Are You Leaving Money on the Table? Make the Most of Your Employee Benefits

July 12, 2024

Let's start with a little thought experiment. If we offered you an instant 30% pay raise, no strings attached, would you take it? Of course, you would! Who wouldn't want that kind of influx of extra cash?


Well, here's the thing — you may already be entitled to the equivalent of a huge pay bump through your employee benefits package. The only catch is that you actually have to take advantage of the benefits to reap the rewards.


You've worked hard to earn what you have. So why leave money on the table by not fully utilizing all your employer's perks and benefits? It makes no sense! 


Keep reading to discover how you can maximize your employee benefits and unlock their full potential. We'll show you just how lucrative employee benefits can be.


Understanding Your Benefits Package


First things first — familiarize yourself with what's included in your benefits package. This might seem basic, but you’d be surprised how many people don't fully understand their benefits. Key areas to focus on include:


  • Health Insurance
  • Retirement Plans
  • Stock Options and ESPPs.
  • Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)
  • Life and Disability Insurance


Your 401(k) Match 


Let's kick things off with a big one — your employer's 401(k) match. This is easily one of the most valuable benefits out there, yet it's still sadly underutilized.


For every dollar you contribute to your 401(k) retirement account (up to a certain percentage of your salary, usually 3-6%), some employers will match those contributions with free money from their end. You're literally getting paid to save for your future!


Let's say your employer offers a 4% match, and you earn $200,000 per year. If you max out the match by contributing 4% ($8,000) annually, your employer will kick in another $8,000 on top of that. Suddenly, your original $8,000 contribution has doubled to $16,000! Where else can you get a 100% return on your money just like that?


Over 30+ years that 401(k) match money could translate into hundreds of thousands of extra dollars for your retirement. It's such an easy way to accelerate your retirement savings and prepare for the future you want.


Even if your employer doesn't match your contributions, maximize your retirement contributions if you can afford it. In 2024, employees can contribute up to $23,000 into their 401(k), 403(b), most 457 plans, or the Thrift Savings Plan for federal employees. 


Maximize Health Insurance Benefits


Health insurance (including dental and vision) is often the most complex part of an employee benefits package. However, it’s also one of the most critical. Here are some tips to help you make the most of your health insurance:


  • Preventive Care: Take advantage of free preventive care services like annual check-ups, screenings, and vaccinations. These can help you catch health issues early, potentially saving you money and hassle down the line.
  • Wellness Programs: Many employers offer wellness programs that provide incentives for healthy behaviors, such as gym memberships, weight loss programs, or smoking cessation programs. Participating in these can improve your health and potentially reduce your insurance premiums.
  • Telemedicine: Check if your plan covers telemedicine services. Virtual doctor visits can be more convenient and sometimes cheaper than in-person appointments.


Take the time to understand the different plan options offered by your employer, including deductibles, copays, and out-of-pocket maximums. Carefully review the health insurance options during open enrollment each year. Don't just go for the cheapest option — consider your family's healthcare needs and choose a plan that provides the right coverage at a reasonable cost.


Flexible Spending Accounts (FSAs) and

Health Savings Accounts (HSAs)


FSAs and HSAs offer excellent tax advantages for covering medical expenses. Here’s how to maximize their benefits:


  • Contribution Limits: For 2024, you can contribute up to $3,200 to an FSA and $4,150 to an HSA ($8,300 for a family). If you’re over 55, you can contribute an additional $1,000 to an HSA.
  • Qualified Expenses: Use these accounts for qualified medical expenses, which can include doctor visits, lab work, prescription medications, and even some over-the-counter items.
  • HSA as a Retirement Account: HSAs have a triple tax advantage (tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses). If you don’t need to use the funds immediately, consider investing the money for future healthcare costs in retirement.


Stock Options and Employee Stock Purchase Plans (ESPPs)


Stock options and ESPPs can be a fantastic way to build wealth, but they require careful planning:


  • Understand the Terms: Know the vesting schedule, the exercise price, and any stock selling restrictions.
  • Tax Implications: Be aware of the tax implications of exercising options or selling ESPP shares. Timing can significantly impact your tax bill.
  • Diversification: Avoid having too much of your portfolio tied up in your employer’s stock. While it's great to have faith in your company, you want to avoid risking your financial future on just one stock.


Evaluating Life and Disability Insurance


Life is unpredictable, and having adequate insurance coverage can provide peace of mind for you and your loved ones. Many employers provide basic group life insurance to their employees for free or at a heavily subsidized rate. However, the coverage amount is usually just 1-2 times your annual salary, which may not be enough for your needs. Review these options carefully and determine if they meet your needs or if you require additional coverage.


Here’s how to make sure you’re adequately covered:


  • Coverage Amount: Assess if the coverage provided by your employer is sufficient. You may need additional coverage to protect your family’s financial future.
  • Supplemental Policies: Consider purchasing supplemental life or disability insurance if your employer’s policy doesn’t meet your needs.
  • Beneficiary Designations: Regularly review and update your beneficiary designations to ensure they reflect your current wishes.


Take Advantage of Other Awesome Perks


We've covered some of the essentials, but there are so many other valuable employee benefits that can help you make the most of your earnings:


  • Employer-paid training, education, and professional development opportunities
  • Commuter benefits to save on public transportation, parking, carpooling options, etc.
  • Employee discounts on products, services, travel, and more
  • Childcare reimbursement
  • Tuition reimbursement
  • Generous paid time off, parental leave, sabbaticals and more
  • Employee Assistance Programs (EAPs) provide confidential counseling, legal assistance, and other valuable resources to help you navigate personal or work-related challenges.


The list goes on and on! But here's the catch — you have to take the time to learn about your benefits and what's available to you. Don't just let these valuable benefits go to waste!


Let Five Pine Help You Make the Most of Your Benefits


When it comes to your finances, small overlooked areas of inefficiency can add up to a staggering amount of money over time. Your employee benefits package represents a prime opportunity to gain additional income if you take advantage of them.


By thoroughly reviewing your available benefits each year and taking full advantage of them, you could easily inject a 10-30% raise into your household's finances. For a high-earner making $500,000+ annually, we're talking about tens of thousands of dollars in additional wealth-building power.


Of course, maximizing your benefits takes a little work and conscientious planning up front. However, the incredible value

you'll get in return is well worth the effort. After all, you've earned these benefits through your hard work and professional success.


If you need help figuring out where to start or could use some guidance, reach out anytime. As your financial advisors, we're here to help you maximize every possible resource available to you. 


To schedule a meeting, email us at info@fivepinewealth.com or call us at 877.333.1015. At Five Pine Wealth Management, we want to ensure you're taking full advantage of your employee benefits package!

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