Making the Most of Your Workplace Benefits

Your Retirement Plan Is More Than a Contribution Percentage

Participating in your employer’s retirement plan is an important first step, particularly if your company offers a matching contribution. But there are several other decisions to consider.

How Much Are You Saving?

Contributing enough to receive the full employer match is generally a good starting point. From there, the right savings rate depends on your income, retirement timeline, other goals, and how much you have already accumulated.

Maximizing your contribution may make sense if you are comfortable with your emergency savings and cash flow. Someone preparing for a home purchase or paying down high-interest debt may need a more balanced approach.

Traditional or Roth?

Many workplace plans now offer both traditional and Roth contributions.

Traditional contributions may reduce your taxable income today, while Roth contributions are made with after-tax dollars and can provide tax-free qualified withdrawals in retirement.

Neither option is automatically better. Your current tax bracket, expected future income, retirement timeline, and existing savings should all be considered. Some people may benefit from dividing contributions between the two.

How Is the Account Invested?

Choosing a contribution rate is only part of the decision. You also need to confirm that the investments are appropriate for you.

Your workplace account should be evaluated alongside your other retirement and investment accounts. Otherwise, you could unintentionally take on too much risk, hold too much of one type of investment, or build a portfolio that does not align with your goals.

Your Health Insurance Choice Affects More Than Doctor Visits

Selecting health insurance often comes down to comparing premiums, deductibles, and provider networks. But your choice also affects your cash flow and savings strategy.

A plan with a lower premium and higher deductible may be attractive if you rarely need medical care. However, you should also consider whether you have enough savings to cover the deductible or out-of-pocket maximum if an unexpected expense occurs.

A plan with higher premiums may provide more predictable costs for someone who regularly uses specialists, takes expensive prescriptions, or expects significant medical care during the coming year.

If both spouses have workplace coverage, compare the plans together. Keeping everyone on one employer’s plan may be simplest, but it is not always the most cost-effective option.

An HSA Can Be a Long-Term Savings Tool

If you are enrolled in an eligible high-deductible health plan, you may also have access to a Health Savings Account.

HSAs offer several potential tax advantages:

• Contributions may be made on a pre-tax or tax-deductible basis.
• Earnings can grow tax-deferred.
• Withdrawals for qualified medical expenses can be tax-free.

Unlike a Flexible Spending Account (FSA), unused HSA funds generally roll over from year to year and remain yours if you change jobs. Depending on the provider and account balance, you may also be able to invest the funds for longer-term growth.

Some people use their HSA to pay current medical expenses. Others pay those costs from regular cash flow and allow the HSA to grow for future healthcare expenses, including expenses in retirement. The best approach depends on your cash flow, emergency savings, and overall financial strategy.

Employer-Provided Insurance May Not Be Enough

Many employers offer life and disability insurance as part of their benefits package. This coverage can be valuable, but it is important to understand what you have.

Consider reviewing:

• The amount of life insurance provided
• Whether supplemental coverage is available
• How much income the disability policy would replace
• How long disability benefits could continue
• Whether the coverage is portable if you leave the company

Employer-provided life insurance may not be enough to support your family if something happens to you. Disability coverage may replace only part of your income—and the benefit could be taxable depending on how the premiums are paid.

Workplace coverage can provide a helpful foundation, but it should be compared with your family’s actual needs and any individually owned policies.

Stock Compensation Requires Additional Planning

Restricted stock units, stock options, and employee stock purchase plans can be meaningful parts of a compensation package. They can also create added complexity.

Important considerations may include:

• When the compensation becomes taxable
• Whether enough tax is being withheld
• When shares can or should be sold
• How much of your wealth is tied to your employer
• Whether upcoming vesting dates affect other financial decisions

Holding company stock can create concentration risk because your income and investments are connected to the same employer. If the company experiences financial difficulty, your paycheck and portfolio could both be affected.

That does not mean company stock should always be sold immediately. It does mean the decision should be part of a broader investment and tax strategy—not simply made because the shares appeared in your account.

Do Not Overlook the Smaller Benefits

Depending on your employer, you may also have access to benefits such as:

• Dependent Care FSAs
• Legal assistance plans
• Identity theft protection
• Tuition reimbursement
• Student loan assistance
• Mental health resources
• Wellness incentives
• Employer contributions to retirement or healthcare accounts

Not every benefit will be useful to every employee. Still, reviewing the complete package may uncover resources that support goals you are already working toward.

Remember Your Beneficiaries

Retirement accounts, life insurance policies, and certain other workplace benefits pass according to their beneficiary designations—not necessarily according to your will.

Review these designations after major life changes such as marriage, divorce, the birth of a child, or the death of a family member. Even without a major change, periodically confirming that the information is correct can help prevent complications later.

Review Your Benefits When Life Changes

Open enrollment provides a natural opportunity to review workplace benefits, but it should not be the only time you consider them.

A job change, marriage, divorce, new child, health diagnosis, home purchase, or approaching retirement may all affect which benefits are most appropriate.

It is also helpful to review the full compensation package when evaluating a new job offer. Salary matters, but differences in retirement contributions, insurance costs, stock compensation, paid leave, and other benefits can significantly affect an offer’s overall value.

The Bigger Picture

Your workplace benefits are not separate from your financial plan. They influence how much you save, how you manage taxes, how your family is protected, and how prepared you are for unexpected expenses.

The goal is not to select every benefit your employer offers. It is to understand which options support your needs and how they work alongside the rest of your finances.

A coordinated review can help ensure that the choices you make at work are moving you toward the goals you have outside of it.

If you would like help reviewing your benefits package and understanding how it fits into your broader financial plan, we are happy to walk through it with you.