More than just a paycheck

The value of a job comes down to more than just how much money you make. Equally important are the accompanying benefits.

The kind of paid sick leave, vacation time, health insurance and retirement plan you will get from an employer is also a big part of the equation.

Benefits add $20,000 to the total compensation of the average private industry worker earning $45,000 a year.1 In fact, benefits rank highest for what employees value when considering job offers from two companies with comparable salaries — more than compensation, work environment or bonuses.2

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Save more with your company's benefits

Understand the value that voluntary benefits can have on your retirement and savings goals.

If you’re lucky enough to work for an employer who understands the value of these perks, make sure you’re taking advantage of them and getting the most support you can in securing your financial future.

Here’s what you need to know about the most common employer benefits.

Retirement

Access to retirement accounts is among the most valuable of workplace benefits because they are often the foundation of many people’s long-term financial security. With most employer-based retirement accounts, you can put away pre-tax money. That helps you reduce the amount of income that you’re taxed on (though you will owe income taxes on withdrawals from the retirement account at some point in the future).

You can invest up to $18,000 per year in 401(k)s and 403(b)s (or $24,000 if you are over 50). Even if saving that much is a stretch, make sure you contribute enough to take advantage of any your company’s  matching-funds plan. If your company matches 50 cents of every dollar you contribute, up to a certain amount, not investing up to this limit is akin to leaving money on the table.

Health insurance

A robust health insurance plan is worth its weight in gold, given rising medical costs. Many health insurance plans offer benefits that go beyond covering doctor visits and lab tests. Some might even give you cash reimbursements for joining and using a gym, free preventive care exams and flu shots, and access to health coaches to guide you in proper nutrition and disease management.

Try to pick the plan that’s right for your household. If you’re planning to start a family, a plan that covers prenatal and maternity care is crucial. If, on the other hand, you’re looking for lower premiums and less coverage, then a high-deductible plan might be worth exploring.

Flexible spending account

A flexible spending account is an excellent tool for saving on your health care expenses. With a FSA, money is taken from your paycheck on a pre-tax basis. You can use it for any health-care-related expense.

There’s a catch, though: You must use the money in your account by the end of the year, or you lose it. Some employers allow you to carry over $500 from one year to the next, so ask if you can do that. If you find yourself with money in the account as the end of the year approaches, push up some of the expenses you know you’ll incur soon anyway. For example, fill a three-month supply of a prescription drug, move up planned dental work, or get yourself a new pair of eyeglasses.

Time off

Although paid time off is not a requirement in the United States, most employers recognize that everyone needs time away from work to take care of personal matters or simply to recharge. Make sure you understand your company’s policies regarding vacations, sick days and family leave, since they vary widely. Some companies have a certain allotment of each type of time off, while others group them all together into one pool.

When you stop and think about it, employee benefits can make all the difference between a good job and a great one. So make sure you’re getting the most from this type of compensation, and not just focusing on your paycheck.
 

1 "Employer Costs for Employee Compensation." U.S. Department of Labor. December 9, 2015. http://www.bls.gov/news.release/ecec.nr0.htm

2 Miller, Stephen. "Employees Value Benefits, Don’t Understand Costs." Society for Human Resource Management. April 20, 2011.  http://www.shrm.org/hrdisciplines/benefits/articles/pages/benefitsvalue.aspx