Key Considerations for Year-End Financial Planning
1. Investment Portfolio and Asset Allocation Review
With the end of 2025 just around the corner, now is a good time to review your asset allocation and see if rebalancing your portfolio is necessary for the upcoming new year.
a. Investment allocation: With the S&P 500 growing by 16.8% Year to Date (12/1/25)and reaching all-time highs, you may consider taking some of your winnings off the table to reduce some of the risk in your portfolio. Meet your financial advisor to discuss your portfolio and see if you are comfortable with the level of risk you are taking for the upcoming year.
b. Key performing asset classes from the year: One of the key asset classes that has driven market growth is AI and technology stocks. They have surpassed expectations this year, but as a reminder, past performance is not indicative of future market performance.
c. General market highlights: Despite volatility, the market has generally responded well to the Tariffs imposed this year and has continued to grow. The S&P 500, since hitting a 52-week low of $4982.77 in early April, has grown by almost 37% (12/1/25) mainly driven by technology stocks and the investments made in AI technologies.
2. Retirement Account Key Reminders
The end of the year is a busy time for retirement accounts. It is important that distributions, contributions, and several other actions are complete by December 31st. At Quotient Wealth Partners, we work with all our clients to help ensure that they meet these deadlines and satisfy their requirements.
a. Requirement Minimum Distributions (RMDs): The IRS requires a minimum amount of money that must be withdrawn from your retirement accounts each year (your traditional IRA and 401k), typically at the age of 73.
b. Inherited IRA Requirement Minimum Distribution: After the SECURE Act was passed, those who have inherited a retirement account from someone who passed away after 2019 have to withdraw the funds in an inherited IRA within 10 years.
c. Qualified Charitable Distribution: Did you know that if you are 70½ or older, you can donate directly from your IRA to a charity, and the amount given counts toward your RMD without increasing your taxable income? This can lower your overall tax bill, reduce Medicare IRMAA surcharges, and help keep you in a
lower tax bracket. It’s one of the most tax-efficient ways for retirees to give to charity.
d. Roth Conversions: A Roth conversion is when you move money from a traditional IRA or pre-tax retirement account into a Roth IRA. You pay taxes on the amount you convert now, and then the money grows tax-free and can be withdrawn tax-free in retirement.
3. Cash Flow and Liquidity Management
Part of comprehensive financial planning extends far beyond the investments within your portfolio. The end of the year is a great time to review your cash on hand and liquidity to determine if you need to adjust your monthly distributions, take an additional distribution, and maximize the interest earned on your cash on hand.
a. Potential upcoming expenses for 2026: Planning to buy a home in 2026? Do you have a child going to college in the fall? Need a new roof? Now is a great time to connect with an advisor about potential large upcoming expenses and see if it makes sense to adjust your investments accordingly.
b. Emergency fund: It varies for every investor how much money they would like to have in cash savings. The end of the year is a great time to discuss your comfort level with your advisor. Planning for the unplanned is a key role in your financial plan.
c. Expenses during the holiday: The holidays can be an expensive time of year! Travel, gifting, decorations, meals, and the list goes on! The end of the year is a great time to connect with your advisor to replace any cash that you may have spent during this time of year and determine a financial plan to rebuild your savings.
4. Taxes
With tax season not too far away, reviewing your tax strategy is key in making sure your financial plan is successful. Keep these strategies in mind so you can have a tax efficient plan not only for this year but for years to come.
a. Tax loss harvesting: If you have a lot of concentration in a stock that has appreciated, it would be a good idea to discuss it with your advisor about Tax Loss Harvesting. Coming up with a plan to mitigate the taxes you will incur in the future could start today versus having a headache down the road. This can also help you diversify your portfolio and ensure your financial plan is not predicated on the success of one company.
b. Estimated tax payments (Q4 payments due by January 15th): If you have made Roth Conversions at the end of this year and you did not withhold for taxes,
you have until January 15th to make your estimated tax payment, so you do not incur any penalties for Tax Year 2025.
5. End of Year Deadlines
There are several tasks that need to be completed by 12/31 each year. We are here to help ensure that your checklist is complete at the end of the year.
- Required Minimum Distributions
- Roth Conversions
- Charitable Contributions / Qualified Charitable Distributions
- Tax Loss Harvesting Trades
- Capital Gain Realizations
- Familial Gifting
6. Looking Ahead
Although the year is ending, it is never too early to look ahead!
a. Forecast for the upcoming year: Itis important to plan ahead for the upcoming year whether that be upcoming expenses, major life changes (Medicare, RMD age, social security). Our advisors are here to help you plan ahead for these major life changes and show you how we will adjust your plan accordingly.
b. Maximize your retirement savings: Increase your automatic contributions each time annual limits rise, for 2026, 401(k) limits are increasing to $24,500 (or $32,500 with the catch-up contribution) and IRA limits rise to $7,500 (or $8,600 with the catch-up), so adjust your payroll deferrals or automatic transfers now to capture the full benefit.
c. Direct Indexing & Long/Short Strategies: If you hold a highly appreciated, concentrated stock position, consider working with your advisor to use direct indexing or long/short strategies to help offset capital gains. Starting early in the year gives you the most time to capture gains and losses effectively.
d. Connect with us! Schedule a complimentary meeting with one of our advisors. We host a variety of in-person and online events to help you succeed in retirement and your financial plan.