Retirement Plan Reminders

This is the time of year when employees start to review and choose their benefit package for the new year. You choose a health insurance plan, decide how much money to put in your HSA account, and realize that only one-third of your childcare cost can be run through a dependent care FSA.

Also, employees determine how much to contribute to their 401(k) account.  For 2019, the maximum employee deferral is $19,000, or $25,000 if you are age 50 or older.  While you might think your 401(k) is on autopilot, we would encourage you to double check and consider a few ideas. 

First, are you leaving money on the table?  If you aren’t contributing enough to receive your employer match, well… that’s just ridiculous.  Even if it means tightening up spending in other places, try your best to get that free money. 

Second, you may have elected to contribute a set dollar amount each paycheck.  You elected this 5 years ago and have never changed it, although you have received a raise each year.  We encourage you to change this to a percentage of your compensation to account for raises throughout your work life.  Additionally, make a goal to try to increase that percentage annually or every other year.  This will dramatically increase your retirement savings.

Third, this is a good time to review your beneficiary designations on your retirement accounts. Have you had a child since the last time you changed them?  Gotten married?  Divorced? Often, employees set it and forget it, but this can lead to unintended and unfortunate circumstances.  Make sure the money goes to the people you want.

Questions about employee benefits?  Please contact a financial advisor.  I might know a good one.