About 18 months after the coronavirus came on the scene, we’re still feeling the effects—and unfortunately enduring continued aftershocks. Most of us have experienced a host of takeaways in the midst of this global pandemic, both big and small, one of which is a renewed appreciation for a steady income. If your employer also offers comprehensive benefits, that’s the icing on the cake, as this greatly increases the potential for net gains from your income. Effectively using these benefits can go a long way in helping you save a small fortune in expenses or gain a fortune through investments.
Let’s discuss some of those benefits—and some you may have overlooked.
Benefits That Cut Costs
One of the first benefits that employees usually look forward to is health insurance. By taking advantage of your employer’s plan, you can save a ton! But have you looked into the possibility of setting up an HSA?
An HSA, or health savings account, is a fantastic way to prepare for unforeseen medical expenses. Money put into an HSA is tax-sheltered, meaning that as long as you use the money you put into it for medical purposes, you don’t have to pay taxes on it. Whether it is a deductible for an emergency room visit or a co-pay on your monthly prescriptions, all medical expenses can be paid out of an HSA.
Even better, an HSA can be set up as an investment account, allowing for the possibility of interest growth within the account. Not only can it be used tax-free for medical expenses, but the earned interest can grow exponentially to further protect you against health expenses in the future.
You also want to make sure that you take advantage of other insurances that are available, like life insurance or long-term disability or care insurance. As an employee benefit, term life insurance can be dirt cheap and helpful supplemental insurance for your comprehensive insurance coverages. Long-term care insurance is also much less expensive through an employer plan, and especially if you are young and in good health.
Benefits That Grow Wealth
The 401(k) has historically been a major factor in wealth building for millions of working people across the country. But if all you have done is set it up and left it alone, you may be missing out on maximizing your retirement savings potential. Be sure to check in on a few details.
First, confirm that you are taking advantage of any 401(k) matching that your company offers. Return on your investment may vary depending on market fluctuation, but taking in any available match is like a guaranteed pay raise.
Next, verify that you control what kinds of funds your money is invested in inside of your retirement account. Sadly, too often employees are given very little information about what kind of options are available, and money can end up inside a kind of one-size-fits-all fund called a target-date fund.
Generic target-date funds are usually designed to have a “higher risk, higher reward” attitude in the early years of its inception, and gradually become more risk-averse as the fund gets near to the retirement date of its investors. These types of funds are common, but sometimes not what an educated consumer would choose if they knew all of their options.
Lastly, one other area that might be worth looking into is if your company has a Roth option for your 401(k). A Roth 401(k) is essentially a post-tax 401(k) that allows you to only pay taxes on your contributions at the time you make them, leaving your growth tax-free when you are ready to retire. The Roth 401(k) has a few different rules you’ll want to go over with your wealth management pro, but for many people saving for retirement, it is a fantastic opportunity to protect the growth in your retirement account from taxes.
Armed With Information
By now it’s old news that most of life is beyond our control. But don’t forget that knowledge brings power. Getting informed about your options is the most important step in maximizing your company’s benefits! Not so fast, you might be thinking, that’s easier said than done. It’s true that many of the available benefits can be confusing to navigate; in fact, it can be tricky to even find out what some of your opportunities are.
If you’re in this boat, don’t worry. Like we always say, you don’t have to be an expert, you just have to know who to ask. We at HBA Wealth are financial professionals experienced in comprehensive wealth management and we’re ready to help you take full advantage of your benefits. Together we’ll thoroughly review your options, discuss your specific goals, and given your unique situation, we can work to get you on the path to financial security.
To get unbiased answers from a team you can trust, contact us at (626) 529-8347 or email Ricky directly at ricky@hbawealth.com.
About Haydel, Biel & Associates
Haydel, Biel & Associates is an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they have built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with creative financial technologies that make it easier than ever to accomplish your goals. They strive to keep things simple and fun to give their clients peace of mind and alleviate financial stress. HBA Wealth takes care of their clients’ needs first and foremost and goes the extra mile to make their clients’ finances grow. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at ricky@hbawealth.com.
The commentary on this blog/website reflects the personal opinions, viewpoints and analyses of the Haydel Biel & Associates employees providing such comments, and should not be regarded as a description of advisory services provided by Haydel Biel & Associates or performance returns of any Haydel Biel & Associates Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Haydel Biel & Associates manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.