A Year-End Financial Checklist for Retirees

You can also build up reserves within your retirement account by keeping enough invested in a money market fund or similar cash position to cover the distributions you plan to take next year.

That way, “your monthly withdrawals come from cash rather than selling investments during a market dip,” Baucum says. “It’s a simple way to create stability and avoid volatility without changing your overall strategy.”

Check if your portfolio needs rebalancing

When markets perform well, as they have over the past two years, portfolios can become overweighted in stocks, Eckels says. That means you may be taking on more risk than you realize or are comfortable with.

Selling stocks or stock mutual funds that have increased in value and reinvesting those profits in less risky, fixed-income assets such as bonds, bond funds or money market funds can provide protection if the market dips next year.

Reviewing your investments also presents an opportunity to reassess your risk tolerance, which can change as you get older. Think about how you responded to market swings, like the volatility sparked by tariff concerns in the spring of 2025, to test whether your stomach for risk has changed, Eckels says.

Rebalancing is easiest in a tax-deferred retirement plan, such as a traditional individual retirement account (IRA) or 401(k), where you can sell investments without triggering capital gains taxes on the profits. But reducing risk by selling investments in a taxable brokerage account isn’t necessarily something to fear, even if it generates a tax bill, Eckels says. After all, “it means you made money.” And paying some tax now may be less painful than losing money during a future downturn because of your stock exposure, she adds.

You can also reduce capital gains taxes by selling investments that have dropped in value this year, Eckels says. The IRS allows you to use investment losses to offset gains.

If your losses exceed your gains, you can deduct up to $3,000 in losses to lower your taxable income. Any losses over $3,000 can be rolled over to lower your taxes in future years.

Take required IRA distributions

If you’re 73 or older and own a tax-deferred retirement account (or accounts), you must make minimum annual withdrawals. Make sure you’ve calculated what your required minimum distribution (RMD) should be this year and taken it in time (the deadline is April 1, 2026, if you turned 73 in 2025, or Dec. 31, 2025, if you were already over that age). Failing to withdraw the full amount can result in hefty tax penalties.

If you’re required to take a distribution but don’t need the cash, you can give up to $108,000 from your IRA to a qualified charity in 2025 if you’re at least age 70½. You can’t claim this qualified charitable distribution (QCD) as a tax deduction, but the amount isn’t included in your taxable income, as an IRA distribution typically would be.

“I helped a client switch their giving directly from their IRA using the QCD rules, and they started saving over $3,000 in taxes each year,” says Jeremy Keil, a financial adviser in Milwaukee and the author of Retire Today: Create Your Retirement Master Plan in 5 Simple Steps.

Update estate planning documents and beneficiaries

The end of the year is a good time to make sure your estate planning documents still reflect your wishes. You might have created them years ago, and the people you appointed to make medical or financial decisions for you may no longer be the right fit, Eckels says. If your children are adults now, for example, it might make sense for them to step into those roles.

Schedule an appointment with an estate planning attorney if you need to update (or create) a will or trust, name a power of attorney to make financial decisions for you if you can’t, and update (or create) a health care directive or living will that spells out what sort of end-of-life medical care you do or don’t want. 

Beneficiary designations deserve the same attention. Make sure the person or people you want to inherit your financial accounts or collect on your life insurance policy are still the ones named as your beneficiaries by logging in to your accounts or reaching out to your account administrator. “Those are easy things to update,” Eckels says.

Otherwise, your assets might end up in the wrong hands. Eckels recalls one client who, after remarrying, discovered that his ex-wife was still listed as the beneficiary on his $500,000 IRA.

Boost your itemized tax deductions

If you itemize deductions on your federal tax return, there are a couple of moves you can make before the end of 2025 to take advantage of changes to the tax rules.

The One Big Beautiful Bill (OBBB), signed into law on July 4, increased the maximum amount of state and local taxes you can claim as an itemized deduction to $40,000, up from $10,000 in 2024. One way to take advantage of this higher limit is by paying 2026 property taxes in December 2025 if you wouldn’t otherwise reach the $40,000 cap, says Jacob Martin, a financial planner with Keeler & Nadler Family Wealth in Dublin, Ohio.

You could also reap tax savings by making charitable donations you’ve planned for 2026 now. This could increase your chances of being able to deduct the full dollar amount of your contributions due to another OBBB change.

“Starting next year, there is a 0.5 percent adjusted gross income [AGI] floor on charitable giving before you can deduct those gifts,” Martin says. That means if your AGI is $100,000 in 2026, for example, you’ll be able to deduct only contributions that exceed $500.

Consider a Roth conversion

If you’re retired but not yet collecting Social Security benefits, you may be in the sweet spot for a Roth conversion, Baucum says.

“Those years when income is temporarily low are a prime window for converting traditional IRA dollars into a Roth IRA at a lower tax rate,” she says. That’s because you’ll have to pay income taxes on the amount you convert. But you can reduce your lifetime tax burden, she says, considering that Roth withdrawals, unlike traditional IRA withdrawals, are tax-free.

If you aren’t 65 and haven’t enrolled in Medicare yet, be aware that a Roth conversion could impact your future Medicare premiums. The premium for Medicare Part B — which covers doctor visits, diagnostic screenings and other outpatient care — is based on your income, and high-income adults can be swollen by a surcharge called the Income-Related Monthly Adjustment Amount (IRMAA).

“Keep tabs on IRMAA when doing your Roth conversions because how much taxable income you have now may impact your Medicare premiums two years from now,” says Bill Shafransky, a senior wealth adviser with Moneco Advisors in New Canaan, Connecticut. “It could be a rude awakening, especially if you haven’t planned out that far.”