You’ve been searching, interviewing, and you’ve finally got an offer. You’re excited, and you should be! However, for many people, this excitement starts to wear off as they read the compensation package information. They ask, “What does that mean? Does that apply to me? Why would I need it?” There doesn’t need to be confusion. Today’s blog post explains the different types of benefits so that you understand your new technical position’s benefits package.
The figure you’ll be making. It’s a simple as that.
The first thing you must know about bonuses are their type. Are they organization wide? Given to all employees regardless of performance? Based on an individual’s work? Understanding how this company distributes bonuses allows you to understand your probability of receiving one. Ask yourself, “How great is my chance of getting a bonus? Will this greatly affect my year-end income?”
The second thing you must know about bonuses is when they are distributed. Is this done yearly? Quarterly? Make sure you ask whether or not your start time disqualifies you from receiving a bonus.
Vacation Time and Paid Time Off (PTO)
Believe it or not, both vacation time and paid time off are sources of real money in your pocket. How so? When you go to Aruba for a week or stay at home to take care of your sick child, you aren’t forfeiting the money you would have made in that timespan. You get paid while not working, which, let’s be honest, is pretty great.
Make sure that you are content (within reason) with the amount of vacation and paid time off. Remember that, if you have kids, you’ll likely need more PTO.
When you purchase stock options in your company, you become a partial owner. That doesn’t mean you have to go to board meetings, but it does mean that you can benefit from your employer’s prosperity.
If your company has a realistic growth potential, purchasing stock options may be a good idea. Why? Assuming your company continues to profit, you’ll purchase shares now at a lower value, and will have the ability to sell them later for a higher rate.
Not sure if buying stock options is your best bet? Research your company. See how they’ve been doing as of late as well as their projected growth. This will allow you to determine if purchasing stock options is worth the risk.
Retirement Accounts: 401K/ 403B/ Matching Funds
For some, retirement seems a long ways off. It may be, but you need to start planning early. Companies know this, and often offer retirement plans.
- 401(k) retirement plans can only be offered by a for-profit or nonprofit organization. In most cases, if you are over 21 years of age and have at least one year of work under your belt, you are eligible to participate.
- 403(b) retirement plans are offered by 501(c)(3) nonprofit organizations and public schools. In most cases, all employees are eligible.
With both a 401(k) and 403(b) plan, your employer may be able to match your retirement funds. While the percent match may vary, you should jump at this opportunity. You’ll get money put towards your retirement without having to put in any extra. Who doesn’t like the sounds of that?
Health Insurance Coverage and Premiums
If you are considering your company’s health insurance coverage, make sure that you understand both what it covers and what your out-of-pocket expenses will be. Compare this to the premiums of other offers or what you can get on the market yourself. Does being on your company’s plan make financial sense?
Long-Term and Short-Term Disability Insurance
Disability insurance ensures you financial stability if you are unable to work due to sickness or injury. Some companies will pay the whole premium, while others will only pay partial. Even if they are paying a small portion of the premium, you are now protected should anything happen. And the best part? You’re not paying for it alone.
If you’re concerned about what will happen to your loved ones financially once you pass on, consider life insurance. This type of insurance ensures that those left behind will have money to cover any of your expenses, including home mortgages.
Most companies offer life insurance to their employees, often at lower rates than you can find elsewhere. Do some shopping around and make sure you’re getting the best service possible. Oftentimes your company’s life insurance is your best bet.
Some companies offer to pay for you go back to school. While this means a time commitment on your end once you are done with the additional classes, the financial payoff may be worth it in the long run. You’ll most likely be saving thousands upon thousands of dollars.
There is a lot to consider when you first receive a compensation package. Hopefully all of the technical jargon makes a little more sense now. The most important thing to remember when you receive your benefits package is to research and compare whether or not you are getting a decent benefits package. More often than not, you will be.
Thanks to pellesten for the use of their respective photographs.