How Much are Your Employee Benefits Worth?
Employee benefits vary across companies but typically include things like your health plans, disability benefits, life insurance options, and your retirement benefits.
The amount your company pays for those health benefits and employee insurance packages can be substantial and is something that you should factor into any job search in addition to your salary. The value of your medical benefits, dental plans, flexible spending accounts, etc can be hard to quantify since premiums, coverage, and types of benefits can vary so widely from company to company.
Estimating Employee Benefits
One thing you can probably do is to find out what dollar value your current employer puts on your benefit package. Of course not all companies have this information available but you can check out your employee payroll system, employee handbook, or your human resources system to see if they publish those numbers anywhere.
My company recently published that information, personalized for each employee, and pointed out that company paid benefits, payroll taxes, and additional compensation add about 50% to my regular pay. Of course, their goal was to show employees how much they invest in us each year so can’t the numbers at face value but they can be used as a starting point for estimates.
Here’s how they broke out our employee benefits, when you’re calculating the value of your benefit package, you can use these categories to help guide your estimate.
Compensation
- Regular Pay
- Bonus
- Sick Pay Used
- Holiday Pay Used
- Paid Time Off Used
Payroll Taxes
- Social Security
- Medicare
- Federal Unemployment
- State Unemployment
Company Paid Benefits
- Medical/Dental Insurance
- Life and AD&D Insurance
- Retirement Contributions
- Long Term Disability Insurance
Additional Benefits
- Vision Plan
- Health Care Flexible Spending Account
- Dependent Day Care Flexible Spending Account
- Tuition Reimbursement
- Adoption Assistance
- Pre-Tax Commuter Benefit
Chase Credit Card Alerts Save the Day!
Chase credit card alerts have saved me from late fees and missed payments more than once. I was reminded of this yesterday when a big transaction came through on my card and I was notified of the larger than normal charge. I’ve only used the alerts for my Chase Freedom and Chase Sapphire cards but I imagine they’re are available on any Chase credit cards you might use.
These alerts are particularly useful if you use online bill pay and online banking to automate most of your finances. You can be notified when things are going smoothly, such as when a payment is made, and also when there are problems, such as a late payment. Here’s a list of the alerts that Chase offers for their credit cards to help you keep track of their status. I’ve group them into the types events that you can monitor.
Credit Card Payments
- No payment was received for this account
- My payment is due in __ days
- A payment has been posted to this account
Unusual Activity
- More than __ ($ USD) is charged to my card for a single transaction
- An international charge has been posted to this account
- A balance transfer has been posted to this account
Credit Limit
- My balance reaches __ ($ USD)
- My available credit is less than __% of credit limit
- My available credit is less than __ ($ USD)
You can pick and choose which of the alerts that you want to recieve, I think the default when you first sign up is that you don’t recieve any alerts.
Credit Alert Options
In terms of how you get the alerts you can select two different email addresses, your phone number, and a text message option. You can have each alert sent to one, all, or any combination of your phone, email addresses, and text options.
From a security perspective, they don’t send out your full credit card number in the alerts, just the last four digits. You can also sign up for online security alerts if you manage your account on the web; these alerts will let you know anytime your user id or password changes.
There is one more alert option if you have a rewards card that I didn’t list above because it didn’t fit into any of the categories. You can be notified when your rewards balance exceeds a certain number points. For example, if you have a cash back reward card and need 5000 points to earn $50, you can be notified when you have enough points to redeem your cash back.
How to Cure Financial Constipation
What was the last big financial decision you had to make? Did you immediately know the answer and take care of it right away or did you file it in the “research and ponder” pile for further deliberation?
If you’re like me, you probably put some thought into it and took your time so you could make the best decision for your situation.
Informed action is smart but do you ever have a case where you experience a little decision making blockage? Making your decision is kind of uncomfortable; you’re worried you might not make the right choice so instead of pushing the decision along you let it sit.
After a while other life events come along that require decisions but they get blocked behind the financial matter you’re still weighing in your mind.
As your financial pipeline gets clogged up the weight and implications of the decisions puts more and more pressure on you, making it even more uncomfortable to get moving.
Have you been there before? Have you been financially constipated? Doesn’t feel very good, does it? Let’s look at a few ways you can cure this condition.
Set Financial Deadlines
Having a do or die date works wonders for getting you in gear. Take filing your income taxes for example, that whole process is one big mess of financial decisions. That’s why the best tax software is worth the money; all the rules and regulations help walk you through all those choices.
Nobody really enjoys doing their taxes; we worry that we’re missing deductions but we also don’t want to drift into any gray areas and end up with penalties and fees if we get audited. If there wasn’t a federally mandated annual deadline some people, probably me, might put off paying taxes for years at a time. Why else do you think that half the people in the country wait until the last few days before the tax deadline to file?
A self-imposed deadline probably doesn’t carry as much weight as the audit division of the Internal Revenue Service but there are ways you can offer some carrot and stick action for your own deadlines.
The obvious carrot approach is to tie incentives to meeting a deadline. Unlike the upcoming home buyer tax credit deadline you can’t knock thousands of dollars off your tax bill for finishing your financial transactions by a certain date but I’m sure you can think of a few things as a reward to help grease the wheels of urgency.
One frequently used technique for shaming yourself into action is to publicly commit to a deadline to several people that can hold you accountable. A method that works really well is setting a deadline with your attorney. Since they bill you for each follow up email, you’ll be sure to get them what they need by the deadline.
Understand Behavioral Economics
One of the biggest financial laxatives around is our emotions. The stock market plunge in 2008 was like a giant decision enema for tens of thousands of people who had been holding stocks for years. As the market sank, people panicked into action and dumped stocks for big losses.
If you want to learn more about how your emotions cause you to do crazy things with your money, read “Why Smart People Make Big Money Mistakes”. It’s one of the best personal finance books I’ve ever read; it’s exploration of behavioral economics will reveal behaviors you probably weren’t aware of.
You’ll learn why it can be so hard for us to make financial decisions and pick up some tips that make it easier to take action.
Get Regular
Just as our bodies can get unstuck through regular exercise and a healthy diet, your financial decisions come easier when you have a standard process for evaluating them. Whether it’s a basic pros and cons list or an in-depth weighted criteria model, using the same approach for making decisions can make you more comfortable with the process.
Familiarity can not only speed up the decision making process, a record of how you justified a decision can make you more comfortable pulling the trigger. It can also help when looking back on old decisions and evaluating whether it’s time for a change.
Visit a Money Doctor
If you don’t feel confident making a decision on your own and it’s holding you back, visit a professional. Experienced certified financial planners, CPA’s, tax attorneys, and estate lawyers have dealt with the money decisions you’re struggling with and can add some useful insight. Getting a qualified objective opinion on money matters can be quite a relief…
IRA or Roth IRA for Your Retirement Plan?
IRA vs Roth IRA was the question for many people opening up a retirement account right before the tax deadline this month so I thought we’d re-visit it for people looking to make an ira contribution. Here are some of the major differences between a traditional IRA and a Roth IRA.
Tax Deferred Contributions vs Tax Exempt Earnings
With a traditional IRA contributions are tax-deferred, meaning that you don’t pay income taxes on the money you put in until you take the money out. With Roth IRA contributions on the other hand, you pay income taxes on the money you earn and put into the account but the earnings when you take money out are tax free.
IRA Minimum Distribution
Both the traditional IRA and Roth IRA require you to wait until 59 1/2 to start withdrawing your earnings without penalties. With the traditional IRA you have to start taking distributions at 70 1/2 years old but the Roth has no minimum distribution requirements. The government doesn’t really care when you take out your earnings for a Roth since they don’t see any tax revenue from it but with a traditional IRA they want to make sure you don’t delay your IRA distributions (and their tax revenue) too long.
Traditional IRA
One of the advantages of the traditional IRA is that you can reduce your taxable income during your working years. Since that income isn’t taxed right away, you have more to invest and the hopes are it will grow for the next several decades until you reach retirement age.
Of course the downside to the IRA is that you are hit with a big tax bill in retirement when you withdraw money from your account. If you anticipate being in a lower tax bracket when you retire than when in your working years then you would pay less taxes. Keep in mind that no one knows what the tax laws will look like decades from now.
Roth IRA
One of biggest advantages of a Roth IRA is that you only pay tax on the contributions, the earnings are tax free. So if you invest your money wisely and it grows by leaps and bounds over the next several decades then you’ll have some nice IRA distributions that aren’t taxed.
Another benefit to a Roth IRA is that you can withdraw any principal you’ve paid in prior to retirement without a penalty. Since an IRA is an “Individual Retirement Account”, it’s best to save the money for retirement when you have have a working wage coming in. However, in an extreme circumstance it’s nice to know you could access the Roth IRA contributions if needed. This does not include the earnings, if you withdraw those early you will pay a penalty.
The obvious downside to a Roth IRA is that the money you contribute is not pre-tax so you don’t lower your income taxes in the year you put money in. Another potential issue with a Roth IRA is that it does have maximum income limitations so so high-income earners don’t have the option of opening one.
Opening an IRA
Deciding between a regular IRA and Roth IRA should not become a retirement investing roadblock. Don’t let indecision hold you back from getting started investing for your retirement years. Just because you open a Roth IRA this year and fund it doesn’t mean you can’t contribute to a traditional IRA instead next year. The most important thing is to get started putting some money away!
Automatic 401k Contributions for Retirement
Increasing your 401k contributions every year is a great way to grow your retirement plan. You probably don’t need a retirement calculator to tell you that your 401k plan will reach your retirement savings goals much faster if you put in more money each year. BUT, knowing that you need to increase your annual investments doesn’t make it any easier to put in more money.
Investing More in Your 401k
Depending on whether you have a traditional 401k or a Roth 401k, the immediate tax implications may differ, but the long term growth effect of increasing your 401k contributions can be pretty big over time. Although the government has established 401k contribution limits, many of us never come close to investing that much into our retirement account every year. So how can we talk ourselves into saving more for retirement?
Automatic Savings Plans
Our 401k plan has an optional feature called Automatic Savings Increases that lets us increase the amount we invest into our 401 k automatically each year. As you can see below, I get to choose what percentage it increases each year, what the maximum contribution percentage is, and what day in the year the increase goes into effect. Our 401k investments are made out of my paycheck so the actual first day of the increase will depend on when I get paid, which is the first and middle of each month.
Of course you can opt into or out of these increases, when I signed up for my 401k account I decided choosing to participate would be a good idea.
Many companies, mine included, give annual performance reviews and based on your results give you a certain percentage of salary increase. My thoughts were that I’d increase my 401k contributions as my salary went up. The only problem is that life gets busy and I forgot to change my contribution percentage last summer when my salary went up.
The good news is that I had signed up for the Automatic Savings Increase plan when I started the job so my contribution percentage automatically went up last year. Even though you may forget to contribute more, you’ll likely remember once the automatic increase kicks in and the amount of your paycheck changes; that’s what happened to me. However, if you time your contribution increases to correspond with annual pay increases then the overall impact to your cash flow should be minimized.
Free Credit Report from Experian
Experian is offering a free credit report for 30 days to American Express cardholders. I logged into my credit card account and requested my credit score after I got an email about it this week. I hadn’t checked my credit report in some time and was pleased to see it was still healthy.
American Express partnered with Experian to offer the credit reports so you don’t have access to your Equifax and Transunion reports but just getting the Experian one for free was nice.
Credit Report Access
As I mentioned above, you have to login to your American Express account first to get the offer and then you’re taken to the Experian Direct website where you enter in the standard information needed for a credit report: name, adddress, email, social security number, phone number, and your year of birth.
Once you’ve submitted that info you create a login so you can come back later and access your credit report. Then you have to agree to the terms and conditions of the offer, I read through them to make sure there was no fee for the report and here’s a summary of what I read.
Credit Report Terms & Conditions
The free credit report is available for 30 days and you can’t enroll more than once in a 12 month period. Experian is the credit reporting agency providing the PLUS credit score and you’re giving them permission under the Federal Credit Reporting Act (FCRA) to obtain the information from your personal credit profile. Then they include some (FCRA) disclosures and let you know you can dispute the information in your credit report if you don’t think it’s accurate.
Then the last step is answering two challenge questions to verify your identity, mine were about a street I used to live on and an auto loan from a few years back. Then you’re taken to your credit report, you can see the different sections pictured below.
Smart Ways to Invest Your Tax Refund
Investing Your Tax Refund
What are you going to do with your tax refund? One option would be to spend it but if you’d like to hang onto that money for a while, Investopedia came up with a list of smart ways to invest your refund. They start off with some of the most secure options if your goal is to preserve that money and then move onto some low cost ways to invest your money if you’d like to see it grow more quickly.
Ally Bank CDs
For safety, they suggest Ally Bank CD’s since they are FDIC insured, have no minimum amount or fees, and have competitive rates:
- 3 – 5 year High Yield Certificate of Deposits
- Penalty-free CD
High Yield Online Checking & Savings Accounts
While these online banks won’t pay as much interest as much interest as a CD, they will pay more than your typical savings account and your money will be available for withdrawal at any time. They recommend:
Low Minimum IRAs
Since your tax refund probably isn’t thousands of dollars they looked for options that had a low minimum balance and low fees that would give your refund a better chance to grow and compound.
The article doesn’t mention it but a TradeKing IRA is an option with no annual fee and no account minimum.
Zero Transaction Fee ETFs
These options let you trade ETFs for free and exchange traded funds have relatively low expense ratios:
- iShares through a Fidelity account – S&P 500 (IVV), Russell 2000 (IWM), MSCI Emerging Markets (EEM)
- Charles Schwab ETFs
Reverse Mortgage Lenders Cut Loan Fees
One of the main reverse mortgage disadvantages we covered last year was the high upfront cost charged by lenders. Although they’re not doing away with them altogether, companies like Genworth Financial, Bank of America, Wells Fargo, and MetLife are reducing their origination or servicing fees on reverse mortgages according to the Wall Street Journal.
Reverse Mortgage Disadvantages & Benefits
Many people have mixed feelings about reverse mortgages. Although they offer a way for a person or couple on a fixed income to tap into a big chunk of their home equity there are downsides as well. For example, reverse mortgages restrict your options to move and also can deplete the value of an estate that can be left to children, grandchildren, or other family members.
Reverse Mortgage Fee Cuts
Reverse mortgages certainly aren’t for everyone but if you or someone in your family has decided to research them as an option be sure to compare the costs from different lenders because the recent fee adjustments could save you thousands of dollars.
For example, the WSJ article looks at an example where the origination fee and monthly servicing fee were dropped, saving the borrower almost $11,000. The biggest fee, HUD insurance (required by Department of Housing and Development) is still part of the loan costs. As lenders compete to gain the business of baby boomers wanting to access the equity in their homes, the fees could continue to drop, so make sure you shop around for the best deal.
Best Deals Sites Online
The best deals sites on the web have thousands of users, all working together to save each other money. A year ago we featured some of the best coupon websites, FatWallet, Hot Coupon World, and Slickdeals, and today are re-visiting how they can save you money. Here is a summary of each:
Hot Coupon World
Hot Coupon World is a great place to find deals at your local grocery store, especially if you are in a smaller grocery market. If you have a young child or a pet and need diaper deals or good prices on pet food, this site can help you find these particular deals easily and quickly. Their coupon database is also invaluable to help you find a particular coupon from the newspaper or online.
If you are interested in learning how to coupon at your local stores then this is a great place for you. They have a mentor service, and lots of articles on how to coupon effectively and how to store your stockpile. Their trading forums are great for people who want to trade coupons- much better and more organized than anything at Slickdeals or FatWallet.
This is not the place to find deals on televisions, or general products, nor is it the place to find freebies. Although they do offer these services they are more limited than Fat Wallet or Hot Deals, and you can’t elect to be notified whenever a product that piques your interest comes up
FatWallet
One of the key features of FatWallet that is not offered by Slickdeals, is Cash Back. FatWallet has a list of over 100 stores that offer cash back. If you are going to purchase anything from one of these stores (and you don’t already use a Cash Back site like Ebates or MyPoints) then you should definitely go to FatWallet first. By simply going to this list and clicking through to the store before you make your purchase, you can get anywhere from 1% to 15% of your money back.
The list is alphabetical and very easy to browse, either by category or store name. If you are just interested in general deals and freebies, FatWallet and Slickdeals are almost interchangeable as I mentioned above.
In addition, the Finance forum on FatWallet is very useful to people who open bank accounts to get free money, or who are interested in playing the Balance Transfer game on their credit cards. There is a wealth of information that can help you in these endeavors that you won’t find elsewhere. The travel deals are also organized best at FatWallet, so if you need a good rental car discount code, this should be your first stop.
Slickdeals
The Freebies and Hotdeals sections on Slickdeals and FatWallet are almost interchangeable because there are a lot of people who use both sites. When a good deal is posted on one of the two sites, someone almost immediately posts the exact same deal on the other.
So, if you are interested only in Freebies and Hotdeals, you could choose between the two depending on which site you prefer to look at. The Coupons and Drug Store forums on Slickdeals offer similar information to Hot Coupon World. Again, when an ad is posted on one of these sites, it will usually show up on the other shortly after. The discussion in these forums on Slickdeals tends to have more useful information than Hot Coupon World, but the discussion can get long and you may have to read through a lot of pointless posts to find relevant information.
If you have time on your hands and want to make sure you don’t miss one single hidden drug store deal- then you should stick with these forums at Slickdeals. If you just want a summary of the advertised deals and not a lot of chat, you may prefer Hot Coupon World.
Free Summer Festivals
Summertime is great for free festivals! There are music festivals, art fairs, food festivals, even kite festivals! Once the weather gets warm there are all kinds of free summer events you can enjoy outdoors.
The picture you see here is from a local kite festival that was a good time and a great summer event for kids.
Our son and daughter enjoyed hours of fun watching the enormous kites fly around the sky and the festival was free of charge!
Many times companies or organizations will sponsor summer festivals and other events because they know a lot of people will be there and they want to get the word out about thier product or service.
Since the sponsors provide the funding for the event, it’s free of charge to you!
As I mentioned above there are all kinds of free festivals and fairs in the summer time that you can visit with your family.
We packed a lunch and brought a blanket so we didn’t even have to pay for food. Instead we enjoyed a picnic while we sat on our blanket and marveled at the huge variety of colorful and acrobatic kites sweeping through the sky. The only cost of the outing was the gas we paid to travel there, not bad for a few hours of entertainment.
The best place to find a list of summer festivals varies depending on the city you live in but a good place to start is a simple web search. For example, if you live in Chicago you could search for “summer festivals Chicago”. Another good place to look is the website of your local newspaper, check out the events section. Enjoy the nice weather and the free festivals!
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I'm Ben Edwards and I've been addicted to personal finance since I was 12 years old.
That passion for money has paid off for my family - so in 2006 I founded Money Smart Life to help you afford the life that you want. Read My Story...
