FINANCIAL FOCUS: Consider changes for employee benefits during open enrollment

Joe Faulk

Joe Faulk

Published: Thursday, October 10, 2013 at 06:10 AM.

At many workplaces, it’s “open enrollment” season, when you can make changes to benefits you receive from your employer.

Focus on these areas as you review your overall benefits package:

Life insurance: If your employer offers life insurance as a benefit, and you haven’t signed up for it, consider adding it during your open enrollment period — because life insurance can be important to your family’s financial security. If you already have life insurance with your employer, you may want to use open enrollment to review your beneficiary designations. If you’ve experienced a change in your family situation, such as divorce or remarriage, you can update your beneficiaries, as needed.

The amount of life insurance offered by your employer in a group policy may be insufficient for your needs, so you may want to consult with a financial professional to determine whether you should add private, or individual, coverage. You may find that individual coverage is comparable, in terms of cost, to your employer’s coverage. In addition, individual coverage is “portable”; you can take it with you if you change jobs. 

Disability insurance: Your employer may offer low-cost — invaluable — disability insurance. Nearly one in three women, and about one in four men, can expect to have a disability that keeps them from work for 90 days or longer at some point during their working years, according to the Life and Health Insurance Foundation for Education. Your employer’s disability policy may not be enough for your needs, so you may need to consider additional coverage.

Retirement plan: Your employer may offer a 401(k) or similar retirement plan, such as a 403(b) plan, if you work for an educational institution or a nonprofit organization, or a 457(b) plan, if you work for a governmental unit. All these plans allow you to contribute pretax dollars; so the more you put in, the lower your taxable income. Equally important, your earnings can grow tax-deferred, which means your money can accumulate faster than if it were placed in an account on which you paid taxes every year.

Try to contribute as much as you can afford to your 401(k) or other employer-sponsored plan. If you’ve gotten a raise recently, consider boosting your contributions during open enrollment. Also, take this opportunity to review the array of investments you’ve chosen for your 401(k) or other plan. If you feel that they’re underperforming and not providing you with growth opportunities you need, consider making some changes. You might also think about making adjustments if your portfolio has shown more volatility than the level with which you are comfortable. Your financial professional can help you determine whether your investment mix is still suitable for your goals, risk tolerance and time horizon.

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