Review Benefit Selections Annually: Why It’s Essential for Your Well-Being
Imagine you are at your favorite coffee shop, placing the usual order but this time, with a twist: a dash of cinnamon. A simple change can make your standard cup feel brand new. Now, apply that philosophy to reviewing your benefits selections annually. This exercise, much like adding cinnamon to your coffee, can bring new flavor to your financial and health well-being.
Benefits Selection: More Than Just Paperwork
When was the last time you read through your benefits package? If you’re like many people, chances are it’s been a while. Your employee benefits package is a crucial part of your compensation puzzle, yet it often goes unchecked, collecting virtual dust in a corner of your HR portal.
However, your once-perfect selections may not suit your current life situation anymore. Whether it’s a change in family status, health circumstances, or financial goals, an annual review of your benefits selections could match your needs more closely to the resources available to you.
The Changing Tides of Life
Life is full of changes—some planned, some unexpected. You might have gotten married or welcomed a new child into the family. Perhaps you’ve decided it’s time to start saving more aggressively for retirement, or you’ve been diagnosed with a chronic illness that will require long-term medication. Outdated benefit selections might not account for these life shifts, potentially leading to inadequate coverage or missed financial opportunities.
Health Insurance: Tailoring for Your Needs
Your health insurance is a primary example of a benefit that should be revisited annually. With the healthcare landscape frequently shifting, new plans, providers, and prescription coverage options can arise that might be more suitable or cost-effective for you and your family.
Consider the possibility of needing a specialist or a particular medication; your current health plan might not offer the best coverage for those services. By reviewing your benefits yearly, you can align your coverage with your health requirements, possibly saving you significant amounts of money and easing access to healthcare.
To Max or Not to Max: Retirement Fund Contributions
Retirement accounts like 401(k)s or IRAs are often featured in benefit packages. One common mistake is “setting and forgetting” your contribution amount. But as your income changes, so should your contributions. Making regular adjustments can help ensure that you’re taking full advantage of employer matching programs and tax benefits, accelerating your journey to a comfortable retirement.
The catch-up contribution for those over 50 or escalating salaries over time are good reasons to give your retirement contributions a thorough review. Don’t leave free money on the table – your future self will thank you.
Flex These Financial Muscles: Flexible Spending Accounts
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are like hidden gems in the benefits world. Review these accounts annually to adjust contributions based on your projected medical expenses. Because funds in some of these accounts expire at the end of the year (FSAs in particular), planning is key.
An annual review helps you avoid overcontributing to an FSA and losing money. Conversely, if you don’t put enough into an HSA, you might miss potential tax advantages and savings for future medical expenses. It’s all about striking the right balance.
Life and Disability Insurance: Preparing for the What-ifs
It’s not the cheeriest of topics, but addressing life and disability insurance is a must. Life changes such as marriage, children, or even buying a house can increase the need for protection. If your employer offers options for additional coverage, it could be wise to consider them, especially if your personal circumstances have changed.
On the other hand, if your kids have flown the nest and your mortgage is paid off, you might find that you’re over-insured and can reduce your coverage to save on premiums. Regularly reviewing these policies ensures that they continue to meet your needs without draining your wallet unnecessarily.
Learning Opportunities: Professional Development
Professional development benefits can sometimes be overlooked. If your employer offers tuition assistance or subsidies for professional courses and certifications, think about how you might use those benefits in the year ahead to advance your career.
Take stock of where you want to be professionally and what you need to get there. Planning can put you on the fast track to advancement—and a heftier salary.
The Fine Print: Other Perks and Benefits
Many organizations offer a variety of other benefits that can easily go unnoticed. From wellness programs to employee discounts, rebates on services, or even pet insurance, there may be offerings that you didn’t find useful or appealing last year but might now be just what you need.
Stay informed about these perks; sometimes, the value is in the fine print. Getting the most from your benefits means taking advantage of all the options, not just the major ones.
The Annual Check-up
So how do you dive into this annual review without feeling overwhelmed? Start by marking a date in your calendar, ideally a month before your company’s open enrollment period, to give yourself ample time to research and make decisions. Examine any life changes you’ve gone through and evaluate your current benefits with a fresh pair of eyes. Consult with HR representatives or benefits counselors who can provide guidance.
Lastly, don’t rush it. Pour over the materials like a good book, sip a cup of coffee (with that dash of cinnamon, if you wish), and give yourself the time to understand and navigate the options.
In Conclusion
There’s power in being proactive with your benefits selections. Just like the seasons change, so do your needs. An annual benefits review keeps your compensation package in sync with your life and guards against complacency. It’s an opportunity to reassess, realign, and perhaps discover new offerings that could enrich your life.
Remember, these benefits are part of your hard-earned compensation. Just as you work to perform your best, so should your benefits package. So take that annual review seriously—it’s an investment in your today and your tomorrow.