People tend to concentrate on health insurance decisions during open enrollment in the fall. But you also have several other options for employee benefits that can provide valuable protection, reduce your tax bill and save you money.
Contribute to a health care flexible-spending account. The amount of money you can contribute pretax to a health care FSA rises a tiny bit, from
Contribute to a health savings account.If you have a high-deductible health insurance policy in 2015 (with a deductible of at least
You can use the money tax-free for current medical expenses, but you also have the option of keeping it growing in the account for years, then using it tax-free for medical expenses in the future. See FAQs About Health Savings Accounts for more information. Your employer may add even more money to your account if you participate in a wellness program.
Choose the dependent-care flexible-spending account. You can contribute up to
The dependent-care FSA will generally save you more in taxes than taking the child-care credit unless you have low income. But if you have two or more kids younger than 13 and spend more than
Take advantage of transportation benefits. If your employer offers a commuter benefits program, you can set aside up to
Boost your retirement savings contributions. It's also a good time of year to reassess how much money to set aside from each paycheck for your retirement savings. You'll be able to contribute up to
Consider Roth contributions. If your employer offers both Roth and traditional contributions to your 401(k) or other retirement-savings plan, you may want to reassess which route to take for 2015. If you've been contributing primarily to a traditional, pretax 401(k), consider diverting at least some of your contribution to the Roth 401(k) instead - you won't get a tax break now, but you'll be able to withdraw the money tax-free in retirement. It's a good way to build up some tax-free savings for the future, especially if your income is too high to contribute to a Roth IRA.
Weigh extra disability insurance. If your employer lets you buy extra disability insurance during open enrollment, that may be the best way to boost your benefits if your current coverage falls short. Many employers automatically provide some disability insurance for employees, but those employer-paid policies generally cover 60% or less of pretax income, with a monthly cap of
Think about long-term-care insurance. Some employers also give you the option to buy long-term-care insurance during open enrollment, often with a 5% to 10% group discount. And you may benefit even more if you're a single woman. Most long-term-care insurance companies recently changed rates to charge single women as much as 50% more than single men when they buy coverage on their own. But long-term-care policies offered through employers generally must have unisex rates. Healthy men or couples, however, may do better with an individual policy. Compare the prices and coverage offered by your employer with buying a policy on your own.
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Kimberly Lankford is a Contributing Editor at Kiplinger's Personal Finance magazine. .