Here are some important considerations to help you make the most of extra benefits for 2014.
-- 401(k) contributions. The contribution limit for 401(k)s, 403(b)s, 457s and the federal government's Thrift Savings Plan remains $17,500 in 2014, plus an extra $5,500 if you're 50 or older during the year. But that doesn't mean you should leave your 401(k) on autopilot. If you haven't been maxing out your contributions, see whether you can afford to contribute a bit more than you did last year. And boost your contribution level to make the most of catch-up contributions if you'll have your 50th birthday this year.
-- Disability insurance. Although most employers provide some disability insurance to their employees, it's usually much less than you'd need to cover your bills if you were unable to work for an extended period. Calculate how much coverage you'd actually receive free from your employer, and see whether it's worthwhile to fill in the gaps by buying extra coverage during open enrollment.
-- Life insurance. Employers generally provide up to one to two times your income in life insurance free, and they will let you buy extra coverage during open enrollment. But their supplemental policies generally cost more than you'd pay for a preferred-rate individual policy, and the rates typically go up every five years instead of staying fixed for 20 or 30 years.
-- Dental insurance. Many employers are offering dental coverage as an add-on this year. But before signing up, compare the total premiums you would pay over the year with the annual coverage cap, which is often $2,000 or less. If your employer offers a subsidized plan as a fringe benefit, it could be a good deal. But otherwise it may be more cost-effective to add pretax money to your flexible spending account to cover dental expenses.
(Kimberly Lankford is a contributing editor to Kiplinger's Personal Finance magazine and the author of Ask Kim for Money Smart Solutions (Kaplan, $18.95). Send your questions and comments to firstname.lastname@example.org. And for more on this and similar money topics, visit http://www.Kiplinger.com.)
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