I’ve read that people spend more time picking out a refrigerator or car than they do picking out benefit plans. As an employee benefits professional, I’d have to agree with that assessment. I’ve seen people’s income run out when they become unexpectedly ill or an ex-spouse receives the life insurance because a new beneficiary form was not completed. These are all situations that could be avoided with just a few minutes of planning.
I know what you’re thinking: “Disability, Medical, Life! Oh My!” But these annual personal check-ups are even more important than the ones you do to weather-proof your house or cars. These check-ups “weather-proof” you and your family against the storms of life and financial loss. (And, you love your family more than your car, don’t you?) So here are some things to think about as you get to the end of another year:
- Beneficiary forms – Life, Pension, 401(k), other retirement plans, etc. Have you reviewed them lately? Have you or your family experienced a life event that may change who you name as a beneficiary (i.e. marriage, death, birth, divorce, etc.)?
- Disability Insurance – If you or your spouse were to have an accident, injury or illness, do you have enough savings to support your standard of living for 3-6 months? If not, you may want to consider purchasing a salary continuation policy such as disability.
- Life Insurance – If your family’s primary wage earner died, would the family be able to maintain their standard of living, pay off the mortgage, save for college, pay for funeral expenses, etc.? If you need more life insurance, there are many different kinds and some are very cheap right now.
- Retirement Savings – Are you at least saving enough in your company’s retirement plan to take advantage of the full company match? If not, you are leaving free money on the table, and you probably couldn’t get the same return on your savings in the market that a match represents. Is it enough? Should you increase your contributions, change your investments, sign up to auto-escalate your deferrals, open an IRA, or Roth IRA? Many banks can recommend an investment adviser who could help you develop a plan for retirement.
- Long Term Care – If you or a family member had to go into a nursing home for care or have professional home health care, could you afford it? Long Term Care protects those other assets mentioned above (in addition to your home, savings, etc.) from being depleted in order to pay for this type of care.
- Medical – Remember that the health reform legislation is making this a whole new ball game. Do you have children up to age 26 that still need to be on your insurance? If you need preventative services for children, there is no longer any cost-sharing for certain preventative services nor are there any pre-existing condition exclusions. If you have a Flexible Spending Account (FSA) or Health Savings Account (HSA), you can no longer use your extra contributions for over-the-counter drugs (starting 1/1/11). Based on these changes, do you need to continue contributing to the HSA and FSA at the same rate?
Now I know what you’re going to say: 1.) these programs are not cheap and money is tight in this economy; 2.) evaluating these plans is boring and not exciting; 3.) I’m young and/or healthy so I have plenty of time to get this stuff later. But the storms of life happen in an instant, whether you are young, old, healthy, wealthy or wise. It’s too late once the roof has blown off! You and your family are worth the time and effort now, so “weather-proof” today.
This special guest blog was contributed by Mady, Susquehanna’s Human Resources Benefits Manager.