Making the Most of Your Retirement Benefits During Open Enrollment

Fall is open enrollment season for many employees, which means they can make changes to their benefits options including the usual staples of health insurance, long-term disability and dental benefits.  Plus you can make changes to your 401(k) retirement plan during open enrollment.

The decisions you make during open enrollment have a big impact on your financial well being. So, if you haven’t given much thought to your retirement plan, it’s time to find how to make the most of your benefits package.

The first thing you want to do is find out the dates of your company’s open enrollment window. Understand that if you decide to make any changes, you will likely be locked into these changes for another year. You should then talk to your human resources department and get a list of all the benefits options available. You’ll want to read the menu for all your benefits and make decisions on what is best for you for all your benefits.

Here are tips on how to review and evaluate 401(k) benefit options:

Open Enrollment and Your Retirement Plan

Open enrollment is an excellent time to review your retirement plan. First take a look at how much you are contributing to your 401(k). Are you saving enough to reach your retirement goals? Can you save more? At a minimum, you want to take full advantage of a company contribution match. While not all employers offer this perk, if your employer does, take advantage of it. Most matching programs are around 3-5% of your income, and those percentages may increase as your years of service to the company accumulate.

These contributions can really add up: Let’s imagine that your employer matches 50 cents for every dollar that you contribute to your 401(k), up to the first 6%. By investing up to the company match, you’ve saved 9% of your income – and you’ve earned a “guaranteed” 50%  “return” on your investment. That’s a pretty hefty return with very little work on your part.

Next you should look at the asset allocation mix within your retirement portfolio. The ideal mix of assets is one that achieves the highest level of returns given the risk you are willing and able to take. Generally, the more time you have until retirement, the more capacity your portfolio should have for higher-risk investments like stocks.

When selecting your mix, be sure to include any retirement assets you own, including those that are outside of your 401(k). This ensures you have an optimal allocation across all the accounts in your entire retirement portfolio.  Additionally, an important advantage of reviewing your portfolio holistically is the benefit that may be derived from efficient asset location. Using this strategy, you can maximize after-tax returns by holding certain investments (typically fixed-income securities) in tax-advantaged accounts (such as a 401(k)) and holding other investments, like equities, in taxable accounts (such as a brokerage account).

Once you have established an appropriate asset allocation, it’s not simply a “set and forget”. Open enrollment should be a reminder to review your asset allocation and rebalance where necessary.  Some investments may have grown more than others over the year, making you overweight in a particular asset class. Now is the time to realign your portfolio with your initial allocation to keep you on track. Another type of adjustment that might be considered at open enrollment is to your asset allocation itself – your circumstances may have changed from previous years necessitating a more conservative allocation. Typically, as you approach retirement, your portfolio has less tolerance for high volatility and so your portfolio should generally become more conservative as time goes on.  Investment advisers usually refer to this as your “glide path”.

With your contributions and your asset allocation strategy in place, the next important step is to select the funds you want to invest in. When doing this, be sure to do your due diligence and review the cost and quality of the funds that you’re considering. And if you already own a fund, now is the time to review whether there were any changes made to key items such as fund fees or whether new fund options have been added to the company’s 401(k) plan.

Take Inventory of Your Finances

Open enrollment can be a great time to do a broader inventory check of your overall financial situation.

Many of us tend to let financial decisions that don’t have immediate consequences slip. We may diligently pay our electric bills and credit cards every month, but forget how much we have stashed away in a rainy day fund or how close we are to paying off student loans. Long-term goals like retirement and the kids’ education can also get lost in the mix. So let open enrollment be the prompt that gets you to pull out the calculator and figure out how to optimize between your different priorities. is an online investment advisor that helps people lock in more money for retirement across all their accounts, including their 401(k). Using patented technology and proven portfolio management methodologies, Jemstep tells users exactly what to buy and sell to maximize their returns without undue risk. Jemstep’s easy-to-use website takes the complexity, difficulty, and anxiety out of investing. Providing the high-caliber, personalized advice that has traditionally been available only to wealthy investors, Jemstep empowers all investors to take charge of their retirement planning and invest with confidence. A Registered Investment Advisor with the SEC, Jemstep is led by a team of experts with over 100 years’ combined experience in financial management and technology innovation and development. Learn more at