Disclaimer: Jill Schlesinger is an ambassador for Marcus by Goldman Sachs and has received financial compensation. However, all thoughts and opinions are hers.
Marcus by Goldman Sachs is the sponsor of the Jill on Money podcast, featuring Jill Schlesinger, a Certified Financial Planner, CBS News Business Analyst and author of the new book “The Dumb Things Smart People Do With Their Money”. Listen to her podcast on Apple and Stitcher.
Open enrollment season is quickly approaching and the choices can be overwhelming.
Other than the benefits I should take advantage of during open enrollment season, what other employer benefits should I be maximizing?
In the second part of this series, let’s look at retirement savings and education benefits.
Traditional Plans: In 2019, participants in 401(k)s, 403(b)s, most 457 plans and the federal government Thrift Savings Plan were able to make a maximum pre-tax contribution of $19,000, with a bonus catch-up amount of up to $6,000 for employees ages 50 and older. These amounts do not include employer matches. Remember: it’s wise to make sure you’re contributing at least enough of your own money to take advantage of your employer’s matching program, if it’s offered.
If your plan provider allows for automatic contribution escalations, choose it! By doing so, you can make sure that you are increasing your contribution level each year. While you’re at it, if there is an “auto-balancing” feature, use that too – it will keep your investment allocation in line with your desired target percentages for each holding.
Roth Plans: Nearly three-quarters of plans are offering Roth 401(k)s to participants, yet only about 7.5 percent of participants are using them. As a reminder, with a Roth, workers make contributions using after-tax dollars and then are able to take tax-free withdrawals in retirement, as long as they follow the rules of the plan.