Don’t forget to take advantage of all of your employment benefits

Author: Consumer Reports
Published: Updated:
FILE – In this Thursday, Nov. 2, 2017, photo, a recruiter in the shale gas industry, left, speaks with an attendee of a job fair in Cheswick, Pa. Employers in the United States are thought to have kept up their brisk pace of hiring in June 2018, reflecting the durability of the second-longest U.S. economic expansion on record even in the face of a trade war with China. Economists have estimated that 195,000 jobs were added last month and that the unemployment rate remained at an 18-year low of 3.8 percent, according to data provider FactSet. (AP Photo/Keith Srakocic, File)

When you get a job, salary is key, but benefits can be boss.

Health insurance gets the lion share of attention given costs, then there are retirement benefits (usually in the form of a 401k), but experts say, there are other work perks you may not be making the most of, or not be taking advantage of at all.

NerdWallet’s Liz Weston says many people don’t understand their benefits or leave money on the table.

Take flexible spending accounts, also called an FSA, “A flexible spending account allows you to put aside money pre-tax to pay for medical expenses,” says Weston.

Tracie Sponenberg, spokesperson for the Society for Human Resource Management says, “The average individual can save hundreds of dollars or more per year by putting money aside into a medical FSA.”

Weston says what many people don’t realize is that the IRS allows you to borrow against anticipated contributions. She adds, “If you have some expenses say on the 1st or 2nd of January and you haven’t contributed a dime you can still pull that money out of the account.”

On the other hand, you typically have to use all contributed funds by the end of the year or lose them.

A Health Savings Account, also known as an HSA, is different.

You can only use what you put into an HSA, but you can contribute more than you can with an FSA, you can roll the money over, and that’s not all.

“They have a triple tax benefit. You get a tax break when you put the money in, that’s deductible. The money grows tax-deferred. Then when you take it out to spend it on medical expenses, it’s completely tax-free,” Weston says.

Some people use the HSA as a sort of investment. You can pay for medical expenses out of pocket now, leaving the money in the account to grow, and get reimbursed for the expenses later, sometimes even years down the road.

Weston says, “This is one of the areas where it’s really worth it to put in the effort, because you can save a lot of money, and you can get real value out of these benefits.”

The key: You’ll need all receipts to get reimbursed later.

Weston says using an account as an investment isn’t always wise, but ask your benefits manager for information.

While you are talking to your benefits manager you may also find some benefits you didn’t even know about. Weston says, “You can have things like free legal coverage. You can have pet insurance that’s subsidized by your employer. There are all kinds of great benefits.”

Another tip? If you want to retire at 63.5, Weston says you can sometimes use COBRA, the health insurance for when you get laid off, to bridge the gap until you hit retirement age.

Of course, it’s important to remember to always max out your company’s 401k for retirement.

The Society for Human Resource Management says the most common mistakes people make when it comes to benefits are:

  • Not reading benefits information or not attending benefits meetings
  • Not signing up every family member for insurance during eligibility or open enrollment
  • Forgetting about short and long-term disability insurance

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