Are you being financially smart with employee benefits?
10/03/2025
The time is approaching when many individuals will be required to make significant decisions regarding their employer-provided benefits. Too often we gloss over this as just a decision about benefits, but in reality, it has a major impact on our financial situation. The choices you make with your employer sponsored benefits can have short- and long-term financial consequences so it is important that you review your situation and choose the benefits that are most likely to improve and protect your financial security.
What are some of the important benefit decisions to be made?
The most common decision that we all make every year is about our health coverage. Some employers offer a multitude of options from low deductible to high-deductible plans. Plus, there can be separate dental and vision plans to consider. You also need to consider retirement planning from how much to invest to the types of investment selections. Companies may also provide additional life or disability insurance, as well as options for health savings accounts (HSAs), flexible spending accounts (FSAs), and FSAs for childcare expenses.
What are some of the considerations for health insurance coverage?
If your company offers multiple plans and types, then you need to evaluate the different costs and coverages to determine how the plans will impact your financial situation. The primary concern should be how much out of pocket expenses you reasonably think you will have to pay under each plan to determine if the cost to lower your out of pocket is worth paying the higher rate. Sometimes you might know what your next year will be like with medical expenses and that can help you make the best decision on the type of plan to choose. Other times you must make the safest choice for your financial situation. This includes looking at any prescription benefits that might help lower the cost of your medications.
How can we avoid mistakes with decisions on retirement savings?
Your company provided retirement savings plan might have several options that allow for many different decisions. These decisions go beyond just contribution amount and investment choices which are two key decisions. Other options might include the ability to have a Roth component within your retirement savings. All of these decisions need to be made in context with your overall financial situation. It is always important to remember that not contributing to at least the company match means you’re losing out on free money. You should strive to save 10% or more for your retirement savings effort. If you have been investing in your 401k for several years and you made investment decisions based on your age at the time, you might need to consider looking at your choices and updating them to better reflect your current age and financial situation.
Are there other benefits we should be considering and using?
Wellness plans might offer the ability to add money to your health savings account or lower your insurance premium. Some companies offer additional life and disability insurance protection, which might be a smart move to increase your coverage at a reasonable cost. If you have children in daycare then the Flexible spending account for childcare might be an important tool so you don’t have to pay taxes on your childcare expenses. Employees considering further education may want to check whether their company provides tuition assistance, reimbursement, or payment options for existing student loans. Bottom line, don’t skip the open enrollment. Take the time to carefully evaluate what your benefit selections are each year.