While salary level is one of the main draws when considering a new job, benefits and perks offered by employers should not be ignored in the decision-making process. Often, benefits may be overlooked, especially from the perspective of a recent college graduate focused on obtaining a high earning job. However, according to the Bureau of Labor Statistics, 30% of compensation can often be bundled in benefit packages. It is important to consider what benefits your potential employer is offering for you to make the best decision and make sure you are covered in all areas of life.
There are several crucial benefits to look for during a job search. Among the most important include medical benefits, specifically what kind of plan is offered – HMO, PPO, or a high deductible health plan. Consider how much the company contributes, and other supplemental coverage offered, such as accident insurance or health savings accounts. Some companies may cover the total cost or part of the cost of your health insurance premium. If your company offers differing levels of coverage, it is important to determine which plan is right for you based on your health, prescriptions, family members, and out of pocket costs. Many companies also offer dental insurance.
Short term and long-term disability along with life insurance benefits are other major considerations. In the case of injury, many companies will replace some amount, such as 60%, of income for the short-term (26 weeks) or the long-term (until you’re 65). While this type of event seems unlikely to most, preparation for the worst case can make all the difference.
When it comes to retirement vehicles, companies may offer 401k, 403b, or IRA programs, which are essential for retirement saving and planning. It is imperative to find out when and what amounts you can contribute and if the company offers matching dollars on an employee’s contributions. 401ks have the benefit of tax deferral, which means taxes won’t have to be paid on the money until withdrawals are made in retirement. Moreover, anything contributed now lowers your taxable income. Understanding and building a retirement plan as quickly as possible is important for financial planning, which makes knowledge of these benefits especially important. If you are looking to start investing in these plans, ask your potential employer what their benefit package offers.
Another important benefit typically offered is paid time off. Companies will offer vacation, personal, and sick days, or paid time-off days to be taken at leisure. Either way, these benefits are highly valued by all employees and should be considered. Knowing whether your paid time-off days roll into the next year can also be a key consideration. Furthermore, paid maternity and paternity leave may be offered.
Other important benefits include voluntary benefits, such as pet insurance, student loan repayment plans, financial planning services, identity theft protection and auto insurance. In addition to these are offers considered to be perks, such as flexible hours, more vacation time, work-from-home options, day-care services, employee outings, biometric screenings, gym memberships, and free food and drink options. To most people, these benefits aren’t thought of but can be huge gains when accepting a job offer.
Health, dental and vision insurance are typically the most important benefits considered during a job search. For graduating residents and fellows, student loan and tuition assistance can be a very valuable benefit due to the high cost of years of education. It is important to consider both life benefits and perks for flexibility to balance long-term security and short-term health and wellness.
When searching for a new job, understanding and choosing benefits from an employer is highly important for your lifetime financial strategies, beyond the salary offered. Talking to the employer about what benefits are offered or a financial advisor about what is right for you, are good ways to start your new career or improve your current situation and gain better control of your financial life.