Hey Reader,

Every year your employer sends you an email, a portal link, or a paper packet with a deadline attached to it.

Most W-2 employees spend less than 30 minutes on it. They click through the same health plan they had last year, leave everything else untouched, and move on with their day.

That 30 minutes — or the lack of real attention during it — costs the average W-2 employee between $4,000 and $8,000 every single year in unclaimed benefits, missed pre-tax savings, and avoidable taxes.

Here is exactly what most people miss.

The Employer Match Nobody Fully Captures

The 401k employer match is the only guaranteed 100 percent return on investment that exists anywhere in the financial world. If your employer matches 50 cents on every dollar up to 6 percent of your salary and you earn $80,000 — not contributing at least 6 percent means leaving $2,400 in free money on the table every year.

That $2,400 per year invested at 7 percent average annual return over 25 years becomes $160,929.

Gone. Because nobody explained during orientation that the match does not accumulate retroactively.

The action: Log into your 401k portal right now and confirm you are contributing at least enough to capture the full employer match. If you are not — fix it before your next paycheck.

The HSA Enrollment Decision Most People Get Wrong

During open enrollment millions of W-2 employees choose between a traditional health plan and a High Deductible Health Plan without understanding the financial implications of that choice.

The HDHP paired with a Health Savings Account is not just a health insurance decision. It is a tax decision. A retirement decision. And for many W-2 employees in good health it is the highest-return financial move available to them during open enrollment.

The HSA triple tax advantage — pre-tax contributions, tax-free growth, tax-free withdrawal for medical expenses — makes it the most powerful savings account in the US tax code. And it is only available to employees enrolled in a qualifying HDHP.

The action: During your next open enrollment compare your total out-of-pocket costs under both plans including premiums, deductibles, and expected medical expenses. For many healthy W-2 employees the HDHP plus HSA combination saves more in taxes than the traditional plan saves in premium costs.

The Dependent Care FSA Most Parents Never Enroll In

If you have children in daycare, after-school programs, or summer day camp — your employer almost certainly offers a Dependent Care Flexible Spending Account that allows you to set aside up to $5,000 per household in pre-tax dollars specifically for those expenses.

At the 22 percent federal bracket that is $1,100 in immediate federal tax savings. Add the FICA savings on top and the total benefit reaches $1,482 per year.

It requires one enrollment decision during open enrollment. Most parents never make it — not because they cannot afford to, but because nobody explained what it was.

The action: Check your benefits portal for the Dependent Care FSA option. If your employer offers it and you have qualifying childcare expenses — enroll at the maximum $5,000 for the year.

The ESPP Most Employees Walk Past

If your employer is a publicly traded company and offers an Employee Stock Purchase Plan — you have access to one of the only guaranteed double-digit returns available to any investor.

A standard ESPP allows you to purchase company stock at a 15 percent discount to the market price. That discount represents a guaranteed 17.6 percent return at the moment of purchase before the stock moves a single dollar in either direction.

Most employees either do not know the ESPP exists or assume it is complicated and skip it during enrollment.

The action: Check whether your employer offers an ESPP. If yes and enrollment is open — sign up at whatever contribution level your budget allows. Even a 5 percent contribution captures a meaningful guaranteed return.

The Pre-Tax Commuter Benefit Sitting Unclaimed

If you commute to work using public transit or pay for parking near your workplace — your employer likely offers a pre-tax commuter benefit under IRC Section 132 that allows you to cover up to $325 per month in transit costs and $325 per month in qualified parking with pre-tax dollars.

That is up to $7,800 per year in commuting expenses paid before federal income tax and FICA are calculated.

For a W-2 employee in the 22 percent bracket commuting in a major city the annual tax savings on the full benefit reaches $1,700 or more. For an expense they were already paying regardless.

The action: Search your benefits portal for commuter benefits or transit benefits. If your employer offers it — enroll today. It takes five minutes and the savings are permanent.

The Benefits Audit You Should Run Right Now

Open enrollment is the highest-leverage financial event in a W-2 employee's calendar year. Not tax season. Not a market correction. Open enrollment — because the decisions made in that 30-minute window compound silently for the next 12 months.

Here is a simple audit to run before your next enrollment window closes:

Am I capturing 100 percent of my employer 401k match?
Am I enrolled in an HSA-eligible health plan and maxing my HSA?
Am I enrolled in the Dependent Care FSA if I have qualifying childcare expenses?
Am I enrolled in the ESPP if my employer offers one?
Am I using pre-tax commuter benefits for transit and parking?
Am I paying my disability insurance premium with after-tax dollars for tax-free benefits?
Have I asked HR about tuition assistance and student loan repayment matching?

A yes on every line means you are capturing your full compensation — not just your salary.

Most W-2 employees answer no to at least three of those questions.

Every no is money your employer was already willing to give you that you never claimed.

Talk soon,

Grant
The Compound View