Fall Financial Action Steps for 403(b) Plan Participants
September 20, 2025
By Barbara O'Neill, CFP®, AFC®
I recently heard someone on Good Morning America say, “September is the new January,” comparing the start of fall with New Year’s Day. Rationale: there is a “fresh start” mentality with the start of school and cooler weather. In 2024, the phrase “October Theory” went viral, encouraging people to make behavioral changes before the end of the year instead of waiting until January. October is also Financial Planning Month.
Financially speaking, the difference between fall and January action steps is that Q4 actions affect the current year’s (2025) taxes, while New Year’s resolutions impact the following year. There is also a shorter timeline. October theory suggests a 90-day window to achieve goals vs. resolutions that are set for an entire year.
This post describes over a dozen fall financial action steps that are particularly applicable to the 403(b) community. It is organized into four sections: tax planning, retirement planning, investments, and other strategies. Also included is a summary of research studies about the financial status and biggest concerns of U.S. consumers. The post concludes with three “need to know” facts and six take-away action steps.
Tax Planning
Pro Forma Tax Return — Now is the time to prepare a projected 2025 tax return so you can adjust income tax withholding, if necessary, through December. This is especially important in light of tax law changes made this year by OBBBA including a higher standard deduction and child tax credit, a higher SALT cap, and the new senior tax deduction. Line up your 2024 tax return with a blank sheet of paper where you list a known or estimated 2025 number for each line item. Next, compare key metrics including gross, adjusted gross, and taxable income and tax withholding.
Tax Withholding — The pro forma tax return will help you determine whether you are likely to have too much or too little tax withholding for your estimated 2025 tax liability. You can also use the online IRS Tax Withholding Estimator [Note: it has not been updated for OBBBA as of 9/2/25]. If there is a substantial difference (either way) between current withholding and what you expect to owe, contact your employer for a W-4 form adjustment.
Charitable Gifting — If you take the standard deduction, as about 90% of taxpayers do, you may not want to follow the standard advice to make charitable donations by December 31, 2025. Instead, wait a day or two to take advantage of the new tax deduction for non-itemizers ($1,000-single, $2,000-married filing jointly) that takes effect in 2026.
Limited Time Offers — Some OBBBA changes are short-lived, including the higher SALT cap, car loan interest deduction, and senior deduction. If you expect these or any other new (to you) tax breaks to lower your income taxes, consider proactively planning to have them offset taxable U.S. savings bond redemptions, Roth IRA conversions, and long-term capital gains withdrawals from taxable accounts and/or to make increased 403(b) plan contributions.
Retirement Planning
403(b) Plan Contributions — Instead of waiting for OBBBA rules to produce a tax refund next year, consider setting aside some of your tax reduction now. Saving even 1% more of your pay can result in significant savings. According to an Advantage Publications calculator, a 40-year old with a $60,000 salary and an 8% average annual return would accumulate an additional $61,621 at age 65. Saving an extra 5% of pay (e.g., 10% to 15%) will produce well over $300,000.
Required Minimum Distributions (RMDs) — 403(b) participants age 73+ must take their RMDs by year end. They are based on a taxpayer’s current age divisor and account balance on December 31 of the previous year. For example, the divisor for age 73 is 26.5. Someone age 73 with a $100,000 403(b) account would need to withdraw $3,774 ($100,000 ÷ 26.5, rounded). The penalty for not taking RMDs is a stiff 25% of the amount that should have been withdrawn but was not.
Social Security Check-Up — If you are currently working, log into your personal Social Security account at https://www.ssa.gov/myaccount/ to make sure your 2024 earnings were recorded properly and to review estimated benefits for ages 62 to 70. If you are already receiving benefits, look for a cost of living adjustment (COLA) announcement from the Social Security Administration in October and a letter in late November/early December about your 2026 benefit amount before and after Medicare premiums are deducted.
SEP Accounts — A previous post discussed side hustles for 403(b) participants and mentioned simplified employee pension (SEP) plans as a way for solopreneurs to save for retirement. SEPs must be set up and funded by the tax filing deadline for the current tax year (e.g., April 15, 2026 for 2025 taxes) but it is not too early to start shopping around now for a vendor. In addition, the earlier your contribution, the earlier your SEP savings starts to grow.
Investments
Portfolio Rebalancing — Starting in October, after Q3 account statements are received, many people start to take a hard look at their annual investment portfolio performance. Rebalancing is the process of getting back to target asset class allocations (e.g., 60% stock, 30% bonds, 10% cash) when the mix of assets shifts over time due to market conditions. Rebalancing helps maintain desired asset allocation weights that are consistent with your age, goals, and risk tolerance. It can be done by withdrawing money from the overweighted asset class(es) or adding money to underweighted assets.
Prospectuses, Annual Reports, and Payroll Authorizations — Investing brings “paperwork” including 403(b) plan mutual fund prospectuses and annual reports. If you’ve filed them away throughout the year, take the time to read them to inform end-of year financial decisions. You may decide to change 403(b) vendors or select different investments from the same vendor. Look for low expenses and above average performance and complete the required paperwork to authorize 403(b) plan changes such as an increase in your contribution amount.
Other Strategies
Below are ten additional fall financial action steps to consider:
- Meet with a financial planner or tax professional for a year-end review and tax planning
- Organize documents for the upcoming income tax season
- Make final contributions to a health savings account (HSA), if available
- Use flexible spending account (FSA) funds before the final “use it or lose it” deadline
- Review and/or revise employee health benefits during fall open enrollment season
- Update net worth statement (asset minus debts) at least once during 2025
- Update your budget (future income minus expenses) at least once during 2025
- Check your credit report for errors or fraud at least once during 2025
- Check your credit card rewards program for expiration dates and tax-free cash earned during 2025
- Set aside money from September to December paychecks to pay for holiday expenses
Research Results
Financial action steps are often prompted by current financial status. The sixth National Financial Capability Survey, released in 2025, found a decline in Americans’ ability to make ends meet and save for emergencies which the researchers described as a “struggle of the middle” (i.e., incomes between $25,000 and $75,000). Specifically, the percentage of U.S. adults who have set aside enough money to cover three months expenses was 46% and 35% probably or certainly could not come up with $2,000 for an unexpected expense.
Another 2025 survey by McKinsey of Americans’ top concerns found inflation and rising prices to be the biggest financial concern (43%), followed by tariff policies (29%), and ability to make ends meet (22%).
Three (More) Things
- October Theory proponents say fall behavioral changes provide a fresh start for the new year and can reduce stress heading into January. The three month timeframe for taking action is also attractive for many people.
- Fall is historically a volatile season for the stock market, making investment adjustments riskier if decisions are rushed. It is important to stick to a well-researched, goal-oriented financial plan.
- Travel during fall/winter months can be expensive as prices often increase throughout October and surge right before major holidays. Travelers can often save money by being flexible with their travel dates.
Six Smart Strategies
No. 1: Review Your Progress — Evaluate how far you’ve come so far in reaching 2025 financial goals and what still needs to be done.
No. 2: Evaluate Estimated Taxes — Make sure your Q4 estimated tax payment (due 1/15/26) for investment and/or a side hustle income will be adequate.
No. 3: Consider Tax-Loss Harvesting — Sell taxable (brokerage) account investments with losses (such as a stock, ETF, or mutual fund) to offset capital gains on other investments .
No. 4: Build Your Emergency Fund — Aim to save three to six months of essential living expenses, but any savings is better than none!
No. 5: Budget for Holiday Expenses — Plan ahead and set a budget for holiday gifts, food, travel, and entertainment to avoid overspending and post-holiday financial stress.
No. 6: Look Ahead to 2026 — Gather data about expected income sources in 2026 including a salary, pension, Social Security, and/or RMDs.
In Summary
Fall 2025 officially runs from September 22 through December 21. Essentially 90 days that will come and go in a New York minute. In between Halloween, Thanksgiving, and December holiday celebrations, not to mention the jam-packed schedules of educators, try to carve out some financial “me time.”
Not only can you close out the current year making financial progress but you can set yourself up for more in the future.
This post provides general personal finance information and does not address all the variables that apply to an individual’s unique situation. It should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.
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Dr. O'Neill is the owner/CEO of Money Talk: Financial Planning Seminars and Publications where she writes, speaks, and reviews content about personal finance. She is a Distinguished Professor Emeritus at Rutgers University and a long-time 403(b) plan participant.