A good salary is most people's primary concern when evaluating a new job opportunity, but if you want to retire as quickly as possible, it's not the only perk you should look for. Wise investors also put the following benefits to work for them to help them retire sooner.
1. 401(k) match
Some companies offer 401(k) matches to help employees save more for retirement. Matching formulas vary by company, but usually an employer pays $0.50 to $1 for every dollar you contribute, up to a certain percentage of your income. This could potentially be worth hundreds or even thousands of dollars per year, and that's before you factor in the years of investment earnings you'll accrue.
But 401(k) matches usually have a caveat: If you quit your job before you've worked for the company long enough, you could forfeit some or all of your match. Most companies have a vesting schedule that determines when you get to keep your employer-matched funds. It's important to know what this is if you don't plan to be with your current employer much longer.
Ask your plan administrator or your company's HR department about how its matching formula works and whether there's a vesting schedule. Aim to contribute at least enough to your 401(k) to get the full match every year, and try to remain with the company long enough to become fully vested before seeking opportunities elsewhere.
2. Health insurance
Employer-sponsored health insurance is often much cheaper than health insurance you could purchase on your own. If you don't have health insurance through your current employer and you're able to find a company that offers this, you may be able to divert the funds you had been using for insurance to retirement instead.
This could potentially give you a few hundred dollars more that you could put toward retirement each month. Or, if you're worried about meeting your high deductible, you could put the money in a health savings account (HSA) instead. More on that below.
3. Health savings account (HSA)
HSAs weren't designed to be retirement accounts, but many people use them for retirement anyway because of the many tax breaks they offer. Your contributions reduce your taxable income for the year, just like contributions to tax-deferred retirement accounts. You can leave the money in your account as long as you need to, and if you use it for medical purposes, it's tax-free. You can also make non-medical withdrawals, though you will pay taxes on these plus a 20% penalty if you're under 65.
Some HSAs also enable you to invest your money just like you could in a retirement account, and a few companies offer an HSA match. This is similar to a 401(k) match but the money goes into your HSA instead.
It's a great option if you've maxed out your other retirement accounts, but you need to make sure you qualify for one first. Individuals must have a deductible of at least $1,400 and families must have a deductible of at least $2,800. Qualifying individuals may contribute up to $3,600 in 2021 while families may contribute up to $7,200. These limits can change from year to year.
4. Paid educational opportunities
Some employers are willing to pay for their employees to pursue additional training or obtain an advanced degree. Often, these companies require employees to work for them for a certain number of years if they want their education paid for, so this is something you have to weigh.
Even if you don't plan to remain with your current employer for the rest of your life, taking advantage of paid educational opportunities could open the door to better-paying jobs down the road. This could make it easier for you to reach your retirement savings goal.
But pursuing additional education often requires a huge time commitment outside of your work, so it's not the right solution for everyone. You'll have to weigh the costs and benefits to decide if it's worth it for you.
You don't need any of these perks to save enough for retirement, but they can make the task much easier, and they may not be the only benefits that can do so. Look over the full list of perks a job offers and think about how you can get the most out of them. If you see a way to pocket a little extra cash every month, consider placing it in a retirement account rather than spending it so you can hit your savings target faster.