With open enrollment, typically people focus on those big benefits like your 401k and health insurance but there are so many other components to maximizing your benefits at work.
Recenty I was invited to join the #ReutersBenefits chat to discuss how families can naviagate through open enrollement.
It was a lively discussion and you can see everyone's take here, but I wanted to share my thoughts and longer answers below.
What are the most important items for families to consider as they approach open enrollment season in the era of COVID-19?
Healthcare can take a huge bite out of a family budget, even if everyone is relatively healthy.
Another key factor to consider is reviewing tax-advantaged benefits you can use (like HSA or Dependent Care FSA). Those can be huge wins for your family
Please explain the key factors employees should think about when selecting healthcare coverage for the coming year.
One must-do I suggest is reviewing what you’ve spent the last couple of years on health/medical expenses.
The goal is to find an affordable plan that covers what you need so having the numbers in front of you can help you weigh your options.
When we ran the numbers, we saw that our
What are the biggest mistakes families make during open enrollment season?
By far, the biggest mistakes I’ve seen are:
- 1) simply keeping the same plan because it’s easier/more familiar or
- 2) selecting the cheapest option (instead of examining the value).
You could either be leaving money on the table or worse, not getting the coverage you need.
What tips do you have for selecting pre-tax benefit options, such as flexible savings accounts, health savings accounts, and dependent care accounts?
I know time can be a factor, so I’d suggest using a money management app to pull the numbers.
You can then easily see how much you’re actually spending. We did that when we had the FSA and it worked well.
How should workers approach disability insurance in a pandemic? How much coverage do employees need?
I know it's an afterthought when you're currently healthy, but things happen.
Disability insurance has been a lifeline for one of my friends.
If you'd like to learn more about how it works, please check out this discussion I had with certified financial planner Matt Miner.
He breaks down what you need to know and how you can protect yourself and your family.
Does it make better financial sense to buy life insurance through an employer or to shop around?
I’d suggest looking at getting term policies outside of work. It can be an affordable way to protect yourself whether you stay at your particular job or not. 2020 has been a reminder that jobs are not guaranteed.
Given the recent volatility in the markets, how should workers approach retirement benefits now?
Reviewing your portfolio to make sure it’s still aligned with your investment plan and timetable for retirement makes a lot of sense right now.
If you have plenty of time before retirement, keep investing for the long term.
Sign up for weekly newsletter full of tips, stories, and more to help your family become financially free
Get the best of Simplify & Enjoy in your inbox