Top 10 Financial To Do’s During Open Enrollment Season.
With these challenging economic times, it more important than ever that you make smart money decisions with your benefits package. Here are 10 things to look at when your open enrollment period comes this fall. Don’t wait until the day before to check your options!!
- Compare Your Coverage Against Your Spouse’s/Partner’s Coverage – If you and your partner both have company benefits make sure to weigh the pros and cons of your health insurance and overall benefits package. Since premiums can change significantly in smaller and medium sized companies based upon last year’s health claim ratings, one company’s insurance programs can be cheaper than other even though it may have been more expensive than the year before. Be sure to check that you doctor takes the new health carrier if you decide to make a change.
- Compare Your Regular Medical Plans Against A Health Savings Account (Review Your Out Of Pocket Medical Expenses) – You should compare the total out of pocket costs you spent last year in medical expenses, and the cost of your overall medical expenses. An HSA plan will be significantly cheaper than your normal HMO, POS, or PPO type medical plan, and can potentially give you other tax advantages.
- Examine How Much To Put In Your Flexible Spending Account (FSA or MSA account) – If your company has a Flexible and/or Dependent Care Savings Account, this could help you reduce your overall tax liability. Be sure to examine your out of pocket expenses closely as these programs are not use or lose.
- Understand Your Life Insurance Needs – Your company may allow to purchase additional term insurance for you, your spouse, and your children through work. This is a great time of year to determine whether your overall financial situation has changed, and whether you need more or less life insurance rather than just signing up for the same amount you did the year before.
- Consider Buying Supplemental Disability Insurance – Most regular group long term disability plans cover 60% of your base salary only (not commissions, bonus, or stock options). Larger companies offer the ability to purchase supplemental long term disability insurance through work. This can be an important part of your overall financial plan as your income is really what drives reaching your financial goals.
- 401(k) or Roth 401(k) (or both?) – To Roth or not to Roth, that is the question. Many employers have not added the Roth 401(k) provision to their overall 401(k) plan. With many tax changes coming up in 2011, this is a great time to determine how much money to put away pre-tax and post-tax for your retirement.
- Examine Your Withholdings – Did you get a refund last year or did you owe money? Did you have a new child this year? Did you get married or divorced this year? Asking these questions will allow you to determine the right amount of withholdings from your paycheck so you don’t get too large a refund or owe too much money come tax time. Many people fill their withholding forms out once, and then never change them again.
- Review Your Beneficiaries – This is an important thing to do on a yearly basis. Purchases you make through work such as life insurance and your 401(k) plan allow for both a primary and a contingent beneficiary. If your family situation has changed at all, it will certainly merit making a review of your beneficiaries.
- Get Rid Of Accidental Death And Dismemberment Insurance – You need a certain amount of life insurance . . . period. You don’t need more insurance if you die accidentally. A sound financial plan should allow you to avoid these little extra insurance costs.
- Learn What Happens With Your Benefits If You Get Laid Off – With unemployment officially around 10%, be sure you understand what benefits are portable if you get laid off. Some programs may be able to extend after your job is terminated while other benefits may just go away. This is important to review whenever any job transition occurs as your financial situation or your health may have changed that could potentially put you in a precarious position should a lay off happen with your position.