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November 7, 2025

Money Matters
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How to Maximize Your 401(k) Before Year-End

Jatniel Brito
5 minute read

As the year draws to a close, it’s easy to get caught up in holidays, travel, or reflecting on how quickly the year flew by. Before fully switching into holiday mode, it’s worth spending a few minutes checking in on your 401(k).

Your 401(k) is one of the most powerful tools for building a comfortable retirement. The final months of the year can be a great time to give it a boost. Whether you’ve been contributing steadily or just getting started, a few strategic moves before December 31st can make a meaningful difference in your retirement savings.

1. Check How Much You’ve Contributed So Far

For 2025, you can contribute up to $23,500 to your 401(k), or $31,000 if you are 50 or older (thanks to the catch-up contribution).

  • Review your 401(k) account to see your year-to-date contributions.
  • If you haven’t reached the limit, consider contributing more before the end of the year.
  • Even small contributions can add up over time due to compound interest.

2. Capture Your Full Employer Match

An employer match is essentially extra money for your retirement:

  • A common structure is a 50% match up to 6% of your salary. Contributing 6% earns an extra 3% from your employer.
  • Review your plan to ensure you’re contributing enough to get the full match.
  • Increasing contributions before year-end can help maximize this benefit.

3. Review Your Investment Mix

Market shifts or approaching retirement may make your original investment mix less suitable.

  • Check if your portfolio is too aggressive or too conservative.
  • Review your investment portfolio to make sure it still makes sense for retirement goals
  • Consider target-date funds and maintain a diversified portfolio, which can help balance growth and manage risk.

‍

The goal is a long-term strategy, not market timing.

4. Use Year-End Bonuses or Raises Wisely

If you receive a bonus or raise:

  • Consider directing part of it to your 401(k) if your employer allows bonus contributions.
  • Consider adjusting your contribution percentage with a salary increase so savings grow automatically.

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Even small changes now can have a big impact over decades because of compound interest. 

5. Check for Vesting Schedules

  • Employer contributions may be subject to a vesting schedule.
  • If you recently changed jobs or are close to fully vested, staying until you are fully vested can help preserve these contributions.

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6. Watch out for Overcontributions

  • IRS limits apply across all 401(k)s combined.
  • If you changed jobs mid-year and contributed to multiple plans, double-check totals.
  • Correct overcontributions before your tax filing deadline to avoid penalties.

7. Revisit Beneficiaries and Account Details

  • Life events like marriage, divorce, or new children can affect who should inherit your 401(k).
  • Update beneficiaries and account information to avoid complications later.

8. Required Minimum Distributions (RMDs)

  • If you are 73 or older, the IRS requires you to take Required Minimum Distributions (RMDs).
  • Missing deadlines can lead to penalties, so review your plan’s RMD process.

9. Consider Consolidating Old 401(k)s from Past Jobs

  • Millions of Americans have forgotten 401(k)s from previous jobs.
  • Managing your savings becomes more challenging when your money is spread across multiple accounts. 
  • Rolling old 401(k)s into your current 401(k) or an IRA can help simplify your retirement planning and reduce fees.

10. Think Beyond Your 401(k)

  • If your plan has limited investment options or higher fees, consider an IRA:
  • In 2025, you can contribute up to $7,000 to an IRA ($8,000 if 50+).
  • Rolling old 401(k)s into a single IRA can streamline management and reduce administrative costs.

End the Year with Your Retirement in Order

Year-end is a great time to take strategic steps with your retirement:

  • Review contributions
  • Capture your full employer match
  • Adjust your investment mix
  • Use bonuses or raises for additional savings
  • Consolidate old 401(k)s and IRAs

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PensionBee can help simplify this process by guiding you through rollovers into a single PensionBee IRA. Personal rollover managers, called BeeKeepers, provide guidance if extra attention is needed. Your savings can be invested in diversified portfolios powered by ETFs like SPY and MDY from State Street Investment Management, one of the world’s largest asset managers.

Frequently Asked Questions (FAQs)

1. How much can I contribute to my 401(k) in 2025?

Up to $23,500, or $31,000 if you are 50 or older (catch-up contribution included).

2. Can I still get my employer match before year-end?

Yes. Review your contributions and increase them if needed to capture the full match.

3. How can I consolidate old 401(k)s?

You can roll them into your current 401(k) or an IRA. Consolidation simplifies management, reduces fees, and gives you a clear view of your retirement savings.

4. Can bonuses or raises go into my 401(k)?

Often, yes, depending on your employer’s plan. Directing part of a bonus or adjusting contributions after a raise can grow your savings automatically.

5. What about Required Minimum Distributions (RMDs)?

If you are 73 or older, the IRS requires you to take RMDs. Check your plan to avoid penalties.

Your investment can go down as well as up. This post, and any associated customer testimonial or third party endorsement, is provided solely for informational and educational purposes, should not be taken as tax, legal, financial or investment advice and is not an offer, solicitation, or recommendation to buy or sell any securities or investments.

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