Estate Planning Considerations for Benefits Open Enrollment

//Estate Planning Considerations for Benefits Open Enrollment

Estate Planning Considerations for Benefits Open Enrollment

Posted by:  The Life and Legacy Planning Group

The fall, generally late-October or early-November, is the time when employers send out summaries of employee benefits offered by the company and give employees the option to enroll in these benefits. These can generally include retirement plan options, health care, dental, vision, short and/or long-term disability, and life insurance coverage. Your employer may pay 100 percent of the premiums, split the costs with you, or you may have to pay all of the premiums yourself. Below are several considerations you should keep in mind once open enrollment begins.

Benefits Explained
When considering any retirement plan offered through your employer such as a 401(k), 403(b), or 457 Plan, you will need to consider what percentage of income you choose to contribute and whether the contribution must be made pre-tax, after-tax, or to a Roth plan (if available). How much you can contribute, and whether pre- or post-tax, depends on your specific financial circumstances. Remember to also consider any “matching” contributions your employer may make since these contributions can help improve your overall retirement savings.

Healthcare benefits may include the ability to enroll in a Health Savings Account (HSA), in addition to enrolling in the usual healthcare, vision, and/or dental coverage. HSAs allow plan participants to set funds aside, tax-free, for health care costs.

Employer-provided life and disability insurance coverage will provide your beneficiary with a stated amount of money if you die while employed by your employer or become disabled. The coverage generally expires when you no longer work for that employer.

Perhaps the most important thing to do during your employer’s open enrollment period is to review the employer-provided benefits package to determine what should remain unchanged, and what should be changed. If you do not understand the options being provided to you, contact human resources right away for more information.

Beneficiary Designations
While you are reviewing your benefit package, you should consider your beneficiary elections, in other words, who will inherit these assets upon your death or incapacity. A primary beneficiary is the first to inherit. Should he or she pass before you, or with you, assets would then go to any contingent beneficiary or beneficiaries you have designated.

Even if you have previously enrolled, you should review your beneficiary designations on your employer-provided benefits to be sure that you still want to benefit those same people in the event of your death. Benefits that require a beneficiary designation are life insurance policies, retirement accounts, health savings accounts (HSA), and disability insurance.

If there are any new providers for your employer-sponsored benefits, this means that the insurance company that provides those benefits has changed. Keep in mind that your previously chosen beneficiaries, and possibly coverage, may not have carried over. It is always better to review these documents, even if you are not planning any changes.

Estate Planning Concerns
If you are contemplating any changes to your beneficiaries, give us a call so we can ensure that your beneficiary designations work as expected with your current estate plan or so we can properly prepare a plan that carries out your ultimate goals for you and your family. Once you have updated your beneficiaries, make sure to obtain written confirmation of this from your employer’s human resources department and share this information with us.  If you have any questions, please feel free to contact us. We’re here to help. 

By |2018-10-22T15:06:11+00:00October 23rd, 2018|Trusts & Estates|Comments Off on Estate Planning Considerations for Benefits Open Enrollment