Year-End Financial Checklist: 7 Things to Do Before December 31st

As the calendar winds down, most people are caught up in holiday shopping, travel, and family celebrations. But December is also the perfect time to take a closer look at your financial picture. A few strategic moves before December 31st can help you save on taxes, strengthen your retirement plan, and set yourself up for a more confident start to the new year.

Think of this as your year-end financial health check-up. Just like a doctor’s appointment, it’s about making sure everything is on track and catching small issues before they become big problems.

Here’s a 7-step checklist to review before the year closes.

1. Max Out Retirement Contributions

One of the smartest year-end moves is to check whether you’ve contributed the maximum allowed to your retirement accounts.

• Employer Plans (401(k), RRSP, etc.): Many accounts let you contribute pre-tax dollars, lowering your taxable income. If you haven’t hit the annual contribution limit, consider adding more before December 31st.

• Individual Accounts (IRA, TFSA, Roth): While some accounts allow contributions until tax-filing deadlines, others are locked at year-end. Double-check the rules for your plan.

• Employer Match: If your company offers a match, make sure you’ve contributed enough to capture the full amount otherwise, you’re leaving free money on the table.

2. Review Tax-Loss Harvesting Opportunities

The end of the year is prime time to look at your taxable investment accounts. If some of your holdings are down, you may be able to sell at a loss and use that to offset gains elsewhere.

• Capital Gains Offsets: Selling losing investments can reduce taxes on profitable ones.

• Carry Forward: If losses exceed gains, you can often carry them forward to offset future taxes.

• Watch Out for Wash-Sale Rules: Be cautious about buying the same or a “substantially identical” security within 30 days, or the loss may be disallowed.

3. Use Up Flexible Spending Accounts (FSAs)

If you contribute to a workplace Flexible Spending Account (FSA) for healthcare or dependent care, check the balance. Many plans have a “use it or lose it” rule, meaning any unused funds disappear after December 31st.

• Healthcare FSA: Schedule dental visits, eye exams, or stock up on eligible medical supplies.

• Dependent Care FSA: Pay for childcare expenses before the deadline if possible.

• Grace Periods or Carryovers: Some employers offer limited carryovers into the next year, but not all. Confirm with your HR department.

4. Check Charitable Contributions

Year-end is also a season of giving and charitable donations can bring tax benefits if you itemize deductions.

• Cash Donations: Gifts made by December 31st can usually be deducted for that tax year.

• Donations of Goods: Clothing, furniture, or other non-cash items may qualify—just be sure to keep receipts.

• Qualified Charitable Distributions (QCDs): If you’re over 70½, you can donate directly from your IRA to a charity, satisfying part of your required minimum distribution (RMD) while reducing taxable income.

5. Evaluate Your Tax Withholding and Estimated Payments

Nobody likes an unexpected tax bill in April. Year-end is your last chance to check whether your withholding and estimated tax payments are on track.

• Review Paystubs: Compare your total withholding against expected tax liability.

• Make Adjustments: If you’ve had major life changes, like a new job, marriage, or side income, you may need to increase withholding or make a final estimated payment.

• Avoid Penalties: Adjustments now can save you from penalties for underpayment later.

6. Review Your Investment Portfolio and Goals

December is the perfect time for a portfolio checkup. Ask yourself: Does your investment mix still align with your long-term goals and risk tolerance?

• Rebalancing: If some assets (like stocks) have grown disproportionately, your portfolio may need rebalancing to restore your target allocation.

• Risk Tolerance Check: Life changes, like buying a home, having children, or nearing retirement, might call for adjustments.

• Future Planning: Consider whether it’s time to explore new opportunities like sustainable investing, alternative assets, or boosting emergency savings.

7. Set Goals for the New Year

A year-end review isn’t just about closing the books, it’s about preparing for the next chapter. Setting financial goals now gives you a head start on January resolutions.

• Short-Term Goals: Building an emergency fund, paying off credit card debt, or saving for a vacation.

• Medium-Term Goals: Saving for a home, education, or major purchase in the next 3–5 years.

• Long-Term Goals: Retirement planning, wealth transfer, or leaving a legacy.

Final Thoughts

The final weeks of the year are a chance to pause, reflect, and make strategic financial moves. By tackling this 7-step year-end financial checklist, you can lower your taxes, maximize retirement savings, and start the new year with clarity and confidence.

At Contivos Financial, we specialize in helping Canadians align their financial strategies with their life goals. Whether you’re planning for retirement, managing investments, or building a safety net, we’re here to guide you every step of the way.