When it comes to thinking about job offers, we’ve already covered how to evaluate the total compensation. However, salary, stock, and bonus aren’t the only important factors to consider when evaluating job offers. Job benefits can be a treasure trove of hidden value for your financial, physical, and mental health. Particularly, they can have a large impact on your financial future, given that the Gen Z workforce holds the power of time and compound interest.

In this post, we’ll uncover the wealth of opportunities that come with your job beyond just your explicit total compensation. From health insurance and tuition reimbursement to 401k matching and paid time off, these often-overlooked and underutilized benefits can have a profound impact on your financial success.

Health Insurance: Guarding your Health and Wealth

As the saying goes, health is wealth. Thus, health insurance plays a pivotal role in safeguarding not only your physical health but also your financial well-being. With the rising costs of healthcare, having health insurance at all, through your job can be a lifesaver. Furthermore, having high quality health insurance can also make a big difference especially if you have recurring medical costs. Having health insurance protects you from unexpected medical bills and ensures that you have access to high quality healthcare when you need it, without causing you to file for bankruptcy in the process.

Since you’re young, you probably think you won’t have too many medical expenses. On the surface this is a pretty fair assessment, considering on a regular basis you probably only need to get an annual physical and teeth cleanings and an exam. But this is only in the best cases, and if you neglect your health or something unexpected comes up you will likely have more than just one visit to the doctor or ER. You never know what can happen, so it is important to be prepared, and limit the possible toll on your health and wallet.

There are a few main types of health insurance plans to consider (there are more than just three but that is too much to cover here):

1. Health Maintenance Organization (HMO): HMO plans usually require you to select a primary care physician and get referrals to see specialists. They often have low premiums (monthly costs) and out-of-pocket costs, but they may have a limited network of healthcare providers, and do not cover out-of-network care except in emergencies
2. Preferred Provider Organization (PPO): PPO plans give you more flexibility, allowing you to visit both in-network and out-of-network doctors without referrals. You will pay less if you use in-network providers, but they cover some out-of-network costs. PPO plans often have higher premiums but are a good option if you want more flexibility and have recurring healthcare expenses.
3. High Deductible Health Plan (HDHP): HDHPs come with low premiums but higher deductibles, which is the amount you need to spend before insurance coverage kicks in. the They often allow you to put money into a Health Savings Account (HSA), which we will discuss below. These plans are great for those who are relatively healthy and want to save on the monthly cost and utilize an HSA. However, you’ll need to pay more out-of-pocket before insurance begins to cover expenses.

Lesser Known Job Benefits: Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)

When it comes to paying for healthcare costs there are two very useful tax-advantaged accounts: flexible spending accounts (FSAs) and health savings accounts (HSAs). They are accounts that hold money and can only be used for healthcare expenses. They allow you to set aside pre-tax dollars, which means you won’t pay federal income tax, FICA taxes, or state taxes (HSAs are not free from state taxes if you live in California, New Jersey or Alabama) on the money you put in.Yyou can use that money to pay for medical expenses like copayments, deductibles, or prescription drugs. These accounts not only help you manage your healthcare expenses more efficiently but also provide tax benefits, saving you more money.

The eligibility requirements between an FSA and HSA differ. Most health insurance plans can offer an FSA. For HSAs, you must be exclusively enrolled in an HDHP, which means you can’t have an HMO or PPO. Furthermore, they have some key differences in how and when you can use the money. For FSAs, your money cannot be invested and it must be used up every year (or you will lose it). If you have yearly medical expenses, you can save on taxes by contributing to and utilizing your FSA. For HSAs, you can invest your money and it can roll over year to year, which means if you don’t have many health expenses your money can continue to grow.

What’s even more powerful about an HSA is that your investment gains can still be used to pay for medical expenses and it wont be taxed! This makes the HSA (and therefore the HDHP) a lucrative choice for young people who need coverage in emergencies, but likely will not have large recurring health expenses! We will cover strategies for fully maximizing the hidden value of the HSA in a later post.

Free money for your future: 401k Matching

One of the most valuable benefits that an employer can offer is a 401k plan with matching contributions. This is literally free money that your employer gives you for your retirement savings. You won’t find free money like this anywhere else, unless you find 20 bucks on the ground. Essentially, when you contribute to your 401k plan, your employer matches a portion of your contributions, effectively giving you free money into your 401k. Even if you think investing for your retirement and locking up your money in a 401k isn’t worth it, how can you throw away free money?

By contributing to your 401k plan, you are setting yourself up for future financial success and security, as well as claiming the hidden value that your company provides through 401k matching. There are some nuances related to the vesting schedule of the company match and the exact dollar amount you get, but once you meet the tenure requirements at your company, that money is yours to keep. If you want to learn more about 401k’s, you can read our post on maximizing your 401k.

Public Transit and Parking Benefits: Helping Your Wallet and the Environment

In the wake of Covid, many companies are backtracking on their remote work policies and forcing employees to go into the office for at least a few days a week. For many Gen Z employees, commuting to work is a reality and a regular expense. Most employers are required to offer the ability for employees to set aside pre-tax money towards their commuter benefits, which can be used for public transit. As well, some employers also offer the ability to set aside pre-tax money to pay for parking costs.

In 2023, you can set aside $300 a month for your commuter benefits, and $300 for your parking benefits. The tax savings can add up especially if you have a high income and a lot of expenditure on commuting. If you had to spend $15 a day on your commute, 3 times a week, that would be about $180 a month. But since the money you are using is pre-tax, and lets say your average tax rate is 20%, you would have had to make $225 (180/80%), to get $185 after taxes. This means you would save $45 a month on your commuting expenses!

In addition, some employers will even offer you a monthly stipend for your commuting expenses. They will pay it directly into your commuter benefit account, and it can be used by you immediately. This can also add up and make it such that you don’t have to pay much out of pocket for your daily commute.

Hidden Value for Gen Z: Tuition Assistance AND Investing in yourself

If you’re considering furthering your education while you are working, company provided tuition assistance can be a huge source of hidden value. Some employers offer to cover a certain amount of your educational expenses per year. This will allow you to pursue advanced graduate degrees or additional certifications related to your job, without worrying about the additional financial burden or the perils of student loans.

Wellness Benefits: Maintaining your Health and Wallet

Wellness benefits and programs are gaining popularity, and can allow you to stay healthy without the out of pocket cost. Gym memberships can be pricey unless you go to a budget gym like planet fitness, but companies can often offer reimbursements for gym memberships or other physical fitness expenses. They can also offer incentives for having a healthy lifestyle like a step count challenge, or discounts on certain products. Utilizing these programs can allow you to prioritize your health and fitness at little to no cost to you. This will in turn benefit your physical, mental, and financial health, and translates to lower medical expenses over your lifetime.

Paid Time Off (PTO): Balancing Work and Life

In today’s fast-paced work environment, work-life balance is essential and can help prevent burn out in the long career ahead of you. PTO isn’t just about taking a break and resetting; it’s about maintaining your mental and physical well-being. No matter what the purpose of your vacation time is, PTO is an essential part of your job benefits and can contribute to your happiness at work greatly.

Wrapping Up

Your job benefits offer a plethora of financial value beyond your salary. They also provide essential benefits for your mental and physical health. Take the time to truly understand and utilize these benefits. Every dollar saved on healthcare, commuting, or education is a dollar that can be put to work to build your future wealth. Never overlook the perks that come with your job; they might just hold the key to your financial success.

Disclaimer: The content provided on this blog (Zooming to Fire) is for informational and educational purposes only. It represents the opinions and perspectives of the authors and should not be considered as financial advice. The authors are not licensed financial advisors, and no content on this blog should be in any way interpreted as professional financial counsel or advice. See more here.