Quarterly Review of Your 401(k): Guide for Q4 2025

Maximize Your 401(k) Before 2025 Concludes

The year’s end is an excellent opportunity to evaluate your finances, reassess your objectives, organize your expenditures, and strategize for the upcoming year.

However, one aspect that frequently gets overlooked is the 401(k) — the employer-sponsored retirement plan that is vital for the financial well-being of countless American workers.

As 2025’s fourth quarter is now here, it’s the perfect time to thoroughly review your 401(k).

1. Assess your contributions before the year wraps up

This year, the IRS (Internal Revenue Service) has set the annual limit for 401(k) contributions at $23,000, plus an additional $7,500 catch-up contribution for individuals aged 50 and above.

If you haven’t yet reached this contribution cap, consider boosting your contribution rate in these final months of the year.

A minor increase in your payroll deduction can have a significant impact, especially with the associated tax advantages.

Should you receive a raise, bonus, or year-end commission, now’s the time to put a portion of that directly into your 401(k).

2. Reassess your investment portfolio

This year, the market has seen strong performance in sectors like technology and clean energy, while bonds and fixed-income investments have gained appeal as interest rates have stabilized.

Rebalancing your portfolio means returning to your intended investment strategy — like having 70% in stocks and 30% in bonds.

Many 401(k) plans allow you to modify your allocations online or via mobile apps. It’s wise to review your distribution at least annually, particularly in the last quarter, when the outlook for the coming year becomes clearer.

3. Verify your employer’s match

The employer match — the company’s contribution to your 401(k) — is one of the primary benefits of the plan.

If your employer provides a 100% match on contributions up to 4% of your salary, not contributing that amount is like saying no to free money.

The end of the year is the perfect moment to ensure you’ve made the most of your matching contributions. Some companies assess this annually, while others do so quarterly.

If you’ve halted your contributions at any point in 2025, ensure you make up for it before the year wraps up.

Don’t forget to review your company’s policies — many employers now offer ESG options, cryptocurrency funds, or target-date funds with updated maturity dates.

4. Reassess your funds and fees

Not every 401(k) fund is the same. Some come with higher expense ratios, which can diminish your returns over time.

Utilize your plan’s dashboard or annual report to evaluate the performance and fees of the funds available.

Low-cost index funds, like those that track the S&P 500 or Russell 2000, tend to deliver better long-term value for investors.

5. Confirm your beneficiaries

A crucial yet frequently overlooked task is ensuring your 401(k) beneficiaries are up to date.

Life changes like marriage, welcoming a child, or other significant family events can render your current information outdated.

The fourth quarter is the ideal time to confirm your account accurately reflects who should inherit your funds in the event of your passing.

6. Review your tax strategy for 2026

Contributions to a traditional 401(k) lower your taxable income for the current year, while Roth 401(k) contributions allow for tax-free growth down the line.

Depending on your income level and possible IRS changes, it may be beneficial to balance contributions between both types.

If you anticipate lower taxes in 2026, now might be the perfect time to consider a traditional 401(k).

7. Utilize available resources and incentives

Numerous employers provide financial literacy resources, retirement calculators, and complimentary consultations with certified experts. If you haven’t made use of these offerings yet, now is the ideal moment.

Some plans may permit 401(k) loans or certain withdrawals during financial emergencies — but these options should be approached with caution and used only when absolutely necessary.

8. Get ready for the upcoming cycle

The last quarter is also a time to focus on preparing for 2026. Set contribution targets — even modest ones — and schedule reminders for quarterly reviews.

By automating your contributions and consistently monitoring your balance, you can maintain a long-term perspective and steer clear of impulsive choices during market declines.

It’s also smart to integrate your 401(k) with other retirement plans, such as IRAs or brokerage accounts.

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