Work Benefits: A guide for 2014
The New Year has begun and now is the right time to look into the benefits from the workplace and how to optimize your savings with value for every penny in 3 simple steps:
1. Invest in Retirement Plans:
At most places, Pensions are a thing of the past and hence, 401(k) plan or a similar structured retirement plan offered by your employer it’s up to you to make the most of it.
In the New Year, the limits on 401(k) contributions remain the same as in the previous: People younger than age 50 may contribute up to $17,500 toward their retirement. Those 50 or older can contribute $23,000 which in turn provides people to save wisely.
If maxing out your 401(k) isn’t an option, the least is to make sure you take advantage of certain matching funds being offered by your employer. Most employers typically match your contributions towards retirement schemes up to certain amount ranging from 3-6 percent of your salary which is easily sufficient to earn you free money during retirement
Also being aware of how your investments fit into your portfolio balance and in synergy with your preferred level of risk. After the boom in the stock markets, especially in the last one year, it is evident that choosing stock accounts as a major portion of your retirement assets wherein rebalancing as per market condition is the right thing to do.
Also, being varied in your choice of stock investments gives you greater exposure rather than sticking to your conventional picks, even though the risks are higher, it’s worth the potential
2. Hold on to your Flexible Spending Account:
A flexible spending account helps you hold out money on ore-tax basis during times of medical emergency. This simple saving helps you set up savings as to how much you want to save towards medical expenses and get reimbursed on submission of medical bills, doctor’s charges and all other medical charges incurred throughout the span of the year
If the balance in your previous years account is still prevalent, consult your employer about the validation of the scheme. Usually, employers let you use the money up to the first quarter of the year until they forfeit it. The New Year has seen the IRS change the rules governing flexible saving plans which allows employees a choice to old up a sum of up to $500 from the preceding year flex-plan money in to the current year. This though hasn’t been widely accepted by all employers hence cross checking specifically with your employers is advisable
3. Take complete advantage of your insurance cover:
Employers have employees covered under various insurances ranging from health insurance, life insurance, and other voluntary insurance policies .What’s important here is to understand completely under what insurance plan have you been covered, although the open enrollment period to make changes to insurance policies pertaining to health has ended .
What’s your option now is to how to optimize your benefits by closely following and understanding what you’ve been covered under during the current year. It would be foolish if you end up footing the bill for your medical expenses all by yourself when you could actually have your way out of it by being covered under insurance.
Also, listing out the names of beneficiaries and/or dependents of your life insurance, as well as any other special family coverage that you pay for sums up as smart thing to do
It is of utmost importance, if there is any shift in family situations, be it change in your marital status or if you have a chills, make changes to your insurance plans at that time itself ,even though the open-enrollment period has ceased.
Remember: Keep tab of all your work benefits
Employers are always looking around for cost cutting and employee benefits are logically the most vulnerable way as it doesn’t qualify as a pay cut.
Be aware of your benefits, and that’s how you can make the most of what is available to you.