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All About The Numbers
- THE AFP BLOG -
We've found that it is not just the numbers that drive planning...
so here are some thoughts
we would like to share
that may help you on your financial journey.
Which Options Make Sense for You?
October 17, 2025
Open enrollment season is here again, and if you’re like most people, you’re staring at a screen full of options, wondering if you should simply click “renew all” and call it a day. But here’s the thing: whether you're reviewing Medicare options or your employer’s benefits package. This isn’t just paperwork; this is a significant part of your financial life. Your benefits package is worth 30-40% of your total compensation, and your Medicare choice impacts not just your budget but your comprehensive health care coverage.
Make Your Benefits Work for the Life You're Building
This October, as we celebrate National Financial Planning Month, let's approach open enrollment differently. Instead of thinking about it as a compliance task, consider it an opportunity to align your benefits with what matters most to you and your family. Start with the Right Questions
Before diving into all those acronyms, step back and ask yourself what you're really trying to accomplish. Are you trying to:
- Build financial security?
- Maximize retirement savings?
- Prepare for healthcare costs down the road?
- Protect your income if something unexpected happens?
- Ensure you have the right Medicare coverage for your health needs and budget?
Your answers should drive your benefit decisions, not the other way around.
Making Intentional Choices
Health Savings Accounts are considered the best accounts you can have and deserve attention if you're eligible. Unfortunately, they are only available for most individuals up to age 65. But here is what an HSA offers:
- Contributions that reduce your taxable income
- Tax-free growth
- Tax-free withdrawals for medical expenses
If you can afford to let this money grow rather than spending it immediately, you're building a dedicated fund for healthcare costs in retirement when you'll likely need it most.
Flexible Spending Accounts work well for predictable expenses like regular prescriptions, glasses, or childcare costs. Just be realistic about what you'll spend—it's better to contribute less and use every dollar than to overestimate and lose money at year-end.
Your retirement plan is where small changes compound over time. If you haven't increased your contribution percentage in a while, consider bumping it up by even 1-2%. If your employer offers automatic escalation, enroll in it. You'll barely notice the change, but your future self will thank you.
Many plans now offer both traditional pre-tax and Roth options. If you're early in your career or have all your retirement savings in pre-tax accounts, Roth might make sense.
Life and disability insurance often get overlooked, but they protect what matters most. If people depend on your income, is your coverage adequate to provide for them? Disability insurance protects your paycheck if you can't work—often more important than insuring your car or home.
For Those on Medicare
During the Annual Enrollment Period, review:
Your prescription drug needs: Do your current medications align with your plan's formulary? Have any of your drugs moved to a different tier or been dropped from coverage?
Your healthcare providers: Does your plan still include your preferred doctors and hospitals in-network?
Your out-of-pocket costs: Compare premiums, deductibles, copays, and maximum out-of-pocket limits across available plans. A lower premium doesn't always mean lower total costs.
Original Medicare vs. Medicare Advantage: Original Medicare (Part B) with a separate plan for Prescriptions (Part D) and a Medigap policy is considered more comprehensive and is a bit more cumbersome due to three sections that need to be reviewed. Medicare Advantage plans (Part C) often include prescription drug coverage and extra benefits like dental and vision, but they typically require you to use network providers.
Don't Forget the Details
Before your enrollment deadline, take time to:
For Everyone:
- Review what you spent on healthcare last year and anticipate this year's needs
- Verify that beneficiaries are up to date on life insurance and retirement accounts
If You're Working:
- Explore other benefits like legal services plans, commuter benefits, and dependent care FSAs
- Consider whether you can increase your retirement contribution, even by 1-2%
If You're on Medicare:
- Check if your plan has sent you an Annual Notice of Change (ANOC) outlining any modifications to your coverage
- Use Medicare's Plan Finder tool at Medicare.gov to compare all available options in your area
- Consider whether you need additional coverage for dental, vision, or hearing services
Life changes, and your benefits should reflect your current situation and future goals.
Making It Count
Open enrollment doesn't require hours of research, but it does deserve your focused attention. Review what you spent on healthcare last year, think about what's coming this year, and make sure the benefits you're selecting support the life you're building. Just like financial planning itself, open enrollment isn't really about the products or the paperwork. It's about making sure the resources available to you are working toward the future you want to create.
When you approach it with intention rather than obligation, those checkboxes become choices that build toward the future you've envisioned, whether that's a comfortable retirement, financial security for your family, or the freedom to pursue what matters most to you.
Need help evaluating how your employer benefits fit into your overall financial plan? We're here to help you connect the pieces.
AUTHOR:
Teri R. Alexander, CFP®, MSFP, CeFT®, AIF®
Founder & Senior Advisor – Alexander Financial Planning, Inc.
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