Making the most of your 401(k) plan can significantly enhance your retirement savings, providing you with greater financial security in your golden years. Here’s how you can make strategic mid-year adjustments to your 401(k) to ensure you’re on track to meet your retirement goals.

Review Your Contribution Limits

For 2025, the IRS raised the employee elective deferral limit for 401(k), 403(b), 457(b), and Thrift Savings Plans to $23,500. The total combined employee and employer contribution cap (per Section 415(c) is now $70,000. Participants aged 50–59 and those 64+ can add a $7,500 catch-up, while those aged 60–63 may contribute an additional $11,250 super catch-up, raising their total to as much as $34,750.

Assess Your Contribution Rate

Check your current deferral percentage. If you’re behind for the year, consider increasing your contributions—either in lump sums or percentages—based on your budget. Remember some plan platforms require percentage entries, not dollar amounts.

Take Advantage of Employer Matching

Make sure you’re contributing enough to receive the full employer match—often 3–6% in Safe Harbor plans. Mid-year is a good time to confirm you’re not missing out on free money.

Increase Contributions Gradually

Don’t feel like you must max out immediately. Small, incremental increases (e.g., 1–2% every quarter) help smooth the impact on your cash flow. Raises and bonuses are also good opportunities to boost contributions.

Automate Future Increases

If your plan allows, set up automatic annual deferral increases. It’s an easy way to stay on track without extra effort.

Reallocate Investments

Mid-year is a great time to review and rebalance your allocation. Confirm your target mix aligns with your retirement plan and risk tolerance. If your plan offers automatic rebalancing or alerts, consider enabling them.

Consider Roth Contributions

If you have access to a Roth 401(k), evaluate whether shifting some of your contributions there could diversify your future tax exposure. Roth contributions don’t affect annual limits and aren’t subject to income eligibility caps.

Monitor Your Progress

Review statements and plan dashboards to make sure your changes are live. Track contributions, allocations, and performance—and adjust again if your financial circumstances change.

Maximizing your 401(k) isn’t about getting every dollar in one go—it’s about staying proactive and aligned with your long-term goals. By adjusting mid-year for the 2025 limits, optimizing for employer matches, rebalancing appropriately, and setting up automation, you can strengthen your path toward a confident retirement.

Need help tailoring your strategy for the rest of the year? Contact Navalign Wealth Partners. Our fiduciary advisors are here to guide you with personalized insights and services that support your retirement journey.