Recs

8

60-Second Guide to Maxing Out Your Benefits

These days, negotiating the best salary you can, or making sure you earn yourself a big bonus, aren't the only things you have to worry about at work. Now more than ever, employee benefits are equally important aspects of your total compensation package. And with skyrocketing health-insurance premiums and health-care costs, you can't afford to make bad decisions about your benefits.

Although there are a lot of nuances to employee benefits, a quick look can tell you a lot about what you're entitled to, and how to make the most of it. By following some simple steps, you can learn about your benefits and find out what you can do to maximize their value.

0:60: Break it up
If you ask your HR department about your benefits, you might find yourself staring at the spine of a 200-page handbook. But don't panic. There are three major types of employee benefits you should be most concerned about: your employer's retirement plan, its health and disability insurance coverage, and self-pay options like flexible spending accounts or health savings accounts. While it's also important to know your employer's policies on things, these are the three areas where you have the most control over your situation -- and the most at stake.

0:50: Take your employer's money
The best way to save for retirement is a whole topic unto itself. But in practical terms, the most important thing you should understand about an employer-sponsored retirement plan -- which in many cases will be a 401(k) plan -- is whether and how much your employer is contributing toward your retirement. Basically, if your employer pays you an incentive to participate in the plan, you should take your employer's money if at all possible. Whether it's through matching contributions, profit sharing, or other types of contributions, your employer's contributions represent free money that you can pick up easily.

0:39: Keep your finances healthy
If you think 401(k) plans are complicated, just wait until you see your employer's health insurance coverage. Many employers offer a wide menu of different plan options, ranging from expensive plans that cover nearly every conceivable medical expense you might have, to bare-bones plans that only kick in after you pay a substantial amount out of pocket. Obviously, you can't predict most medical expenses, but spending the time to figure out which plan option matches your needs most closely can pay big dividends in saved premium costs and lower medical bills.

0:27: Flex your muscles
No matter which plan you pick, you probably won't eliminate medical costs entirely. That's why a flexible spending plan can be so useful. These plans let you apply pre-tax money to health-care expenses like doctor's bills, prescription drugs, and other medical needs. In addition, some flex plans let you put money toward child care expenses. Used correctly, these plans can save you 30% or more on money you're going to spend anyway.

0:15: Cover the contingencies
Nobody wants to think about what would happen to their families if they were injured or killed on the job. But good benefits packages include things like life insurance and disability insurance coverage, which are tailored toward making sure that you and your family will have the income you need if something happens to you at work. Understanding how those benefits work with state laws like workers'-compensation statutes is important in order to find out exactly what you'd receive if tragedy were to strike.

0:04: Get back to work
Remember: Your employer won't keep giving you those benefits if you don't make sure you do your regular job. So while you shouldn't hesitate to ask your HR department about any questions you have, make sure you keep your on-the-job research to a minimum. After all, we don't want to get you into any trouble!

Got another sec?


Read/Post Comments (1) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 12, 2013, at 11:24 AM, HarryKyin wrote:

    A good employer takes care of all round benefit of an employee. The employer will see that the employee gets good retirement benefits,insurance cover to protect the employee and his family. Also it will depend on the employee completely how he keeps all these facilities the employer gives him and manages them well. Employee stock option if the employer provides the employee should think wisely and manage that well. All through the life the employee should have his savings healthy for himself and family.

Add your comment.

DocumentId: 612644, ~/Articles/ArticleHandler.aspx, 4/16/2014 12:18:42 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 16,262.56 89.32 0.55%
S&P 500 1,842.98 12.37 0.68%
NASD 4,034.16 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes


Advertisement