Open enrollment season is your once-a-year opportunity to review and adjust your workplace 401(k) plan. Most employers run open enrollment in the fall, with changes taking effect January 1. Missing this window often means waiting another full year to optimize your retirement savings strategy.

According to the IRS, 401(k) contribution limits and tax rules update annually, making year-end the ideal moment to align your plan with current regulations and your financial goals. Here are the six critical settings to review before the deadline.

1. Contribution Rate: Maximize Your Deferrals

Review your current contribution percentage and compare it against the annual limit. For 2026, the IRS allows employees to contribute up to $23,000 in salary deferrals (this limit adjusts annually for inflation). If you received a raise during the year but kept the same percentage, you may have room to increase contributions without affecting your take-home pay as much as you expect.

Run the numbers: if you are contributing 6% on a $75,000 salary, that is $4,500 annually. Bumping to 10% would add $3,000 to your retirement account and reduce your taxable income by the same amount (for traditional pre-tax contributions). As foundational texts such as Principles of Finance explain, consistent increases in contribution rates compound significantly over decades.

If maxing out feels unrealistic, aim for at least the percentage that captures your full employer match (see item 2). Every dollar below that threshold is leaving free money on the table.

2. Employer Match: Verify You Are Getting the Full Amount

Most plans offer a match formula, such as 100% of the first 3% of salary plus 50% of the next 2%. This means you need to contribute at least 5% to capture the maximum match. The Department of Labor notes that employer contributions are effectively guaranteed returns on your investment, often 50% to 100% immediately.

Log into your plan portal and confirm your current contribution rate meets the match threshold. If your employer changed the match formula during the year (some companies adjust it during annual reviews), you may need to update your percentage accordingly.

3. Roth vs. Traditional Contributions: Optimize Your Tax Strategy

Many plans now offer both traditional (pre-tax) and Roth (after-tax) 401(k) options. Your choice affects when you pay taxes: traditional contributions reduce your taxable income now, while Roth contributions grow tax-free and come out tax-free in retirement.

If you expect to be in a higher tax bracket in retirement, or if you are early in your career with a lower current income, Roth contributions can make sense. Conversely, if you are in your peak earning years and expect lower income in retirement, traditional pre-tax contributions offer immediate tax relief. You can split contributions between both types; many people do 75% traditional and 25% Roth, or adjust the mix based on their specific tax situation (consult a tax professional for personalized advice).

Read also: 7 Ways to Maximize Your 401(k) Employer Match

4. Investment Allocation: Rebalance and Review Fees

Your default investment elections may no longer match your risk tolerance or timeline. If you chose investments five years ago and have not touched them, your portfolio has likely drifted. Stock-heavy allocations grow faster in bull markets, shifting your balance away from bonds or stable-value funds.

Review your current allocation and compare it to your target. Target-date funds automatically rebalance and adjust risk as you approach retirement, making them a hands-off option for many savers. If you selected individual funds, check the expense ratios. According to Investopedia, even a 0.5% difference in annual fees compounds to tens of thousands of dollars over a 30-year career. Many plans now offer index funds with expense ratios below 0.10%, significantly cheaper than actively managed options.

5. Catch-Up Contributions: Use Them If You Are 50 or Older

If you turn 50 or older by December 31, you qualify for catch-up contributions. For 2026, this allows an additional $7,500 on top of the standard $23,000 limit, bringing your total potential contribution to $30,500. This provision exists precisely to help workers accelerate savings in the final stretch before retirement.

If you are already maxing out the standard limit and have the cash flow, adding catch-up contributions meaningfully boosts your nest egg. Even contributing half the catch-up amount ($3,750) adds substantial compounding power over 10 to 15 years.

6. Beneficiary Designations: Keep Them Current

Life changes such as marriage, divorce, births, or deaths require updating your beneficiary forms. Your 401(k) beneficiary designation overrides your will, meaning the person listed on the form receives the account regardless of what your estate plan says. If you named an ex-spouse years ago and never updated the form, they may still be entitled to the account under federal law (ERISA rules vary by situation).

Review your primary and contingent beneficiaries. If your primary beneficiary has passed away or your family structure has changed, update the forms during open enrollment. Most plan portals allow electronic updates; confirm the changes save correctly and print a confirmation for your records.

Take Action Before the Deadline

Open enrollment deadlines vary by employer but typically fall in mid to late November for a January 1 effective date. Mark your calendar, log into your plan portal, and review each of these six areas. Small adjustments now compound into significant retirement security over time.

This information is educational and not personalized financial or tax advice. Consult a certified financial planner or tax professional to discuss your individual situation, especially regarding Roth vs. traditional elections and how contribution changes affect your overall tax strategy. Verify your plan’s specific rules and deadlines with your HR department or plan administrator.