5 Smart New Year’s Resolutions for the Purposeful Investor: Optimize, Don’t Just Accumulate

For the purposeful investor, a New Year’s resolution isn’t about the broad strokes of saving or budgeting. By the time you have reached a certain level of financial stability, the goal shifts from accumulation to optimization. It is about identifying the friction points—taxes, cash drag, and risk—and making adjustments to improve your aftertax, after-inflation outcome.

As we look toward 2026, the legislative and economic landscape continues to evolve. To ensure your financial plan remains resilient and efficient, here are five resolutions designed for those who have already built a solid foundation and are now looking to fine-tune their strategy.

1. Audit the Roth Versus Traditional Math for 401(k) Contributions

Most earners in higher tax brackets default to traditional 401(k) contributions for the immediate tax break. However, the math is rarely that simple. With the potential sunset of current tax provisions and the introduction of new tax-deferred vehicles, a tax bucket strategy needs an annual checkup.

The Resolution: Don’t just max out your contribution to a traditional 401(k) by default. Review your projected tax bracket at the time of withdrawal versus your bracket today. If you are in a high-earning peak but expect a significant tax valley in early retirement, contributing to a traditional 401(k) remains a strong choice. However, if you anticipate that future tax rates will be higher—or if you want to avoid future pressure to take a required minimum distribution—consider a Roth 401(k). Having tax-bracket flexibility later in life is a powerful tool for controlling your effective tax rate.

2. Capture the Universal Charitable Deduction

For several years, the high standard deduction rendered charitable giving tax-neutral for many who don’t quite reach the itemization threshold. However, under recent legislative changes, a specific planning window has opened for those who take the standard deduction.

The Resolution: If you are a nonitemizer, ensure you are tracking your charitable cash contributions. You can now deduct up to $1,000 for individuals and $2,000 for joint filers directly from your income. While I always advocate for donating appreciated securities for larger gifts, this “above-the-line” deduction is an easy, effective way to reduce taxable income for your baseline giving. It’s a simple win that should be tracked starting with your very first donation of the year.

3. Pivot to Intra-Year Tax-Loss Harvesting

The most common mistake investors make is waiting until December to look for tax-loss harvesting opportunities. Volatility does not follow a calendar; a market dip in May is just as valuable for harvesting a loss as a dip in December.

The Resolution: Move away from year-end monitoring and toward continuous monitoring. Set specific triggers to harvest losses throughout the year rather than waiting for the holidays. By capturing these losses when they occur, you build a bank of offsets that can be used against year-end capital gains distributions. This effectively lowers your tax bill while keeping your long-term market exposure constant.

4. Eliminate Cash Drag in Tax-Advantaged Accounts

Cash is a tactical tool, but in the wrong account, it is a silent performance killer. I often see dead cash sitting in retirement accounts or Roth IRAs, often the result of a dividend payment or a sale that wasn’t reinvested. In a Roth account, where every dollar of growth is permanently tax-free, uninvested cash is a missed opportunity.

The Resolution: Conduct a cash sweep audit. First, ensure that your long-term, tax-advantaged accounts (Roth and IRAs) are 100% invested according to your target allocation; these are the last places you should hold cash. Second, for your taxable liquidity, ensure you are actually earning a competitive rate. If your primary checking or brokerage sweep is still paying near zero, move your working capital to a high-yield vehicle or a Treasury-based money market fund.

5. Rightsize Your Risk Transfer (the Insurance Pivot)

Insurance is intended to protect against a loss you cannot afford to sustain. As your portfolio grows and your life stage changes, the risks you need to transfer to an insurance company also change.

The Resolution: Rebalance your insurance portfolio to match your current reality.

• The Self-Insurance Threshold: If you are retired or have a portfolio large enough to provide for your heirs and sustain your lifestyle, the original purpose of life insurance—replacing an income stream—may no longer exist. Similarly, disability insurance is unnecessary once you are no longer relying on a paycheck.
• The Liability Shift: As your net worth increases, your target for potential liability claims grows. Ensure your umbrella liability coverage is adequate and coordinated with your home and auto deductibles. Finally, check that your homeowners’ replacement cost coverage has kept pace with the significantly higher costs of construction.

Summary for the New Year

Success at this stage of the game isn’t about finding the next hot investment; it’s about the disciplined management of the details. By optimizing your tax buckets, harvesting losses in real time, and rightsizing your insurance, you are adopting habits that protect and grow what you have worked so hard to build.

The opinions expressed here are the author’s. Morningstar values diversity of thought and publishes a broad range of viewpoints.