As we close out 2025, it’s the perfect time to make sure your financial plans are aligned for the year ahead. Contribution limits are changing, new rules are taking effect, and several deadlines could impact your taxes, retirement savings, gifting strategies, and more. A few smart moves before year-end can help you start 2026 on a stronger financial footing. Below are the key updates and reminders to guide your planning.
Gifting:
Annual gifts must be completed by December 31. The annual exclusion amount is $19,000 per recipient.
Retirement Plan Contributions:
- 401(k), 403(b), Thrift Savings Plan, and most 457 plans:
Maximum employee contributions are $23,500 for 2025 ($24,500 in 2026).
The catch-up contribution for those age 50+ is $7,500 in 2025 ($8,000 in 2026).
Total maximum contribution: $31,000 in 2025 ($32,500 in 2026). - Enhanced catch-up contributions (age 60–63):
Beginning in 2025, individuals ages 60–63 may contribute an enhanced catch-up of $11,250, which remains unchanged for 2026. - After-tax requirement for high-income earners:
Starting in 2026, all catch-up contributions for individuals earning over $145,000 (indexed for inflation) must be made as Roth (after-tax) contributions.
SIMPLE IRA:
Maximum contribution is $16,500 in 2025 ($17,000 in 2026), with a catch-up contribution of $3,500 in 2025 ($4,000 in 2026) for those age 50+.
Health Savings Accounts (HSAs) for 2025:
$4,300 for individual coverage ($4,400 in 2026)
$8,500 for family coverage ($8,750 in 2026)
The catch-up contribution for those age 55+ is $1,000.
IRA Contributions (Traditional and ROTH):
Must be made by April 15, 2026, for the 2025 tax year.
Contribution limits are limited to $7,000 ($7,500 in 2026)
The catch-up contribution for those 50+ is $1,100.
Simplified Employee Pension (SEP-IRA):
SEP contributions can be made up to your tax filing deadline, including extensions.
Maximum contribution for 2025: $70,000 (subject to the 25% of compensation limit).
Unused 529 Plans:
Unused 529 funds may be rolled into a Roth IRA for the beneficiary, up to a lifetime maximum of $35,000, provided the account has been open for at least 15 years.
You may also transfer funds to another 529 plan beneficiary.
Required Minimum Distributions (RMDs):
If you turn 73 in 2025, you must take your first RMD by December 31, 2025.
If you turn 73 in 2026, notify your tax professional to account for the additional taxable income.
Beneficiary IRAs:
Annual withdrawals are required beginning in 2025 for most beneficiaries within the 10-year rule.
Penalties for missed RMDs were waived for tax years 2021–2024, but apply starting in 2025.
Note: Certain exceptions apply if the original owner died before their required beginning date.
Review Your Cash Reserves:
Review your cash reserves to ensure they can cover unexpected expenses, short-term needs, or employment changes.
A typical household should maintain six months of essential expenses, though appropriate amounts range from three to twelve months depending on your situation.
Review Your Estate Documents:
Review your estate documents to ensure they reflect any changes in circumstances and confirm that all beneficiaries are current.
Protect Yourself Against Scammers:
Run a credit report to check for unexpected activity.
Consider identity-protection services.
Update passwords periodically.
Avoid unknown links, emails, and phone calls.
Maintain Detailed Records:
Maintain detailed records to ensure your survivor, executor, or power of attorney can access essential documents, photos, videos, and digital accounts – including online access to all financial institutions.
Review Your Goals:
Revisit your financial planning goals early each year to ensure your strategies align with your short- and long-term objectives.
Thoughtful preparation now can make a meaningful difference in the year ahead. Taking time to review your savings, tax strategies, estate plans, and financial goals ensures you’re positioned for a confident start to 2026. If you have questions about any of these updates or would like help evaluating your personal situation, please reach out – we’re here to assist and guide you through every step.
Sources:
HSA contribution limits 2025 and 2026 | Fidelity
401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 | Internal Revenue Service
Retirement plan and IRA required minimum distributions FAQs | Internal Revenue Service
https://acrobat.adobe.com/id/urn:aaid:sc:us:a4813a62-fd65-4a68-85f4-7209dec08853
Understanding 529 rollovers to a Roth IRA
