Open Enrollment Checklist for High Earners: 2027 Edition

By Allen Buckley, CFP®, Founder & Managing Partner, Paragon Private Wealth Management

Open enrollment sets most of your workplace benefits for the coming year. For higher earners, a few of those choices carry real tax weight: HSA eligibility, the pre-tax and Roth split in your 401(k), whether catch-ups must be Roth, and deferred compensation deadlines. Here is the checklist we walk through with families. If your window has closed, it still works as a guide for next year.

Key takeaways

• 2027 HSA limits: $4,500 for self-only coverage and $9,000 for family coverage, plus $1,000 more if you are 55 or older.
• 2027 HDHP minimums: a deductible of at least $1,750 (self-only) or $3,500 (family), with out-of-pocket costs capped at $8,700 or $17,400.
• 401(k) limits: for 2026, $24,500, plus $8,000 at age 50 or older, or $11,250 at ages 60 through 63. The IRS has not yet announced 2027 figures.
• Roth catch-ups: if your prior-year Social Security wages from the employer sponsoring your plan were over $150,000 (the 2026 test, based on 2025 wages), your catch-up contributions must go in as Roth.
• Deferred compensation: elections are generally due by the end of the year before you earn the pay, and your plan may set an earlier date.
• FSAs: the 2026 health FSA limit is $3,400. The dependent care FSA limit rose to $7,500 starting in 2026.

1. Confirm you're eligible for an HSA before you pick a plan

To contribute to a health savings account (HSA), you have to be an eligible individual. Under IRS Publication 969, that means you're covered by a high deductible health plan (HDHP) on the first day of the month, you have no other health coverage except what the rules permit, you aren't enrolled in Medicare, and no one can claim you as a dependent.

The "other coverage" rule trips people up. Being covered by a health FSA or HRA that pays or reimburses your medical expenses generally disqualifies you. A limited-purpose FSA (dental and vision, for example) generally doesn't. If your spouse has a general-purpose health FSA, ask the plan or your tax professional whether it can reimburse your expenses.

For 2027, Rev. Proc. 2026-24 defines an HDHP as a plan with a deductible of at least $1,750 for self-only coverage or $3,500 for family coverage, and out-of-pocket costs (not counting premiums) of no more than $8,700 or $17,400. An HDHP can still cover preventive care before you meet the deductible.

The 2025 tax law also widened HSA eligibility. Starting in 2026, bronze and catastrophic plans are treated as HSA-compatible, and certain direct primary care arrangements are allowed. For 2027, those direct primary care fees can't exceed $150 a month ($300 if the arrangement covers more than one person). Telehealth before the deductible is now permanently allowed for plan years beginning in 2025 or later.

If Medicare is close, plan around it. Your HSA contribution limit drops to zero starting with the first month you're enrolled, and that includes months of retroactive coverage if your Medicare enrollment is backdated. Our post on 5 key dates before leaving work covers Medicare timing.

2. Treat the HSA as more than a spending account

For 2027 the HSA limits are $4,500 (self-only) and $9,000 (family). If you're 55 or older by the end of the year, you can add $1,000.

Unspent HSA money generally carries over from year to year. Withdrawals for qualified medical expenses are tax-free. After 65, withdrawals for other purposes are taxed as income but no longer face the 20% additional tax that applies before 65. Some Medicare premiums can be qualified expenses once you're 65, though Medigap premiums are not. That's why some families treat an HSA as part of their retirement plan, paying current medical bills from cash flow. Whether that fits depends on your cash flow and health costs.

3. Decide on pre-tax or Roth 401(k) contributions

For 2026, you can defer up to $24,500 into a 401(k), 403(b) or governmental 457 plan. If you're 50 or older, you can add $8,000, and if you're 60, 61, 62 or 63 during the year, the catch-up is $11,250 instead. The IRS had not announced 2027 limits when we wrote this; the 2026 limits came out on November 13, 2025. Check the 2027 numbers before you set your election.

Pre-tax contributions lower taxable income now; withdrawals are taxed later. Roth contributions go in after tax, and qualified withdrawals (generally after age 59½ and at least five years in the account) are tax-free. The 401(k) and 403(b) limit applies to you across all of your plans, not to each plan, though a governmental 457(b) plan has its own separate limit. You can split your deferrals between pre-tax and Roth. The choice turns on your tax rate today versus what you expect in retirement, which no one knows for certain.

4. Check whether the Roth catch-up rule applies to you

SECURE 2.0 added a rule for higher earners. If you're 50 or older and your Social Security wages (Box 3 of your W-2) from the employer that sponsors your plan were over the threshold in the prior year, your catch-up contributions must be Roth. For 2026, the test is 2025 wages over $150,000. For 2027, the test will use your 2026 wages, and the IRS has not yet announced the 2027 threshold.

A few details. The test is per employer. If your plan has no Roth option, you may not be able to make catch-up contributions at all. The final regulations generally apply starting in 2027, and plans can use a reasonable, good-faith reading of the law for 2026. Ask HR how your plan is handling it, and whether it will automatically treat your catch-ups as Roth. We cover this rule in more depth in our post on 2026 federal tax changes.

5. Mark the deferred compensation election deadline

For nonqualified deferred compensation plans, the timing rules come from IRC section 409A and its regulations.

• The general rule: you elect to defer pay for services in a year by the end of the year before. For calendar-year taxpayers, that's December 31. Your plan can set an earlier deadline.
• Newly eligible: in your first year of eligibility, you may have 30 days to elect, but only for pay earned after the election.
• Performance-based pay: if the pay qualifies under the regulations, the election can come as late as six months before the performance period ends.
• Changing it later: a later election to delay a payment generally can't take effect for 12 months and must push the payment back at least five years.

The election becomes irrevocable at the deadline. Before you sign, ask when and how the money will be paid, what happens if you leave, and how the plan is funded.

6. Review group life and disability coverage

Group-term life insurance is tax-free up to $50,000 of coverage. The cost of coverage above $50,000, figured from an IRS table, is added to your taxable wages (IRS Publication 15-B).

For disability coverage, if your employer pays the premium, or you pay it pre-tax and it isn't included in your income, benefits you receive are generally taxable. If you pay the premium with after-tax dollars, the benefits generally aren't taxable (IRS Publication 525). Some plans let you choose. Also ask whether the plan caps the monthly benefit and how much of your income it would replace.

7. Set your FSA elections

• Health FSA: for plan years beginning in 2026, the limit is $3,400, and plans that allow a carryover can let up to $680 roll into the next year. The IRS had not announced the 2027 figures when we wrote this (the 2026 figures came out on October 9, 2025), so check your plan's 2027 limit.
• Dependent care FSA: starting in 2026, you can exclude up to $7,500 a year ($3,750 if married filing separately), up from $5,000.

If you plan to contribute to an HSA, choose a limited-purpose health FSA if your employer offers one.

8. Coordinate with your spouse

If you're both HSA-eligible and either of you has family HDHP coverage, both are treated as having family coverage, and one family HSA limit is split equally between you unless you agree on a different division. Each spouse makes any $1,000 catch-up into their own HSA. Each of you has your own 401(k) limit, and the Roth catch-up test is applied to each of you separately, by employer. If both employers offer a dependent care FSA, ask your tax preparer how the household limit applies before you both elect the maximum.

Frequently asked questions

What are the 2027 HSA contribution limits? $4,500 for self-only coverage and $9,000 for family coverage, plus $1,000 if you are 55 or older, under IRS Rev. Proc. 2026-24.

Can I keep contributing to an HSA after I enroll in Medicare? No. Your HSA contribution limit is zero starting with the first month you're enrolled in Medicare, including any months of retroactive coverage.

Who has to make Roth catch-up contributions? Workers 50 and older whose prior-year Social Security wages from the employer sponsoring the plan exceeded the IRS threshold. For 2026, that's 2025 wages over $150,000.

When is the deadline to elect nonqualified deferred compensation? Generally by the end of the year before you do the work, so December 31 for most people. Your plan may set an earlier date, and special rules apply to new participants and performance-based pay.

What is the dependent care FSA limit for 2026? $7,500 a year ($3,750 if married filing separately), up from $5,000.

Talk it through with Allen

Benefit elections touch your taxes, savings and cash flow at once. Paragon Private Wealth Management works alongside Paragon Tax, so we can look at your elections and your tax picture together. If you'd like a second set of eyes on your choices this year, contact Allen. We work with families across the country from our offices in Franklin, Tennessee and Modesto, California. Our year-end tax planning checklist pairs well with this one.

Paragon Private Wealth Management is a financial services group offering investment advisory services through Savvy Advisors, Inc. ("Savvy"). Savvy is an investment advisor registered with the Securities and Exchange Commission ("SEC"). Paragon Private Wealth Management is not a separately registered investment advisor.