Psychology of Money

Reminders before you click "renew" at enrollment time. When it comes to employer, private health, and Medicare benefits, it's easy to click "renew last year's choices" and move on. However, it can be worth the extra time to look closely at all options, and how they might have changed. Consider this amusing statistic: "Research shows employees only spend 17 minutes electing their benefits, while Netflix users spend an average of 18 minutes deciding what to watch," according to Kiplinger's. What kind of areas produce tricky choices? Health Insurance - Under 65 and over 65 Long term care insurance - if you can get it Long term disability insurance Life insurance Employer Stock Options and Restricted Stock Employer Retirement Plan Matching Employee Assistance Programs - (which sometimes cover financial planning fees :)) Under 65: Health Insurance If you are under 65, check for HSA (Health Savings Account) eligibility on your policy. Contributing to a family HSA can save roughly $2000/year in taxes (depending on your marginal tax bracket). Plus, if you are relatively healthy and do not use the HSA, your earnings grow tax-free until retirement. Click here [https://www.hollydonaldsonfinancialplanner.com/hsas-over-iras/] for the reasons why HSA’s beat IRA’s as retirement accounts. HSA eligibility, unlike IRA eligibility, is not dependent upon having earned income. The last year you can contribute to an HSA is the year before you turn 65. 65 or Over: Medicare If you are 65 or over, your first opportunity to enroll begins 3 months before you turn 65 and continues until 3 months after, unless you are still employed. Sign up for Part B at the first opportunity (after leaving your employer), otherwise your premiums can increase 8% – 10% per year, permanently. Enrollment for existing Medicare beneficiaries runs from October 15 - December 7. If you are on prescriptions, the formulary - the list of drugs that Part D covers - might have changed. Make sure your prescriptions will still be covered. Stories abound of huge jumps in co-pays after January 1. At www.medicare.gov, you can input your prescriptions and the site will advise you which Part D plan covers the meds you need. Long-Term Care Insurance Group long-term care offerings through employers are becoming a benefit of the past. Private policies can be bought with better coverage, but premiums are increasing. If you have access to a group policy, strongly consider enrollment. Most group policies are portable if you leave the employer, or if the employer stops offering it. Also consider shopping existing group coverage against a private policy. Long-Term Disability This tends to be the most overlooked benefit. We are all more likely to be disabled than to die. Most employers provide short-term disability for 90 days. Long-term disability coverage, if offered, varies from 40% to 80% of compensation until age 65. Some employers provide the opportunity to purchase supplemental coverage; others don’t. Most employees I speak with are either not sure whether they have enrolled in this coverage, or how much they have. Additionally, check whether…

Fall benefits reminders before you click "renew." When it comes to employer, private health, and Medicare benefits, it's easy to click "renew last year's choices" and move on. However, it can be worth the extra time to look closely at all options, and how they might have changed. Consider this amusing statistic: "Research shows employees only spend 17 minutes electing their benefits, while Netflix users spend an average of 18 minutes deciding what to watch," according to Kiplinger's: http://bit.ly/Kiplingers-Benefits. What kind of areas produce tricky choices? Health Insurance - Under 65 and over 65 Long term care insurance - if you can get it Long term disability insurance Life insurance Employer Stock Options and Restricted Stock Employer Retirement Plan Matching Employee Assistance Programs - (which sometimes cover financial planning fees :)) Under 65: Health Insurance If you are under 65, check for HSA (Health Savings Account) eligibility on your policy. Contributing to a family HSA can save roughly $2000/year in taxes (depending on your marginal tax bracket). Plus, if you are relatively healthy and do not use the HSA, your earnings grow tax-free until retirement. Click here [https://www.hollydonaldsonfinancialplanner.com/hsas-over-iras/] for the reasons why HSA’s beat IRA’s as retirement accounts. HSA eligibility, unlike IRA eligibility, is not dependent upon having earned income. The last year you can contribute to an HSA is the year before you turn 65. 65 or Over: Medicare If you are 65 or over, your first opportunity to enroll begins 3 months before you turn 65 and continues until 3 months after, unless you are still employed. Sign up for Part B at the first opportunity (after leaving your employer), otherwise your premiums can increase 8% – 10% per year, permanently. Enrollment for existing Medicare beneficiaries runs from October 15 - December 7. If you are on prescriptions, the formulary - the list of drugs that Part D covers - might have changed. Make sure your prescriptions will still be covered. Stories abound of huge jumps in co-pays after January 1. At www.medicare.gov, you can input your prescriptions and the site will advise you which Part D plan covers the meds you need. Long-Term Care Insurance Group long-term care offerings through employers are becoming a benefit of the past. Private policies can be bought with better coverage, but premiums are increasing. If you are at least 40 and have access to a group policy, strongly consider enrollment. Most group policies are portable if you leave the employer, or if the employer stops offering it. Also consider shopping existing group coverage against a private policy. Long-Term Disability This tends to be the most overlooked benefit. We are all more likely to be disabled than to die. Most employers provide short-term disability for 90 days. Long-term disability coverage, if offered, varies from 40% to 80% of compensation until age 65. Some employers provide the opportunity to purchase supplemental coverage; others don’t. Most employees I speak with are either not sure whether they have enrolled in this coverage, or how much…