On the Job

Does your employer offer a retirement plan? I know – retirement is still decades away, but steady savings can have a huge impact on your long-term investments. Be sure to contribute at least enough to get the maximum employer match if they offer one.

Retirement plans at your old employer need to be reviewed as well. Should you leave the 401(K) or SIMPLE IRA with them, or roll them over to an IRA outside of the employer? Be sure you do not withdraw the funds before age 59 ½. Otherwise, you will be facing tax penalties as well as paying income taxes on the funds withdrawn. A trustee to trustee direct roll over to the new plan is key to avoiding unexpected tax consequences.

Employer insurance benefits can be very confusing. Health, life and disability are the common ones offered. Health insurance options may also include Flexible Spending Accounts and Health Savings Accounts. These are ways to put money aside on a pre-tax basis for your health costs. That saves you money! Don’t automatically select the least expensive (or most expensive) health plan option. Take the time to read through the Summary of Benefits and Coverage and think about your own situation. If you don’t understand what you are reading, don’t be embarrassed. Talk with your human resources person – they want to help you.

Life and disability insurance become more important now that you have a spouse and dependents. If you could not work, how would your bills get paid? If your employer does not provide disability insurance, you should consider purchasing a policy on your own. Most employers do provide some life insurance, but that is likely not even close to what would be needed to provide for your family should you die during your peak earning years.