We work for more than a paycheck. We work to save for retirement, to get an education, to improve the livelihood of ourselves and the world around us.
Unique benefits packages are an employer’s golden ticket to keeping employees happy and healthy. Are you taking advantage of the benefits your workplace offers?
Establish Your Goals
The first thing to consider is your personal savings goal. What benefits save you the most money? Looking at the financial consequences of your work’s benefits package is crucial to maximizing them. Could you contribute more of your paycheck to your 401(k)? Have you added to your Health Savings Account? These are all questions to think through as you elect your benefits this cycle.
Written In Bold
As an employee, there are a few benefits that span across most companies: retirement plans and health savings accounts. Let’s look at these a little more in depth to assess how you take advantage of these benefits.
Company Retirement Plans
When a large company offers its employees a retirement plan, it is often in the form of a 401(k), 403(b), or 457(b). Small company plans commonly include SIMPLE IRA or SEP IRA. Each plan differs the amount of money you can contribute and the amount that the employer will match.
How much money are you contributing? Too often, people pick a number to contribute on an arbitrary basis which can lead to not having enough saved to meet your goals. This cycle, check to ensure that you are contributing the amount that your employer will match to increase your retirement savings and keep yourself on track. One tip is to automatically increase your contribution when you get a raise or a promotion. This way, you will be contributing more and also have a larger paycheck to budget with.
How is the company contributing? It is a good idea to assess the stock presence of your company to determine the way that they match the payment to your retirement account. Matching the money in the form of stocks is not a bad thing, rather it is just something to keep an eye on. I recommend that you keep no more than 20% of your financial portfolio tied up in stocks. If you have more than that, I would be happy to talk with you about ways for allocating those funds.
Health Savings Account and Flexible Spending Account
A health savings account (HSA) and flexible spending account (FSA) are savings options that allow you to cover yourself in the event of large medical expenses. Each provide different avenues for reaching your savings goals, and are increasingly popular among employers and employees alike.
Both of these accounts are useful because they provide you with tax benefits. The money you contribute to the accounts is accrued on a pre-tax basis. This lowers your taxable income and allows you to save more money for your health. For example, if you were to undergo Lasik eye surgery, you could save for this procedure in your health savings account on a pre-tax plane which would help you save faster.
There are differences between HSA and FSA savings models. Here are some facts about the HSA specifically.
- These accounts are only available when you enroll in a high deductible health insurance plan.
- You can roll over the money allocated in this account each year with no problem.
- HSA plans are available outside of your employer. Many healthcare agencies offer HSA plans for high deductible health insurance, so this could be a good option to look into if your employer does not offer one.
Flexible spending accounts are similar to HSAs, but there are a few notable differences.
- FSA plans can only be established by your employer. This means that you cannot get this account through any other outside sources like you can with the HSA.
- FSA plans do not allow for you to roll over your savings year to year, meaning that you have to spend the money you saved in the account before the end of the benefits’ cycle or you forfeit the money.
Read the Fine Print
Along with the more traditional benefits available, many companies offer additional benefits to their employees. I encourage you to read your employee handbook and benefits section closely to make sure that you can take advantage of all that your company has to offer. Many benefits that are gaining popularity among larger companies are:
- Student loan repayment
- Student loan debt cripples many recent grads, and one way companies are combating this is by offering a benefit for student loan debt. For example, PwC offers employees $1,200 per year to help repay student loans.
- New Parent funds
- The U.S statistically offers the most unattractive maternity and paternity leave options in the world. Some companies are trying to rectify that statistic, by offering 3-4 months of paid maternity and paternity leave. Companies also have been known to help in the adoption process with giving parents time off to make those arrangements. Facebook even reimburses employees for day care and adoption fees while also offering ‘baby cash’ to help cover expenses after the child is born.
- Employee Wellness
- This benefit is an arc, encompassing many different perks a company might offer including: flex-time, increased vacation limit, gym memberships, fitness classes, relaxed environment, and healthy food options. These benefits are often not taken advantage of and this cycle I encourage you to look into the programs your company has in place to help you live a better, more well-rounded life.
The benefits that your company offers are there for you to use– so use them! Take part in the perks of your workspace to help achieve your financial and personal goals.