2025 Year-End Financial Planning FAQs: Tax, Retirement, and Investment Strategies

By Aiden Cox

As the end of the 2025 calendar year approaches, investors face both opportunity and complexity. Recent legislative changes introduced by the OBBBA (“One Big Beautiful Bill”) and the continued rollout of SECURE Act 2.0 have created new considerations for tax planning, retirement contributions, and investment management.

Below are some of the most frequently asked questions our clients at Canter Wealth are asking right now. These year-end financial planning strategies require timely action to help maximize potential tax savings and long-term financial outcomes before the year closes.

Tax Law & Deduction Changes for 2025

1. Am I paying less in taxes this year due to the OBBBA?

Answer: Potentially, yes, but the impact depends heavily on your income level and how you structure your deductions.

While recent tax law changes may reduce tax liability for some individuals, personalized tax planning is essential to determine how these provisions apply to your specific situation.

Key changes to consider:

• Increased Standard Deduction: The OBBBA significantly raised the standard deduction, which may make itemizing less beneficial for many taxpayers, particularly middle-income earners.
• New Senior Deduction: Taxpayers age 65 or older may qualify for an additional senior deduction of $6,000 ($12,000 for married filing jointly), directly reducing taxable income.
• Expanded SALT Deduction with Phaseouts: The State and Local Tax (SALT) deduction cap has increased, but strict income phaseouts limit the benefit for high-income earners.

Planning trend: Recent legislation continues to discourage itemized deductions, pushing more taxpayers toward the standard deduction model.

Retirement Strategy & Contribution Planning

2. Will my catch-up contributions have to be Roth (after-tax) starting next year?

Answer: Yes, if you are considered a high-income employee.

A major provision of SECURE Act 2.0 takes effect in 2026, making 2025 your final year to make pre-tax catch-up contributions if you qualify as a high earner.

What this means:

• High-Income Definition: Individuals with prior-year FICA wages exceeding $145,000 (indexed).
• Roth-Only Catch-Up Contributions: Beginning in 2026, all catch-up contributions (age 50+) to employer-sponsored retirement plans must be made on a Roth basis for high-income earners.
• 2025 Planning Opportunity: You must update your contribution elections before January 1, 2026, to take full advantage of pre-tax deferrals this year.

3. Should I consider a Roth conversion in 2025?

Answer: Possibly, but this decision requires personalized analysis and tax projections.

Given historically low tax rates and uncertainty around future tax policy, Roth conversions can be a powerful long-term tax strategy for some investors.

Key considerations:

• Future Tax-Free Income: Roth conversions increase your current Adjusted Gross Income (AGI), but allow for tax-free withdrawals in retirement.
• AGI Phaseout Risks: Conversions may not be appropriate for individuals who need to stay below certain income thresholds to preserve deductions or credits.
• Personalized Projections: At Canter Wealth, we run hypothetical tax projections to evaluate whether Roth conversions today support your long-term distribution strategy.

Investment Management & Tax Efficiency

4. Should my portfolio be rebalanced before year-end?

Answer: Yes, your portfolio should be reviewed, with rebalancing done strategically when necessary.

Market fluctuations throughout the year can cause asset allocations to drift away from your target risk profile. Year-end is an ideal time to realign your investment strategy.

Best practices include:

• Use Tax-Advantaged Accounts: Rebalancing within 401(k)s and IRAs helps avoid triggering taxable capital gains.
• Tax-Loss Harvesting: In taxable accounts, harvesting losses before December 31 can help offset realized gains and reduce tax liability.
• Avoid Overtrading: While frequent rebalancing is not recommended, a structured year-end review is critical to maintaining long-term investment discipline.

Plan Before the Year Ends

These are just a few of the common questions we hear during the year-end financial planning season. Tax laws, retirement rules, and investment strategies continue to evolve, and the details matter.

Now is the time to act.
Contact Canter Wealth today to schedule your 2025 year-end financial review and ensure your financial plan is aligned for the year ahead.

Disclosures:

This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, prospective investors are encouraged to contact Canter Wealth or consult with the professional advisor of their choosing.

Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.”

Certain information contained herein has been obtained from third party sources and such information has not been independently verified by Canter Wealth. No representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information by Canter Wealth or any other person. While such sources are believed to be reliable, Canter Wealth does not assume any responsibility for the accuracy or completeness of such information. Canter Wealth does not undertake any obligation to update the information contained herein as of any future date.

Except where otherwise indicated, the information contained in this presentation is based on matters as they exist as of the date of preparation of such material and not as of the date of distribution or any future date. Recipients should not rely on this material in making any future investment decision.