So if you have to work, why not make some extra money off your company! It’s amazing how many people do not take advantage of all their employee benefits. In this highly competitive work environment, employers are forced to offer better benefits to attract and maintain valuable employees. But even if your employer offers premium benefits, if you never utilize them what good does it do you and your family. It is sad to say, but if you are not taking advantage of all your company’s benefits, you are quite literally throwing money away. Here’s a quick list of some of the more common employee benefits that will save you money and how to take advantage of them so you can make the most of your J-O-B:
This is one of the best ways to save for retirement. When you enroll in your company’s retirement program (such as a 401(k)), in most cases the money deducted from your paycheck will be pre-tax dollars. Not only will the contributions to your retirement account reduce your current income, but also the money in your retirement account will grow tax-deferred. Tax-deferred means you will not pay taxes on your investment gains until you pull the money out of your retirement account. Deferring taxes is beneficial because typically your tax rate will be lower after you retire so you keep more of your money you earn and give less to the government.
Although, most companies provide “Traditional” retirement savings programs, some companies may also offer the “Roth” type retirement program. The difference between a Traditional retirement plan versus a Roth is your contributions to a Roth account will not be counted as pre-tax dollars so they will not reduce your current income. However, later when you pull out your money, you will not pay taxes on the money you withdraw, including any earnings or gains you made on the investments. The benefit to the Roth is that your money earns income TAX-FREE. The concept is to save today and gain tomorrow. Now if you are paying a lot of taxes and need the tax break today, consider going with the Traditional plan. Keep in mind that the Traditional plan only defers your taxes until you withdraw the monies unlike a Roth that earns profits tax-free.
This is by far the biggest benefit to your company’s retirement program, if available through your employer. Some retirement programs offer a matching feature, where the company matches a percentage of your contributed dollars up to a certain point. Most programs require you to meet some vesting criteria before the money is officially yours, but once you meet the criteria these company matching dollars are yours to keep, even if you leave the company. Now that’s what I call FREE Money!
Some companies offer Flexible Spending Account (FSA) programs, which allows you to pay for certain non-reimbursable medical costs and daycare costs with pre-tax dollars. Like your retirement contributions, the money allocated to the FSAs is deducted out of your salary, therefore reducing your current year’s income. Lower taxes equal more money for you!
If you’re looking to fine tune your skills or broaden your knowledge; before signing up for the local extension class, find out whether your employer is willing to pay for your classes or seminars. You may even get your MBA or graduate degree paid for by your company. Although, many times educational programs are not formally offered by your employer, your boss may be willing to approve certain courses or seminars to keep the department updated and entice you to stay on board. Companies that offer to pay for MBA/graduate degrees often require the employee to stay for a minimum number of years. But considering the high cost of graduate programs it may be well worth it.
If you have any certifications, such as a CPA, that require continuing education ask your employer to foot the bill or contribute a portion of your costs. Also ask them to pay for your renewal fees or membership dues to any related industry associations.
Most companies offer free life insurance and disability insurance based on your salary. If you are looking to increase or supplement your coverage, compare your company’s rate to an outside insurance agent’s rate. Your company may offer a lower rate for the same coverage.
The key to saving money through your employee benefits is to take the time to find out what is available and don’t be afraid to ask for more. If you are a valuable employee…and all FiscallyFitters are…then your company may be willing to bend the rules to keep you happy
A good friend of mine said: “Make money on the money you make”. Even when you are sleeping, your money should be working for you. For example: Do you have a checking account that earns interest? It is surprising how many people keep relatively large balances in non-interest bearing accounts. Even a little interest can add up to a lot over a period of time.
Search out financial institutions that offer no-fee interest checking accounts that have low or no minimum balances. Many credit unions offer these types of programs. Sometimes you don’t have to be a direct credit union member because family members of credit union members can also open accounts or some office buildings offer credit union affiliate programs with all their tenants.
Sometimes banks offer no-fee interest checking accounts if you “auto deposit” your paycheck. Some investment accounts offer checking account features for no extra charge. Look for periodic special promotions run by new banks opening in your neighborhood. Many smaller community banks offer accounts with more benefits to compete with the larger banks. One cautionary note is that small, relatively new banks may go out of business so make sure you periodically check their rating on bankrate.com to make sure they are not in trouble.
If you are unable to find a good interest bearing checking account because the minimum balance is too high or the bank charges a monthly fee, consider opening a savings account in the same bank. Keep all your money in the savings account, earning interest, and transfer funds into your checking only as needed (when paying bills). Today, it is so easy to transfer money via the telephone or through Internet banking so why keep any cash in a non-interest bearing account.
Although interest rates are very low today, whatever you earn is free money and there is a high likelihood that rates will start rising towards the end of 2015. Always make sure your money is working for you.
Also save money by avoiding paying any fees for financial services. Use only no-fee accounts and no-fee credit cards. Plan ahead and avoid using ATM or other “cash-on-demand” services that charge a fee. There are so many financial institutions competing for your business. Search out the ones that are willing to PAY you for the privilege of holding your money.