New benefits and incentive structures can impact your long-term plans
Many workplaces today offer a wide range of benefits to round out their employees’ comprehensive compensation package. In addition to a variety of retirement plan types, you may also have access to perks like stock options, insurance policies (health insurance, life insurance, short- and long-term disability, AD&D, and more), Flexible Spending Accounts and deferred compensation accounts, to name just a few.
It can be overwhelming to understand which benefits to enroll in, how much you will need to cover out of your own paycheck, and how it all fits into your long-term financial plan. Here are some tips to help you make the most of this unique opportunity.
The most common employer-sponsored retirement options include the 401(k), 403(b), and 457 Plans. Some employers offer a dollar-for-dollar match up to a specific percent of your annual salary. While you do need to adhere to IRS contribution limits, you don’t want to forgo free money. To maximize your employer opportunities, contribute at least the maximum amount your employer will match. If you make $50,000 per year, a 3% match would mean you invest $1,500 and your employer would add $1,500 to your plan. Be sure to ask about other benefits, including partial contributions once the match has been met.
Publicly traded as well as private companies can offer employee stock options. This means you’re given the option to buy a set number of shares of company stock at a set price. Employees are then allowed to sell back their stock at a later time, making stock options a valuable part of compensation packages.
A majority of employers offer some form of health benefits to their employees. This includes everything from fully-funded healthcare to subsidized insurance, where the employee is responsible for co-pays, deductibles, and some premium costs. The most popular options include preferred provider organizations (PPOs), where a network of healthcare providers are available to those enrolled in the plan, and health maintenance organizations (HMOs) that require enrollees to stay within a specific network of care providers.
Some employers offer additional insurance to help employees protect their financial future. These may include short-term and long-term disability, which covers an employee’s salary for a short or longer period of time due to a debilitating injury or illness. Other options include accidental death and dismemberment (AD&D) insurance, as well as life insurance.
The benefits are yours
There is no cookie-cutter benefits package that all employers use as a baseline. These plans can vary widely between workplaces. When you walk into a new job, walk in ready to understand your choices, and how to prioritize your needs to make the most of your benefits. The bottom line is to research your new employment benefits before making any long-lasting decisions about your retirement and financial plan.
Meet with a professional
The Financial Advisors at Addison Avenue Investment Services, a division of First Tech, can also help you plan ahead, whether you’re facing a job change, retirement, career advancement or just have questions about your benefit options. Make an appointment today and make sure your plan is keeping up with your life.
Registered address: 1011 Sunset Blvd, Rocklin, CA 95765 │ 855.744.8585
Financial Advisors offer securities through Raymond James Financial Services, Inc. Member FINRA/SIPC and securities are not insured by credit union insurance, the NCUA or any other government agency, are not deposits or obligations of the credit union, are not guaranteed by the credit union, and are subject to risks, including the possible loss of principal. First Tech Federal Credit Union and Addison Avenue Investment Services are not registered broker/dealers and are independent of Raymond James Financial Services, Inc. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.
Matching contributions from your employer may be subject to a vesting schedule. Please consult with your Financial Advisor for more information.
Shares acquired via an exercise of employee stock options are subject to resale restrictions. Restricted stock is nontransferable and must be traded in compliance with special Securities and Exchange Commission (SEC) regulations.