12 Days of Christmas End of Year Financial Planning
The holiday season brings joy, celebration, and for many families a welcomed pause before the new year begins. It is also the perfect moment to reflect on your financial health and prepare for strong momentum in 2026. Inspired by Connor’s Corner Episode Four, this year’s theme is the 12 Days of Christmas: Financial Planning Edition. Each day highlights a core area of end of year financial planning designed to improve organization, reduce tax liabilities, and align your household with meaningful goals.
Below is a complete breakdown of the twelve topics and how each contributes to better end of year financial planning.
Either watch the video or read the entire post. Or both. We hope you enjoy.
Day One
Reviewing the Basics
End of year financial planning always begins with the essentials. If you are at the age where Required Minimum Distributions apply, confirm they are completed before December thirty first. Your RMD amount is based on your previous year’s balance, so your 2025 distribution uses your December thirty first 2024 account value. Missing this step causes avoidable penalties, so start here.
Day Two
Reviewing Major Life Changes
A full year brings many changes. Did you get married, have a child, experience a relocation, or update your employment? These events affect payroll deductions, tax planning, retirement contributions, and overall household budgeting. The end of the year is the perfect time to confirm that everything reflects your current circumstances.
Day Three
Reviewing Financial Alignment With Your Spouse
It is incredibly valuable to sit down together and evaluate what worked well this year and what should change. This check in ensures you begin 2026 united with clarity, shared goals, and renewed confidence.
Day Four
Using Tax Loss Harvesting
Tax loss harvesting remains one of the most strategic end of year financial planning tools. If you realized gains in a taxable brokerage account, you can offset them by selling a position that is currently at a loss. Losses beyond three thousand carry forward into future years. For older investors, it is important to remember that unused capital losses do not pass to beneficiaries, making this strategy time sensitive.
Day Five
Updating Estate Planning
Wills, trusts, powers of attorney, and beneficiary designations need regular review. Holidays are often spent with the very people who will be impacted most by these documents. If your plan is outdated, incomplete, or has not been touched in several years, this is the ideal time to bring everything current.
Why This Matters
Estate issues create major complications for families, especially in business ownership situations. Clear instructions remove stress and ensure a smooth transition.
Day Six
Maximizing Tax Advantage Accounts
This includes the IRA, Roth IRA, employer retirement plans, education accounts, FSA selections, and HSA planning. IRA contributions for 2025 can be made until April fifteenth 2026, but employer plans must be completed by December thirty first.
Day Seven
Reviewing Health Care Decisions
Open enrollment for private health plans takes place in November and December. Choosing a plan that aligns with your upcoming year helps reduce future stress. Consider expected medical procedures, premium costs, and deductible preferences.
Day Eight
Considering Roth Conversions
Roth conversions must be completed by December thirty first. Since this strategy affects Medicare thresholds, current tax brackets, and household income planning, it is essential to consult your advisor to determine whether it is appropriate for your situation.
Day Nine
Annual Gifting Opportunities
The annual gift exclusion allows up to eighteen thousand per recipient or thirty six thousand for a married couple. Families who prefer to give while they are here to witness the impact often use this time of year for gifting.
Day Ten
Qualified Charitable Distributions
For individuals age seventy and a half or older, a Qualified Charitable Distribution can be sent directly from an IRA to a qualified charity. This strategy satisfies RMD requirements and reduces taxable income.
Day Eleven
Projecting Tax Liability and Estimates
This includes reviewing your final pay stub, updating your projections, and determining whether an estimated payment is needed to avoid interest or penalties. Being proactive helps ensure there are no surprises on April fifteenth.
Day Twelve
Reviewing Investment Philosophy
Risk tolerance changes over time. Your portfolio may no longer match your comfort level or your goals. An end of year review confirms proper alignment heading into 2026.
A Strong Start to 2026
End of year financial planning provides clarity, confidence, and direction. By making your goals measurable, aligning with your household, and taking advantage of tax opportunities, you enter the new year with momentum and purpose. The 12 Days of Christmas theme is a reminder that thoughtful planning can make each year even better than the last.
Common Mistakes to Avoid
Even though the process seems straightforward, there are pitfalls to watch for:
Using converted funds to pay taxes – Always pay the tax on conversions from cash, not from the converted funds themselves. This ensures the entire balance continues to grow tax-free.
Ignoring Medicare implications – If you’re 63 or older, remember Medicare premiums are based on your income from two years prior. A large conversion could unexpectedly raise your premiums.
Failing to consult a professional – Tax brackets, deductions, and retirement income strategies are complex. Working with a professional ensures you avoid overpaying or missing opportunities.
How Roth Conversions Support Legacy Planning
Beyond personal benefits, Roth conversions play a key role in estate and legacy planning.
If your children are in higher tax brackets than you are, converting now could save them thousands later. For instance, a parent in the 12% tax bracket converting funds today prevents heirs in the 24% bracket from paying double the taxes in the future.
This strategic move shifts taxable income to the generation best positioned to handle it and helps preserve more wealth for your family.
Final Thoughts on Roth Conversions
A Roth conversion can be one of the most effective tools for long-term financial and tax planning — but only when used strategically. The decision involves evaluating income levels, tax brackets, Medicare considerations, and legacy goals.
At Bridgeway Financial Consulting & Tax Services, we specialize in helping clients make informed decisions about Roth conversions and comprehensive retirement planning.
If your current advisor isn’t discussing Roth conversions with you, it might be time to start the conversation. Schedule a consultation today to explore whether a Roth conversion fits into your financial strategy.