It’s never too early to start planning for retirement. Benefits Open Enrollment is a great time to see if you’re sabotaging your retirement savings.
Y’all, I work in HR. I am not a financial advisor or a financial planner. So, seek professional financial advice from a certified professional. I *AM* a 40+ year old HR professional and I have seen my share of heartache when it comes to retirement planning and other choices employees need to review during benefits open enrollment.
Open enrollment is the time of year where you can make changes to enroll in different benefit programs at your workplace. Other times during the year, you need to have a qualifying life event to make changes. Things like getting married and having a child are types of qualifying life events.
Typically, you can elect to participate in your retirement program (probably a 401(k) any time during the year. However, you’re focused on these things during open enrollment, so it’s a good time to re-evaluate if you’re saving enough.
From what I’ve read, many folks recommend that employees save anywhere from 15-20% of their income each year to secure a financially stable retirement. You might be making some mistakes that are keeping you from that goal. This article describes several and I’ll list a few below:
- Not contributing enough to earn the full 401(k) match from your employer. Dude. Save enough to get the full match. It’s FREE MONEY.
- Take advantage of other tax-advantaged accounts. In addition to your 401(k), you may be eligible to contribute to an IRA or a Roth IRA. Learn about those and contribute if you qualify. Any taxes you can save is money in your pocket.
- Take a look at the health plan at work – will a High Deductible Plan work for you? If so, you can use the Health Savings Account that comes with the high deductible plan as a tax-free savings account. Check it out. Please.
- Drive your car another year. Don’t buy a new car. Keep the one you have. Keep it well maintained and drive it until it won’t drive any more. Save money while you’re driving the old one to PAY CASH for a new-to-you used car. Hondas and Toyotas last a long time.