Key Financial Moves for Retirees to Make Before End of 2025

As 2025 draws to a close, retirees should focus on several key financial actions to secure their retirement income and avoid costly penalties in the upcoming year. First, performing a year-end portfolio review and rebalancing can realign investments with retirement goals, especially if stocks have disproportionately grown compared to bonds or income-oriented assets. This helps manage risk and lock in gains amid volatile markets. Second, retirees aged 73 and older must ensure they take required minimum distributions (RMDs) from tax-deferred accounts such as IRAs and 401(k)s. Missing RMD deadlines can result in significant IRS penalties, with some relief available if the error is corrected promptly. Utilizing Qualified Charitable Distributions (QCDs) can satisfy RMD requirements tax-efficiently for those who donate to charities. Third, with the 2026 Social Security cost-of-living adjustment (COLA) projected at 2.8%, retirees should adjust their budgets accordingly. However, rising Medicare Part B premiums—from $185 to $202.90—will reduce the net benefit increase, necessitating a careful review of monthly expenses and potential supplementary income sources such as part-time work or consulting. Finally, year-end is an opportune time to review and update estate planning documents including wills, trusts, and beneficiary designations across retirement and insurance accounts. Life changes such as marriages, divorces, or births may render previous arrangements outdated, highlighting the need for proactive management to ensure assets are distributed according to current intentions. Overall, these financial maneuvers offer retirees a strategic approach for optimizing retirement income, minimizing tax liabilities, and ensuring legacy plans reflect their wishes heading into 2026. Consultation with a financial advisor can provide personalized guidance tailored to individual situations.