When your company offers you a benefit, take it. These benefits have monetary value, and taking advantage of them can boost your overall financial health.  However, many people aren’t aware of the ever-expanding array of perks they may encounter from employers. Let’s go over some of the more common employee benefits and how to ensure you’re getting the most out of them.

Retirement benefits

 

Most people know the basics around getting the most out of workplace retirement plans, but they’re worth recapping.

 

  • Take advantage of any employer match on your retirement account contributions.
    • Ask if your employer offers a Roth 401(k) option. Not every plan sponsor provides a Roth option, but if your plan does, talk to your financial advisor about whether it makes sense to use it.
  • Ask if your plan allows after-tax contributions to your 401(k). 
  • Find out if your plan offers in-service distributions. This tells you whether you can roll funds out of your 401(k) into a different account while you’re still employed at the company.
  • Does your 401(k) allow loans? If so, a financial advisor can help you decide whether this is a good option or if there’s a better source available.

 

If your employer offers a Roth option, after-tax contributions, and in-service distributions, you may be able to execute a mega backdoor Roth contribution.

 

  • Pay attention to the investments you select. In particular, you’ll want to think about any fees (which can eat into your potential returns) as well as your overall allocation. Make sure you either set up automatic rebalancing or create a reminder for yourself to rebalance periodically.

 

A financial advisor can help you understand how the investments in your workplace retirement account fit in with any other investible assets and your portfolio overall. At Quorum, we track how your 401(k) fits into your overall portfolio and may be able to manage the investments on your behalf.

Health benefits

 

If your company offers health insurance coverage, making the most out of your benefits likely depends on your personal circumstances and the plans they offer. If the process feels daunting, you might consider working with a healthcare consultant who can help you understand the fine print of the plan offerings and the various costs (and benefits) associated with each.

 

  • Look for a triple tax advantage. If you are considering a high deductible plan, ask if your company has a health savings account (HSA) benefit. Some firms offer an employer match.
  • Ask about wellness incentives. Many companies now offer monetary support or program-based assistance for people looking to quit smoking, get in shape, or work on their mental health. This may come in the form of an employee assistance program (versus a formal, regulated benefit) or even free access to an app.
  • Create a flexible spending account (FSA) if your company offers one. These pre-tax dollars can be used for a wide (and expanding) list of products and services—from contact lenses to bandaids—and can help you reduce your taxable income for the year.
  • Ask about dental and vision insurance. Keeping up with routine care can save you in the long-run, as these benefits aren’t covered under original Medicare.

 

Other insurance

 

Many companies offer basic life and disability insurance policies as part of your employer-sponsored coverage. These plans can be a good opportunity for folks who have no current coverage. They can also be an affordable way to expand your current coverage. 

 

That said, you may want to look into insurance policies that aren’t linked to your employment to ensure your coverage doesn’t cease if you ever leave your job. Often, premiums increase on these policies as you age, so waiting and purchasing a policy when you leave your job could lead to a higher overall cost of coverage.

 

Learn more about the Quorum Private Wealth approach to life insurance.

Life and family benefits

 

While many job seekers know to ask about vacation policy, they may not look past the headline. However, a company’s policy on sick leave, family-planning expenses, and more can make a huge difference in both financial and personal wellbeing. Ask about:

 

  • PTO and holidays. Some companies recognize fewer official holidays while others have standard “Summer Friday” days off. Additionally, some firms cap your sick days and require you to take short-term disability for longer illnesses. Is bereavement leave something they provide? Knowing about these benefits can help ensure you don’t waste vacation or personal days.
  • Parental leave. This information is most important to anyone hoping to expand their family, but it can also be important if you’re managing teams or projects.
  • Adoption or fertility assistance. A growing number of companies will offer to help share the cost of family planning.
  • Remote work opportunities. See if your company offers them and if there are any restrictions involved. You may also want to inquire about whether this stance has evolved over time, to help you assess whether it might change again in the future.
  • Flexible work hours. In addition to remote work opportunities, some companies may offer to accommodate nontraditional schedules, allowing employees to work from 7 a.m. – 3 p.m., for example. Others don’t monitor hours at all, so long as you attend meetings and get your work done.
  • Paid or unpaid sabbaticals. Some companies allow you to take paid sabbatical after a certain number of years. Others might allow you to take an unpaid sabbatical without losing your job—something that may be helpful in high-stress industries.
  • Family care assistance. Some companies offer childcare support; others are extending this paid assistance to additional family members, such as elderly parents that workers might otherwise need to take time off to care for.
  • Pet insurance or support. You may be able to bring your pet to the office, secure a doggy daycare stipend, or take advantage of other pet-related benefits.
  • Financial, tax, or legal planning support. Some companies offer a stipend to help with tax preparation, legal fees, or similar.
  • Company-specific benefits. Do you get access to your company’s product for free or at a discount? Are those benefits transferable? (For instance, if you work for a car company, do your friends and family receive a discount?)

 

Professional development

 

Many people don’t realize they can take advantage of employer-sponsored programs to boost their earning (and promotion) potential within the company. 

 

  • Does your company offer tuition reimbursement or scholarships? If so, is this restricted to continuing education for your role, or a broader policy? Depending on your industry, your company may help pay for continuing training and education. This may include paying for professional licenses and certifications.
  • Ask about student loan repayment assistance. New legal provisions allow companies to offer an “employer match” to employees repaying student loans. Your company must have these provisions written into their retirement plan benefits, however.
  • Ask about mentorship and coaching opportunities. While many of us have informal mentors at any job, a formal mentorship program that you can put on your CV may offer benefits beyond the actual mentoring.
  • Can you take time off to volunteer? If so, is this discretionary or something you must do with your company? Either way, this can provide an opportunity to give back while possibly learning new skills and expanding your network. Along these lines, your company may also offer charity matches for any donations you make. 

 

Compensation benefits

 

Make sure you understand how you’re paid—in particular, ask for details about any non-cash compensation to ensure you understand the terms. You want to make sure you’ll be able to fully enjoy these benefits.

 

Understanding whether your employee stock options are incentive (ISOs) or nonqualified (NSOs), for instance, can impact your tax strategy and overall financial plan, so you’ll want to know which you have. 

Next steps: How to learn more about company benefits

 

For some benefits, like retirement and healthcare, companies are required to disclose certain information to you by ERISA. (For health insurance, ask for your summary of benefits and coverage (SBC); for retirement and legal benefits, as for summary plan descriptions (SPDs).

 

Many other policies are governed by human resources. Ask your company’s HR if they have a master list of available benefits. Or, ask for a 1:1 meeting with HR to review your benefits. You might ask them to put you directly in touch with the benefits administrator if you want to learn more about a specific policy or offering.

 

A financial advisor can help you evaluate your options. For instance, at Quorum, we might help clients assess whether they should opt into additional life insurance coverage or coordinate with their tax advisor to ensure our client is withholding the proper amount of tax on any bonus compensation.

 

As you begin to use your employer benefits, make sure you have a plan in place to optimize them. Set up whatever patient or employee portals you need to in order to monitor account balances, set reminders, or handle any tasks. 

 

Note when your company allows you to make adjustments to your benefits (often this is limited to open enrollment one month of the year). Use that window as an opportunity to review your benefits each year—see if your company has any new offerings and look at whether you’re optimizing your current benefits.

 

If you have questions about how to optimize your benefits, set up a consultation to discuss.