October is open enrollment for most employee benefit plan for employers. Here are some things to think about as you choose your options:
• Health insurance: Does your plan offer a High Deductible with HSA option? These can be a great deal if you are generally healthy and don’t expect to need surgery or high-ticket testing in 2018. The premiums will be lower and you can deposit up to $6,920 into the Health Savings Account (family) for 2018. (plus $1,000 for those over 55). This gives you an adjustment against income on your tax return and you can take withdrawals from the account to pay for your medical and dental expenses. For more information on the tax benefits of these accounts see IRS Publication 969.
o Insurance for your children under age 26 – run the numbers to see if your plan may be cheaper for your adult child than what they can get on their own. ACA increased the age for adult children to remain on their parents’ policies. They can pay you monthly for the cost, and they should begin to build that into their budgets, but save money if you can save money.
• Life insurance: Do you and your spouse have enough life insurance to pay off debt, fund your kids’ education, and provide for your spouse until retirement? Check your existing policies and see if you might need to add some additional insurance. It is usually pretty reasonably priced through the group plan.
• Disability: Do you have the maximum amount of disability insurance?
• 401k plan: Are you at least contributing enough to get the employer match? Are you maximizing your contributions? If not, try to do a 1% increase per year until you are getting the full $18,500/year saved plus the catch-up of $6,000 for those over 55.
• Long-term care: Is this an option in your benefit plan? If so, take a close look at it and see if you can participate. If you are in your 50’s, take a close look at the plan and see if it is something you can afford. Traditional policies can be very expensive so see if the group insurance might meet a need.
This year take a close look at your options rather than just doing “same as last year.” You may find that you can save some money.
As a part of your evaluation, pull out the life insurance policies and note the dates so you are clear on whether you are getting close to the end of the term. We all thought we’d be rich by this point but maybe we still really need that insurance. Be sure you know what you need and for how long so you can take action if needed.
To your financial success!