10 Tips For Maximizing Your Employee Benefits

In today’s competitive job market, attracting and retaining top talent involves more than just offering a high base salary. While a lucrative paycheck is undoubtedly appealing, the benefits package that accompanies it can be a game-changer. 

For many tech professionals, a comprehensive benefits package not only boosts overall compensation but also enhances quality of life and career satisfaction. Whether you’re evaluating a new job offer or preparing to make your annual selections, it’s essential to thoroughly understand your options, so you can maximize your employee benefits and set yourself up for long-term success. 

#1: Understand What Benefits Are Available to You

It’s easy to get caught up in the excitement of a new job offer or the day-to-day obligations of your work and overlook the finer details of your employment package. However, to truly maximize your benefits, you need to have a comprehensive understanding of what’s available to you. 

From health insurance and retirement plans to stock options and beyond, tech companies often offer an array of benefits that can significantly impact both your financial and overall well-being. Carefully read your employee handbook and consult your human resources department for additional guidance to fully leverage the benefits available to you. 

#2: Take Advantage of Matching Programs

In the tech industry, where salaries are often competitive, employer matching programs for 401(k) retirement accounts can be a significant perk. Here’s how it works: 

Suppose your employer offers to match your 401(k) contributions up to 5% of your salary, which is $200,000 annually. If you contribute at least 5% of your salary to your 401(k), your employer will match your contributions up to $10,000. 

To maximize your employee benefits, be sure to contribute at least enough to your 401(k) to to qualify for your employer’s matching contribution. Otherwise, you’re essentially leaving free money on the table and potentially missing out on a significant boost to your retirement savings. 

Also, some companies may offer Flexible Spending Account (FSA) and Health Savings Account (HSA) matches, further boosting the value of your benefits package. An FSA allows you to set aside pre-tax dollars for qualified medical expenses, while HSAs can fund a broader range of medical expenses. If your employer offers this perk, be sure to contribute enough to get the full match.

#3: Make Use of HSAs and FSAs to Maximize Your Employee Benefits

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are two types of accounts that offer pre-tax savings for qualified medical expenses. These accounts can be incredibly beneficial, especially for employees with high-deductible health plans. 

HSAs and FSAs complement traditional health insurance by funding ancillary medical expenses, such as prescription glasses or contact lenses, dental care and orthodontics, chiropractic services, physical therapy, and more. However, one of the most significant benefits of HSAs and FSAs is their tax advantages:

• HSAs: Contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are also tax-free. This triple tax advantage makes HSAs a powerful tool for both healthcare savings and long-term investment.

• FSAs: Contributions are pre-tax, reducing your taxable income for the year. However, unlike HSAs, FSAs usually have a “use it or lose it” policy, meaning you need to use the funds within the plan year.

Note that both HSAs and FSAs have annual contribution limits, which may change over time. If your employer offers these benefits, consider taking advantage of the potential savings they can offer. 

#4: Enroll in Disability Insurance 

As you climb the career ladder, your ability to work is often your most valuable asset. While high salaries, stock options, and other forms of compensation can provide a comfortable lifestyle, they often come with a level of financial responsibility that can be hard to maintain if you’re unable to work. 

Fortunately, many employers offer disability insurance, which can provide a critical financial safety net if illness or injury prevents you from performing your job responsibilities. In fact, 78% of employers offer short-term and 63% offer long-term disability benefits, according to a survey by the International Foundation of Employee Benefit Plans.

While many companies offer disability insurance as part of their benefits package, these plans often provide only basic coverage. If this is the case, you may want to consider supplementing your coverage with an individual plan that offers more comprehensive benefits tailored to your needs.

Also, keep in mind that there may be tax implications if you make a claim against your disability insurance policy. If your employer pays for your premiums, any benefits you receive will be taxable. However, if you pay the premiums yourself with after-tax dollars, the benefits are usually tax-free.

#5: Consider Group Legal Plans

With the complexities that come with stock options, equity compensation, and growing net worth, estate planning often becomes increasingly essential. However, hiring an experienced estate planning attorney to help you draft the necessary documents can be costly. 

Because of the rising importance of proper estate planning, many employers have begun to offer their employees access to legal services at a reduced cost. In fact, more than 75% of Fortune 100 companies and 55% of Fortune 500 companies offered some type of legal plan to their employees as of 2021, according to Benefits Pro. 

Opting into a group legal plan can save you significantly on legal fees, but be aware of certain limitations. For instance, some plans may restrict you to a network of lawyers, which may not be ideal if you already have a lawyer you trust.

In addition, while many services may be covered, there could be additional costs for more complex legal needs. If your employer offers this benefit, be sure to clarify the details of your plan upfront to ensure it aligns with your objectives. 

#6: Assess Your Need for Life Insurance

Enrolling in an employer-sponsored life insurance plan can be a cost-effective way to provide a financial safety net for your loved ones. However, be sure to carefully review the plan details first to ensure it aligns with your objectives. 

For example, employer-sponsored plans often cap your coverage amount, which may not be sufficient for your needs. To maximize your employee benefits, you may want to consider purchasing a supplemental policy that provides more comprehensive coverage. 

Plus, unlike individual life insurance policies, employer-sponsored plans generally aren’t portable. Therefore, if you leave your job, you may lose your coverage. 

#7: Take Advantage of Wellness Programs 

As workers place a greater weight on the value of employee benefits, many companies are going the extra mile by offering various lifestyle benefits. These perks, ranging from financial wellness programs to sabbatical leave, can provide work-life balance, making the daily grind more sustainable and enjoyable. 

To maximize your employee benefits, view these perks not as extras but as integral components of your overall compensation and well-being. In many cases, these benefits can significantly enhance your quality of life and lead to greater job satisfaction over the long run. 

#8: Know Which Benefits Roll Over

Tech professionals frequently change jobs, whether it’s for better opportunities, career growth, or startup ventures. Understanding which benefits will roll over to a new employer can help you avoid losing valuable perks and maximize your employee benefits at your new company. 

For example, if you’re considering leaving your job, check your vesting schedule to see how much of your 401(k) you’ll be able to take with you. Leaving before you’re fully vested may mean forfeiting some or all of your employer’s contributions, which can be a significant setback in some cases. 

In addition, if your new job doesn’t provide immediate health insurance coverage, you may be able to continue your current coverage through COBRA for a limited period. However, you’ll usually have to pay the full premium yourself, which can be quite expensive.

Finally, keep in mind that Health Savings Accounts (HSAs) are portable, meaning you can take them with you when you change jobs. However, your ability to contribute to an HSA is tied to your enrollment in a qualifying high-deductible health plan (HDHP). 

On the other hand, Flexible Spending Accounts (FSAs) usually aren’t portable. You’ll need to use the funds before your last day of employment, or you’ll lose them.

#9: Periodically Review Your Benefits

Remember, employee benefits aren’t set in stone. Employers often update their offerings, and your needs may change over time. To maximize your employee benefits, make it a habit to review your benefits package at least once a year to ensure it still meets your needs.

You can elect or make changes to your benefit selections during open enrollment season. This typically takes place in November and lasts for two to four weeks; however, every employer is different, so be sure to check with your HR department so you don’t miss the window. 

#10: Consult with Simplicity Wealth Management to Maximize Your Employee Benefits 

Maximizing your employee benefits isn’t just about immediate gains; it’s a long-term strategy that can significantly enhance your overall financial plan. If you’re unsure how to navigate your benefits package, consider consulting with a trusted financial professional like Simplicity Wealth Management. 

Simplicity Wealth Management specializes in the financial planning needs of tech professionals with equity compensation. As open enrollment season approaches, we can help you understand the various options available to you, so you can maximize your employee benefits and overall compensation package. 

Kickstart your financial planning journey today by scheduling an introductory call. And to learn more about maximizing your employee benefits, particularly if you have equity compensation, download our free guide, The Insider’s Guide to Managing Stock Options & Restricted Stock.