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401(k) plans are designed to help in retirement, but if you don’t follow the rules, you may find yourself facing 401(k) withdrawal penalties.

This is because the purpose of a 401(k) plan is to provide money following retirement from employment – not function as a general savings account.

If you are unaware of 401(k) withdrawal penalties, you may be shocked when you get stuck with a high tax bill.

Read on to learn more about 401(k) withdrawal penalties and how to avoid them.

 

Rules for 401(k) Withdrawals at Retirement Age

There are rules for withdrawing funds from a 401(k).

If you do not follow these rules, you may face 401(k) withdrawal penalties.

For instance, while you can withdraw money from your 401(k) at any point, you may face a penalty from the IRS of 10% if you withdraw funds before age 59½.

Distribution Rules

When you are ready to withdraw from your 401(k), there are rules about how the funds are distributed. 

You may opt to receive regular distributions for a set period of time, or you may opt to take lump-sum withdrawals. 

The remaining money is still invested, and your portfolio may change based on these investments.

You can also cash out your 401(k). 

However, you will be required to pay taxes on the full amount of the withdrawal, which could mean a huge tax bill and possibly a higher tax bracket. 

Your age plays a leading role in distribution rules. 

If you withdraw from your 401(k) before 59½, this is considered an early withdrawal and is subject to penalties. 

You can keep your money in your 401(k) until you are 73 or 75. 

At this age, you must take required minimum distributions (RMDs) regularly. This is a set amount based on your life expectancy and account balance. You may withdraw more than this set amount, but you are not allowed to withdraw less. 

If you were born from 1951 to 1959, you can begin taking RMDs when you turn 73. If you were born in 1960 or later, you can begin taking RMDs at 75.

If your 401(k) plan holds less than $5,000, you may be required to take a lump-sum distribution.

Tax Rules

When you withdraw money from a traditional 401(k), it is taxed as regular income in the year you take the money out. 

This means you will pay taxes on the withdrawals at your current income tax rate.

Your 401(k) withdrawals will be considered taxable earnings for the year they were withdrawn.

However, the tax benefits of a 401(k) plan are designed to help you save for retirement. 

By deferring taxes until retirement, you may be in a lower tax bracket than you would have been when you initially made the contributions.

Contribution Rules

Once you retire and leave your employer, you are no longer allowed to contribute to your 401(k) plan. 

Should your plan only contain between $1,000 and $5,000, your employer may try to force you out of the plan, and you may be required to roll over funds. 

The other option for those with less than $5,000 is to take a lump-sum payment. 

If you want to continue to contribute to a retirement savings vehicle after you retire from your employer, you may want to consider rolling over your 401(k) savings into an IRA.

However, you are still only allowed to contribute earned income, so this option is for those who have not fully retired and are still earning some sort of taxable income (such as part-time income in post-retirement).

 

401(k) Withdrawal Penalties

The IRS requires an automatic withholding of 20% of a 401(k) early withdrawal for taxes.

For instance, if you withdraw $15,000 from your 401(k), you may only get about $12,000 after taxes are taken out. 

Along with the withholding taxes, the IRS will also hit you with a 10% penalty on all funds withdrawn when you file your tax return – if you’re under the age of 59½.

But it’s not just a 10% penalty. 

The amount withdrawn may also be taxed as ordinary income for the year the money was taken out – which may push you into a higher tax bracket, forcing you to pay even more taxes.

Now, back to the example. 

Let’s say you’re under 59½, and you pull out $15,000 from your 401(k). 

At this point, you are up to 30% in taxes and penalties. 

This means you may only get about $10,500 of the $15,000 early withdrawal. 

The exact number depends on individual tax circumstances – some may get some of the 20% withholdings back

[Related Read: Why a 401(k) Withdrawal Should Be Your Last Resort]

 

How to Avoid 401(k) Withdrawal Penalties

The first way to avoid the penalty is to wait until you are 59½ to take money out of your 401(k).

However, there are some situations that may qualify for an exemption from the 10% penalty.

• The first way is if you qualify for a substantially equal periodic payment plan.
  With this plan, retirement plans may be cashed out penalty-free. But this is only if you take annual distributions for a period of 5 years or until you turn 59½. However, income tax must still be paid on the withdrawals.

• The second way is if you leave your job – but this only applies to those aged 55 and over.
  This is what is called the 55 and Separated from Service rule. This is an IRS policy that allows workers aged 55 and over to take early withdrawals from their employer-sponsored retirement accounts without paying a 10% penalty provided that they leave their jobs. It only applies to accounts you have with your current employer. But you will still owe taxes on the withdrawal, and funds withdrawn will be taxed as ordinary income.
• The third is if you’re getting a divorce and must pull money out of your 401(k) to give to your spouse.
  If this happens, then you won’t be charged a penalty for taking money out of your 401(k).

 

Situations That Qualify for Hardship Withdrawal

Another means for avoiding 401(k) withdrawal penalties is to take a hardship withdrawal.

A hardship withdrawal is a withdrawal of funds from a retirement plan due to “an immediate and heavy financial need,” and if you qualify, you usually don’t have to pay the penalty. 

Situations that qualify for a hardship withdrawal: 

• Medical bills for you, your spouse, and your dependents 
• Money to buy a house
• Money to avoid foreclosure or eviction 
• Higher education expenses for you, your spouse, or your dependents 
• Funeral expenses 
• Disability
• Adoption purposes
• Disaster 
• Military reservist 

Now, in order to qualify, you need to prove you can’t get the money anywhere else – for example, you can’t get a loan, and you don’t have a savings account.

The administrator of the 401(k) will have to approve a 401(k) hardship withdrawal. They’ll want to see the documentation of the hardship. 

Keep in mind – If you do qualify, you will still have to withhold 20%, and it’s taxed as ordinary income.

[Related Read: The Real Impact of 401(k) Hardship Withdrawals]

 

The Longer You Wait, the Better

Ultimately, the longer your money is invested in your 401(k), the more it has the opportunity to grow.

While you cannot continue contributing to your 401(k) after you retire, your money can still grow while it is invested.

Another thing to consider is when to retire.

The longer you wait to retire, the better.

In addition to giving you more time to contribute to your 401(k), Social Security benefits are based on your highest 35 years of earnings.

Speak to a financial advisor and a tax professional before you make any 401(k) withdrawals.

They can help you understand the tax implications, 401(k) withdrawal penalties, and your financial future. 

 

Click below to book a complimentary 15-minute 401(k) Strategy Session with one of our advisors today.

Book a Strategy Session

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It is becoming more popular to take a 401(k) loan. 

A December 2023 report found “more retirement savers have taken loans from their 401(k) accounts over the past year, suggesting that U.S. households are borrowing more readily as they feel the pinch of inflation.”¹

David Blanchett, a certified financial planner and head of retirement research at PGIM, the asset management arm of insurer Prudential Financial, says, “I think 401(k) loans – like credit card debt – are kind of leading indicators of economic stress in America.”²

As Americans struggle to make ends meet, they may need to make tough choices.

One way to ease some of the financial burdens they face: Taking a 401(k) loan.

As Blanchett explains, “Individuals are having to tap their retirement savings because they have to pay for or pay back something.”³

Approximately 138,000 people in this particular study took a loan from their workplace plan in the third quarter of 2023, borrowing an average of $10,778.⁴

While 401(k) loans are an option, it’s important to understand their potential impact before making a decision.

Read on to learn why a 401(k) loan could impact your long-term retirement savings strategy.

 

The Difference between a 401(k) Loan and a Withdrawal

A 401(k) loan allows you to borrow money from your own 401(k) retirement account, but you must pay it back with interest.

The money you pay back and interest both go back into your 401(k) retirement account.

A 401(k) loan must be paid back typically within 5 years, with interest, and you do not have to pay taxes on the amount borrowed – unless you fail to repay it in the required time frame. 

In contrast, 401(k) withdrawals are permanent removal of funds and are subject to ordinary income tax on the amount withdrawn plus a 10% early withdrawal penalty.

For today, we are focusing on explaining 401(k) loans, not 401(k) withdrawals.

 

401(k) Loan Rules

The first thing to know about 401(k) loans is that not every employer-sponsored 401(k) plan allows participants to borrow from the plan.

You must check first to see if your plan permits 401(k) loans.

Then, you’ll need to determine how much you’re allowed to borrow.

Ultimately, how much you are allowed to borrow is determined by the plan.

According to the IRS, “Generally, if permitted by your plan, you may borrow up to 50% of your vested account balance up to a maximum of $50,000.”⁵

In addition, there are also rules about how much time you have to repay what you borrowed. 

According to the IRS, “The loan must be repaid within 5 years, unless the loan is used to buy your main home. The loan repayments must be made in substantially level payments, at least quarterly, over the life of the loan.”⁶

You will also be expected to pay the borrowed money back with interest. 

Your 401(k) plan may have additional rules, such as requiring consent from a partner or spouse to take a 401(k) loan.

That’s not all.

Some 401(k) plans prohibit you from making additional contributions until the loan is paid off. 

If your plan restricts contributions while a loan is outstanding, it could affect your future 401(k) balance due to missed employer matching and potential investment growth.

 

What to Know about Leaving a Job with a 401(k) Loan

Another important thing to consider before taking a 401(k) loan is how long you plan to stay with the same employer.

Let’s say you have taken a 401(k) loan and then decide to leave your job or you are fired. 

You’ll be expected to pay the loan back by the due date of your tax return in April.

If you do not pay back the full unpaid balance of the 401(k) loan, then it will be treated as an early withdrawal.

Early withdrawals are costly!

If you are under age 59½, you will also have to pay a 10% federal tax penalty on the unpaid balance along with income taxes on the balance of the loan.

If you have to leave a job before you can pay back the loan, you may find yourself in a vicious debt cycle.

[Learn More: What Happens If I Leave My Job with a 401(k) Loan?]

 

The Personal Consequences of 401(k) Loans

Pulling out money from your 401(k) today for an immediate cash need may hurt your future retirement.

When you dip into your 401(k), you are borrowing from your future.

You may miss out on the potential growth of the money borrowed – and you could end up with less for retirement (even if you follow the rules and pay it back within 5 years).

To show you how powerful compounded growth is to your future, let’s say you have $75,000 in your 401(k), and you don’t tap into your account. 

You are 53, and you plan to retire at 68 – or in 15 years. 

Even if you stopped contributing any more money to your 401(k) for the next 15 years and you got a 6% return on your money, that money could grow to $179,741. 

In this scenario, there has been almost $100,000 growth to your account balance–without you ever contributing another cent.

When you borrow money from your 401(k), you miss out on this type of compounded growth. 

[Related Read: 401(k) Loans: Stop Using Your 401(k) as a Bank]

 

What to Do instead of Taking a 401(k) Loan

If you are struggling financially and know you have money saved in your 401(k) account, it may be tempting to take a 401(k) loan.

A 401(k) loan should be the last resort.

Consider the following options instead.

• Speak to a financial professional. Get an honest take on what borrowing from your 401(k) could mean for your retirement future. Ask for suggestions on how to cover costs while protecting your future.
• Build an emergency fund. Make setting aside emergency savings a goal. If you have money ready for financial emergencies, you won’t have to borrow from your 401(k).
• Cut expenses. If you are considering a 401(k) loan because you can’t make ends meet, instead of taking a loan, cut back on your expenses. Downsize, eliminate unnecessary spending, and stick to a budget.

Find out what 401(k) Maneuver may do for your retirement account balance. Click below to book a complimentary 15-minute 401(k) Strategy Session with one of our advisors today.

Book a Strategy Session

Sources

1. https://www.cnbc.com/2023/12/10/more-americans-take-401k-loans-an-indicator-of-financial-stress.html
2. https://www.cnbc.com/2023/12/10/more-americans-take-401k-loans-an-indicator-of-financial-stress.html
3. https://www.cnbc.com/2023/12/10/more-americans-take-401k-loans-an-indicator-of-financial-stress.html
4. https://www.cnbc.com/2023/12/10/more-americans-take-401k-loans-an-indicator-of-financial-stress.html
5. https://www.irs.gov/retirement-plans/plan-participant-employee/401k-resource-guide-plan-participants-general-distribution-rules
6. https://www.irs.gov/retirement-plans/plan-participant-employee/401k-resource-guide-plan-participants-general-distribution-rules

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The S&P 500 went up more than 20% for 2 years in a row, an impressive run that doesn’t happen often. 

After 2 years of strong market performance, what should investors expect next? 

Keep reading (or watch the video) below as Mark Sorensen, our Chief Investment Officer, breaks down the latest trends –  including the potential for increased volatility, the continued impact of artificial intelligence, and what history tells us about markets after consecutive strong years.

A Rare Market Streak and What It Means for 2025

Historically, when we see back-to-back strong years, the market tends to take a breather. 

This doesn’t necessarily mean a downturn, but rather a period of increased volatility and consolidation.

One trend to watch: While big tech stocks have dominated the past 2 years, earnings growth for the top 7 technology companies in the S&P 500 is expected to slow in 2025, dropping from an average of 24% to around 18%. 

Meanwhile, the other 493 stocks in the index – many of which saw just 5% earnings growth last year – are expected to see double-digit earnings growth this year. 

This shift could lead to a broader market rally beyond just big tech.

We do think that, as we consolidate this year, with a little more volatility, there will be opportunities. 

We still think the market will finish higher –  but probably not 20% again this year.

Artificial Intelligence: A New Industrial Revolution

One of the biggest drivers of the market’s growth – and its potential for continued strength – is artificial intelligence (AI). 

AI is being compared to past industrial revolutions, like the introduction of the railroad, the automobile, and the internet. 

Just as those innovations transformed industries, AI is expected to bring efficiencies and improve margins for companies across multiple sectors.

Looking back at the 1980s and 1990s, we saw a prolonged bull market where the S&P 500 gained in 16 out of 18 years. 

Even in the 2 years when the market dipped, the following years saw major rebounds, with gains of 26% and 34%.

Investors who panicked during brief downturns may have missed out on significant long-term gains.

So even if we think this is a year of pause, we do believe that the market is in a bull market that will be sustained for a while, as technology continues to build efficiencies over time.

Volatility Is Normal and May Create Opportunity

Although 2025 may not see another 20% rally, that doesn’t mean investors should be concerned. 

Some volatility is expected, just as we saw in previous years when the market experienced pullbacks before rallying again. 

In 2023, the market dipped from July to October before rebounding to finish the year strong. 

Similarly, in 2024, we saw a couple of pullbacks before climbing to new highs.

Recent concerns around AI competition briefly shook the tech sector. 

But, as we’ve seen time and time again, the market tends to overreact to uncertainty. 

When stocks sell off irrationally, it often creates a buying opportunity.

The Fed, Interest Rates, and Inflation

One of the biggest factors affecting market performance are interest rates. 

The Federal Reserve successfully brought inflation down from over 9% to around 2.5% – 3%, but now it has stalled. 

Investors have been nervous that inflation could creep back up, leading to higher interest rates. 

However, recent CPI and PPI reports show inflation is still trending lower, easing those concerns.

At the same time, the U.S. economy remains strong, with GDP estimates continuing to rise. 

While some feared that a strong economy would force the Fed to keep rates higher for longer, the latest data suggests inflation can stay under control even with economic growth.

Check out the video as Mark Sorensen, our Chief Investment Officer, breaks down the latest trends and what history tells us about markets after strong years.

401(k) Maneuver exists to help employees with the goal to grow and protect their 401(k) accounts.

Our done-for-you, virtual service allows you to keep your 401(k) right where it is while we review and rebalance your account based on your risk tolerance and current market conditions.

Find out what 401(k) Maneuver may do for your retirement account balance. Click below to book a complimentary 15-minute 401(k) Strategy Session with one of our advisors today.

Book a Strategy Session

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Tax season kicks off this week, and with it comes a handful of changes you’ll want to know about before filing your 2024 taxes. 

From adjustments to standard deductions and tax brackets to updated rules on credits, contributions, and thresholds, staying informed may help you maximize your refund or reduce what you owe.

Read on to learn about 8 updates you want to know for your 2024 taxes.

#1 Standard Deduction Increase

When filing 2024 taxes, take advantage of the inflation adjustment for standard deductions.

According to the IRS, “The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.”¹

This means that individuals can take the standard deduction and reduce their taxable income. For example, if an individual taxpayer earned $50,000, he could reduce his taxable income to $35,400 using the standard deduction.

#2 New Tax Brackets

Another thing to be aware of when filing 2024 taxes are the changes to tax brackets.

While there are still 7 different tax rates ranging from 10% to 37%, the tax brackets (or income ranges) for each of these 7 rates have changed due to inflation.

The changes are worth noting.

For instance, those who earned $46,000 in 2023 were in the 22% income tax bracket; however, those earning this same amount in 2024 are now in the 12% income tax bracket.

• 10% = $0 to $11,600 for single filers or $0 to $23,200 for married couples filing jointly
• 12% = $11,601 to $47,150 for single filers or $23,201 to $94,300 for married couples filing jointly
• 22% = $47,151 to $100,525 for single filers or $94,301 to $201,050 for married couples filing jointly
• 24% = $100,526 to $191,950 for single filers or $201,051 to $383,900 for married couples filing jointly
• 32% = $191,951 to $243,725 for single filers or $383,901 to $487,450 for married couples filing jointly
• 35% = $243,726 to $609,350 for single filers or $487,451 to $731,200 for married couples filing jointly
• 37% = $609,351 or more for single filers or $731,201 or more for married couples filing jointly

#3 Tax Credits

When filing 2024 taxes, be on the lookout for potential tax credits.

For example, due to the Inflation Reduction Act, taxpayers may earn a clean vehicle credit of up to $7,500 for purchasing a new electric vehicle or up to $4,000 for purchasing a used electric vehicle.

Also, for this tax year, you may be able to transfer the credit to an eligible dealer to reduce the amount you owe when purchasing an electric vehicle. 

#4 New Tax Threshold on Capital Gains

If your total taxable income is $47,025 or less, you will not have to pay any capital gains tax.

This is an increase from 2023’s income threshold of $44,625.

Those earning more than $47,025 will have a capital gains tax rate of 15%.

#5 FSA Increase

Those with a Flexible Spending Account will also notice an increase.

The FSA limit has increased to $3,200 for 2024, and if your plan allows, you may carry over up to $640 from the FSA into the 2025 tax year.

#6 Save More in an HSA

Those with a Health Savings Account (HSA) can contribute up to $4,150 (couples/families can contribute up to $8,300).

Those 55 or older can take advantage of a catch-up contribution of an extra $1,000.

#7 1099-K Tax Forms

Those individuals who worked a side hustle and were paid through a third-party app, such as PayPal, Venmo, or Cash App, may receive a 1099-K tax form.

The IRS is requiring these third-party apps to issue a 1099-K for users who earn self-employment income of $5,000 or more.

#8 Don’t Forget You Still Have Time to Fund Your IRA

In 2024, IRA contributors will be able to invest up to $7,000, up from $6,500. The catch-up contribution limit for those 50 or older will be $8,000.

You have until April 15, 2025, to fund your IRA for 2024.

Better Prepare for a Life of Abundance in Retirement.
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Sources

1. https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024 

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Retirement savers, take note – 2025 is bringing big changes to 401(k) plans. 

That’s because the SECURE Act 2.0 introduces changes that could offer investors new opportunities to enhance their retirement savings.

These updates aim to make saving for retirement more accessible and effective for 401(k) savers.

Here’s a breakdown of the top 3 changes to be aware of so you can make informed decisions about your 401(k) in 2025.

Faster 401(k) Eligibility for Part-Time Workers

Good news for part-time workers – starting in 2025, you’ll have quicker access to your employer’s 401(k) plan thanks to a change in the SECURE Act 2.0. 

Here’s the deal: If you work at least 500 hours per year (but fewer than 1,000), you’ll now be eligible to participate in your employer’s 401(k) plan after just two consecutive years of service instead of three. 

This shift is aimed at helping part-time employees build their retirement savings sooner. 

For part-time workers clocking 1,000 or more hours a year, the eligibility rule hasn’t changed – you can still enroll after one year of service.

Whether you’re juggling multiple part-time jobs or scaling back your hours, this change allows you to start contributing to your 401(k) plan sooner – giving your savings more time to grow. 

For example, if you’re working two part-time jobs, you could potentially contribute to multiple 401(k) plans. 

However, it’s important to remember that your total employee contributions across all 401(k) plans cannot exceed the annual IRS limit.

Bigger Catch-Up Contributions for Older Workers

Starting in 2025, workers who are ages 60, 61, 62, and 63 will be eligible for an even higher catch-up contribution limit: Up to $11,250. 

That brings the total contribution for those in this age range to $34,750 ($23,500 regular contribution + $11,250 catch-up contribution). 

Of course, you’ll need to earn at least that much to contribute the full amount.

These increased limits provide an opportunity for older workers to potentially boost their retirement savings as they approach retirement. 

Whether you’re playing catch-up or simply taking advantage of this added flexibility, these higher limits could possibly make a meaningful difference in your retirement nest egg.

10-Year Rule for Inherited 401(k)s

If you inherit a 401(k) from someone who isn’t your spouse, heads up – big changes are coming in 2025.

Thanks to the SECURE Act, non-spousal beneficiaries who inherited a 401(k) after 2019 are required to withdraw all the money within 10 years. 

This is known as the 10-year rule. 

Many people assumed this meant they could wait until the very end of the 10 years to take anything out, allowing the account to grow tax-free in the meantime.

But in 2024, the IRS clarified the rule. 

Now, if the account owner passes away after their required beginning date (the age they were required to start taking minimum distributions), beneficiaries have to take annual required minimum distributions (RMDs) during those 10 years. 

Here’s how it works: You’ll need to take yearly withdrawals based on your life expectancy – even if you don’t want to touch the money yet. 

And yes, you’ll still need to clear the account out entirely by the end of that 10-year window.

But starting in 2025, beneficiaries affected by this rule must start taking annual RMDs – or risk facing penalties.

The good news is that the IRS is waiving penalties for missing RMDs from 2021 through 2024.

401(k) Contribution Limits for 2025

The contribution limit has increased to $23,500 in 2025, up from $23,000 in 2024. For workers aged 50 and above, there is no increase in catch-up contribution limits. 

It remains $7,500 ($31,000 total).

Self-employed individuals with a Solo 401(k) may also contribute up to the new 401(k) limit of $23,500, along with catch-up contributions if eligible.

[Related Read: Retirement 401(k) and IRA Contribution Limits for 2025]

Need Help with Your 401(k)?

Financial advisors may help you get closer to your retirement goals than you think. 

It doesn’t matter how far away or close to retirement you are or how much money you’ve saved. 

In fact, recent studies show how professional account management may improve your annual 401(k) account performance by 3% or more.

See how much you may have at retirement, and how 3% may improve your 401(k) performance. Check out our retirement calculator.

If you want independent, professional account management to help grow and protect your 401(k), schedule a complimentary 15-minute 401(k) Strategy Session with one of our advisors. 

Book a Strategy Session

Our goal at 401(k) Maneuver is to…

• Increase your account performance over time.
• Manage downside risk to minimize losses.
• Reduce fees that are hurting your retirement account performance. 

We aim to achieve these goals by first looking at how much equity exposure someone has, based on current market and economic trends (risk management). 

And, second, for the equity allocation, our goal is to be in what is working and out of what is not in terms of investment style.

With 401(k) Maneuver, you can go about your life doing what you love with confidence, knowing we are handling the changes for you. 

With 401(k) Maneuver, there’s no need for FaceTime meetings. 

And you don’t even have to move your account – you can keep it right where it is.

Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) Strategy Session with one of our advisors.

Book a Strategy Session

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401(k) plans are a critical tool for many Americans striving to secure their retirement.

These tax-advantaged accounts often represent a significant portion of an investor’s financial future.

However, common misconceptions about 401(k) plans may hinder participants from optimizing their retirement savings.

Sometimes, the beliefs we hold as facts can lead us astray.

This applies to 401(k) plans, these misconceptions could potentially affect how you manage your retirement savings. And how much you have saved. 

Keep reading for 5 common 401(k) myths.

Myth #1: Your Employer Covers All the Costs

Many employees believe that because their 401(k) plan is employer-sponsored, all associated costs are borne by the employer. 

While some employers cover administrative fees, others may not. 

Additionally, the investments in your 401(k) often come with their own fees, such as expense ratios for mutual funds and other investment options.

The U.S. Department of Labor requires 401(k) providers to disclose all fees to participants. 

This information is typically included in your plan’s fee disclosure documents and is updated annually. 

Reviewing these documents may provide insights into how much of your returns may be reduced by fees.

For a clearer picture of your 401(k) costs, request the fee disclosure section (408(b)(2)) from your plan provider or Human Resources department.

If you don’t know how to read this disclosure, get a professional to help you. 

Alternatively, you can examine your most recent 401(k) statement for a breakdown of fees.

High fees may significantly impact the long-term growth of your retirement savings. 

For example, a 1% fee might not seem like much, but over decades, it could mean tens of thousands of dollars less in your account.

Myth #2: A Set-It-and-Forget-It Approach Works Best

Some participants assume that once their 401(k) is set up, they can leave it alone and watch it grow. 

However, a successful retirement savings strategy often requires ongoing attention.

Over time, factors such as market fluctuations, changes in risk tolerance, and evolving tax policies may impact your 401(k). 

Regularly reviewing your account and rebalancing your investments may help ensure your portfolio remains aligned with your retirement goals.

If you’re unsure how to manage or rebalance your 401(k), seeking independent, professional advice may help you navigate the complexities of retirement planning.

See how 401(k) Maneuver helps employees grow and protect their 401(k) accounts.

Myth #3 Reading Your Statements Doesn’t Matter

Your 401(k) account balance plays a key role in determining the retirement income you receive.

That’s why it’s essential to review your statements every time you receive one. 

These statements provide a clear picture of your 401(k)’s performance and help identify areas where adjustments may be needed to rebalance your portfolio.

They also break down the fees you’re paying, which directly impacts the amount of income you’ll have in retirement.

While 401(k) statements may vary based on your employer and plan, most contain similar key information.

Check out this video below to learn how to read and understand your 401(k) statements.

Myth #4: Target Date Funds Are the Best Option for Every Investor

Target date funds are often promoted as a simple, hands-off investment choice for retirement savings. 

These funds adjust their asset allocation over time, becoming more conservative as you approach your target retirement year. 

While this may suit some investors, it’s important to recognize that target date funds are not a one-size-fits-all solution.

Target date funds provide a convenient option for many investors but may not align with everyone’s unique financial situation.

Additionally, these funds may carry higher fees compared to other investment options. 

Choosing individual investments based on your personal risk tolerance and retirement timeline may better align with your financial strategy.

For example, an investor with a higher risk tolerance nearing retirement may find that a target date fund’s conservative allocation does not align with their growth-oriented strategy. 

Conversely, someone with a lower risk tolerance might feel target date funds remain too aggressive.

Regularly reviewing and rebalancing your portfolio may also help ensure your investments remain aligned with your goals.

Myth #5: Age Matters When It Comes to Contributing to Your 401(k)

Another 401(k) myth is thinking you’re too old or too young to start contributing. 

The cost of retirement continues to rise. 

Healthcare, transportation, housing – it’s only going up from here. 

And every bit you save now will help in the future.

If you’re close to retirement, what you contribute today may make a significant impact on your retirement income. 

Contributing the max (or close to it now) may also help come tax time with a lower tax bill because contributions are not counted as income. Consult a tax advisor to understand how contributing to your 401(k) could affect your tax situation.

For those who are younger, it’s never too early to start investing because you have time on your side. 

Contributing what you can now helps the power of compounding to take effect. And you’re able to grow your savings tax deferred.

Protect Your Retirement

401(k) Maneuver provides professional account management to help you grow and protect your 401(k) account. 

Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that may harm your account performance. 

Our done-for-you virtual service lets you keep your 401(k) right where it is while we review and rebalance your account based on your risk tolerance and current market conditions.

Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors.

Book a Strategy Session

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If you know you need to make some changes in order to increase retirement savings in 2025, then keep reading.

We’ve compiled 9 potential changes you can make to your saving, spending, and investing habits that may increase retirement savings in 2025.

Read on to learn more.

The State of Retirement Savings

According to the Northwestern Mutual 2024 Planning & Progress Study, “The ‘Silver Tsunami’ is here: 11,000 Americans will turn 65 every day through 2027; only half of Boomers+ and Gen X believe they’ll be financially ready for retirement.”¹

Unfortunately, many who are part of the “Silver Tsunami” are not ready for retirement.

A separate 2024 survey by Prudential found there will be an increase in “Silver Squatters” or older Americans who will need “to rely more on family for housing, financial support.”²

This is because they have not saved enough for retirement.

According to Prudential, “Nearly a quarter (24%) of 55-year-olds expect to need financial support from family in retirement – twice as many as 65- and 75-year-olds (12%). One in five (21%) also expects to need housing support, compared to 12% of 65-year-olds and 9% of 75-year-olds.”³

So, it’s no surprise that many Americans seek ways to increase retirement savings.

Reconsider Target Date Funds

Vanguard’s How America Saves 2024 Report found that “Eighty-three percent of all participants used target-date funds, and 70% of target-date investors had their entire account invested in a single target-date fund.”⁴

This is likely because employers automatically enroll employees in target date funds by default. 

Target date funds are based on an investor’s expected retirement date, but other important factors, such as location, profession, salary, risk tolerance, goals, and objectives, are not always considered. 

While target date funds offer a simple, hands-off approach to investing and are often selected as a default option for their convenience, they may not align with everyone’s individual needs.

Those hoping to increase retirement savings in 2025 might benefit from evaluating whether the default option is the best fit for their situation. 

Rebalance Your Account

Rebalancing your 401(k) can be beneficial because your risk tolerance may change over time.

The stock or mutual fund you originally selected may no longer align with your financial goals or market conditions.

Rebalancing involves periodically buying or selling assets in your portfolio to maintain your desired level of asset allocation. 

However, the appropriate frequency for rebalancing varies depending on individual circumstances, such as your financial strategy, goals, and market conditions.

Those who do not rebalance their allocations periodically may miss opportunities to better align their portfolio with their objectives. 

Consider adding rebalancing to your financial planning routine for 2025, and consult a financial advisor to determine the right approach for your situation.

Check out this video to learn more about rebalancing. 

Reassess Your Risk Tolerance

Having accessible funds can provide safety and security during market dips or unforeseen financial challenges. 

While cash savings are an important component of a financial plan, keep in mind that most money market accounts pay little to no interest, which may limit potential growth opportunities.

Your risk tolerance is unique and may change over time due to life events, financial goals, or market conditions. 

Reassessing your risk tolerance periodically can help ensure your financial strategy aligns with your current situation.

Consider consulting a financial advisor when reassessing your risk tolerance to ensure your investment decisions reflect your long-term goals and personal circumstances.

Contribute the Maximum if Possible

Try to contribute as much as possible to your 401(k) – this means contributing up to the limit.

The 401(k) contribution limit has increased to $23,500 in 2025, up from $23,000 in 2024.

For workers 50 and above, the catch-up contribution limit remains at $7,500, allowing for a total contribution limit of $31,000. 

Individuals aged 60 to 63 may contribute an additional $11,250 instead of the $7,500 catch-up contribution for other age groups, bringing their total contribution limit to $34,750.

While contributing the maximum may not be feasible for everyone, aim to contribute enough to take full advantage of your employer’s matching contributions – if offered. 

Earn Free Money via the Company Match

No one willingly turns down free money. But that’s what happens when you don’t contribute enough to get the company match.

For example, if your company matches 100% up to 6% of your pay, and you make $40,000 a year, you could put in $2,400 (or 6%) for the year, and your company would match this 100%.

This means you have earned $2,400 free money toward your retirement!

[Related Read: 4 Ways to Potentially Maximize Your 401(k) Company Match]

Save Extra Money

We live in a time when it is common to “treat yourself.”

Now, this is different from “paying yourself first.”

Paying yourself first refers to taking care of yourself by saving for your retirement before paying for other things.

Treating yourself refers to treating yourself today, in the present.

Stop spending so much in the present and start saving more for your future. 

When you get a bonus, don’t spend it. Save it.

When you get a raise, don’t increase your lifestyle. Save the extra for a more comfortable retirement lifestyle.

Your future self will thank you.

Boost Your Income

If you are behind and want to increase retirement savings, look for opportunities to boost your income.

Consider taking on a second job or side hustle. Look for investment opportunities, such as rental units. 

Get Engaged with Your Investments

Even though investments help grow money for the future, many people aren’t engaged with their investments. 

Here are some ways that may help you get engaged – and stay engaged – with your investments:

• Learn how to read your 401(k) statement. To know where you stand financially, you need to read your 401(k) statement. See a breakdown of statement images, graphs, and explanations in How to Read a 401(k) Statement and Understand It to gain a better understanding. 

• Read blogs. Continue reading this blog and subscribe to YouTube videos or podcasts that strengthen your understanding.
• Ask questions. If there is something you don’t know or don’t understand about your 401(k) investments, ask! Check out this article: 5 Questions to Ask a 401(k) Plan Provider Sooner Rather Than Later.

Ask for Help

The best chance to increase retirement savings is by asking for help.

There is no shame in admitting you don’t have all the answers and don’t know how to save enough to retire comfortably.

401(k) Maneuver exists to help employees grow and protect their 401(k) accounts. We provide independent, personalized professional account management to help employees, just like you, grow and protect their 401(k) accounts.

And we do this without in-person meetings, so you don’t have to drive to an appointment or spend hours preparing for the meeting.

Our done-for-you virtual service allows you to keep your 401(k) right where it is while we review and rebalance your account based on your risk tolerance and current market conditions. 

All you need to do is connect your account to our secure platform, and we manage your account for you. There’s no need to move your account – you can keep it right where it is. 

Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) Strategy Session with one of our advisors.

Book a Strategy Session

Sources

1. https://news.northwesternmutual.com/2024-04-02-Americans-Believe-They-Will-Need-1-46-Million-to-Retire-Comfortably-According-to-Northwestern-Mutual-2024-Planning-Progress-Study
2. https://news.prudential.com/latest-news/prudential-news/prudential-news-details/2024/2024-Pulse-of-the-American-Retiree-Survey/default.aspx
3. https://news.prudential.com/latest-news/prudential-news/prudential-news-details/2024/2024-Pulse-of-the-American-Retiree-Survey/default.aspx
4. https://institutional.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2024/has/how_america_saves_report_2024.pdf

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As we wrap up 2024, it’s time to focus on personal finance tips for 2025.

Make getting your financial house in order your main 2025 resolution.

Not only is it possible, but it is also something many of us need to do.

A 2024 Bankrate study found, “Whereas 72% of Americans indicated they were not completely financially secure in 2023, that number has now risen to 75% in 2024. Three in 10 (30%) Americans say they are not completely financially secure and likely never will be, up from 26% in 2023.”¹

Financial security is important – but it is up to you to get there. 

Here are 12 personal finance tips for 2025 to help you take actionable steps toward improving your financial situation.

#1 Get Engaged with Your Finances

Mark Hamrick, a Senior Economic Analyst at Bankrate, explains, “Many Americans are stuck somewhere between continued sticker shock from elevated prices, a lack of income gains and a feeling that their hopes and dreams are out of touch with their financial capabilities.”²

If you feel this way, it can be tempting to bury your head in the sand and give up.

That’s not the answer. 

If you want to improve your financial situation, get engaged with your finances. 

Take a good, hard look at where you stand financially.

Review your debts. Review your savings accounts.

You need to be honest about where you are currently so you can get yourself to a more financially secure future. 

#2 Set Achievable Goals

We love to set New Year’s resolutions, but we often fail to keep them. 

Instead of setting an unattainable resolution, set achievable goals for yourself.

Ask yourself the following questions:

• How much debt do you have? How much time will it take you to pay it off realistically?
• How much more do you need to contribute to your 401(k) each paycheck to put yourself in a better position come retirement?
• Do you have any money saved for emergencies?

Consider your answers. 

You may not be able to pay off all your debt and save more for retirement in 2025.

But could you set a more realistic goal, such as paying off 80% of your debt by the end of 2025, boosting contributions by 1%, or building an emergency fund of $5,000?

Setting smaller, more achievable goals may motivate you better than setting big dream goals.

#3 Get a Plan for Retirement

How can you save for a goal of retiring and traveling the world, if you don’t have a plan to get there? 

It’s pretty difficult.

If you don’t have a retirement plan, create one based on your individual needs and wants.

Ask yourself the following questions:

• At what age do you want to retire? 
• What do you want your retirement to be like? Where do you want to live?
• How much money will you need to have a financially secure retirement? 

Answering these questions helps get a plan in place. 

Use our 401(k) Calculator to see how much you may have at retirement with professional account management.

#4 Create a Budget

Once you know where you stand currently and have set financial goals, it’s time to create a budget.

Creating a budget is one of the best personal finance tips for 2025.

Keeping your current financial situation and goals in mind, draw up a budget that covers every budget item – including paying down debt, building up savings, and discretionary spending.

If you need help, there are numerous apps to help you budget and prevent you from overspending. 

#5 Pay Yourself First

One effective way to stay on track with your budget is to prioritize saving for your future by paying yourself first. 

Consider setting up automatic contributions to your 401(k) or IRA, if eligible, to have a portion of your paycheck deposited directly into these accounts. 

Additionally, transferring money to your savings account before paying other expenses can help you build financial security over time.

#6 Build an Emergency Fund

Life happens, which is why you need an emergency fund.

If you don’t have an emergency fund, chances are you may have to put charges on your credit card.

Consider setting up a dedicated savings account just for emergencies.

Get a quick start on your emergency fund by depositing your tax refund into your emergency savings account.

#7 Boost 401(k) Contributions

How much are you currently contributing to your 401(k)? 

Will 2025 be the year when you contribute more?

Try to do whatever is possible to increase contributions – especially contribute enough to make the company match.

Note – Individuals aged 60 to 63 may contribute an additional $11,250 in 2025 instead of the $7,500 catch-up contribution those 50 to 59 and 64 and older may contribute. This means those in this group can potentially contribute up to $34,750 in total to their 401(k) plan.

[Related Read: 2025’s Super Catch-Up 401(k) Contribution]

#8 Regularly Rebalance Your 401(k)

We recommend rebalancing 401(k) account allocations throughout the year. 

Unmanaged allocations may experience larger losses because of down markets. In contrast, they may miss growth opportunities during good markets.

Instead of allowing these things to happen, rebalance regularly to earn more and retain more of your savings.

You can rebalance yourself or work with 401(k) Maneuver.

We offer professional quarterly 401(k) account rebalancing that is personalized to your tolerance to risk and based on current economic and market conditions.

Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance.

See how it works.  

#9 Improve Your Credit

Whether you are worried about your credit score or the increase in identity theft issues, you should get a copy of your credit report.

Ensure all the information is correct and report potential identity theft issues.

Call 1.877.322.8228 or visit www.annualcreditreport.com to obtain a free credit report from the three major credit reporting agencies.

Look over your credit report and see if you notice anything suspicious.

For those with a lower credit score, use 2025 to pay bills on time and boost your credit score.

#10 Review Insurance Policies

Take a few minutes of time in 2025 to review your insurance policies.

Don’t simply renew your insurance year after year.

You could potentially be missing out on savings based on changes you’ve made or changes with the insurance company.

Plus, you may be able to find better rates through a different company.

#11 Commit to Knowledge

One of the most effective personal finance tips for 2025 is committing to knowledge.

Knowledge is power. 

Learn all that you can about finances and retirement savings. 

As you grow knowledgeable, you will grow more secure and confident about making financial decisions for your future.

Check out our complimentary 401(k) investing guide. Read blogs like this one. Watch videos. Listen to podcasts. 

#12 Work with a Financial Advisor

A financial advisor may help you get on track to meet your goals and help you feel more financially secure. 

[Try our 401(k) Calculator to see how professional management help may impact your 401(k) balance in retirement.] 

401(k) Maneuver provides professional account management with the goal of helping you grow and protect your 401(k).

Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that harm your account performance. 

Have questions about how 401(k) Maneuver works? Book a complimentary 15-minute 401(k) Strategy Session with one of our advisors.

Book a Strategy Session

Sources

1. https://www.bankrate.com/banking/financial-freedom-survey/
2. https://www.bankrate.com/banking/financial-freedom-survey/

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America, it may be time to hit pause on spending. Even if just for a little while. 

The statistics from Clever speak volumes:

• Nearly three-quarters of Americans (71%) have regrets about their spending, and a majority of Americans (55%) say they spend recklessly.
• 78% of Americans make purchases they immediately regret.
• 38% of Americans say they often know their purchases are reckless but make them anyway.
• 1 in 6 Americans (16%) say their spending has ruined their life.
• 84% of Americans justify unnecessary purchases with phrases such as “I deserve it” or “I’ll treat myself.” 
• Nearly one-third of Americans (29%) engage in “doom spending,” which is overspending to cope with stress.¹ 

It’s no secret that our spending habits can spiral out of control, often justified with phrases like, “I deserve it,” or “This is just a one-time purchase.” 

Enter the spending break: A chance to pause, reevaluate, and reclaim control over your finances. 

Whether it’s a No Spend Challenge or a personal commitment to curb unnecessary purchases, this practice isn’t just about saving money – it’s about redefining how we spend and live.

Keep reading to learn why a spending break could be the financial reset you need and how to make it a success.

Benefits of a Spending Break

The idea of a spending break is to only spend money on necessities for a set amount of days, such as a month.

During a spending break, you only pay for the things you need: Hosing, utilities, gas, and groceries. 

The goal is to eliminate unnecessary spending and put the money saved during this time period into your savings.

There are benefits to taking a spending break.

For instance, Kendall Meade, a financial planner at SoFi, says, “When they are going through these no-spend times, people realize what they were spending money on wasn’t that important to them. […] It can help them figure out what they can cut out moving forward.”²

Here are some reasons why so many people are taking on the No Spend Challenge. 

• Save Money. If you are NOT spending money, you are saving money. Take a look at your bank account at the end of your spending fast. The excess you have (compared to your usual spending months) should go straight into savings.

• Identify Needs versus Wants. We are used to being able to buy things when we want them just because it is so easy now with card payments, Apple Watch pay, and online shopping. This is a problem because it makes it easier to buy things we want but really don’t need. If you are forced to question whether what you are buying is a want or a need, it will shift your way of thinking about shopping.

• Examine Lifestyle Creep. Lifestyle creep is a real thing. We tend to reward ourselves as we advance in our careers by elevating our lifestyle. We upgrade our homes, cars, and even our groceries. When you turn off spending, it will be more evident about what things you’ve been accustomed to buying now that you are in a different life season. This should also make you consider how much more you could have saved for retirement if you kept your lifestyle the same as your income rose.
  
  [Related Read: Are These 5 Bad Financial Habits Sabotaging Your Retirement Savings?]

• Avoid Emotional Impulse Buys. As the statistics show, impulse shopping is a big issue for many people. We fall victim to the Dollar Section at Target or the items at the checkout lane. But, if you are on a spending break, you‘ll find it easier to resist this temptation.

Less Stuff. American homes are packed full of stuff. I know people who have so much stuff that they often forget about the stuff they already own and go out and buy the same stuff they already own. A little spending break can do wonders for the state of your closet and junk drawers.

Tips for a Successful Spending Break

Now that you understand the benefits of participating in a spending break, let’s talk about how to succeed when you hit pause. 

• Set a Reasonable Time Frame. Generally, you’ll hear people talk about a No Spending Month. While this is a reasonable amount of time, it isn’t a set rule. You can set up whatever time frame works best for you. You may need to start small with a No Spend Weekend and then gradually move up to a No Spend Week.

• Use Cash. We live in a time when we rarely ever need to use cash, but cash is more tangible than a credit card. Once the cash is gone, it’s gone. For the time of your spending break, use cash rather than cards.

• Remove Temptations. If you know you will be tempted by emails announcing sales, notifications alerting you to discounts, or Instagram accounts hacking new products, turn them off for the spending break.

• Borrow Before You Buy. Make it a goal to borrow before you buy. When you are tempted to buy something new – even something you are convinced you “need” (like a new dress for an event) – ask around and see if someone has one you can borrow. This not only prevents you from spending money during this time period, but it also allows you to see if you truly need it.

• Talk to Friends and Family about What You’re Doing. Be honest with friends and family about your spending break. They may even want to participate alongside you.

• Plan Ahead for Spending Occasions. It’s important to consider what is happening during this time period. For example, if you know your best friend’s birthday falls during your spending break, go ahead and plan around it. You don’t want to miss out on planned events and special occasions because of this challenge.

Don’t Get Discouraged When You Slip Up. If you do wind up buying something that is not considered a necessity during this spending break, don’t beat yourself up. Give yourself grace and start fresh the next day.

Better Prepare for a Life of Abundance in Retirement.
Check us out on YouTube.

Click Here

SOURCES

1. https://listwithclever.com/research/bad-spending-habits-2024/
2. https://www.cnbc.com/select/no-spend-challenge/

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The 2025 retirement savings rules may provide new opportunities for individuals to save more in their 401(k) plans. 

This is due to the passing of SECURE Act 2.0 which passed in 2022, which many provisions set to take effect in 2025.

Some of the new provisions may require employer implementation – and employers have discretion over whether to adopt certain options. 

This means you may need to inquire about your employer’s plans to ensure you can take full advantage of these changes.

Read on to learn more about the 2025 retirement savings rules.

Increased Catch-Up Contributions

The IRS announced an increase to 401(k) plan contribution limits for the upcoming year.

The 401(k) contribution limit has increased to $23,500 in 2025, up from $23,000 in 2024.

For workers 50 and above, there is no increase in catch-up contribution limits. 

The catch-up contribution limit for those 50 years and older remains $7,500 for a total contribution limit of $31,000.

Super Catch-Up 401(k) Contributions

The SECURE 2.0 introduced a new provision for individuals aged 60 to 63, allowing them to make higher catch-up contributions starting in 2025.

For this age group, the catch-up contribution limit increases to $11,250. 

As a result, eligible individuals aged 60 to 63 may contribute up to $34,750 in total to their 401(k) plan in 2025.

Automatic Enrollment in Workplace Retirement Plans

The 2025 retirement savings rules also include requiring employers to automatically enroll new employees at a savings rate between 3% and 10% of their salary.

In addition to the automatic enrollment, the contribution rate will now automatically increase by 1% each year until it reaches at least 10%.

The contribution rate will be capped at 15%.

Note – Employees retain the option to opt out of automatic enrollment.

Additional Allocations for Employer Matching Contributions

A 2024 provision of the Secure Act 2.0 relates to student loans and retirement. 

This provision of the Secure 2.0 Act allows employees to pay off student loans while saving for retirement through matching employer contributions. 

It went into effect on January 1, 2024, but many are still unaware of how it works.

In addition to this 2024 provision, the 2025 retirement savings rules pave the way for employer matching contributions to go to savings other than 401(k) plans.

According to reports, “The IRS has allowed workers at one company to use 401(k) matching contributions to pay for medical and student loan expenses, indicating the possibility that others might someday be able to do the same. The agency in an August ruling determined that a company, which it didn’t name, could allow its workers to allocate matching contribution to their 401(k), retiree health reimbursement arrangement (HRA), health savings account (HSA), or an educational assistance program used to pay off student loans.”¹

You can potentially have your employer match go towards student loans, a HAS (Health Savings Account), or an HRA (Health Reimbursement Arrangements) instead of your 401(k).

In about 5 years, this will be standard, but it is very new, and employers must request this ability from the IRS and then fill out the required paperwork.

If you are interested in this option, it is something you may want to discuss with your employer. 

Even if your employer doesn’t offer this option in 2025, you can go ahead and get the ball rolling. 

Lost 401(k) Plan Search Tool

Americans change jobs – often.

As a result, many Americans have several different 401(k) accounts.

According to reports, “There are some 24 million forgotten 401(k)s holding assets in excess of $1.3 trillion.”²

Generally, when 401(k) accounts sit too long, the accounts may eventually be deemed unclaimed property by the state.

[Related Read: The Danger of Forgetting to Roll Over Old 401(k)s]

You do not want to lose your hard-earned retirement savings!

We’re going to assume that was not your plan, but you may have mistakenly believed the 401(k) was rolled over when you changed jobs when it wasn’t.

It is up to you to keep track of your 401(k) savings.

But it has been hard to keep up with old 401(k) accounts – especially if you have changed jobs multiple times.

It’s about to get much easier!

The 2025 retirement savings rules include the Department of Labor adding a new search tool specifically for helping individuals locate lost 401(k) plans from former employers. 

This searchable database will make it easier to find old retirement accounts before they become property of the state.

Even if you don’t think you have any money unaccounted for, it’s still wise to take advantage of the new 401(k) plan search tool.

How to Maximize Retirement Savings in 2025

The 2025 retirement savings rules introduce several opportunities for Americans to enhance their retirement savings. 

Here are some strategies to consider:

• Take advantage of the increased catch-up contributions. Find ways to boost your contributions. Put any bonuses or Christmas gift money towards boosting contributions.
• Raise the percentage you are contributing. Every little bit adds up to more savings in the future.
• Carefully consider how you want to allocate your employer’s matching contributions. The goal should be to contribute as much as possible to your 401(k), but in some situations, such as contributing to a HAS, it may be a wise choice. 
• Use the lost 401(k) plan search tool just in case. It may prove to be well worth the little bit of time it takes.
• Speak to a financial advisor. You want to make sure you are following the rules and using them to your advantage. 

Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors.

Book a Strategy Session

Sources

1. https://www.investopedia.com/irs-ruling-could-open-up-401k-matches-student-loans-medical-payments-update-8738211
2. https://www.schwab.com/learn/story/tracking-down-lost-401k

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