Will you begin your own adventure of filling out your company benefits ahead of time? Or will you complete the package at 10 p.m. the night before it is due?
Do you want to Be a Financial Olympian about your company provided health benefits?
Here are my top 5 recommendations for you to Be a Financial Olympian with your Open Enrollment Benefits.
1: 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. Remember, that FSA accounts will have a cap of $2,550 and are use or lose accounts. This means, you need to think carefully about how much to deploy to these accounts.
2: Understand Your Life Insurance Needs
Your Company may allow you 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. Do you need more or less life insurance or can you sign up for the same amount you did last year? One big question in this category is whether or not your life insurance plan will have guaranteed insurability or if you will have to take a physical.
3: 401(k) or Roth 401(k) (or both?)
To Roth or not to Roth, that is the question. Many employers have now have added the Roth 401(k) provision to their overall 401(k) plan. With tax brackets having changed in 2015, this is a great time to determine how much money to put away pre-tax and post-tax for your retirement for 2016.
4: 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.
5: 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.
BONUS: Get Rid Of Accidental Death And Dismemberment Insurance
This is called the “Las Vegas Coverage.” Why? The odds of it happening are slim. You need a certain amount of life insurance, period. You don’t need more insurance if you die accidentally. Cancel it and add some additional life insurance
Not sure which coverage’s to pick? Give us a call and together we can discuss your choices for 2016.
Just please DO NOT JUST DO WHAT YOU DID LAST YEAR!
Be a Financial Olympian
Michael
