In this webinar replay, Kati Zuromski, Business Development Executive at Tavola Group was joined by Mike Smith, Co-Founder and Managing Partner at Insight Financial Partners, to discuss how to get more value from your 401k through tax-smart retirement planning. Together, they covered contribution strategies, common mistakes to avoid, and ways to align your retirement plan with long-term financial goals. If you’re unsure whether your current strategy is optimized or how your 401k fits into your overall tax picture, you can schedule a free tax consultation with Tavola Group for personalized guidance.

Why Tax Planning Matters for Your 401k

Katie opened the session by sharing our approach at Tavola Group. We focus on proactive tax planning that helps clients make smarter financial decisions throughout the year, not just at filing time. A well-structured 401k strategy can reduce taxes, improve cash flow, and support long-term wealth goals.

Mike emphasized that 401k plans remain one of the most effective tools for building retirement income. Today, the 401k market exceeds $9 trillion, and for many people, it plays a central role in creating a reliable income stream after they stop working. However, the benefits depend on how consistently the plan is reviewed and how strategically contributions are made.

Understanding 2025 401k Contribution Limits

One of the most practical parts of the discussion focused on current contribution limits. For 2025, individuals under age 50 can contribute up to $23,500. Those age 50 and older can make an additional $7,500 catch-up contribution. Special catch-up opportunities may also apply for certain age groups under recent legislation.

Mike encouraged participants to first make sure they are contributing enough to receive their full employer match. Many employees do not realize that failing to capture the match means leaving part of their compensation behind.

For business owners and self-employed professionals, the opportunity to save may be even greater. Solo 401k plans allow contributions as both the employee and the employer, which can significantly increase total annual retirement savings when structured properly.

Pre-Tax vs. Roth Contributions: Making the Right Choice

A common question during the webinar was whether pre-tax or Roth contributions are the better option. Mike explained that the decision depends on your current tax rate and your expectations for future tax rates.

Pre-tax contributions reduce taxable income today, which can help with current cash flow. Roth contributions are made after tax, but qualified withdrawals in retirement are tax-free. For many individuals, using a combination of both creates flexibility and helps manage future tax exposure.

Katie reinforced that this decision should be coordinated with a broader tax strategy. When retirement planning and tax planning work together, clients are better positioned to keep more of what they earn over time.

Retirement Planning Strategies for Business Owners

Mike also discussed the additional planning opportunities available to business owners and executives. Depending on cash flow and long-term goals, employers may benefit from adding strategies such as cash balance plans, Safe Harbor provisions, or non-qualified plans alongside a traditional 401k.

These structures can allow higher contributions for owners while still meeting IRS requirements and supporting employee participation. They can also serve as powerful retention and incentive tools for key team members.

The main takeaway was that plan design should not remain static. Regular reviews help ensure the structure continues to support both business goals and personal retirement objectives.

Common 401k Mistakes to Avoid

The session also highlighted several mistakes that can limit long-term results. Undercontributing, missing employer match opportunities, and failing to understand the tax impact of contribution choices are among the most common issues.

Another major risk is failing to monitor the plan. Mike noted that consistent review of plan performance, investment options, and design features is one of the most important responsibilities for both participants and plan sponsors.

Participants were also encouraged to avoid early withdrawals whenever possible. Taking distributions before retirement can trigger taxes, penalties, and long-term setbacks that are difficult to recover from.

How Your 401k Fits Into a Broader Retirement Tax Strategy

As the discussion wrapped up, both speakers emphasized the importance of integrating your 401k into a larger financial plan. Retirement income often comes from multiple sources, including IRAs, business income, investment accounts, and Social Security. Coordinating these sources with a tax strategy can improve long-term outcomes and help create more predictable income in retirement.

At Tavola Group, this integrated approach is central to how we support our clients. We work alongside financial and legal professionals to help ensure each decision supports both short-term needs and long-term goals.

Take the Next Step with Tavola Group

If there is one message from this webinar, it is that small decisions made today can have a significant impact on your future tax burden and retirement income. Whether you are an employee, business owner, or self-employed professional, a proactive strategy can help you save more and avoid costly surprises.

If you would like to review your 401k strategy or understand how it fits into your overall tax plan, schedule a free tax consultation with Tavola Group. Our team will help you identify opportunities, clarify your options, and build a plan that supports your long-term financial goals.