Whenever we talk about our compensation at work, it’s really easy to focus on our income. But that income comprises only 70% of your total benefits. The remaining 30% comes from other types of benefits that your employer offers.
And some of these benefits aren’t automatically given to you. Instead, they require you to know that they actually exist, and then sign up for them. Sadly, too many people aren’t aware and taking action to ensure they get the benefits that they work so hard for.
Are you one of those people not taking advantage of your benefits? Here are three employee benefits that too many people overlook:
401(k) Employer Match
Having an employer that will match contributions to your 401(k) is my favorite employee benefit. So long as you put money into your company’s 401(k) plan, your employer will match it up to a certain point.
Most people do take advantage of some of this benefit. However, not everyone is contributing enough to get the full match from their company. For instance, if a company will match your contributions dollar for dollar up to 4% of your salary, but you only put in 3% of your salary into your 401(k), then you’re leaving 25% of your potential benefits behind.
Don’t make the mistake of leaving behind employer contributions.
So figure out how much you need to contribute to get the full employer match, and make sure that you put in that amount. If you don’t you’re leaving easy money on the table.
Health Savings Account (HSA)
For a lot of younger and healthier people, they aren’t spending all that much on their health insurance. If that describes you, you could be a good fit for a Health Savings Account.
A Health Savings Account allows you to put part of your income to an account before taxes are taken out. Then, if you need to use it for qualified health expenses, you can take money out of that account without paying taxes on it.
Or, if you don’t need the money for any health expenses, you can actually invest the money and allow it to continue growing.
In other words, with an HSA, you could save money on your taxes when you contribute to the account. Then you can have tax free growth all the years that it’s invested. And when you need it, as long as you take it out for qualified medical expenses, you won’t have to pay any taxes or penalties on the withdrawals.
Sounds like a pretty good deal, right? And you would think that many people would take advantage of these awesome tax benefits.
Unfortunately, only 34% of employees choose the HDHP plan. Now this plan may not be the best fit for you, given your family and health situation. But with the potential tax savings, it’s worth your consideration.
Group Long Term Disability Insurance
According to the Social Security Administration, “more than one in four 20-year-olds will experience a disability for 90 days or more before they reach 67.”
Yet despite the need to prepare for some kind of period where one can’t work, in 2014 only a third of people took part in their work’s group long term disability.
So even though a large number of people have a need for this type of insurance, most aren’t taking advantage of it. Which leaves them on their own if they ever become disabled and aren’t able to keep working at their job.
In addition to filing a really important need, this benefit is more affordable and easier to qualify for than other options. Private disability insurance (which you would have to buy individually) is a much more expensive option. And social security disability insurance is harder to qualify for than a group insurance policy. For all of these reasons, I’d encourage you to take a hard look into signing up for your work’s group disability policy.
So there you have it, three employee benefits that too many people aren’t taking advantage of. Did I miss any? Which ones are your favorites? I’d love to hear what you think. You can email me at scott@dev-forthrightfinances.pantheonsite.io, call me at 424-258-4460, or contact me here.