By Nino Pavan, J.D., CFP®
As the year winds down, many Southern California Edison and SoCal Gas employees find themselves asking: “Am I doing everything I can to reduce my taxes before December 31?” That’s where these tax reduction tips come in. They’re designed to help you safeguard and grow your wealth.
At Financial Designs, our mission is to guide individuals and families toward a confident retirement through goal-centered planning. We’ve compiled the following tips as practical strategies to reduce taxes now while keeping your long-term financial goals on track.
1. Maximize Retirement Contributions
If you’re still working and have access to an employer-sponsored retirement account, such as a 401(k), contributing the maximum allowed can be one of the most powerful year-end tax strategies.
For 2025, the standard employee contribution limit is $23,500. But if you’re approaching retirement, catch-up contributions give you an extra boost:
- Age 50 or older: an additional $7,500, bringing your total to $31,000
- Age 60 to 63: an extra $11,250, for a total contribution of $34,750
Taking full advantage of these limits can lower your taxable income today, helping you keep more money in your pocket. Remember, withdrawals in retirement are subject to income tax, but contributing now sets you up for long-term financial stability.
2. Take Required Minimum Distributions Carefully
For clients who are 73 or older, taking your required minimum distributions (RMDs) from tax-deferred retirement accounts is a critical opportunity for tax planning. Accounts subject to RMDs include:
- 401(k) and 403(b) plans
- Traditional IRAs
- SEP and SIMPLE IRAs
Missing an RMD or withdrawing it late can result in a penalty of up to 25% of the amount you should have taken. Planning ahead allows you to avoid unnecessary fees and taxes.
3. Offset Capital Gains With Strategic Investment Moves
If you’ve realized significant gains in your taxable investment accounts, now is the time to consider ways to offset those gains. Selling investments that have decreased in value to offset gains (known as tax-loss harvesting) is one of the most practical tax reduction tips for the year.
Additionally, if your losses exceed your gains, you can deduct up to $3,000 from your ordinary income, with any remaining losses carried forward to future years. This strategy helps smooth your tax liability while keeping your long-term investment plan on track.
For investors nearing retirement, timing the sale of appreciated assets and coordinating with other year-end tax strategies, such as charitable giving (see the next tip!) or retirement contributions, can help optimize tax savings.
4. Make Thoughtful Charitable Contributions
Year-end is an ideal time to give back while also optimizing tax-saving opportunities. If you itemize deductions, aim to make your charitable contributions before December 31.
In many cases, charitable giving can be coordinated with other year-end strategies to help reduce your overall tax liability. For instance, qualified charitable distributions (QCDs) from eligible retirement accounts can satisfy your annual required minimum distributions. Donating those assets directly to a qualified charity can be an effective approach.
5. Partner With a Fiduciary Financial Advisor
While these tax reduction strategies can be highly effective on their own, the most impactful results come from reviewing them with an experienced professional. Partnering with a fiduciary financial advisor verifies the guidance you receive is always in your best interest, tailored to your unique financial situation, and aligned with your long-term goals.
At Financial Designs, we serve as fiduciary financial advisors who can help you review your tax reduction strategies, confirm they’re optimized for your circumstances, and fit seamlessly into your overall retirement plan.
Working with a fiduciary can provide confidence that your year-end moves aren’t just reactive tactics, but part of a comprehensive plan designed to strengthen your retirement readiness.
Take the Next Step With a Financial Specialist
If you want to verify that these tax-reduction tips are optimized for your personal situation, it’s time to partner with a professional who understands the unique perks available to Southern California Edison (SCE) and SoCal Gas employees.
The team at Financial Designs specializes in guiding SCE and SoCal Gas employees, especially those over 50, through optimizing retirement savings, managing RMDs, and strategically reducing taxes. By aligning your year-end strategies with your long-term goals, we help you reduce stress, preserve wealth, and feel confident that your retirement is on track.
To schedule a no-obligation consultation, call (909) 626 1642 or email fdc@fdcadvisors.com today!
About Nino
Nino Pavan is President and a CERTIFIED FINANCIAL PLANNER® professional at Financial Designs, a retirement planning firm in Claremont, California, with the mission of enabling individuals and families to financially prepare for and confidently enjoy their retirement years through goal-centered planning. With more than 30 years in the financial services industry, Nino is thankful for the opportunity to serve his clients by making the retirement process a stress-free one; he worries about their money so they don’t have to!
Nino holds a law degree from the University of Southern California, a Bachelor of Science in Telecommunications Management from DeVry Institute of Technology and has been a contributing advisor to Kiplinger. In addition to being a CERTIFIED FINANCIAL PLANNER® professional and Investment Advisor Representative, Nino has passed the Series 7, 24, and 63 securities exams and holds life and disability insurance licenses. He also conducts retirement and estate planning workshops for employees of major California companies. Outside of the office, Nino enjoys sports (regular and fantasy), traveling (specifically tropical destinations), walking, pickleball, church activities, and spending time with his wife Sherry and their two children, Derek and Sara. To learn more about Nino, connect with him on LinkedIn.
