Many times when working with clients and asking about income, they only discuss their salary and/or hourly wage. However, employee benefits are a part of income that cannot be overlooked. Your client may already be taking advantage of some of these benefits and not using them to their fullest extent, or they may not currently be using them. Here are some items of discussion regarding common employee benefits.

Retirement benefits are a great way to start saving for the future. Some employers require employees to make pre-tax contributions while others make this options. Most employers will match up to a certain amount of retirement contributions. If a match is offered, clients should take a look at the plans offered by their employer and contribute at least the amount that will be matched. The amount matched by the employer is essentially free future income to the employee.

Even if a match is not offered, have clients look at the benefits of contributing to a retirement account on a pre-tax basis. The majority of individuals will have less income in the future, lowering the amount of tax they will pay on the money later.

Health insurance can be expensive. By taking advantage of an employer plan can potentially save individuals and families thousands of dollars in premiums and health care costs every year. Just choosing a health insurance policy is not enough. Clients should make sure they are using it to maximize the benefits. For example, having annual check-ups with their primary care physician. Not only is the individual using the benefit, but by having regular check-ups can find serious medical issues before they become even more costly.

Dental and/or vision insurance plans can also save a client a lot of money every year, depending on their need for these services. Having a dental cleaning every 6 months and annual eye exam are typically covered under these plans along with discounts on additional services.

Many employers offer term life insurance plans for employees for a few dollars a month. Taking advantage of these plans can help secure someone’s financial future against an unexpected death in the family. If your client is the main source of income in a family, it is essential to plan for this possibility. The client may also be able to receive a supplemental plan for a spouse and/or child(ren). The average cost of a funeral is $6,000-$9,000, this can really derail some individual’s finances.

A benefit many employees overlook is using either a flexible spending account (FSA) or health savings accounts (HSA). These accounts can help clients save money by taking a portion of their paycheck pre-tax and setting aside for medical expenses and/or childcare expenses (FSA only). If an individual makes between $30,000 – $40,000 and sets aside $2,000 for medical expenses, they could save approximately $580 a year.

With the cost of tuition rising every year, employer education assistance programs are a huge benefit for some. Some employers may offer to pay for a certain number of credits per year, which can save someone thousands of dollars a year. By taking courses, the person can then earn a degree which can make them eligible for promotions or to apply for higher earning positions.

Some employers work with other vendors to offer employees discount programs. For example, you may be able to receive a discount on your cellular telephone service or purchase airline tickets at a discount. These savings can add up in the long run.

There are other benefits employers may offer their employees. As financial counselors, we can work with clients to determine which are beneficial to their financial situation and help them save money. Having a conversation with clients about these opportunities is important.

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