The final months of the year can be a valuable time for Southern California Edison employees to review their financial plans and identify decisions that may need to be completed before December 31.

 

For some employees, that may mean reviewing 401(k) contributions, evaluating Roth conversions, considering charitable gifts, managing investment gains and losses, or revisiting tax withholding. For others, year-end planning may focus more on retirement timing, pension decisions, healthcare benefits, beneficiary designations, or preparing for Required Minimum Distributions.

 

Not every strategy will be appropriate for every SCE employee. The goal is not to complete a long list of financial transactions simply because the calendar year is ending. It is to identify the decisions that are relevant to your circumstances and determine whether acting before year-end may improve your broader financial plan.

 

For employees approaching retirement, year-end planning can be especially important because decisions involving income, taxes, benefits, and retirement accounts can affect both the current year and the years that follow.

 

Review Your 401(k) Contributions

 

One of the first places to look at year-end is your Edison 401(k).

 

If you are still working, review how much you have contributed so far this year and whether your current contribution rate remains appropriate.

 

Depending on your circumstances, you may want to consider:

 

• Whether you are taking full advantage of available employer contributions
• Whether your pre-tax versus Roth contribution mix still makes sense
• Whether you are eligible for catch-up contributions
• Whether changes in income have affected how much you are able to save
• Whether your contribution rate should be adjusted for the coming year

 

Employees nearing retirement may also want to think beyond maximizing contributions and consider how the different tax characteristics of their retirement savings could affect future income.

 

A large traditional 401(k) balance can provide valuable retirement resources, but distributions may create taxable income later. Roth assets may provide a different source of retirement income depending on applicable rules.

 

Key Question

Are your current 401(k) contributions aligned with both your retirement goals and your future tax strategy?

 

Evaluate Whether a Roth Conversion Makes Sense

 

Year-end is often a natural time to evaluate Roth conversions.

 

A Roth conversion generally involves moving eligible pre-tax retirement assets into a Roth IRA. The taxable portion of the conversion is generally included in income during the year it occurs.

 

For some SCE retirees, particularly those who have already retired but have not yet begun Required Minimum Distributions, a lower-income year may create an opportunity to evaluate a partial conversion.

 

A conversion may potentially reduce future pre-tax account balances and create greater flexibility later in retirement.

 

However, additional taxable income can also affect:

 

• Federal and state income taxes
• Medicare premiums
• Social Security taxation
• Other income-related tax calculations

 

Because a Roth conversion generally cannot be evaluated in isolation, it may be useful to model several years rather than focusing only on the immediate tax cost.

 

Key Question

Would recognizing some taxable income this year potentially improve your tax flexibility later in retirement?

 

Review Capital Gains and Investment Losses

 

Taxable investment accounts may provide additional year-end planning opportunities.

 

If investments have declined, realizing certain losses may potentially offset capital gains, subject to applicable tax rules.

 

Conversely, an unusually low-income year may create an opportunity to evaluate whether intentionally realizing certain gains makes sense.

 

Tax considerations should not drive every investment decision. Selling an appropriate long-term investment solely for a tax benefit may create a different problem.

 

Instead, year-end tax planning can be incorporated into the broader investment review.

 

Consider whether your portfolio still reflects:

 

• Your risk tolerance
• Retirement time horizon
• Income needs
• Diversification objectives
• Tax circumstances

 

The goal is to coordinate tax planning with sound investment management rather than treating the two as separate exercises.

 

Look at Your Income Before the Year Ends

 

By the fourth quarter, you often have a clearer picture of what your income will look like for the year.

 

That makes this a useful time to review income from:

 

• Salary and bonuses
• Pension benefits
• Retirement account withdrawals
• Social Security
• Investment income
• Capital gains
• Real estate or other sources

 

Understanding your estimated total income can help identify whether there are tax-planning decisions worth considering before December 31.

 

For employees transitioning into retirement, this can be particularly important because income may change significantly from one year to the next.

 

Someone retiring late in the year, for example, may have a very different tax situation than someone who has already spent an entire year in retirement.

 

Review Your Tax Withholding and Estimated Payments

 

The end of the year is also a good time to determine whether enough tax has been withheld.

 

SCE employees and retirees may have withholding from salary, pension payments, retirement distributions, or Social Security.

 

However, investment income, capital gains, Roth conversions, or other transactions may create additional tax liabilities.

 

Discovering a significant tax shortfall when the return is prepared can be an unpleasant surprise.

 

A year-end projection with a qualified tax professional may help determine whether withholding or estimated payments should be adjusted.

 

The objective is not necessarily to receive a large refund. It is to avoid unnecessary surprises while maintaining appropriate cash flow.

 

Consider Charitable Giving Strategies

 

For individuals who already intend to support charitable organizations, year-end can be an appropriate time to review how those gifts are made.

 

Depending on individual circumstances, strategies may include:

 

• Cash contributions
• Donating appreciated securities
• Donor-advised funds
• Qualified Charitable Distributions for eligible IRA owners

 

The tax treatment of charitable gifts depends on several factors, including age, account type, income, deduction rules, and the organization receiving the gift.

 

The purpose should not be to make donations simply for a tax deduction.

 

Instead, tax planning may help make charitable giving you already intend to do more efficient.

 

Make Sure Required Minimum Distributions Are Addressed

 

For retirees subject to Required Minimum Distribution rules, year-end is an important deadline.

 

RMDs generally must be taken from certain tax-deferred retirement accounts once the applicable rules apply.

 

Failure to complete required distributions can create tax consequences.

 

If you are subject to RMDs, confirm:

 

• Which accounts are included
• How much must be distributed
• Whether distributions have already been completed
• How the RMD affects taxable income
• Whether charitable giving may fit into the strategy

 

Employees who are not yet subject to RMDs may still want to estimate future required distributions and consider whether current planning could improve future flexibility.

 

Review Healthcare and Employee Benefits

 

Year-end often overlaps with open enrollment, making it a natural time to review workplace benefits.

 

SCE employees may want to look at:

 

• Medical coverage
• Dental and vision benefits
• HSA contributions
• FSA elections
• Life insurance
• Disability insurance
• Dependent coverage

 

Employees approaching retirement should pay particular attention to how benefits will change once employment ends.

 

Questions may include:

 

• When will employer healthcare coverage end?
• Will you be eligible for Medicare?
• How will a spouse be covered?
• What happens to employer-provided life insurance?
• What happens to HSA or FSA balances?

 

Benefit decisions can have a meaningful impact on both current cash flow and retirement readiness.

 

Review Beneficiaries and Estate Planning Documents

 

The end of the year is also a good reminder to review beneficiary designations.

 

These may include beneficiaries on:

 

• The Edison 401(k)
• IRAs
• Life insurance
• Annuities
• Other financial accounts

 

Beneficiary designations can control how certain assets transfer regardless of instructions in a will.

 

It may also be appropriate to review wills, trusts, powers of attorney, and healthcare directives, particularly if there has been a major family or financial change during the year.

 

Estate planning should be coordinated with retirement planning rather than treated as a separate issue.

 

If Retirement Is Close, Revisit Your Retirement Date

 

For SCE employees considering retirement within the next year, year-end is an ideal time to revisit the plan.

 

Review:

 

• Pension estimates, if applicable
• 401(k) balances
• Social Security timing
• Healthcare coverage
• Expected retirement spending
• Tax implications
• Cash reserves
• Investment allocation

 

Sometimes an employee discovers that retiring a few months earlier or later could affect benefits, taxes, healthcare, or savings.

 

That does not mean the financially optimal date is always the right personal decision.

 

Retirement should also reflect health, family, career satisfaction, and the lifestyle you want to create.

 

Key Question

If you expect to retire within the next twelve months, have you compared several potential retirement dates rather than assuming one date is automatically best?

 

Common Year-End Planning Mistakes

 

Waiting Until the Final Days of December

Certain transactions and administrative changes can take time. Planning earlier provides greater flexibility.

 

Making Tax Decisions in Isolation

A strategy that reduces taxes today may affect Medicare premiums, future RMDs, investment risk, or taxes later.

 

Focusing Only on Investments

Year-end planning should also include benefits, insurance, estate planning, taxes, and retirement income.

 

Automatically Repeating Last Year's Decisions

Your income, family circumstances, tax situation, and retirement timeline may have changed.

 

Trying to Use Every Available Strategy

A strategy is valuable only when it fits the individual's financial circumstances and goals.

 

A Year-End Checklist for SCE Employees

 

Before the year ends, consider whether you have reviewed:

 

• 401(k) contributions
• Pre-tax versus Roth savings
• Potential Roth conversions
• Capital gains and investment losses
• Estimated taxable income
• Tax withholding or estimated payments
• Charitable giving
• Required Minimum Distributions, if applicable
• Health and employee benefits
• Beneficiary designations
• Estate planning documents
• Retirement timing if retirement is approaching
• Investment allocation and cash reserves

 

You may not need to make changes in every area.

 

The value of the review is determining where action is appropriate and where staying the course may make more sense.

 

Frequently Asked Questions

 

What financial planning should I do before year-end?

Year-end planning may include reviewing retirement contributions, taxes, investments, Roth conversions, charitable giving, Required Minimum Distributions, employee benefits, beneficiaries, and retirement timing.

 

Should I complete a Roth conversion before December 31?

A Roth conversion may be worth evaluating depending on your current and expected future tax situation. The taxable amount is generally recognized in the year of conversion, so timing matters.

 

Should I increase my 401(k) contributions at year-end?

Potentially. Employees may want to review contribution limits, employer contributions, cash flow, and overall retirement goals before making changes.

 

What should retirees review before year-end?

Retirees may want to review RMDs, tax withholding, investment gains and losses, charitable giving, Roth conversions, healthcare costs, beneficiaries, and expected spending for the coming year.

 

Why is year-end planning especially important before retirement?

The transition from employment into retirement can change income, taxes, healthcare, benefits, and investment withdrawals. Reviewing those areas before the year ends may help identify opportunities or potential issues before retirement begins.

 

Final Thoughts

 

Year-end financial planning is not about checking every possible strategy off a list.

 

It is about taking a thoughtful look at what changed during the year, what may change next year, and whether any decisions need to be made before the calendar turns.

 

For Southern California Edison employees, that may involve retirement contributions, pension planning, taxes, healthcare, investments, or preparing for retirement itself.

 

At Guardian Financial Partners, we believe these decisions are most useful when they are evaluated together. Your retirement accounts, taxes, investments, employee benefits, and long-term goals are interconnected.

 

A focused year-end review can help identify where adjustments may be appropriate and provide greater clarity heading into the new year, while helping you preserve your assets and protect your lifestyle.

 

 

About the Author

 

Casey S. Bartels, CFP® is a Founding Partner of Guardian Financial Partners. Since 2007, Casey and his partners have worked with Southern California Edison employees and executives, helping them navigate retirement planning, pension decisions, tax planning considerations, and other important financial decisions.

 

Educating Edison is our educational series designed to help Southern California Edison employees better navigate their financial lives.

 

Guardian Financial Partners is not affiliated with, endorsed by, or sponsored by Southern California Edison. The content presented in the Educating Edison series is for educational purposes only and is not intended as individualized investment, tax, legal, insurance, or retirement advice. Tax laws, contribution limits, retirement plan rules, and benefit provisions are subject to change and may vary based on individual circumstances. Individuals should consult appropriate financial, tax, legal, and benefits professionals regarding their specific situation.