Key year-end cutoffs could impact your taxes, retirement income, and healthcare heading into the new year
As December rushes by with holiday plans, year-end work pressure, and family gatherings, many Americans overlook some of the most important financial deadlines of the entire year. For retirees — and those preparing for retirement — these final days of December can shape taxes, healthcare costs, and long-term income for years to come.
Miss the wrong deadline and the consequences can be steep: penalties, higher tax bills, lost employer matches, or reduced Medicare coverage. The good news is that with a little preparation, these last-minute moves can also create powerful financial advantages.
Here are the most critical retirement-related deadlines you must act on before December 31 — and what to do now to stay protected.
Required minimum distributions are non-negotiable
One of the most serious year-end obligations for retirees is taking required minimum distributions (RMDs) from traditional IRAs, 401(k)s, and other tax-deferred accounts.
If you are age 73 or older (or 72 if you reached that age before 2023), the IRS requires you to withdraw a minimum amount each year.
Why it matters:
Failing to take your RMD can trigger a 25 percent penalty on the amount you should have withdrawn. If corrected quickly, that penalty may be reduced to 10 percent — but that still represents a painful and unnecessary loss.
What to do now:
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Confirm your RMD amount with your financial institution immediately
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If you own multiple IRAs, you can combine withdrawals into one distribution
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401(k) RMDs must be taken separately from each plan
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Avoid waiting until the final week of December when processing delays are common
Roth conversions close at year’s end
A Roth conversion — moving money from a traditional IRA or 401(k) into a Roth account — must be completed by December 31 to count for the current tax year.
This strategy allows your money to grow tax-free for the rest of your life, but the converted amount will be taxed as ordinary income in the year of the conversion.
Why it matters:
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Roth accounts offer tax-free retirement withdrawals
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They reduce future RMD obligations
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They can protect against rising tax rates in retirement
What to do now:
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Review your current tax bracket before converting
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Consider spreading conversions across multiple years
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Work with a tax advisor to avoid pushing yourself into a higher bracket
Charitable giving deadlines can cut taxes and satisfy RMDs
December 31 is also the deadline for charitable contributions if you want the deduction on this year’s taxes.
For retirees age 70½ and older, there is a powerful option called a Qualified Charitable Distribution (QCD) that allows you to give directly from your IRA to a charity.
Why it matters:
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QCDs count toward your RMD
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The donated portion is not taxed
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You can donate up to $100,000 annually using this method
What to do now:
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Decide whether to give cash, securities, or use a QCD
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Transfers must be completed before December 31
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Do not wait until the final banking days of the year
Flexible spending accounts can disappear overnight
If you still work and have a Flexible Spending Account (FSA), December 31 is often a “use it or lose it” deadline.
Unused funds may be forfeited unless your employer offers a limited rollover or grace period.
Why it matters:
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Unused funds may permanently disappear
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You lose tax-free healthcare dollars you already set aside
What to do now:
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Schedule delayed medical appointments
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Buy eligible over-the-counter medical items
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Check with your employer about rollover options immediately
Medicare plan changes lock in by early December
While many retirement deadlines fall on December 31, Medicare Open Enrollment closes earlier — on December 7.
This affects Medicare Advantage and prescription drug plans for the upcoming year.
Why it matters:
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After the deadline, you are locked into your plan
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Premiums, drug coverage, and provider networks change yearly
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A missed deadline can mean thousands in unexpected healthcare costs
What to do now:
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Review your 2025 Medicare plan details
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Confirm your doctors and prescriptions are still covered
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Submit changes before the enrollment cutoff
Tax-loss harvesting can soften your tax bill
If you have a taxable investment account, December 31 is the deadline for tax-loss harvesting — a strategy used to offset capital gains or reduce taxable income by up to $3,000.
Why it matters:
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It can significantly reduce your tax liability
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It helps rebalance your portfolio without altering your long-term investment strategy
What to do now:
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Review underperforming investments
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Sell losses strategically
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Avoid violating the wash sale rule, which disallows deductions if a similar security is repurchased within 30 days
401(k) contributions stop on December 31
If you’re still working, contributions to employer-sponsored retirement plans like 401(k)s must be completed by December 31. IRA contributions may be made until the tax filing deadline in April, but 401(k) contributions cannot be delayed.
Why it matters:
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You could lose employer matching funds
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You miss the chance to lower your taxable income for the year
What to do now:
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Check your contribution progress
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Adjust payroll deductions if room remains
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Confirm contribution cutoffs with HR immediately
Beneficiary and estate reviews prevent costly mistakes
While not tied to a hard IRS deadline, end-of-year estate planning reviews are critical and often overlooked.
Beneficiary designations override wills — meaning outdated forms can send your assets to the wrong people.
Why it matters:
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Divorce, remarriage, or deaths can invalidate old plans
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Errors can trigger family disputes and legal battles
What to do now:
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Review beneficiaries on retirement accounts, life insurance, and annuities
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Update outdated forms
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Meet with an estate planner if major life changes occurred this year
Health savings account contributions still have time — with limits
If you qualify for a Health Savings Account (HSA), contributions can be made until the tax filing deadline — but payroll contributions may still cut off in December depending on your employer.
Why it matters:
HSAs offer one of the rare “triple tax benefits”:
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Tax-deductible contributions
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Tax-deferred growth
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Tax-free withdrawals for medical expenses
What to do now:
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Max out contributions if possible
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Confirm employer deduction deadlines
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Use HSAs strategically as a retirement healthcare fund
Why these deadlines matter more than ever
With inflation still weighing on retirement savings and healthcare costs rising, every tax advantage and income strategy matters. A missed RMD, a forgotten FSA balance, or a poorly timed Medicare decision can quietly drain thousands from your retirement.
December is not just the end of the calendar year — it is the final opportunity to lock in financial protection for the year ahead.
Key takeaways for retirees and future retirees
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RMDs must be taken before year-end to avoid heavy penalties
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Roth conversions and charity strategies expire on December 31
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Medicare changes lock earlier in December
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FSAs often vanish if unused
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401(k) contributions stop with the calendar year
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Estate and beneficiary reviews prevent irreversible mistakes
The bottom line
The final days of December offer one last chance to protect your retirement income, minimize taxes, and avoid penalties that don’t show mercy for procrastination. Whether you’re newly retired or years away, these deadlines apply to nearly every household building long-term financial security.
Handled properly, they can unlock powerful savings. Missed entirely, they can quietly cost you for years.
Emily Johnson is a critically acclaimed essayist and novelist known for her thought-provoking works centered on feminism, women’s rights, and modern relationships. Born and raised in Portland, Oregon, Emily grew up with a deep love of books, often spending her afternoons at her local library. She went on to study literature and gender studies at UCLA, where she became deeply involved in activism and began publishing essays in campus journals. Her debut essay collection, Voices Unbound, struck a chord with readers nationwide for its fearless exploration of gender dynamics, identity, and the challenges faced by women in contemporary society. Emily later transitioned into fiction, writing novels that balance compelling storytelling with social commentary. Her protagonists are often strong, multidimensional women navigating love, ambition, and the struggles of everyday life, making her a favorite among readers who crave authentic, relatable narratives. Critics praise her ability to merge personal intimacy with universal themes. Off the page, Emily is an advocate for women in publishing, leading workshops that encourage young female writers to embrace their voices. She lives in Seattle with her partner and two rescue cats, where she continues to write, teach, and inspire a new generation of storytellers.
