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It's Open Enrollment Time

By Dave Verbeke

This time of the year can be very stressful because it’s time to make your
benefits decisions for the coming year. It can be difficult to know which
decisions are right for you and your family. Here are a few helpful hints to
get you through open enrollment and ready for 2022.

High deductible health care plan (HDHP) or not? Most companies have gone to HDHP to reduce the cost of providing health insurance to their employees. If you have a choice between a HDHP and a copay plan, you should look at your annual health care costs to see how a change will impact your budget. The idea of the HDHP is to have you self-insure for the small claims and have the plan pay for large expenses. If you chose a HDHP, a health savings plan (HSA) is a great tax advantaged way to save for health care expenses. Contributions to an HSA are triple tax free when used for health expenses! Contributions are pre-tax so you avoid State, Federal and FICA taxes. You do not have to use all of the money in the plan each year. If your employer does not offer HSA payroll deductions, contact us to open an account.

HSA contribution limit (employer + employee) - Self-only: $3,650, Family: $7,300
HSA catch-up contributions (age 55 or older) - $1,000

HDHP minimum deductibles - Self-only: $1,400, Family: $2,800
HDHP maximum out-of-pocket amounts - Self-only: $7,050, Family: $14,100

401k contribution amount - Your 401k plan at work is one of the most convenient ways to save for retirement. If your employer offers a match, you should make sure you contribute at least enough to receive the full matching funds. In order to replace your income in retirement, you should reach for the savings goal of 10% to 15% of your income. If you’re not at that level yet, work to increase your current contribution amount by 1% per year until you hit the goal. If Roth (post-tax) contributions are offered in your plan, it may make sense for you to make after-tax contributions now, in exchange for tax free withdrawals in retirement. This is most effective for people with 10 or more years until retirement and in the lower tax brackets. Contact your advisor for more information.

Group life or disability plans - These plans offered by the employer can be a low cost way to add insurance coverage. Group plans usually have minimal underwriting requirements so it is easy to get coverage even if your health isn’t perfect. Disability insurance is frequently overlooked and group plans can be very cost effective. If you need additional life insurance, we have an online pricing tool to check for competitive pricing on term policies. Contact your advisor for a comparison.

Medicare Advantage and Supplemental policies - Medicare decisions for retired clients are complex and require an experienced, trusted professional to guide them through the process. New to our Strategic Alliance Group is Matt Kern from Kern Financial. He specializes in Medicare insurance and offers plans from multiple carriers. Please contact us for a referral to Matt.

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