The blur of the holiday season can lull people into focusing on sales at the expense of crucial year-end financial housekeeping, which could save them more money than shopping discounts ever could. Dec. 31, 2025 is the last chance to make the following key money moves, which can pad your savings, lower your tax bill and set you up for financial success in 2026. Contribute To Employer-Based Retirement Funds Although Vanguard suggested contributing as much as possible early in the year to maximize compou ...

Financial Strategies for Year-End Preparation - The article emphasizes the importance of taking financial actions before the end of the year to alleviate stress during the holiday season and prepare for 2026 [1][2]. Tax Strategies - Harvesting tax losses is recommended, especially in September, which is typically a weaker month for stock performance. Losses can offset capital gains and reduce overall tax bills, with up to $3,000 in excess losses applicable to ordinary income [3]. - It is crucial to avoid wash sales when harvesting tax losses, which occur if a substantially identical security is purchased within 30 days before or after the tax loss is taken [3]. Retirement Contributions - Maximizing contributions to retirement accounts, such as 401(k) plans, is advised before year-end. Contributions made before the end of the year count for the 2025 tax year [4]. - For individuals aged 60 to 63, the catch-up contribution limit increases to $11,250 for 2025, allowing for significant boosts to long-term account balances if spread out over the remaining months [5]. Portfolio Management - Portfolio rebalancing is suggested as a proactive measure, even before year-end. A review of the portfolio can help ensure alignment with investment goals, especially after significant market gains [6][7]. - Given the stock market's performance, with gains exceeding 20% in the past two years and a year-to-date return over 13% as of mid-September, reallocation may be beneficial to mitigate risks from potential market corrections [7]. Income and Capital Gains Monitoring - Monitoring income levels is important, particularly in low-income years, as this may present opportunities to realize capital gains at a lower tax rate. Some taxpayers may qualify for a 0% rate on long-term capital gains depending on their taxable income [8].