Answers to Financial Questions You’re Too Shy to Ask Your HR

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Anne: Have you ever wondered if you're truly making the most out of your paycheck, not just today, but for your future? From acronyms like 401k and HSA to that fine print and your benefits package, it's easy to feel overwhelmed or even unsure about what kind of savings opportunities are actually available to you at work today.

We're breaking down those questions from the major points all the way to that. Fine print so you can confidently take control of your financial benefits at work. And here to join us today are two expert guests from right here at SHRM. Brytnee Fallan from Financial Strategy and Accounting Operations, and Sheri Martel from Total Rewards.

Together we'll share insider tips, clarify the rules, and answer those tough employee contribution questions. You may be too shy to email your HR team about. All right, Brittany and Sherry, welcome to All Things Work.

Sheri: Thank you.

Brytnee: Thank you.

Anne: And just a [00:01:00] i'll, if you wanted to add the disclaimer.

Brytnee: Oh yeah. Um, I'm really excited to talk about 401k and benefits, but uh, I'd just like to add that we're not financial advisors, but we're happy to give you all the information that we can.

Anne: Perfect disclaimer. Thanks. Keep that in mind to our audience throughout this episode. All right, so let's kick things off by breaking down a few of the major acronyms to understand them a bit better. So, Brittany, in the retirement savings category, we often hear the two. Big ones, 401k and IRA. And especially for maybe students who are entering the workforce, they're learning all this for the first time.

Uh, could you explain the difference between the two?

Brytnee: Yeah, so a 401k is an employer sponsored plan. So it's a savings plan that employers can set up for their um, employees. And an IRA is a individual retirement account, which you can go to any financial institution or bank that has those options and [00:02:00] set them up on an individual basis, but an employer.

Sponsored plan is where you see your 4 0 1 Ks, your 4 0 1 4 3 Bs and things like that.

Anne: A lot of acronyms to keep up on, so, but we'll keep it simple for now. So, Sherry, in the total rewards category, can you explain the difference between the HSA and the FSA? I had a bit of a struggle the last couple years remembering.

Sheri: Certainly. So with the HSA, the S is for savings, so that. That's the key word there. So for the HSA, it's a health savings account to put money aside pre-tax to save for future medical, dental, vision expenses with the flexible spending account, the S is for spending. So that's the key word to remember there.

The money that you set aside for those medical, dental, vision expenses, needs to be spent within that current plan year. It's use or lose. So the difference between the savings that will last. Forever, um, you can keep adding into versus the spending [00:03:00] account that you do need to use each year.

Anne: I'm taking notes. I'm gonna keep this recording for when I re-enroll next year. So a common question employees might have, which is something I had for you, Sherry, when you and I were, uh, I called for our audience who may not know, I'm the one who actually called Sherry. And I said, I am having so much trouble.

Can you help me out? She got on a call with me, she screen shared, walked me through it. Sherry, you were wonderful. Your, the whole team here is amazing, and so I would love to dive into this common question about what is the best choice, which one's better for me when it comes to choosing between the different health savings plans?

How would you suggest HR respond to those types of questions?

Sheri: Well, thank you Anne, and I'm glad I was able to help you. It's a question that, um, does come up often, um, where I can't give exact advice as to what, to um, what plan is the right for [00:04:00] an individual. I do encourage. Each individual to make sure they fully understand each plan and what it entails. So what are the out-of-pocket maximums?

What are the deductibles? What are the copays? And then take that information back and really look at their personal financial situation and make the decision on what's gonna work best with them. Are they comfortable paying that out-of-pocket maximum under one plan or not? Um, would they prefer to have a more.

Regular, um, copay situation when they go to doctor and know that they're gonna be paying 25, 50, 70 $5 versus getting a larger bill. That's really up to them. But I think the biggest point is to make sure that employees fully understand the benefit and, and what all the pricing entails so they can make the best financial decision for themselves.

Anne: Exactly. You know, you're not gonna tell them you have to do this or you should do that. You're just gonna present the opportunities and really clarify the details down to it so that they at least are fully educated and know based on what you told them, [00:05:00] what they would probably prefer based on their financial needs for the year.

So I love that. Yeah. Sherry, you didn't gimme financial advice, but you did walk me through a lot of information. Uh, so. Uh, going back to employer matching, it's frequently mentioned in discussions about employee benefits. It's one of the first things you kind of hear when you're even in orientation. So Brittany, could you share a deeper explanation of what employer matching entails?

Brytnee: Yeah, so employer matching is, is unique 'cause there's a different, there's. Two major ways that I think about it. So from the standpoint of your 401k, an employer match could be a dollar for dollar match or it could be a partial match, um, where your dollar for dollar is, if you put in 4%, they've matched it up to four.

The 4% dollar for dollar, where some plans are a partial match where it's like 50% up to six, which if you put in six, you'll get 3%. Um, the other piece of [00:06:00] that is there's different types of 401k plans where. Like you have your safe harbor plans where you don't even have to put anything in it to have that match come through.

And those plans, those safe harbor plans are for employers so that they can pass those non-discrimination testings, which is a whole compliance piece and Aresa regulations on 401k plans. But a lot of those safe harbor plans, it's an auto match even if you don't contribute. So I would take a look at your plan, see what your employer has put into those provisions to see what your plan has.

Anne: I feel like every student in high school should have a full on course and test at the end of the year to learn all of this so that they feel prepared when the day comes for them. So Sherry, we're gonna turn back to you. How can employees fully leverage employer matching benefits and what are the, what are really the important considerations they should keep in mind to avoid missing out on those contributions and possibly even leaving that money [00:07:00] on the table?

We don't want that for people.

Sheri: I definitely don't want that. I, I definitely want to, you know, encourage, um, staff to put know what their employer match is, how much do they match. So, in Brittany's example, you know, if they match 50% of the first, you know, um, 6%, if you put in 6% minimum. They're gonna match 3%. If you put in less than that, you're leaving money on the table 'cause you're not getting that full match that your employer offers.

So it's really important that you, you take a look at that and if you are able to, you know, put at least that minimal amount that you need to get the full employer match, whatever that be for your company, that will help you from leaving money on the table that could be given to you for, for free

Anne: Exactly. I know. I think, uh, I, I, I. I'm in my thirties and I still, you know, I call my parents I'll, I'll talk to them and I'll just make sure each time like, am I doing this right? Is this what it really means? I can't remember. And I think a lot of people have to realize we're all [00:08:00] humans. We're all trying to figure it out.

And honestly, we have terrible memories. I need to start record. My conversations on what I did for the last enrollment to see what, what it means for this year. So there's just so much information, it's just why we're here talking about it. Um, so because we're humans, um, and financial decisions, they just can feel very daunting, overwhelming, intimidating.

It just, it kind of triggers that emotion in us. Like how? How do we figure this out? And it's almost paralyzing for some people. So what would you say, and this is a question for both of you, so we can start with Brittany. What would you say are hrs best practices for supporting those employees who may feel that kind of overwhelming feeling or paralysis there?

Brytnee: Uh, I think one of the biggest things is just normalizing the conversation. I think a lot of the times we. Think everyone, you know, manages, they have their benefit guide and they can [00:09:00] understand it, but a lot of times they don't. And like I had a number of conversations with our coworkers and I'll be like, oh, are you taking advantage of this?

And they're like, what are you talking about? And so I think just normalizing those conversations about financial benefits, even as you know, maybe uncomfortable as they can be, is probably one of the best things you can do. Um. I think education, uh, financial education. I sit up here in accounting and finance and I still have those conversations with my coworkers.

So like we all just need a little help and sometimes we don't understand. So I think like that would be the first step for me. I.

Sheri: I, I think that's great. I agree. I think, um, normalizing those conversations and having that, you know, judgment free zone, letting people know that it's okay to come to HR and ask those questions. Just, I, you know, sometimes because we go over maybe, you know, HR, we go over all the benefits, um. Quickly during onboarding.

Um, you know, and that can be overwhelming. You're learning a lot during onboarding, so letting you know, staff know, reminding them, come to me [00:10:00] anytime. I'll answer that question. Let's talk about it not just now, but three months down the road. Reminding staff of those benefits throughout the year because again, onboarding can be so overwhelming with so many new options and you're trying to set up these plans and your finances and things like that, and you have a limited number of days you can do that upon enroll, you know, new hire and things like that.

So having these conversations throughout the year, reminding staff that they can still change some of these things and update some of these things throughout the year, um, when they might have more time or feel more ready to sit down and look at it and ask more questions and make those changes.

Anne: Yeah. And here at SHRM we even have what we call our benefits fair, where people go from table to table, uh, just talking about the different types of benefits, financial health, and there are people there along with the HR staff just helping us understand, and they just. Feel comfortable, because I'm always that type of person.

I'll come to you and I'll be like, oh, this is probably a stupid question. And then you guys are like, no, no, no. There's no such thing as stupid questions. You know, it's just a question, and that's okay. It [00:11:00] helps give you direction. So for anybody who's like me, just remember that there's no, no stupid questions.

All right, so let's talk about. A few different strategies for getting the most outta those financial benefits. Uh, both significant life events and year end opportunities can have a real direct impact on your employee contributions and overall benefit choices. To start, let's focus on how major life events can influence your benefits, and we know this is a big deal for everybody.

So, Sherry, how do major life events such as marriage. Having a child or even a promotion impact financial benefits and eligibility.

Sheri: Definitely. So when you have a major life event, like having a child or getting married, um, that's. Really the only time throughout the year that you can change your, um, benefits enrollments. So that is the time that you can make those changes. You can add your spouse, you can add your child. And when you do that, if you're switching from employee only coverage to [00:12:00] employee and spouse, or employee and child, um, or family coverage, you then have the opportunity to up your limits, your contribution limits for your FSA.

You can enroll in a dependent care account if you now have a child, you can up your HSA on maximum contributions. So there's a great way, um, when you have those events in your life to increase your contributions. Not only just add, um, your family members to your plan, but also increase your contributions to those plans.

And if you get a promotion, um, that's a great time to take a look and see, you know, am I able to put more money into my 401k now? Can I increase that percentage that I contribute so that I'm able to make more money throughout the year, um, with my retirement plan?

Anne: so Brittany, can a promotion or salary increase be actually leveraged to optimize retirement or those savings contributions?

Brytnee: Yeah, I think one of the things that. You know, you don't really think about is the tax benefit. Um, and I, I don't like to dig too deep [00:13:00] into it, but you know, when you get a promotion or a salary increase, a lot of times that tax implication goes up. And so really understanding one, your, your total compensation, what you're getting paid on that net end, and see if there's a way to put your money into different tax vehicles, as I like to call them, that protect you your money and protect that tax liability.

So using, you know, those promotions or salary increases and maybe using a flat per, or using a percentage of your compensation rather than a flat amount to then kind of, you know, that sliding scale as you go up in salary. Your contributions also go up.

Anne: I feel like I really hope our audience has like a pen and paper right now, but the good thing is you can go back and listen to these episodes. So in between those major life events. There are also some things employees can do before the year's over. So Sherry, let's dive into this. What are those key financial benefits employees really should review or update [00:14:00] as the year comes to a close?

This is also a question for me. I'm curious.

Sheri: Well, one of the first things you wanna do, if you do have that flexible spay account, you wanna check the balance of it because it is use or lose. So you don't wanna leave that money on the table and have it just before fitting. And with the FSA, there are so many products included in the FSA that you most people don't even realize are FSA approved.

So I recommend seeing how much you have left in that account. And most FSAs have an FSA store, um, online, or even Target or CBS or places like that will tell you what is FSA eligible and you can buy items that you're going to use that aren't going to go to waste. Outside of what you might have been using your FSA for throughout the year of just prescriptions or general medicines, things like that.

So definitely take a look at that. Definitely take a look at your dependent care account. Make sure if you have one that you've submitted the claims, you've submitted the reimbursement so you don't lose that money because once the year's gone you can't go back and and claim that again. So that's really important.[00:15:00]

And again, with your health savings account, just take a look. Um, are you able to put a little more money into that before the end of the year? Um, do you wanna contribute a little more? Are you able to, because again, that money doesn't, um, care. Doesn't expire, it rolls over into the next year. So that's a great opportunity as well.

So those are some things you wanna look at between now and the end of the year.

Anne: Yeah, those are the great, great money saving tips right there. So, uh, going back to you, Brittany, are there considerations employees should keep in mind for making financial benefit changes before those year-end deadlines?

Brytnee: So I, I like to point out, you know, that a lot of plans are set. So, like for instance, here at SHRM we have, you know, automatic enrollment on our 401k plans, we have that annual escalation. So every year that you're enrolled in our plan, if you're not contributing already, I think believe it's 10% that like it goes up by 1% every year.

So like, one, see where you're at on your escalation. Two, know your [00:16:00] limits. What are the 401k limits for this year? It's 23,500 if you're under the age of 50. And then it's that additional 7,000. Um. So like just understanding your 401k contribution limits, understanding the limits that are changing for the next year.

Like the IRS just released them for 2026. So understanding those things, understanding how your plans work is a big thing. Some people will be like, oh, I, I selected 10%. Now it's like a 11%. Well, we have an annual escalation if you're not paying attention. So like, we just like to remind people that some plans have different provisions and you should be mindful.

Anne: I need to pay closer attention. I am, I'm sorry, but I am one of those people where people start talking about financial benefits and my brain. Stops. It just stops. And I just, I think I absorb it and then I go back home and I try to remember, and I just always forget, I'm just not a finance brain. I'm a very creative English writing type brain.

I've always [00:17:00] been like that. So thank God I have support systems who can help me out through that. Uh, so that's really great. Thank you so much for, for bringing that down for us. So. There are some questions employees might have, but. May not feel comfortable going to HR about it. I know I'm not the shy one anymore, but I used to be the very shy one.

So we asked our audience to submit their questions and our weekly all things work newsletter and we actually have some really great ones today. We got, we got quite a few, um, and a lot of them are pretty useful. There's some questions I even had that, I'm so glad these people asked. So for our audience tuning into this episode, be sure you're signed up for the All Things Work Newsletter and be on the lookout for that question of the week.

Your submission could be featured in an upcoming episode, so you're ready to dive into these questions.

Brytnee: Yes.

Anne: Awesome. That was, didn't sound so excited for that, but okay. They were nodding for our [00:18:00] listeners versus our viewers. Okay. So. Michan from Arkansas. They asked, is there ever a good time to withdraw from my 401k early and are there any negative consequences I should consider?

This was something I always thought about.

Brytnee: So this is a complicated one. It's all dependent on financial situations, and I would say depending on what's going on in your life, uh, you'll have to make those determinations. But there are things you can do and use your 401k. Four to help cover whether you're in a financial hardship, you have some medical expenses, or if you're buying a house and things.

Things like that where you wanna, alright, I have, I have this savings vehicle, can I use it? Can it be leveraged in certain other instances? And. From a distribution standpoint, I would, it would be hard for me to recommend that, but if that's what needs to happen, there is a, you know, penalty [00:19:00] for withdrawals.

But there's other options you can take. Um, for a lot of the 401k plans, you can take a loan on your 401k, which is 50% or up to $50,000 of your vested balance. And so that's a whole nother thing that we could get into. But, um. If you need to take a loan from that plan and then you're paying back that loan, the interest you're paying on that loan, you're paying to yourself.

So it's things like that where like you're not taking a distribution 'cause you're not like keeping that money, but you're paying it back in a loan situation, but you're not paying some bank interest, you're paying yourself. So there are options and you just have to understand where you're at in your situation.

Anne: Shania asked a question that we could have a whole other episode about, but we won't dive too deep. Thank you for getting to the answer without, without going too far in. All right. So Tony from Georgia asked, are there exceptions for enrolling in financial benefits outside of the standard period?

That's a good question.[00:20:00]

Sheri: I'm gonna leave the.

Brytnee: So I, I guess it would depends. So like 401k plans. You can change your contribution at any time. Um, the only thing that may change is the date that it goes into effect. So like if you did it this day, there something in your plan probably says at the earliest. It can be put into process or at the next first of the month or whatever.

Um, but a lot of other benefits, whether it's. Financial advising, or if it's H-S-A-H-S-A, you can also change your contributions, which isn't really an option on your FSA. 'cause you said that at the beginning of the year, and so it's a use it or lose it. It's front loaded. There's no way to change that. But in HSA, you can change your election and contributions throughout the year.

So just understanding what benefit you have and what those provisions are.

Anne: All right. Sherry, anything to add? Just curious.

Sheri: No, I was going to, um, agree with Brittany. The HSA is one you can change throughout the year, but I do sometimes get asked about the FSA [00:21:00] and oh, I, you know, can I put more in now? Or I put in too much. I don't wanna do that much. And unfortunately with the FSA, it is front loaded, so you cannot make that change throughout the year.

So. So I always make sure that I remind staff to, um, plan wisely with the FSA, how much they want to contribute to that each year.

Anne: a good point. All right. So Mayor from Rhode Island asked how do I address confusion or errors I spot in my financial benefits coverage.

Sheri: Well, if, if an employee ever feels like there's an error, there's a concern, I, I definitely recommend that they reach out to HR, you know, reach out and, and ask the question. And. No, ask the questions you know of, of what they think is wrong or what is wrong. You know, it might be something, you know, of a timing issue.

Maybe they did update their, um, 401k elections, however, the way some plans work and it could take one or two pays for that to go into effect. So they're not seeing it yet. It could be in instances where. [00:22:00] A 1% increase, um, that happens each year goes into effect, but they forget about that and they're like, wait, why am, why is more being taken outta my paycheck now?

I didn't expect that. So, um, reach out, um, find out what's going on. Work with your HR, um, person at your, you know, at your company to get, get the answers and find out what's going on so that things can be corrected if needed. Don't be shy. Don't sit on it.

Anne: Don't be shy people. Brittany, did you have a thought to add to that?

Brytnee: I, it's funny, I used to work in HR here at SHRM, so Sherry and I used to work hand in hand together on these things. And I mean, just I communication like we. We're not infallible and you know, systems and processes are aren't infallible. So like we wanna be able to address them. And the only thing I would say is a lot of people should monitor their benefits and what's going out of their payroll elections.

Watch your pay stubs, see what's going on. Make sure it's going into the bank. It's the same as your paycheck, it's your money. You should be, you [00:23:00] know, like if you got paid less on a paycheck, you'd probably notice. So, you know, just being mindful, monitoring what's going on, um, and so that you can be on top of it when things are happening.

Anne: And life can get so busy too. It's a, I mean, even if it's just a monthly reminder, Hey, check in. What does this, what does the situation look like? I, I know I have a reminder on my phone, you know, even when just paying my bills, I just check other accounts and make sure everything's all looking pretty and nothing happens.

Uh, but again, life does get busy, so it, it's, it's understandable. So we have a couple more questions. Um. I'm gonna take a quick pause here 'cause I wanna make sure the last question's Okay to ask. Um, Mel, it says, um, uh, from Mike from Utah. The last one it says, how do I know if my 401k investments aren't performing well or if I should make changes?

Is that too close to like financial advice or could we answer that? Okay.

Brytnee: uh, I can give you, I, this was a question that I had when we, when I first read through [00:24:00] it, but I, there is a way that I could answer this without giving advice.

Anne: If we're comfortable with that, I can still ask it

Brytnee: Okay.

Anne: and I'll, I'll put the disclaimer in again, so no worries. Like disclaimer, we can't provide financial advice, so, okay. Alright, so we have a couple more questions, both 401k based. I'll start with Elaine from New Jersey. She asked what happens if I can afford to contribute to my 401k right now?

Brytnee: I if it, if they were to ask me that, I would say, you know, take that time to get your feet planted on a good foundation. If you have to take that time off, do so and make a plan in the future. You know, plan ahead. See, all right, I can target putting back into my 401k or savings for retirement at a future time, but making those plans and setting those goals.

Ha talking to a financial advisor. A lot of 401k plans have financial advisors that you can talk to, to help guide those, um, conversations. And even if you're not [00:25:00] contributing, they can be like, all right, so once you get here, you can start putting maybe 1% in or something like that. But have those conversations.

Anne: Awesome. Yeah, definitely. It can't hurt to have the conversation. Uh, and just a disclaimer again, we said at the beginning of the episode, this is not a financial advice. Uh, this is simply just an overview from the HR perspective. So final question. We have Mike from Utah. He asked, how do I know if my 401k investments are performing well or if I should make any changes?

I think a lot of us could ask our HR friends this, but you know, we, we, we know that we can't give. Distinct financial advice.

Brytnee: So I think you have to think about it in two schools of thought. A lot of times 401k plans have those target retirement date funds. And so a lot of us, if we're just automatically enrolling in plans, we're being put into those target date funds, which the only thing I can say is that your plan has a fiduciary responsibility to ensure that the investments that are being used [00:26:00] for our 401k plans are.

You know, providing the benefits they need to, to our employees. So they're being monitored. Our, your plan sponsors are monitoring them. If you have like a retirement committee in-house, they have a fiduciary responsibility to help guide those retirement plan decisions from an investment standpoint. Um, now if you're investing on your own, I would just say make sure you're looking at those benchmarks.

You know, you're at. S and P five hundreds and your Dow Jones, you know, see what those benchmarks are doing and kind of make those educated guesses. But talk to a financial advisor if you're talking about that.

Anne: Definitely great advice. All right, so final thought, uh, just for both of you. We talked a lot about how, you know, we're humans. Life gets busy. We're maybe not the best when it comes to the language of the benefits package. And, uh, we talked about how a lot of people maybe are a little too shy or, or worried about going to HR with their questions or maybe they don't even [00:27:00] know how to.

Form the question. They're just like staring at a piece of paper going, what, what is this? So Sherry, we'll start with you, you know, what's, what's your final piece of advice for maybe the average employee? You know, just trying to navigate this, especially if you're like a, a, a entry level, you're starting your first job.

This is, a lot of, this is new to you.

Sheri: My, my biggest piece of advice is, is don't be shy. It's so important. Don't think that any question is a dumb question because again, you're talking to people whose job it is to manage these benefits, to know them, and to understand them. So of course, you know, we are gonna talk about it with ease, but we don't, and we truly do not expect the staff to have the same level of understanding that we do.

We expect them to ask questions, and it's okay to not know even where to start. When someone comes to me and says. I don't know what this is. How do I just, I usually invite them to a meeting where we can sit down and just kind of start at the very beginning and start looking at the basics. And [00:28:00] eventually we get to what that actual question is, because sometimes they don't even know what it is until we start digging through all the products and finding it out.

Um, so don't be shy and don't, you know, ask questions and don't wait. I think it's so important. I think people avoid it because they don't wanna ask questions, and then three or six months has gone down the road and they've missed out on opportunity and missed out on savings. So do it. Go right into HR, ask him a question.

Anne: don't be afraid. Exactly. And Brittany.

Brytnee: I, so I would say I'm the biggest fan of retirement plans, and you could ask anyone here, like, I love retirement plans. So, um, I think. The only thing I would say is understand your retirement plan. We all know that like 401k plans are these savings and that we put contributions, but some plans have provisions that could be helpful for people, especially with Secure 2.0 that came out.

There's um, in. Student loan [00:29:00] provisions on plans now where like if you make a student loan payment, it could count as like a contribution to your 401k and you could get an employer match if your plan allows it. So like understanding your specific plan and what options you have is so vital to success in retirement planning.

And I think if that's the one thing I would say is please understand your plan. If you don't understand and you don't know what options you have, ask those questions.

Anne: It could really save you money in the long run. Well, thank you so much Sherry and Brittany for sharing your thoughts today. Walking us through some, you know, real situations and answering a lot of our questions from our audience. That was super helpful, so thank you.

Sheri: Thank you. Thanks for having us.

Anne: It was great having you. All right.

That's all for this week. We'll catch you next time.