Your Employee Benefits Package Is Worth More Than You Think

Every year around November, your employer drops a 40-page PDF in your inbox titled something like "2026 Benefits Enrollment Guide" and you have approximately 20 days to make decisions worth six figures over your career. Most people spend less time on this than they do choosing a restaurant for date night.

I've watched people who can model complex financial scenarios in Excel, negotiate their salaries with precision, and optimize their credit card points completely botch benefits decisions that cost them $50K, $100K, sometimes more over a decade. Not because the concepts are particularly difficult. They're not, but because benefits packages are deliberately designed to look boring, feel optional, and hide their actual value behind bureaucratic language and terrible user interfaces.

Your benefits package isn't "free money from your employer." It's deferred compensation, structured tax arbitrage, and long-term wealth infrastructure. If you're making six figures or more, the difference between getting this right and getting it wrong might be two or three extra years of work at the end of your career.

Let's talk about what you're actually leaving behind.

If your employer offers a 401(k) match and you're not contributing enough to get the full match, you are, and I say this with genuine affection, being an idiot with your money.

This isn't market timing advice. This is your company giving you 50 cents or a dollar for every dollar you contribute. That's a 50-100% instant return. The stock market's historical average is around 10% annually. Your 401(k) match is 50-100% immediately.

But here is where the high-earner mistake happens: The True-Up Trap. Many people front-load their contributions to get the money in the market early. But if you hit the $24,500 limit by August and your company doesn't offer a "True-Up" provision, you lose the employer match for every paycheck in September through December. Check your plan docs. If there's no True-Up, you need to pace your contributions to hit the limit on your very last paycheck of the year.

The math is straightforward: if you're in the 24% federal bracket (plus state and local taxes in places like New York), every dollar you defer saves you somewhere around 34 cents in taxes. You contribute $1, it only costs you $0.66 in take-home pay, your employer adds $0.50, and you're starting with $1.50 working for you instead of $0.66 sitting in your checking account. This is the rare free lunch in finance. Take it.

If you have access to a Health Savings Account, you have access to the single best tax-advantaged account in the American tax code. Not "pretty good." The best.

HSAs are triple tax-advantaged: Contributions go in pre-tax, growth is tax-free, and withdrawals for medical expenses are tax-free. No other account does this. 401(k)s tax you on the way out. Roth IRAs tax you on the way in. HSAs say "sure, just don't pay taxes anywhere, it's fine."

The HSA Pivot: Most people use this for contact lenses and Tylenol. For high earners, the move is to pivot. Max out the family limit ($8,750 for 2026), invest it in index funds, and pay for your current medical expenses out-of-pocket. Save your receipts. You can reimburse yourself tax-free years—or decades—later. It effectively becomes a stealth Roth IRA with no income limits.

If you work in tech or finance, stock comp (RSUs, ESPP, Options) often represents 25% to 50% of your total annual compensation. This is where I see the most expensive mistakes.

We insure our cars and our lives, but we often ignore our ability to earn an income. Your employer likely offers group long-term disability, replacing 60% of your income up to a cap (often $10K-$15K per month).

The Gap: That $15k/month cap sounds fine until you realize it's pre-tax. If you're making $300k, a $15k/month pre-tax benefit is a massive pay cut that won't maintain your mortgage or lifestyle. If you're in a high-income profession, you likely need a personal, portable disability policy to supplement the group coverage. This isn't fear-mongering; it's math.

If you have young kids, the Dependent Care FSA is one of the few remaining tax breaks for high earners. For 2026, the contribution limit has finally increased to $7,500 per household (up from the $5,000 limit that stood unchanged since 1986).

At a 35% tax bracket, this is worth about $2,600 in tax savings. If you're paying for daycare in any major city, you'll hit that $7,500 limit before the end of the year. It's not a fortune, but it's finally a meaningful adjustment to a benefit that was stagnant for nearly four decades.

The gap between someone who optimizes their benefits and someone who doesn't isn't visible in year one. But over a career? Over 20-30 years of compounding tax savings and intentional decisions?

The person who navigated the True-Up, pivoted their HSA, and managed their equity intelligently will retire with somewhere between $500K and $1.5M more than the person who didn't. Same job, same salary, wildly different outcomes.

Your benefits package is not a formality. It’s a substantial piece of your net worth that requires active management. Treat it that way or plan to work an extra decade.

Your choice.