The decisions you make during annual enrollment can impact your finances throughout the year—and generally you can’t change them once you’ve locked in your selections. Set yourself up for success by making sure you fully understand your options.
Step 1: Understand what your company offers.
The first step to making informed decisions is to understand what’s available to you.
Many companies host webinars or in-person sessions reviewing the benefits offered, which is a great place to start if you’re not sure what’s available. You should also have access to documentation of your benefits. Connect with your company’s benefits specialists if you have trouble finding the information you need.
If you have access to Goldman Sachs Ayco Financial Management through your employer, work with one of our coaches to review your options. They’re trained on the specific benefits of each company we work with and can help you see the whole picture.
Step 2: Look at where you are now and where you hope to be a year from now.
When annual enrollment emails start popping up in your inbox, you may be tempted to elect the same benefit options you currently have and call it a day. If this sounds familiar, fight the urge!
Think about it this way: Your paycheck is only part of what you’re given in exchange for your time and work. According to the U.S. Bureau of Labor Statistics, benefits generally make up about 30% of an employees’ total compensation—meaning if you’re not maximizing your benefits, you’re missing out!*
Your benefits are a critical part of your compensation package, so make sure you’re actually benefiting from them. Annual enrollment elections aren’t just another action item for your to-do list. You should think critically about how opting in—or out of—certain benefits could impact you not just next year, but five, 10 or 20 years down the road as well.
Take stock of what your life currently looks like.
Do you expect any of your answers to change in the next year? If so, be sure to consider which benefits will most likely be impacted.
For example, if you have a planned surgery for next year, you’ll want to account for that as you make your elections. To prepare for the associated costs, you may choose to enroll in a health insurance plan with a lower deductible. Alternatively, you may decide to choose a high deductible health plan (HDHP) and contribute a higher amount to a health savings account (HSA) to shoulder the cost.
How you plan for future costs depends on your current financial circumstances and how much you can afford. Be sure to look at your finances as a whole as you map out your decisions.
Step 3: Compare your options.
Common benefits you can enroll in during annual enrollment include:
Health insurance. Your company may offer a few different options, each with their own advantages and disadvantages.
You may be eligible to contribute to a flexible spending account (FSA) depending on the plans your company offers and the health insurance option in which you enroll. Learn more about how you can use an FSA in our guide to FSAs.
Vision and dental insurance. There are generally one to two options for vision and dental insurance. Be sure to look into what’s covered and make sure it matches what you need.
Long-term disability and life insurance. Enrolling in these benefits can be optional (sometimes a company will pay for a certain amount of coverage with or without the option for employees to buy up an additional amount of their choosing) and often depends on your personal feelings around risk. Long-term disability insurance provides financial protections in case you become unable to work due to a health problem. Find out what you need to know about life insurance in this article.
Remember: Generally, you can only make changes to your benefits elections outside your annual enrollment window for qualifying life events like getting married or divorced, or having a child. For most benefit elections, you’re locked in for the year after the annual enrollment window closes.
It’s best to go into annual enrollment with a strong understanding of your needs and a solid plan. If your company provides access to our services, work with a coach to plan ahead.
If your company offers our services as a company benefit, register or log in to learn more about this and other financial wellness topics.
* Based on data from the U.S. Bureau of Labor Statistics
United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.
The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.
Information and opinions expressed by individuals other than GS PFM employees do not necessarily reflect the view of GS PFM. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.
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