Maximizing Your Employer Benefits in 2025

Open enrollment season is here, which means it is time to take a close look at your employer-provided benefits. These choices play a big role in your overall financial plan and can account for a substantial portion of your total compensation. Rather than rushing through the paperwork, take the time to make thoughtful decisions that ensure your benefits align with your financial goals.

Here is what to keep in mind for 2025…

Retirement Plans

Retirement savings through your employer is one of the most impactful long-term benefits available.

• Employer Match and Vesting: Always contribute at least enough to receive your full employer match – it is essentially free money! Review your plan’s vesting schedule to understand when you truly “own” your employer contributions and what makes the most sense relative to the amount of time you expect to be at your employer.

• Contribution Limits: In 2025, you can contribute up to $23,500 as an employee to your 401(k), 403(b), or 457 plan.

• Catch-Up Contributions: If you are age 50-59 or 64+, you can contribute an extra $7,500 on top of the regular limits. Starting in 2025, individuals ages 60-63 are eligible for an additional catch-up contribution of up to $11,250 (indexed for inflation), if your plan allows it. For participants in 457 plans, there is also a special “3-year catch-up” provision that may enable you to double the annual limit you can contribute in the three years before reaching your plan’s normal retirement age.

• Pre-Tax vs. Roth: Decide whether contributions should reduce taxes now (pre-tax) or provide tax-free withdrawals later (Roth), considering your tax situation relative to your goals.

• Investment Options: Review your plan’s investment menu. Make sure your asset allocation aligns with your risk tolerance and goals, and pay close attention to fees and expense ratios.

• In-Plan Roth Conversions and Mega Backdoor Roths: Some employers allow advanced strategies to expand your tax-free retirement savings.

• Rollovers: If you want to roll in an old employer-sponsored retirement plan or IRA to your current plan, review the Summary Plan Description to verify if your plan allows it. While consolidating old retirement accounts into your current plan offers simplicity, be sure to compare the fees and investment options with other outside accounts available to you.

  
  

Health, Vision, and Dental Insurance Options

For many employees, health coverage is the most significant benefit. When reviewing your employer’s offerings, weigh your options carefully.

• HMO vs. PPO: HMOs typically come with lower premiums but require you to stay within a narrow network and often need referrals to see specialists. PPOs cost more but provide more flexibility and broader provider networks.

• Choosing the Best Plan:

  • Cost of Care: Weigh premiums (deducted from your paycheck) against deductibles and copays.

  • Usage: Estimate your expected healthcare needs for the coming year.

  • Risk Tolerance: Consider the plan’s out-of-pocket maximum to understand your worst-case scenario.

  • Network: Make sure your preferred doctors, specialists, and pharmacies are in-network.

• Family Coverage: If you are married or have dependents, compare the cost and coverage of adding them to your employer’s plan. Factor in what your employer contributes and how the benefits compare to other coverage they may already have.

• Dental and Vision: While sometimes overlooked, these plans can reduce costs for preventive care, cleanings, eye exams, glasses, and contacts.

  
  

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)

These tax-advantaged accounts can provide powerful savings opportunities.

• Health Savings Account (HSA): If you are covered by a high-deductible health plan (HDHP), an HSA can be one of the most powerful tools available. In 2025, you can contribute up to $4,300 as an individual or $8,550 for a family, with an additional $1,000 catch-up contribution if you are age 55 or older. HSAs come with a triple tax advantage: contributions are tax-deductible, funds grow tax-free, and withdrawals for qualified medical expenses are tax-free. Unlike FSAs, unused funds roll over from year to year, and you can even invest them for long-term goals such as retirement. You can learn more about HSAs in our blog post: Health Savings Accounts: Everything You Need to Know to Make the Most of Your HSA.

• Flexible Spending Account (FSA): FSAs, by contrast, have a “use-it-or-lose-it” rule. The 2025 contribution limit is $3,200, and while some employers allow a small rollover or grace period, it is best to plan carefully so you do not forfeit unused dollars.

Major Differences Between HSAs and FSAs

• Dependent Care FSA: Families may also benefit from a Dependent Care FSA, which allows up to $5,000 (if you file your taxes as single, head of household, or married filing jointly) or $2,500 (if you are married and file a separate tax return) in pre-tax contributions to cover eligible childcare or dependent care expenses, helping working families save meaningfully on annual costs.

Life and Disability Insurance

Protecting your income and your family’s financial security is just as important as growing wealth.

• Life Insurance: Employers typically provide group life insurance coverage of one to two times your salary, or a flat amount like $50,000 or $100,000. Some companies even allow you to purchase additional coverage. While this supplemental coverage can be convenient, especially if you have health issues that might make private insurance expensive, it may not transfer if you leave your job. For long-term protection, it is often worth comparing the cost and flexibility of an individual term life insurance policy.

• Disability Insurance: Disability insurance is just as important, if not more so, because your income is often one of your largest financial assets. Long-term disability coverage is especially critical for high earners. Be sure to review your plan’s definition of disability, as well as the elimination (waiting) period before benefits begin. If your employer pays the premium, any benefits you receive will be taxable. In contrast, coverage you pay for could be tax-free, taxable, or a combination of both, depending on how you paid your premiums (pre-tax or after tax). It is also wise to coordinate your coverage with your emergency fund so you can cover expenses during the waiting period. Also, similar to group life insurance, your group disability policy may not transfer if your health changes in the future and/or you leave your job. Consequently, you may be subject to the risk of re-insurability.

Other Benefits

Beyond the core benefits, employers are increasingly offering valuable perks. Be sure to review and use what is available:

• Equity Compensation: Stock options (ISOs, NQSOs) and restricted stock units (RSUs) can meaningfully boost your total compensation, but they come with complicated vesting schedules and tax implications.

• Education and Career Support: Tuition reimbursement, professional development stipends, or student loan repayment assistance.

• Wellness and Lifestyle Benefits: Gym memberships, fitness stipends, mental health counseling, fertility support, and paid parental leave.

• Legal, Travel, or Insurance Perks: These can save you money compared to paying out of pocket.

The Bottom Line

Employer benefits are more than just add-ons to your paycheck – they are central to your financial plan. From health insurance and HSAs to retirement savings and life insurance, making thoughtful choices during open enrollment can help protect your family, reduce taxes, and set you up for long-term success.

If you are unsure how to prioritize your options, consider working with a financial advisor to tailor your benefits selections to your unique situation. To learn more about how Holzberg Wealth Management can help you achieve your financial goals, check us out! You can schedule a complimentary, no-obligation call with us here.

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About the Author

Holzberg Wealth Management is a family-owned and operated financial planning and investment management firm based in Marin County, CA. As your financial advisors, we serve you as a fiduciary and are fee-only, so we never receive commissions of any kind. We help individuals and families like you in the greater San Francisco Bay Area and nationwide with the financial decision-making process to organize, grow, and protect your assets.

** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions.