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Richard T. Miller, CPA, PFS
Registered Representative
Van Buren Financial Group, LLC
615 West 18th Street, Wilmington, DE 19802
Phone: 302-655-9505
September/October 2025
A 401(k) Plan: Paving the Road to Retirement
There's a lot to like about a 401(k) plan. Whether you already participate in your employer 's plan or you're just now thinking about joining, reviewing the benefits as tax time approaches is a smart idea.
The Pretax Advantage
When you participate in a traditional 401(k) plan, your contributions to the plan are taken out of your pay before income taxes are deducted, thus lowering your taxable income. Your plan contributions and any earnings grow tax deferred until you withdraw them, typically at retirement, when you may be in a lower tax bracket than you are now. And with automatic payroll deduction, contributions to your employer's plan come out of your paycheck before you are tempted to spend the money.The Benefits of a Match
Most employers match employee contributions up to a certain percentage. That's like getting "free money". All the funds you contribute to the plan belong to you right from the start. Over time, all your employer's contributions will also belong to you, based on a vesting schedule outlined in your employer's plan documents. Remember, the sooner you start contributing to your plan, the longer you'll have to benefit from compounding–earning interest on both contributions and earnings.Tax Deduction
You have until December 31, 2025, to make contributions to a 401(k) to lower the taxable income on your 2025 income tax return, so consider contributing as much as possible.The maximum 401(k) plan contribution limit in 2025 is up to $23,500. However, if you're aged 50-59 you can add an additional $7,500 in catch-up contributions, bringing the total to $31,000. New in 2025, that catch-up contribution amount increases to $11,250 if you are age 60-63, for a total annual contribution of $34,750.
Van Buren Financial Group, LLC and LTM Marketing Solutions, LLC are unrelated companies. This newsletter was created by LTM Marketing Solutions, LLC and was not written or created by the named financial professional and does not necessarily represent the views and opinions of Cetera Wealth Services LLC or its subsidiaries. Securities offered through Cetera Wealth Services LLC, member FINRA/SIPC. Advisory Services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity. Rebalancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.
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