Inspira Financial | B2C | 2024
Are You Sticking To Your New Year’s Resolutions?
As the first few months of the year pass by, the initial excitement of New Year's resolutions can sometimes fade. Whether your goal was to save more money, get in shape, or improve your overall well-being, staying on track can be challenging. However, there's a valuable tool that you might not be fully utilizing: your employee benefits. These benefits can provide a significant boost in helping you achieve your aspirations, whether they are financial or health-related. Let's explore how pre-tax benefits can be the secret weapon to sticking to those New Year's promises.
Financial resolutions
Health savings accounts (HSAs) and flexible spending accounts (FSAs)
If your New Year's resolution involves getting your finances in order, HSAs and FSAs can be invaluable allies. If you’re enrolled in an HSA, this allows you the opportunity to contribute pre-tax dollars toward medical expenses. Or if you prefer, you can contribute now and save for the future. Since HSAs roll over year-to-year your funds never expire. The money you put into an HSA is not taxed and can travel with you throughout your career providing a triple benefit of tax savings and a dedicated fund for health care costs.
FSAs operate similarly, offering the chance to contribute pre-tax money to cover eligible medical expenses such as copayments, deductibles, and other health care needs. If you’re enrolled in an FSA, you may reduce your taxable income and ensure you have funds set aside for medical expenses throughout the year. However, it’s important to track your spending since FSA funds are "use it or lose it" by the end of the plan year (although some plans offer a grace period or rollover options).
Don't forget, pre-tax benefits, including FSAs and HSAs. have specific contribution limits set by the Internal Revenue Service (IRS). Reference your specific account limits and plan your contributions accordingly to maximize your savings without exceeding the allowable amounts.
Retirement savings plans
Planning for retirement might have been on your list of resolutions, and if your employer offers pre-tax retirement plans like 401(k) accounts, they can be incredibly helpful. When you contribute to a 401(k) plan, you are putting a portion of your salary into the account before taxes are deducted. This not only lowers your taxable income but also helps you build a nest egg for your future.
Many employers offer matching contributions for 401(k) plans, which means they will match a percentage of your contributions. This essentially gives you "free money" for your retirement savings, making it easier to achieve your financial goals.
Health goals
Gym memberships and wellness programs
Improving your health and fitness is a common New Year's resolution, and employee benefits can make this journey more accessible. Many employers provide wellness or lifestyle accounts that offer discounts on gym memberships, reimbursements for fitness classes, and incentives for participating in wellness programs. If you’re enrolled in this type of benefits program, don’t let it go to waste. By taking advantage of these benefits, you not only save money but also gain the motivation and support needed to prioritize your health. The financial savings make it easier to commit to regular exercise and wellness activities, leading to improved overall well-being.
Tips for success with pre-tax benefits
Know your options
The first step to leveraging pre-tax benefits is understanding what your employer offers. Take the time to review the available benefits, contribution limits, and any employer matching programs. Knowing your options allows you to make informed decisions that align with your goals.
Set realistic goals
When it comes to financial and health goals, setting realistic and achievable milestones is key. Break down your resolutions into smaller steps that you can track and celebrate along the way. This helps maintain motivation and allows you to see progress over time.
Automate contributions
Many pre-tax benefit programs allow you to automate your contributions directly from your paycheck. By setting up automatic payroll deductions, you ensure that your savings and expenses are taken care of without any extra effort on your part.
Stay informed
Tax laws and benefit regulations can change, so it's essential to stay informed about any updates that may affect your pre-tax benefits. Your employer should provide resources and updates to help you navigate these changes effectively.
A path to resolution success
As you reflect on your resolutions, remember that pre-tax employee benefits can be powerful tools in achieving your financial and health goals. Whether you're saving for retirement, prioritizing your well-being, or aiming for a healthier lifestyle, these benefits offer tangible advantages that can make a real difference.
By maximizing contributions to HSAs, FSAs, and other pre-tax accounts, you not only save money but also invest in your future and well-being. Take the time to explore your benefits, set clear goals, and leverage them throughout the year.
So, are you sticking to your New Year's resolutions? With the help of employee benefits, this could be the year you turn those aspirations into lasting achievements. Here’s to a year of financial prosperity, improved health, and reaching your fullest potential!