The end of the year is quickly approaching, which means you’ve likely got a lot on your to-do list. But don’t forget to wrap up your financial planning tasks for 2024.

Year-end financial housekeeping is a gift that keeps giving well after the tinsel and toys are tucked away. Not only does it ensure you end the year strong, it also helps start the new year on the right financial note.

Here are our top moves for putting a bow on your 2024 finances.

#1: Mind Your RMDs

Did you reach age 73 this year? If so, don’t forget to take annual required minimum distributions (RMDs) from your IRA, SEP IRA, SIMPLE IRA, and retirement plan accounts.

If your 73rd birthday was in 2024, you technically have until April 1, 2025, to take your first RMD. But since RMDs are counted as taxable income—and you must also take your second RMD in 2025—it’s often better to take your first RMD in 2024 to avoid paying taxes on two RMDs next year.

Anyone who turned 74 or older this year must take their RMDs by December 31, 2024.

The required withdrawal rules for inherited IRAs can differ, so be sure to reach out to your Vista team if you have questions.

#2: Make the Most of Giving

Gifts to family or friends must also be made by December 31 to take advantage of the annual gift tax exclusion. Individuals can give up to $18,000 ($36,000 for married couples filing jointly) this year to any number of recipients with no federal gift tax consequences.

Charitable donations must also be made by December 31 to count on your 2024 tax return. Remember, donations of appreciated stock can often be more tax-savvy than direct cash gifts. Individuals with retirement accounts can also redirect up to $105,000 in RMDs to a charitable organization. Known as a qualified charitable distribution (QCD), this is a great way to reduce taxable income and fulfill your giving goals.

#3: Max Your Retirement Plan Contribution

Are you still working? It’s always a good idea to double-check your retirement plan contributions and ensure you’re maximizing your savings.

Savers under age 50 can sock away $23,000 in a 401(k), 403(b) or Thrift Savings Plan this year. Individuals aged 50 and older can also make a catch-up contribution of $7,500 for a total contribution of $30,500.

Contribution limits will increase in 2025 to $23,500 ($31,000 for individuals aged 50-59). And good news for those approaching retirement: 60-, 61-, 62-, and 63-year-olds can take advantage of an additional “super catch-up” contribution of $3,750 for a total contribution of $34,750 in 2025.

#4: Use Up Your Flexible Spending Account

A flexible spending account is a savings vehicle that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. While you can carry $640 in flexible spending funds into 2025, you must spend the remainder or risk losing it.

To use up surplus funds, refill prescriptions, get new glasses or contacts, replace hearing aids, or purchase other reimbursable items. (Get the full list of IRS-approved expenses.)

 #5: Maximize IRA, 529 Plan, and HSA Contributions

Sure, you have until April to contribute to your IRA, 529 college savings plans, and Health Savings Accounts (HSAs). But a little pre-planning never hurts.

This year, people under 50 can contribute $7,000 to an IRA. Those 50 and older can contribute an additional $1,000 ($8,000 total).

Many states offer tax deductions or credits for residents’ contributions to 529 college savings plans. Oregon, for example, provides a refundable credit of up to $340 for married taxpayers who fund a state-sponsored 529 plan.

Maximum HSA contributions in 2024 are $4,150 for individuals and $8,300 for families, plus a $1,000 catch-up for those 55 and older.

#6: Consider a Roth Conversion

In a lower-income year, a Roth conversion may make sense. Here’s what to consider:

  • Tax bracket: If you expect to be in a higher tax bracket in the future, it might make sense to “prepay” taxes today by converting to a Roth IRA instead of paying a higher tax rate on future IRA withdrawals.
  • Time horizon: Ideally, you’ll want to wait 10 to 15 years before taking withdrawals from a converted Roth IRA. This enables tax-free account growth that may exceed the amount you pay in taxes to convert.
  • Cash flow: Be sure you have enough cash outside the IRA to pay conversion taxes.

The deadline to convert to a Roth IRA is December 31. While Roth conversions don’t make sense for everyone, it’s worth checking in with your Vista team to see if a conversion is a fit for you.

Looking Forward to a Prosperous 2025

With your financial housekeeping out of the way, a last task is to take stock of the year before setting goals for 2025.

What did you achieve this year, and what lessons will you take with you into 2025? Holidays are a good time to reflect on the year’s highlights and challenges and to contemplate how these experiences shape your journey. Please consider sharing these with us in our next conversation.

Remember, your Vista team is here to help you live a happier and more prosperous life!