Is this the No. 1 401(k) move for 2025? (2025)

If you're watchingthemarkets in2025and feeling uneasy, you're not alone. Recent tariffs announcedbetweentheU.S. and China – along with retaliatory measures – have rattled investor confidence and pushed major indexes into correction territory withtheS&P havingtheworst quarter since 2022.

Theheadlines scream uncertainty, portfolios are flashing red, and it’s natural to wonder if now isthetime to retreat or lean in and make a boldmove.

But, what ifthisdip presents a golden opportunity? Specifically,could frontloading your 401(k)right nowbeoneofthesmartestfinancialmoves you makethisyear?

Frontloading means contributing a significant portion – or evenall – of your annual 401(k) limit early intheyear, rather than spreading it out evenly over each paycheck. (Getty Images / Getty Images)

What Does It Mean to Frontload Your 401(k)?

Frontloading means contributing a significant portion – or eventheentirety – of your annual 401(k) limit early intheyear, rather than spreading it out evenly over each paycheck.For2025,theIRS allows up to$23,000in contributions (or$30,500if you’re 50 or older).

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Instead of monthly contributions, you might hitthecap by spring – locking in more shares whilethemarket is still down.If you have money inthebank to pay your bills,therecouldbea brilliant time to rob Peter to pay Paul and put more in your 401(k) while prices are cheaper.

Why FrontloadingCouldMake SenseRight Now

1. You’re Buying While It’s On Sale
With markets down thanks to tariff-fueled volatility, prices on stocks and index funds are lower thanthey’vebeen in months.Especially in technology. Frontloading lets you scoop up more sharesforthesame dollar, positioning you tobenefit whenthemarket eventually rebounds.

2. Time intheMarketBeats TimingtheMarket
By getting your money in earlier, you give those dollars more time to grow. Compounding worksbest with time on your side, and historically, markets bounce back – often when investors least expect it.Thisis what helpsthe"snowball" effect.

3. It TakestheEmotion Out
It’s hard not to let emotions cloud your decisions during turbulent times. Frontloading is a way to make a strategicmoveandthen letthemarket do its thing, without constantly second-guessing yourself throughouttheyear.

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AreThere Any Pitfalls?

1. YouCouldMisstheEmployer Match
Some companies only match contributions per pay period. If you max out early, you might leave employer dollars onthetablefortherest oftheyear. It’s important to readthecompany Summary Plan Description (SPD) to see how your plan handles matchesbefore frontloading.

2. You Might NotBeCatchingtheBottom
Markets can always fall further. Frontloading doesn’t guarantee you’re buying atthelowest point, andthere’s a chance your investments dip morebeforethey rise. Ifthetariff war continues,thiscouldsend markets further downthisyearbeforethey rebound.

3. Cash Flow Can Get Tight
Frontloading requires havingtheflexibility to take a hit to your take-home pay early intheyear. If that’s going to put stress on your budget orforce you to dip into savings, it might notbeworth it.

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Consider a Hybrid Strategy

If going all-in feels too aggressive, consider a partial frontload. Increase your contributionsforthenext few months while prices are still down,then return to your regular pace.Thisgives you some upside potential while keeping cash flow manageable.

Ted’s Final Thought

It’s easy to get spooked whenthemarket drops. But often,thebestfinancialmoves are made when things feel uncertain. If your budget allows and your plan supports it, frontloading your 401(k) in a down market – especiallyonedriven by temporary shocks like tariffs – might justbethebestfinancialmoveyou make in2025.

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