- Life & Money
- Family & Work
- Your Career
- Cathie Ericson
- Sep 28, 2017
Job Benefits 101: What to Look for When You Start With a New Employer
If you’re like most people, you probably only think of compensation as the paycheck that hits your bank account every two weeks. Surprise: Your salary typically comprises less than 70 percent of your compensation, according to the Bureau of Labor Statistics.
The other 30 percent? That would be the job benefits your company provides for you, so it’s worth knowing how to make the most of what you’re being offered. Unfortunately, less than 10 percent of human resource professionals thought their employees were “very knowledgeable” about their benefits, says the Society for Human Resource Management (SHRM).
If there are perks that you could be taking advantage of but you’re not, that’s like leaving money on the table. With that in mind, here are eight common benefits worth looking into at your company.
What makes 401(k)s even sweeter is that your company might offer an employer match. That means they’ll throw some money into your retirement account on your behalf.
With pensions going the way of the VHS tape, most companies (a whopping 90 percent, according to SHRM) offer 401(k) plans or similar retirement savings options. If you haven’t started investing in yours, contact your HR department ASAP and figure out how to enroll. The reason is simple: Your 401(k) contributions come straight out of your paycheck, which makes it easy to start building your nest egg.
A 401(k) also has tax advantages: The contributions and earnings you make to a Traditional 401(k) are tax-deferred, meaning you won’t have to pay taxes on that money until you make withdrawals in retirement — plus, anything you contribute now helps to lower your taxable income. Roth 401(k)s, meanwhile, are funded with post-tax dollars, but you won’t have to pay taxes on your earnings when you withdraw later in retirement. (Traditional 401(k)s are more common, but some companies do offer a Roth option.)
What makes 401(k)s even sweeter is that your company might offer an employer match. That means they’ll throw some money into your retirement account on your behalf. An example of a typical match is 50 percent up to 6 percent of your salary. So if you make $100,000 and contribute $6,000 a year to your 401(k), your company would throw in another $3,000 for you. That’s free money for retirement!
If you work for a large or midsized company, chances are it offers health insurance coverage. Some companies cover the total cost of your health insurance premium, but most likely you’ll have to cover some of it yourself. Still, that’s preferable to paying full price: Research from the National Business Group on Health, for instance, found that big companies expected their health insurance premiums to go up by 6 percent in 2017, while the average increase for the second-lowest-cost silver plan (used as a benchmark for prices) on the state exchanges was 25 percent.
If your company offers different levels of coverage, choosing the right plan for your situation will depend on a number of factors, including your ongoing need for doctor’s visits and prescriptions; the number of family members you have to cover; whether the doctors you like are in your health network; and how much your out-of-pocket costs could be. It’s important to make your choice thoughtfully, because you won’t be able to change your selection until the next enrollment period, unless you have a major life change, such as getting married or welcoming a new baby.
Another health-related insurance benefit worth looking into: disability insurance, also called disability income insurance. If you were to get injured in an accident or come down with a serious illness, this type of insurance can help replace a portion of your income if you’re unable to work for an extended period of time. Some companies may offer both long-term and short-term disability insurance. In some cases, employers might offer short-term disability as a way to help cover a portion of income during maternity leave.
PAID TIME OFF (PTO)
We’re guessing this is your favorite job benefit of all (after your salary, of course). Generally speaking, PTO is the amount of time for which your company will pay you even if you’re not working. Your company might separate PTO out by vacation, personal and sick days. Or they might have bundled PTO, which means there’s just one bank of paid leave they offer you, and you can use it for whatever reason you want. (A score for those of us who don’t get sick much but need that occasional mental health day to recharge.)
Make sure you know if your company’s PTO policy is use it or lose it each year — in which case, use it — or if you can roll over a certain number of days into the following year (so you have more time for that extended European backpacking adventure you’ve been planning).
Your employer may offer a baseline amount of life insurance coverage at little or no cost to you, while offering the option to get additional coverage at a discount under the company’s group plan. Your company is the policyowner, however, so keep in mind if you leave your job, you’ll likely lose that coverage.
Your company has a lot of incentive to keep its employees healthy, considering sick workers cost U.S. employers more than $225 billion a year. So it’s worth checking to see what wellness programs they offer that go beyond, say, the company gym.
Examples of wellness perks include free onsite flu shots; biometric screenings; discounts on gym memberships; health coaching; onsite fitness classes; or even financial wellness, in which your company offers resources to help with money goals like budgeting or saving for retirement.
Nearly 70 percent of companies offer some sort of wellness resource at work, according to SHRM, so take advantage of what’s available. Your body — and wallet — will thank you.
Doesn’t seem right that you should have to pay to go to work, does it (especially when traffic can put you in such a bad mood)? You may not always have a choice for how you get to the office, but you might be able to help offset some of that cost through your employer.
Some companies will reimburse their workers for the price of public transportation or parking, or at least let you pay for those costs with pre-tax dollars. Others might even offer ride-sharing or shuttle services in your neighborhood to the corporate campus. Hey, if what your company offers can help you save on gas or subway fare and keep your sanity intact, why not take advantage?
You always meant to finish that degree or get an extra one, didn’t you? Well, thanks to corporate tuition benefits (83 percent of companies offer some sort of educational assistance, says SHRM), you just may be able to.
A company might offer a set amount toward continuing or higher education, or they may cover a percentage of your tuition. In either case, you'll probably be required to stay with your firm for a certain period of time after you finish your degree — that's only fair, after all — so read the fine print carefully. If you don't meet your employer's requirements, you might have to pay back the tuition reimbursement.
It's worth taking a deep dive into your HR packet to understand everything that’s being offered to you (outside of the free snacks or company pool table). And if any of them can help you save or get you closer to your financial goals, all the better.
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