| So you have benefits. But what does that | | | | a Roth IRA, if you are eligible, before |
| really mean? | | | | making such contributions to a retirement |
| | | | plan. |
| For people living in Texas, and especially in | | | | |
| cities like Dallas, Houston and Austin, the | | | | Those who have a pension plan in addition to |
| question deserves some attention. It's | | | | a 401(k) or other retirement-savings plan |
| especially the case when considering that a | | | | should take the time to learn exactly how the |
| good number of people may not fully | | | | employer calculates employee benefits. In |
| understand what either their employer is | | | | many cases, that calculation will be based on |
| delivering as part of a comprehensive | | | | years of service and average pay when an |
| benefits package, or, in the case of someone | | | | employee retires. |
| who is paying at least a portion of their own | | | | |
| benefits coverage, what they are getting for | | | | What happens if you become unable to work |
| their hard-earned dollars. | | | | because of disability? Think the odds are in |
| | | | your favor? Perhaps, but the odds are you're |
| Benefits aren't cheap. According to the | | | | more likely to become disabled than you are |
| Bureau of Labor Statistics, it costs an | | | | to die while working. For that reason, having |
| employer roughly 30% of full-time payroll to | | | | disability insurance as part of a benefits |
| cover benefits and that's a percentage that | | | | plan is a good thing. |
| continues to rise with healthcare costs, | | | | |
| which most people think about first when | | | | Think about it: how long could you be out of |
| considering benefits. | | | | work without having an impact on you or your |
| | | | family? Would you be able to pay for rent or |
| Employees who have benefits - - including | | | | a mortgage? Other bills? |
| health insurance -- should be aware of what | | | | |
| they have, whether they're paying for it or | | | | Many employers offer disability insurance as |
| not. One key point is to not assume you have | | | | part of a benefits package. If someone makes |
| coverage. Even if the insurance plan is going | | | | the choice to buy it, they'll likely pay less |
| to pay for a medical bill, the amount of | | | | than if you purchased it on your own. |
| coverage over an employee's lifetime might be | | | | |
| affected. Understanding the limits of | | | | Still, only 28% of employees sign up for |
| coverage including the maximum coverage is | | | | long-term disability coverage. For those who |
| important information to know. | | | | work in an office, the percentage is higher |
| | | | -- up to 40%. Some may think nothing will |
| It's also important to know and understand | | | | ever happen to them, but it might be |
| what choices might be available to you as an | | | | surprising to know how often people need to |
| employee. In some cases, a person may be able | | | | take advantage of this benefit. |
| to choose their own doctor -- with a certain | | | | |
| amount of the costs paid for by the health | | | | Short-term disability often covers benefits |
| insurance plan. In other cases, a plan might | | | | for one year or less and sometimes an |
| pay the majority of costs, even preventive | | | | employer will automatically cover any |
| costs which some plans would not cover, but | | | | short-term disability, with long-term |
| there is a list of "approved" doctors from | | | | coverage typically replacing 50% to 70% of a |
| which to choose. | | | | salary. That coverage is not always |
| | | | automatic, though, so employees need to make |
| Benefits may also include some sort of | | | | sure to sign up if they want the benefit |
| retirement fund, so employees who have those | | | | before they need it. |
| available to them would be wise to check out | | | | |
| exactly what's included in their benefits | | | | How an employee pays for disability insurance |
| package and take advantage of what the | | | | may also make a difference should they need |
| employer is already willing to pay out. In | | | | to collect. If coverage is paid for with |
| some cases, the contribution of an employer | | | | after-tax dollars, future benefits would be |
| will depend on how much the employee is | | | | tax-free. But if premiums are paid with money |
| willing to contribute to a fund, but if the | | | | before it is taxed, the benefits will be |
| money is available, it would be wise to jump | | | | taxable. A company that pays for a disability |
| in, even if an employee has to cut back on | | | | policy with pre-tax dollars might be |
| other areas of expense in order to do so. | | | | convinced to make a change in their policy if |
| | | | they know it's a concern. |
| Even if someone can't contribute the maximum | | | | |
| amount that an employer would allow (and for | | | | Other benefits to consider and to fully |
| which they are willing to match), starting | | | | understand include life insurance, specialty |
| somewhere is better than no contribution at | | | | health coverage such as that for eye, dental |
| all. By starting small and gradually raising | | | | or hearing, and various stock options that a |
| the percentage of money being contributed, | | | | company might offer. |
| progress is being made. | | | | |
| | | | If an employer offers benefits to its |
| Another option in some benefit plans is the | | | | employees, understanding the extent (and |
| ability of employees to make after-tax | | | | limitation) of the various components of the |
| contributions to their retirement plan. | | | | plan is an important undertaking. But even if |
| Experts say the best advice is to take full | | | | benefits aren't available, there are options |
| advantage of pre-tax dollars, contributing to | | | | to consider. |