Do you truly understand how much your company is really paying you?
There is more to a job than just pay but more importantly there is more to a job and that is finding a career. Money is great, benefits are wonderful, but how do you know if your compensation will be better than the new job you are contemplating, or thinking about going to?
It starts with pay. Pay is easy to compare using websites like Glassdoor or Indeed to see what others in your field are making for the same job. These websites can be tough to use as comparisons may not be exact so keep that in mind. As I mentioned above, pay is only one part of the equation.
If you are unsure what a retirement plan is think 401k. If you don’t know what a 401k is, it is a vehicle in which you can save pre-tax dollars into for your retirement. There are other parts of a company offered retirement plans, but the bedrock of any retirement savings starts with the 401k. This is a tool that companies can use to provide extra value to it’s employees. Each critical when evaluating your employer or that new job you have lined up.
1. Matching plan – The way you save into your 401k are called contributions. What an employers can set up is a matching plan to match your contributions. For example if they say they match the first 3% of your contribution at 100% and you make $1,000/year saving 3%, you would have put in $30 and your company would match the $30 in this example. So you now contributed 6% to your 401k by only really saving 3%! Each employer is different in what if any match they provide.
2. Profit Sharing – Employers can put an profits from the business into employees retirement accounts. This can be an optional thing to the employer but also a very powerful benefit for you as the employee. Instead of a bonus the employer may find this a better way to support you for retirement.
3. Non-elective contribution – A portion of employer provided contributions to your 401k each year. Non-optional plans don’t depend on you contributing money. Meaning instead of a match or worrying about profits, the employer is set up to put say 3% in your 401k without you having to save anything. Talk about benefit!
Don’t forget those health benefits. Besides Retirement plans there are other benefits such as HSA offerings or FSA options. Both of these I have written about before here. But in short they provide a way to save pre-tax dollars for health care. Most larger corporations will offer benefits and are required to but these benefits help add to your entire compensation package.
A nice benefit would be one where the employer covers a majority of your premiums. Have you seen the cost of the health insurance exchange plans? An employer that provides significant health care assistance can be money back in your pocket. This is the case of ignorance is bliss. Go to healthcare.gov and search for a plan. You will see the savings your employer is providing you.
Does your job offer Life, Disability, Long Term Care insurance? All three of these benefits again will save you money by not having to go into the marketplace and buying them on your own.
One of the biggest ones that goes unnoticed is life insurance. Most companies only provide up to $50,000 which won’t cover much in event of death. If you are comparing companies look to see if one offers extra coverage. If not you will have to look to an independent agent to get your needs met.
With the need for health care in our old age a long term care insurance benefit can go a long way. With carriers continuously increasing prices, LTC is a portable benefit you can take with you after you leave the company!
Starting off in a career can be exciting, but make sure you know the entire compensation, it’s more than just pay. If you need help contact your financial advisor for a review!