Your New Year Financial Checklist – The first quarter of the year is an ideal time to revisit your finances and ensure you’re on track, whether you’re still working or enjoying retirement. By taking a few proactive steps early in 2025, you can manage your financial goals, retirement savings, and taxes more effectively.

Here’s a checklist to help you get started.

Revisit Your Financial Goals

Whether you’re working or retired, Q1 is the perfect time to revisit your financial goals. Are you on track  for retirement, saving for a major purchase, or adjusting to changes in your lifestyle? Reviewing and updating your goals can help you make informed decisions about your spending, savings, and investments.

Revisit Your Tax Withholding or Withdrawal Strategy

For those still working, review your tax withholding to make sure it aligns with your current income and filing status. If you’ve had a recent life change, such as getting married, having a child, or switching jobs, adjust your W-4 accordingly to avoid overpaying or underpaying taxes.

If you’re retired and drawing income from your retirement accounts, revisit your withdrawal strategy. Ensure you’re withdrawing from your accounts in the most tax-efficient way and that your distributions will meet your income needs for 2025. A review now can prevent future shortfalls or unnecessary taxes.

Maximize Retirement Contributions or Plan for RMDs

If you’re still working, create a plan to maximize your retirement contributions. In 2025, you can contribute up to $23,500 to your 401(k). Those aged 50 and older can make an additional $7,500 catch-up contribution. Starting this year, individuals aged 60 to 63 will be able to contribute a higher catch-up amount of $11,250. (This change is part of the SECURE Act 2.0.) For SIMPLE IRAs, a similar catch-up exists for those between the ages of 60 and 63.

For retirees over 73, it’s time to plan for your required minimum distributions (RMDs). Although you have until Dec. 31 to take your RMD, planning in Q1 can help avoid penalties, which can be as high as 25% of the amount not withdrawn.

Make 2024 Contributions

If you didn’t maximize your retirement contributions in 2024, you have until Apr. 15, 2025, to make IRA contributions for the previous year. If the contribution goes to a traditional IRA, this can help reduce your taxable income.

You also have until Apr. 15 to make Health Savings Account (HSA) contributions for 2024, if you are eligible. These contributions are tax deductible. The limits are $4,150 for individuals and $8,300 for families.

Replenish Your Emergency Fund or Reevaluate Your Budget

For working individuals, assess your emergency fund. A good target is three to six months’ worth of living  expenses saved. If you dipped into it last year, make replenishing it a priority.

For retirees, this is a good time to reevaluate your budget. Have your expenses changed? Are there subscriptions you no longer use, or opportunities to lower your costs for items like cell phones or cable? Understanding your spending will help you manage your retirement savings more effectively.

Prepare for Tax Season

Begin gathering tax documents early. Whether you’re working or retired, organizing your W-2s, 1099s, and receipts for charitable contributions will help streamline the tax filing process and prevent last-minute stress.

Stay Financially Focused in Q1

Taking time in Q1 to revisit your tax strategy, retirement contributions, emergency fund, and financial goals can help you feel more confident throughout 2025—whether you’re still in the workforce or enjoying retirement.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.

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