8 Smart Retirement Account Moves Worth Making Before 2024 Ends

With the end of the year approaching quickly, it’s not too late to make a few key changes to take advantage of your retirement account benefits.

Although you’ll likely need to pivot quickly to make these changes, the benefits are enormous — and these impactful steps can help you build a brighter financial future by potentially lowering your tax liabilities and increasing your retirement savings.

Here, we explore the eight top retirement account moves to make before the end of the year that can make a difference in the success of your retirement plan.

Start by assessing what contributions you’ve already made to your retirement accounts this year. From there, determine how much more you can contribute for the year. If possible, max out your retirement contributions. Even if you can’t reach the maximum limit, consider tucking more funds into the account.

For example, savers can contribute up to $23,000 to their 401(k) in 2024. If you are within striking distance of that amount, try to hit the max. But whether or not you hit the maximum limit, do your best to up your contributions before the end of the year.

If you are lucky enough to work for an employer offering a matching contribution, do your best to at least contribute enough to earn the entire match. After all, the matching contribution allows you to essentially double your money immediately.

Savers who are aged 50 and older have an opportunity to make catch-up contributions to their tax-advantaged retirement accounts.

For example, savers who qualify for catch-up contributions can contribute an additional $7,500 to their 401(k) in 2024 and an extra $1,000 to their IRA in 2024.

If you are eligible to make catch-up contributions, consider adding to your retirement accounts before the end of the year. The extra boost to your account can go a long way as you plan for retirement.

The funds come from after-tax money when you make standard contributions to a Roth IRA. During retirement, you’ll make tax-free withdrawals from your Roth IRA.

In contrast, contributions to traditional retirement accounts, like a 401(k) or IRA, are made with pre-tax dollars, which defers your tax obligation until you withdraw your funds in retirement.

A Roth IRA conversion might allow you to limit your future tax liabilities. But you’ll have to pay income taxes on the amount you convert. It might be the right time to pursue a Roth IRA conversion if you've had a relatively low-income year.

Since this is a relatively complex tax decision, it is usually a good idea to discuss this option with a tax professional before proceeding.

If you are at least 73 years old, it is important to review the required minimum distribution (RMD) rules. Those who must take an RMD must withdraw the appropriate funds before the end of the year.

Although it might be tempting to skip your RMD, any amount you don’t take is subject to a 25% excise tax.

Take some time to review your portfolio’s performance. If some assets are losing value, you can potentially sell them to offset the gains from other areas of your portfolio.

This can lower your tax liabilities for the year. If possible, invest those savings back into your portfolio.

A Health Savings Account (HSA) offers many tax advantages. Contributions are pre-tax, the funds can grow tax-free, and the funds can be withdrawn tax-free to cover qualified medical expenses.

If you have a qualifying High Deductible Health Plan (HDHP), you might qualify to contribute to an HSA. Maximize your contributions to your HSA whenever possible to supercharge your retirement savings.

Hoarding cash can provide a sense of security. But if your emergency fund has ballooned beyond the recommended size, it might be time to redistribute that money into your retirement accounts.

Generally, experts recommend tucking away three to six months’ worth of expenses into an emergency fund. If you have more than a year’s worth of expenses in a savings account, it might be a good idea to push some of that money into your retirement accounts. When you invest the funds, you put the money to work for you — and these investment gains can significantly impact your financial future.

Of course, there is risk associated with investing. But if you hold onto a reasonable amount of your emergency savings, the potential to grow your nest egg might be worth the risk.

Saving for a financially stable retirement can take decades.

But as you progress, it is helpful to assess your retirement readiness along the way. Making small but impactful adjustments along the way can help you build a comfortable retirement nest egg.