Amazon Open Enrollment: Making the Most of Your Amazon Employee Benefits

Amazon offers a comprehensive employee benefits package, covering everything from health care and financial wellness to family care. Open enrollment season—which typically takes place in October and November based on where you live—is the perfect time to review your benefits carefully and make informed choices that maximize their value for the year ahead.

With Amazon’s unique offerings like Restricted Stock Units (RSUs), a robust 401(k) plan, and flexible spending accounts, there are numerous ways to tailor your selections for the year ahead. Here’s a guide to understanding and making the most of your Amazon employee benefits during open enrollment.

Understanding Your Amazon Company Stock & Employee Retirement Benefits

One of the standout perks of working at Amazon is the opportunity to own a piece of the company through the Employee Restricted Stock Unit (RSU) program.

Amazon grants RSUs to employees based on their job level and tenure, allowing you to build wealth as Amazon’s stock value grows. These units vest over time, meaning you’ll gain full ownership of the stock after a certain period of employment.

In addition to RSUs, Amazon offers a 401(k) plan through Fidelity with company matching. For every $1 you contribute (up to 4% of your salary), Amazon will add $0.50, allowing you to benefit from free money toward your retirement. These matching contributions vest after you’ve completed three years of service.

Furthermore, you can choose from pre-tax, Roth, or traditional after-tax contributions, giving you flexibility based on your tax strategy. Keep in mind, the IRS contribution limit for 2024 is $23,000, with an additional $7,500 available if you are 50 or older (however, catch-up contributions aren’t matched). To take full advantage of the company match, ensure you’re contributing at least 4% of your salary.

Strategies for Maximizing Your Amazon Company Stock & Retirement Benefits

To make the most of your RSUs and 401(k), it’s important to align them with your broader financial goals.

First, make sure you contribute enough to your 401(k) to receive the full company match—it’s essentially a 50% return on your contributions up to the match threshold. Beyond that, consider your tax situation. For instance, contributing to a Roth 401(k) may be beneficial if you expect your tax rate to rise in the future, while traditional pre-tax contributions can reduce your taxable income today.

To maximize your Amazon RSUs, first consider how they fit into your overall financial picture. Since RSUs are taxed as income upon vesting, it might make sense to sell a portion of your vested shares each year to cover taxes and diversify your portfolio.

Holding too much company stock can expose you to risk if Amazon’s stock price fluctuates, so diversifying can help protect your financial security. You might also want to consult a financial professional to discuss tax-efficient strategies for managing your stock holdings, such as utilizing tax-loss harvesting or donating appreciated shares to offset gains.

Lastly, don’t forget about your Flexible Spending Accounts (FSAs). Healthcare FSAs allow you to set aside pre-tax dollars for eligible medical expenses, which can help reduce your overall taxable income. If you have dependents, you might consider using a Dependent Care FSA to cover childcare expenses while you work. Both options provide immediate tax savings that can add up over time.

Balancing Amazon Stock in Your Portfolio

While Amazon stock may seem like a great investment, holding too much of it can leave you vulnerable to concentration risk—the risk that comes from having too much of your wealth tied to a single company. Diversifying your portfolio across different types of assets can help manage risk and ensure your investments are aligned with your long-term financial goals.

If a significant portion of your wealth is tied up in Amazon stock, selling some of your vested RSUs each year may be a wise move. By selling gradually, you avoid timing the market and reduce the risk of selling at a low point. You can then reinvest the proceeds into other investments, like mutual funds or ETFs, to spread your risk and ensure you’re not overly reliant on the performance of one asset.

Additional Benefits Worth Considering

Amazon offers a wide range of employee benefits that can further support your financial and personal well-being.

For example, the company provides disability insurance at no cost, which covers up to 60% of your income if you’re unable to work due to illness or injury. Short-term disability even includes pregnancy-related coverage, offering 100% of your salary for up to 14 weeks.

If you have a family, Amazon’s child, elder, and pet care referral services can be invaluable. You can access qualified caregivers for your loved ones through services like Sittercity, helping you balance work and home life with ease. Moreover, Amazon offers generous adoption assistance, reimbursing up to $5,000 for single-child adoptions and up to $10,000 for sibling-group adoptions.

Amazon also offers six weeks of paid parental leave after the birth or adoption of a child, which employees can take in one block or split into two increments within the first year. Through the Leave Share Program, you can share any unused leave with your spouse or partner if they lack access to paid parental leave. Additionally, the Ramp Back Program allows birth parents and primary caregivers to ease back into work with a reduced schedule over eight weeks, with pay and RSU vesting adjusted accordingly.

Beyond family care, you can enroll in legal services through MetLife, which provides discounted rates on essential services like estate planning and real estate matters. These benefits can save you money and provide peace of mind for you and your family.

Navigating Your Amazon Employee Benefits with Confidence

Amazon’s benefits package is comprehensive, supporting various aspects of your life, from healthcare to financial wellness. As you prepare for open enrollment, take time to review each benefit and consider how it can best serve you and your family in the coming year. Making informed choices now will set you up for a successful and secure future.

If you’re looking for personalized guidance on how to fully take advantage of these benefits, Simplicity Wealth Management is here to assist. We’ve worked with many current and former Amazon employees, helping them navigate the complexities of their RSUs and Amazon employee benefits. Book your complimentary Simplicity Session today to learn more and begin your financial journey.

For more tips and strategies for maximizing your Amazon RSUs, download the free Tech Equity Blueprint.