By: Edward J. Leach, CFP®, MBA, CEPA®
As we approach the year's final quarter, it’s the perfect time for a retirement plan check-up. Even if you set your 401(k) contributions months ago, life has a way of shifting the numbers — salary increases, bonuses, or payroll changes can all affect how much you are actually putting away.
A quick review now helps ensure you are on pace to maximize contributions, capture your full employer match, and make the most of valuable tax-advantaged savings opportunities.
2025 Contribution Limits at a Glance
Employee contributions: Up to $23,500 (either pre-tax, Roth, or a combination, depending on your plan)
Catch-up (age 50+): Extra $7,500 for a total of $31,000
Enhanced catch-up (ages 60–63): Extra $11,250 for a total of $34,750
Action Step
Log into your retirement plan or review your pay stub to confirm your contribution rate. If maximizing your 401(k) savings is part of your financial plan, check that you’re on track to hit the 2025 limits. Missing out on contributions means missing out on tax benefits, long-term growth, and potentially your full employer match — opportunities you don’t want to leave on the table.
If You Changed Jobs This Year
One easy-to-miss detail: the IRS contribution limits apply across all 401(k) plans combined. That means if you contributed to a 401(k) with a previous employer earlier in the year, those amounts count toward your $23,500 limit and applicable catch-up contributions for 2025.
Your new employer won’t know what you contributed at your old job. If you don’t adjust, you could accidentally contribute more than the IRS limit, which can trigger penalties and extra paperwork.
Don’t Forget Beneficiaries
While you’re reviewing contributions, it’s also a good time to double-check your beneficiary designations. Life changes — such as marriage, divorce, or the birth of a child — can impact who you want listed on your retirement accounts. Keeping these up to date ensures your savings are passed on according to your wishes and avoids unnecessary complications later.
We’re Here to Help
The end of the year is a natural checkpoint to make sure your retirement plan is aligned with your goals. That means confirming your 401(k) contributions (whether pre-tax, Roth, or both), checking your progress toward the 2025 limits, reviewing your beneficiary designations, and preparing for choices you’ll make during open enrollment. If you’d like us to walk through these areas with you — or see how they fit into your broader financial plan — please reach out. We’re here to ensure you make the most of your opportunities today and stay prepared for what’s ahead.
Ed Leach, CFP®, MBA, is a Partner and Wealth Advisor at HIGHLAND Financial Advisors, LLC in Wayne, NJ, and works directly with clients advising them on their financial planning and investments. Ed’s work focuses on the unique needs of business owners, helping them extract value from their businesses while creating efficiencies in their business and personal financial plans. He is also a member of NAPFA, which is dedicated to serving fee-only advisors.
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The above article was written with the assistance of artificial intelligence (AI).