Each year there’s typically an open enrollment for many benefit programs from your employer. Here are some tips to consider.
Leverage employer contributions
Employers that offer retirement plans like 401(k)s, 403(b)s, and 457s often include an employee match or safe harbor contribution. So make sure you understand this benefit and are signed up to donate AT LEAST the minimum to take advantage of any employer-provided benefits.
Maximize your retirement contributions
Review the retirement plans offered and maximize your contributions to the greatest extent possible. If your employer offers traditional AND Roth alternatives, consider dividing your contributions between the two options. Remember Roth 401(k) plan contributions are after-tax, but their earnings are tax free versus tax deferred. And remember if you’re age 50 or over, you’re eligible for an additional catch-up contribution.
Special word on catch-up contributions. Looking ahead to 2026, there are two things to consider with catch-up contributions:
1. if you are age 60 to 63, the $8,000 catch-up contribution is increased to $11,250.
2. If your income is more than $150,000, ALL of your catch-up contributions must be placed in a Roth account (if your employer offers it). So be careful with your tax planning activity in this area.
Review and leverage tax-advantaged health insurance
HSA contributions. If your employer offers high deductible health plans, you’re eligible for a Health Savings Account (HSA). If this is the case, try to maximize your annual contribution into this fund to ensure your qualified health expenses are paid on a pre-tax basis. This is pretty important, as unused funds can be carried over into future years. The limits for 2026 are: $4,400 single and $8,750 for families with a $1,000 catch-up contribution if age 50 or over.
FSA contributions. If your employer offers a flexible savings account (FSA) option, you will want to forecast and contribute to this account to pay for qualified AND planned expenses. The annual limit for 2026 is $3,400, but only $680 can be carried over into the following year.
Review your investments
While you’re at it, now is a good time to review your retirement account investments and conduct any adjustment or rebalancing that you think makes sense. Depending on your age and situation, you may wish to review your plan and strategy to help optimize your tax obligation and risks looking into the future.
Identify and review other benefits
Many employees offer an array of benefits that are often overlooked. Now is a great time to take a look at all that’s offered and leverage as many as possible. Here’s a list of the most common that can provide great benefits:
- Discounted or free insurance
- Group life insurance
- Disability insurance
- Long-term care insurance
- Dependent care assistance (up to $7,500)
- Education assistance (up to $5,250)
- Other fringe benefits: adoption expense help, stock options, and employee discounts.
Each of these benefits can greatly increase your effective pay and reduce your tax obligation, but only if you make it a habit to review your options each year. So break out your employee handbook and take a look.