End-of-Year Financial Planning: Steps That Can Strengthen Your Finances Before 2026
The final weeks of the year are a chance to review your finances, make adjustments, and prepare for the new year.
A few intentional steps in November and December can improve your tax situation, strengthen your savings, and help you start 2026 with clarity instead of pressure.
This guide breaks down key actions that matter for most households, explained in plain language and supported by official sources.
Review Your Spending and Cash Flow
Before making any year-end decisions, look at how much money came in and how much went out this year. Even a simple review can help you see patterns you missed earlier.
A fast and simple way to see if you’re on pace is to make sure you check three items at year-end:
- Total spending
- Savings progress
- Debt changes over the year
If you notice areas of overspending or higher debt balances than expected, this is the time to reset your approach for 2026.
Check Your Withholding and Estimated Taxes
If you changed jobs, received a raise, worked freelance, or had inconsistent income at any point this year, your tax withholding may not match your actual tax liability.
The IRS offers a withholding estimator that helps taxpayers calculate if they need to adjust before the year closes.1 This reduces the chance of an unexpected tax bill in April.
Maximize Retirement Contributions if You Can
For many households, the final weeks of the year are the last opportunity to make contributions that count for the 2025 tax year.
You can:
- Increase your 401(k) contribution for your final pay periods
- Contribute to a Traditional or Roth IRA, subject to income rules
- Review employer match opportunities you might have missed earlier
The IRS publishes annual contribution limits for each plan.2 Even a small increase at year-end can improve next year’s financial position.
Use Flexible Spending Account Funds
Many health FSAs follow a “use it or lose it” structure. Some plans allow a small carryover or a grace period, but others do not.
The IRS provides specific guidance on FSA carryovers.3 Review your plan’s rules and use eligible funds before the deadline.
Eligible expenses often include:
- Eye exams
- Prescriptions
- Dental appointments
- Certain over-the-counter supplies
Check with your benefits provider to confirm your plan’s rules.
Prepare for Required Minimum Distributions (RMDs)
If you are at the age where RMDs apply, ensure your distribution is processed before December 31. The IRS requires annual minimum withdrawals from Traditional IRAs and most workplace retirement plans beginning at a specific age.4 Missing the deadline can result in penalties.
If you are unsure whether the requirement applies to you this year, review the IRS rules or speak with a tax professional.
Evaluate Charitable Giving Plans
Year-end is a common time for charitable contributions. If you plan to itemize deductions, donations completed by December 31 can be included for the 2025 tax year.
The IRS outlines documentation requirements for cash and non-cash donations.5 Many taxpayers overlook the need for written acknowledgment for gifts of $250 or more.
Charitable giving does not need to be limited to cash. Items such as clothing, household goods, and appreciated assets may also qualify when donated to eligible organizations.
Review Investments and Consider Tax-Loss Harvesting
If your taxable investment accounts include positions that declined in value, selling them may allow you to offset gains elsewhere.
This technique, often called tax-loss harvesting, must be completed before December 31.
Only consider this if it fits your financial goals and tax situation. The IRS publishes the rules that apply to capital gains and losses.6
Update Beneficiaries and Important Documents
Life changes can make older beneficiary designations outdated. Year-end is a logical time to update:
- Retirement accounts
- Life insurance
- Health savings accounts
- Transfer-on-death instructions
Updating beneficiaries is free, fast, and critical to ensuring your accounts transfer as intended.
Evaluate Emergency Savings
The Federal Reserve’s Economic Well-Being of U.S. Households report shows that many Americans would struggle to cover an unexpected expense.7 The end of the year is an opportunity to review your savings and make adjustments before the new year begins.
Even a small automatic transfer each month can build stability over time.
Plan for Known 2026 Expenses
Look ahead at predictable costs in the coming year. These might include:
- Insurance premiums
- Property taxes
- Vacations or travel
- Tuition or childcare
- Vehicle maintenance
- Home repairs
Planning for known expenses reduces the need for high-interest credit later.
The Bottom Line
The end of the year offers a chance to review your finances, take advantage of tax opportunities, and build a stronger foundation for the year ahead. Small decisions made now can make a meaningful difference in 2026.
If you want help reviewing your plan or identifying which steps matter most for your situation, you can meet with our team. OneDigital’s Financial Academy also provides educational resources to support your financial goals throughout the year.
1. IRS. “Tax Withholding Estimator.” https://www.irs.gov/individuals/tax-withholding-estimator
2. IRS. “Retirement Plan Contribution Limits.” https://www.irs.gov/retirement-plans
3. IRS. “Flexible Spending Arrangements.” https://www.irs.gov/publications/p969
4. IRS. “Required Minimum Distributions.” https://www.irs.gov/retirement-plans/required-minimum-distributions-rmds
5. IRS. “Charitable Contributions.” https://www.irs.gov/charities-non-profits/charitable-organizations
6. IRS. “Capital Gains and Losses.” https://www.irs.gov/publications/p550
7. Federal Reserve. “Economic Well-Being of U.S. Households.” https://www.federalreserve.gov/publications/report-economic-well-being-us-households.htm
This material has been prepared for informational and educational purposes only. It is not intended to provide and should not be relied on for tax, legal or accounting advice and are not applicable to any person or organization’s individual circumstances. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Additionally, any statements made reflect our views and/or best estimates, are not intended to guarantee any particular result.
Investment advice offered through OneDigital Investment Advisors LLC.
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