4 401(k) Moves You Should Make Before the End of the Year

Your 401(k) is supposed to make you money. While its value primarily depends on how much you contribute, careful monitoring and a thorough understanding of the plan's rules are also crucial.

The end of the year marks your final opportunity to make several key 401(k) moves for 2025. It's also a great time to review your plan to figure out what's working and what isn't. Make the following four moves now to set yourself up for success in 2026 and beyond.

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1. Claim your 401(k) match if you haven't already

You're only allowed to make 2025 401(k) contributions until Dec. 31, 2025, which means you're running short on time to claim your company match for the year if you haven't already. This match might be worth a few thousand dollars right now, which is already a worthwhile bonus. But after you've invested it for a few decades, it could be worth tens of thousands of dollars -- enough to cover several months or even a year or two of retirement expenses.

Check with your 401(k) plan administrator or the company's HR department if you're unsure how your employer's matching formula works. Typically, companies give you $1 or $0.50 for every dollar you contribute, up to a certain percentage of your income. Figure out how much you must defer from your paychecks to get the entire match, and then subtract the amount you've already put into your 401(k) in 2025.

If you haven't saved anything this year, it might not be possible to contribute enough to claim your entire match in the time that's left. That's OK. You may still be able to claim a portion of it. Decide how much you can afford to defer from each paycheck and then update your deferral amount, either through your online 401(k) account or by letting your HR department know.

While you're at it, it's not a bad idea to start building your game plan for 2026. Divide the total amount you must save to claim your full match by the number of pay periods in the year to figure out how much you must defer from each to get the whole match.

2. Take your required minimum distribution (RMD) if you have to

Once you turn 73, you must take required minimum distributions (RMDs) from your traditional 401(k) each year unless you're still working and own less than 5% of the company. These are mandatory annual withdrawals that the government forces you to take and pay taxes on so it can get its cut of your savings. Roth 401(k)s are not subject to RMDs.

How much you must withdraw depends on your age and your account balance as of Dec. 31, 2024. If you're unsure what that was, check with your plan administrator. Divide that amount by the distribution period next to your age as of Dec. 31, 2025 from the IRS's Uniform Lifetime Table. For example, if you're 75 and had $500,000 in your 401(k) at the end of last year, your 2025 RMD would be $500,000 divided by the 24.6 distribution period for 75-year-olds, or $20,325. This is the minimum amount you must withdraw, although you can take out more if necessary.

Those who just turned 73 in 2025 technically have until April 1, 2026 to take their first RMD. All older adults must take theirs by Dec. 31, 2025. Failing to take your RMD on time will result in a 25% penalty on the amount not taken. If you make a mistake and correct the issue within two years, the IRS will reduce the penalty to 10%.

3. Review your 401(k)'s performance and fees

It's good to review your 401(k)'s performance at least annually, but be careful not to get too caught up in short-term gains or losses. Focus on the bigger picture.

If you have all your money in stocks and you're in your mid-50s, that could be a problem because you might be overexposing yourself to risk. This could lead to significant losses as you approach retirement if a recession occurs. That might be a valid reason to reconsider your investment strategy. A fund performing poorly over the last quarter probably isn't.

Pay attention to how much your investment fees are as well. When you're dealing with funds, they'll often have expense ratios. These are a percentage of the assets you have invested in the fund. Ideally, you want to keep this under 1% of your assets.

If you feel as if you're paying too much in fees, see if there are other more affordable investment options you could switch to, or talk to your employer about adding new ones. You may also prefer to set aside some money in an IRA next year. These accounts offer more investment options, which can also help you better control how much you lose to fees.

4. Review your account beneficiaries

It's important to check your account beneficiaries periodically to ensure they're who you want them to be. This is especially critical if you've recently experienced a major life change. For example, if you got divorced earlier this year, you probably don't want your ex inheriting your retirement account if you die. Or, if you've just added another member to your family, you may want to ensure that they receive a share of your savings if you pass away.

Check with your plan administrator or HR department if you're unsure how to make this change. Usually, you just have to fill out a form.

You probably have a lot on your plate between now and the end of the year with the holiday season underway. However, try to set aside a little time for the above activities if you haven't already done so.

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