Financial Planning Fridays #166: Year-End 2025 Planning

Hi friends. As we enter the last quarter of the year, we wanted to share a few key year-end financial planning strategies that we focus on for our clients here at Presilium. These steps can help you make the most of today's opportunities and set up a stronger financial foundation for the future.

First, tax loss swaps. Have you taken the time to review the investments inside your taxable accounts for any positions that are temporarily down? Market volatility and market downturns, like the one we saw earlier this year, can provide great opportunities to capture taxable losses by completing tax loss swaps. These losses can then be used to offset gains in the current year, and, perhaps equally as important, these losses can also be carried forward indefinitely and used to offset gains in future years as well. Tax loss swaps are also one of a few tactics that may greatly increase your overall return net of taxes over time. We do this automatically for our clients, but we find that our new clients have rarely done this in the past.

Second, have you taken full advantage of the opportunity to fully fund your retirement accounts, your IRA and Roth IRA, and your 529s? These all come with various contribution limits and restrictions, which are important to know, and year end is a great time to evaluate and re-evaluate any additional avenues to save a bit more and improve your current or future tax picture.

Third, on the other side of this coin, have you taken the full required minimum distribution from your own retirement accounts or your inherited retirement accounts? This is important to stay on top of in order to avoid unnecessary taxes and penalties, and it should be completed well ahead of the December 31st deadline.

Fourth, have you looked at converting part or all of your retirement accounts to a Roth IRA to allow these funds to begin to grow tax-free? While tax rates are near historic lows, it is more important than ever to consider converting a portion of your retirement accounts to a Roth IRA. This is a big decision that we have discussed in detail in prior videos.

Finally, charitable giving. Have you considered establishing a donor-advised fund or transferring stock or cash to support the organizations that are most important to you? If you are donating to charitable organizations, or plan to on a regular basis, it may make sense to establish a donor-advised fund with one large lump sum that can grow for you over time, which you can then use to make these donations on an ongoing basis, all the while capitalizing on one large deduction this year.

At Presilium, we're hard at work on these year-end financial planning strategies for our clients. We are constantly thinking about how, what, and when we can work on to ensure that our clients have the best possible financial future. Please feel free to reach out to us if we can help you or your family in any way with your year-end planning. Thank you, and I look forward to talking with you next Friday morning.