The final weeks of the year are a great time to improve your finances. Small actions—like boosting retirement savings, using FSA funds, and reviewing insurance—can reduce taxes and set you up for a stronger new year.
Why Year-End Is the Perfect Time to Reset Your Finances
As the year winds down, many Santa Ana and Orange County residents are juggling holiday plans, work deadlines, and family commitments. It’s also one of the best times to pause and check your financial health.
A few thoughtful moves before December 31 can help:
- Lower your future tax bill
- Strengthen your retirement savings
- Avoid leaving money on the table
You don’t need to do everything—even one smart step can make a difference.
💰 Max Out (or Boost) Retirement Contributions
Take a look at how much you’ve contributed so far to your:
- 401(k)
- 403(b)
- Traditional or Roth IRA
If your budget allows, increasing contributions—even slightly—can help reduce taxable income and grow long-term savings through compounding.
Example:
A Santa Ana employee increases their 401(k) contribution by just 2% in December. That small change lowers taxable income now and grows over time.
🏥 Use Your FSA and Consider Adding to Your HSA
Flexible Spending Accounts (FSA)
Many FSAs are “use it or lose it.” Check your balance and consider:
- Scheduling dental or vision appointments
- Buying eligible medical supplies
Health Savings Accounts (HSA)
HSAs offer triple tax advantages:
- Contributions are pre-tax
- Growth is tax-free
- Withdrawals for medical expenses aren’t taxed
If you have an HSA, year-end is a great time to increase contributions.
🎂 Required Minimum Distributions (RMDs)
If you’re 73 or older, you may be required to take distributions from certain retirement accounts before year-end.
Missing an RMD can result in penalties.
If you don’t need the income, qualified charitable distributions (QCDs) from an IRA can support causes you care about while potentially reducing taxable income.
📉 Review Investments for Tax Efficiency
Look at your taxable investment accounts and consider:
- Tax-loss harvesting: Selling investments at a loss to offset gains
- Gain harvesting: Locking in gains if you’re in a lower tax bracket this year
Up to $3,000 in net capital losses may be deductible against ordinary income.
🔁 Consider a Roth Conversion Strategy
If your income was lower than usual this year—or you expect higher taxes in retirement—a Roth IRA conversion may be worth discussing with a professional.
For higher-income earners, a backdoor Roth strategy may be an option:
- Contribute to a traditional IRA
- Convert it to a Roth IRA
This strategy requires careful planning but can provide long-term tax benefits.
❤️ Make Charitable Gifts Thoughtfully
If charitable giving is part of your plan:
- Donations made before year-end may reduce taxes if you itemize
- Giving directly from retirement accounts can be tax-efficient in some cases
🔍 Review Your Bigger Financial Picture
Year-end is also a great checkpoint to:
- Confirm your emergency fund is adequate
- Review insurance policies and coverage limits
- Update beneficiaries on retirement and financial accounts
- Revisit estate planning documents if life circumstances changed
Takeaway
The end of the year isn’t about perfection—it’s about progress. Even one smart financial move can help you enter the new year more confident and prepared.
And remember: these are general ideas, not personal tax or investment advice. Always consult a qualified tax or financial professional before making changes.
🤝 Local Guidance You Can Trust
Since 1989, Neighborhood Insurance Agency has helped Santa Ana and Orange County families protect what they’ve worked hard to build.
We help clients:
- Review insurance as part of their financial picture
- Compare coverage across multiple carriers
- Make informed, confident decisions
👉 Contact us today for a free insurance review or quote and start the new year with peace of mind.
Santa Ana, CA 92705
Reference
Internal Revenue Service. (2024). Retirement plans and IRAs.
https://www.irs.gov/retirement-plans
Internal Revenue Service. (2024). Health savings accounts.
https://www.irs.gov/publications/p969
Fidelity Investments. (2024). Year-end financial planning checklist.
https://www.fidelity.com/viewpoints/personal-finance/year-end-checklist
