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Year-End Retirement Deductions: A Guide to Boosting Your Retirement Savings

The countdown to retirement is on, and with the end of the year approaching, now is the perfect time to bolster your retirement savings. In this blog post, we'll walk you through five essential strategies that can potentially put thousands of dollars back in your pocket. Act fast, as these opportunities are time-sensitive and can significantly impact your financial future.

1. Establish Your 2023 Retirement Plan Before December 31 for Enhanced Tax Benefits

If you haven't set up your retirement plan yet, there's no time to waste. Whether you're a sole proprietor or a corporation owner, you can make both employer and employee contributions to your plan. By having your corporate 401(k) plan in place by December 31, you can contribute up to $22,500 ($30,000 if you're 50 or older) as an employee, and up to 25 percent of your compensation as an employer. The total contribution cannot exceed $66,000 ($73,500 if you're 50 or older). Don't miss out on this opportunity to maximize your deductions for 2023.

In the quest to optimize your retirement savings, you might find yourself wondering which plan is the right fit for you – the Traditional or Roth IRA, Roth 401(k), or even a Defined Benefit plan. Each option comes with its unique set of advantages, allowing you to tailor your retirement strategy according to your needs and financial goals.

When it comes to IRAs, both Traditional and Roth options have their merits. A Traditional IRA allows you to contribute pre-tax dollars, potentially lowering your taxable income for the year. In contrast, a Roth IRA utilizes after-tax contributions, offering tax-free withdrawals during retirement.

Considering employer-sponsored plans, the Roth 401(k) combines features of both the Traditional 401(k) and the Roth IRA. It offers tax-free withdrawals in retirement while allowing for higher contribution limits than a Roth IRA. On the other hand, Defined Benefit plans provide a fixed, pre-established benefit for employees upon retirement, offering financial security but usually requiring higher contributions.

Deciding between these options depends on your current financial situation, future income expectations, and tax planning strategies. Exploring the nuances of each plan and consulting with a financial advisor can help you make an informed decision, ensuring you choose the best plan to secure your financial future.

3. Claim Up to $15,000 in Tax Credits with a New Retirement Plan

If you're the sole employee in your business and haven't established a qualified retirement plan yet, you can claim a tax credit of up to $15,000 by setting up a new plan. This credit is based on your qualified start-up costs and can be claimed over three years. Take advantage of this incentive before it's too late.

4. Utilize the New 2023 Small Employer Pension Contribution Tax Credit

Thanks to the SECURE 2.0 Act, there's an additional tax credit available for employer retirement plan contributions. You can earn a credit of up to $1,000 per employee in the year you establish the plan, with decreasing credits in subsequent years. Make sure to explore this new credit and maximize your savings.

5. Claim the Automatic Enrollment $500 Tax Credit

Another benefit introduced by SECURE 2.0 is the $500 tax credit for eligible small employers who implement an automatic contribution arrangement in their retirement plans. This credit is available for up to three years and can apply to both new and existing plans. By encouraging employee participation, you not only boost your savings but also qualify for this valuable tax credit.

6. Consider Converting to a Roth IRA for Long-Term Tax Savings

If you have an existing 401(k) or traditional IRA, it might be the perfect time to consider converting to a Roth IRA. While you'll need to pay taxes on the conversion, the long-term benefits are substantial. With a Roth IRA, you can enjoy tax-free qualified withdrawals after age 59 1/2, and there are no required minimum distributions, providing you with more control over your retirement funds.


Securing your financial future requires strategic planning and timely action. By taking advantage of these last-minute year-end retirement deductions, you can significantly enhance your retirement savings and reduce your tax burden. Don't miss out on these valuable opportunities – act now and pave the way for a financially comfortable retirement. Your future self will thank you.

Disclaimer: Laws and regulations are subject to change, and readers are advised to consult EPL advisors for personalized advice and compliance with specific state requirements. This information is not specific advice and is meant for general education.

You can reach our CEO and founder Peter Ellefson anytime


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