Let’s Break It Down
Many business owners hear “retirement plan” and immediately think, “We’ll look at that next year”.Then next year becomes the year after that and, suddenly, it’s January again and the opportunity feels like it has slipped away again.
If you’re still thinking about a qualified retirement plan even though 12/31/2025 has passed, there is good news. For most businesses, it may still be possible to adopt a qualified retirement plan and treat it as a 2025 plan. In other words, you may still be able to turn last year’s results into this year’s smart move.
Why this matters right now
A retirement plan isn’t just a “nice benefit.” Done well, it can reduce taxable income through deductible employer contributions, help owners save more for retirement in a more structured way, and strengthen recruiting and retention with a benefit employees actually value. What many owners don’t realize is that you don’t always need to have the plan in place by 12/31/2025 to capture many of the benefits for 2025. Adopting a plan after year-end can provide valuable tax-savings opportunities. In addition to allowing businesses to make tax-deductible contributions based on actual prior year results, there may be several tax credits available to businesses who implement a new plan.
The “after year-end” planning opportunity
Recent law changes under the SECURE Act have made it easier for certain employers to establish plans after the year ends. While the details may vary, the key concept is that the end of the year isn’t necessarily the absolute deadline. This creates an unusual planning window in early 2026 where you can look at 2025 performance now (with real numbers) and decide whether a plan is a good fit.
Who should take a closer look
This is especially worth exploring if your business fits one or more of the following:
- 2025 was a strong year and you’d like a tax-smart strategy instead of “writing a bigger check to the IRS”
- The business owner wants to meaningfully increase retirement savings
- You’re competing for talent and want a benefit that offers real value
- You’ve been meaning to set up a plan but didn’t want to move forward until the year’s results were in
What kind of plan are we talking about?
It is important to note that only employer contributions, such as a profit sharing contribution, can be made to a plan established after the year-end deadline. But this applies only to the first year of the plan.
Going forward, qualified retirement plans come in several flavors, and the “best” option depends on the goals and demographics of each individual business. Common choices include:
- 401(k) plans (often with employer match and/or profit sharing)
- Safe harbor 401(k) designs for streamlined compliance and predictable employer contributions
- Profit sharing options that can be flexible year-to-year
- Customized designs that, in the right circumstances, can help certain owners and key employees maximize their savings in 2026 and beyond.
The right structure is often the difference between “this plan is too costly” and “this plan is one of our most valuable strategic assets.”
A practical next step
If you’re curious whether your business can still adopt a plan for 2025, start with a quick feasibility check. In most cases, a short conversation can confirm:
- whether you’re eligible to adopt a plan after the 2025 year-end
- which plan design fits your goals and employee demographics
- realistic contribution ranges and what’s involved operationally
No pressure or jargon – just clear answers and, if it makes sense, a straightforward path.
Bottom line
If you had a strong 2025, or you want to strengthen benefits in 2026, this is a great moment to revisit a qualified retirement plan. You may still have a window to make it count for 2025, and even if you don’t, starting now can set you up well for 2026.
