How to Take Advantage of Employer Benefits to Save More

February 11, 2022

Let’s be honest, when you’re starting a new job, you’re often most focused on the salary. But what about everything else your employer offers? It’s easy to overlook the valuable benefits package, but taking full advantage of them can have a massive impact on your financial future. Many companies provide benefits that aren’t immediately obvious and can truly transform your savings strategy.

Beyond the Paycheck: What Are We Talking About?

Employer benefits go far beyond just your salary. Here are some common types of benefits you might encounter:

401(k) Plans with Matching: This is arguably the most valuable benefit. Many employers will match a portion of your contributions, essentially giving you free money towards your retirement. For example, they might match 50% of your contributions up to 6% of your salary. Never leave free money on the table!
Health Savings Accounts (HSAs): If your employer offers a high-deductible health plan (HDHP), you may be eligible for an HSA. These accounts offer a triple tax advantage: contributions are tax-deductible, growth is tax-deferred, and withdrawals for qualified medical expenses are tax-free.
Wellness Programs: Many companies provide discounts on gym memberships, healthy food options, or even programs focused on stress reduction and mental health.
Employee Stock Purchase Plans (ESPPs): Some companies allow you to purchase their stock at a discounted rate.
Life Insurance and Disability Insurance: Often offered at a lower cost than you could obtain on your own.
Tuition Reimbursement: If you’re looking to further your education, this can be a huge benefit.

How to Maximize Your Benefits

Understand Your Plan Details: Don't just passively enroll. Carefully read the materials provided by your HR department. Pay close attention to:
- Matching Formulas: How does your employer match your contributions? Is it a dollar-for-dollar match, or a percentage?
- Vesting Schedules: How long do you need to work for the company before you’re fully entitled to the employer’s contributions?
- Eligibility Requirements: Are there any restrictions on who can participate?
Start Early: The power of compounding interest is your friend! The sooner you start contributing to your 401(k) or making contributions to an HSA, the more your money will grow.
Contribute Enough to Get the Full Match: Seriously, this is crucial. Don't leave money on the table just to save a few extra dollars. It’s like turning down a raise – you're sacrificing free money.
Review Your Benefits Annually: Your financial situation and your employer’s offerings might change over time. Take a fresh look at your benefits package each year to ensure you’re still on track.

Resources to Explore

IRS.gov: https://www.irs.gov/ - For information about retirement plans and tax-advantaged accounts.
Your HR Department: Your HR department is your best resource for information about your company’s benefits.

Taking advantage of employer benefits is a smart way to build wealth and secure your financial future. Don’t underestimate the value of these offerings – they can make a significant difference!