The Money Move People Will Regret Not Making Before the New Year Begins
Written by
Laura Beck
Edited by
Molly Sullivan
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Yes, there’s a money move that’s easy to regret if you don’t hit the end of year deadline. This isn’t about flashy investment strategies or get-rich-quick schemes.
It’s about a boring, responsible financial move that Americans will wish they’d made before the calendar flipped: maxing out — or at least significantly increasing — contributions to tax-advantaged accounts before year-end.
The Deadline That Actually Matters
Unlike IRA contributions, which can be made until the tax-filing deadline in April, employee contributions to 401(k), 403(b) and 457(b) plans must be completed by Dec. 31. There’s no extension, no grace period, no retroactive adjustments.
For 2025, the 401(k) contribution limit is $23,500 for employee salary deferrals. Workers ages 50 to 59 or 64 and older can contribute an additional $7,500 in catch-up contributions, bringing their total to $31,000. Those between ages 60 and 63 qualify for an enhanced catch-up limit of $11,250, allowing total contributions of $34,750.
Miss the Dec. 31 deadline and those contribution opportunities disappear. You can’t make them up next year because each year has its own separate limit.
The Numbers Tell a Sobering Story
Most Americans aren’t taking full advantage of these retirement vehicles. According to Vanguard’s How America Saves 2025 report, only 14% of participants contributed the annual maximum to their 401(k) last year, despite Americans saving an average of 7.7% of their paychecks in their employer-provided retirement plan — a record high.
The long-term cost of missing these contributions compounds quietly but devastatingly. Assuming a 6% annual return, the difference between contributing $10,000 versus $24,500 over 10 years is about 145% — $132,000 versus $323,000. After 20 years, the person contributing the maximum will have approximately $900,000, while the person contributing $10,000 annually will have just $368,000.
Even more concerning: Research from Empower shows that 25% of workplace savers aren’t contributing enough to maximize their employer match — essentially leaving free money on the table every single paycheck.
Why People Keep Missing This Opportunity
The “I’ll start in January” mindset dominates year-end thinking. Life gets busy during the holidays, and increasing retirement contributions feels like something that can wait. But this delay costs real money.
Consider a 35-year-old who skips maximizing contributions for just one year. That $23,500 left on the sidelines, assuming 6% annual growth until age 65, would have grown to approximately $134,000. Skip five years of maximum contributions throughout a career, and you’re looking at well over a half-million dollars in lost retirement savings.
The regret intensifies when people realize they had the cash flow to contribute more but simply didn’t adjust their payroll deductions in time. Many workers receive year-end bonuses or have extra income in December but miss the deadline to redirect those funds into tax-advantaged accounts.
Other Year-End Financial Moves With Hard Deadlines
Beyond 401(k) contributions, several other financial moves must be completed by Dec. 31:
Health savings accounts (HSAs) have a unique timeline. While HSA contributions can generally be made until the tax-filing deadline in April, employer-based HSA contributions through payroll deductions are tied to Dec. 31. Making contributions outside of payroll after year-end may mean paying FICA taxes that could have been avoided.
Tax-loss harvesting allows investors to sell securities at a loss to offset capital gains or up to $3,000 of ordinary income. This strategy must be executed before Dec. 31 to apply to the current tax year. Harvested losses can even carry forward to future years, making this a valuable year-end planning tool.
Roth conversions offer another opportunity with a firm deadline. Converting traditional IRA funds to a Roth IRA must be completed by Dec. 31 to count for the current tax year. Market downturns can create particularly advantageous conversion opportunities, as you’ll owe taxes on a lower account balance.
Flexible spending accounts (FSAs) operate under strict use-it-or-lose-it rules at most employers. While some employers allow up to $640 to roll over or grant a grace period into mid-March, most require funds to be spent by Dec. 31.
How To Avoid This Regret
The solution is straightforward but requires action by Dec. 31:
Review your current 401(k) contributions immediately. Log into your retirement account and check your year-to-date contributions. Calculate whether you’re on track to hit the maximum based on your remaining pay.
Contact HR to increase contributions if needed. Most employers allow you to adjust contribution percentages quickly. Some even allow one-time lump sum contributions from bonuses or other income.
Consider your full financial picture. While maxing out retirement contributions offers significant long-term benefits, ensure you have adequate emergency savings and aren’t carrying high-interest debt that might deserve priority attention.
Set up automatic increases for next year. Many plans allow you to schedule automatic annual increases, helping you gradually reach the contribution limit without requiring annual decisions.
More From GOBankingRates
