Overview of DIY Money: Open Enrollment
In this episode, the hosts use open enrollment season as a reminder to review the financial benefits available through work. The conversation focuses on the big decisions most people face each year: 401(k) contributions and allocations, health insurance selection, life and disability coverage, and lesser-known employee perks that can add real value. The main message is to use open enrollment intentionally rather than just clicking through the default options.
Key Takeaways
- Open enrollment is a great annual checkpoint to reassess your workplace benefits.
- The biggest opportunities are usually:
- maximizing retirement contributions and employer match
- choosing the right health insurance plan
- reviewing life and disability insurance
- looking for extra employee benefits that are easy to miss
- Many benefit choices can be changed outside of open enrollment, but this is often the best time to make sure everything is set up correctly.
Retirement Plan Review: 401(k), 403(b), 457, etc.
Why it matters
The hosts encourage listeners to use open enrollment to check their company retirement plan, even if they’ve already been contributing.
What to review
- Contribution amount: Are you putting in enough to get the full employer match?
- Employer match changes: Companies sometimes change match formulas or contribution rules.
- Investment allocation: Make sure your portfolio still matches your goals and risk tolerance.
- Rebalancing: Open enrollment is a good yearly habit for rebalancing your account if needed.
Important guidance
- The employer match is described as free money and should generally be captured whenever possible.
- If you’re unsure about allocation, revisit whether you should be:
- aggressive
- moderately aggressive
- balanced
- fully invested in stocks or bonds, depending on your situation
- They also remind listeners to consider traditional vs. Roth contributions:
- Traditional often makes sense if you expect to be in a higher tax bracket now than later
- Roth often makes sense if you expect to be in a lower tax bracket now than later
- Splitting contributions can make sense if you’re somewhere in the middle
Health Insurance Decisions
High-deductible plan vs. PPO/traditional plan
The hosts break down the common tradeoff:
-
High-deductible health plan (HDHP):
- usually lower monthly premiums
- higher deductible
- often paired with an HSA
- may make sense for healthier people who don’t expect much medical care
-
More traditional/PPO-type plan:
- higher premiums
- lower out-of-pocket burden when care is needed
- may be better for people with ongoing medical needs or frequent care
What to compare
- Monthly premium
- Deductible
- Coinsurance
- Maximum out-of-pocket cost
- What services are covered
- Whether the employer contributes to an HSA
Practical advice
They suggest thinking about:
- how much healthcare you used last year
- whether you expect significant medical expenses next year
- whether you’re planning for pregnancy, surgery, or ongoing treatment
- how much your employer contributes to an HSA, since that can change the math
Life Insurance and Disability Coverage
Term life insurance
The hosts recommend checking employer-provided term life insurance, but not relying on it alone.
- Employer coverage may be inexpensive or free
- It may not follow you if you leave the job
- Having additional individual coverage outside of work can provide more stability
Disability insurance
They emphasize disability coverage as a commonly overlooked but important benefit.
- Short-term disability and long-term disability are both worth understanding
- Disability is often more likely than an unexpected death
- Coverage can be a major safeguard for your financial plan if you’re unable to work
Extra Benefits People Often Miss
The episode also encourages listeners to scroll through the “bonus” or hidden sections of their benefits portal.
Examples mentioned
- student loan repayment assistance
- parking reimbursement
- gym or health club memberships
- other employer reimbursements or perks
Why this matters
These benefits are easy to overlook but can add up significantly over time. The hosts note that some of these require a separate sign-up process or an additional website, so it’s worth reading the fine print carefully.
Main Action Items
- Review your retirement contribution amount and make sure you’re getting the full employer match.
- Reassess your 401(k) allocation and rebalance if needed.
- Compare health plan options based on expected medical usage, premiums, deductible, and out-of-pocket limits.
- Check whether your employer contributes to an HSA.
- Review employer-provided life and disability insurance.
- Look for hidden employee perks like loan repayment help, gym discounts, or parking benefits.
Closing Thought
The episode wraps with a simple DIY Money reminder:
“Live on less than you make. Invest the rest. Do so for a very long time.”
That theme fits the whole episode: open enrollment is less about paperwork and more about making sure your benefits are aligned with your long-term financial plan.