New Year Financial Planning Checklist

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The beginning of a new year can serve as a fresh start with financial resolutions and monetary goals. Here’s a checklist to help ensure your 2025 financial plan stays on track by incorporating regulatory changes and updates to your spending, saving, investing, and giving in the new year.

REVIEW YOUR INCOME  

Will your income be impacted by changes to Social Security for 2025?

  • In 2025, Social Security recipients will see a cost-of-living adjustment of 2.5% in their benefits.

  • Some workers will see a reduction in take-home pay due to the higher ceiling in Social Security payroll taxes. In 2025, the first $176,100 you earn will be subject to Social Security withholding, up from 168,600 in 2024.

Are you expecting a pay increase or lump-sum bonus(es)? An increase in your household-adjusted gross income could move you into a higher tax bracket. Review the 2025 Federal Income Tax Brackets and discuss with your CPA to determine if any adjustments in W-4 withholdings would be wise.

PLAN FOR LIFE’S MILESTONES 

Life events such as marriage, retirement, and death of a loved one can have a significant impact on your financial plan.

Will your tax filing status change in 2025 due to a marriage or divorce? Are you planning to retire this year?

  • Look to maximize employer-sponsored benefits prior to retirement.

  • Understand how the timing of your retirement can impact your benefits coverage including enrollment in Medicare and changes to your income and living expenses through year-end.

  • If you’re eligible for a pension, contact human resources for pay-out calculations and necessary distribution paperwork.

Is your family expanding due to marriage (you or your children), a new baby, or a grandchild? When experiencing a life event that expands family members, it is prudent to review your beneficiary designations and ensure your estate plan is up to date to reflect your growing family.

INVESTMENT PORTFOLIO REVIEW 

Schedule a comprehensive investment portfolio review with your Clearwater Capital advisor early in 2025 to review your portfolio mix and any necessary investment changes for the new year.

  • Are you on track to maximize your retirement investments? If you have access to a Roth 401(k) and a traditional 401(k), you can contribute up to the annual maximum limit across both contribution types.

Review progress towards long-term financial goals.

  • Do you have changes to income and cash flow needs?

  • Are there any risk adjustments that need to be made in your portfolio?

  • Update your balance sheet with year-end values of all assets and liabilities.

Prepare for tax time.

  • Confirm you can access your year-end statements and tax documents once they are posted online.

  • Review your realized capital gains and dividends for 2024.

  • If eligible, make your 2024 IRA contributions by April 15, 2025.

Are you subject to a Required Minimum Distribution (RMD) in 2025? If you turn 73 this year you have until April 1 of 2026 to make your first withdrawal, however, you’ll have to take BOTH your RMD for 2025 and 2026 before next year-end to meet the IRS requirement.

  • Coordinate the timing of your RMD payout with your advisor. This includes reviewing if tax withholding is appropriate as well as utilizing the Qualified Charitable Distribution (which allows you to donate up to $105,000 directly from your IRA).

  • If you inherited an IRA and are subject to the 10-year rule, ensure your distribution strategy is incorporated in your 2025 financial plan.

PLAN FOR 2025 EXPENSES 

Although “budget” is no one’s favorite word, let’s face it, financial planning and budgeting go hand in hand. Understanding how much you anticipate spending is directly correlated with the level of confidence you can have in meeting your financial goals.

What is your general monthly budget? This includes monthly expenses like food, housing, and transportation in addition to variable expenses like entertainment.

What larger one-time expenses are you planning in 2025? This might include:

  • Vacation(s)

  • Home maintenance purchase or renovation project

  • Wedding

  • Purchase of a new vehicle 

As you look ahead to the new year, it is the perfect time to start with a fresh perspective on your financial plan and wealth-building strategies. Work with your Clearwater Capital advisor to incorporate this checklist with your unique circumstances and financial goals.

For more information regarding Social Security, visit SSA.gov.

For more information regarding 401(k) contributions, visit IRS.gov.

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