Year-End Money Moves

Markets can surprise us, but our tax bill shouldn’t. That’s the spirit of this conversation: finish the year with intention and avoid last-minute scrambling on December 31. We start with context. After a choppy stretch, the S&P 500 rallied more than most expected, driven by resilient earnings and upbeat guidance in logistics and cloud infrastructure. Tech headlines created volatility, but the underlying theme remained steady: the market rewards profits, not promises. That backdrop matters because portfolio decisions don’t live in a vacuum. If you’re sitting on too much cash or in tax-inefficient vehicles, you’re letting markets and taxes decide for you. Year-end is the moment to take back control.

The first lever is retirement savings. Maxing a 401(k) match is still the cleanest, least risky way to boost net worth—pretax contributions lower current taxable income; Roth contributions trade today’s deduction for future tax-free growth. If one spouse doesn’t work, a spousal IRA may still be on the table. And when your income dips, partial Roth conversions can be powerful: you prepay tax at a lower bracket, then let future gains compound tax-free without required minimum distributions. Most firms require Roth conversion paperwork to be submitted well before year-end; set an internal deadline in early December to avoid bottlenecks. The goal isn’t perfection; it’s getting the math to favor your future self.

Healthcare accounts come next. HSAs are uniquely tax-efficient: contributions are made with pretax dollars, growth is tax-deferred, and qualified withdrawals are tax-free. They’re stealth retirement accounts when invested, especially if you can pay current medical costs from cash flow and let the HSA compound. FSAs lack rollover flexibility in many plans, so check your “use it or lose it” rules and adjust new elections accordingly. Education savers should review 529 plans. While contributions aren’t federally deductible, growth and qualified withdrawals are tax-free, and many states offer credits. Grandparent-owned 529s can help with aid considerations, and Secure Act 2.0 introduced a path—within limits—to roll leftover 529 funds into a Roth IRA for the beneficiary, reducing the fear of “overfunding.”

Asset location is quite alpha. Place tax-inefficient assets (like high-turnover funds or taxable bonds) in tax-advantaged accounts, and hold tax-efficient assets (like index ETFs or municipal bonds) in taxable accounts where appropriate. If you own active mutual funds, ask for their year-end distribution estimates; few frustrations top paying taxes in a down year due to embedded capital gains. Consider whether tax-loss harvesting makes sense, but don’t let the tax tail wag the investment dog. Municipal bonds can reduce tax drag for higher earners, but test the after-tax yield against comparable corporate bonds and watch for AMT implications. The objective is smooth, low-friction compounding over time.

Rules keep shifting, so RMD awareness is critical. The Secure Act 2.0 moved RMD age to 73 now and 75 later this decade. Roth IRAs still do not have lifetime RMDs for the original owner, which is why conversions can significantly reshape retirement cash flow and estate planning. If you’re already taking RMDs, confirm amounts and custodial processing dates, and consider qualified charitable distributions to satisfy RMDs tax-efficiently if you’re charitably inclined. Finally, be cautious with residency changes to chase lower income taxes. Some states offset low-income taxes with higher taxes on sales or property. Evaluate total tax burden, healthcare, and domicile rules before you pack a box. The throughline across all of this is simple: use November and early December to make deliberate moves. Markets will swing; your plan should not.