How to Use the Final Quarter to Achieve Your Retirement Goals

As we approach the last few months of the year, it presents an appropriate moment to evaluate your retirement strategy and make targeted adjustments to support your financial future. Whether retirement is years away or just around the corner, the last quarter of the year provides valuable opportunities to refine your approach, increase savings, and help ensure that your goals remain on track.

1. Maximize Your Retirement Contributions

One of the most impactful ways to enhance your retirement savings is to maximize contributions to your tax-advantaged retirement accounts. Review your contributions year-to-date and, if possible, consider increasing them to reach the annual limits before the year ends. Even modest increases can yield significant long-term benefits due to the power of compounding. Taking full advantage of these contribution opportunities can substantially improve your retirement outlook.

2. Review and Rebalance Your Investment Portfolio

The end of the year is an ideal time to reassess your investment portfolio to confirm it remains aligned with your retirement objectives. Over time, fluctuations in market performance may cause your portfolio to deviate from its intended asset allocation. Rebalancing your portfolio to maintain the appropriate mix of equities, fixed-income instruments, and other assets is crucial to managing risk and staying on course with your long-term financial goals.

3. Maximize Employer Contributions

If you are enrolled in a 401(k) plan with an employer matching program, verify that you are contributing enough to fully benefit from the match. Employer matching is a valuable tool for enhancing your retirement savings, effectively adding “free” money to your nest egg. Review your contribution level and, if needed, increase it during this final quarter to take full advantage of the employer match. This simple adjustment can accelerate your retirement savings with minimal effort.

4. Evaluate the Potential for a Roth Conversion

The year-end is an opportune time to consider converting funds from a traditional IRA or 401(k) into a Roth IRA. A Roth conversion allows for future tax-free withdrawals, which can be especially beneficial if you anticipate being in a higher tax bracket during retirement or if tax rates increase. However, it is important to remember that the amount converted is treated as taxable income for the current year. Carefully evaluate the potential tax implications and make sure you have adequate resources to cover any resulting tax liability before proceeding with a Roth conversion.

5. Review Your Social Security Strategy

For those nearing retirement, Social Security benefits are a key component of the overall income strategy. The final quarter of the year is an excellent time to review your Social Security strategy to ensure it aligns with your broader retirement plan. Delaying the start of Social Security benefits beyond full retirement age (up to age 70) can lead to significantly higher monthly payouts. Conversely, if you plan to claim benefits early, consider the potential long-term impact on your overall retirement income. Fine-tuning your approach to Social Security can help you maximize your benefits and secure a more stable financial future.

6. Engage in Year-End Tax Planning

The last quarter of the year provides a final opportunity to implement tax-saving strategies that can bolster your retirement savings. If you find yourself in a higher tax bracket, consider contributing to a traditional IRA or increasing your 401(k) contributions to reduce your taxable income. Additionally, strategies such as tax-loss harvesting—selling investments that have declined in value to offset gains—can help lower your overall tax burden. Any tax savings generated can be reinvested to further strengthen your retirement portfolio.

7. Consult a Financial Advisor

Meeting with a financial advisor in the final quarter of the year can provide valuable insights and strategies tailored to your specific retirement goals. Whether you are considering adjusting your contribution levels, rebalancing your portfolio, or refining your Social Security strategy, a trusted advisor can help guide you through complex financial decisions. This is an excellent time to review your financial standing and set the foundation for a successful new year.

Finishing the Year Strong

As we approach the end of 2024, there are still ample opportunities to make meaningful progress toward your retirement goals. By maximizing contributions, reviewing your investment strategy, and capitalizing on tax-saving opportunities, you can enhance your financial future and guarantee you are well-positioned to enjoy a comfortable retirement.

If you have any questions regarding your retirement strategy or would like personalized advice, our team of experienced financial advisors is here to assist you. We are committed to supporting you at every stage of your financial journey.

(2024) Leewardfinancialgroup.com

Any opinions are those of John A Piotrowski and Leeward Financial Group and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Past performance does not guarantee future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.