5 Things to Check on During Open Enrollment

Open Enrollment season is here! The time of the year those of us working for companies get to select our benefits for next year. And it’s easy to give in to status quo bias (a fancy way of saying I’ll just do what I did last year) or select the options that take the least amount from your paycheck (guilty as charged!).

But making sure you have the appropriate level of insurance and maximizing all that your company offers is crucially important the financial wellbeing of you & your family.

So here are 5 things to check on this open enrollment season:

1.       Check you are optimizing tax advantaged accounts

Whether it’s the Health Savings Account (HSA) or Flexible Spending Accounts (FSA) for health & dependent care, check to see if you are eligible (HSAs are only available with a high deductible health insurance plan), you’re contributing the appropriate amount based on your expenses, and you’re using the funds that you are putting away (FSAs are use it or lose it by yearend).

Learn more about the difference between HSAs & FSAs here: HSA vs FSA: Which is right for you? | Fidelity

PS Did you know that HSAs are also a way to save for retirement? You are able to contribute with pre-tax dollars, the funds grow tax-deferred, and if used for qualified health expenses, are withdrawn tax-free! You can also invest the funds in your HSA to help keep up with the increasing cost of medical expenses as we get older.

2.       Check you have sufficient insurance coverage

If your employer offers life insurance, check out the level of coverage. Many employers offer a year’s salary or less & that may not be sufficient life insurance for you & your family. You may be able to add coverage, supplemental life insurance, through your benefits. Something else to consider – life insurance through your company ends when you are no longer working there. It may also be prudent to get life insurance outside of your employer.

Check out this article to learn more about how much life insurance you may need: How Much Life Insurance Do I Need? - NerdWallet

Then there’s disability insurance, something that often gets overlooked. But I encourage you not to scroll right past it! Learn more about disability insurance here: It’s Open Enrollment Season: Don’t Overlook Disability Insurance (transamerica.com)

3.       Check your beneficiaries are up to date

Our lives & the people in them are ever-changing. So while you’re going through open enrollment, check to see if your beneficiaries are up to date. You can tag beneficiaries on your retirement plans and insurance policies. You can also add them to your investment accounts through a Transfer on Death designation.

4.       Check out what other benefits are being offered

Your company may have transit benefits, legal assistance plans, and connections with providers that can help with backup childcare, student loans, tuition assistance, eldercare, financial wellness, and so much more!

5.       Check on your retirement plan

Since you’re already poking around your benefits site, might as well check in on your 401k plan! Some things to consider are…

-          How are my investments doing?

-          Do I own the right investments for me?

-          Am I contributing enough? Can I contribute more?

-          Am I getting my company’s full match (if one is offered)?

The 401k contribution limit for 2023 is $22,500 ($30,000 if you’re over age 50) so there is still time to max it out if you haven’t yet done so.

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