Year-End Money Moves: 9 Things to Do Before December 31

December 31 isn’t just New Year’s Eve. It’s a financial deadline — and most of the year’s best money moves expire with it.

Every January, millions of people realize they left free money on the table: an unmatched 401(k) contribution, an unspent FSA balance that vanished, a Roth IRA they meant to fund “sometime.” The difference between those people and you is this checklist.

None of these moves take more than an hour. Several take ten minutes. All of them are worth real money. Work through them before the ball drops.

1. Top up your 401(k) before the contribution window closes

For 2026, the IRS lets you contribute up to $24,500 of your salary to a 401(k) ($8,000 extra if you’re 50 or older; $11,250 extra if you’re 60–63, per IRS Notice 2025-67). Whatever you don’t contribute by December 31 is gone forever — the limit doesn’t roll over.

A worked example: Say you’ve contributed $18,000 so far this year and you get paid biweekly, with 5 paychecks left. Your remaining room is $24,500 − $18,000 = $6,500. Divide by 5 paychecks: bump your contribution by $1,300 per paycheck and you max out the year.

That sounds like a lot — until you remember it’s pre-tax money. If you’re in the 22% bracket, that $1,300-per-paycheck bump only reduces your take-home by about $1,014 per check. And if your employer matches contributions, check whether you’re on track to capture the full match — leaving match money unclaimed is the single most expensive year-end mistake. Our full breakdown: 401(k) Employer Match: The Free Money You Can’t Afford to Miss.

Can’t max it? Contribute something extra. Every dollar you add in December is a dollar that compounds for decades.

2. Fund your Roth IRA for 2026

The 2026 Roth IRA limit is $7,500 ($8,600 if you’re 50+). Here’s the part people miss: you have until tax day (April 2027) to make your 2026 contribution — but December is when you should decide, because January-you will be distracted.

A Roth IRA is funded with after-tax dollars, which means the money grows tax-free and comes out tax-free in retirement. For someone in their 20s or 30s with decades of compounding ahead, it’s one of the highest-value accounts available.

Quick illustration of the stakes: $7,500 invested once at age 30, growing at an illustrated 7% for 35 years, becomes roughly $80,000 — from a single year’s contribution. Now imagine doing it every year.

Income phase-outs apply (for 2026, single filers $153k–$168k, married filing jointly $242k–$252k), so check your eligibility — but most under-40 earners qualify for the full amount.

3. Spend down your FSA (use it or lose it)

Flexible Spending Accounts are the cruelest deadline in personal finance: most FSA balances are use-it-or-lose-it at year end. Only a small amount (a few hundred dollars, set by the IRS each year) can roll over, and only if your employer’s plan allows it.

Check your balance this week. Then spend it on things you’d buy anyway:

• Eye exam, new glasses, or contact lenses (order before the holiday shipping crunch)
• Dental work you’ve been postponing
• Prescription refills and copays
• Sunscreen, first-aid supplies, and other FSA-eligible pharmacy items

An unspent $800 FSA balance isn’t “savings” — it’s an $800 donation to your employer. Don’t donate.

4. Do your open enrollment homework (it’s probably open right now)

For most employers, open enrollment runs October through early December — meaning your window is open right now. This is your once-a-year chance to change health plans, adjust HSA/FSA contributions, and review your 401(k) elections without a qualifying life event.

The expensive mistake is auto-renewing without looking. Premiums, deductibles, and networks change every year. A plan that was perfect in 2026 might be wrong for 2027 — especially if your health needs, prescriptions, or family situation changed.

Run the numbers on at least two plans: total annual cost = premiums + expected out-of-pocket. The cheapest premium is rarely the cheapest plan. Our walkthrough: Open Enrollment: How to Choose Your Health Insurance and 401(k) Options This Year.

5. Rebalance your investments and harvest losses

If you invest outside retirement accounts, December is rebalance season. Over a strong year, stocks drift to a bigger share of your portfolio than you intended — rebalancing sells a little of what’s grown and buys what’s lagged, restoring your target mix. It’s the closest thing to a free lunch in investing: it manages risk without requiring predictions.

In taxable accounts, there’s a bonus move: tax-loss harvesting. If you hold investments that are down, selling them before year end lets you use the losses to offset gains (or up to $3,000 of ordinary income per year, carrying the rest forward). Just watch the wash-sale rule — don’t buy the same or a “substantially identical” security within 30 days before or after the sale, or the loss is disallowed.

6. Update your beneficiaries (the 15-minute move everyone skips)

Your 401(k), IRA, and life insurance pass to whoever is named as beneficiary — regardless of what your will says. When did you last check those designations? For most under-40s, the answer is “when I opened the account,” which might mean an ex-partner, a parent’s old address, or nobody at all.

Log into each account, confirm the beneficiary, and update it if your life changed this year — marriage, divorce, kids, a new partner. Fifteen minutes. Zero cost. Potentially the most important item on this list.

7. Make charitable gifts before the cutoff

If you itemize deductions, charitable donations must be made by December 31 to count for 2026 — the check-clearing date doesn’t matter, the gift date does. Two pro moves:

• Bunch donations. If your total itemized deductions hover near the standard deduction, bunching two years of giving into one December can push you over the line and make the deductions actually valuable.
• Donate appreciated stock instead of cash. You deduct the fair market value and never pay capital gains tax on the appreciation. For a stock that’s doubled, that’s meaningfully better than selling it and donating cash.

Even if you take the standard deduction, December giving still counts for your own goals — just know the tax math differs.

8. Pull your free credit reports

You’re entitled to free credit reports from all three bureaus every week via AnnualCreditReport.com. December is a natural checkpoint: scan for accounts you don’t recognize, errors in balances or payment history, and any hard inquiries you didn’t authorize.

Why now? Identity theft spikes during holiday shopping season, and errors compound silently — a wrongly reported late payment can cost you real money on every loan you take for years. Disputes filed in December get resolved while you’re thinking about it, not discovered when you’re applying for a mortgage in March.

9. Build your January buffer

Here’s the move that ties the whole year together: December is when next year’s financial stress is manufactured. Holiday spending, travel, gifts — the average household’s January credit card statement is the bill for December’s optimism.

Flip it. Before the holidays peak, decide your January starting position:

• Set a hard holiday spending cap now (our Holiday Money Plan walks through a $1,500 example: gifts, travel, food, and decor, funded over 10 weeks).
• Pre-schedule a January 2nd automatic transfer to savings — even $200. Future-you will be grateful.
• If you’re carrying a balance into the holidays, make a payoff plan before adding to it. January debt at 19.65% APR is December fun at a brutal markup.

Your 2-week sprint plan

Overwhelmed? You don’t need to do all nine in a day. Here’s the order that captures the most value fastest:

• This weekend: Check FSA balance and 401(k) contribution total (moves 1, 3) — both have hard deadlines.
• Next week: Open enrollment review and beneficiary check (moves 4, 6) — 30 minutes each.
• By mid-December: Roth IRA decision, rebalancing, charitable gifts (moves 2, 5, 7).
• Before New Year’s Eve: Credit reports and January buffer (moves 8, 9).

Put two of these on your calendar right now — literally, open your phone and schedule them. Year-end money moves don’t fail because they’re hard. They fail because December is busy and nobody scheduled them.

Bottom line

December 31 is a use-it-or-lose-it deadline for thousands of dollars in tax advantages, employer matches, and FSA balances. The nine moves above are the highest-value hour you’ll spend on your finances all year. Do them in the order of the sprint plan, and you’ll start January ahead of 90% of people — with more saved, less wasted, and nothing left on the table.

FAQ

What happens to 401(k) room I don’t use by December 31?

It’s gone. Unlike IRAs (which give you until tax day), 401(k) contributions must be made within the calendar year through payroll. Unused 2026 contribution room does not carry forward.

Can I still fund my 2026 Roth IRA in 2027?

Yes — IRA contributions for a tax year can be made until that year’s tax filing deadline (typically mid-April). But decide in December; procrastinated IRA funding is the most common kind.

How much of my FSA rolls over?

It depends on your employer’s plan and the IRS limit for the year — typically only a few hundred dollars, and some plans allow none at all (they may offer a short grace period instead). Check your plan documents; assume the worst and spend accordingly.

Do I really need to rebalance if I’m young and mostly in stocks?

Yes — arguably especially then. Rebalancing isn’t about being conservative; it’s about keeping your risk where you chose it. A portfolio that drifted from 90/10 to 97/3 stocks is taking risk you never signed up for.