Don’t Waste Perks. Leverage Your Employee Benefits Package.
Benefits are still one of the most important factors in hiring negotiations. While job seekers often fight for a better employee benefits package, many leave a lot on the table. It’s important to stay on top of changes each fall, despite how time consuming or confusing it may be.
“Most [employees] don’t look at their complete packages every year,” said Eric Roberge, certified financial planner. “They just do what they have to do.”
Pay special attention to these areas when choosing your health insurance and retirement benefits this summer.
Your 401(k)
When looking at your employee benefits package, pay attention to the 401(k) plan. Planning for retirement is important. Look into your company’s 401(k) plan then compare it to other options like a Roth account. Whether you’re considering contributing to a retirement plan, or re-evaluating your plan, ask yourself the following questions:
- Do they match contributions? Up to what amount?
- Have the investment options changed?
- Are you allocated correctly?
- Should you rebalance?
Don’t fund your plan too quickly, and miss out on the allowed company match. CFP and owner of Wander Financial Services Robert Wander warns clients to check their retirement account default allocations. If your company’s match comes in the form of stock, beware of becoming overexposed.
Financial advisers suggest increasing your 401(k) savings by one percent each year, because it’s something most people can do without missing the money.
Health Insurance
Health insurance is one of the most important aspects of your employee benefits package. When reviewing your healthcare options for next year, pay attention to premiums and coverage. Have they changed at all from this year? Should you switch to a high-deductible plan to reduce upfront costs? If you invest in a health savings account, will your company contribute as well?
“The premium gets significantly lower, but they tend to be afraid of the high deductible,” says certified financial planner Eric Roberge. “They assume they’ll have to pay the whole deductible, but in reality – even if they paid more out of pocket, they’d pay the same amount as the higher-premium/lower-deductible plan.”
HSAs offer tax-advantaged ways to pay out-of-pocket expenses. Money set aside in an HSA can be carried indefinitely to meet out-of-pocket expenses in the future. “If you foresee a major health-care expense next year that is not covered by your insurance, such as braces for a child, consider electing an option with a flexible spending account,” says Levi Brandriss, CFP with Ameriprise Financial.
Life Insurance and Diability
There’s a better chance of becoming disabled than dying, but most employees don’t know how disability coverage works at their company. Although companies typically pay for the disability policy, employees have the option to pay it themselves through payroll deduction. If you do so, the benefit is tax-free when used.
Fall is here, and it’ll be time to discuss your employee benefits before you know it. Don’t opt into the same health insurance policy before reviewing what’s available to you. Consider your entire budget, and whether or not your old plan still works for you and your family. Open enrollment typically only happens once a year, so do your research before making your choice.
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