Are you “Fiscally Fit”? April 4 marks National Employee Benefits Day
Take a moment to ponder this question: Are you a person who has put away three to six months worth of savings in an emergency fund or are you living paycheck to paycheck?
A recent study published by Bankrate revealed that only 38% of Americans have enough money in their savings to pay for an unexpected event, such as a car repair or hospital visit. For those who are short on cash, 16% of respondents said they would borrow from a friend or family member, while 12% mentioned credit cards.
These are not the only methods used to pay for unexpected expenses. Nearly one-fifth of 401(k) plan participants borrow at any given time against their plans – often multiple times! This does not bode well for the employee. If the employee leaves their job for any reason, the balance is due within 60 days; if it is not paid back in the allotted time frame, then the loan balance is in default and is now a tax liability.
Here are some recommendations for employees to ensure they’re financially fit:
• Get on track to start saving for the long and short term. Putting aside a percentage of a paycheck into a savings account every pay day will start to build that nest egg.
• Revisit contributions made to 401(k). Verify that you are maximizing your contributions, especially if your employer matches contributions – this is free money in your pocket!
• Know your healthcare options. Health savings account (HSA) and flexible spending account (FSA) may seem confusing at first – but knowing the benefits of both will help save you money in the long run. These funds are pretax contributions – giving you an opportunity to pay for out-of-pocket expenses in a cost-effective way!
Emplicity encourages all client sites and internal employees to take a few moments to reflect on their own financial fitness. Our team is ready to answer any questions regarding health insurance, 401(k), worker’s compensation insurance, and other benefits. Reach out to us today: 1-877-476-2339.