Are You Making the Most of Your Compensation Package?
When you’re considering a job change, what are your priorities when choosing an employer? The workplace culture and fulfilling work are likely at the top of the list, as is adequate pay. But when it comes down to it, if you’re like many job seekers, you want to work for the company that offers valuable employee benefits.
In any job, salary is only part of the overall compensation package. Employer-paid benefits, including everything from health insurance and retirement accounts to gym memberships and discount programs, also contribute to your earnings. If you do not take full advantage of everything your employer offers, you may be leaving money on the table.
Stonecrop Wealth Advisors strives to help clients secure a more prosperous. This commitment includes helping you make the most of the compensation package and wealth-building resources provided by your employer.
Are You Getting Everything You’ve Earned?
The best employee benefits entice top talent to organizations and keep employees engaged and satisfied. However, that doesn’t mean employees always use those benefits. Data from the International Foundation of Employee Benefits Plans (IFEBP) indicates that 80% of employees don’t open or read their benefits materials. What’s more, of those people who do read the materials, only about 50% understand them.
If you don’t fully understand what your employer has to offer, you might not be getting all the benefits you’ve earned.
Consider some of the most commonly underutilized employer benefits:
Employer Match Programs
If you’re not taking advantage of your employer’s matching program for retirement savings, you’re giving up “free money.” Plan specifics vary, but some employers match worker contributions to 401k retirement plans up to a specified dollar amount or salary percentage. The longer you stay with the company, the more of that money you get to keep, helping build your retirement nest egg.
Employer match programs potentially add thousands of dollars to your retirement account. They also encourage you to save more money by maximizing your contributions to increase the matched amount.
Another matching program offered by some employers are stock purchase plans, some of which allow you to purchase stock of your employer at a discount.
Tuition Reimbursement Programs
Tuition reimbursement programs allow you to seek additional education and position yourself for advancement, and ultimately, increased earnings. Some companies even offer student loan reimbursement to qualifying employees, which may help you reduce an existing debt burden and put more funds toward wealth building.
Unfortunately, companies with tuition reimbursement options report that the majority of workers don’t use the benefit. A Society for Human Resource Management survey revealed that only about 10% of employees who have access to tuition reimbursement programs take advantage of them. This is despite strong evidence that getting additional education on the company dime increases earnings potential. At insurance carrier Cigna, for example, employees who took advantage of education benefits were more likely to earn promotions and saw a 43% increase in their earnings over three years.
Some companies with tuition reimbursement programs even extend the benefits to employees’ immediate families. This means your spouse or children may qualify for scholarships or other programs through your employer.
Health insurance isn’t just for major medical problems. Even the most basic health benefits plans cover preventive care, such as annual checkups, mammograms, cancer screenings, and vaccinations. Unfortunately, surveys indicate that only about half of employees ever take advantage of these benefits—and the majority never make any medical claims at all.
Maintaining good health is closely tied to wealth building. Early detection of serious conditions makes them easier to manage and reduces the likelihood of significant medical expenses in the future.
If your employer provides you with access to a Health Savings Account (HSA), you should consider diverting some of your income to this powerful and tax-efficient savings device.
Paid Time Off and Other Perks
IFEBP reports that vacation and paid time off benefits are the most well-understood among employees. However, they too, are underutilized: More than half of Americans don’t take all of their paid vacation days. Many people don’t use their sick days either, instead coming to work sick, despite the effect on productivity and the health of their co-workers.
Not all companies’ paid time off policies allow employees to roll over unused vacation time, and even those that do often have restrictions on how much can be saved. Time off to recharge is vital to reducing stress and increasing productivity, which ultimately benefits your career and increases earnings potential.
The best employee benefits aren’t just paid time off for vacations, either. Other forms of leave include:
Paid parental leave.
Paid time off for volunteering.
Paid personal days.
Other employer-paid benefits can save you time and money—but only if you use them. Look at your employer’s offerings of parking or public transportation discounts, entertainment and shopping discounts, gym memberships, even dry cleaning deals. You might discover that you’re spending more than necessary.
Taking Advantage of the Best Employee Benefits
Making the most of your employer benefits package is an important step toward maximizing your resources and building wealth to care for yourself, your family, and your community. Stonecrop Wealth Advisors is here to help you identify additional opportunities, ensuring you can Do Good both now and in the future.
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