If you recently started a new job, you may not be aware of all the benefits available to you—and thus you may be leaving money on the table.
“The value of these extras—including retirement-savings plans, paid time off, health insurance and other benefits—can add up to about a third of your total compensation,” says Robert Aruldoss, a senior research analyst at the Schwab Center for Financial Research.
Here are some common (and not-so-common) benefits to investigate—and how to maximize them.
1. Health care
- Carefully weigh your health care options, taking particular note of coverage, copayments and deductibles. (Cheaper monthly premiums don’t always pay off if they result in substantially higher out-of-pocket health care costs.) If your spouse or domestic partner also has health care coverage, compare the plans to ensure you’re getting the best coverage for your money.
- If you’re covered by a high-deductible health plan, ask whether the company offers a Health Savings Account (HSA). Contributions are federally tax-deductible; capital gains, dividends and interest accumulate tax-free; and you pay no tax on withdrawals for qualified medical expenses.
- Also see whether the company offers a tax-deductible Flexible Spending Account (FSA), which allows you to contribute up to $2,700 per year1 to cover certain out-of-pocket health care costs. (Generally, individuals can contribute to HSAs and FSAs simultaneously only if they are using an “HSA-compatible” FSA. When used in conjunction with an HSA, FSA funds may be limited to dental and vision expenses.)
- Check whether the new company offers a 401(k) or similar workplace retirement plan—and whether there’s a company match. If so, contribute at least enough to capture the match, though you may need to kick in a lot more to reach your goals.
- Look into the pros and cons of rolling existing 401(k) funds into your new employer’s plan or an Individual Retirement Account.
3. Other benefits
- Determine if your new company offers life insurance, or whether you might be better off purchasing it independently. (Compare term and permanent life insurance.)
- If you have or plan to have children, find out whether the company offers a tax-deductible FSA for dependent care, which allows married couples filing jointly or single parents filing as heads of household to contribute up to $5,000 per year to cover child care expenses.
- Inquire about commuter benefits, such as pretax parking and transit passes.
- See whether the employer offers other potentially valuable benefits, such as adoption coverage, low-cost legal plans or tuition reimbursement—some employers even offer discounts on gym memberships and technology purchases.
- Look into any employer-offered short- and long-term disability coverage. As with life insurance, individual disability insurance may supplement or be a better fit than group coverage. (Learn more about individual disability insurance.)
1For married couples, each spouse may contribute up to the annual limit to her or his employer-sponsored FSA. You generally must use the money in an FSA within the plan year or risk losing any unspent funds.