Zacks Investment Management

William M. from Jacksonville, FL asks: Seasons greetings, Mitch! I’m curious to hear if you have a handful of yearend financial tips you could share…whether they involve investing, personal budgeting, retirement planning, etc. I realize that’s a broad question but any ideas you have would be appreciated. Happy Holidays!

Mitch’s Response:

Thanks for emailing, William, and happy holidays to you as well!

I have a few tips and yearend financial checklist items I can share with you. I do think it’s a great idea to take a close look at your financial situation, investment portfolio, etc. at yearend and early in the new year to ensure the ‘house is in order,’ to set some new goals and to get yourself ready for a successful year.

Let’s start with retirement plans and health savings account contributions. I like to put these savings limits first because, in my view, saving should be a top household priority.

Retirement plans like 401(k)s and Simple IRAs have yearend deadlines for 2024 contributions, but you can contribute to IRAs and HSAs through tax day next year. To note, not everyone is eligible to contribute to the accounts below, and in some cases, contributions may not be fully tax deductible.

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• IRAs and Roth IRAs²

$7,000 – Maximum Contribution Limit for IRAs and Roth IRAs

$1,000 – Age 50+ ‘Catch-Up’ Contribution

Note: Income levels affect tax deductibility of IRA contributions and the ability to participate in Roth IRA plans.

• 401(k), 403(b), & 457

$23,500 – Maximum Contribution Limit

$7,500 – Age 50+ ‘Catch-Up’ Contribution

• Health Savings Accounts (HSAs)

$4,150 – Individuals

$8,300 – Families

$1,000 – Age 55+ ‘Catch-Up’ Contribution

Next up is taking time to review your goals, investment time horizon, and your household budget. Has anything changed since last year that warrants an adjustment to your asset allocation? Is there a new expense coming up in 2025 that you need to plan for from a cash flow perspective? Are there any areas of your household budget where spending can be trimmed?

These are all questions that should inform how you spend and save money each month, and also how your portfolio is positioned in terms of liquidity, cash flow generation, and growth. A shift towards shorter-term needs—perhaps assisting with a grandchild’s college education or paying for long-term care—could mean adjusting an asset allocation towards cash flow generation. A longer-term focus—such as passing assets to heirs or adding charitable contributions to an estate plan—could mean tilting a portfolio more towards growth.  

A final tip I have for the holiday season is to consider charitable giving. Oftentimes, making charitable contributions does not factor into your tax filing for the year, because folks take the standard deduction instead of itemizing. But if your charitable contributions are large, you may consider itemizing instead.

A unique opportunity exists for charitable contributions as an RMD, however. According to the IRS, IRA owners age 70½ and older can make up to $105,000 in tax-free charitable donations during 2024 through qualified charitable distributions (QCDs). For those aged 73 or older, qualified charitable distributions QCDs also count toward the year’s required minimum distribution (RMD). Married couples, if both meet qualifications and have separate IRAs, can donate up to $210,000 combined.³

Generally, IRA distributions are taxable, but QCDs remain tax-free if sent directly to a qualified charity. To make a QCD for 2024, IRA owners need to ensure the transaction is completed by year-end.

I hope you find these tips helpful, and encourage all readers to reach out to Zacks Investment Management for help in the new year.

With that being said, I invite you to download our free guide, 7 Secrets to Building the Ultimate DIY Retirement Portfolio⁴, which offers valuable insights for effective retirement planning in 2025, including:

• How to accurately establish your retirement income needs
• The two phases of determining your asset allocation
• Developing an investment discipline that allows you to get good results over time
• Investing rules to help you avoid self-sabotage
• Plus, our views on key steps to create and maintain the ultimate retirement portfolio

If you have $500,000 or more to invest, get this guide for a step-by-step approach to building a retirement portfolio that can help you achieve your goals and secure your future.

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