** This post is part of Avaii Insights: A Look at Financial Planning Topics – The Avaii Way —our ongoing blog series featuring insights from thefinancial planners at Avaii Wealth Management in Appleton.
Each edition offers practical guidance on topics that matter most to your financial life, all rooted inThe Avaii Way: Planning Made Easy.
Open Enrollment: What to Look for in Your 2026 Benefits Package
Open enrollment season is here—a once-a-year opportunity to make decisions that can meaningfully impact your finances for the year ahead. While it’s easy to default to last year’s choices, taking a closer look at your employer benefits can uncover opportunities to improve your cash flow, reduce taxes, and strengthen your long-term financial plan.
Here’s a simple breakdown of key areas to review as you evaluate your 2026 benefits package.
Health Accounts: HSA vs. FSA
Most employers offer a tax-advantaged account to help cover medical costs, but the two most common options—Health Savings Accounts (HSAs)andFlexible Spending Accounts (FSAs)—work very differently.
Health Savings Account (HSA)
If you’re enrolled in a high-deductible health plan, you may be eligible for an HSA. These accounts offer a triple tax advantage:
Contributions are tax-deductible
Growth is tax-deferred
Withdrawals for qualified medical expenses are tax-free
HSAs also carry forward every year, can be invested, and ultimately function as a powerful supplemental retirement vehicle.
Flexible Spending Account (FSA)
FSAs offer up-front tax savings by letting you set aside pre-tax dollars for health expenses. Unlike HSAs, FSAs are generally “use it or lose it,” though some plans allow a small carryover into the next year.
Which is right for you?
If you want longer-term savings, investment growth, and future flexibility →HSA.
If you expect higher medical expenses early next year and want immediate tax savings →FSA.
Roth vs. Pre-Tax 401(k) Contributions
Your employer retirement plan may allow you to split contributions betweenpre-taxandRoth. Understanding the difference can help you optimize your long-term tax picture.
Pre-tax 401(k):Reduces your taxable income today. Your contributions grow tax-deferred, and you pay taxes when you withdraw in retirement.
Roth 401(k):Contributions are made after taxes, but qualified withdrawals in retirement are tax-free.
Which should you choose?
If you expect to be in ahigher tax bracket later, Roth can provide meaningful long-term savings.
If you wanttax relief now, or anticipate being in a lower bracket in retirement, pre-tax may make sense.
For many people, ablend of bothprovides balance and future flexibility.
Medical, Dental, and Vision Plans: Evaluate More Than the Premium
It’s natural to focus on monthly premiums, but a strong benefits review goes deeper.
Key questions to consider:
Are your preferred doctors in-network?
How do deductibles and out-of-pocket maximums compare?
Does one plan offer better coverage for regular prescriptions?
Are there differences in mental health benefits?
The “cheapest” option isn’t always the most cost-effective once you factor in your expected medical needs for the next year.
Disability Insurance: One of the Most Overlooked Benefits
Many people underestimate disability insurance, even though it protects your most valuable asset—your income.
Short-Term Disability (STD)
Covers a portion of your income for temporary disabilities, typically lasting a few weeks to several months.
Long-Term Disability (LTD)
Kicks in after STD ends and can protect your income for years. Employer coverage varies widely, and in many cases, buying supplemental coverage can help fill gaps.
Why it matters:
A strong disability plan ensures your financial goals stay on track, even if an unexpected medical event impacts your ability to earn.
Life Insurance: Understanding Your Options
Many employers offer a baseline amount of life insurance coverage—often one to two times your salary. While this is helpful, it’s rarely enough to fully protect your family’s long-term needs.
During open enrollment, review:
Whether supplemental life insurance is available
How rates compare to private policies
Whether dependent coverage is needed
Your life insurance decisions should align with your broader financial plan, not just your workplace offerings.
How Your Benefits Choices Support Your Long-Term Plan
The decisions you make during open enrollment influence much more than the year ahead. They shape:
Your tax strategy
Your long-term savings potential
Your risk protection
Your cash flow
Your readiness for unexpected expenses
Even small adjustments—like shifting part of your 401(k) to Roth, increasing disability coverage, or choosing a more cost-effective health plan—can create meaningful benefits over time.
Final Thought
Open enrollment isn’t just an administrative task—it’s a planning opportunity. Reviewing your options with intention can help you maximize your benefits, avoid unnecessary costs, and ensure the choices you make today support the financial life you want tomorrow.
If you’d like help reviewing your benefits package or understanding which choices fit your long-term goals, our team is here to make the process simple.
Hey there! Thanks for stopping by our blog. A quick heads-up: the information here is more like friendly tips than personalized financial advice. Investing can be a bit of a wild ride, and what worked before might not be the golden ticket for the future. So, before making any major money moves, it's always a good idea to have a friendly chat with a financial professional. We're all about providing insights, not making promises. Your unique financial journey is key, and we're delighted to have you on board for the journey.