Is Your Business Retirement Plan Doing Enough? How to Evaluate and Optimize It Mid-Year

By Samuel Irvine, CFP®, CRPC®

As we cross into the second half of the year, it’s a great time for business owners to step back and ask: Is your business retirement plan still aligned with your goals? Whether you have a plan in place or you’re exploring new options, now is the perfect moment to evaluate performance, employee participation, and tax efficiency.

A mid-year retirement plan review isn’t just smart—it’s strategic. It allows you to make necessary adjustments before critical deadlines, optimize your plan’s tax benefits, and helps ensure you’re supporting both your employees and your long-term financial vision.

Why Mid-Year Matters

Too often, business owners wait until year-end to address their retirement plans—by then, options may be limited. Mid-year reviews offer breathing room to:

• Catch up on contributions,
• Increase plan engagement,
• Implement plan enhancements,
• Meet critical IRS deadlines (like the October 1 deadline for Safe Harbor 401(k) plans).

In other words, it’s your window of opportunity to make meaningful changes while there’s still time.

Understanding Your Retirement Plan Options

Here’s a quick refresher on some common business retirement plans and what to review mid-year:

SEP IRA

• Great for self-employed or small businesses with few employees.
• Contributions are flexible but employer-only.
• Mid-year tip: Run projections to ensure your contributions are aligned with taxable income.

SIMPLE IRA

• Best for businesses with 100 or fewer employees.
• Has mandatory employer contributions.
• Mid-year tip: Evaluate participation and communicate benefits to encourage employee involvement.

Traditional 401(k)

• Offers higher contribution limits and employee deferrals.
• Requires compliance testing.
• Mid-year tip: Monitor contribution levels and ensure the plan is on track to pass nondiscrimination tests.

Safe Harbor 401(k)

• Eliminates most compliance testing.
• Requires employer contributions but allows higher deferral limits.
• Mid-year tip: If you’re considering implementing one for the current year, October 1 is the setup deadline.

Questions to Ask During a Mid-Year Review

Use these checkpoints to assess whether your current plan is serving its purpose:

• Are employees actively participating, or do you need to boost engagement?
• Is your plan maximizing tax savings for you and other owners?
• Has anything changed in your cash flow or staffing that may affect your contribution strategy?
• Could a different type of plan better serve your business and retirement goals?

How to Optimize Your Plan Now

With a tax-intelligent approach, your retirement plan can be more than a benefit—it can be a powerful planning tool. Here are a few ways to strengthen it now:

• Coordinate with your CPA to model potential contributions for 2025 based on current income and tax forecasts.
• Add a profit-sharing feature to boost owner and key employee savings without increasing required matches across the board.
• Consider switching to or implementing a Safe Harbor 401(k) to eliminate compliance headaches.
• Educate employees with simple, clear communication to drive participation (which can also help with testing outcomes).

Key Deadlines to Know

Mark your calendar for these important dates:

• October 1, 2025: Deadline to start a new Safe Harbor 401(k) for the 2025 calendar year.
• November 1, 2025: Deadline to notify employees if you’re switching from a SIMPLE IRA to another plan for 2026.
• December 31, 2025: Final deadline for making many types of plan contributions for this tax year.

Let’s Talk Strategy

Retirement plans shouldn’t be set-it-and-forget-it. With the right review, you can make smarter moves now that benefit you at year-end—and long into the future.

Not sure how your plan measures up? Let’s schedule a mid-year review to ensure your retirement strategy is working as hard as you are.

Source: irs.gov 

Retirement plan withdrawals may be subject to taxation and penalties when withdrawn early. Investments are subject to market risks including the potential loss of principal invested. Past performance is not a guarantee of future results. Neither diversification nor asset allocation assure or guarantee better performance and cannot eliminate the risk of investment losses.