Scan the financial headlines, and you’ll find no shortage of year-end advice vying for your attention. Some of it is unique to 2024, while other tips are timeless traditions. If your wealth were a garden, which actions would actually deserve your focus? Here are four essential items to consider as 2025 approaches—plus a reflection on how to make the most of the remaining year.

Feed Your Cash Reserves

With savings accounts offering competitive annual interest rates around 4–5%, your idle cash can finally grow a bit while it sits. Two key thoughts:

Mind Where You’ve Stashed Your Cash

If your spending money is sitting in low- or no-interest accounts, consider moving it into higher-yield options like money market accounts, short-term CDs, or U.S. Series I Savings Bonds (“I Bonds”). Keep in mind: I Bonds require a minimum one-year holding period. These vehicles are ideal for short-term savings or emergency funds you may need in the next year or so.

Put Your Cash in Context

While attractive, today’s savings rates are unlikely to outpace inflation in the long run. Once your cash reserves are in place, consider allocating any surplus funds into your investment portfolio to pursue long-term growth. This ensures your wealth isn’t just sitting idle but working toward your bigger financial goals.

Prune Your Portfolio

A tidy portfolio needs regular attention, and year-end is a great time for an annual review. For 2024, consider these steps:

Rebalance: With 2024 stock performance potentially affecting your asset allocation, it’s worth rebalancing back to your target mix—particularly in tax-sheltered accounts where adjustments are more tax-efficient.

Relocate: As your income picture becomes clearer, consider contributing to tax-advantaged accounts like IRAs, HSAs, and 529 plans. Remember, you have until April 15, 2025, to make contributions for 2024, but starting sooner may make sense if funds are available.

Redirect: Redirect excess wealth toward personal or charitable giving. You can donate appreciated investments from taxable accounts to charities or Donor Advised Funds, reducing your tax liability while supporting meaningful causes.

Train Those Taxes

As 2024 closes, smart tax planning can minimize your lifetime tax burden. Keep these strategies in mind:

RMDs and QCDs: If you’re subject to Required Minimum Distributions (RMDs), don’t miss the December 31 deadline to avoid penalties. If you’re charitably inclined, consider making Qualified Charitable Distributions (QCDs) to offset your RMDs.

Tax-Loss and Tax-Gain Harvesting: Use tax-loss harvesting to offset gains or tax-gain harvesting to take advantage of lower capital gains rates. Always consult your tax team to evaluate your specific situation.

Prepare for 2025 Tax Changes: The 2017 Tax Cuts and Jobs Act is set to expire in December 2025, potentially leading to higher tax rates. While we don’t recommend making decisions based solely on this, 2024 could be a relatively tax-friendly year to complete strategic moves like Roth conversions or capital gains harvesting.

Weed Out Your To-Do List

While there’s no shortage of year-end financial advice, the most important step is to focus your efforts.

James Clear, author of Atomic Habits, offers this wisdom:

“Instead of asking yourself, ‘What should I do first?’ Try asking, ‘What should I neglect first?’ Trim, edit, cull. Make space for better performance.”

And Farnam Street emphasizes the value of focus:

“The best way to improve your ability to think is to spend large chunks of time thinking. … Good decision-makers understand a simple truth: you can’t make good decisions without good thinking, and good thinking requires time.”

Instead of trying to tackle everything at once, pick the financial action that best aligns with your goals, and take the time to do it well.

Need Guidance?

If you’d like personalized advice to wrap up 2024 or prepare for the year ahead, call Navalign Wealth Partners today. We’re here to help you tend your financial garden for growth and success.