Year-End Money Tasks for People Living on Fixed Income

What to do with your money before December 31

The end of the year is when you can catch up on money decisions that affect your taxes, your income next year, and how much you'll actually have to spend. If you're living on a fixed income—Social Security, a pension, or both—some of these moves take just a phone call or a few minutes online, but they change what you owe in April and what you receive in January. You don't need to do everything on this list, but you should know which ones apply to your situation and which ones have real deadlines.

Most of these tasks cluster into three categories: things that change your tax bill, things that lock in your income for next year, and things that protect you from unexpected costs in 2025. Start with whichever feels most urgent, then work through the rest at whatever pace works for you.

Key Takeaways

• Check your Social Security statement now to catch any errors in your earnings record, since corrections become harder after the year ends.
• Review your Medicare coverage before December 7 if you want to change plans for 2025, because that deadline is firm and cannot be extended.
• Estimate your tax bill for the year so you know whether you'll owe money in April or whether you're having too much withheld.
• Look at your prescription drug costs and whether switching to a different plan would save you money on medications you take regularly.
• Gather receipts and records for any large medical, charitable, or home repair expenses, since these may reduce what you owe in taxes.

Check your Social Security earnings record for errors

Your Social Security statement shows the earnings history the government used to calculate your benefit amount. If there are mistakes in that record—a year where your earnings were recorded wrong, or a year that's missing entirely—your benefit could be lower than it should be. The longer an error sits, the harder it is to fix, because Social Security has limits on how far back they'll correct records.

You can view your statement online at ssa.gov by creating a my Social Security account, or you can call Social Security at 1-800-772-1213 and ask them to mail you a copy. Look at the earnings listed for each year you worked. If you see a year that looks wrong—a year where you know you earned more, or a year that should be there but isn't—write down the year and the amount you believe is correct. Then call Social Security with that information and ask what documents they need from you to correct it. They may ask for a W-2, a tax return, or a pay stub from that year.

If you're still working and earning money, make sure the current year's earnings are showing up correctly too. Sometimes there's a lag between when you earn money and when it appears on your record.

Review your Medicare coverage before the December 7 deadline

Medicare's Annual Enrollment Period runs from October 15 through December 7 each year. This is the only time most people can change their Medicare plan for the following year. If you want to switch from Original Medicare to a Medicare Advantage plan, or from one Advantage plan to another, or if you want to change your prescription drug plan, December 7 is the deadline. After that date, you're locked into your current coverage for the whole year unless you have a may have access to life event like moving or losing other insurance.

Start by looking at what you're paying now—your monthly premium, what you pay when you see a doctor, and what you pay for prescriptions. Then go to Medicare.gov and use their plan comparison tool to see what other plans cost for the same services. Pay special attention to your regular medications. If you take the same prescriptions every month, search for plans that cover those drugs at the lowest cost. A plan that looks cheaper overall might charge more for the specific medications you need.

If you need help comparing plans, you can call 1-800-MEDICARE and ask to speak with a counselor, or you can find a local counselor through your State Health Insurance Assistance Program (SHIP). These counselors are free and can walk you through the options over the phone.

Figure out what you'll owe in taxes this year

If you're receiving Social Security, some of it may be taxable depending on your total income for the year. If you have a pension, withdrawals from retirement accounts, or other income beyond Social Security, you may owe federal income tax. The time to figure this out is now, not in April, because you still have time to adjust.

Gather your statements from the year: your Social Security statement (you can view this online), any 1099 forms from pensions or retirement account withdrawals, any interest or dividend statements from savings or investments, and any other income. Add them all up. Then use the IRS worksheet for Social Security taxation (available at irs.gov) to see how much of your Social Security is taxable. If you're going to owe money in April, you have two choices: you can have more tax withheld from your Social Security or pension starting in January, or you can make estimated tax payments to the IRS before the end of the year.

If you're not sure whether you'll owe, call the IRS at 1-800-829-1040 and describe your income to a representative. They can tell you roughly what you'll owe. If you want to adjust your withholding, you can fill out a Form W-4S (for Social Security) or a Form W-4 (for other income) and send it to the agency paying you.

Review your prescription drug coverage and costs

If you're on a Medicare prescription drug plan, the list of covered medications and the cost of each one can change every year. If you take regular medications, the plan you're on now might not be the cheapest option for 2025. This is especially true if you take brand-name drugs or if your medications recently moved to a higher cost tier.

Go to Medicare.gov and use the prescription drug plan finder. Enter each medication you take regularly, including the dose and how often you take it. The tool will show you what each plan charges for those specific drugs. Look not just at the monthly premium, but at what you'll pay out of pocket for your medications over the whole year. A plan with a higher premium might save you hundreds of dollars if it covers your drugs at a lower cost.

If you find a plan that saves you money, you can switch during the Annual Enrollment Period (before December 7). Your new plan will start on January 1. If you're happy with your current plan, you don't need to do anything—you'll stay on it automatically.

Gather records of medical, charitable, and home expenses

If you paid for significant medical care, made donations to charity, or paid for home repairs or improvements this year, those expenses may reduce what you owe in federal income tax. You don't have to do anything with these records right now, but gathering them before the end of the year makes tax time much simpler.

Look for receipts and statements for: medical expenses you paid out of pocket (doctor visits, prescriptions, medical equipment, dental work, hearing aids), donations to may have access to charities (churches, nonprofits, food banks), and major home repairs or improvements (roof replacement, new furnace, accessibility modifications). If you don't have a receipt, write down what you remember—the date, the amount, and what it was for—and keep that note with your tax records.

Whether these expenses actually reduce your taxes depends on your total income and how much you paid. But having the records ready means you won't scramble to find them in March or April.

Check your insurance coverage for gaps in 2025

Before the year ends, look at what insurance you have and what it covers. If you have a gap—for example, you have health insurance but no dental coverage, or you have homeowner's insurance but no coverage for water damage—now is the time to explore options for 2025.

For health coverage, you already reviewed Medicare during the Annual Enrollment Period. But if you have supplemental insurance (Medigap) or a Medicare Advantage plan, check whether your out-of-pocket maximum is something you can afford if you have a major health event. For dental and vision, these are usually separate plans you buy on your own, and you can change them anytime. For home and auto insurance, your policy renews on a specific date—check your policy documents to see when yours renews, and start shopping a few weeks before that date if you want to compare rates.

You don't have to make changes right now, but knowing what you have and what you don't have means you can make a plan for January.

Frequently Asked Questions

Do I have to do all of these things before December 31?

No. The only firm deadline is Medicare enrollment (December 7). The others are useful to do before the year ends, but you can do them in January if that works better for you. The main advantage of doing them in December is that you have time to make changes before they take effect on January 1.

What if I find an error on my Social Security statement after December 31?

You can still report it and ask for a correction, but Social Security has time limits on how far back they'll go. If the error is from several years ago, they may not be able to fix it. That's why checking now, while the year is still open, is worth doing.

Can I change my Medicare plan after December 7?

Only if you have a may have access to life event, such as moving to a different state, losing other insurance, or becoming newly may be able to access for Medicaid. If you miss the December 7 deadline without a may have access to event, you're locked into your current plan until the next Annual Enrollment Period in October.

How do I know if I need to adjust my tax withholding?

If you're expecting to owe money when you file your taxes in April, you should adjust your withholding. If you're expecting a refund, you could adjust it too, though many people prefer to let the government hold the money and get it back as a refund. Call the IRS at 1-800-829-1040 if you're unsure.

What if I can't afford to switch to a cheaper Medicare plan because of the deductible?

Some plans have higher deductibles but lower monthly premiums, while others have lower deductibles but higher premiums. Look at the total cost—premium plus what you expect to pay out of pocket—rather than just the premium. If cost is a real barrier, ask about programs like Extra Help (for prescription drugs) or Medicaid, which may cover some of your costs. Call 1-800-MEDICARE to learn what you might be may be able to access for.