The Distillery: Open Enrollment Edition
October is the month the benefits packet shows up, and for most energy employers in Houston the window to act on it is short. Here’s three things worth doing before the deadline, and one thing to think about if retirement is closer than 65.
One. Start with last year’s bills, not the plan chart.
The comparison chart shows you premiums and deductibles in the abstract. What decides the right plan is what your household actually spent last year. Pull the statements, add it up, and then read the chart. Households with two working spouses should do this for both packets at once, because the right answer sometimes splits the family across two plans. The full walkthrough is on the blog.
Two. Treat the HSA as a savings account, not a copay account.
An HSA is the only account with three tax breaks in one place. Contributions go in before tax, growth isn’t taxed, and withdrawals for qualified medical costs come out tax free. Most people spend it down every year. If your cash flow allows, fund it fully, invest the balance above a cash cushion, and pay routine bills from checking while the account grows. Keep the receipts. They can be reimbursed later in any year you choose. Read The Best Way to Use Your HSA at https://www.theadvocateswealth.com/blog/the-best-way-to-use-your-hsa .
Three. Read the disability page and check the 401(k) election.
Group disability coverage usually replaces a percentage of base salary and often leaves bonus and equity out. For energy compensation that gap can be meaningful, and enrollment is the one time a year most employers let you buy up the coverage without an exam. While you’re in the portal, confirm your 401(k) percentage still captures the full match, and elect the catch up contribution if you’ve turned 50.
If you’re retiring before 65
This year’s enrollment choices are part of the bridge between your last paycheck and Medicare. Next week on the blog we walk through the coverage options in those years, what each one depends on, and why the HSA you fund now matters more than it looks.
The guide
We put the whole packet into a decision guide written for energy professionals in Houston. It’s free, and it walks through each election in the order the portal asks for it. Download it here.
Coming in November
On November 1 the firm moves into tax planning season. Roth conversions, charitable gifts, and tax loss harvesting all close on December 31, and November is when the decisions get made. If you’re a client, your advisor will be in touch about the items that apply to you. If a bonus, a large gift, or a charitable plan is on your calendar before year end, let your advisor know this month.
Thank you for reading. If anything in this issue raises a question, Let’s Talk.
IMPORTANT DISCLOSURE INFORMATION
Past performance is no guarantee of future results. Different types of investments involve varying degrees of risk. Therefore, there can be no assurance that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Advocates Wealth Planning (“Advocates Wealth Planning”), or any non-investment related content, will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Neither Advocates Wealth Planning’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if Advocates Wealth Planning is engaged, or continues to be engaged, to provide investment advisory services. Advocates Wealth Planning is neither a law firm nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. Moreover, no portion of this discussion or information serves as the receipt of, or a substitute for, personalized investment advice from Advocates Wealth Planning. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.theadvocateswealth.com. The scope of the services to be provided depends on the needs and requests of the client and the terms of the engagement.
Please Remember: If you are an Advocates Wealth Planning client, please contact Advocates Wealth Planning, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless and until you notify us, in writing, to the contrary, we shall continue to provide services as we do currently.