by Nicholas Hamner
Investment Advisor Representative
[email protected]
It is now officially the fourth quarter of 2025, which means we’re up by 28 over the Chiefs and it’s time to put the backups in it’s time for you as a retiree or soon-to-be retiree to take stock of your financial actions this year and make sure you’re not forgetting anything. Forgetting something now can be costly down the road, so better to be safe than sorry.
- Have you taken your Required Minimum Distributions for the year?
If you turned 73 this year (if you were born in 1952), you must now consider required minimum distributions, or RMDs. These are the minimums you must withdraw every year from your qualified (funded from pre-tax contributions) retirement savings accounts. If you are older than 72, RMDs are an annual thing. If you haven’t taken your RMDs for the year, you have to. If you miss them, Uncle Sam can penalize you up to 25%, so it’s in your best interest not to miss them. Of course, if you have a Roth account, no Roths are subject to RMDs. - Have you checked your income levels to determine any Roth conversions?
If you’re considering converting a traditional retirement account—one that’s taxable on withdrawals—to a Roth account that can be withdrawn tax-free and is not subject to RMDs, keeping yourself out of a higher tax bracket is something to consider while making the conversion since you’re liable for taxes on the funds at the time of the conversion. Now is a great time to calculate if a conversion makes sense, how much income you will take in this year, what bracket you’re in, and how much room you have to convert this year. - Have you checked your income levels for IRMAA purposes?
If you are 63 or older, Medicare is in your future or already a part of life and you may already be familiar with Income-Related Monthly Adjustment Amounts, or IRMAA. IRMAA is the penalty/adjustment to your Medicare Parts B and D that are based on how much income you brought in two years prior (that’s why we started at 63). When we’re talking withdrawals and money moves, it’s a good idea to see what any potential moves will do to your overall income and how that will impact what IRMAA adds on to your Parts B and D bills. When you’re rushing to make year-end decisions, things like this can often be overlooked. So if you’re 63 or older, pay attention! And just to keep things interesting, IRMAA’s income brackets are completely different than the IRS’ income tax brackets. - Have you considered Qualified Charitable Distributions?
If you are looking for ways to lower next year’s tax bill and you’re charitably inclined, you may want to consider a Qualified Charitable Distribution, or QCD. These are pulled straight from your qualified/traditional retirement accounts, count towards your RMD, and don’t hike up your taxable income because the contribution is going straight from your account to the charity. There are a few kinks to this to make it work right, so if it’s something you want to do, ask. But we do ask that you ask sooner rather than later, because trying to get this through in December can be a race against the clock. - Have you checked your portfolios for winners & losers?
More than likely you’ve got some winners and losers in your portfolios. Hopefully more winners than losers! But if you do have some losses on non-IRA stocks (they can’t be in your IRA, they have to be individual stocks) you want to get rid of, you can use those sold off for a loss to offset anything sold for a gain this year. And if you have so many losses that you have loss left over after you cancel out this year’s gains, it can carry over into future years. It’s a concept called Tax Loss Harvesting, it’s intricate, but if you’ve got losses this year maybe we can help you find some semblance of a silver lining. - Have you looked at your flexible spending account (FSA) or healthcare savings account (HSA)?
If you or your spouse are still working and have an FSA as part of your employer-provided health care, remember that most of them have “use it or lose it” provisions. If you’ve got an FSA balance, don’t let it go to waste. Doctors, dentists, and optometrists are all particularly busy the last quarter of the year as folks spend down their balance. And it’s worth seeing what all you can buy at the drug store with your FSA funds before the year runs out (or your drug store chain closes for good). On the HSA side, those can be quiet little boosts to your retirement savings if you play them right. If you have an HSA, use these last few months of the year to make sure yours is funded fully for the year. - Have you reviewed your Medicare supplements?
The fourth quarter of the year is when we get the Medicare Annual Enrollment period, where those already signed onto Medicare can make changes to their Medicare Advantage or Part D prescription drug plans. Check your benefits, check your costs, check your health and any prescription changes, and see if there is a better option out there. You have from October 15th to December 7th to make these changes, so make sure you’re looking at everything you have vs. what you need. - Have you reviewed your beneficiaries?
Once a year you should check the beneficiaries on all your retirement accounts, insurance policies, and anything else that isn’t passing through your estate. Make it a part of your year-end to-do list. Just this week we caught a government employee who filled out their paperwork about five years before they got married, never looked at it again, and had a (multi!) million-dollar TSP set to go to a long-ago ex. You can usually check and change these online away from the eyes of any spouse who may bristle at overlooked mistakes… or names from the past. Even still, a moment of discomfort now is much better than a tainted legacy.
Of course, with any of these, if you would like help or have any questions just ask. We’re here to help, and more importantly we like to help. Some of these may not apply to you. Some of these may not make sense for you to do. But you won’t know unless you look.
Clock is ticking!