“6-7” Year-End Financial Planning Tips for 2025
If you’re a parent like me, or a grandparent, you’ve probably heard your kids or grandkids running around the house shouting “6-7!” multiple times a day and at any opportunity that presents itself. I’ve asked people of all ages what it means, and, after a few confusing explanations, I’ve finally accepted two things: I’m officially at that stage of life where I can’t keep up with popular trends, and, most importantly, that “6-7” doesn’t seem to mean anything at all.
While this recent fad may not have much meaning, it sparked an idea: here are 6, or maybe 7, financial planning tips to help you end the year strong as we get closer to wrapping up 2025.
1. Max Out Your Retirement Contributions
Before December 31, consider contributing as much as possible to your 401(k), IRA, or SEP plan. The sooner you contribute, the longer your money has to grow through compounding.
Remember: IRA contributions are allowed through April 15, 2026, but employer-plan contributions close on December 31, 2025.
Even small increases in contributions can make a meaningful difference over time.
2. Take Your Required Minimum Distribution (RMD)
If you’re 73 or older, or you’ve inherited an IRA, you must take your Required Minimum Distribution (RMD) by December 31 or April 1, 2026, if it’s your first RMD. Because missing the deadline can trigger penalties, it’s important to act early.
3. Top Off Your 529 Education Plan
529 plans can be an excellent resource for building long-term education savings for children or grandchildren. By contributing to a 529 plan before the end of the year, you can get closer to achieving your education savings goals while also potentially qualifying for state tax benefits.
For larger gifts, you can even “superfund” a 529 plan, contributing up to five years’ worth of contributions at once, which can help reduce your taxable estate and maximize growth potential.
4. Consider a Roth Conversion
A Roth conversion allows you to move funds from a traditional IRA to a Roth IRA, where your money can grow and be withdrawn tax-free in retirement, assuming certain conditions are met.
Be mindful, you’ll owe income taxes on the amount converted in the year you make the transfer, since these dollars haven’t been taxed yet. Because the conversion amount is added to your taxable income, you may want to spread conversions over multiple years to help manage your tax bracket and avoid a big one-time tax hit.
5. Give Back Through Charitable Donations
Charitable giving is often a win-win, supporting the causes you care about while potentially reaping financial benefits as well. Donations made by December 31 may qualify for tax deductions. Additionally, if you’re age 70½ or older, a Qualified Charitable Distribution (QCD) from your IRA can allow you to donate up to $108,000 directly to charity tax-free, while also satisfying your RMD.
6. Review and Rebalance Your Portfolio
As the year comes to a close, revisit your investment strategy to make sure your asset mix still aligns with your goals, timeline, and risk tolerance. Consider:
- Rebalancing to maintain your target mix of stocks, bonds, and cash.
- Tax-loss harvesting to offset gains.
- Topping off your Health Savings Account (HSA) if eligible.
- Revisiting your emergency fund to help you prepare for 2026.
7. Update Insurance Coverage and Beneficiaries
Life can change quickly, and it’s crucial to ensure your insurance coverage and beneficiary designations keep pace. Review your health, life, auto, and homeowners’ insurance policies and make any necessary updates during open enrollment. Also, confirm all your beneficiary designations are up to date across accounts and policies.
Bottom Line:
We can all hope that the “6-7!” trend is nearing its end for everyone’s sake. However, while we wait, make sure to stay on top of year-end planning items before it is too late. Take time now to finish 2025 strong and enter 2026 with greater confidence and clarity.
For more helpful content delivered directly to your inbox, sign up for our newsletter.