Every December, I have the same conversation with smart, successful business owners. They’re profitable. They’re busy. And they’re frustrated that their tax bill still feels heavier than it should. Someone inevitably says:
“Chris, I maxed out my retirement. There’s nothing else I can do, right?”
That’s usually the moment I smile — because it tells me they’ve been sold a half-truth.
Retirement planning isn’t a single lever you pull once a year. It’s a system. And in 2025, that system has more moving parts, more flexibility, and more tax-saving power than most people realize.
This guide is not about obscure loopholes or risky tricks. It’s about using the tools already written into the tax code — correctly, intentionally, and in the right order — so your money works harder for you than it does for the IRS.
Think of this as the retirement checklist I wish every business owner had before year-end planning meetings begin.
The First Mistake Most People Make With Retirement Accounts
Before we get tactical, let me clear up a dangerous misconception.
You do not need to fully fund a retirement account in the same year you open it. That single misunderstanding costs business owners thousands of dollars in lost tax planning flexibility every year.
Opening an account establishes eligibility. Funding can often happen later — sometimes well into the following year — depending on the account type, your entity structure, and how your income ultimately shakes out.
I’ve seen business owners delay opening accounts because they “weren’t ready to commit the cash.” Meanwhile, the calendar flipped, deadlines passed, and opportunities disappeared. The lesson is simple. Start accounts early. Decide funding later.
Now let’s walk through the core pieces of a smart 2025 retirement strategy.
Open the Account Now — Even If You Fund It Later
This is one of the least glamorous strategies and one of the most powerful.
For many retirement vehicles, the act of opening the account is what locks in your ability to use it. Funding can follow once you know what your final numbers look like.
Business owners rarely know their true taxable income in October or November. Revenue comes in late. Expenses shift. Deals close. Bonuses happen. Life happens.
By opening accounts now, you give yourself options. By waiting, you give yourself constraints.
I often tell clients that tax planning is like reserving seats at a table. You don’t need to eat every dish, but if you don’t reserve the seat, you don’t get the menu.
The HSA — The Most Overlooked Retirement Account in America
If I had to pick the single most underused retirement tool among business owners, it would be the Health Savings Account.
The HSA is the only account in the tax code with a triple benefit. Contributions are deductible. Growth is tax-free. Qualified withdrawals are tax-free. The IRS has strict guidelines on HSA’s (for good reason). You can find them >> HERE <<.
That combination does not exist anywhere else.
The key requirement is being enrolled in a qualifying high-deductible health plan. Once that box is checked, the HSA becomes a stealth retirement account.
Here’s where most people get it wrong. They use the HSA like a checking account. Money goes in, medical bills come out, end of story.
That’s fine — but it’s not optimal.
When possible, I encourage clients to pay current medical expenses out of pocket and let the HSA grow. Decades later, that account can function like a tax-free medical retirement fund. And yes, you can reimburse yourself years later if documentation is maintained.
For business owners thinking long-term, the HSA quietly becomes one of the cleanest retirement buckets available.
Solo 401(k) — The Power Tool for the Self-Employed
If you’re self-employed or own a business with no full-time employees other than a spouse, the Solo 401(k) is one of the most flexible and powerful tools available.
It allows you to wear two hats. One as employee. One as employer. That dual role unlocks significantly higher contribution potential compared to traditional IRAs. It also allows for strategic timing of contributions based on final income calculations.
What matters most is that the plan is established on time. Funding decisions can often be made later, once the year’s financial picture is clear.
I’ve helped clients set these up in December with funding occurring months later — and the tax savings were still fully captured. This is where proactive planning beats reactive filing every single time.
Safe Harbor 401(k) — When Growth Changes the Rules
At a certain point, business success creates new challenges.
Once you have employees, a Solo 401(k) is off the table. That’s where a Safe Harbor 401(k) often enters the conversation.
Yes, there are employer contribution requirements. Yes, it’s more complex. But it also opens the door to meaningful tax deferral at higher income levels — while keeping compliance manageable.
What I like about Safe Harbor plans is predictability. You know the rules upfront. You know the costs. And you eliminate many of the annual testing headaches that scare business owners away from offering retirement plans.
For growing companies, this becomes less about generosity and more about control — controlling taxes, controlling benefits, and controlling long-term planning.
Roth Conversions — Paying Taxes When You’re in Control
Roth conversions tend to get emotional reactions.
Some people love them. Some people fear them. Most misunderstand them.
A Roth conversion simply means you’re choosing to pay tax today in exchange for tax-free growth tomorrow. The question is not whether Roth is good or bad. The question is timing.
Years with lower income, high deductions, business losses, or transitional phases are often ideal for conversions. You’re filling lower tax brackets intentionally instead of letting future required distributions push you into higher ones.
I’ve worked with business owners who assumed Roth strategies were only for high-income earners. In reality, for Roth conversions, lower-income years are often the best time to convert.
The tax code rewards those who plan ahead — not those who blindly defer forever.
Lower Income Years — When Roth Becomes a No-Brainer
Here’s a counterintuitive truth.
If your income is lower than usual, you may have a rare opportunity sitting right in front of you.
Chunking money into Roth accounts during lower-income years allows you to lock in historically low tax rates. That money then grows tax-free for decades.
I’ve seen clients skip Roth strategies because they were “waiting until they made more.” Ironically, higher income often makes Roth less attractive from a tax perspective. Truth be told… the best Roth years are often the quiet ones. The rebuilding years. The transition years. The years most people overlook.
Why Retirement Planning Is Really About Tax Control
Most people think retirement accounts are about saving money.
They’re not. They’re about controlling when and how you pay tax. Every dollar you defer today is a decision about tomorrow. Therefor, when you convert is a decision about certainty versus uncertainty. Every account type is a different bucket with different rules.
When I build retirement strategies, I’m not chasing the highest contribution number. I’m designing flexibility. Multiple buckets, levers, and exit ramps.
Because the future tax code will not be written for your convenience.
How This Fits Into a Bigger Entity Strategy
This is where entity structure quietly shapes everything.
An LLC taxed as a sole proprietor creates different planning options than an S-Corp. An S-Corp opens doors around reasonable compensation and retirement contributions. A growing business with employees introduces entirely new layers.
This is why cookie-cutter advice fails business owners. Your retirement plan does not live in isolation. It lives inside your entity, your income strategy, and your long-term vision. When those pieces align, retirement planning stops feeling like a chore and starts feeling like leverage.
The Real Risk of Doing Nothing
The biggest risk I see is not choosing the wrong account. It’s defaulting into inaction.
Every year you delay opening accounts, testing strategies, or asking better questions is a year you cannot reclaim. The IRS does not allow retroactive planning simply because you were busy.
I don’t expect business owners to master tax law. That’s my job. But I do expect them to recognize that retirement planning is not a once-a-year checkbox.
It’s a system. And systems reward those who build them early.
Pulling It All Together
If you take nothing else from this guide, remember this. You don’t need to fund everything today. You do need to create options.
Open accounts early. Use HSAs intentionally. Match retirement plans to your entity structure. Look at Roth conversions strategically — especially in lower-income years. And stop assuming retirement planning is just about age 65.
It’s about control. It’s about flexibility. And it’s about keeping more of what you build.
Welcome to the New Age of Accounting. Let’s begin.
P.S. If you found this article helpful, you’ll love my new book S-Corp Mastery: How Smart Business Owners Maximize Tax Savings & Build a Lasting Legacy. It’s now live and available in a sleek, easy-to-read PDF version. Grab your copy here
Chris is the Managing Partner at Weston Tax Associates, a best-selling author, and a renowned tax strategist. With over 20 years of expertise in tax and corporate finance, he simplifies complex tax concepts into actionable strategies that drive business growth. Originally from Sweden, he now lives in Florida with his wife and two sons.
