October marks National Financial Planning Month, and with just a few months left in the year, now is a great time to revisit your financial planning strategies. Whether you are working and planning for retirement or enjoying your retirement years, Fall is an ideal time to make key moves that can reduce your tax bill and keep more money in your pocket.
To maximize your money, a CFP® professional can help navigate many complex financial planning topics, including tax strategies, charitable gifting, claiming Social Security and Medicare planning. Additionally, with significant changes in the tax code resulting from the passage of the “One Big Beautiful Bill Act” (OBBBA), reviewing how those changes affect your tax planning strategy for the year is essential as year-end approaches.
Tax Planning Strategies
Tax planning can be complex, but it’s one of the most powerful tools to keep more of your money working for you. If you’re planning for retirement, a CFP® professional can help you look ahead — reviewing your income sources, maximizing retirement account contributions and adjusting strategies based on recent tax law changes. As year-end approaches, it’s an ideal time to assess whether you’re taking full advantage of available deductions, credits and tax-efficient savings vehicles.
For those already in retirement, tax planning looks different. As year-end approaches, review where you fall in your tax bracket. Many retirees find that their tax brackets drop in early retirement compared to their working years, which can create unique opportunities. For example, if you remain within the 12% tax bracket, realizing capital gains tax-free in brokerage accounts can allow you to reset your cost basis, diversify highly appreciated stocks and ultimately keep more money in your pocket.
Charitable Planning
Charitable giving can play a role in both retirement planning and in-retirement strategies. When planning, it’s worth considering how your future charitable goals fit into your overall financial plan — whether through donor-advised funds, gifting appreciated securities or other tax-efficient methods.
If you’re already retired, there are additional opportunities to give strategically. If you have to take required minimum distributions (RMDs) from retirement accounts, you have until December 31 to decide how to handle those funds. Instead of taking an RMD from an IRA as income and paying taxes on it, you can direct the RMD from an IRA to a qualified charity through a qualified charitable distribution (QCD) and the distribution won’t be added to your taxable income. If you were planning to give to charity anyway, this move supports causes you care about while reducing your taxable income.
Social Security
Social Security claiming is one of the most consequential financial decisions. If you’re still in your earning years and haven’t reached full retirement age (FRA), year-end is an ideal checkpoint to evaluate your cash flow and consider the timing of your benefits. Continuing to work while claiming early can reduce your benefit if your income exceeds certain thresholds, so many people find it advantageous to delay until their employment income winds down.
Once you’ve reached FRA, you can collect without reductions but choosing whether to continue delaying in exchange for larger payments requires careful thought. And if you’ve claimed within the last 12 months but discovered you don’t need the income, you may be able to withdraw your application and restart later at a higher amount. Each of these decisions can have a lasting impact, making it important to ensure your Social Security strategy aligns with your broader retirement goals.
Senior Deduction
With the passing of OBBBA, seniors 65+ qualify for an additional standard deduction ($6,000 for single filers/$12,000 for married couples filing jointly) with income phaseout ranges. This new deduction can help create a withdrawal strategy to maximize your deduction and increase tax savings. You’ll want to be sure to avoid unnecessary taxable IRA withdrawals that could phase you out of this deduction. If additional cash flow is needed but you are close to the phaseout range, consider drawing from cash or brokerage accounts instead. For example, if you are in the 22% federal tax bracket, each dollar you lose of that new deduction means you pay 22 cents more in tax, which is the direct cost of missing that deduction.
Small year-end moves can have a major long-term impact on your overall tax savings, especially after the passage of the One Big Beautiful Bill. Coordinating with a CFP® professional during National Financial Planning Month can help form an effective tax, retirement income and withdrawal strategy to maximize your tax savings, create an efficient plan, and keep you in the strongest financial position to enjoy retirement.
Get started on securing your financial future today
Find a CFP® professional