While this may be geared toward younger workers entering the corporate working world early in their careers, there are many employee benefits that are often overlooked by workers, thus missing out on substantial financial and investment gains. Everyone is well aware of their salary, vacation and sick days, etc., but the employee manual that you were handed day one is probably loaded with plan benefits that will help your bottom line. You probably even have a benefit that increases your investment account by one hundred percent! Let’s find out what they are and how to put them in place.
Employers offer their workers benefits beyond just health insurance and retirement planning. These perks can range from mental health services to financial advice and can be used to boost your personal wealth. According to research from Businessolver, many workers don’t know how to get the most out of those benefits. In fact, some 32% of employees report to being confused about their benefit packages. The confusion can be even more prevalent when it comes to benefits outside the enrollment process. The Society for Human Resource Management lists the following as the most popular employee perks.
Every year American workers leave thousands of dollars on the table in the form of company benefits. According to the U.S. Department of Labor, on average combined benefits are worth 30% of total compensation. At almost one-third of your salary you can’t afford to ignore all benefits offered. We’ll take a look at a couple of the major categories and then some of the more esoteric.
Matching Retirement Benefits
This is arguably the most significant and financially beneficial benefit that companies can offer. However, they are often underutilized. Employees sometimes feel as if they can’t afford to save more, but they don’t realize what they are giving up in potential savings, like the employer match on contributions. For instance, let’s assume that your employer matches 100% of your contributions, up to 6% of your salary. If your current annual salary is $60,000 and you contribute $500 a month (10% of your salary) to your 401 (k) plan for 30 years and earn a 9% annual return, your 401 (k) balance at retirement would be $2,265,664. This is twice as much as the balance without an employer match, which was $1,132,832. Your employer match would add $1,132,832 to your 401 (k) over 30 years. That’s a huge difference! As you can see, an employer match can significantly boost your retirement savings and help you achieve your financial goals
Medical Spending Accounts
The most emphatic benefit for employees has to be health insurance. Insurance is a valuable part of your overall compensation package, estimated to be worth and additional $5,000 before taxes each year. As you are well aware, insurance doesn’t usually cover all of your medical expenses, whether it’s a doctor’s visit or a hospital stay. To help employees prepare for these costs many employers offer access to Healthcare Savings Accounts (HSA) and/or Flexible Spending Accounts (FSA). These savings vehicles allow employees to set aside pre-tax money for medical expenses every year. For 2024, the maximum HSA contribution will be $4,150 for an individual and $8,300 for family coverage, up from the current limit for 2023 of $3,850 for individuals and $7,750 for a family. These funds can be used for everything from copays to sunblock, but typically must be used within the calendar year or they will be lost.
In addition to traditional healthcare and medical spending accounts, there are other types of insurance that are often offered as employee benefits. Remember to do a little due diligence though before signing on to any type of policy. Usually a large company can get you better coverage and pricing than you could as an individual, but check to make sure. Typically, employers offer additional life insurance, but many increasingly also offer disability, long-term care, critical-illness and even pet insurance.
Healthcare providers have come to realize that it is better to take care of you before you become sick or injured. As such, wellness programs and incentives have become available to help keep healthcare costs down. According to the Society for Human Resource Management, programs include free or discounted access to vaccination clinics, nutrition education, exercise programs and activities, fitness center memberships, health screenings, health risk assessments, weight-loss programs, smoking-cessation and stress-reduction programs. Not too shabby if the cost is covered.
Professional Services
These are things that weren’t around, or even thought of in days of old. The pandemic and the world of remote work opened the eyes of employers to the light of employees having lives outside of work. People buy homes, enter into contracts, start families and more. Many employers understand this and offer free or discounted professional services like real estate agents, attorneys, childcare, and adoption assistance. Check your benefits to see if there is a group legal, real estate, or accounting plan. It may require a small monthly premium in order to opt in for services, but many who have used the services attest that it is well worth it.
How about discounted products or services. These amenities are becoming more and more popular with larger companies. Things like cell phone service, membership to a gym, or even tickets to a movie or theme park may all be in that benefits package somewhere. If you don’t have the inclination or time to delve through all the manuals and emails, ask around. Your human resource department should be more than happy to fill you in on the details.
