There’s more to a job than a paycheck. When changing careers or switching jobs, an important factor to take into account (pun intended) is the overall compensation package. What security do you stand to gain, lose or augment in pursuit of your goals? Whether you consider your career a ladder or a jungle gym, it helps to get a firm grip on the benefits at stake.
How’s Your Health (Plan)?
Millions of American workers rely on group health insurance to provide affordable quality health care. If you’re one of them, here’s how to get the most out of it:
1. Understand what you have by taking a close look at the plan's summary description (SPD).
This will give you a detailed summary of what your plan offers, including physician choice; deductibles; co-payment disclosures; maximum out-of-pocket expenses; incentives and exclusions; maternity benefits and more.
2. Ask before you need additional coverage for illness or injury.
Asking questions like…
- Do I need prior approval to visit a specialist?
- What does the plan define as emergency care?
- What happens if I get sick or injured while I’m out of town?
- What hospitals are in the plan's network?
…will go a long way toward helping you fill potential coverage gaps.
3. Take responsibility for your own care.
Lifestyle adjustments like weight loss and smoking cessation will not only lower your risk for certain illnesses, they could also cut down on your insurance contributions.
4. Deal with denial of claims by knowing up front what your insurance company's timeframe is for processing claims, issuing denials, and resolving appeals.
Because it can be such a bureaucratic process, always keep records and copies of all correspondence between you and your insurer. Even if your claim is denied, continue to follow through to see if the paperwork can be corrected. Just because it was denied does not mean that it needs to remain denied. Sometimes a letter from the doctor or other official can make all the difference.
Make Your Company’s Retirement Plan Part of Yours
Sixty-five is a number that may feel a long way off, and for many retirement may come even later, but you should start taking full advantage of this benefit now. Even though few and fewer companies are providing defined benefit plans to their workforce these days, employer matched 401(k)s and IRAs are powerful vehicles for revving up your retirement savings. Make sure you contribute at least to the level of the company's match—it’s an automatic return on your money, and not maximizing your match is like leaving free money on the table.
Here are some key features:
- Contributions are automatically deducted from your paycheck pretax. Yes, this cuts into your salary, but could limit your tax liability come April 15th
- You decide what portion of your salary to contribute, up to the legal limit; your employer matches up to a certain percentage
- Your plan might also let you make after-tax Roth contributions, making qualified distributions tax-free down the line
- Tax-deferred growth…still not convinced? Revisit the beauty of compound interest.
When It’s Time to Move On
Nothing lasts forever, including your job or career. When you leave your job, your vested balance in your employer's retirement plan is yours to keep. You can:
- Take a lump-sum distribution, which is not really the best idea since it opens you up to income taxes and potential penalties.
- Leave your funds in the old plan, growing tax deferred until you figure out what to do with your money. Just be sure you understand what it means to leave your funds with a former employer's plan. Often there are associated fees. If the returns do not compensate for those fees, the funds should probably be moved to an IRA or new employer 401(k) plan.
- Roll your funds over to an IRA or your new employer's plan to continue bulking up that nest egg.