In my last article we talked about getting the most out of your primary employer. The majority of us are working jobs we’d rather not be working for a company we’d rather not be working for. Me? I actually love my job and my company. But I would say the average worker doesn’t feel a strong bond with their employer.
I think one of the reasons we’re frustrated with our employer is because we don’t understand all of the benefits they give us. Did you know I get a 26% discount off of my Verizon bill every month? Check with your employer – maybe you do too.
Imagine seeing a friend of yours every single day. Each day when you bump into one another, they give you a few coins. Same thing, every day. One coin after another.
Some days you get a penny, other days you get a nickel, and when you’re lucky you get a quarter. Unless you’re standing right beside a gumball machine when you receive the quarter, you see the change given to you as a nuisance. Who wants to lug around all this metal? Who wants their leg to sound like a maraca when they walk?
Maybe not the best analogy, but what I’m getting at is important. It’s estimated that 20-30% of your compensation for employment is paid to you through benefits, not through your standard paycheck. The problem is that most employees are not maximizing the benefits being offered.
The moral of my terrible story is this…if someone is willing to give you free money, you take it!
With that said, here are my 3 favorite benefits you need to be taking advantage of:
This SEEMS like an obvious one but too many people leave money sitting on the table. Many years ago companies would offer a defined benefit plan in order to assist their employee’s through their retirement years. After you worked for a company for ‘x’ number of years, you would receive a percentage of your salary plus the number of years you worked there times another multiplier. This would allow for a comfortable retirement. There was no effort required on the part of the employee.
Unfortunately, most pensions have deceased along with those that collected them.
Now most employers have switched to defined contribution plans. Now there is a lot more effort required by the employee; but with that effort comes control. Now an employee and manage their portfolio according to their risk tolerance and specific goals. Also, these contribution plans are much more portable than the prior pensions.
Employee Stock Purchase Plan
Every employer wants their employees to be invested in the company. Whether it’s mentally feeling a part of the team or literally having ownership in the company, it’s all the same. As an incentive, most companies will offer an easy way for each employee to purchase company stock. While I never advise directly in individual stocks, employers are offering discounts or will match a portion of what you invest.
Flexible Spending Account
I wish Tupac and Biggie would’ve spent more of their time on Earth rapping about flexible spending accounts. These things are straight up gangster.
Think about all the medical expenses you may have over the next year. Maybe even costs such as dependent care or parking. Wouldn’t you rather pay for these things with pre-tax dollars rather than giving the government around 25-28%?
I didn’t want to get too specific with each of the above just yet. Each benefit deserves its own post (or several).
Readers: Aside from health insurance, what benefits to you take advantage of?
This post was written by A. Blinkin.
We have a SEP plan, and while I don’t have to do anything exactly to get it, it’s nice to know that it’s there!
It is nice to know someone is looking out for you!
We have an employee assistance program (EAP). Through it, employees can access confidential and free counselling and career planning support by telephone. Many employees do not take advantage of these services but they can make all the difference when you are coping with a difficult situation @ home or work.
Interesting…do you know if you are speaking with HR employees of your company or is it outsourced? I would think some people wouldn’t be as open if they knew who was on the other end.
Are you expecting to come on full time or are you looking elsewhere? That pension is quite enticing!
Our employer offers life insurance for myself, wife, and kids, up to amounts that actually would cover us in the event of something bad, and it’s much cheaper than what I can find anywhere else.
Very nice. I know my company offers 1x my salary but I haven’t looked into additional coverage yet. That’s interesting that it’s cheaper for you than elsewhere. I would’ve assumed the opposite.
I’ve always worked in non-profit and academia, so I haven’t had an opportunity to participate in a stock purchase plan, but do all the others (including cell phone discount). Some others…discount tickets for movies and attractions and 529 (college savings) plan. We also took the leap this year into a high deductible and HSA plan through my husband’s employer. Our plan is to sock away as much as possible in the HSA to help with medical costs when we retire early.
Sounds like you have covered just about everything. You have fully studied up on your benefits.
Did you work at a brewery or a bar? My uncle used to work at a brewery & they were allowed to drink on the job as much as they wanted. I don’t know how that worked, but it did.
I’m always amazed by how many people don’t take advantage of employer-matched retirement accounts–it’s FREE money!!
It’s weird, isn’t it?
I’m taking advantage of 401k and ESPP. My insurance plan doesn’t allow FSA and that’s too bad. I’m using DCAP for day care and that helps a lot.
That is good. The only thing I worry about with my ESPP is that I’m invested too heavily in 1 individual company. I could potentially lose my job AND lose a huge amount of my investment value at the same time. Kind of like a double whammy?
I planted the seed in the HR department to offer supplemental long-term disability insurance to the company’s employees.
You see, my former employer paid for long-term disability insurance on behalf of the employees. That’s great, right? The only thing is that the benefit would have covered, at most, 60% of our salary and that amount was capped at a figure that was much lower than 60% of many employee’s salaries. (The average salary of the company was really high.)
Add to that, an employee would have to pay taxes on their disability benefits after taking a 40% pay cut. The solution? Offer a supplementary disability insurance policy that employees would pay for that would increase their benefits and that they wouldn’t have to pay taxes on.
I took advantage of this benefit once it was provided. Too many young people don’t appreciate the importance of protecting their greatest asset: their ability to earn income.
I’m impressed. You did a lot of homework. How did you approach “planting this seed?”
When I was working I had some type of emergency medical leave insurance or something. I also paid into the state’s retirement plan. I still maintain those benefits although they’re not growing too quickly as I’m not contributing anymore! Looking forward to taking advantage of these things when I graduate and get back in the workforce.
I need to sign up for the FSA on the next open enrollment. I’m so anxious to do so it’s a little ridiculous!
Do whatever you have to do to get that pension! WOW them!
haha this is my kind of company! I’d love to hear more. I’m torn between big vs small companies. Sometimes the jobs at bigger companies are so specialized that you’re kept to one task. You don’t get to see other areas. At smaller companies you’re responsible for a lot more. So maybe your time at the smaller company will lead to higher compensation in the future?
I’m happy that my company offers all three of those benefits and I take advantage of all of them. So many people aren’t even aware of everything they are entitled to. I think everyone should be working to get the maximum compensation, its like free money without any extra work.