How Small Open Enrollment Decisions Can Make a Big Difference in Your Financial Future

Most people think of open enrollment as a routine task — something to check off a list before the deadline. But what they often overlook is how small benefit choices today can have a powerful impact on your future. Choosing wisely can lead to lower taxes, stronger savings growth, and greater financial flexibility in retirement.

Here’s how to make the most of your 2026 benefits enrollment:

1. Maximize Your 401(k) Contributions — and Consider the Roth Option

For 2026, employees can contribute up to $23,000 to their 401(k), plus an additional $7,500 catch-up if you’re age 50 or older.

If your prior-year wages from your employer exceed $145,000, the SECURE 2.0 rules require that catch-up contributions be made as Roth contributions (after-tax).

Also consider the benefits of a Roth 401(k) — contributions are made with after-tax dollars, but withdrawals in retirement are tax-free. You can even split contributions between traditional (pre-tax) and Roth (after-tax) accounts to diversify your future tax exposure and manage taxes more effectively in retirement.

Tip: Always contribute at least enough to maximize your employer match — it’s free money toward your retirement savings.

2. Take Advantage of Health Savings Accounts (HSAs)

HSAs are one of the most tax-efficient savings tools available — you get triple tax benefits:

Contributions are tax-deductible
Growth is tax-deferred, and
Withdrawals for qualified medical expenses are tax-free.

For 2026, the HSA contribution limits are $4,300 for individuals and $8,550 for families, plus an extra $1,000 catch-up if you’re 55 or older.

Tip: Don’t leave your HSA idle in cash. Invest it for growth, so it can serve as a powerful retirement health savings vehicle.

3. Don’t Forget About Flexible Spending Accounts (FSAs)

FSAs allow you to contribute pre-tax dollars to pay for eligible health and dependent care expenses — saving you up to 30% when factoring in taxes.

For 2026, the health FSA limit is $3,250, and the dependent care FSA limit is $5,000 per household.

Tip: Plan contributions carefully since FSAs generally follow a “use it or lose it” rule — though some employers allow a small rollover or grace period.

4. Make Use of After-Tax 401(k) Contributions (Mega Backdoor Roth Opportunity)

If you’ve already maxed out your 401(k) and still want to save more, some employers allow after-tax contributions. These can later be converted to a Roth IRA through a strategy known as the Mega Backdoor Roth — allowing for tax-free growth on an even larger pool of assets.

Tip: Confirm your plan allows in-service rollovers or conversions before implementing this strategy.

5. Don’t Overlook Employee Stock Purchase Plans (ESPPs)

If your employer offers an ESPP, don’t ignore it — these plans often let you buy company stock at up to a 15% discount, creating an instant return on investment.

Payroll deductions make participation simple and automatic. Just be careful not to let too much of your portfolio become concentrated in company stock.

Tip: Take advantage of the discounted purchase price and consider selling after one year to qualify for lower long-term capital gains tax rates, while still benefiting from your employer’s discount.

6. Review Life and Disability Insurance Options

Employer-provided group life insurance can be an affordable way to add a layer of protection for your family.

Coverage through work is usually inexpensive, and premiums are often deducted pre-tax.
Supplemental coverage is available if you need more protection than the basic plan provides.
Disability insurance is equally important — it protects your income if you’re unable to work due to illness or injury.
Employer plans often cover short-term or long-term disability at a lower cost than individual policies.
Consider coordinating employer coverage with any private policies for full protection.

Tip: Make sure your beneficiaries and coverage amounts are up to date — this can provide peace of mind for you and your family.

7. Don’t Overlook Employer-Provided Legal Services

Some employers offer access to legal services as part of your benefits package. These plans can be especially useful for:

Drafting wills or basic estate planning documents,
Updating powers of attorney.
Handling simple legal matters without incurring high costs.

Tip: Even limited estate planning through your employer’s plan can provide peace of mind and ensure your assets are distributed according to your wishes.

Take Action

We want to be a resource for you — helping you make the best decisions during open enrollment so you can take advantage of every tax and savings opportunity available.

👉 Schedule a call to review your benefits and see what makes the most sense for your situation.