Failing to take full advantage of your employee benefits is like saying no to a raise. Investigate your benefit package carefully to find out how you can get the most from it.
New York, NY (PRWEB) February 22, 2005 -- Experts say that employee benefits can account for up to 40 percent of total compensation, so its wise to fully investigate the real value of the benefit package when youre comparing job offers.
As these members of the Armchair Millionaire community attest, Americans love their benefits--and dont take them for granted:
"I am so lucky in that my employer pays 100 percent of my health insurance premiums (for my whole family) and dental insurance. I also get free life insurance equal to two times my salary. We also get tons of personal and sick leave. By not paying insurance alone, I am getting about $250 extra in my paycheck each month - great benefits!" --Riley31101
"I view my benefits as extra pay. I know many who are not as fortunate to receive any benefits at all. No matter what benefit package you receive, you should it as a plus." --kirkisms
As you compare different job offers, always ask these two key questions about the benefit package:
1. Do the benefits match your needs? Benefit packages are not one-size-fits all. For example, if youre single, family-friendly benefits like onsite daycare may mean much less to you than more vacation time.
2. How much are the benefits really worth? Take a look at the real dollar value of any benefit package youre offered. That spiffy employee gym is appealing at first glance, for instance, but a comprehensive health insurance plan is worth far more.
Once youve settled into your new cubicle, keep in mind that its up to you to make the most possible from your benefit package. My guide shows you how.
The Armchair Millionaire's Guide to Getting the Most from Your Employee Benefits
Insure Yourself Right:
• Health insurance: If your spouse is not covered by their own employer, by all means sign them up for your medical plan if you can. Even if you have to pay the premium yourself, theyll likely get better coverage from your group plan than through an individual policy.
• Disability insurance: Dont overlook this critical coverage. While many companies offer group disability insurance plans, they often require you to pay some or all of the premium. Still, the group rate from your employer will probably be far lower than youd pay for an individual policy.
• Life insurance: Many employers cover all their workers in group life insurance policies, which provide a basic benefit upon the death of an employee. Be aware that these plans rarely cover all your life insurance needs, however. Find out if you can purchase additional coverage through your employer, or if you need to buy your own policy.
Leverage that 401(k). This is a no-brainer: If your employer offers a match on 401(k) contributions, contribute at least that much to your plan. If you earn $40,000 per year and your employer matches your contribution of just 3 percent of your salary, that translates into a $1,200 annual tax-free benefit.
Max out the flexible spending account. Flexible spending accounts let you to pay for certain health care and dependent care expenses (such as childcare, insurance co-pays and prescriptions) with pre-tax dollars. Many employees pass up flexible spending accounts because they dont want to be bothered with the required paperwork, but the effort is absolutely worth it. If you set aside $5,000 in your flexible spending account, for example, you could easily realize a tax savings of $1,200 per year.
Further your education. If your employer will foot the bill for tuition, go for it. Down the road, those night classes could lead to a better position with the company--or even a better job at a new company.
The Bottom Line: Failing to take full advantage of your employee benefits is like saying no to a raise. Investigate your benefit package carefully to find out how you can get the most from it.
The Armchair Millionaire Weekly Survey: Should you borrow from your 401(k) plan? Log on to www.armchairmillionaire.com and let us know.
Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at www.armchairmillionaire.com.
Contact Information:
Lewis Schiff
Armchair Millionaire
877-833-2823
http://www.armchairmillionaire.com
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