Many people I talk to are utterly overwhelmed during their open enrollment period.
Should I change this benefit? Should I opt-in for this or that?
In my opinion, this is a great time to maximize your paycheck!
There is so much money left on the table that can be placed back into your budget to reach your financial goals, but there are some steps to take.
I want to give you 5 tips for open enrollment period that you can use in order to fully maximize all that is available to you.
1. Know when it starts and ends. How can you be empowered if you don’t know when the annual enrollment period begins or ends? Usually, you will get some type of internal notification from your company. I highly recommended marking your calendar and not waiting until the last minute.
2. Review your benefits from previous period or employer. You’ll want to review what benefits you had last–either last year or if you’re changing jobs from your previous employer. I suggest printing these out before you get started on the upcoming year to give you a side-by-side comparison. It’s very possible to use your last paystub to look at this also. Most employer websites have a separate portal that may allow for this comparison so you won’t have to print it out.
3. Elect the free stuff. This may be a no-brainer but elect the free stuff. Typically this may be life insurance for you as an employee, short-term, long-term disability and maybe some other things. If it’s free and you don’t use it, you’re leaving money on the table more than likely.
4. Consider the HDHP vs. PPO. One of the most expensive benefits you are provided is health insurance. Just look at your W2 from last year in box 12DD. I’ve seen a lot of plans that have employer-sponsored and/or subsidized medical coverage depending on plan type. That’s to say you may get free health care if you choose a high deductible health plan (or HDHP). This is beneficial in a lot of ways and I’d cover how these plans work in this video. This could potentially save you a lot of money in current and future taxes, as well as, allow you to get some extra cash from your employer.
3. Max out your 401(k). If possible try to contribute the IRS limit into your 401(k) plan thereby maximizing any type of employer match that you are eligible for. I see many people only contribute the default as most plans will elect 1-2% if you don’t specify a %.
Thanks for listening, reading and watching.
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