Your year-end financial planning checklist for 2026

1. Max out your retirement contributions for 2026

There’s still time to make 2026 contributions to your retirement accounts. However, you might not want to wait until the deadline to contribute. The sooner you contribute, the more time your money can grow and benefit from the power of compounding. You have until:

• December 31, 2026, to contribute to your employer plan. Employer contributions to SIMPLE and SEP-IRAs can generally be made until the employer’s tax-filing deadline, including extensions. However, SIMPLE IRA employee contributions must be made by December 31, 2026.
• April 15, 2027, to contribute to your traditional or Roth IRAs.

Additional considerations

Don’t forget, your IRA contributions can’t exceed either your earned income for the year or the IRS-imposed limits, whichever amount is less. How much you earn can limit or restrict your Roth IRA contributions.

If you exceed Roth IRA income limits, you may be eligible to set up a backdoor Roth IRA. If you don’t have income but are married to someone who does, you may be eligible to open a spousal IRA and have your spouse contribute on your behalf. Before you pursue these alternative options, make sure you explore the different IRA rules and limits for each scenario.

Depending on your retirement account, you may be eligible for tax deductions. Traditional employer-plan contributions generally come out of your pay on a pre-tax basis, which automatically reduces your taxable income. But IRA contributions work a little differently. While Roth IRA contributions are never tax-deductible, traditional IRA deductions vary based on your modified adjusted gross income and whether you’re covered by a retirement plan at work.

2. Take your required minimum distribution (RMD)

If you’re required to take RMDs, you’ll want to act before the end of the year to avoid paying a penalty. If you turned 73 this year and are taking an RMD for the first time, you have until April 1, 2027, to take your 2026 RMD. Keep in mind that delaying it until 2027 means you’ll need to take both your 2026 and 2027 RMDs during the same calendar year.

The IRS requires you to take RMDs from certain tax-deferred retirement accounts, such as traditional IRAs and qualified retirement accounts from a former employer. Roth 401(k)s and Roth IRAs aren’t subject to RMD requirements if you’re the original account holder. If you’re required to take an RMD from your Vanguard IRA, Vanguard will automatically calculate your RMD amount each year.

If you inherited an IRA on or after January 1, 2020, you might be subject to the 10-year rule. This means the account must be liquidated by the end of the 10th year following the year of the original owner’s death.

Read more about RMDs for inherited IRAs

3. Reach your 529 education savings goals with a 2026 contribution

You have until December 31 to contribute to most states’ 529 education savings plans to qualify for a tax deduction or credit. However, plans administered in Georgia, Indiana, Kansas, Mississippi, Oklahoma, South Carolina, and Wisconsin allow you to contribute until April 15 of the following year. And Iowa allows for contributions through April 30 of the following year.

529 plans are a great way to give the gift of education while reaping tax benefits too.

• You can contribute up to $19,000 in 2026 for single filers ($38,000 if married filing jointly) per beneficiary without triggering the federal gift tax.
• You may be able to deduct your contributions from your state income tax (or get a state tax credit) depending on where you live.¹
• If you want to contribute more to a 529 account in a single year, you can “superfund” the account without it counting against your lifetime gift tax exemption. By superfunding a 529, you can make up to 5 years’ worth of contributions ($95,000 for single donors and $190,000 for married couples in 2026) all at once to reduce your taxable estate. This election applies the annual gift tax exclusion for that beneficiary over the 5-year period.

4. Complete a Roth conversion by December 31, 2026

You have until the end of this year to complete a Roth conversion for the current tax year.

Roth IRAs offer many benefits, including tax-free growth and tax-free distributions, assuming you’re age 59½ and you’ve held the account for at least 5 years. There are also no RMDs as long as you’re the original account holder, making it easier to leave a tax-free inheritance to your heirs. But there are some additional tax considerations to keep in mind when considering a conversion.

Understand the tax impact of a Roth conversion

Since a conversion is a taxable event, there are a few things you might want to consider first. When converting assets from a traditional IRA to a Roth IRA, there are no income restrictions, and you don’t have to convert the entire amount at once. Since you’ll owe ordinary income taxes on any pre-tax amounts, partial conversions make it easier to spread out your tax payments over 2 or more years. To avoid paying a higher tax rate, you may want to consider converting an amount that keeps you in your current tax bracket. Depending on your home state, you may also have to pay state income taxes on a conversion.

Why Roth conversion timing matters

Deciding when to convert often hinges on whether your tax rate will be higher now or in the future. If you believe your tax rate is lower now than it’ll be when you start taking withdrawals, a conversion may be beneficial. You’ll pay conversion income taxes now while you’re in a lower tax bracket, and you’ll enjoy tax-free Roth IRA withdrawals later when the higher tax bracket won’t matter.

Ways to manage conversion taxes

If you’re 73 or older, you’ll need to satisfy your RMD before converting, which will result in a taxable event. However, taking advantage of a qualified charitable distribution (QCD) can help ease the overall tax burden associated with a conversion.

5. Take advantage of charitable giving tax benefits

Charitable giving offers a way to financially support your favorite charities while enjoying tax benefits that accompany your generosity.

Charitable tax deductions

For charitable donations made by December 31, 2026, you can deduct up to 60% of your 2026 adjusted gross income (AGI) for cash gifts made to a qualifying charity (which excludes private foundations and supporting organizations). The deduction is usually limited to 30% of your AGI for noncash contributions such as appreciated stock gifts and donations to qualifying private foundations or organizations.

Qualified charitable distributions (QCDs)

If you’re 70½ or older, you can take up to $111,000 for tax year 2026 from your traditional IRA to donate directly to a qualified charity without paying taxes—the QCD is simply excluded from your taxable income. If you’re age 73 and don’t need to live off your RMD income, the benefit is twofold—it can help you meet your RMD requirement and reap the tax benefits. You may have to withdraw more depending on your actual RMD amount.

Note: If you make a QCD, you won't be able to claim a charitable deduction with those same assets.

The Secure Act 2.0—signed into law in December 2022—includes a onetime election for a QCD to a split-interest entity. This allows you to make a QCD of up to $55,000 to fund either a charitable remainder unitrust (CRUT), charitable remainder annuity trust (CRAT), or charitable gift annuity (CGA). Consult your tax advisor and estate planner to see if this makes sense for you.

6. Assess your investment portfolio and asset mix

The end of the year is a good time to check your asset allocation and rebalance your portfolio if needed. Assess whether your current allocation is right for your goals or if you need to shift your portfolio to be more conservative or aggressive, depending on your risk tolerance and goal time horizon. You’ll also want to check if there are opportunities to consolidate any similar investments within an account or add any investment types you might be missing to balance out your mix. While reviewing your asset allocation, consider whether you have any realized capital gains this year, as you may benefit from tax-loss harvesting.²

It’s also a good time to check on other savings accounts you may have, like a health savings account (HSA) or emergency fund. If you have an HSA to save for medical expenses, it’s a good idea to max out your contributions. Investing early lets you take full advantage of tax-advantaged compounding. The biggest advantage of HSAs is their triple tax benefit: Contributions can be tax-deductible, your savings grow tax-free within the account, and qualified withdrawals are tax-free.³

7. Review your insurance and beneficiaries

The end of the year is a good time to make sure you’re up to date on the following:

• Update your beneficiaries if necessary.
• Review your insurance policies, like homeowners, auto, life, and more.
• Review your health insurance or Medicare elections and update them if needed during the open enrollment period.

8. Set financial goals for next year

Before the new year begins, identify 2 to 4 achievable financial goals you’d like to work toward. Clear goals can help guide future financial decisions and keep your priorities in focus throughout the year.

Your goals might include:

• Increasing your retirement plan contributions.
• Building or replenishing your emergency fund.
• Paying down high-interest debt.
• Developing or reviewing an investing plan that aligns with your time horizon and risk tolerance.
• Preparing for tax season by gathering important documents and noting any changes to your income, accounts, or personal circumstances.

Taking these steps now can help you approach the new year with a clearer plan.