As fall sets in, we find ourselves with just 100 days left in the year. This is a powerful reminder of both urgency and opportunity — a final sprint towards ending the year on strong financial footing. The countdown can serve as a wake-up call for both employers and employees to reassess and optimize their 401(k) strategies. Here, we highlight four essential tasks that can lead to better compliance and enhance retirement outcomes.
Conduct a Strategic Retirement Plan Review (For Employers)
Employers, this is a prime time to evaluate whether your current retirement plan aligns with your business goals and team dynamics. Take a close look at your auto-enrollment settings, matching contributions, and eligibility criteria. Adjustments made now can prevent future misalignments and ensure that your plan remains a robust tool for both attracting and retaining talent.
Get Ahead of Nondiscrimination Testing (For Employers)
Preparing for year-end nondiscrimination testing is crucial in avoiding potential penalties and ensuring your 401(k) plan complies with regulations. Start by organizing your census data and reviewing past results. If needed, consider options like safe harbor plans or qualified nonelective contributions to maintain your plan’s compliance and equity.
Review and Update Beneficiaries (For Employees)
Life changes such as marriage, divorce, or the birth of a child can affect your beneficiary designations. Take this opportunity to update these details in your 401(k) plan. This simple task ensures your savings will go exactly where you want them to, providing future peace of mind for you and your loved ones.
Maximize 401(k) Contributions (For Employees)
Consider increasing your contribution rate to take full advantage of the tax benefits and the power of compounding. For 2025, the contribution limits are $23,500, with an additional $7,500 available for those 50 and older. Even small incremental changes can significantly impact your financial future, setting you up for a stronger retirement.
The clock is ticking, but there’s still time to make meaningful changes. Even implementing one or two of these tasks can lead to notable improvements. Proactive planning now means fewer headaches and greater financial confidence in the future. Reach out to your financial advisor or HR team for guidance and take control of your 401(k) today!