Updated: Jun 6
Electing benefits can be a daunting task, and it’s difficult to know which benefits best suit our client’s needs.
With our guidance, clients will be able to ask the right questions for determining which benefit elections are appropriate for their unique situation. We like to get a step ahead and be prepared to provide thoughtful answers to our client’s many questions.
This checklist covers the key issues to consider when a client must make a decision surrounding their employer-provided benefits.
Employer-sponsored retirement plans
Medical insurance, life insurance, and disability insurance
Coordinating employer benefits with savings, fund-sourcing, and tax planning needs
Impact on their overall financial plan
When it comes to financial planning, many individuals overlook the importance of understanding and leveraging their employer benefits. Failing to take advantage of these benefits can result in significant missed opportunities and financial losses. In this blog post, we will explore a comprehensive checklist and flowchart that covers four key areas: employer-sponsored retirement plans, medical insurance, life insurance, and disability insurance. By asking the right questions and making informed decisions, you can optimize your financial situation and secure a brighter future.
Employer-Sponsored Retirement Plans:
The first area of focus is employer-sponsored retirement plans. It is crucial to review your current investment options, allocations, and risk tolerance. Analyze whether your investments offer appropriate diversification and consider the impact of plan fees and expense ratios. Additionally, understanding your plan's features, such as loans and in-service withdrawals, is essential. Evaluate employer contributions, vesting schedules, and the availability of catch-up contributions for individuals aged 50 and above. Taking advantage of these options can significantly enhance your retirement savings.
Next, let's dive into employer-sponsored medical insurance options. Carefully review the available health, vision, and dental coverage, considering factors like age, health, income, and cash flow. Understand the differences between high-deductible and low-deductible plans, as well as the potential impact on your future financial situation. Explore the advantages of Health Savings Accounts (HSAs) and their triple tax savings advantage. Evaluate whether adding your spouse or dependents to your medical insurance is beneficial and assess the costs associated with different coverage options. Pay attention to the flexible spending account (FSA) and health reimbursement account (HRA) offered by your employer, as they can provide additional tax advantages.
Life insurance is often a topic that is overlooked but deserves careful consideration. Assess the need for additional life insurance coverage through your employer-sponsored plan, taking into account the portability of the coverage and potential future changes in your health. Compare the costs and coverage limits of the employer's policy to private policies, as the latter may offer more cost-effective options. Prioritize obtaining adequate coverage that aligns with your life insurance needs.
Disability insurance is another critical aspect to evaluate. Similar to life insurance, consider the portability of coverage and potential changes in your health when assessing employer-sponsored disability insurance. Understand the definitions of disability, such as own occupation, modified own occupation, or any occupation, to determine the suitability for your specific job and personal needs. Review the plan summary and coverage limits, and if necessary, seek an individual disability policy to ensure comprehensive protection. Evaluate the taxability of employer-sponsored disability insurance benefits, as they are generally fully taxable as income.
By using this comprehensive checklist and flowchart, you can make informed decisions and maximize the benefits offered by your employer. Whether it's optimizing your retirement plan, selecting the right medical insurance coverage, obtaining appropriate life insurance, or securing disability insurance, taking proactive steps can significantly impact your financial well-being. Don't leave valuable dollars on the table—ask the right questions, understand your options, and work with a financial advisor to ensure you're making the most of your employer benefits. Your financial future deserves careful attention and planning.