Ahhh... fall is in the air. The temperatures have cooled down, the leaves are turning brilliant colors, the kids are back in school, and soon it will be open enrollment time for workplace health and retirement benefits. Do you know what your benefits package includes? When was the last time you checked it? If it's been a while, now is the time to start looking into it. Here are a few things to keep in mind when evaluating your benefits package for the coming year:
- Start early. Read those pamphlets that arrive in the mail explaining your benefit choices, and give yourself some time to weigh the options. Be alert to changes in policies, and do your homework. Talk to your HR department.
- Evaluate past choices. Did you pay for services you didn't really use? Try to estimate how much coverage you'll need for the coming year, and think about trimming down to the services you will be using most.
- Consider higher deductibles. If you're in good health, fairly young and aren't living paycheck to paycheck, think about switching your health coverage to a high-deductible policy to reduce premiums. Many companies are now starting to offer health savings accounts or HSAs, which combine relatively low premiums and high deductibles with an investment fund to pay for future health-related costs.
- Check other insurance options. This is a good time to decide on life and disability coverage, and many employers now offer long-term care protection. With advances in medical technology, we are all living longer - long term care has become an important part of retirement planning. The younger you start paying those premiums, the less it will cost each month. Disability insurance is also critical for generally healthy people since the chance of suffering a debilitating injury is sometimes much higher than the risk of death. A good rule of thumb is to insure 60% of your pay for disability.
- The online calculators found at PaycheckCity.com (www.PaycheckCity.com) let you examine different scenarios affecting take-home pay - from health plan options to saving more in workplace retirement accounts. Play around with your paycheck; it can help you decide what works best.
- Start saving on the side. Flexible-Spending Accounts offer a way to divert money from your paycheck to meet various unreimbursed health costs, without being taxed on the cash. FSAs are a way to pay for such expenses on a pre-tax basis.
- Step up retirement savings. Raise the amount of money you put into your 401k style retirement plans to take full advantage of employer matching funds. PaycheckCity.com calculators help you to understand how 401k changes can impact your net pay.
- Rebalance your portfolio. Look at your 401(k) assets at least once a year to ensure the investments you hold are still suitable. Things have changed a lot in the past year, so make sure you have the appropriate mix of investments. Don't stake more than 10 percent of your portfolio on any one company, especially if it's the same firm you depend on for a living (remember Enron!)