Employer Benefits (Financial Planning)

If your employer provides a 401(k) plan or Health Care and Dependent Care Flexible Spending Accounts (FSAs) and you're not participating, you could be missing out on hundreds - or thousands - of dollars in tax savings each year. That's money that goes right into your pocket instead of Uncle Sam's. Many employers will match a portion of your savings. It's like passing up free money if you don't participate.

How do 401(k) Plans Work?
With a 401(k) plan, money is deducted from your paycheck before taxes are withdrawn, which lowers your taxable income and therefore, lowers your taxes. Some plans allow you to contribute money on an after-tax basis as well. Check with your financial advisor for cases when this might be advantageous in your situation. Please review your employee handbook.

Choosing a Health Plan
With the countless options available and the complex terminology and paperwork, selecting a health care plan can be overwhelming. There are two basic types of plans: group plans (plans supported by an employer) and individual plans (plans not supported by an employer).
Before choosing a plan, ask yourself:

• How much can you afford to pay monthly for health care?
• Who requires coverage under your plan (just you, or a spouse or dependents as well)?
• How often do you, your spouse, and children visit the doctor?
• Do you want or need dental and vision coverage?
• Do you or your dependents have medical conditions that require specialized care?
• What would happen in the event of an accident or surgery?
• What is the maximum deductible you could afford to pay?

Knowing the answers to these questions can help you understand your health care needs and financial considerations. If you or a family member has a pre-existing health condition, it can be more difficult to get the health coverage you need. As part of the Affordable Care Plan passed in 2010, there is a Pre-Existing Condition Insurance Plan (PCIP) available. You can find out more about it at healthcare.gov.