As 2025 comes to an end, advisors have a chance to help clients take proactive steps that can improve their tax situation and reinforce their long-term financial plans. Year-end is an ideal time to encourage clients to revisit strategies that may have taken a back seat earlier in the year.
Below are five timely strategies to review with clients before year-end.
1. Maximize Retirement Contributions
Encourage clients to maximize their employer-sponsored retirement plans. For 2025, Internal Revenue Code Section 401(k) contribution limits are $23,500, with an additional $7,500 catch-up contribution for clients age 50 and older. Those between the ages of 60 and 63 have access to a special $11,250 catch-up limit.
For clients with access to both traditional and Roth 401(k) options, review how each fits into their long-term tax strategy. The Roth option, when combined with employer match opportunities, can be a powerful way to build tax-free retirement income.
Some employers also allow after-tax contributions beyond the standard limits, allowing clients to defer up to $46,000 extra per year. These funds can later be rolled into a Roth IRA, increasing tax-free growth potential.
Advisor takeaway: Review client contribution levels and explore whether pre-tax contributions or Roth elections align with their long-term tax diversification goals.
2. Recommend Spousal IRA Contributions
For married clients where one spouse earns little or no income, a spousal IRA can extend retirement savings benefits to both partners. For 2025, each spouse can contribute up to $7,000, or $8,000 if age 50 or older.
Depending on income levels and plan participation, contributions may or may not be deductible. Either way, the ability to accumulate additional tax-deferred assets can significantly strengthen a household’s retirement assets.
Advisor takeaway: Review household income and ensure eligible clients are maximizing contributions before the April 2026 filing deadline.
3. Review Backdoor Roth Strategies
For higher-income clients exceeding the Roth IRA income limits ($230,000–$246,000 for joint filers), the backdoor Roth IRA remains a useful planning technique. By contributing after-tax dollars to a traditional IRA and then converting to a Roth IRA, clients can continue building tax-free retirement savings despite income restrictions.
Advisors should, however, monitor the pro-rata rule, which may create taxable income if clients hold other pre-tax IRA balances.
Advisor takeaway: Coordinate with clients’ tax professionals to evaluate whether this strategy is suitable and to ensure conversions are executed cleanly.
4. Ensure FSAs Are Fully Utilized
Flexible spending accounts (FSAs) are often underutilized. These accounts are “use it or lose it,” and unspent funds may be forfeited at year-end unless a plan offers a limited carryover. Typical eligible expenses include medical, dental, vision and dependent care costs.
Advisor takeaway: Add FSA reminders to your year-end client checklist and encourage clients to schedule remaining eligible expenses early.
5. Guide Charitable Giving and Donor-Advised Fund Strategies
Year-end is a perfect time to review charitable giving plans. Donating appreciated securities, rather than cash, can allow clients to avoid capital gains taxes while receiving a deduction for their charitable gift.
A donor-advised fund (DAF) can also be a powerful tool for clients who wish to give strategically. Contributions to a DAF provide immediate tax deduction while allowing flexibility to recommend grants to charities over time. For clients anticipating higher-income years, “bunching” several years’ worth of gifts into a DAF can maximize the impact of itemized deductions.
Advisor takeaway: Integrate charitable strategies into year-end tax planning conversations to help clients meet both philanthropic and financial objectives.
For advisors, the final quarter of the year is about coordination, clarity and communication. Reviewing contribution limits, charitable strategies, and cash flow decisions with clients before Dec. 31 not only enhances outcomes but also reinforces your role as a proactive advisor.
A thoughtful year-end conversation can serve as both a client service touchpoint and a foundation for deeper financial discussions heading into 2026.
