triple tax advantages: 

• Contributions are deductible. 
• Growth is tax-free. 
• Qualified withdrawals are tax-free. 

The list of qualified withdrawals is extensive but primarily related to medical and healthcare costs (excluding most regular insurance premiums).³   

The funds in an HSA roll over from year to year, even if you leave your employer. In addition, once you turn 65, you may use withdrawals for any expense penalty-free (though you’ll still owe income tax on non-medical withdrawals). 

Once you enroll in Medicare, however, you can no longer contribute to an HSA. If you’re within a few years of enrollment, maximizing HSA contributions now can create a powerful resource for covering future healthcare costs or general expenses after age 65. 

With the right timing, a Roth conversion can be an effective strategy for pre-retirees looking to reduce their taxable income in retirement. If your income leaves some room in your current tax bracket, converting part of your traditional IRA to a Roth before the end of the year can help you take advantage of today’s tax rates. 

Many retirees find that their income doesn’t drop dramatically in early retirement — especially once Social Security, pensions, and Required Minimum Distributions (RMDs) begin. Converting now lets future growth compound tax-free, potentially reducing taxable income later. 

Keep in mind, Roth conversions can also affect Medicare Income-Related Monthly Adjustment Amount (IRMAA) thresholds, which is the increase to your Medicare premiums based on your prior year’s income. Exceeding certain income thresholds can temporarily raise Medicare Part B and D premiums, but those surcharges only apply for one year and are recalculated annually. For many, the long-term benefit of tax-free withdrawals out of their Roth IRA may very well outweigh a short-term bump in premiums, but an advisor can help you determine the best course of action for you.  

If you’re in your peak earning years, charitable giving can play a strategic role in managing taxable income. 

A donor-advised fund (DAF), for example, enables you to capture a large charitable deduction in a high-income year, while retaining the flexibility to distribute gifts over time — even well into retirement. Many pre-retirees fund DAFs in their final working years, then use those assets for annual giving until they turn 70.5, when qualified charitable distributions (QCDs) become available directly from IRAs. 

You can also “bunch” multiple years of gifts into one tax year to exceed the standard deduction and itemize — then take the standard deduction the following year. Bunching may be especially appealing in years you choose to donate appreciated assets. Rather than sell the asset, pay capital gains, and donate the proceeds, direct donations to your DAF or charity of choice are tax deductible (and maintain the full value of the asset, a benefit for the receiving organization). 

By reviewing your taxable portfolio before December 31, you may find valuable opportunities to harvest tax losses and offset capital gains or other taxable income. Credent’s Investment team excels at capturing opportunities for tax-loss harvesting on behalf of our clients. This can be an especially powerful move if you’re gearing up for a major financial event, such as a business sale or stock option exercise, or if you are in a high-tax year.

For charitably minded investors, there’s even a potential “triple benefit” to tax-loss harvesting before gifting appreciated securities:  

• Reduce current capital gains. 
• Avoid capital gains on the gifted assets.
• Receive a full-value deduction for the charitable contribution. 

The cumulative effect may meaningfully lower your total tax bill while aligning your investments with your long-term charitable goals. However, speak to your advisor first about the limitations and considerations. 

Consider the end of this year as your checkpoint for aligning your savings, taxes, and charitable goals before entering the new year — and soon, a whole new phase of life. Whether it’s making the most of catch-up contributions, exploring Roth opportunities, or rethinking charitable giving, completing items on this year-end tax planning checklist can help reduce your lifetime tax burden and position your retirement income for greater flexibility. 

If you’d like to discuss any of these year-end tax planning checklist strategies in more detail, reach out to our team using the form below.