There are few things in life as potentially exciting and nerve wracking as getting that first job out of college. After years of studying during college (and possibly grad school), building contacts throughout your field, polishing and re-polishing your resumes, going through rounds of interviews, you finally receive the job offer you want.
The salary is in line with what you’re looking for, you have a pretty decent commute and there is plenty of room for advancement. Finding yourself in this “dream job” scenario is definitely a cause for celebration.
But once the party is over, it really pays to look at the COMPLETE picture of what your new position can offer you. If you don’t, you risk potentially losing a lot of money and benefits.
Receiving a paycheck is the obvious benefit of working at a new job, but it is not the only benefit. Every workplace is different, but there are many benefits that you could potentially be eligible for that go unclaimed.
And no matter how nice upper management or HR seem, they will usually not go out of their way to tell you about all the benefits you’re missing. Here are some of the benefits that many people leave on the table but really shouldn’t because it’s like throwing away free money.
One of the biggest benefits of employment is affordable health insurance. While healthcare premiums are usually cheaper for employees, they still have to make the correct choice of health plan based on their needs.
With the emergence of high deductible health plans (HDHP’s), this decision has become a little more difficult. HDHP’s have lower premiums than traditional health plans, but they have higher deductibles to meet. Which means you’ll have to pay more out of pocket before the insurance will start to cover anything.
This can be a good situation if you don’t usually spend money on healthcare throughout the year. That’s because if you enroll in a HDHP, you can also enroll in a Health Savings Account (HSA).
HSA’s allow you to set aside pre tax funds to pay for future healthcare expenses. The best part is that the account is yours for life and can grow tax free. A very effective tax savings tool. Read more about them here.
But if you tend to spend a lot of money on healthcare, a HDHP may not be the answer for you. Most companies will give you plenty of resources to make the right decision. The employee still needs to do the work and choose the best plan for them.
Another aspect of health insurance that has caught on recently is the addition of “wellness incentives”. These are discounts your company gives if you meet certain criteria regarding your health.
For example, my current company gives a discount on your health insurance premium if you are a non-smoker. Getting a yearly physical with lab work will get you another discount as well.
This helps you by saving money and it helps the company because healthy employees means more productivity. Many colleagues overlook these easy discounts. It’s almost like free money you just have to fill out some forms.
Almost all employers are offering 401k’s as the employee retirement plan of choice instead of a traditional pension. With a pension, your employer would contribute money to an account and manage the investments. If you worked a certain number of years and qualified for the pension, you would receive a steady income from that account during retirement. This put all the onus on the employer and hardly any on the employee. Those days are long gone for the most part as 401k’s put the responsibility to contribute AND manage the investments on the employee. This is obviously better for employers since they cut their costs along with responsibility, but it can be good and bad for the employee. Bad for the employee who doesn’t contribute or manage their investments effectively and good for the employee who contributes regularly and invests appropriately.
A big advantage of the 401k plan is that the money you contribute is deducted before taxes, meaning you don’t pay any taxes the year you contribute but you will pay when you eventually withdraw the money. The ideal scenario is to contribute as much as you can when you’re making a lot of money and your taxes are relatively high, and withdraw the money when your taxes are relatively low during retirement. Another great perk which varies by employer is the 401k company match. This is the amount your company will contribute into your account up to a certain percentage. A pretty standard match policy is that a company will match your contribution dollar for dollar up to 3%. This is essentially “free” or “found” money which will help your account grow much quicker.
I’ve met some colleagues who don’t really give a thought to contributing to their company 401k. There could be many reasons not to such as not wanting that money withheld from your paycheck or just general apathy, but contributing even a little bit won’t hurt your take home pay too much. And not contributing at least up to the company match is just leaving money on the table. So contribute to your 401k at least up to the company match. Your future self will greatly appreciate it. Plugging in some number into this 401k calculator can show you how much you can really save.
Health care and retirement are two of the biggest benefits companies offer. Taking full advantage of these two benefits is critical to your physical and financial well being. Stay tuned for the next article talking about other job perks to take advantage of.