Year’s end is a chance to adjust contributions and coverage for a range of eligible benefits, for including insurance, voluntary, and retirement savings.
Quick takeaways
Autumn brings a slew of holidays—and open enrollment season for workplace benefits and coverage. Are you wondering, “What benefits should I enroll in?” Here’s what you need to know this year.
When you can make changes to your benefits coverage: Generally once a year and typically in November and December, unless you have a major life event such as having a baby, getting married, or losing a spouse’s health coverage.
Changes required: None unless you need or want to. “Think of open enrollment as an opportunity to make decisions that affect your overall financial picture, rather than a checklist of action items,” says Stanley Poorman, a financial professional with Principal®.
What to review during open enrollment: Open enrollment offers you a chance to adjust (or keep) health, dental, and vision plans along with disability income insurance policies and voluntary benefits. You can also set up or change contributions to a health savings account or a flexible savings account. If eligible, this may also be the time where you can enroll in your employer's deferred compensation plan.
When it comes to health insurance, “benefit enrollment is a great time to do a side-by-side comparison and think long-term. Ask yourself two questions: What is the right amount of coverage to protect my loved ones? and What is the best way for me to get that coverage?” Poorman says.
An out-of-pocket (OOP) cost comparison should include premiums, co-pays and deductibles, OOP max, and prescription coverage. A comparison between your plan and a partner or spouse's plan should consider OOP costs, your family’s health and financial situation, and coverage for children (if you have or plan to have).
Use open enrollment to plan for likely health costs. Maybe the kids need braces, or you know you’re due for new glasses.
These accounts can help you save for OOP medical expenses, particularly if your insurance is a high-deductible health plan (HDHP); you decide how much you want to contribute. A couple of bonuses: You can roll over unused funds each year, and you can carry forward funds for health costs—which could be helpful in retirement. Finally, HSAs are triple tax-advantaged. You contribute on a pre-tax basis, earnings can grow tax-free, and withdrawals are tax-free if used for qualified medical expenses. There are lots of rules around HSAs, so visit the IRS website (PDF) to learn more.
Learn more about HSAs and ways to save for the cost of health care.
| 2026 HSA contribution limits |
|
|---|---|
| Self-only | $4,400 |
| Family | $8,750 |
| Age 55 or older | Catch-up contribution: $1,000 |
| Employer HSA contribution | Not treated as taxable income, but it counts toward your annual contribution limit. |
With an FSA, you can contribute some of your pay on a pre-tax basis to an account for reimbursement of qualified health care and dependent care expenses. Because they’re pre-tax, FSA contributions lower your taxable income. And, FSAs for dependent care may include elder care in some instances. However, unlike an HSA, in an FSA, what you don’t use in the coming calendar year, you lose.
| FSA contribution limits | |
|---|---|
| Current existing limits | $3,300 limit per year for health care, and a dependent care limit of $7,500 per year for married filing jointly or $3,750 for married filing separately |
| Employer limits | May be lower |
During open enrollment, there are a few things to consider about life insurance. First, you may be able to buy more coverage through your employer (called “voluntary” life insurance), with the premiums deducted from your paycheck. Even if you lose or change jobs, you often lose employer-provided life insurance, but you can retain voluntary coverage and pay the premiums directly to the insurer. One more reason to consider it? The younger you are, the cheaper life insurance is (generally).
Voluntary benefits are typically a suite of benefits that you may choose to add. Your participation is optional but the voluntary benefit coverage may provide high value for your wants and needs.
These benefits often fit into four practical, impactful categories: health and wellness; financial wellness; personal benefits; and security. For example, a voluntary benefit like hospital indemnity may cover out-of-pocket expenses for a medical stay. Or, you may see caregiving support or flexible monthly stipends offered at your workplace.
For information about what voluntary benefits may be available to you, reach out to your employer's human resources.
“Buying more coverage outside the workplace means you’ll have disability insurance even if you change jobs, and you can increase your coverage as your income grows,” Poorman says. Here’s what to consider:
- Do you have disability coverage through work?
- Is it short- or long-term, or a combination of both?
- Would the coverage replace all or most of your income if you’re unable to work due to injury or illness? (Most cover about 60% of pre-tax income, which equals about 40–50% of your income.)
- If you become disabled while out of work, how would you cover your expenses beyond what you receive for disability insurance?
If you’re wondering if you have enough coverage, our disability income calculator helps you do the math.
Use these key questions to help make sure you’re on track with your retirement savings in both qualified and nonqualified plans.
- Are you contributing enough to get an employer match for your 401(k)?
- Does your asset allocation still reflect your risk tolerance for all your retirement savings accounts?
- Do you need to increase your contributions to catch up and stay in line with your retirement goals? The IRA contribution limit is $7,000 per year, with an additional $1,000 for those age 50 and over, and you can save in both a 401(k) and IRA.
- Are you eligible and participating in your employer's nonqualified deferred compensation plan? This type of plan allows you to save additional pre-tax dollars beyond qualified retirement plan limits. You defer a portion of your compensation today that will be paid out at a later date. This money could be used to help supplement any retirement funds, in addition to saving for long-term goals you may have in retirement.
Your workplace may offer a variety of options including childcare assistance, education assistance, or mental health benefits, sometimes called employee assistance programs (EAP). An EAP is a voluntary program that offers free and confidential assessments, short-term counseling, and referrals for work or personal problems. It may also be available to other members of your household, depending on your plan.
For more details, check your employer’s intranet site, connect with human resources, or talk to the benefits administration department.
If you participate in a retirement plan with services from Principal, have one of our IRAs, or have life insurance through your employer, you and/or your spouse have access to free online resources to prepare your own standard will, power of attorney, power of attorney for health care, living will, and more. To get started, create an account with ARAG.
