Update estate planning documents and beneficiaries<\/p>\n
The end of the year is a good time to make sure your estate planning documents still reflect your wishes. You might have created them years ago, and the people you appointed to make medical or financial decisions for you may no longer be the right fit, Eckels says. If your children are adults now, for example, it might make sense for them to step into those roles<\/a>.<\/p>\n Schedule an appointment with an estate planning attorney if you need to update<\/a> (or create) a will<\/a> or trust, name a power of attorney<\/a> to make financial decisions for you if you can\u2019t, and update (or create) a health care directive<\/a> or living will<\/a> that spells out what sort of end-of-life medical care you do or don\u2019t want.\u00a0<\/p>\n Beneficiary designations deserve the same attention. Make sure the person or people you want to inherit your financial accounts<\/a> or collect on your life insurance policy<\/a> are still the ones named as your beneficiaries by logging in to your accounts or reaching out to your account administrator. \u201cThose are easy things to update,\u201d Eckels says.<\/p>\n Otherwise, your assets might end up in the wrong hands. Eckels recalls one client who, after remarrying, discovered that his ex-wife was still listed as the beneficiary on his $500,000 IRA.<\/p>\n Boost your itemized tax deductions<\/p>\n If you itemize deductions on your federal tax return, there are a couple of moves you can make before the end of 2025 to take advantage of changes to the tax rules<\/a>.<\/p>\n The One Big Beautiful Bill<\/a> (OBBB), signed into law on July 4, increased the maximum amount of state and local taxes you can claim as an itemized deduction to $40,000, up from $10,000 in 2024. One way to take advantage of this higher limit is by paying 2026 property taxes in December 2025 if you wouldn\u2019t otherwise reach the $40,000 cap, says Jacob Martin, a financial planner with Keeler & Nadler Family Wealth in Dublin, Ohio.<\/p>\n You could also reap tax savings by making charitable donations you\u2019ve planned for 2026 now. This could increase your chances of being able to deduct the full dollar amount of your contributions due to another OBBB change.<\/p>\n \u201cStarting next year, there is a 0.5 percent adjusted gross income [AGI] floor on charitable giving before you can deduct those gifts,\u201d Martin says. That means if your AGI is $100,000 in 2026, for example, you\u2019ll be able to deduct only contributions that exceed $500.<\/p>\n Consider a Roth conversion<\/p>\n If you\u2019re retired but not yet collecting Social Security benefits<\/a>, you may be in the sweet spot for a Roth conversion, Baucum says.<\/p>\n \u201cThose years when income is temporarily low are a prime window for converting traditional IRA dollars into a Roth IRA<\/a> at a lower tax rate,\u201d she says. That\u2019s because you\u2019ll have to pay income taxes on the amount you convert. But you can reduce your lifetime tax burden, she says, considering that Roth withdrawals, unlike traditional IRA withdrawals, are tax-free.<\/p>\n If you aren\u2019t 65 and haven\u2019t enrolled in Medicare yet, be aware that a Roth conversion could impact your future Medicare premiums. The premium for Medicare Part B<\/a> \u2014 which covers doctor visits, diagnostic screenings and other outpatient care \u2014 is based on your income, and high-income adults can be swollen by a surcharge called the Income-Related Monthly Adjustment Amount (IRMAA).<\/p>\n