Do you know what benefits your employer provides? Do they offer a health savings account, stock purchase plan or matching contributions to your retirement savings plan? Many people miss out on these benefits because they are not aware of their options.
Your Financial Plans & Strategies advisors can help you to review your options and make sure you are taking advantage of these benefits to help maximize your retirement savings. There are a few employer benefits we would like to focus on in this post because they will likely have the largest impact on reaching your retirement goals:
- Employer match on Qualified Plan contributions: Many employers will match your retirement savings contributions in your employer-sponsored plan up to a certain dollar amount or percentage of your compensation. Our recommendation for most people is to contribute at least enough to obtain the maximum employer match for their retirement plan. For example, Joe contributes 6% of his salary to his 401k and his employer matches up to 50% of these contributions. If Joe is fully vested in the plan, when he retires or leaves his job, he is entitled to receive all of his contributions plus any made by his employer.
- Health Savings Account employer match: If your employer’s health insurance is a high-deductible health plan, check to see if your employer offers a match on contributions to a Health Savings Account (HSA). This retirement fund has a triple tax advantage – contributions are tax-deductible, savings grow tax-free and when used for qualified medical expenses the distributions are tax-free.
- Employee Stock Purchase Plan: An ESPP is a different type of employer plan, which typically allows an employee to purchase company stock as a discounted price. ESPPs can be qualified or non-qualified, meaning the tax implications vary depending on the type of plan.
- Student loan repayment: Often, people put off contributions to retirement savings plans in order to pay down large student loan balances. If you find yourself in this situation, see if your employer offers student loan repayment. Though not yet a common benefit, more employers are offering this as more of their employees are saddled with student loan debt.
If you have questions about your company benefits, ask your human resources department for more information. Once you’ve gathered information about your benefits, please give our team a call if you have any questions.
Investment Advisory Services offered through Financial Plans & Strategies, Inc. a Registered Investment Advisor