Benefit plan open enrollment is under way at many employers, the midterm elections are behind us, and the window for 2026 tax moves closes on December 31. Here are three topics worth a closer look this month.
In this issue
- Open enrollment: benefits are about 30% of your pay, so don't take the defaults
- The AI trade and the midterm elections: what changed, and what history says
- Year-end tax moves: harvest losses, check your retirement accounts, and look closely before a Roth conversion
1. Open enrollment: benefits are about 30% of your pay, so don't take the defaults
The Bureau of Labor Statistics reports that benefits made up 31.6% of what employers spent on compensation for civilian workers in June 2026: $15.61 of $49.46 per hour worked. The share was 30.0% in private industry and 38.8% in state and local government [1]. That figure includes costs you do not elect, such as the employer's share of Social Security and Medicare and paid leave, but it shows how much of your pay package is settled in a short enrollment window.
Many benefit portals pre-fill last year's choices, and it is tempting to click "keep current elections." We would encourage you not to. Many elections are locked in for the plan year, so set aside some time with last year's elections and a recent pay stub in front of you.
There are many elections on the form, but these are the three I would look at first. For your health plan and HSA, price a normal year and a bad year rather than comparing premiums, and if you choose a high-deductible plan, treat the HSA as a long-term account [2]. For your health FSA and dependent care FSA, fund only what you expect to spend, because unused money is generally forfeited [2]. For your employee stock purchase plan (ESPP), the discount can be attractive, but decide in advance when you will sell so your paycheck and your savings do not all depend on one employer [3].
2. The AI trade and the midterm elections: what changed, and what history says
AI-related stocks have had a rough stretch, and the worry is that spending is running ahead of the cash it produces [4]. We do not think that is a reason to panic, and we do not think it is a reason to look away either. It is a good moment to check how much of your portfolio quietly depends on the same handful of AI-related names, through index funds, target-date funds, and any company stock you hold.
The midterms handed Democrats control of both chambers of Congress, according to current projections, though a few races are still uncalled [4][5]. History is mildly reassuring: stocks have tended to do better in the twelve months after a midterm than in the twelve months before one [6], and CNBC noted that the S&P 500 was higher one year after each midterm election going back to the early 1980s [7]. But the sample is small, and the U.S. Bank research did not find a consistent midterm effect [6], so we would not make portfolio decisions on it. Our view is that an election result is not a reason to change a long-term plan. A better use of this moment is a conversation about how much AI exposure you are really carrying and whether your plan can handle a rough year. If you would like to have that conversation, let's schedule a call.
3. Year-end tax moves: harvest losses, check your retirement accounts, and look closely before a Roth conversion
A few things we would like to sort out with you before December 31.
Harvest losses, carefully. If you hold something at a loss in a taxable account, selling it can offset gains and, within limits, other income [8]. The catch is the wash-sale rule: buying the same or a substantially identical investment within 30 days before or after the sale can disallow the loss, and automatic dividend reinvestment can trigger it [9].
Make use of your retirement accounts. Check how much of what your 401(k) and IRA allow you are using this year. IRA contributions for 2026 can generally be made until the April 2027 filing deadline [10], while payroll deferrals are set through your employer. The IRS announced this year's limits in November 2025 [11].
Think carefully before a Roth conversion. A conversion can make sense for some households, but it generally cannot be undone, and details such as the five-year clocks, the once-per-year rollover rule, and Medicare premium surcharges can catch careful people off guard. We would rather run the numbers with you before December 31 than sort out surprises afterward.
If any of these topics are on your mind, I'm happy to help you think through your priorities and next steps. Reply to this email and we will find a time for a call.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All investing involves risk, including the possible loss of principal. No strategy, including diversification or tax-loss harvesting, assures a profit or protects against loss. All performance referenced is historical and is no guarantee of future results. Past performance, including historical market behavior around elections, is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. Tax-loss harvesting is subject to the wash sale rule and is not suitable for every investor. Roth conversions increase taxable income in the year of conversion and are not suitable for everyone.
Benefit plan features, limits, and elections depend on your employer's plan documents. Investing in a single company's stock, including through an employee stock purchase plan, involves risk, including loss of principal.
Economic forecasts set forth may not develop as predicted and are subject to change. Information from third-party sources is believed to be reliable but has not been independently verified by Allset Wealth; views expressed are those of the sources cited.
The Standard & Poor's 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Traditional IRA/401k account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
Sincerely,
Danni Shen, CFA® | Co-founder / CIO, Allset Wealth | Financial Planner
https://www.allsetwealth.com/
909 Rose Ave. Suite 650 North Bethesda, MD. 20852
Work: (301) 547-4054 | Fax: (877) 840-2379
Cell: (240) 478-8077 (Voice Only)
Sources
- [1] Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026, released September 9, 2026 (https://www.bls.gov/news.release/archives/ecec_09092026.htm)
- [2] IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans (https://www.irs.gov/publications/p969)
- [3] Internal Revenue Code Section 423, employee stock purchase plans (https://www.law.cornell.edu/uscode/text/26/423)
- [4] Reuters via Yahoo Finance, "Market analysts react to Democratic sweep in US midterms," November 4, 2026 (https://finance.yahoo.com/markets/stocks/articles/analysts-react-us-midterm-election-025738421.html)
- [5] CBS News, Election Day 2026 live updates, updated November 4, 2026 (https://www.cbsnews.com/live-updates/election-day-2026-midterms/)
- [6] U.S. Bank Asset Management Group, "Stock market performance after midterm elections" (https://www.usbank.com/investing/financial-perspectives/market-news/stock-market-performance-after-midterm-elections.html)
- [7] CNBC, "Midterm elections could jolt stocks as Democrats look poised to sweep Congress," November 3, 2026 (https://www.cnbc.com/2026/11/03/midterm-election-stock-market.html)
- [8] IRS Topic 409, Capital gains and losses (https://www.irs.gov/taxtopics/tc409)
- [9] IRS Publication 550, wash sales (https://www.irs.gov/publications/p550)
- [10] IRS, Retirement topics: IRA contribution limits (https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits)
- [11] IRS news release IR-2025-111, 2026 retirement plan limits, November 2025 (https://content.govdelivery.com/accounts/USIRS/bulletins/3fb3d4b)
