Maximizing Employer Benefits from a Financial Advisor
Enrolling in your employer’s benefits can be a rewarding experience. It feels good to complete important tasks quickly. With your employer’s help, you often get valuable options at a good price. Here are four tips to help you make the most of annual enrollment.
1. Assess Your Health Care Needs
Is the plan you chose last year still the best fit for you and your family? If you have multiple plans to choose from, consider the following factors to help you make an informed decision:
Premium costs: How much will you pay each month?
Annual deductible: What’s the amount you need to pay before your coverage kicks in?
Copays and coinsurance: What will you pay for office visits, prescriptions, and other services?
Employer contributions: Does your company contribute to a Health Savings Account (HSA)?
Provider network: Are your preferred doctors, clinics, or hospitals in-network?
In addition to looking at plan details, consider how much care you and your family use. Also, think about whether that will change in the next year.
Once you know your options, calculate the possible out-of-pocket costs for each plan. Then, decide what matters most to you. This could be lower premiums, access to local providers, or convenience of care.
After enrolling, take time to understand the benefits your plan offers. Many people skip important care like preventive screenings, immunizations, and mental health services. They think it will cost extra. However, these services may be fully covered by your plan.
Don’t overlook dental and vision coverage: Even if your health plan covers emergency dental work or annual eye exams, your employer might offer supplemental insurance. Adding these options can help you manage out-of-pocket expenses for routine care and specialized treatments.
2. Explore Ways to Save on Health Care Costs
Tax-advantaged accounts can help you manage out-of-pocket health expenses now and in the future. If you’re eligible, these accounts offer significant savings opportunities to stretch your health care dollars.
Health Savings Account (HSA)
If your health plan qualifies for an HSA, you can take advantage of one of the most tax-efficient savings tools available. Here’s what makes HSAs valuable:
Triple tax benefits: Contributions, investment growth, and withdrawals for qualified medical expenses are all tax-free.
Portability: If you switch jobs, your HSA stays with you, and you can keep contributing as long as you're enrolled in an HSA-eligible plan.
Investment potential: You can invest your HSA funds, growing your savings for future health expenses.
It's a good idea to save enough for next year’s medical expenses. Try to reach the annual contribution limit if you can. Some employers offer matching contributions. This is like free money you can use right away or save for future health needs.
2024 HSA contribution limits: $4,150 for individuals and $8,300 for families.
2025 limits: $4,300 for individuals and $8,550 for families.
Catch-up contributions: If you’re 55 or older, you can contribute an additional $1,000 per year. Your spouse can also make a catch-up contribution, but they’ll need their own HSA to do so.
Flexible Spending Account (FSA)
FSAs allow you to set aside pre-tax dollars for health-related expenses, but there are two main types:
Health FSA: Covers a wide range of qualified medical expenses, including prescriptions and over-the-counter items.
Limited-purpose FSA: Used alongside an HSA, this account covers vision, dental, and preventive care expenses.
When using an FSA, be careful to only contribute what you plan to spend within the year, as most FSAs have a “use-it-or-lose-it” rule.
By maximizing these savings accounts, you can reduce your out-of-pocket costs while building a financial cushion for future health care needs.
3. Maximize Your Workplace Retirement Accounts
If you haven't enrolled in your employer’s retirement savings plan yet, now is a great time to start. Many employers offer both traditional and Roth 401(k) options, each with unique tax benefits:
Traditional 401(k): Contributions are made pre-tax, which lowers your taxable income for the year.
Roth 401(k): Contributions are made with after-tax dollars, so they won’t reduce your current taxes, but both contributions and earnings can be withdrawn tax-free in retirement.
If your employer offers a matching contribution, try to contribute enough to get the full match. It’s like free money for your future. A good long-term goal is to save about 15% of your pre-tax income for retirement, including any match from your employer. This percentage, recommended by financial professionals, helps set you up to maintain your lifestyle in retirement.
Many retirement plans offer an auto-increase feature, which automatically boosts your savings rate annually. If available, consider signing up so your contributions grow gradually over time without any extra effort.
To ensure your money grows effectively, invest with a long-term perspective. Younger employees may benefit from a higher allocation in stocks, which offer greater growth potential over time. Those nearing retirement may prefer a more balanced mix of stocks and bonds to manage risk.
Since every financial situation is unique, consulting with a financial advisor can help you fine-tune your investment strategy and make sure you're on track for the retirement you envision.
4. Explore All the Benefits Available to You
Your retirement savings and health plan are important. Your employer may also offer extra benefits. These can help you save money, protect your assets, and plan for the future.
Many of these extra benefits are often ignored. However, they can help support your financial and personal well-being.
For example, life insurance and disability insurance provide critical protection, helping safeguard what you’ve worked hard to build. Although these policies may come with a cost—even through your employer—the financial security they offer in case of unexpected events can be invaluable.
Supplemental benefits also extend beyond financial protection. Some employers offer mental health resources, caregiving support, or pet insurance to reduce everyday stress. Others provide legal insurance or assistance with student loan repayment and continuing education programs, helping you grow personally and professionally.
Bottom Line
By taking full advantage of these benefits, you can free up time, reduce stress, and improve your overall well-being. Whether it’s mental health support or financial assistance, these programs are designed to help you thrive both at work and in life.
Sources:
https://www.fidelity.com/learning-center/personal-finance/employer-benefits
Disclosures:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information