Financial Planning Secret: Why a Year-End Checkup May Be the Most Important Step You Take This Year | Spokane Financial Advisor Guide
As a Spokane financial advisor who works closely with retirees and pre-retirees, I can tell you that the final month of the year is one of the most important financial planning windows we get. While most people are focused on holiday plans, travel, and wrapping up work projects, those who want to retire comfortably and stay comfortably retired should add one more item to the calendar: a year-end financial checkup.
Financial planning isn’t something you “set and forget.”
Your life changes. Tax laws change. Markets change. And your goals evolve over time. Because so many tax-sensitive strategies must be completed by December 31, the end of the year is when some of the most impactful financial planning opportunities become available.
Whether you’re already retired in Spokane or preparing for retirement in the next few years, a thoughtful year-end review can help you reduce taxes, avoid costly surprises, and start the new year with clarity, confidence, and a plan.
Below is a comprehensive, expert-level checklist that our team walks clients through here in Spokane every year.
1. Charitable Giving: Maximize Impact and Minimize Taxes
Year-end is the prime time to optimize charitable giving strategies.
Qualified Charitable Distributions (QCDs)
If you’re age 70½ or older, a QCD from your IRA may be one of the most powerful charitable tax strategies available.
A QCD:
- Counts toward your RMD
- Does not increase taxable income
- Helps reduce taxes on Social Security
- Can reduce Medicare IRMAA surcharges
Donor-Advised Funds (DAFs)
Many Spokane retirees overlook this, but it can create thousands in tax savings each year. If you want flexibility, a DAF lets you:
- Contribute appreciated stock
- Receive an immediate deduction (if itemizing)
- Distribute gifts to charities over time
This is especially valuable in high-income years or during large Roth conversions.
Gifting Appreciated Securities
Instead of donating cash, give appreciated stock or ETFs.
- You receive a deduction (if itemizing)
- Avoid capital gains tax
- Allow more dollars to support the causes you care about.
2. Review and Update Beneficiary Designations
One of the highest-impact, lowest-effort year-end tasks is reviewing your beneficiaries. Beneficiary designations override your will and trust.
They determine who inherits:
- IRAs
- 401(k)s
- Annuities
- Life insurance
- Transfer-on-death accounts
Life events that should trigger a review include:
- Marriage or divorce
- Birth of children or grandchildren
- Death of a beneficiary
- Change in inheritance goals
I see this issue frequently among Spokane retirees; outdated designations can unintentionally disinherit family members or cause tax complications.
3. Estate Planning & Washington State Estate Tax Considerations
Year-end is the perfect time to revisit estate planning and legacy decisions.
Update Your Estate Plan
Review:
- Wills
- Trusts
- Powers of attorney
- Healthcare directives
This ensures your documents reflect current wishes and current laws.
Washington State Estate Tax Exposure
Washington has one of the lowest estate tax thresholds in the country. Many Spokane families unintentionally cross the threshold due to:
- Appreciated real estate
- Business ownership
- Large retirement accounts
Tools like gifting, Roth conversions, and trust planning may help reduce or eliminate state estate tax over time.
Communicate Intentions With Family
A short conversation can save confusion later and help reduce stress on your heirs.
4. Maximize Retirement Account Contributions Before the Deadline
While IRAs allow contributions up to tax filing day, most employer plans require action by December 31.
401(k), 403(b), and 457(b) Plans
Be sure to:
- Max out salary deferrals if possible
- Use catch-up contributions if age 50+
- Coordinate contributions with year-end Roth conversion planning
For Spokane professionals nearing retirement, these final high-income years offer powerful savings opportunities.
Health Savings Accounts (HSAs)
If you’re HSA-eligible, this account offers:
- Tax-deductible contributions
- Tax-free growth
- Tax-free withdrawals for medical expenses
This is one of the most tax-efficient tools available.
5. Evaluate Roth Conversions Before December 31
For retirees in Spokane with large 401(k)s or IRAs, Roth conversions may be the most valuable long-term tax strategy available.
Why a Roth conversion matters:
- Reduces future Required Minimum Distributions
- Lowers taxes for your surviving spouse
- Mitigates Washington State estate tax exposure
- Provides tax-free income later
- Offers flexibility during market downturns
Conversions must be completed before December 31; no extensions.
By December, you must have accurate estimates for:
- Income
- Realized capital gains
- Bonuses or business income
- Pension payouts
- Social Security benefits
This allows precise bracket management to avoid unnecessary taxes or IRMAA penalties.
6. Review Investments for Tax-Loss Harvesting
Tax-loss harvesting can reduce taxes by offsetting capital gains or up to $3,000 of ordinary income.
Benefits include:
- Lower tax bill
- Smarter rebalancing
- Future tax-loss “assets” to use strategically to offset gain
We ensure replacement holdings avoid wash-sale rules so you maintain market exposure.
7. Take Advantage of the 0% Capital Gains Bracket (When Available)
For some retirees, especially those in “gap years” before RMDs, pensions, or Social Security, the 0% long-term capital gains bracket can be a gift.
If eligible, you can:
- Harvest gains
- Rebuy the investment
- Permanently reset the cost basis
This reduces future capital gains and can be a powerful estate planning benefit.
8. Verify All RMDs Are Completed
A missed RMD can create penalties and unnecessary tax complexity.
We review:
- IRA RMDs
- Old 401(k) or 403(b) accounts
- Inherited IRAs
- Roth IRAs that require inherited distributions
We also ensure QCDs fully satisfy RMD requirements.
9. Make Last-Minute 529 Contributions
529 plans offer:
- Tax-free growth
- Strategic legacy planning opportunities
- Potential state tax benefits (if outside Washington State)
December is a popular month for grandparents funding education goals.
10. Manage Year-End Income Timing
Strategically managing income can help:
- Reduce IRMAA surcharges
- Optimize Roth conversions
- Lower Washington State estate tax exposure
- Stay within your ideal tax bracket
You might accelerate or defer:
- Consulting income
- Bonuses
- Real estate rents
- Portfolio withdrawals
This is one of the most overlooked yet powerful planning tools.
11. Use the Annual Gift Exclusion ($18,000 Per Recipient for 2025)
This is a clean, simple way to reduce future estate tax exposure or help family members.
Many Spokane families do year-end gifting to:
- Children
- Grandchildren
- 529 plans
- UTMA accounts
- Family home down payment assistance
No gift tax return is required if you stay under the limit.
12. Review Employer Stock, RSUs, and ESPPs
For Spokane professionals with employer equity, it’s critical to review:
- RSU vesting
- NUA opportunities
- Concentrated stock positions
- ESPP tax lots
Year-end creates a natural inflection point for diversification and tax planning.
13. Confirm HSA Eligibility and Avoid Penalties
We verify:
- High-deductible health plan coverage
- Last-month rule eligibility
- Medicare transition timing
This helps avoid unexpected penalties.
14. Review Withholding and Estimated Taxes
One of the easiest year-end fixes is adjusting withholding. You can even defer IRA distributions late in the year, and it’s treated as if paid evenly throughout the year, helping you avoid penalties.
15. Rebalance Portfolios After a Volatile Year
Year-end rebalancing ensures your portfolio stays aligned with:
- Risk tolerance
- Retirement income needs
- Tax strategy
- Long-term goals
It’s a foundational discipline that leads to better long-term outcomes.
16. Refill Cash Reserves
For retirees, maintaining 12–24 months of cash or short-term investments like bonds help reduce the risk of selling investments at the wrong time.
Year-end is the perfect time to:
- Refill cash
- Plan for upcoming expenses
- Ensure cash is earning a competitive interest
Final Thoughts from a Spokane Financial Advisor
Between tax deadlines, retirement income strategy, RMD rules, and investment planning, the final weeks of the year offer more financial planning opportunities than almost any other time.
A well-structured year-end review helps Spokane retirees:
- Reduce current and future taxes
- Strengthen long-term retirement strategies
- Maximize charitable giving impact
- Prepare family members and heirs
- Improve investment outcomes
- Start the new year with clarity and confidence
If you're a retiree or preparing for retirement in the Spokane area, this is the ideal time to meet with a Spokane financial advisor who specializes in tax-efficient retirement planning, Roth conversions, and Washington State estate tax strategies.
The right year-end moves can make a huge difference in the security of your financial future.
Meet with our Spokane Financial Advisor today
About the Author
Noah Schwab CFP® is a financial advisor in Spokane, Washington, helping retirees with $ 1M+ maximize their 401(k) with Roth conversions and tax strategies.
- No commissions or insurance
- Investment management, tax and financial planning
Noah Schwab, CFP®, is a Spokane financial advisor specializing in helping retirees with tax-efficient retirement income strategies, Roth conversions, and estate planning. This article is for educational purposes only and should not be considered tax or legal advice.
