Work Life

Analyzing Your New Benefits Package

You just landed a new job? Congratulations! Along with new opportunity, a new job typically brings a new employer-sponsored benefits plan—one that may not equal the one you're leaving behind. It's important that you take the time now to familiarize yourself with the details of your new plan, says Lindsey Hansen, SunTrust Private Financial Advisor. "You don't want to wait to read the fine print until it's time to cash in on your policies," he adds. Here are four items to consider:

1. Evaluate your life insurance

"A lot of people know they have life insurance, but they don't know how much coverage they actually have or need," Hansen says. "If there are people who rely on your income, you owe it to them to do the calculations." Hansen recommends evaluating your coverage with an online calculator that accounts for inflation, expenses and income. If the numbers show your policy payouts aren't sufficient to cover future expenses, consider upping your coverage or investing in a supplemental policy.

2. Check on supplemental health insurance

Even if your new plan offers excellent health benefits, certain medical events, such as a chronic illness that requires long-term care, may still pose a financial risk. Supplemental insurance can help fill the gaps in your current health plan. Hansen suggests running a "worst-case scenario" analysis to assess whether you have the funds on hand to deal with a disaster. Be sure to read the fine print: Some employer-sponsored benefit packages include disability insurance, so extra insurance might not be the best use of your funds.

3. Diversify your retirement savings

Stashing additional money in a Roth IRA is a smart way to maximize tax-advantaged contributions to your retirement savings. Even if you don't expect to hit the 401(k) contribution limit, diversifying the accounts in which you hold your retirement savings makes sense. A typical employer-sponsored plan limits you to a relative handful of funds, while an IRA lets you invest in a virtually unlimited range of options.

4. Consult a pro

Assessing a benefits package can be complicated. If you're not sure whether your new benefits provide adequate coverage, or if you need help understanding the details, ask an expert to help you run the numbers on your health and retirement options and identify potential shortfalls. "Sometimes people get overwhelmed by having so many choices," Hansen says. "An advisor can review your options, lay out the pros and cons, and help walk you through making the decisions that are right for you."

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