Benefits play a crucial role in employee compensation, and workers would be wise to pay more attention to them. Research shows that many workers spend less than a half an hour selecting their benefits, while others select the same choices each year despite various changes in their lives. Many employees don’t take their benefits as seriously as their paycheck because the benefits don’t affect them immediately. However, employees who familiarize themselves with open enrollment can save over $700 per year by avoiding the mistakes of those who are not familiar with the process.
Disability Insurance Provides income Protection
Disability insurance is a low cost method for protecting your income in case you’re suddenly put out of work as a result of becoming disabled. Most employees depend on a steady wage to pay their bills, but if this income stream is suddenly disrupted by an accident it can wreak havoc on the worker and his family. However when selecting this type of insurance it is important to understand terms such as the elimination period, and you will need to have a sufficient amount of cash put away for emergencies while you file the claim. With this type of insurance at minimum you will want to cover half your income and you must also determine whether you need to pay taxes for the premium.
Use Health Insurance to Augment Your Budget
Health insurance should be considered the most important aspect of your benefits package. While the chances of becoming disabled are very low for most workers, the chances of becoming sick at some point are much higher. How you’ve structured your health plan will determine how much you spend, as well as the quality of your service. Employees that are currently facing health problems should consider a plan that features a low deductible and co-pay. The plan should also offer great flexibility in terms of healthcare specialists.
However, employees with good health that are making lots of money should consider a healthcare plan with a high deductible. While the employee will have to spend a lot up front, their premiums will be low, and they can also use a savings account designed for healthcare.
Structure a Good Retirement Plan
Many employees, especially those that are young adults, pay little attention to retirement. They see it as being something far off, and will often procrastinate when it comes to setting it up. However, this plan is one of the most important of all, because it will allow you to enjoy a relaxing life during your golden years, after your service to the company is completed. The earlier you set up and stick to this plan, the better off you will be when you’re ready to use it.
The retirement plan an employee uses will depend on their employee. Some companies offer IRAs while others offer the 401(k) or a TSP (Thrift Savings Plan). Retirement plans have various tax options and most employers will match the contributions that are made by their employees. A 50% match is the best an employee can find, and if your company offers this you should definitely consider taking advantage of it.