RENO, Nev. (KOLO) – During today’s Morning Break’s Dollars and Sense segment, financial advisor Ashley Hicks of Edward Jones explains what you can do now to prepare for open enrollment.

The the following information it was written by Edward Jones for use by his advisers.

If you work for a mid-sized or large company, you may soon be able to review your employee benefits package as we enter open enrollment season. So consider your options carefully with an eye toward making changes that suit your needs.

Here are some of the key areas to watch:

• pension plan – Depending on your employer, you can change your 401(k) or similar retirement plan at any time during the year, but you may want to use the open enrollment season to review your contribution amounts. If your salary has increased in the past year, you may want to increase your pre-tax contributions (including catch-up contributions from age 50). At the very least, try to put in at least enough to earn employer match if one is offered. At the same time, look at how your contributions are allocated among the different investment options in your plan. You’ll want your investment mix to reflect your goals, risk tolerance and time horizon.
• life insurance – If your employer offers no-cost group life insurance as an employee benefit, you may want to take it out—but keep in mind that it may not be enough to fully protect your family if something happens to you. You may have heard that you need about seven to 10 times your annual income as a life insurance death benefit, but there really isn’t a right answer for everyone. Instead, you should evaluate various factors—including your mortgage, your income, your spouse’s income (if applicable), your debts, the number of years until retirement, the number of children and their future educational needs—for determine how much insurance you need. . If your employer’s group policy seems insufficient, we recommend that you consider adding outside excesses.
• disability insurance – Your employer may offer group disability insurance at no cost, but as with life insurance, it may not be enough to adequately protect your income if you become temporarily or permanently disabled. In fact, many employer-sponsored disability plans only cover a short period, such as five years, so to get longer coverage until age 65, you may want to look into a separate personal policy. Disability policies vary widely in premium costs and benefits, so you’ll want to do some comparison shopping with several insurance companies.
• Flexible Spending Account – A Flexible Spending Account (FSA) allows you to contribute up to $3,200 before taxes to pay for some out-of-pocket medical costs, such as prescriptions and insurance copays and deductibles. You decide how much you want to put into your FSA, up to the 2025 limit. You generally have to use up your FSA funds by the end of the calendar year, but your employer can give you a 2 1/2 month extension or allow you to carry over until $640.
• Health Savings Account – Like an FSA, a health savings account (HSA) allows you to use pre-tax dollars to pay for out-of-pocket medical costs. Unlike an FSA, however, your unused HSA contributions will carry over to the next year. An HSA also allows you to make withdrawals, although they may incur a 10% penalty. To contribute to an HSA, you must participate in a high-deductible health insurance plan.

Ashley Hicks is a monthly contributor to Morning Break. To learn more about Ashley Hicks and her services at Edward Jones, click here. She can also be found on Facebook and LinkedIn.

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