Summary

As you get closer to retirement, a few year-end moves can help you save more, avoid costly mistakes, and keep your tax plan on track. This checklist focuses on four common areas: boosting contributions with catch-up rules, preparing for required minimum distributions (RMDs), evaluating Roth conversions, and using charitable giving strategies that may reduce taxable income.

---

💪 Play catch-up if you can

If you’re 50 or older, you may be allowed to save extra money in certain tax-advantaged accounts beyond the standard annual limits. These “catch-up” contributions can be especially helpful if you started saving later, took time out of the workforce, or simply want to accelerate your retirement progress while you still have income coming in. A good starting point is to run your numbers through a retirement calculator to see whether increasing your contribution rate makes sense for your goals and timeline.

For workplace retirement plans, contributions usually need to be made by the end of the calendar year to count for that year. IRAs often give you more time, typically until the tax filing deadline to make contributions for the prior year. Eligibility rules can also vary depending on the type of account. For example, Roth IRA contribution eligibility is tied to your income, so higher earners may see their ability to contribute reduced or phased out depending on filing status.

Health savings accounts (HSAs) add another layer of opportunity for people who have a qualifying high-deductible health plan. HSAs can offer a unique tax combination: contributions may be tax-deductible, growth can be tax-deferred, and qualified medical withdrawals can be tax-free. Contribution limits differ for individual versus family coverage, and people 55 and older may be able to make an extra catch-up contribution. Keep in mind that to contribute, you generally need to meet the plan’s deductible requirements, and if you enroll in Medicare, you typically can’t contribute anymore—though you may still be able to use existing HSA funds for qualified medical costs, including certain Medicare-related expenses.

Takeaways:

• If you’re 50+ (and 55+ for HSAs), catch-up rules may let you add more to retirement and health-related savings accounts.

• Workplace plan contributions usually must be made by December 31, while IRA and HSA contributions are often allowed up to the tax filing deadline.

• Roth IRA contribution eligibility can phase out at higher income levels, so it’s worth checking your modified adjusted gross income.

Key Terms

• Catch-up contribution: An additional amount you may be allowed to contribute to certain retirement accounts once you reach a specific age (commonly 50+, and 55+ for HSAs).

• Roth IRA income phase-out: Income thresholds that can reduce or eliminate your ability to contribute directly to a Roth IRA, depending on your filing status.

• Health savings account (HSA): A tax-advantaged account used with a qualifying high-deductible health plan that can help pay for eligible medical expenses.

• High-deductible health plan (HDHP): A health insurance plan with a higher deductible that may qualify you to contribute to an HSA if other requirements are met.

---

📅 Plan for required minimum distributions

Retirement accounts are designed to help you save and grow money over time, but most traditional retirement accounts can’t stay untouched forever. At a certain age, you may be required to start withdrawing a minimum amount each year—these are called required minimum distributions, or RMDs. If you miss an RMD deadline or withdraw less than required, the penalties can be severe, so it’s worth building a plan well before you reach the starting age.

RMD amounts are typically calculated using your retirement account balance as of December 31 of the previous year and a life expectancy factor. Because the calculation depends on year-end balances, you’ll often want to look at your accounts as the year winds down so you can anticipate what next year’s withdrawal might look like. Many custodians and plan providers can help calculate your RMD, and official IRS tables are also available for reference.

In most cases, RMDs must be taken by December 31 each year. However, there’s a special timing rule for your first RMD: you may be able to delay it until April 1 of the year after you reach the applicable age. That delay can be useful, but it can also create a “double-withdrawal” year because you’d still need to take the second RMD by December 31 of that same year. Depending on your income, two withdrawals in one year could increase your taxable income and potentially affect things like tax brackets or Medicare-related costs.

Some accounts have exceptions. For example, certain employer plans may allow you to delay RMDs if you’re still working for the employer sponsoring the plan and you’re not a 5% (or greater) owner. Roth IRAs are also treated differently: there are no RMDs required during the original owner’s lifetime, though beneficiaries may have distribution requirements after inheriting the account.

Takeaways:

• RMDs generally begin later in life for most traditional retirement accounts, and missing them can trigger major penalties.

• Your annual RMD is usually based on your prior year’s December 31 account balance and IRS life expectancy factors.

• Delaying your first RMD may create a year where you must take two distributions, which can increase taxable income.

Key Terms

• Required minimum distribution (RMD): The minimum amount you must withdraw each year from certain retirement accounts once you reach the required age.

• Prior-year account balance: The December 31 value used to calculate an RMD for the following year.

• First-year RMD rule: A timing option that may allow your first RMD to be taken by April 1 of the following year, which can result in two RMDs in one calendar year.

• Roth IRA RMD exemption: A feature of Roth IRAs where the original owner is not required to take RMDs during their lifetime.

---

🔁 Consider account conversions

If you want more flexibility later—especially around taxes and RMDs—you may hear people talk about converting money from a traditional retirement account to a Roth account. A Roth conversion means moving funds from a pre-tax account (like a traditional IRA) into a Roth IRA. The trade-off is straightforward: you pay taxes on the converted amount now, but future qualified withdrawals from the Roth can be tax-free, and Roth IRAs don’t require RMDs for the original owner.

Whether a conversion makes sense depends heavily on your current tax situation and what you expect your future tax rate to be. Conversions can be appealing for people who expect their income—and tax bracket—to rise later, or who want to build a pool of tax-free retirement income. On the other hand, if you expect your income to drop once you retire, paying taxes now could be unnecessary or even costly.

For some savers, conversions can become more attractive as RMD age approaches. If you’ve built a large balance in traditional retirement accounts, mandatory withdrawals later could push you into a higher tax bracket than you expect. In that scenario, converting some money to a Roth before RMDs begin might help smooth out taxable income over time. However, conversions need to be handled carefully: converting too much in one year can raise your tax bill significantly, and higher reported income can also affect other costs, including potential Medicare premium adjustments. Because the “right” conversion amount is often a tax-planning question, many people benefit from running projections or working with a qualified tax professional.

Takeaways:

• A Roth conversion can reduce future RMD pressure and create tax-free withdrawal potential, but it usually triggers taxes in the year you convert.

• Conversions often work best when your current tax rate is lower than what you expect later.

• Converting too much at once may increase taxes and could affect Medicare-related costs.

Key Terms

• Roth conversion: Moving funds from a pre-tax retirement account into a Roth IRA, typically creating taxable income in the year of conversion.

• Tax bracket: A range of income taxed at a specific rate; changes in taxable income can move you into a higher or lower bracket.

• Tax diversification: Holding retirement money in different “tax buckets” (pre-tax, Roth, taxable) to create flexibility in retirement withdrawals.

• Medicare premium adjustment: A potential increase in Medicare costs that can occur when your reported income rises above certain thresholds.

---

❤️ Make charitable contributions

If charitable giving is part of your goals, there may be a strategy that helps support causes you care about while also improving your tax picture. For eligible account holders, qualified charitable distributions (QCDs) allow you to send money directly from an IRA to a qualified charity. When done correctly, the distribution can be excluded from your taxable income—and it can also count toward satisfying your RMD for the year, as long as the funds leave your IRA by your RMD deadline.

QCDs typically become available starting at age 70½. The process matters: the transfer must go directly from your IRA to the charity, rather than being withdrawn to you first and then donated. If you take the money into your own hands first, it generally won’t qualify as a QCD. This is one reason it’s smart to coordinate with your IRA custodian and the charity so the paperwork and payment method are handled correctly.

Another helpful feature is that QCDs can often be made from multiple types of IRAs, including traditional IRAs, rollover IRAs, and certain inherited IRAs. Some older employer-based IRA-like plans, such as SEP or SIMPLE IRAs, may also qualify if they are no longer receiving contributions. There is usually an annual cap on how much you can donate through QCDs, so it’s important to track the total amount across all QCDs you make during the year.

Takeaways:

• Qualified charitable distributions (QCDs) can reduce taxable income and may satisfy some or all of your RMD for the year.

• QCDs must go directly from your IRA to a qualified charity to count.

• This strategy can be especially useful for people who want to give consistently while keeping taxable income lower.

Key Terms

• Qualified charitable distribution (QCD): A direct transfer from an IRA to a qualified charity that may be excluded from taxable income and can count toward an RMD.

• Qualified charity: An organization that meets IRS requirements to receive tax-deductible charitable donations.

• Direct transfer: A payment sent straight from the IRA custodian to the charity (not routed through your personal bank account).

• Inherited IRA: An IRA received as a beneficiary; distribution rules can differ depending on your relationship to the original owner.

---

Conclusion

A year-end retirement check-in can help you take advantage of opportunities that are easy to miss when life gets busy. If you’re eligible, catch-up contributions can accelerate savings, while early RMD planning can prevent expensive mistakes later. For the right person, Roth conversions may offer long-term tax flexibility, and charitable strategies like QCDs can support meaningful giving while potentially lowering taxable income. If you’re unsure which steps fit your situation, a quick projection—or a conversation with a tax professional—can help you prioritize the moves that matter most.