How to Prepare Your Finances for a Successful New Year

Travis Tsukayama, CFP® CFA
Nov 7
6 min read

Image Credit | Atmosphere | Adobe Stock

It was late into the evening on December 31, 2019. Fireworks lit up the sky in Honolulu as revelers partied into the new year. I had celebrated with my family earlier in the evening, but now I sat in my apartment with an Excel spreadsheet open on my laptop. I know it sounds very nerdy. But this was something important.

I keep an annual tradition that brings financial advisors more joy than receiving cookies on Christmas Day. Each December, I perform a year-end financial review. The benefits are twofold. First, I can ensure I don’t miss any time-sensitive deadlines, usually pertaining to retirement account contributions and tax moves. Second, this exercise allows me to get a jump on next year’s planning.

In my experience, many people don’t create personal financial goals for the new year. It’s difficult to achieve success when the destination isn’t clear – setting goals clearly defines where you want to end up.

A thorough review consists of goal setting and more. There are many moving pieces to account for as the year draws to a close. I should have started my review in 2019 weeks earlier but it’s good to follow through with the process at any time. Even if it’s when the clock strikes midnight on a new year.

In today’s post, you’ll learn:

- What year-end deadlines to be aware of when reviewing your finances.

- What items should be reviewed to achieve financial success year after year.

- Why upcoming milestone birthdays are a key ingredient to planning for success.

Year-End Deadlines for Tax and Retirement Planning

I usually begin my review by taking inventory of actions I still need to take and the deadline by which they need to be done. Most financial planning action must be done by the end of the calendar year or by the tax filing deadline the following April.

Financial Planning Moves to Finish by December 31

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Taking your annual required minimum distribution (RMD): Unless it’s your very first RMD, your annual RMD must be satisfied by the end of the calendar year.
Donations to charity: Gifts to charity, either by giving cash and appreciated stock or through Qualified Charitable Distributions, must be done by the end of the year to qualify for a tax deduction this year. [https://www.andrewsllc.com/post/charitable-giving-strategies-for-retirees-how-to-maximize-your-tax-benefits].
Gifts to family and friends: Non-charitable gifts must be made by year-end to use the gift tax annual exclusion ($19,000 per recipient in 2025).
Roth conversions: If you plan on converting funds from your pre-tax IRA to Roth IRA, ensure the conversion is done by the end of the year (12/31) to count as income for that tax year.
Capital gain and loss harvesting [https://www.andrewsllc.com/post/capital-gains-and-losses-how-to-strategically-lower-your-tax-bill]: Capital gains and losses in your taxable accounts must be realized by year-end to count in the current year’s tax filing.
Employee contributions to 401k or Solo 401k: Employee contributions (including catch-up) generally must be made by the end of the year (12/31).

Financial Planning Moves to Complete by April’s Tax Filing Deadline

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IRA contributions (including Traditional and Roth IRA): Make your IRA contributions for the prior tax year by the tax filing deadline, not including extensions.
SEP IRA, Simple IRA, and Solo 401k employer contributions: These retirement plans allow employer contributions for the prior tax year to be made up until the tax filing deadline including extensions (October 15th if an extension is filed).
Pay your tax bill: Any balance due must be paid by the April tax filing deadline. This applies even if you request an extension.
File for an extension: This gives you until October 15th to file your tax return, but any tax balance due must be paid by April’s deadline.

Items to Review for Financial Success in the New Year

Image Credit | hadjanebia | Adobe Stock

I have a client who writes down his financial goals every year. He develops them independently and brings the list to my office in January for discussion. The goals are specific and include his target for savings and income expectations from the account.

As you might imagine, he often achieves these goals – not because they’re easy, but because he’s meticulous and intentional about planning. He pairs goal setting with consistent follow-through.

As part of your year-end review, start planning for next year’s success starting with the following:

Evaluate Cash Flow Changes

Start by reviewing your income and expenses in the current year. Did you end the year with a surplus or deficit? Getting clear on your cash flow situation helps you set realistic spending and saving goals in the new year.

Look ahead to any expected changes to your income and expenses in the coming year. Will you have any upcoming one-time expenses (new car, home renovation, fancy vacation)? Will you have any new sources of income (pension, Social Security benefits, inheritance) in the coming year?

Can you Save More?

If you are looking to save more into your retirement or emergency fund, this is an ideal time to adjust your contributions. Each additional dollar saved into your 401k retirement plan or grandchild’s 529 college savings account benefits from the power of compounding and grows over time. Compare your rate of savings this year with your long-term targets and make adjustments if needed to stay on course for your goals.

Life Changes and Milestone Birthdays

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This step is often overlooked – identify whether there are any big life changes or significant birthdays coming up in the next year.

One of the most common and predictable life changes is retirement. There’s a long list of items to check off before you retire and many take time to complete. Getting a head start on understanding your 401k rollover options, health insurance coverage, and retirement lifestyle can make for a smoother transition. [https://www.andrewsllc.com/post/how-to-retire-happily-lessons-on-living-well-beyond-the-numbers]

Each year, I see 1-2 clients relocating to a new state after retiring. With physical relocation comes planning for moving expenses, changes in the monthly budget, and changes in state tax laws. Giving yourself time to plan financially for the move makes for an easier transition and now is an ideal time to form the strategy.

Looking ahead to next year, you might find yourself reaching an age of significance for your personal financial planning. Here are a few of the important milestone ages and the financial implications to think through:

We’ll start with age 50: Eligible for catch-up contributions to 401k and IRAs.

Age 55: If you separate from your employer, you can take penalty-free withdrawals from that employer’s 401k plan under the Rule of 55.

Age 59 ½: You can withdraw from IRAs and 401k penalty-free. Withdrawal of earnings from Roth IRAs are now penalty-free if you have had a Roth IRA funded for more than 5 years.

Age 62: Earliest age to claim Social Security benefits, though they will be permanently reduced.

Age 65: Eligible to enroll in Medicare.

Age 66-67: Full retirement age for Social Security, depending on birth year.

Age 70: Maximum Social Security benefit reached. No point in waiting to claim benefits beyond this age.

Age 73: Required Minimum Distributions start for those born prior to 1960.

Age 75: Required Minimum Distributions start for those born in 1960 or later.

Most of the items above require some planning. Adding a review of milestone birthdays is a way to be proactive instead of letting these critical ages catch you by surprise.

In Summary

A year-end financial review helps you stay on track with deadlines, make adjustments for the new year, and set clear financial goals. By looking at the year ahead for life changes and milestone birthdays, you can capitalize on key opportunities and avoid costly surprises.

You don’t need to wait until the start of the new year to plan! Getting a jump on your year-end review now will guide you nicely into 2026. Then you can swap the Excel spreadsheet for champagne and fireworks this New Year’s Eve.

Thanks for reading. Have a great day.

Travis

Investment advisory services offered through Andrews Advisory Associates LLC, a registered investment advisor. This blog is not meant to give investment advice. Before investing in any advisory product please carefully read any disclosure documents, including without limitation, the firm’s Form ADVs. The information herein is provided for informational purposes only, and does not constitute an offer, solicitation or recommendation to sell or an offer to buy securities, investment products or investment advisory services. Nothing contained herein constitutes financial, legal, tax, or other advice. These opinions may not fit your financial status, risk and return profile or preferences. Investment recommendations may change, and readers are urged to check with their investment adviser before making any investment decisions.

In my experience, many people don’t create personal financial goals for the new year. It’s difficult to achieve success when the destination isn’t clear – setting goals clearly defines where you want to end up.

In today’s post, you’ll learn:

- What year-end deadlines to be aware of when reviewing your finances.

- What items should be reviewed to achieve financial success year after year.

- Why upcoming milestone birthdays are a key ingredient to planning for success.

Year-End Deadlines for Tax and Retirement Planning

I usually begin my review by taking inventory of actions I still need to take and the deadline by which they need to be done. Most financial planning action must be done by the end of the calendar year or by the tax filing deadline the following April.

Financial Planning Moves to Finish by December 31

Taking your annual required minimum distribution (RMD): Unless it’s your very first RMD, your annual RMD must be satisfied by the end of the calendar year.

Gifts to family and friends: Non-charitable gifts must be made by year-end to use the gift tax annual exclusion ($19,000 per recipient in 2025).

Roth conversions: If you plan on converting funds from your pre-tax IRA to Roth IRA, ensure the conversion is done by the end of the year (12/31) to count as income for that tax year.

Capital gain and loss harvesting [https://www.andrewsllc.com/post/capital-gains-and-losses-how-to-strategically-lower-your-tax-bill]: Capital gains and losses in your taxable accounts must be realized by year-end to count in the current year’s tax filing.

Employee contributions to 401k or Solo 401k: Employee contributions (including catch-up) generally must be made by the end of the year (12/31).

Financial Planning Moves to Complete by April’s Tax Filing Deadline

IRA contributions (including Traditional and Roth IRA): Make your IRA contributions for the prior tax year by the tax filing deadline, not including extensions.

SEP IRA, Simple IRA, and Solo 401k employer contributions: These retirement plans allow employer contributions for the prior tax year to be made up until the tax filing deadline including extensions (October 15th if an extension is filed).

Pay your tax bill: Any balance due must be paid by the April tax filing deadline. This applies even if you request an extension.

File for an extension: This gives you until October 15th to file your tax return, but any tax balance due must be paid by April’s deadline.

Items to Review for Financial Success in the New Year

I have a client who writes down his financial goals every year. He develops them independently and brings the list to my office in January for discussion. The goals are specific and include his target for savings and income expectations from the account.

As you might imagine, he often achieves these goals – not because they’re easy, but because he’s meticulous and intentional about planning. He pairs goal setting with consistent follow-through.

As part of your year-end review, start planning for next year’s success starting with the following:

Evaluate Cash Flow Changes

Start by reviewing your income and expenses in the current year. Did you end the year with a surplus or deficit? Getting clear on your cash flow situation helps you set realistic spending and saving goals in the new year.

Look ahead to any expected changes to your income and expenses in the coming year. Will you have any upcoming one-time expenses (new car, home renovation, fancy vacation)? Will you have any new sources of income (pension, Social Security benefits, inheritance) in the coming year?

Can you Save More?

Life Changes and Milestone Birthdays

This step is often overlooked – identify whether there are any big life changes or significant birthdays coming up in the next year.

Looking ahead to next year, you might find yourself reaching an age of significance for your personal financial planning. Here are a few of the important milestone ages and the financial implications to think through:

We’ll start with age 50: Eligible for catch-up contributions to 401k and IRAs.

Age 55: If you separate from your employer, you can take penalty-free withdrawals from that employer’s 401k plan under the Rule of 55.

Age 59 ½: You can withdraw from IRAs and 401k penalty-free. Withdrawal of earnings from Roth IRAs are now penalty-free if you have had a Roth IRA funded for more than 5 years.

Age 62: Earliest age to claim Social Security benefits, though they will be permanently reduced.

Age 65: Eligible to enroll in Medicare.

Age 66-67: Full retirement age for Social Security, depending on birth year.

Age 70: Maximum Social Security benefit reached. No point in waiting to claim benefits beyond this age.

Age 73: Required Minimum Distributions start for those born prior to 1960.

Age 75: Required Minimum Distributions start for those born in 1960 or later.

Most of the items above require some planning. Adding a review of milestone birthdays is a way to be proactive instead of letting these critical ages catch you by surprise.

In Summary

A year-end financial review helps you stay on track with deadlines, make adjustments for the new year, and set clear financial goals. By looking at the year ahead for life changes and milestone birthdays, you can capitalize on key opportunities and avoid costly surprises.

You don’t need to wait until the start of the new year to plan! Getting a jump on your year-end review now will guide you nicely into 2026. Then you can swap the Excel spreadsheet for champagne and fireworks this New Year’s Eve.

Thanks for reading. Have a great day.

Travis

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