CWM September Newsletter: Benefit Enrollment Periods
What is enrollment?
Open enrollment for employer-sponsored benefit plans represents a time when plan participants can make changes to their plans. This includes altering or updating coverage for health insurance, dental insurance, and life insurance. Although 401(k) changes can typically be made throughout the year, open enrollment also provides individuals an opportunity to think about their retirement accounts and withholding options and make changes along with their other benefits.
When is enrollment?
Open enrollment varies by employer, but typically occurs in the Fall to allow changes made by the employee to be enacted on January 1st of the following year. The enrollment window usually lasts 2-4 weeks but can be shorter or longer depending on the plan.
What should you be thinking about during enrollment?
While enrollment periods typically focus on health insurance plans, they also offer an opportunity to reassess other employer benefits including your company sponsored retirement plan or 401(k). As company-sponsored plans often represent the majority of an individual’s retirement savings, it is crucial to fully understand the features and investment options. We often use this time of year to discuss with clients the utilization of their 401(k). Some items that you may want to think about pertaining to your 401(k) or other company-sponsored retirement plan during enrollment season:
1. Do you know what your company’s match is for contributions?
2. Are you taking full advantage of your employer’s match?
3. Does your 401(k) have a Roth contribution option?
4. If so, does it make sense for you to make Roth contributions?
5. Is your 401(k) invested in an appropriately commensurate with your age and risk tolerance?
6. Are you invested in a target date fund? If so, are there better options available?
7. If you are over 50, are you taking advantage of the available catch-up contribution?
8. Will your current withholdings provide adequate savings for your desired retirement?
9. Have you read, or even skimmed, your Summary Plan Document detailing all features of your plan?
If you don’t know the answer to any of the above questions, we recommend reaching out to your plan advisor or personal financial professional for assistance. If you would like to have a further discussion about your employer’s benefit plan and how you appropriately use it to plan for retirement, we are here to help.
You can schedule a free 30-minute enrollment prep meeting with us using the link below: