| RESOURCES
7 Tips To Share With Employees: Getting Value From Benefit Plans This Enrollment Season
1. Give yourself enough time. Many people spend more time shopping for a new refrigerator than they do selecting their benefits. Given the impact benefits can have on overall quality of life - both now and in retirement - you owe it to yourself to seriously evaluate all of your benefit options.
2. Conduct short- and long-term assessments. Take a careful look at your benefits selections from last year, and estimate your needs and costs for the year ahead. It's important to first understand the entire spectrum of benefits options your employer offers - including health care, retirement and extra benefits options like vacation time - evaluate the amount of money you have to invest, and then make the right decisions for your specific health and financial needs.
3. Pay attention to new offerings. Chances are good that the benefits options you selected in the past may not look the same this year. Many companies are offering new features, such as covering 100 percent of preventive care and not subjecting preventive care to a deductible. In addition, new consumer-driven health plans allow you to choose how you spend your health care dollars, depending on your risk tolerance and personal needs. While designs differ, all consumer-driven health plans provide financial incentives to use care appropriately, as well as education and decision-support tools to help you make better health care decisions.
4. You've got tools - use them. Employers are providing you with a number of useful online tools for estimating your benefit needs. According to Hewitt research, nearly all employers offer health care cost estimators, more than 90 percent offer investment education and 37 percent offer outside investment advisory services. By using these tools, you can gain greater confidence that you're selecting the best benefits options for your individual situation.
5. Consider a health account. If your employer offers Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs) or Flexible Spending Accounts (FSAs), take advantage of them! They allow you to save and pay for health care expenses on a tax-advantaged basis and can also be useful vehicles to help you save for future health care expenses.
6. Use open enrollment as a yearly financial checkup. This is a great time to give your 401(k) plan a comprehensive examination and to get on the right road to retirement. Are you contributing enough? Are your investments appropriately diversified? Use enrollment season as an excuse to review your plan and to take advantage of new features that might be available, including contribution escalation, lifestyle funds and automatic rebalancing.
7. Think about the long-term impact of seemingly small decisions today. Today's needs seem so immediate, but saving even a little bit more today can have a huge impact at retirement. For example, a worker age 30 earning $40,000 a year who contributes 6 percent of his salary to a 401(k) plan will have approximately $770,000 by the time he retires (assuming a 7 percent annual rate of return and a company match of 3 percent). If that same worker increases his contribution level to 8 percent - just 2 percent more - he is projected to have about $940,000, or $170,000 more by retirement age.
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