Article Date: Thursday, October 18, 2007
You trained hard this season, and had a great year. But if you’re like the rest of us, you’re probably also juggling a job, family, planning for retirement, mowing the lawn, and all the other things we wish we could pass off to someone else. During the summer months, when we enjoy being outdoors and active, projects around the house tend to accumulate. But for the working athlete, the off-season is the time to put your life in order. November is the perfect time to shift your focus a bit, and pay some attention to other aspects of your life, such as your finances and your insurance coverage.
If your employer offers health insurance, the end of the year is the time most employers hold their “open enrollment” period, which means that you will be asked in the next few weeks to select your plan, and make any modifications. Take the time to review and really understand the differences between the various plans offered by your employer. Look back at this past year, and assess how much health care you used. Athletes are fit and healthy people, but often subject their bodies to demanding or dangerous conditions, and sports injuries can prove to be very expensive. Don’t assume that just because you are fit you don’t need much coverage.
If your employer offers a Flexible Spending Account (FSA), consider taking advantage of it. FSAs are savings accounts in which you deposit pre-tax money to be used for many types of health care expenses, including over-the-counter drugs. These accounts offer substantial savings because you are not taxed on the portion of your income that you deposit in them. Many people do not realize that they could be paying with tax-free dollars for many of the things they buy anyway, such as birth control pills, over-the-counter allergy drugs, contact lenses, contact lens cleaning solution, prescription eyeglasses, prescription sunglasses, and flu shots. Accordingly, they do not elect to deposit nearly enough money in their account. But be careful. You must use any funds deposited in the account within that same year. The IRS requires that any money remaining in spending accounts at the end of the year be forfeited. By the same token, if you do currently have an FSA, now is the time to use any remaining balance before the end of the year.
If you are self-employed, you have options too. Congress has enacted a law that allows the self-employed to open a Health Savings Account (HSA). HSAs are tax-deferred investment accounts that allow you to save money for medical expenses. Here's how an HSA works: You, as a self-employed, would make a deposit into the account, and in addition to not paying any income tax on your contributions, you also pay no tax on the earnings that accumulate in your Health Savings Account. Contrary to a Flexible Spending Account, money not withdrawn to pay for medical care is carried over to the next year and can continue growing tax-deferred. HSAs are completely portable and can move from job to job and even continue when you retire.
Now is also a good time to plan for the unexpected emergency. For example, cyclists and triathletes log hundreds, if not thousands, of miles on the bike each year, often times on busy roads, or in far away rural areas. Runners routinely train and run before dawn, on roads with no sidwalks or shoulders. Think about what your plan is if there is a medical emergency, or if you are unconscious. Each year, nearly 800 cyclists are involved in fatal accidents. The number of non-fatal accidents is far greater than that. Many of us have a false sense of security from carrying some cash and a photo ID. While carrying cash and an ID is necessary, it is far from being sufficient. You should make it a habit to also carry on you contact information for a person to call in case of emergency. You can either place a sticker inside your helmet, a note in your wallet, or use one of the many bracelets and such devices that are sold for this purpose. But be careful. The person you identify as your emergency contact person may not be able to be of much help if you haven’t given that person the power to speak with doctors, get information about you, or make decisions on your behalf if you are unconscious. This can be especially true if your emergency contact person is a friend or a partner not related to you by blood or marriage. It’s a good idea to sign a short power of attorney for health care, and have your emergency contact person hold on to it. These forms are available on the web for less than the price of a box of gels.
Emergencies, however, are not only medical in nature. Sometimes, you need a little cash to deal with problems that come up. Maybe it’s the car that breaks down and you need to buy a new one. Maybe you have to take an unexpected trip to take care of family business. Maybe there is some downsizing going on at your work and you’re not sure what your prospects are. These can be stressful times if you are not prepared. Now is also a good time to start thinking about building a safety cushion. The easiest way to do this is to open a saving account at your bank, and have an automatic deposit made into the account with each pay check. Financial experts usually recommend saving three months worth of salary for emergencies.
Once you have taken care of your own health care and that of your family and are building some savings, give some thought to protecting your home. Many homeowners are required by their mortgage lender to carry homeowner’s insurance, but those of us who rent our house or apartment often neglect to purchase a basic renter’s insurance. Renter’s insurance is important to have, but the good news is that it is generally inexpensive, and typical renter’s insurance provides coverage on all of your belongings up to a certain amount. However, expensive or unusual items often require an addendum to your policy in order to be covered. You should check with your insurance carrier and make sure that your new $4,000 carbon bike and your fiancée’s engagement ring are covered.
When Spring arrives, and you’re itching to get out and start training for next season, you’ll be glad you took care of these things.
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