Overwhelmed with benefit choices with new job

[mrsbornkuntry]

My DH started a new job (with double his previous income, yay!) and I am just overwhelmed with all of the choices in benefits. I have chosen our health insurance and dental insurance. I think I'm going to get vision as well since 5 of us wear glasses. At his last job the choices were pretty much either get the insurance or don't, but this one has 6 or more choices for each category .

How do I decide how much life insurance we need? We already have a policy for DH and a small one for me and the kids (pretty much just covers burial) through the National Guard, do we need more?

Also, I don't know how much to put in our flex spending account (health), is there a calculator for that? I'm scared to put too much since we lose what we haven't used at the end of the year and it doesn't include otc medicines anymore. On the other hand, with 5 kids we make quite a few visits to the dr. and will have a copay. Does it include oop dental and vision costs? Should I just wait and enroll for 2012 since we'll already be 4 months into 2011?

And should DH get letters in the mail telling him when our insurance from his old employer ends? What about his 401K? We'd like to move that into his TSP, but I can't find any info on their website on how to do that.

DH spent the past two days in orientation, it seems like they're paying him, then telling him how to spend it and then he brings home all of the papers to me for me to figure it all out because I handle those things so now I'm buried in stacks of printouts and brochures all over my desk. Help!!

 

[QVCshopper]

Regarding his prior 401k, I wouldn't roll it into his new work's plan. Instead, I would put it in a rollover IRA at a reputable mutual fund company like Vanguard, Fidelity, etc.

About the flex plan, look at what you spent last year and put that away. I don't really put much into the flex plan myself as we are relatively healthy and you really only save your tax bracket, which is 15% for us. If you have some upcoming expense you know about, maybe save for that.

For the eyes, yes, get it. We get the eyes about every other year. For the life insurance, DH gets five times his salary, plus we have our own term life. We can get a $100k policy for me, and used to, until we got our own term life insurance.

I think you should get your DH's input tonight or this weekend. We treat these things as a group decision. We always go in the best plan we can afford since I have young kids. You never know what can happen.

Hope that helps!

 

[juliebean]

Congrats on the new job for your hubby! My husband's company has similar choices as far as life insurance, health savings, etc.

I would also move the 401K into a trusted independent IRA, if for no other reason than to have more control and also to diversify.

For the company life insurance, the cost is so small that we go with the highest available amount (it's a couple of dollars a month) - it's five times his yearly pay and would cover our mortgage and give us living expenses for about 5 years in case something happened to him. The no brainer for us is that it's just about $20 a year more than 1 or 2 times his salary, so it's a lot of protection for not much money. We also have the max. spouse available for a couple of dollars a year too, same thing - peace of mind for a couple of dollars a year. If you husband's is similarly very low cost - I'd spend the extra couple of dollars and get the max. If not, make sure you'd have enough to keep you going until you can become the major earner and protect your assets.

We have a HSA, and money can be saved year to year, but if you have an FSA, I would only put a small amount in it - hate to lose that and the year is already 1/3 done.

 

[scrapquitler]

How do I decide how much life insurance we need? We already have a policy for DH and a small one for me and the kids (pretty much just covers burial) through the National Guard, do we need more?

The reccomendation that I've seen is that if you have children, you should have 10X your income level for each adult. So if your husband makes 50K, you should have 500K of life insurance for him. For a SAHM, DH and I decided that we should have 250K on me, then DH could hire a nanny/housekeeper at least on a part time basis until the kids are out of here.
!

,

 

[tar heel]

Yes, the Flexible Spending Plan money can be used for out-of-pocket dental and vision expenses. Many also give you past December 31 to use the money -- ours is March 31 of the following year.

I've never been particularly worried about putting too much in -- we'd just buy glasses, stock up on contacts or order all the prescription refills we have available if we had extra money.

Someone said it was "only 15%" savings. I think 15% is a lot! One of the best things about the FSA is that all the money is available January 1 even though your deductions have just started.

 

[Kitzka]

For the life insurance, we get the amount that will cover our mortgage plus burial costs so the other spouse can use their salary to live on should one of us pass away.

for flex spending, you can use it on some over the counter meds but you need a presciption or something like that from your dr. we are a family of 3 and we use about 3000 a year. between dr's appt, scripts, glasses, contacts, dental visits and copays, we usually use it all up by Sept. i need to remember to put in more next year!

Lara

 

[herdtoDisney]

Also, I don't know how much to put in our flex spending account (health), is there a calculator for that? I'm scared to put too much since we lose what we haven't used at the end of the year and it doesn't include otc medicines anymore. On the other hand, with 5 kids we make quite a few visits to the dr. and will have a copay. Does it include oop dental and vision costs? Should I just wait and enroll for 2012 since we'll already be 4 months into 2011?

And should DH get letters in the mail telling him when our insurance from his old employer ends? What about his 401K? We'd like to move that into his TSP, but I can't find any info on their website on how to do that.

I don't know if you can move 401k money into the TSP (he's federal, you're talking Thrift Savings, right?) I don't remember seeing this on the paperworks anywhere-I thought it all came out of the paycheck. But double check on that.

As for the FSA, I have that and what I do is, figure up approx. how many co-pays and OOP I expect throughout the year (family of seven=14 dentist visits and I don't have dental insurance available ) and any ongoing prescriptions. To ensure that we use it all, I don't put any 'extra', meaning, I figure what I know we will use, but if we have a couple extra co pays (say for strep or something) that's ok, at least we use the whole account every year. I just reread and you have 5 kids , as I do the FSA can be used for vision and dental as well as medical.

 

[Jeff_G]

Look into Term Life outside your employer, do not have ALL your life insurance with your employer! If you want to have some if it with them ok, but check into term life. Generally speaking if someone is depending on your income you should have 10 times your annual pay. But again don’t have it all with your employer…

Two or so years ago my father In law was laid off, his employer shutdown the company and moved overseas. Two months after he was laid off, the day before his medical insurance was to expire, he went into the hospital with some abdominal pain and was diagnosed with terminal cancer. At that point he could not get any life insurance. Thankfully he was a veteran and the VA system took good care of him. He battled the cancer for two years but ultimately lost the fight.

I have discovered that my employers group life insurance costs more per month for less coverage then my term policy. Your mileage may vary based on health and age but I would look into it.

 

[mrsbornkuntry]

Thank-you for all of the replies, you have answered pretty much all of my questions. I have discussed the options with DH, but ultimately it is my decision, I pay the bills and handle the insurance, that's just the way we work.

I think I am going to not use the FSA for this year since it won't be a full year, but then enroll during open enrollment for next year.

I like the idea of not getting vision every year, I hadn't thought of that, but it makes alot of sense. We will need it this year, but I will reconsider next year.

Thank-you so much for the life insurance guideline, that is exactly the kind of answer I needed.

 

[mrsbornkuntry]

I don't know if you can move 401k money into the TSP (he's federal, you're talking Thrift Savings, right?) I don't remember seeing this on the paperworks anywhere-I thought it all came out of the paycheck. But double check on that.

As for the FSA, I have that and what I do is, figure up approx. how many co-pays and OOP I expect throughout the year (family of seven=14 dentist visits and I don't have dental insurance available ) and any ongoing prescriptions. To ensure that we use it all, I don't put any 'extra', meaning, I figure what I know we will use, but if we have a couple extra co pays (say for strep or something) that's ok, at least we use the whole account every year. I just reread and you have 5 kids , as I do the FSA can be used for vision and dental as well as medical.

Yes, the thrift savings plan. I'll have to read into it some more, but it sounds like an IRA might be the better way to go.

 

[cbg1027]

How do I decide how much life insurance we need? We already have a policy for DH and a small one for me and the kids (pretty much just covers burial) through the National Guard, do we need more?

Congrats to your DH on the new job!

I'm not much help here but there is one area I can comment on...the life insurance.

My basic advice would be to get as much life insurance as your budget will allow with making major cuts to other areas. I say this for several reasons -

1 - You have 5 children. You don't know how old they will be when you die and what sort of situation they will be in at the time. Say 1 (or more) are in college at the time and you are paying for it. If something happens to you or DH....then you child gets the rug pulled out from under them and it will be very difficult for them to continue their education. Yes, they can get a job, or work more hours, but that's a huge stressor on top of a horrible thing already (the passing of a parent).

2 - All of the 'hidden costs' of your death are unpredictable at this point. My mother just died a few months ago and my father 2.5 years before that and I cannot tell you how many things keep popping up that we have to pay for. Not even debts, just all the legal garbage....everything has a processing fee, a transfer fee, some sort of fee! It's never ending and having to worry about money after the death of a parent just makes things that much harder in an already difficult situation.

3 - Consider your funeral and applicable burial costs. Find out what it would cost today, and then double it to account for inflation in the hopes your kids won't have to worry about that for a long time.

There are so many things that could happen and it is so much easier on your family when they don't have to worry about all the financial aspects immediately after your death.

Another example - my mother was self-employed and had no retirement fund, no 401k, no IRA, nothing, zip, nada. During the last 6 months of her life we finally had to hire a part time caregiver because my brother, sister, and I were exhausted and could not arrange for one of us to be with her at all times. A point came where someone had to be with her 24/7. Hiring a caregiver (LPN, RN, etc) is not cheap and we had to pay for it out of our pockets. My mother had to stop working because she was ill, so there was no money coming in to pay for the caregiver. Lucky for us, my mother had a $250,000 policy, so my siblings and I were able to be 'paid back' for the money we spent on the caregiver.

Again, my bottom line here is get the biggest policy you can feasible afford with sacrificing quality of life! You never know what the costs of your death will be and the insurance is just that - insurance so that your kids will be ok after you're gone.

 

[Magical-Memories]

Contests on your hubby's new job!

I agree with other posters on the life insurance. You want to make sure you have an outside term life policy for each of you (sounds like you might). Why? Because if you only have the life insurance offered by your company....and say 10 years down the road, he gets laid off or changes jobs and the new company doesn't offer this benefit, then you won't have anything....and now you are 10 years older so getting term will be more expensive...or God forbid you have developed some type of illness that will prevent you from getting it.

We have a million dollar term for my dh ...it is/was affordable for us and will end when kids are out of college and house is paid. I only have 200... Which I probably should increase.

With that said, dh did take advantage the life insurance his work offers too, because it was so cheap. (I think it's unnecessary....but he did it anyway.)

On the 401k....definitely roll that into something outside of your husbands new company too. Just in case anything were to happen to your new company. You could call Fidelity or Schwab, etc. yourself and they will walk you through. Or you could go see a financial planner and they will do it too.

Good luck

 

[LovableGluttons]

Congrats to your DH on the new job!


Another example - my mother was self-employed and had no retirement fund, no 401k, no IRA, nothing, zip, nada. During the last 6 months of her life we finally had to hire a part time caregiver because my brother, sister, and I were exhausted and could not arrange for one of us to be with her at all times. A point came where someone had to be with her 24/7. Hiring a caregiver (LPN, RN, etc) is not cheap and we had to pay for it out of our pockets. My mother had to stop working because she was ill, so there was no money coming in to pay for the caregiver. Lucky for us, my mother had a $250,000 policy, so my siblings and I were able to be 'paid back' for the money we spent on the caregiver.

Again, my bottom line here is get the biggest policy you can feasible afford with sacrificing quality of life! You never know what the costs of your death will be and the insurance is just that - insurance so that your kids will be ok after you're gone.

Abby, you really put it out there! I work for a hospice agency and my patients and family are often at a loss when discovering that their health insurance does not pay for round the clock patient care in or out of the home if the patient requires a lot of assistance.

There are public assistance programs that do provide that kind of care, but you have to qualify for them financially, and it still is not 24 hour care.

Many long term care plans require 50 days in a nursing home before they will begin to pay. If Medicare pays 100% of the first 20 days, but only 80% of the next 80, that 20% to cover until the LTC plan kicks in can be a huge financial burden.

 

[mrsbornkuntry]

Okay, another question now, a couple posters have mentioned getting a term life insurance policy outside of DH's company. Is there a website to compare some or can anyone recommend a good company to look into?

 

[TammyAlphabet]

Definitely get the life insurance. My late husbands life insurance spared myself and our children alot of worry when he passed. I also agree that getting term outside of the employer is good.

 

[Jeff_G]

Okay, another question now, a couple posters have mentioned getting a term life insurance policy outside of DH's company. Is there a website to compare some or can anyone recommend a good company to look into?

I went with Zander Insurance, their web site asks a few questions and then provide you with several quotes from different insurance companies.

I also checked into select quote but found their agent very pushy.

I did have to submit some blood work and a urine sample as they check for HIV, some proteins that indicate kidney failure, drugs and nicotine, as well as a few other things. They sent an EMT to the house he was real good with the blood draw. Well worth the hassle for the peace of mind knowing my family would be protected if something were to happen to me…

You can go with a 20 or 30 year term, enough to get your kids out of the house, your house paid off and hopefully enough money invested at the end of the term to self insure.

 

[mrsbornkuntry]

I went with Zander Insurance, their web site asks a few questions and then provide you with several quotes from different insurance companies.

I also checked into select quote but found their agent very pushy.

I did have to submit some blood work and a urine sample as they check for HIV, some proteins that indicate kidney failure, drugs and nicotine, as well as a few other things. They sent an EMT to the house he was real good with the blood draw. Well worth the hassle for the peace of mind knowing my family would be protected if something were to happen to me…

You can go with a 20 or 30 year term, enough to get your kids out of the house, your house paid off and hopefully enough money invested at the end of the term to self insure.

Thanks, I will look into those .