December 01, 2025 | by Atherton & Associates, LLP

End-of-Year Retirement Planning: Maximizing Contributions Before December 31

As the end of the year approaches, one of the most financially impactful actions you can take is often overlooked: maximizing your retirement contributions before December 31.

Making last-minute contributions to retirement accounts such as a 401(k), Traditional IRA, or other qualified plans can significantly reduce your taxable income, boost long-term savings, and take advantage of valuable tax benefits. Here’s how you can make the most of this year-end tax-saving opportunity.

Why Contribute Before Year-End?

1. Reduce Your Taxable Income: An immediate benefit of contributing to a retirement account—like a Traditional 401(k) or IRA—is the ability to lower your taxable income.
2. Take Advantage of Annual Contribution Limits: Retirement accounts have annual contribution limits set by the IRS. If you don’t use your limit by the deadline, you lose that opportunity forever. Making year-end contributions helps you take full advantage of your allowable limits.

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Types of Retirement Accounts to Consider

1.  401(k) or 403(b) Plans (Employer-Sponsored)

• Deadline: Contributions must be made through payroll by December 31.
• Tax benefit: Contributions are made pre-tax, reducing your taxable income.
• Employer match: If your employer offers a match, contribute enough to get the full benefit—don’t leave free money on the table.

2.  Traditional IRA

• Deadline: You have until the tax filing deadline (April 15, 2026) to make 2025 contributions but contributing before year-end locks in savings early.
• Tax benefit: Contributions may be fully or partially deductible, depending on your income and whether you’re covered by a workplace retirement plan.

3.  Roth IRA

• Deadline: Same as Traditional IRA (April 15, 2026) but contributing before year-end locks in savings early.
• Tax benefit: No immediate deduction, but qualified withdrawals are tax-free in retirement.
• Income limits: Contribution eligibility phases out at higher income levels.

4.  SEP IRA (for self-employed individuals)

• Deadline: Can be opened and funded up to the tax-filing deadline, including extensions.
• Tax benefit: Contributions are tax-deductible and limits are much higher (up to 25% of compensation or $70,000 for 2025, whichever is less).

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Steps to Maximize Year-End Contributions

1.  Check Your Year-to-Date Contributions: Review your pay stubs or retirement account statements to see how much you’ve contributed so far in 2025. This helps determine how much more room you have under IRS limits.

2.  Adjust Payroll Contributions (401(k)): If you’re not on track to max out your 401(k), consider increasing your contribution rate for your final paychecks of the year.

3.  Make IRA Contributions: If you haven’t yet contributed to an IRA, or haven’t hit the limit, you can still contribute for 2025. Remember, income limits may affect deductibility or eligibility.

4.  Don’t Forget Catch-Up Contributions: If you’re age 50 or older, you’re eligible for additional “catch-up” contributions. This is a great way to supercharge your savings while reducing your taxable income.

5.  Consider a Roth Conversion: If you’re in a lower tax bracket this year, this might be a strategic time to convert a Traditional IRA to a Roth IRA. You’ll pay taxes on the converted amount now but enjoy tax-free withdrawals later—potentially a smart long-term move.

6.  Coordinate with a Tax or Financial Advisor: A financial advisor or CPA can help you:

• Optimize the mix of Traditional vs. Roth contributions
• Ensure you don’t exceed IRS limits
• Identify other tax-saving opportunities before year-end

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Final Thoughts

Maximizing your retirement contributions before year-end is a smart, strategic move that can benefit you both now and in the future.

Now is the time to act—check your year-to-date contributions, adjust your savings strategy if needed, and talk to a financial or tax advisor to make sure you’re on track. A few smart decisions today can set you up for a stronger financial future tomorrow.

Written by Michelle Ulm, CPA, Tax Manager

October 20, 2025 | by Atherton & Associates, LLP

The SECURE 2.0 Act made significant changes to retirement plan rules, including new requirements for catch-up contributions. While the law was passed several years ago, plan sponsors have been waiting for final guidance on how to apply these provisions. After reviewing public feedback on the proposed regulations, the IRS has now issued final regulations clarifying two key changes:

• Higher-income participants must make catch-up contributions as Roth, and
• Participants aged 60-63 will soon be eligible for higher catch-up limits.

This article breaks down what changed and what plan sponsors need to do to prepare.

What SECURE 2.0 changed – and why clarification was needed

SECURE 2.0 introduced two major changes to catch-up contributions. First, it requires higher-income participants to make their catch-up contributions on a Roth (after-tax) basis. It also allows individuals aged 60 to 63 to make enhanced catch-up contributions above the standard age 50+ catch-up limit.

These provisions raised several questions for employers and administrators. Should plans track whether a participant’s income crosses the threshold and automatically apply Roth treatment? If a participant works for multiple employers, must the plan consider income from all sources? What happens if the participant fails to elect Roth treatment? And how should systems implement the new age-based limits?

The final regulations address these questions and provide a clearer roadmap for compliance.

Required Roth contributions for high earners

Participants who earned more than $145,000 in FICA wages from the employer (or related employers) in the prior calendar year must make all catch-up contributions on a Roth basis. This threshold is indexed annually.

Plan must aggregate FICA wages paid by all related employers under common control or part of an affiliated service group (as defined by IRC sections 414(b), (c), or (m)). If a participant worked for multiple entities within a corporate group, their wages must be combined to determine whether the threshold is met.

If a high earner fails to elect Roth treatment, the plan may apply a “deemed Roth” rule, allowing those contributions to be treated as Roth by default. This helps avoid compliance issues caused by participant inaction.

If catch-up contributions are incorrectly treated as pre-tax when they should have been Roth, the plan can fix it using the IRS’s existing correction programs without disqualifying the plan.

Increased catch-up limits for ages 60-63

Beginning in 2025, the SECURE 2.0 Act allows participants aged 60 through 63 to make larger catch-up contributions than those permitted at age 50 and above. Specifically, participants in this age group can contribute the greater of $10,000 or 150% of the regular catch-up limit for the year. This enhanced limit applies only in the calendar year when the participant is age 60, 61, 62, or 63. Once a participant turns 64, the standard age-based catch-up limit applies again.

Plan sponsors will need to ensure that their systems can correctly identify eligible participants based on age and apply the higher limit only during the applicable years. The rules also allow plans to restrict the use of these increased limits to Roth contributions if desired, as long as the plan document is written accordingly.

Timing

The increased catch-up limit for participants aged 60 to 63 becomes effective in 2025.

The Roth requirement for high earners takes effect for taxable years beginning after December 31, 2026, with full compliance required in 2027. In the meantime, the IRS has extended administrative relief: plans that make a reasonable, good-faith effort to follow the rules will not be penalized during the transition period.

Governmental and collectively bargained plans have more time to comply with the Roth requirement. However, early adoption is permitted, and the IRS has made clear that transition relief will end after 2026.

Preparing for compliance

To prepare, plan sponsors should review their payroll and recordkeeping systems to ensure they can track FICA wages across related employers and apply the Roth requirement accurately. Systems must also be able to identify participants aged 60 to 63 and apply the correct catch-up limits.

Clear communication with participants will also be critical. Employees nearing age 60 should be aware of the opportunity to contribute more. High earners should understand why their catch-up contributions must be Roth. Targeted emails, FAQs, and examples can make these rules more accessible without overwhelming employees with technical language.

Finally, sponsors should document their compliance processes, particularly during the transition period. Written procedures and clear internal policies will help demonstrate good-faith compliance if the plan is audited.

Looking ahead

Although full implementation may seem far off, the timeline is already underway. By taking proactive steps now, employers can ensure their plans not only meet the new standards but also serve the long-term financial interests of their workforce.

June 12, 2025 | by Atherton & Associates, LLP

Retirement Savings Tools 

June 12, 2025
From the Office of Colton Cummings, Tax Associate

When thinking about retirement, it’s never too early (or too late) to start utilizing the many tools out there to build wealth while maximizing tax savings. While having money in a savings account may generate some interest year over year, there are much more beneficial retirement savings tools available that some may not be aware of.

Health Savings Account (HSA)

• A Health Savings Account (HSA) is a tax-advantaged savings account that allows individuals to set aside money for qualified medical expenses.
• This tool can be used not only to generate earnings on contributions made over time, but also to cover qualified medical expenses such as doctor visits, medications, hospital stays, and medical equipment to name a few.
• Contributions reduce your taxable income, and if distributions are used to cover medical expenses, then these distributions are tax-exempt as well.
• While there are no income limits, there are contribution limits, and to qualify, you must be covered under a high-deductible health plan (HDHP).

Individual Retirement Accounts – Roth IRAs

• After Tax Contributions: You contribute after-tax money that you’ve already paid taxes on.
• Tax-Free Growth: Your investments inside the Roth IRA grow tax-free.
• Tax-Free Withdrawals: Qualified withdrawals in retirement are tax-free and penalty-free once you reach age 59 ½ and the account has been open for at least five years.
• Withdraw Contributions Anytime: You can withdraw your contributions at any time, tax-free and without penalty.
• No Required Minimum Distributions (RMDs): Unlike Traditional IRAs, there are no required minimum distributions from a Roth IRA.
• Roth IRAs are most effective if you believe that you will have higher income and be placed in a higher tax bracket closer to retirement.

Individual Retirement Accounts – Traditional IRAs

• Tax Deductible Contributions: Contributions to a Traditional IRA are deductible from your taxable income, potentially reducing your current tax liability.
• Taxable Withdrawals: A Traditional IRA will grow on a tax-deferred basis and when you withdraw money in retirement, it is taxed as ordinary income.
• No Income Limits for Opening: Unlike a Roth IRA, there are generally no income limits to opening and contributing to a Traditional IRA.
• Required Minimum Distributions (RMDs): Generally, you are required to start taking withdrawals from a Traditional IRA at age 73.
• The Traditional IRA is most effective if you think you will be in a lower tax bracket heading into retirement compared to your current tax bracket.

Action Item
Health Savings Accounts and Individual Retirement Accounts (IRAs) can be beneficial retirement savings tools. Consult your tax advisor to discuss how these accounts could benefit you.