The start of a new year always feels full of possibility. It’s like a fresh chapter, giving you a chance to set goals and make changes to set yourself up for the months ahead. But for high-income earners, it’s more than just about New Year’s resolutions. It’s the perfect moment to reassess, reorganize, and take control of your financial future. Whether you’re trying to minimize your tax burden, optimize your investment portfolio, or ensure your retirement planning and estate planning are on track, the beginning of a new year is the ideal time to take action.
In this article, we’ll guide you through the key areas to focus on at the start of the year to help ensure your wealth is working as hard as possible for you. Starting now gives you a head start, so you’re not playing catch-up later in the year.
Tax Planning: Minimize Your Tax Burden from the Start
When it comes to tax planning for high-income earners, the new year is the perfect time to make adjustments for the current and upcoming tax year. Now is a great time to review your tax strategies and make decisions that can impact your tax burden from the get-go.
One way to do this is by maximizing deductions. Imagine Sarah, a high-income earner with a growing tech business, realizes in January that her tax bill for last year could have been lower if she had contributed more to her 401(k) and utilized some other tax-saving strategies. Since it’s the start of the year, Sarah has the opportunity to make a plan now to help reduce her overall tax burden—perhaps even by tens of thousands of dollars over time.
If you can relate to our imaginary friend Sarah, start by reviewing last year’s tax return, considering potential deductions or tax-advantaged accounts, optimizing charitable contributions, and making sure that your investment strategy is optimized for tax efficiency. Now is the time to review your investment strategy and consider adjustments that could provide tax savings in the short term and long run.
Download our 2025 Financial Checklist for a comprehensive guide to starting the new year strong.
Investment Portfolio Review: Align Your Investments with Your Goals
One of the best financial habits you can develop is to review your investment portfolio at the beginning of each year. By doing this early in the year, you can make sure that your investments align with your long-term goals and that they are positioned to help you achieve financial success. Whether you’re looking to grow your wealth or minimize risk, this review helps to ensure that your money is working for you.
Consider a man named Kyle, a high-income earner with a diverse investment portfolio that includes stocks, bonds, and real estate. In the past year, Kyle got married, and he and his wife are starting to think about starting a family. On top of market performance, life changes like this could shift his goals and risk tolerance. But Kyle reassesses and realigns his portfolio at the start of the year to optimize his investments.
Like Kyle, reviewing your portfolio helps to ensure that it’s ready for the market conditions of the new year, and that you’re maximizing growth potential while minimizing risks. By addressing asset allocation and location early on, you’ll be in a better position to manage volatility and take advantage of market opportunities as they arise throughout the year.
Is Your Financial Plan Ready for 2025? Make sure by checking the boxes on our 2025 Financial Checklist. A tailored strategy designed for high-income earners to set you up for success in the months and years to come.
Retirement Planning: Maximize Contributions and Prepare for the Future
Another important area to focus on in January is retirement planning. The new year is the ideal time to ensure you maximize your retirement savings and make the most of your contributions. Many high-income earners can take advantage of catch-up contributions, which allow you to contribute more to your retirement accounts if you’re over the age of 50, with additional contributions available for the first time this year to those between ages 60 and 63.
For example, let’s take Karen, newly 50, who’s looking ahead to retirement and wants to make the most of her retirement savings. Because she’s over 50, Karen is eligible to contribute an additional $7,500 to her 401(k) this year. By taking advantage of this catch-up provision, she ensures she’s building her nest egg as efficiently as possible. If she had waited until later in the year to make this decision, she might have missed out on tax benefits she could have gained earlier.
Whether you’re over or under 50, or contributing to a 401(k), IRA, or Roth IRA, the beginning of the year is a great time to catch up and maximize your contributions. Starting the year strong with retirement planning will ensure you’re on the right track to meet your long-term goals and secure the lifestyle you envision for the future.
Don’t miss out. Get more information from our 2025 Financial Checklist.
Estate Planning: Safeguard Your Legacy and Minimize Estate Taxes
Estate planning isn’t something many people want to think about, but for high-income earners, it’s an essential part of financial security. The first quarter provides an excellent opportunity to review or update your estate plan, including your will, trust, and beneficiary designations.
For example, imagine Alex, a high-income earner with a growing family and a sizable estate. Let’s say he’s recently purchased a large asset and has a newborn at home. Because Alex reviews his will and trusts each January he ensures they reflect the most recent changes in his family life and he doesn’t miss these important milestones. He also looks over his beneficiary designations to make sure that the money he worked hard to accumulate will go to the right people and be protected from unnecessary estate taxes, which can significantly reduce the wealth passed on to heirs.
Be sure to also check for changes in tax laws, your financial situation, or other family circumstances that might warrant adjustments. Early updates like this can help protect your wealth, minimize estate taxes, and ensure your legacy protection aligns with your wishes.
Time to Act: Take Control of Your Financial Future Today
The new year is a powerful opportunity to align your resolutions and goals with your financial plans.
We’ve made it easy with our 2025 Financial Checklist to Start the New Year Strong.
By focusing on tax planning, investment reviews, retirement planning, and estate planning, you’ll take the necessary steps to set yourself up for financial success. If you see something you want further guidance on, reach out and book a free call today.
The opinions expressed herein are those of KFA Private Wealth Group (“KFA”) and are subject to change without notice. KFA reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This should not be considered investment advice or an offer to sell any product. Past performance is no guarantee of future results. This contains forecasts, estimates, beliefs and/or similar information (“forward looking information”). Forward looking information is subject to inherent uncertainties and qualifications and is based on numerous assumptions, in each case whether or not identified herein. It is provided for informational purposes only and should not be considered a recommendation to buy or sell securities or a guarantee of future results. KFA is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about KFA, including our investment strategies, fees and objectives can be found in our ADV Part 2, which is available upon request.
