Finish the Year Strong: 8 Money Moves for High Earners Before December 31

There’s a particular kind of calm that comes from walking into January with your financial house in order. The contributions are maxed out, the tax surprises are dealt with, and next year’s plan is already set.

That calm isn’t luck. It mostly comes from a few hours of planning in November and December.

Most people leave money on the table here. In Vanguard’s latest How America Saves report, only 14% of 401(k) participants hit the annual contribution limit in 2025, even though 45% raised their savings rate during the year (Vanguard, How America Saves 2026). The intention is there. What’s usually missing is a short list and a deadline.

Here’s the list. There are about seven weeks left in 2026, and most of these moves take less than an hour.

First, Know Which Deadline You’re Working With

Not every move has to happen by New Year’s Eve. It helps to sort them before you start:

December 31, 2026: 401(k) contributions through payroll, FSA spending (unless your plan has a grace period), tax-loss harvesting, charitable gifts, and most state 529 deductions.
January 15, 2027: the fourth-quarter estimated tax payment for 2026.
April 15, 2027: IRA and HSA contributions for 2026.

Start with the December 31 items. The rest can wait until after the holidays.

1. Top Off Your 401(k)

For 2026, you can defer up to $24,500 into a 401(k), 403(b) or 457 plan. If you’re 50 or older, you can add an $8,000 catch-up, for $32,500 in total. If you turn 60, 61, 62 or 63 this year, your catch-up limit is $11,250 instead (IRS).

401(k) contributions only come out of paychecks, so the real deadline is your last payroll of the year, not December 31. Log in to your plan, see what you’ve contributed so far, and divide what’s left by the number of paychecks remaining. Then update your deferral percentage for those last checks. Most plans let you do this online in a few minutes.

Two details worth checking while you’re there:

The Roth catch-up rule is new this year. Starting in 2026, if you’re 50 or older and earned more than $150,000 in FICA wages from your employer in 2025, your catch-up contributions must go in as Roth (after-tax) money (IRS). Your plan should handle it automatically, but confirm it’s set up the way you expect.
Know how your match works. If you max out early in the year, some plans stop matching once your contributions stop. Others make a “true-up” payment. Ask HR or check your plan summary.

2. Put Your HSA to Work

If you have a health savings account, it may be the most tax-efficient account you own: contributions are deductible, growth is tax-free, and withdrawals for qualified medical costs are tax-free too.

For 2026, the limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up if you’re 55 or older (IRS Rev. Proc. 2025-19). You have until April 15, 2027 to contribute for 2026. Contributions through payroll before year-end also skip Social Security and Medicare tax, so payroll is the better route if your employer allows it.

One new rule could open this up to more people next year. Starting in 2026, bronze and catastrophic plans are treated as HSA-eligible (IRS). If you’re choosing a plan during open enrollment, that’s worth factoring in.

3. Spend Down (and Right-Size) Your FSA

Flexible spending accounts are “use it or lose it,” with a little flexibility. Depending on your plan, you can carry over up to $680 into next year or use a grace period of up to two and a half months, but generally not both (Benecor Health, summarizing IRS Rev. Proc. 2025-32). Check your balance now, and book the eye exam, the dental cleaning or the new glasses before the money expires.

Then look ahead. The health FSA limit is $3,400 for 2026, and the dependent care FSA limit jumped from $5,000 to $7,500 this year. If you pay for childcare, make sure your 2027 election reflects the higher limit.

4. Check Your RSU Withholding Before It Checks You

If you receive RSUs, this one can save you an unpleasant April. When shares vest, employers usually withhold federal tax at a flat 22% supplemental rate (37% on supplemental wages above $1 million). That rate doesn’t adjust to your actual bracket (Brighton Jones).

If your top bracket is 32%, every $10,000 of vested shares withheld at 22% can leave about $1,000 owed at tax time. Add a few vests and a rising stock price, and the gap adds up.

You have two easy fixes:

Raise your withholding on your remaining paychecks with a new W-4. The IRS generally treats withholding as if it were paid evenly through the year, which can help you avoid an underpayment penalty even when you catch up late.
Make an estimated payment by January 15, 2027.

While you’re looking at your equity, mark your 2027 vest dates. We cover how vesting works in more detail in our guide to RSUs and stock options.

5. Harvest Losses (Thoughtfully)

If some investments in a taxable account are worth less than you paid, selling them can offset capital gains you’ve realized this year. If your losses exceed your gains, you can deduct up to $3,000 against ordinary income and carry the rest forward to future years (IRS Topic 409).

Watch out for the wash sale rule: if you buy the same or a “substantially identical” investment within 30 days before or after the sale, the loss is disallowed (Vanguard). That includes purchases in your IRA or by automatic reinvestment, so check your settings before you sell.

6. Give Smarter Under This Year’s New Rules

The charitable deduction changed in 2026, so last year’s approach may not fit (Tax Foundation; CASE):

If you take the standard deduction, you can now deduct up to $1,000 in cash gifts to qualified charities ($2,000 if married filing jointly).
If you itemize, only the portion of your giving above 0.5% of your AGI counts. And if you’re in the 37% bracket, the tax benefit of itemized deductions is capped at 35 cents on the dollar.

Two classic strategies still apply. Giving appreciated stock you’ve held more than a year can avoid capital gains tax on the growth, and a donor-advised fund lets you make a larger gift in one year and recommend grants to charities over time. A tax professional can tell you which approach fits your numbers.

Supporting family counts too: in 2026 you can give up to $19,000 per person without filing a gift tax return (IRS).

7. Fund the 529 Before the Ball Drops

If you’re saving for a child’s education, check your state’s deadline. In most states, contributions must be made by December 31 to count toward this year’s state tax deduction (Savingforcollege.com). Illinois, for example, lets residents deduct up to $10,000 ($20,000 married filing jointly) for contributions to its Bright Start plan by year-end (Bright Start). Colorado and Virginia offer state deductions too, while Texas and Florida have no state income tax to deduct against.

Mail and bank transfers take time around the holidays, so aim for mid-December instead of December 31.

8. Set Up 2027 on Purpose

The best year-end move is the one that makes next year automatic. While open enrollment is fresh, spend an hour on these:

Raise your 2027 401(k) deferral. The IRS hadn’t published 2027 limits as of early November, and they usually go up. When they’re announced, set your percentage so you reach the new limit on your own schedule.
Review your benefits elections. Health plan, HSA or FSA, life and disability coverage. If you’re weighing COBRA against a Marketplace plan for any reason, our COBRA vs. Marketplace guide walks through the 2027 numbers.
Pick an emergency-fund target. Choose a number of months of fixed expenses and automate a monthly transfer toward it, so your retirement accounts never have to double as one (here’s why that matters).
Look for the gap in your safety net. Most benefits packages protect your health, your life and your ability to work. Very few protect your paycheck itself (more on that here).

Meet Maya: One Afternoon, Done

Maya is 44, a product director in Denver earning $230,000, with RSUs that vest quarterly. She blocks off one Saturday afternoon in November.

401(k): She’s contributed $19,600 so far, so she’s $4,900 short of the $24,500 limit. With four semi-monthly paychecks left, she raises her deferral to put about $1,225 into each one.
HSA: She has put in $2,400 toward the $4,400 self-only limit. She schedules the other $2,000 before April.
RSUs: About $60,000 of shares vested this year, all withheld at 22%. Her top bracket is 32%, so she files a new W-4 to add withholding to her last few paychecks instead of finding out in April.
FSA: She has $410 left, which pays for an eye exam and new glasses.
2027: She sets a calendar reminder to update her 401(k) percentage when the new limits come out, raises her automatic savings transfer, and reviews her coverage, income protection included.

Total time: about three hours. She starts January with the work already done.

Where Cushion Fits in a Complete Plan

Good planning covers every part of your finances, and that includes your income, the asset that funds everything else on this list.

Cushion is private income protection for professionals. If you’re ever laid off, it works alongside state unemployment to bring you to a target of 40%, 50% or 60% of your verified gross income (combined with your state benefit), up to $10,000 a month for 2 to 5 months. Here’s why it belongs on a year-end checklist:

It’s a planning tool, not a reaction. Every policy has a 120-day vesting period, so it’s designed to be set up in a calm moment, like a year-end review.
It protects the rest of your plan. Unrestricted cash means your 401(k), HSA and 529 can keep growing.
It’s yours. Your policy is individually owned and goes with you from job to job, and we never contact your employer or HR.

You’ve insured your home, your car and your health. Your career is an asset. Insure it like one. See what Cushion would cover for you →

Quick Reference: Your Year-End Checklist

Top off your 401(k) before your last 2026 paycheck
Fund your HSA (by April 15, 2027)
Spend down your FSA and set your 2027 elections
Check your RSU withholding and fix any gap
Harvest losses, watching the 30-day wash sale window
Plan charitable gifts under the 2026 rules
Fund your 529 by December 31 for state deductions
Set up 2027: deferrals, benefits, emergency fund and income protection

This article is for educational purposes only and isn’t tax, legal or investment advice. Contribution limits, tax rules and plan features vary, and your situation is unique, so consult a qualified professional before making decisions. Coverage options, limits, waiting periods, and policy availability vary by jurisdiction and are subject to underwriting approval and individual policy declarations.

Cushion provides private supplemental involuntary unemployment insurance. Coverage is subject to eligibility, underwriting and policy terms; a 120-day vesting period applies. Surplus lines policies are not protected by state guaranty funds. Cushion Insurance Agency, LLC acts as general agent and surplus lines broker (Resident CA Surplus Lines License #6019626; non-resident surplus lines broker licenses in its operating states). Coverage is underwritten on a non-admitted basis by an eligible surplus lines insurer, identified in your policy declarations. Claims are administered by Reserv on behalf of the insurer. Licenses & disclosures: needcushion.com/licensing

Read article