Key Year-End Strategies That Matter Most | Wealth Planning Update

As we round the corner into the new year, many individuals are wondering what they need to get done ahead of year-end, and how they can position themselves for success in 2026. As a team, here are a few key considerations we review with our clients:

• Tax Loss Harvesting – Are there any unrealized capital loss opportunities in your portfolio that you can sell? This would help offset any capital gains that have been realized this year. You can also carry forward losses or apply a portion of those losses to offset taxable including wages.
• Income Acceleration/ Deceleration – For retirees, it’s important to understand lifestyle needs and how to optimally fund each need. Ahead of taking any additional retirement distributions , consider your potential income sources and the effect they will have on your marginal income tax bracket, including their effect on your Medicare IRMAA brackets.
• Roth Conversions – Converting Traditional IRA assets to Roth IRA assets can be extremely beneficial for individuals who want to focus on generational gifting or those who will be in a higher income tax bracket in retirement.
• Lifetime Gifting – For those who gift annually to family members or friends or for those who are presently above the lifetime exemption amount, ensure you finalize your 2025 gifts strategy. As a reminder, every person can gift up to $19,000 per person this year free of gift tax and without a hit to their federal lifetime exemption.
• Beneficiary Designations – It’s best practice to review your accounts and make sure your beneficiaries reflect your wishes every year. This is particularly important for retirement accounts.

With charitable giving top of mind for so many people, it’s important to detail the available options for individuals, depending on their tax filing and age.

If you are 70 ½ or older, consider re-directing any Required Minimum Distributions to your charities of choice. This is called a Qualified Charitable Distribution (QCD). The maximum distribution using QCDs is $108,000 per person this year, and you want to make sure those charities have enough time to process the transactions before the end of the year.

A Donor Advised Funds (DAFs) is also an incredible option to leverage for individuals who are charitably inclined. As a reminder, these accounts allow investors to donate non-cash gifts such as highly appreciated stock and, in return, receive a charitable deduction for the entire gift upfront while also avoiding capital gains taxes. With these vehicles, givers are empowered to facilitate gifts to any 501(c)3 organizations with those funds and do so on their own timeline.

If you plan to file your taxes using the increased standard deduction, it may make more sense to hold off until 2026, when the new OBBBA above the line deduction benefit will be available to taxpayers.

What’s ahead for retirement account contributions in 2026?

The chart below provides a quick update on those contribution changes due to inflation. It’s best to make adjustments to your withholdings to get a jump start on savings for the next year.

Lastly, for those who need to focus on ACA Open Enrollment for health insurance, a quick reminder: this window closes December 15 for any enrollments, renewals, or changes for coverage beginning on January 1. While there is an extended deadline in some states, we recommend reviewing your coverage as soon as possible, as you would need a qualifying event (divorce, marriage, job change, etc.) to re-open the enrollment window. Take a look at the coverage and plans in depth, rather than focusing solely on the premium cost.

As always, it’s important to consult with your Main Street Research advisor about your individual needs. While these strategies can be valuable, they shouldn’t be applied in isolation. Our entire team is here to support you with any questions about your portfolio or your holistic wealth planning strategy.

We hope this Wealth Planning Update is helpful, and if you’d like to revisit planning with our team, please feel free to reach out. If you think this update would benefit your colleagues, family, and friends, please feel free to share it. If you have a friend or family member who is interested in a no-cost portfolio review, please let us know.

Thank you again for your continued vote of confidence in our work.

Watch