Maximize Your Howard University Benefits This Enrollment Season
Quick Facts You Should Know
403(b) Retirement Contributions: Howard automatically contributes 6% of pay and also matches 50% of employee contributions, up to 2%. That’s up to 7% of pay in employer money—don’t leave it on the table.
457(b) Deferred Compensation Plan: Available if your income exceeded $155,000 in 2024 and you’ve maxed out your 403(b). This plan lets you shelter another $23,500 per year from taxes.
Health Savings Account (HSA): Available with the Consumer-Driven Health Plan, the HSA offers a triple tax advantage: pre-tax contributions, tax-free growth, and tax-free withdrawals. 2025 limits are $4,300 for single coverage and $8,550 for family coverage, with an additional $1,000 catch-up allowed at age 55.
Long-Term Disability (LTD): Paid by Howard, LTD covers 60% of base pay up to $10,000 per month. High earners often face a sizable income gap above this cap.
Life Insurance: Howard provides basic life insurance equal to one times salary, up to $1 million, at no cost. Supplemental coverage is available through MetLife, along with optional portable long-term care plus life insurance policies.
Key Considerations and Mistakes to Avoid
Not maxing the Howard match. Many contribute less than 2%, missing out on free money.
Assuming disability coverage is enough. For high earners, the $10K/month LTD cap often falls short.
Confusing HSAs with FSAs. HSAs roll over for life and can grow as retirement assets—FSAs are “use it or lose it.”
Overlooking tuition remission planning. Benefits require service years and program eligibility—families should align education savings with timelines.
Choosing benefits in isolation. Benefits are tools, but they must connect to broader financial goals: retirement, wealth transfer, and family security.
A Case Study
Case Study: How Jane Aligned Benefits + Financial Plan
Jane, a 52-year-old tenured professor, earns $190,000 and is 10–12 years from retirement. She and her spouse have two children in college and are starting to think about long-term care.
On paper, Jane was doing well: contributing to her 403(b), covering her family under Howard’s medical plan, and relying on employer-paid LTD and life insurance.
But during a benefits review, several gaps appeared:
● Retirement Shortfall: Jane was only contributing 6% to her 403(b). With Howard’s 7% employer money, she was at 13%, but her retirement target required 18%. We helped her increase contributions and add the 457(b) plan for additional tax deferral.
● HSA Missed Opportunity: Jane was enrolled in the CDHP but only used her HSA for annual expenses. We reframed the HSA as a retirement healthcare account, investing contributions for long-term growth.
● Disability Gap: Howard’s LTD would replace less than half of her income after taxes. We reviewed supplemental disability coverage to close the gap.
● Managing Costs for Extended Periods of Care: Jane explored Howard’s Life option, but we also compared stand-alone Life insurance and hybrid policies to integrate with her broader estate and retirement plan.
Outcome:
By coordinating her Howard benefits with her financial plan, Jane:
● Boosted retirement savings by $15,000/year, putting her on track for her income replacement goal.
● Positioned her HSA as a tax-free bucket for future healthcare.
● Protected her family against a potential $60,000+ annual income shortfall if disabled.
● Made informed decisions on long-term care that preserved flexibility and protected her retirement assets.
This example is hypothetical and intended for illustrative purposes only and is not indicative of the actual performance of any particular financial product.
Learn More
This material is provided by Aether Financial Group for educational purposes only. We are not affiliated with, endorsed by, or acting on behalf of Montgomery County Public Schools or its benefits providers. While we make every effort to ensure the accuracy of information based on available resources, benefits details should always be confirmed directly with MCPS Human Resources and the official plan providers. Nothing herein should be construed as legal, tax, or benefits administration advice.