Getting married is a life-changing event, but it also is a benefit-changing event in more ways than one! With everything going on with the wedding planning it is hard to think of the day-to-day post wedding planning details. Getting married and adding a spouse to your work benefit plan, or you to theirs, isn’t just about the health insurance premium. Many employers offer company-sponsored benefits like health savings accounts and 401(k) savings plans.  If you don’t take advantage of these benefits, you could be missing out on hundreds – or thousands – of dollars in savings.   This month, we want to provide you with information about how these accounts work and how you can make them work for YOU!  Indiana Investment Watch was kind enough to help our readers understand and say “I DO” to ALL of their work benefit options:

Health Savings Accounts

Health Savings Accounts, or HSAs, were created in 2003 to help people covered by high-deductible health plans pay for medical expenses.  Money contributed to an HSA is NOT taxed at the time of deposit.  You, your employer, or both can put money in an HSA.  If your employer doesn’t offer an HSA, check with your bank.  You can use the money to pay for qualified medical expenses, like visits to the doctor or pharmacy.  Here’s what Indiana Investment Watch likes best about HSAs: the money stays put from year to year!  If you manage to avoid getting the flu this winter, the money in your HSA will roll over and be available next year.  Funds in an HSA also belong to YOU!  So if you change jobs or take time off to be a stay-at-home parent, the money remains in your account.

Flexible Spending Accounts

Now let’s talk about FSAs.  The IRS allows you to make contributions to an FSA through payroll deductions that are taken out on a pre-tax basis.  The best part is that by putting money in an FSA, just like in an HSA, your taxable income is lowered.  Who wouldn’t want to pay less tax?  If your employer offers an FSA plan, you have to sign up for it during the company’s open enrollment period, and you’ll have to re-enroll each year.  You’ll be asked to decide how much money you want deducted from your paycheck each pay period, with the minimum and maximum amounts determined by your employer.  That money will be set aside to pay for eligible out-of-pocket medical expenses.  Unlike an HSA, FSAs have a “use it or lose it” rule.  The money does NOT carry over from year to year, so you’ll want to consider the amount you contribute carefully and keep track of that money.  Indiana Investment Watch 101 says- “Not using your full FSA contribution is like throwing money in the garbage!”

401(k) Plans

If your employer offers a 401(k) plan, it’s likely you’ve been to a meeting to discuss your options or at least been invited to such meetings.  It’s a great opportunity to learn, but let’s face it, such meetings can be confusing.  So what is a 401(k) plan?  Simply put, it’s a way to save for retirement.  Money is deducted from your paycheck BEFORE taxes are withdrawn.  This helps lower your taxable income and save you money!  Your investment earnings will NOT be taxed until the money is withdrawn when you retire.   When setting up or making changes to a 401(k) plan, there are a few things you need to know.

–        Does your employer match a portion of your contribution? If so, Indiana Investment Watch says take full advantage!  Otherwise, it’s like passing up free money.

–        How much can you afford to contribute?  Most experts recommend setting aside at least 10% of your gross income.  If that isn’t possible, start smaller and contribute more when you start earning more.

–        Have you recently changed jobs?  Don’t leave your 401(k) behind!  You can roll over your account balance into your new employer’s plan or into an Individual Retirement Account (IRA).

Each employer is unique and may offer additional benefits such as deferred income matching, paid days off for parent teacher conferences, volunteer efforts, and so on.  Don’t be shy.  Ask your company’s human resources representative questions about your benefits!  Then discuss the options with your spouse and an even an investment professional.