Introduction

In addition to your salary, your employer likely compensates you with noncash benefits, such as health insurance and equity awards. Even when a benefit doesn’t have a clear dollar amount associated with it, every aspect of your total benefits package is an important element when it comes to supporting your health and financial well-being today and in the future.

To help you determine which benefits you need—and how much you should choose—this checklist will walk you through the process of making benefit decisions via the lens of your financial plan. Our hope is that this guide will help to clarify and simplify the process of choosing your work benefits, as well as give you a framework for fully appreciating the value that each benefit has to offer.

1. Choose a health insurance plan

  • Review the premiums, deductible, coinsurance, copays, and out-of-pocket maximum terms for each plan, and use these to evaluate the total costs you may be exposed to over the coverage period.
  • Select a plan that makes sense for you based on your family’s healthcare needs and your budget.
  • Once you’ve chosen a plan, make sure you have enough cash set aside to cover potential out-of-pocket costs.
  • If you have a low-deductible health plan with a flexible spending account (FSA), set your contribution amount by estimating how much you think you may spend on healthcare that year.
  • If you have a high-deductible health plan and have access to a health savings account (HSA), contribute as much as you can afford to save (up to the annual contribution limit). HSAs offer a unique triple tax advantage and allow you to keep the funds invested for many years. Investing these funds for long-term growth can help you to maximize the benefits.

2. Protect your human capital

  • Human capital is your ability to earn money through your skills and work. Disability and life insurance can protect your earning power by supporting your family financially if you aren't able to work due to illness, injury, or death. To help you understand if you have enough protection, calculate your disability and life insurance need.
  • Assess your current disability and life insurance coverage.
  • Determine if there is an insurance gap (the difference between your insurance need and current coverage).
  • Consider your options for closing the gap. If your current coverage falls short of your insurance need, speak with your financial advisor about purchasing supplemental disability and/or life insurance coverage either through your employer (if available) or through an insurance provider.

3. Save for retirement

  • Determine how much you can afford to save. Compare your spending and your income.
  • Review the details of your company’s retirement savings plan (annual contribution limits, contribution match, retirement contribution, etc.).
  • Prioritize your savings. Fill out our savings waterfall worksheet and determine which accounts will provide you with the most after-tax growth potential—starting with your employer 401(k) match, if available.
  • Make payroll deductions and direct deposits, and set up automatic investment strategies, so that your savings are put to work quickly.
  • Establish good savings habits. Some plans give you the option to automatically increase your savings rate annually in case you forget to increase it yourself.

4. Make the most of your equity awards

  • If you receive equity awards from your employer, either automatically or voluntarily, it's important to take the time to understand how the plan or program works. Gather the details of your equity compensation plan and share them with your financial advisor. If you are unfamiliar with your plan’s details, ask your employer if they offer educational materials and advice.
  • Determine the role your equity awards will play in your financial plan to help you achieve your goals, and make sure you revisit this approach whenever there’s a life change.
  • Monitor the amount of your wealth that’s held in your company’s stock. Your financial advisor can help you assess and manage the risks associated with holding a concentrated stock position in your portfolio. For more insights and strategies regarding concentrated stock positions, listen to our podcast: How to address your company stock within your financial plan.

Life insurance

Three reasons why your group life coverage might not be enough for you.

Disability insurance

Three reasons why your group disability coverage might not be enough for you.

Retirement savings plans

Ideas on different options, various 401(k) plans, and steps to start saving.

Health insurance

Ideas on selecting health coverage and funding out-of-pocket expenses.

Conclusion

This is not an exhaustive list of common work benefits. You may have access to other benefits not mentioned in this guide, such as financial wellness programs or mental health support. Even still, we hope that this helps give you a head start to making the most of your work benefits.

Make sure you share these details and approach these decisions with your financial advisor and tax consultant, where relevant, so they can help you consider them through the lens of your overall financial plan. After all, many of these choices require a balance between what’s optimal for your financial situation today, versus what’s best for you and your family in the future.

CIO research disclaimer