For successful individuals and business owners, year-end financial planning isn’t just about checking boxes–it’s about strategically positioning wealth for long-term tax efficiency, maximizing business value, and protecting what you’ve built.
Higher income, complex portfolios, business liquidity events, multi-generational legacy planning, and tax-sensitive concentrated assets all demand a more strategic approach as we embark on 2026.
Retirement contribution limits are rising, which means greater room for tax-advantaged savings:
Business owners using Solo 401(k), SEP, or SIMPLE IRAs may unlock even greater deduction opportunities, especially when optimizing salary vs. distribution strategies.
Additionally, high-net-worth households should assess potential future changes to estate and tax policy, as accelerating certain strategies in 2025 may lock in current advantages.
Before December 31, 2025
Max Employer-Sponsored Retirement Contributions
Target full $23,500 + catch-up if eligible — high earners benefit the most from pre-tax reductions.
Tax-Loss Harvesting & Capital Gains Strategy
Now is the prime time to offset gains from business sales, RSUs, or real estate and boost long-term tax efficiency. Consider pairing gains with charitable contributions of highly appreciated stock could potentially eliminate capital gains entirely.
Charitable Giving Optimization
HNW households may benefit from:
Accelerating charitable gifts into 2025 may improve tax positioning — especially if you anticipate income from a sale or liquidity event.
Advanced Gifting & Wealth Transfer
Business-Owner Tax Planning
If your income fluctuates due to ownership distributions, consider:
Use FSA / Dependent Care Allocations
Avoid “use-it-or-lose-it” deadlines where applicable.
By April 15, 2026 (Tax Filing Deadline)
Fund IRAs or Backdoor Roths for 2025
HNW individuals often exceed Roth limits, so consider Backdoor Roth conversions. IRA contributions for 2025 may be made until the tax-filing deadline. Mega Backdoor Roth strategies may also apply for business owners with plan design flexibility.
HSA Strategic Funding
Triple tax advantage if eligible: pre-tax contributions, tax-free growth, tax-free qualified withdrawals. Unused HSA assets can serve as a powerful retirement medical fund—a major cost consideration for HNW retirees.
Plan RMD Timing for Tax Efficiency
If turning 73 in 2025:
This could double taxable income in one year if not planned carefully. Coordinate with charitable strategies (e.g., QCDs) to reduce your tax burden.
Roth Conversions
Ideal in lower-income years or pre-retirement window.
Must take RMDs first if applicable.
Large conversions can also help reduce future estate tax exposure.
Estate & Legacy Planning in Motion
End-of-year is a good time to review:
Annual gift exclusions allow compounding multi-year wealth transfer. Explore SLATs, GRATs, IDGTs, and multi-tier trust structures for asset growth outside the taxable estate.
Concentrated Equity Risk Management
Executives and founders may need:
You have additional year-end levers:
We recommend updating your business valuation annually—long before you decide to sell—so value gaps can be addressed proactively.
January: Reset portfolio allocations, update 2026 retirement contribution automation.
February: Review business KPIs and forecast compensation and cash flow.
By March: Confirm IRA/HSA funding for 2025.
May-August: Mid-year tax assessment: income shifts? model Roth conversions and charitable timing.
Q4: Lock in tax strategy, prep for gifting, execute wealth transfer moves and business liquidity modeling.
Year-end isn’t the finish line—it’s a wealth-building strategy moment.
For high-net-worth families and business owners, the decisions you make right now about taxes, retirement, business structure, and wealth transfer can meaningfully shape the next decade of your financial life—and your family’s future for generations.
Penta Wealth Management is proud to announce that we have been named as one of the Top Wealth Management Services Providers of 2023 by Banking CIO Outlook. The list recognizes the top firms who are at the forefront of delivering wealth management services and was determined using market research focused on peer/client recommendations and best practices. We are honored by this acknowledgment and proud of our team’s commitment to excellence.
