The Final Countdown: 2025 Last-Minute Wealth Planning Ideas

A 2025 Year-End Wealth Planning White Paper

Based on the webinar by Jonathan I. Shenkman, President and Chief Investment Officer, ParkBridge Wealth Management

As 2025 draws to a close, high-net-worth individuals and their advisors should be thinking strategically about the final opportunities and obligations that this year presents before it transitions into 2026. In his annual “Final Countdown” webinar, Jonathan Shenkman shared a comprehensive suite of timely wealth planning ideas — spanning investment management, tax strategies, estate planning, retirement accounts, charitable giving, trust administration, and risk management. The purpose of this white paper is to translate that rich transcript into an actionable framework to guide investors and advisors through the remainder of the year.

Investment Planning: Fundamentals and Year-End Do’s and Don’ts

1. Rebalance for Discipline and Risk Control
As markets oscillate, portfolios often drift from their target allocations. Even if major indices like the S&P 500 outperformed in 2025, individual portions of your portfolio (e.g., REITs, small caps, investment-grade bonds) may have lagged. Rebalancing helps bring your allocation back in line with your long-term risk tolerance and objectives. It also creates opportunities to realize tax losses by selling positions that underperformed and repositioning into areas with stronger prospects.

2. Don’t Chase Past Performance
While certain strategies outperform in one year, chasing yesterday’s winners seldom delivers sustainable returns. Private credit, for example, has been popular but also volatile. A disciplined allocation philosophy and simple investment vehicles often outperform tactical shifts driven by short-term hype.

3. Automate to Remove Emotional Drift
Investors should automate contributions and rebalancing where practical. Automated processes help eliminate emotional timing decisions and ensure that savings stay on track throughout market cycles.

Retirement and Distribution Planning

4. Required Minimum Distributions (RMDs)
If you or a client is age 73 or older, RMDs must be taken before year-end to avoid severe penalties. If the income is not needed for living expenses, consider tax-efficient options like Qualified Charitable Distributions (QCDs), which allow IRA owners to distribute up to $108,000 per person ($216,000 per married couple) directly to charity without recognizing taxable income.

Charitable Giving: Amplify Impact and Tax Efficiency

5. Front-Load and Bunch Charitable Giving
Starting in 2026, a minimum AGI threshold (0.5% of AGI) will be required before itemized charitable deductions generate any tax benefit. Before this rule becomes effective, taxpayers can front-load or bunch multiple years’ worth of charitable contributions into 2025 to maximize itemized deductions.

6. Use Donor-Advised Funds (DAFs)
DAFs allow donors to take an immediate tax deduction while retaining advisory privileges over the timing and allocation of gifts. Donating appreciated securities into a DAF can avoid capital gains tax while providing a meaningful deduction, especially when stocks have risen significantly.

Roth Conversions and Tax Positioning

7. Roth IRA Conversions
Converting traditional retirement accounts — including IRAs, SEPs, and 401(k)s — into Roth IRAs can make sense for individuals with lower taxable income years or those anticipating higher future tax rates. Since Roth accounts grow tax-free and don’t require RMDs, they can be a powerful planning tool when integrated with current tax bracket analysis. However, taxpayers must balance the immediate tax cost of conversion against long-term benefit.

8. Consult Your Tax Advisor First
Because conversions affect current tax liability, coordinate with your tax professional to estimate taxable income and determine how much can be converted without pushing you into a higher bracket.

Beneficiary Reviews: Avoid Costly Oversights

9. Update Beneficiaries Across All Accounts
Retirement accounts, life insurance, and similar assets pass outside wills via designated beneficiaries. It is critical to review and update these designations annually — especially after major life events. An outdated designation (e.g., an ex-spouse on file) can unintentionally direct assets contrary to your wishes.

10. Consider SECURE Act Impacts
Under changes enacted in 2019, most non-spouse beneficiaries must distribute inherited retirement accounts within 10 years. Annual beneficiary reviews can identify impacted accounts and help inform broader estate planning strategies.

Estate Planning: Timing and Strategic Review

11. Reassess Estate Plans in Light of Law Changes
The lifetime federal estate tax exemption is set to rise to $15 million per person in 2026 and is now indexed for inflation. This eliminates the previous “use or lose” deadline to make large gifts before year-end. Nonetheless, an annual estate plan review is essential to align with changes in law and family circumstances.

12. Annual Exclusion Gifts and Direct Payments
Annual exclusion gifts (up to $19,000 per recipient in 2025) remain a cost-effective way to gradually reduce a taxable estate. Additionally, direct payments for qualified tuition and medical expenses sidestep gift tax rules and move assets out of your estate.

13. Federal and State Tax Considerations
Federal rules aren’t all that matter. Many states (e.g., New York) have significant estate taxes with lower exemptions than federal thresholds. Thoughtful planning must address both federal and state-level implications.

14. Step-Up in Basis: Gift vs. Bequest
Assets held until death receive a step-up in cost basis, eliminating appreciation subject to capital gains tax when heirs sell. In contrast, gifts made during life transfer the original basis and can trigger substantial capital gains — particularly on highly appreciated assets. Determining when to gift versus bequest requires careful analysis of tax and appreciation expectations.

Real Estate and Tax Rate Environment

15. Real Estate Planning Opportunities
Market and political shifts can present planning opportunities. For example, potential downward pressure on urban real estate valuations (as referenced in the webinar) can present a strategic window to move assets out of an estate at lower values and conserve the estate tax exemption.

16. Interest Rates’ Impact on Wealth Transfer Instruments
Interfamily loans — when structured properly using applicable federal rates (AFRs) — remain an efficient way to transfer wealth by allowing assets to appreciate above the rate at which the loan is priced. Despite higher commercial lending rates, these loans offer a meaningful estate tax advantage.

17. Grantor-Retained Annuity Trusts (GRATs)
In a high interest rate environment, GRATs may be less efficient because the trust assets must outperform the Section 75-20 rate to generate tax-free wealth transfers. However, refinancing existing GRATs when interest rates fall can enhance transfer efficiency and capture additional appreciation for beneficiaries.

Trust Administration and Tax Efficiency

18. Administrative Trust Considerations
Trust owners should review administrative matters such as Crummey notice requirements to ensure contributions qualify for the gift tax annual exclusion. Proactively sending notices can ensure that trust funding achieves the desired tax benefits.

19. Year-End Non-Grantor Trust Distributions
Distributing income to beneficiaries with lower tax brackets can be tax-efficient given trusts’ compressed tax rates and the 3.8% net investment income tax threshold. Utilizing the 65-day rule allows trustees to delay distributions made in early 2026 and treat them as if made in 2025 for tax purposes.

Investment Allocation and Interest Rate Environment

20. Avoid Common Fixed Income Mistakes
In falling interest rate environments, investors often reach for yield inappropriately. Investing in lower credit quality or extending duration excessively can expose portfolios to unexpected risk if rates move differently than anticipated. Instead, bond allocation should align with time horizon and risk objectives, serving as ballast rather than speculative income-seeking.

21. Maintain Liquidity and Time Horizon Awareness
Your investment allocation should reflect your needs: cash equivalents (e.g., money market funds, T-bills) for short-term needs; bonds for intermediate goals; and stocks for long-term growth. Investors with horizon longer than 10 years should maintain meaningful equity exposure to outpace inflation and achieve growth objectives.

529 Plans and Education Planning

22. Superfund 529 Contributions
Consider “superfunding” 529 college savings plans before year-end. With five-year gift tax election, a married couple can contribute up to $190,000 per beneficiary (without using lifetime exemption), reduce taxable estate, and enjoy tax-free growth for qualified education expenses. Additionally, 529 assets held by grandparents do not count against the federal financial aid formula under FAFSA, offering another strategic benefit.

Tax Loss Harvesting and Employer Plan Optimization

23. Tax Loss Harvesting Strategies
Selling securities at a loss to offset capital gains can reduce tax liability. Advisors can implement tax swap strategies where one fund is sold for a loss and replaced with a similar but not “substantially identical” fund to maintain market exposure. Donating cash proceeds from these sales can also generate charitable deductions in addition to realizing losses.

24. Maximize Employer Plan Contributions
Before year-end, review contributions to employer-sponsored plans. In 2025, the 401(k)/403(b) contribution limit is $23,500 ($31,000 if 50+). For those aged 60–63, a higher catch-up limit applies. Planning contributions into next year’s (2026) rising limits ensures efficient retirement savings.

25. Roth vs Traditional Contributions
Deciding between Roth and traditional contributions depends on expected future income and tax rates. Generally, high-income years favor traditional pre-tax contributions while lower income years may favor Roth contributions. Annual review ensures that your retirement strategy remains aligned with personal circumstances.

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)

26. Maximize HSA Contributions
HSAs offer triple tax benefits: pre-tax contributions, tax-free growth, and tax-free qualified distributions. For 2025, individuals can contribute up to $4,300 ($8,550 family), with an additional $1,000 catch-up for those 55+. Expanded eligibility in 2026 (including ACA plans) will broaden access. HSAs should be allowed to grow when younger for future retirement healthcare needs.

27. Use FSA Funds Before They Expire
Flexible Spending Accounts are “use it or lose it” accounts. Plan to use any remaining 2025 FSA funds before year-end or risk forfeiture.

Budget Management and Sequence of Returns Risk

28. Assess Cash Flow and Sequence Risk
Retirees must evaluate expected cash flow needs for the coming year and set aside sufficient liquidity. Additionally, sequence of returns risk — the risk that negative returns early in retirement can disproportionately erode portfolio value — suggests maintaining a larger cash cushion, especially for those drawing on their portfolio.

29. Reevaluate Safe Withdrawal Rates
While the traditional “4% safe withdrawal rate” remains a rule of thumb, individual circumstances and market performance should influence customized withdrawal strategies each year.

Income Tax Planning: SALT and AMT Considerations

30. SALT Deduction Opportunities
For 2025, the state and local tax (SALT) deduction cap has increased to $40,000 for taxpayers earning up to $500,000. Taxpayers above this threshold may see a reduced cap. Managing timing of income and deductions can maximize SALT benefits before caps phase out.

31. Alternative Minimum Tax (AMT)
AMT affects more taxpayers under the updated tax rules. In 2025, exemptions are $137,000 (joint) and $88,100 (single), phasing out at higher income levels. Planning tips include adjusting deduction timing and splitting certain activities across tax years to minimize AMT exposure.

Private Foundations: Distribution Requirements

32. Meet Required Distributions
Private foundations must distribute at least 5% of assets annually for qualifying charitable purposes. Failure to meet distribution requirements incurs excise taxes. Structuring foundation investments to balance growth and distribution needs is essential.

Planning with Perspective

33. Integrate Your Plan
While individual planning tactics are important, the overarching goal is integration — aligning investment decisions, tax strategies, retirement planning, estate and trust decisions, and philanthropic goals into a cohesive plan. This holistic approach ensures that your overall financial strategy is coherent and effective, not merely a collection of disconnected ideas.

34. Educational and Legacy Opportunities
Continuing to educate yourself and your heirs about wealth and values strengthens long-term stewardship. Shenkman even suggests his personal book, The ABCs of Personal Finance, as a foundational tool for teaching financial literacy to the next generation.

Conclusion: Making Year-End Planning Count

As the calendar closes on 2025, investors and advisors still have opportunities to make impactful planning decisions that can shape tax outcomes, wealth transfer efficiency, portfolio health, retirement readiness, and philanthropic impact well into 2026 and beyond. By applying the actionable ideas outlined here — rebalancing portfolios, managing distributions, optimizing charitable giving, coordinating retirement contributions, and reviewing estate and beneficiary designations — you can convert the final countdown into meaningful progress toward long-term financial goals.
For personalized guidance, connect with a qualified wealth management professional, estate planning attorney, and tax advisor to implement these strategies in a manner that aligns with your unique circumstances.