When you work for a company that offers comprehensive benefits, the potential for net gains from your income goes way up. By utilizing these benefits effectively, you could either save a small fortune in expenses or gain a fortune through investments.
Here we will go over some of those benefits, and talk about some that you might have overlooked.
Benefits That Cut Costs
One of the first benefits that employees usually look forward to is health insurance. By taking advantage of your employer’s plan, you can save a ton! But have you looked into the possibility of setting up an HSA?
An HSA, or health savings account, is a fantastic way to prepare for unforeseen medical expenses. Money put into an HSA is tax-sheltered, meaning that as long as you use the money you put into it for medical purposes, you don’t have to pay taxes on it. Whether it is a deductible for an emergency room visit or a co-pay on your monthly prescriptions, all medical expenses can be paid out of an HSA.
Even better, an HSA can be set up as an investment account, allowing for the possibility of interest growth within the account. Not only can it be used tax-free for medical expenses, but the earned interest can grow exponentially to further protect you against health expenses in the future.
You also want to make sure that you take advantage of other insurances that are available, like life insurance or long-term disability or care insurance. As an employee benefit, term life insurance can be dirt cheap and helpful supplemental insurance for your comprehensive insurance coverages. Long-term care insurance is also much less expensive through an employer plan, and especially if you are young and in good health.
Benefits That Grow Wealth
The 401(k) has historically been a major factor in wealth building for millions of working people across the country. But if all you have done is set it up and left it alone, you may be missing out on maximizing your retirement savings potential. Be sure to check in on a few details.
First, confirm that you are taking advantage of any 401(k) matching that your company offers. Return on your investment may vary depending on market fluctuation, but taking in any available match is like a guaranteed pay raise.
Next, verify that you control what kinds of funds your money is invested in inside of your retirement account. Sadly, too often employees are given very little information about what kind of options are available, and money can end up inside a kind of one-size-fits-all fund called a target-date fund.
Generic target-date funds are usually designed to have a “higher risk, higher reward” attitude in the early years of its inception, and gradually become more risk-averse as the fund gets near to the retirement date of its investors. These types of funds are common, but sometimes not what an educated consumer would choose if they knew all of their options.
Lastly, one other area that might be worth looking into is if your company has a Roth option for your 401(k). A Roth 401(k) is essentially a post-tax 401(k) that allows you to only pay taxes on your contributions at the time you make them, leaving your growth tax-free when you are ready to retire. The Roth 401(k) has a few different rules you’ll want to go over with your wealth management pro, but for many people saving for retirement, it is a fantastic opportunity to protect the growth in your retirement account from taxes.
Armed With Information
The most important step toward maximizing your benefits from work is to get informed about your options! Many of the benefits available can be a bit of a maze to navigate, and sometimes it’s tricky to find out exactly what some of your opportunities are if you don’t know what to ask.
If you want to thoroughly explore your unique situation with a professional, Anderson Financial Strategies is a great place to start. We are experts in comprehensive wealth management and are ready to help you take full advantage of your options.
To explore our services for your family or business, please call us today at 855-237-4545, and schedule an executive briefing to discuss your specific goals.
Shon Anderson is president and chief wealth strategist at Anderson Financial Strategies, LLC with over 15 years of experience. As a fiduciary, Shon’s mission is to provide his clients with quality financial expertise along with rapidly responsive service through an honest relationship. He specializes in providing family office-style services to help his clients organize and focus their financial life. Shon graduated from Wright State University with a bachelor’s degree in financial services and an MBA in finance. He is a CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioner and holds the Chartered Financial Analyst (CFA®) designation. His insights have been quoted in leading financial news publications such as CNBC, Yahoo Finance, Fox Business, Consumer Reports, Forbes, Bankrate.com, Investment News, and Kiplinger. Shon serves as an adjunct professor teaching personal finance courses at Wright State University, leads CFP® exam review courses for Keir Educational Resources, and is president of the CFA Society Dayton. Shon and his wife, Jessica, reside in Sugarcreek Township, Ohio, and are blessed with triplet daughters, Elizabeth, Bridgette, and Alexandra, along with their son, Jacob, and dog, Jack. Over the years, Shon has been involved in several volunteer organizations including the Wright State chapter of Delta Tau Delta as an alumni adviser and was a Big Brother in the Big Brothers/Big Sisters program. To learn more about Shon, connect with him on LinkedIn.