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Which Employer Benefits Will Help You Grow Your Wealth?

Carla Fried · May 23, 2019 · 4 min read


In addition to your base salary, your employer shells out plenty more for a variety of benefits. The cost of providing benefits such as paid vacation, health insurance, and a retirement savings plan adds up to another 30% of pay for private-sector workers, on average.

The value to you can be even greater. Some key benefits are all about helping you increase your wealth. All you need to do is make sure you choose the best options within various employee benefits.

Enroll in the company’s retirement plan

Retirement accounts are a clear way way to build long-term wealth. That said, you want to make sure you are taking advantage of the options that can turbo-charge your savings.

If you are offered a company matching contribution, make sure your contribution rate is at least enough to snag the biggest possible match. (Hint: if you relied on auto-enrollment when you started your job, you may not be contributing enough.) You should also check to see if your plan now offers a Roth 401(k) option. Over the past few years, many employers have added this feature. With a Roth 401(k) you set yourself up to have tax-free income in retirement. That can be incredibly valuable.

Make a wise decision on health insurance

Many employers offer a few types of plans you can choose from. If you have the option to enroll in a high deductible health plan (HDHP) it is worth serious consideration. Sure, the mere name is off-putting: no one naturally likes the sound of “high deductible.” Don’t worry, it’s not necessarily a budget breaker. The IRS sets limits for the amount of deductible and out-of-pocket expenses each year.

If you can cover that deductible from your emergency fund or income, the HDHP also enables you to open a health savings account (HSA).

An HSA is an unbeatable wealth builder. The money you contribute to an HSA delivers three tax breaks. Your contribution is tax-deductible, your money grows tax-free while it is invested, and when you use the money to pay for qualified health care expenses there is no tax bill. In addition, an HSA can be a valuable stealth retirement plan.

Take advantage of education benefits

The more you polish your skills, the more likely you can make the case for raises and promotions. Manage to save and invest some of those pay bumps can play a significant role in building wealth over the long-term. At a minimum, make sure you sign up for any optional on-the-job training. If you want to take a course –online, or a community college – or pursue a degree, schedule a chat with H.R. to see if there are any programs to help pay for the cost of building your skillset. The I.R.S. allows employers to pay an employee up to $5,250 in annual education assistance without that money being counted as taxable income. Not all employers offer this benefit, but be sure to ask. Some employers also offer a student-loan repayment plan or assistance, so be sure to ask about this as well.

Cover medical expenses with a Flexible Spending Account

You may be aware of the standard FSA that allows you to use pre-tax dollars to pay for qualified health care expenses. In most cases, you can't have an FSA if you also have an HSA, unless you have a limited-purpose FSA, or an FSA for dependent care. The money in an FSA can't be saved indefinitely: you typically have just 12-15 months to use the money you contribute in a given calendar year. That said, an FSA is a tax-smart way to cover some health care expenses and smart to get if your employer offers one.

There’s also a dependent care FSA that allows you to sock away money to pay for childcare, or the care of an adult-dependent, such as a parent. That money reduces your taxable income. The less you pay in tax, the more funds you just might have available to put toward building more wealth.

Getting started with Lively

If have an high deductible health plan and are looking to open an HSA, Lively offers an easy-to-use platform and great education and support. For employers, Lively's benefits solutions, including FSAs and HSAs, offer innovative, simple-to-use features and unparalled customer service. Get in touch with us today to get started with Lively.

Carla Fried

Carla Fried

Carla specializes in service journalism for news outlets including The New York Times, Money magazine, and For the past 15 years she has writen for traditional news outlets, ghostwriting books and articles for clients, creating content for major financial service firms, and editing investment newsletters and white papers.

Her work appears in The New York Times, Money Magazine, Barron's and Consumer Reports.

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Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.



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