Employee Benefits: How Often Should I Review Them? by Michael Alexander, CPA, PFS
When my eldest daughter recently got her first full time permanent job (which by the way, I am thrilled about), she had many questions about the benefits her company was providing. It reminded me that many of us look at these questions only when we begin work or change jobs and then we set it and forget it. So as we are in the first quarter, when we often think about tax returns and other money things, please remind yourself to look at your life and disability insurance, your 401K or pension, your health savings account and other benefits and re-ask these questions:
- Am I taking out of my earnings the maximum amount possible to contribute to my pension or 401K? Or if I can’t afford that much, am I taking as much as my company matches? Or am I at least taking something?
- Does the insurance coverage I have cover enough of my expenses should something happen to me? It may be time to think about getting additional insurance separate from your company.
- Who are my beneficiaries? Often a young person puts down parents or siblings as beneficiaries. It is very important when life changes, with marriage or kids, to change the beneficiaries to the right people. Also, if you only listed primary beneficiaries initially, you should consider adding contingent beneficiaries in case the primary ones are no longer alive.
- For married couples who each are offered health care coverage by their companies, review the costs and benefits for the different policies. It may be better to go on your spouse’s coverage than for each of you to have separate coverage.