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7 Money Moves Retirees Should Avoid at the End of the Year

Some financial decisions made in December can unintentionally raise your tax bill, shrink long-term savings, or create avoidable complications.

By Adam Palasciano

Edited by Calista Headrick

Updated Dec. 16, 2025

The final weeks of the year can tempt retirees to make quick financial decisions, especially when markets move or holiday expenses pile up. But acting too fast — or without a plan — can potentially lead to unintended tax issues, reduced investment returns, and long-term financial setbacks. Retirees who want to avoid money mistakes should approach year-end planning with extra care, since every choice affects fixed income, retirement accounts, and taxes.

Here are seven decisions to think twice about before Dec. 31 rolls around.

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Selling investments based on a feeling

Selling stocks or bonds because of fear, excitement, or short-term headlines can derail a carefully built retirement portfolio. Emotional decisions often lock in losses or cause investors to miss market rebounds. Generally, it's best to stick to a long-term plan, especially during the last months of the year when volatility and holiday stress can cloud judgment.

Before selling, review your asset allocation, risk tolerance, and income needs. Making changes from a place of analysis, not emotion, helps keep your retirement strategy on track.

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Giving family members cash gifts that are too large

Supporting adult children or grandchildren may feel generous, but gifting too much late in the year can impact your own financial stability. For tax year 2025, the IRS allows you to give up to $19,000 per recipient without filing a gift tax return or tapping into your lifetime exemption, which currently sits at $13.99 million for individuals.

While federal tax consequences are unlikely for most retirees, the real risk is reducing your own savings too quickly. Review gifting limits carefully and ensure any generosity fits comfortably within your long-term income plan.

Investing in cryptocurrency without planning ahead

Diving into Bitcoin or other digital assets at the end of the year, especially without research, can expose retirees to unnecessary risk. Cryptocurrency values can swing dramatically, making it unsuitable for retirees who rely on stable, predictable income. A rushed December purchase or sale may also complicate tax reporting if gains or losses occur.

Retirees should consider how speculative investments fit into their overall asset mix and whether they have the risk tolerance for high volatility.

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A last-minute Roth IRA conversion (if it impacts your tax bracket)

Converting funds from a traditional IRA to a Roth IRA can be smart, but doing it hastily at year-end may lead to a higher-than-expected tax bill. A conversion increases taxable income for the year, which may push retirees into a higher tax bracket. It can also trigger additional costs, including taxes on Social Security benefits or the IRMAA (income-related monthly adjustment amount) surcharge on Medicare premiums.

Retirees should run projections or consult a tax professional before converting to ensure the move aligns with their income and tax strategy.

Giving a donation to charity via cash or check

Cash or check donations are simple, but they are not always the most tax-efficient method for retirees. Donating appreciated securities such as stocks, mutual funds, or bonds allows you to support your favorite cause while avoiding capital gains tax on assets that have increased in value.

Retirees aged 70½ or older may also use a qualified charitable distribution (QCD) to donate directly from an IRA, which may help reduce taxable income. These strategies often provide greater tax benefits than writing a traditional check.

Not meeting deadlines that could potentially reduce your tax bill

Several key deadlines fall on Dec. 31, and missing them can cost retirees real money. For example, Flexible Spending Account (FSA) reimbursements must typically be submitted before year-end, otherwise, unused funds may be forfeited. Retirees using a 529 plan must also reimburse themselves for qualified education expenses within the same calendar year those costs were incurred.

Reviewing all tax-related deadlines can help prevent losses and ensure you maximize available savings opportunities.

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Forgetting to update your beneficiaries

Life changes such as the death of a spouse, remarriage, or a new grandchild should prompt a review of beneficiary designations.

Forgetting to update these records may send assets to the wrong person or cause delays for your heirs. Year-end is an ideal time to log in to each account and confirm everything is current.

Bottom line

The final weeks of the year offer retirees a valuable opportunity to fine-tune their financial plans, avoid unnecessary taxes, and ensure their savings remain protected. Reviewing investments, gift strategies, charitable giving methods, and beneficiary designations now can help prevent costly oversights.

By approaching each decision intentionally, you can strengthen your overall strategy while planning for retirement.

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