What financial, business or personal priorities should you focus on this year?

Now is an excellent opportunity to evaluate your investment strategies, savings plans and budgeting techniques. Whether your goal is to bolster your retirement fund, refine your estate planning approach or strengthen your overall financial standing, there are numerous paths you can explore.

Here are a few key areas to consider:

Maximize Retirement Contributions

Could you contribute more to your retirement accounts this year? In 2025, the contribution limit for both Roth and traditional Individual Retirement Accounts (IRAs) remains at $7,000, with an additional $1,000 allowance for individuals over 50 years old who are eligible for «catch-up» contributions. Your modified adjusted gross income (MAGI) may impact the amount you can contribute to a Roth IRA. In the case of a traditional IRA, you are permitted to contribute if you (or your spouse, if filing jointly) earn taxable income. However, income thresholds will determine if those contributions qualify for tax deductions. (Source: IRS.gov, 2025)

Once you turn 73, you are required to take minimum distributions (RMDs) from a traditional IRA. These withdrawals are considered taxable income, and if withdrawn before age 59 1/2, they may also incur a 10 percent federal penalty.

Roth 401(k)s offer tax-free and penalty-free withdrawals under certain conditions. To qualify, you must meet the five-year holding requirement and be at least 59½ years old. Withdrawals may also qualify under specific circumstances, such as the account holder’s passing. It’s essential to note that employer-matched contributions are pre-tax and will not be tax-free when withdrawn in retirement. Unlike traditional accounts, Roth IRAs do not require minimum distributions for the original owner.

Charitable Contributions

If you’re considering charitable giving, you may be eligible for a tax deduction, provided you adhere to IRS regulations. Proper documentation is crucial – bank records, payroll deductions, credit card statements, or written acknowledgments from the receiving organization can serve as proof of your donation.

Before adjusting your charitable giving strategy or record-keeping approach, it’s advisable to consult with a tax, legal or accounting expert.

Strategic Asset Location

Asset location plays a vital role in an investment strategy and refers to the placement of different assets in taxable, tax-deferred or tax-free accounts. It differs from asset allocation, which focuses on diversifying investments to manage risk. While asset allocation does not eliminate investment risk, it is a fundamental component of a well-balanced financial plan.

Review Withholding Status

Would adjusting your withholding status benefit you? Consider evaluating your tax situation if:

• You consistently owe taxes at the end of the year.
• You typically receive a substantial tax refund.
• Your marital status has recently changed.
• Your job or income level has shifted.

It’s wise to consult a tax, HR or accounting professional to determine the best course of action before any modifications.

Key Life Changes

If you got married recently, it might be time to update the beneficiaries on your retirement accounts and insurance policies. Additionally, if you’re changing your last name in 2025, you’ll need to request a new Social Security card. Updating your legal and financial records ensures that your assets and benefits are correctly allocated.

For individuals returning from active military duty, it’s essential to check your credit status and ensure all financial obligations are in order.

Consider Upcoming Financial Transactions

Are you planning to sell real estate, launch a new business, or receive commissions or bonuses in 2025? Do you anticipate selling an investment held outside of a tax-advantaged account? These financial moves can have tax implications, so it’s worth evaluating their potential impact in advance.

Prioritize Financial and Physical Wellbeing

Committing to healthy financial habits in 2025 is just as important as taking care of your overall wellbeing. Regularly reviewing your financial plan and seeking professional guidance, when necessary, can help you achieve long-term stability.

By focusing on these steps, you can set a strong foundation for a prosperous year ahead.

It’s important to remember that this article is purely for informational purposes and should not be used as a substitute for professional financial or tax advice.

Barbara Traylor Smith, CFP, ChFC, CLU, can be seen on KREX Saturdays at 6 p.m. and KJCT Sundays at 8 a.m. or heard on KNZZ Saturdays at 8 a.m. She has been featured in Bloomberg Business Week, Entrepreneur and Fortune magazines. Contact her at 970-256-1748 or retirementoutfittersllc.com. Investment advisory services offered through Foundations Investment Advisors LLC, an SEC registered investment adviser.