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Understanding Your Employer Benefits

When most people are looking for a new career they often focus on the salary or commission structure but often times skim through the employer benefits packages. But employer benefits can be very lucrative for yourself and convenient for your family.

Here are six common employer benefits to evaluate with a new compensation package:

Health Insurance
One of the most common and helpful benefits is health insurance. Each company will be different but generally, you will receive medical insuranhuce if you are a full-time employee. When reviewing the insurance options be sure to check the following:

  • Monthly payments – are you responsible for a portion or is it fully covered by your employer?
  • Is disability or life insurance provided?
  • Are dependents allowed? What is the additional monthly cost?

Health insurance can be extremely costly, especially as you get closer to retirement age. Be sure to spend extra time evaluating your insurance options.

Life Insurance
Life insurance is another common benefit for employers to offer. Usually, it will pay out the amount of one year’s salary and sometimes give you the benefit of purchasing more. At Bayntree we recommend always having a separate life insurance policy that is not associated with your employer as you will lose the benefit if you are no longer employed.

FSA’s & HSAs
If you don’t spend much on health care each year or are in a high tax bracket HSA’s can be incredibly helpful. The money you contribute to an HSA is pre-tax and tax-free if used for qualified health care expenses. In 2018, the annual HSA limits are $3,400 for individuals and $6,750 for a family. Adults over the age of 55 can add up to $1,000 more in each category.

HSA’s can be used for eligible medical expenses such as deductibles, copays, and coinsurance as well as other expenses not covered with your plan. Health spending accounts also allow you roll the balance from year to year unlike a flex spending account. Additionally, HSA’s can be invested in stocks, mutual funds or other investments to earn more money.

FSA’s (Flexible Spending Accounts) also allow you to contribute pre-tax dollars and can be used tax-free for qualified expenses. Unlike an HSA, any money in an FSA is forfeited after the plan year ends. Make sure to carefully estimate your expenses when choosing the election amount.

401K
Often times your employer will offer a 401K to help fund your retirement. But not all 401K’s are created equal as each of them will have different funds to choose from. Additionally, some employers will match a percentage of your contribution amount to help increase your retirement savings. This is one of the best benefits that can be offered as it is essentially free money from your employer toward your retirement.

Stock Options
While not nearly as common as the previous three options, some employers will offer stock options as part of the benefits package. The type of options will depend on whether the company is publicly traded or plans to in the future. Generally, stock options are offered at a lower price where you can eventually sell at a designated time.

Time Off Policy

Paid Time Off
Understand how your new employer lets you accrue time off throughout the year. It might be a set number, accrue bi-weekly or monthly, and could increase the longer you are employed.

Sick Time Off
Some employers offer sick time that is separate from PTO to take care of yourself or a family member. Be sure to check the total number of days and if it expires each year.

These are some of the most important employer benefits to evaluate when choosing a new employer. Be sure to review the package in its entirety to make sure you don’t miss out any of these helpful benefits.

If you have any questions about your employer benefits or need assistance reviewing your portfolio, request a call from a Bayntree financial advisor today.

Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.

Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.

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