Smart Year-End Tax Ideas for Retirees

As the year winds down, the calendar starts tapping its foot. Deadlines approach, holiday plans pile up, and everything that felt far away suddenly feels very close. The good news is that many of the most useful tax ideas for retirees are still fully available in mid-November. And most of them are simpler than they look.

Here are several smart ideas to consider before December 31:

Take care of your RMDs: If you are 73 or older, your required minimum distribution will need attention before the year ends. Getting this done now avoids penalties and gives you room to adjust withholding if something changed during the year. And if you do not need the income, you still have choices for handling it in a tax efficient way.

Think about a Qualified Charitable Distribution: For retirees who like supporting charities, a QCD can reduce your taxable income while helping causes you care about. If you are 70 1/2 or older, you can send part or all of your RMD directly to a qualified charity. The amount you give still counts toward your RMD, but it does not show up as taxable income. It is one of the cleanest year end moves available.

⭐️ 5-Star Tip: If you don’t need all of your RMD for spending and you’re charitably minded,

a Qualified Charitable Distribution can reduce or even eliminate the taxable part of your RMD. Here’s the idea:

• If your RMD is $40,000 and you send $10,000 directly to charity as a QCD, you only pay tax on the remaining $30,000.

• If your RMD is $10,000 and you send the full amount as a QCD, your RMD is fully satisfied and your taxable income from it is zero.

It’s one of the most efficient year-end moves for retirees who want to give without adding to their tax bill.

Review whether a Roth conversion fits your situation: By November and December, most retirees have a good idea of where their income will land. That makes this a good time to look at a possible Roth conversion. Many people convert just enough to stay within their current tax bracket. It can be a helpful long-term move if you expect higher tax rates later. Remember that conversions cannot be undone, so small and thoughtful tends to work better than all or nothing.

Look for tax loss harvesting opportunities: If you have investments that are down this year, selling them before December 31 could help offset gains elsewhere. You can also use up to three thousand dollars of excess losses to offset ordinary income. Just watch the wash sale rule. Do not buy the same or substantially identical investment within 30 days before or after the sale.

Evaluate charitable gifts before year end: If you itemize deductions, December 31 is the final day for 2025 gifts to count. Cash donations, appreciated securities, or contributions to a donor advised fund can all help reduce your taxable income. These are use it or lose it opportunities. Once the year is over, the deduction window is closed.

Double check your withholding and estimated taxes: A quick review now can help avoid a surprise in April. If you had unexpected income this year, adjusting withholding on your RMD or Social Security benefit may help prevent underpayment penalties.

Do a quick retirement plan sweep: If you still work part time, make sure you have contributed what you intended to your workplace plan. Salary deferrals typically close with the calendar year, and the catch-up amounts for workers 50 and older can make a meaningful difference.

The bottom line

Even if November snuck up on you, there is still plenty of time to make smart, tax efficient decisions before the year ends. A few simple steps now can help keep next April calm and predictable, which is exactly how tax season should feel.

👉 Are you looking for a fee-only advisor to work with? Book your free discovery call and let’s start the conversation.

John Piershale, CFP®, AEP®

Fee-Only and Fiduciary Advisor

NAPFA-Registered Financial Advisor

This article is for educational purposes only and is not legal or tax advice. Please consult an attorney or tax advisor regarding your personal situation. John Piershale Wealth Management, LLC is an Investment Adviser registered with the State of IL and in other jurisdictions where exempt from registration. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.