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5 Smart Moves to Boost Your Retirement Savings Before Year Ends

The clock keeps ticking, and your retirement is one year closer. But there’s still time before December 31, 2025 to take steps that can help you build the retirement you want—while also maximizing your tax benefits.

Here are five strategies every business owner and investor should consider before year-end.

  1. Establish Your 2025 Retirement Plan

First things first: do you currently have a retirement plan for yourself or your corporation?

If not, now is the time to set one up. By establishing a qualified retirement plan, you can secure a tax deduction for 2025 contributions.

For most defined contribution plans like 401(k)s, you wear two hats: employee and employer. That means you can contribute both employee deferrals and employer contributions, helping you put a significant amount of money away before year-end.

Even if you’ve been thinking about it for a while, taking action now can make a meaningful difference in your retirement savings and your tax bill.

  1. Claim the Retirement Plan Start-Up Tax Credit (Up to $15,000)

If you establish a new qualified retirement plan, including 401(k)s, profit-sharing plans, SIMPLE IRAs, SEPs, or defined benefit pension plans, you may qualify for a non-refundable tax credit for your plan start-up costs.

The credit is calculated as the greater of:

  • $500, or
  • The lesser of:

    • $250 × the number of non-highly compensated employees eligible to participate, or
    • $5,000 

What counts as qualified start-up costs?

  • Ordinary and necessary expenses to establish or administer the plan
  • Costs related to retirement education for employees 

This credit directly reduces your tax bill, making it a smart incentive to start your plan before year-end.

  1. Take Advantage of the Small Employer Pension Contribution Tax Credit (Up to $3,500 per Employee)

Thanks to the SECURE 2.0 Act, small employers can earn a tax credit for contributions to employee retirement plans.

Here’s how it works:

  • In the year you establish your plan, you can claim up to 100% of your employer contribution, limited to $1,000 per employee
  • The credit decreases over the next five years: 100%, 75%, 50%, 25%, then 0%
  • For example: contributing $1,000 for each of 30 employees this year could earn you a $30,000 tax credit

Limits apply for:

  • Businesses with 51–100 employees (credit reduced by 2% per employee)
  • Employees earning more than $105,000 

This credit is a powerful tool for businesses looking to reward employees and reduce taxes simultaneously.

  1. Add Automatic Enrollment and Claim an Extra $500 Credit Per Year

SECURE 2.0 also introduced a $500 tax credit for adding automatic enrollment to a qualified employer plan, applicable for up to three years ($1,500 total).

Key points:

  • Applies to new or existing 401(k) and SIMPLE IRA plans
  • No actual money needs to be spent, simply add the automatic contribution feature
  • Exclusions apply: SIMPLE 401(k)s, government or church plans, businesses with fewer than three years of operation, or businesses with 10 or fewer employees

This is stackable with the start-up credit, meaning you could get both incentives while encouraging employees to save automatically.

  1. Convert to a Roth IRA

If you already have a 401(k) or traditional IRA, consider a Roth conversion.

Before you do, answer one question: How much tax will you owe on the conversion? That determines how much cash you’ll need on hand.

Here are four key benefits of a Roth IRA:

  1. Tax-free withdrawals of contributions at any time
  2. Tax-free withdrawals of converted amounts, after a five-year waiting period for each conversion
  3. No taxes on earnings for qualified distributions after age 59½ and five years of account ownership
  4. No required minimum distributions at age 73, your money continues to grow tax-free until you pass it on 

A Roth IRA can be a game-changer, giving you flexibility, tax-free growth, and control over your money well into retirement.

Whether you’re a business owner, self-employed, or planning for your personal retirement, there’s still time in 2025 to make moves that boost your savings and reduce taxes.

From establishing a plan to taking advantage of new credits and Roth conversions, the right strategy now can pay off for decades to come.

If you want help choosing the best approach for your situation or making sure you maximize your deductions and credits Basc Expertise is here to guide you step by step.

 

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