I’m 59, plan to retire in late-2025. I want to boost my 401(k) contributions from 25% to 65% of my paycheck — but I worry my employer will figure out my retirement plans. What should I do?

Why you shouldn't worry about hiding your retirement efforts

When you suddenly increase your 401(k) contributions dramatically, there's a decent chance your employer will take notice and maybe ask a few questions. However, there are a few reasons why this likely isn't something you should be very concerned about.

For one thing, your boss may not realize that your contributions have changed at all. Your 401(k) contributions are deducted directly from your pay, and your company's payroll processor is likely going to be the one who handles that. Unless your company is very small, your boss probably isn’t the one preparing and signing your paychecks.

Secondly, increasing your 401(k) contributions likely isn’t going to be the first thing that tips off your employer to the fact that you’re nearing retirement. In fact, it’ll likely be your age that puts your retirement on your employer’s radar.

When you hit 59 years old, your boss likely already knows you’re potentially nearing the end of your career. Increasing 401(k) contributions late in your career isn't necessarily a red flag, since it's normal to want to increase your savings as you get closer to leaving work.

But if you're really worried your boss is going to have an issue with your increased 401(k) contributions, you could always opt to funnel some of your savings into a traditional or Roth IRA instead. Both traditional and Roth IRAs also come with tax breaks — as long as your income isn't too high — and you can invest in them outside of work so your boss will be none the wiser.

Of course, if your boss does take notice and asks about your increased 401(k) contributions, you could always have a viable excuse at the ready: “Retirement? No no, I just felt like I've been falling behind on my savings and wanted to catch up.”

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How to ensure you're ready for retirement

If you're considering retiring late in 2025, you arguably have bigger things to think about than whether your boss is going to get nosy about your increased 401(k) investments. It's time to start making sure your ducks are in a row since your paychecks will be ending sooner rather than later.

Since the annual contribution limit is quite high, contributing as much as you can to your 401(k) is a great way to start. Most employees can contribute up to $23,500 to their 401(k) in 2025, which is an increase of $500 from 2024.

Employees aged 60 to 63 are also eligible for a special catch-up contribution of up to $11,250 under the SECURE 2.0 Act. This means, depending on your age, you could invest as much as $34,750 to your 401(k) in 2025, and that doesn’t even include matches from your employer.

You'll also want to think about healthcare coverage when you retire, as the costs can increase substantially if your employer is no longer subsidizing your healthcare. The qualifying age for Medicare is 65, so you may need to cover a few years on your own if you retire before that age.

The good news is that if you retire before 65 and lose your healthcare coverage, you would qualify for a special enrollment period to the Health Insurance Marketplace, which means you could purchase a plan even if your retirement falls outside of the annual open enrollment period.

If you contribute as much as you can to your 401(k) and keep your healthcare costs in mind, you can set yourself up for a very comfortable retirement.