Open Enrollment: Don't Lose Free Money This Year
Don't leave money on the table this open enrollment season.
Open enrollment is often a stressful time, and many of us tend to put off decisions until the last minute, usually defaulting to the same benefits as the previous year. But this can mean missing out on thousands of dollars in potential savings. Let’s dive into some key areas to focus on.
Health Insurance Choices
Choosing the right health insurance plan is crucial. Generally, there are three types:
PPO: Offers flexibility in choosing healthcare providers without needing referrals.
HMO: Requires you to use a network of doctors and typically covers more than a high deductible plan.
High Deductible Plan: Best for healthy individuals or families looking to save on monthly premiums, but it carries more risk for unexpected medical expenses.
If you have specific medical needs, consider opting for the PPO. A family with children might find the HMO more suitable, while singles or couples just starting out may prefer the high deductible plan for its cost-effectiveness.
Health Savings Accounts vs. Flexible Spending Accounts
If you choose a high deductible plan, you’ll have the opportunity to open a Health Savings Account (HSA). HSAs are preferable because:
They allow for investments and grow tax-free.
You receive a tax deduction when contributing.
Withdrawals for qualified medical expenses are tax-free.
In contrast, a Flexible Spending Account (FSA) is a use-it-or-lose-it benefit, meaning any unspent funds at year-end disappear. Evaluate which option suits your needs better.
Retirement Planning: 401(k) Options
When it comes to retirement plans, many overlook the ability to split contributions between traditional and Roth 401(k) accounts. You can choose to invest a percentage into both, providing immediate tax benefits with the traditional option while allowing for tax-free growth with the Roth.
Make sure to contribute enough to take full advantage of any employer match, this is free money you don’t want to miss out on!
Life and Disability Insurance
Life insurance typically operates on a group plan basis, which may not always be beneficial if you're healthy. Consider applying for individual plans instead. Disability insurance, on the other hand, is essential; statistics show that you are five times more likely to experience a long-term disability than to pass away. Prioritize maximizing your disability coverage.
Additional Benefits
Don’t forget about other potential benefits, such as dependent care options if you have children. These can significantly impact your overall financial health.
As you navigate this open enrollment period, take the time to review your options carefully. If you're unsure, reach out for help to understand your benefits better.
Thank you for tuning in, and remember to be well and do good!
Brendan is the Managing Director for Waymark Wealth Management. He has extensive experience in comprehensive wealth management. His focus includes retirement planning, behavioral finance, investment portfolio construction, education funding, insurance & risk management, taxes, charitable giving, and estate planning. Brendan has an ability to take clients' complex visions and distill them down to simple action plans, helping them move from where they are today to where they want to be tomorrow.
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The opinions voiced in this video are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
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