10 Money Tips for Newly Married Couples

In a recent study, 35% of married couples described money issues as their primary source of stress. While there are many potential causes of such financial stress, in some cases the root may begin with habits formed early in the marriage.

Fortunately, couples may be able to head off many of the problems money can cause in a marriage.

Top 10 Tips For Newly Married Couples

Communication. Couples should consider talking about their financial goals, memories, and habits because each person may come into the marriage with fundamental differences in experiences and outlook that may drive their behaviors.

Set Goals. Setting goals establishes a common objective that both become committed to pursuing.

Create a Budget. A budget is an exercise for developing a spending and savings plan that is designed to reflect mutually agreed upon priorities.

Set the Foundation for Your Financial House. Identify assets and debts. Look to begin reducing debts while building your emergency fund.

Work Together. By sharing the financial decision-making, both spouses are vested in all choices, reducing the friction that can come from a single decision-maker.

Set a Minimum Threshold for Big Expenses. While possessing a level of individual spending latitude is reasonable, large expenditures should only be made with both spouses’ consent. Agree to what purchase amount should require a mutual decision.

Set Up Regular Meetings. Set aside a predetermined time every two weeks or once a month to discuss finances. Talk about your budgeting, upcoming expenses, and any changes in circumstances.

Update and Revise. As a newly married couple, you may need to update the beneficiaries on your accounts, reevaluate your insurance coverage, and revise (or create) your will.

Love, Trust, and Honesty. Approach contentious subjects with care and understanding, be honest about money decisions you know your spouse might be upset with, and trust your spouse to be responsible about handling finances.

Consider Speaking with a Financial Advisor. A financial advisor may offer insights to help you work through the critical financial decisions that all married couples face.


Click Here For a free copy of our Newlywed Checklist

Getting a Head Start on College Savings

The American family with a child born today can expect to spend about $233,610 to raise that child to the age of 18. And if you’ve already traded that supercharged convertible dream for a minivan, you can expect your little one’s college education to cost as much as $198,000.

But before you throw your hands up in the air and send junior out looking for a job, you might consider a few strategies to help you prepare for the cost of higher education.

First, take advantage of time. The time value of money is the concept that the money in your pocket today is worth more than that same amount will be worth tomorrow because it has more earning potential. If you put $100 a month toward your child’s college education, after 17 years’ time, you would have saved $20,400. But that same $100 a month would be worth over $32,000 if it had generated a hypothetical 5% annual rate of return. (The rate of return on investments will vary over time, particularly for longer-term investments. Investments that offer the potential for higher returns also carry a higher degree of risk. Actual results will fluctuate. Past performance does not guarantee future results) The bottom line is, the earlier you start, the more time you give your money to grow.

Second, don’t panic. Every parent knows the feeling – one minute you’re holding a little miracle in your arms, the next you’re trying to figure out how to pay for braces, piano lessons, and summer camp. You may feel like saving for college is a pipe dream. But remember, many people get some sort of help in the form of financial aid and scholarships. Although it’s difficult to forecast how much help you may get in aid and scholarships, they can provide a valuable supplement to what you have already saved.

Finally, weigh your options. There are a number of federal and state-sponsored, tax-advantaged college savings programs available. Some offer prepaid tuition plans and others offer tax-deferred savings. (The tax implications of education savings programs can vary significantly from state to state, and some plans may provide advantages and benefits exclusively for their residents. Please consult legal or tax professionals for specific information regarding your individual situation. Withdrawals from tax-advantaged education savings programs that are not used for education are subject to ordinary income taxes and may be subject to penalties.) Many such plans are state sponsored, so the details will vary from one state to the next. A number of private colleges and universities now also offer prepaid tuition plans for their institutions. It pays to do your homework to find the vehicle that may work best for you. Click here to visit a past blog article to learn more about Saving with 529 Plans.

As a parent, you teach your children to dream big and believe in their ability to overcome any obstacle. By investing wisely, you can help tackle the financial obstacles of higher education for them – and smooth the way for them to pursue their dreams.

Five Tips To Manage Your Credit Score

Your credit score, often called your FICO score, represents to a lender how likely you are to pay your bills on time. It may determine whether you can get a loan, a job, an apartment, or insurance. A low score may prevent you from obtaining the lowest borrowing rates or the best loan terms.

Your credit score is based on information provided by your creditors to the three credit reporting agencies: Equifax, Experian, and TransUnion. Because each agency may have different information about you, your score may differ slightly among the three.

What affects your credit score? Although judgments, liens, and bankruptcies can have a damaging effect on your score, it is the little things that count. Fully 65 percent of your FICO score is based on two key factors: your payment history and the amount of debt you carry versus the amount available to you (i.e., your credit card limits). Also important is your length of credit history, how much new credit you have applied for, and your mix among credit types. For more detailed information, visit www.myfico.com/crediteducation.

Tip #1: Get your score.

Although you can get a free credit report once every 12 months through www.annualcreditreport.com, the report does not include your score. You only get a free score if you have been denied credit or insurance. Many lenders will provide your score upon request, after your application has been approved. If you want to know your score before applying, you can pay a small fee to one of the credit reporting agencies or go to www.myfico.com. Offers for free scores are usually tied to monthly credit monitoring services.

Tip #2: Correct your information.

It is a good idea to check your credit reports annually to ensure that they are accurate. Correct mistakes immediately, with both the institution and the credit reporting agencies; they have a responsibility to correct errors under the Fair Credit Reporting Act. Be sure to send copies of supporting documentation and keep a record of your request.

Tip #3: Understand your rating.

FICO scores range from 300 to 850, with 850 the best possible score. In 2015, the median credit score in the U.S. was 723. As a general rule, a FICO score above 700 is very good; scores below 600 indicate a high credit risk.

Tip #4: Know how to improve your score.

You can take the following actions to help improve your score:

 

· Pay bills on time.

· Pay down credit card balances. Reduce the credit card balances you carry to below 35 percent of your available credit limit; 10 percent is ideal.

· Cut up unnecessary cards but don’t close the accounts. Because your utilization rate counts as 30 percent of your FICO score, don’t reduce your available credit by closing old accounts. Instead, train yourself not to carry unnecessary cards or cut them up.

· Remember that the trend is your friend. As your credit “blips” recede into the past, your new habits have more weight.

 

Tip #5: Avoid debt negotiation companies.

Don’t be taken in by ads for companies that offer to get you out of debt by negotiating with creditors. You may get a reduction in your credit balance, but not without paying a high price. Moreover, if the company encourages you to walk away from your debt, you will also likely damage your credit score and wind up paying additional taxes.

You don’t need a third party to work out a modified repayment plan. Call the number on the back of your credit card, explain your situation, and ask to restructure your payments.

Will Trade War Lead to More Market Volatility?

On July 26, 2019, the S&P 500 peaked—but it has since dropped by almost 6 percent (as of August 3). To be sure, such a large and fast drop has rattled investors. So, what’s behind this sudden pullback—and is it likely to continue?

Spotlight on Trade War

The drop was triggered by a renewal of the trade conflict between the U.S. and China. The U.S. ratcheted up the conflict by threatening to impose a new range of tariffs of 10 percent on $300 billion of imports from China. China retaliated by canceling orders of U.S. agricultural goods and allowing the exchange rate for its currency to drop below 7 against the U.S. dollar for the first time ever. The market had largely grown used to U.S. threats, but the Chinese retaliation is a new element that has threatened to take what had been a cold trade war into the hot zone. Such a hot trade war would meaningfully threaten corporate earnings by causing lower sales and higher costs around the world. 

Given this, the cause of the pullback is clear: corporate earnings will be threatened, and as stock prices depend crucially on those earnings, prices have pulled back. With sales to China potentially down and with costs rising as companies relocate their supply chains to more expensive areas, a 6 percent drop in earnings is certainly possible. In that sense, the size of the pullback makes sense, as it reflects a reasonable estimate of the potential earnings damage. The speed of the pullback also makes sense, in that the causes—U.S. policy and Chinese reaction—took place over a period of days, just as the pullback did.

Looking at the recent pullback this way, we can see it not as some bolt out of the blue but as a rational reaction to changes in policy and the subsequent economic impact. With this understanding, we can also draw some conclusions about what likely comes next.

Is the Market Reaction Rational?

First, markets are indeed reacting rationally. There is a clear connection between what is happening in the news, what it means for corporate earnings, and what happens to stock prices. Markets are reacting as they should.

Second, we may see more volatility. As the U.S. and China duel back and forth on policy, the markets will keep responding to that new information. If earnings look likely to get hit, we could see more of a decline. On the flip side, markets are also likely to respond if policy looks to be less damaging. If, for instance, the U.S. and China cut a deal or even agree to keep talking, we could see a recovery. This recent drop is not necessarily the start of a larger decline but a response to circumstances—which could go either way.

What’s Next?

The good news is that a deal should be reachable. The U.S. made its point with the tariff announcement, while the Chinese have now made theirs with the agricultural order suspension and currency manipulation. These are likely both negotiating tactics, rather than a determination to start a trade war. We have seen this kind of back-and-forth before, although at a lower volume, and the result has been a deal. An agreement remains the most probable result this time, in which case we could see a recovery in both expectations and stock prices.

The real risk here is that if the confrontation continues, it will increasingly affect both business and consumer confidence. Business confidence has already pulled back, although it remains expansionary. But consumer confidence remains strong. The U.S. economy largely depends on internal demand. So, a pullback in consumer confidence is what could ultimately cause a deeper and longer decline in financial markets. This scenario, however, would take time. And unlike the stock reaction, it would not be immediate.

Pay Attention, Do Not Panic

We therefore need to pay attention to how the situation evolves, but now is not a time to panic. So far, we are seeing a rational reaction by markets to a change in circumstances; moreover, it is one we have seen before. Chances are that a deal will be reached and conditions will normalize.

Even if they do not, the fact is that the U.S. economy remains solid—and that will not change overnight. With hiring still strong, with consumers confident and spending, and with the recent rate cut by the Federal Reserve providing a tailwind, there is a considerable amount of cushion for financial markets to help them weather the policy-related turbulence around the trade war. Any decline will likely be gradual, and we will have time to respond.

Authored by Brad McMillan, CFA®, CAIA, MAI, managing principal, chief investment officer, at Commonwealth Financial Network®.

© 2019 Commonwealth Financial Network®

8 Mistakes That Can Upend Your Retirement

Pursuing your retirement dreams is challenging enough without making some common, and very avoidable, mistakes. Here are eight big mistakes to steer clear of, if possible.

No Strategy. Yes, the biggest mistake is having no strategy at all. Without a strategy, you may have no goals, leaving you no way of knowing how you’ll get there – and if you’ve even arrived. Creating a strategy may increase your potential for success, both before and after retirement.

Frequent Trading. Chasing “hot” investments often leads to despair. Create an asset allocation strategy that is properly diversified to reflect your objectives, risk tolerance, and time horizon; then, make adjustments based on changes in your personal situation, not due to market ups and downs.

Not Maximizing Tax-Deferred Savings. Workers have tax-advantaged ways to save for retirement. Not participating in your workplace retirement plan may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions.

Prioritizing College Funding over Retirement. Your kids’ college education is important, but you may not want to sacrifice your retirement for it. Remember, you can get loans and grants for college, but you can’t for your retirement.

Overlooking Health Care Costs. Extended care may be an expense that can undermine your financial strategy for retirement if you don’t prepare for it.

Not Adjusting Your Investment Approach Well Before Retirement. The last thing your retirement portfolio can afford is a sharp fall in stock prices and a sustained bear market at the moment you’re ready to stop working. Consider adjusting your asset allocation in advance of tapping your savings so you’re not selling stocks when prices are depressed.

The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation and diversification are approaches to help manage investment risk. Asset allocation and diversification do not guarantee against investment loss. Past performance does not guarantee future results.

Retiring with Too Much Debt. If too much debt is bad when you’re making money, it can be especially harmful when you’re living in retirement. Consider managing or reducing your debt level before you retire.

It’s Not Only About Money. Above all, a rewarding retirement requires good health. So, maintain a healthy diet, exercise regularly, stay socially involved, and remain intellectually active.

Merging Your Money When You Marry

If you’re newly engaged or just tied the knot – Congratulations! Getting married is exciting, but it can also come with several challenges. One challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.

Discuss your financial goals

The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them.

Prepare a budget

Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.

Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of entries in your checkbook and credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending.

Bank accounts--separate or joint?

At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it's sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account. Or, you could always decide to maintain separate accounts.

Credit cards

If you're thinking about adding your name to your spouse's credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.

If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account.

Insurance

If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans.

It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium.

Employer-sponsored retirement plans

If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy.

Choosing The Right Method For You

The most important thing in deciding how to combine finances is to be honest about your feelings from the start and always keep an open line of communication. Money is frequently considered to be the biggest strain on relationships, but working together to find solutions that work for everyone can reduce some of the stress.

If you’re looking for some objective outside perspective to help make some of these tough decisions, please feel free to schedule a free consultation. We also have a great checklist for newlyweds – click here to get your copy.

Financial Planning: Helping You See The Big Picture

As a financial planner, it always shocks me to hear some of the reasons people have for not having a financial plan in place.

“I don’t have enough money yet”

“I’m too young”

“It’s too expensive”

The question I usually respond with is: “Do you picture yourself owning a new home, launching a business, starting a family or retiring comfortably?”  These are just a few of the financial goals that may be important to you, and each comes with a price tag.

This is where financial planning comes in. Financial planning helps you target your goals by evaluating your whole financial picture and outlining strategies that are tailored to your individual needs and available resources.

Why is financial planning important?

A financial plan serves as a framework for organizing all of the pieces of your financial life. With a financial plan in place, you'll be able to focus on your goals and understand what it will take to reach them.

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related--for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use that information to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll know that your financial life is headed in the right direction.

The financial planning process

Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:

 
  • Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan

  • Establish and prioritize financial goals and time frames for achieving these goals

  • Implement strategies that address your current financial weaknesses and build on your financial strengths

  • Choose specific products and services that are tailored to help meet your financial objectives

  • Monitor your plan, making adjustments as your goals, time frames, or circumstances change

 

Why can't I do it myself?

If you have enough time and knowledge - you absolutely can. Keep in mind that developing a comprehensive financial plan typically require expertise in several areas. It is also difficult to give yourself objective advice. A financial professional can give you, fact-based information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered.

Staying on track

The financial planning process doesn't end once your initial plan has been created. Your plan should be reviewed at least once a year to make sure that it's up-to-date. It's also possible that you'll need to modify your plan due to changes in your personal circumstances or the economy.

Common questions about financial planning

 

What if I'm too busy?

Don't wait until you're in the midst of a financial crisis or 10 years out from retirement before beginning the planning process. The sooner you start, the more options you may have.

Is it expensive?

This a typical assumption based on some stereotypes that are quickly becoming outdated. If you envision an older man in a fancy office who profits off the financial products you buy — well, it’s probably time to take another look. We’ve redesigned the cost to be more affordable for the younger generations. 

Is the financial planning process complicated?

Each financial plan is tailored to the needs of the individual, so how complicated the process will be depends on your individual circumstances. But no matter what type of help you need, the goal is to make the process as easy as possible.

What if my spouse and I disagree?

This is more common than you would think, but I’ve been trained to listen to your concerns, identify any underlying issues, and help you find common ground.

 

Conclusion

Your financial health — just like the physical or mental kind — takes time and effort. We all have financial goals and, in many cases, there are several that require our attention at any given time. Having a well-designed financial plan in place will help you navigate those important decisions and keep you on track. By starting earlier in life, you have the advantage of time. Don’t let your “fears” stand in the way of making real progress.

As a financial planner, my goal is to make every effort to help you make smart financial decisions and hopefully avoid making crucial mistakes. I’m invested in your success. If you’re on the fence, please reach out and ask me questions.

How Do Restricted Stock Units Work?

A question I often get from clients and friends – “I have these things called Restricted Stock Units (RSUs)what are they and how do they work?”

An RSU is a contractual right to receive company shares or an equivalent cash payment at some point in the future. They are an increasingly popular form of equity award offered by companies of all shapes and sizes. Many companies here in the Raleigh-Durham area have shifted to RSUs because they are administratively convenient, are “easy” for employees to understand, and can be structured in a way that helps attract and retain key employees and drive performance.

So with that in mind, let’s take a closer look at what RSUs are and how they can work for you.

You’ve been granted RSUs: Now what?

If you’ve been granted RSUs, congratulations! It’s most certainly not a bad thing! You have likely been given this equity award because you are valued, and your employer wants you to stay with the company and meet certain performance benchmarks. But it’s important to understand that your employer has merely promised to deliver shares (or an equivalent cash payment) to you at a future date. As such, RSUs can be thought of as a form of deferred compensation.

You do not owe any tax at the time of the RSU grant. In fact, you will not owe tax until you actually receive the shares. RSUs typically come with a vesting schedule, and there may be performance conditions that must be satisfied before the stock can be delivered. Unlike a stock option, your RSU has intrinsic value; whether the value of the company increases or decreases after the grant, the stock will have value and can never be “out of the money.”

What happens when RSUs vest?

Once RSUs vest, they will be delivered to you and you will recognize ordinary income based on the fair market value of the stock at the time of delivery. Unlike with stock options, no analysis regarding when to exercise is needed. In most cases, the employer will withhold shares in order to cover the tax, delivering the net shares to you. You may have additional options for withholding, you may be able to elect to receive cash instead of stock, or you may be able to defer the delivery of the shares beyond the vesting date. Be sure to check your plan document to ensure that you understand all of your options.

Once you own the employer stock, you are free to hold it or sell it immediately. Your cost basis in the shares is the fair market value on the date they were delivered. So, if you sell the shares immediately, there will be no additional taxable gain. But if you choose to hold the shares and sell them down the road? You would pay capital gains tax on any gains earned since you acquired the shares; if the shares decrease in value, you would have a capital loss that you can use to offset other capital gains.

Planning questions you should be asking

 

·       Should I hold or sell?

·       What happens if I leave the company?

·       What if I’m planning to retire?

·       What’s the risk?

·       Will I be pushed into a higher tax bracket?

 

A valuable benefit

RSUs can be a valuable piece of an employee benefits package, especially when they are incorporated into a financial plan. As you can see – there are lots of moving parts and several important questions that need to be reviewed. Working with a financial advisor and tax professional can help you plan accordingly and make the most out of your RSUs.

Still confused or want to talk about your situation – contact us and we’d be happy to schedule a time that is convenient for you.

4 Tips for Secure Holiday Shopping

Although the holiday season is known for gift giving and good cheer, it’s also known for an increase in cybercrime and identity theft. Before you get a jump start on your holiday shopping, follow these four tips to ensure that you’re protecting yourself this season.

 

1.  Watch out for gift card scams.


Lately, there’s been an increase in gift card phishing scams. Typically, an attacker pretends to be someone you know and asks you to purchase a gift card on his or her behalf and e-mail back the redemption code. Don’t fall for this common scam.

 
 

2. Make smart decisions about your smart device.


Internet-connected home devices (e.g., smart security cameras, smart light bulbs, smart speakers, Amazon Echo, Google Home) are all the rage this year, but they may not be as secure as your typical “up-to-date” computer, potentially leaving them vulnerable to attacks. When setting up your new device, be sure to check out the settings or manual to enable any helpful security features it comes with.

 
 

3.  Check your online accounts manually—without clicking on links.


Holiday season is peak time for fake delivery notifications, order confirmations, and password reset e-mails. Rather than clicking on links from within the confirmation e-mail, open a new browser window and log in to your accounts that way.

 
 

4. Consider freezing your credit.


Don’t let identity theft ruin your holidays. Now that credit freezes are free, it may be worth placing a freeze on your credit file to prevent any unauthorized accounts from being opened.

 

If you have any questions about safe holiday shopping this year, feel free to call me at 919-463-0018.

Wishing you and your family happy holidays!

Are You Maximizing Your Employee Benefits?

For many of you, your salary and bonus are likely just a part of the total compensation you receive from your employer. Why not give yourself a raise by learning about and taking advantage of all your company benefits? This article will help you ensure that you’re making the most of the benefits your employer offers.

Retirement Plans

Your company’s 401(k) plan can play an important role in your future financial security. If your employer matches contributions, you should be contributing at least enough to get the maximum match. If you plan to max out your contributions, make sure you don’t do so too early in the year and potentially miss out on the matching.

For those of you that are considered highly compensated, your employer may also provide a nonqualified deferred compensation plan with matching to cover wages above the qualified limit. It is important to find out how the plans interact and how you can maximize your benefit.

Stock Options and RSUs

Some companies still grant employee stock options as a form of compensation. These can add significant value to your long-term financial success, but they can be complicated and have additional risk that needs to be considered.

 
  • Risk of termination before vesting

  • Risk of market volatility in the stock price

  • Risk of asset concentration

 

There are also several tax considerations that need to be evaluated when working with stock options and RSUs. I recommend working with a financial advisor to determine what works best for you.

Health Insurance

Many companies subsidize health insurance coverage for their employees, and some offer a choice of different plans.

 
  • HMOs generally have lower premiums and lower costs to access health care but limit which providers you can see.

  • PPOs allow you to choose any physician, but they charge higher fees if you decide to see an out-of-network provider.

 

Before selecting a plan, I recommend confirming that your doctor is a preferred provider.

If one of your health insurance choices is a high-deductible health plan, you may have the option to set aside money in a health savings account (HSA) to pay for qualified health care expenses on a pretax basis. HSA contributions remain in your account until you use them, distributions for qualified medical expenses are tax-free, and the account is portable. Some companies even contribute to employees’ HSA accounts.

Flexible Spending Account

Your company may offer flexible spending accounts (FSAs) for a variety of expenses, including health care, dependent care, transportation, and parking. If you have any of these qualified expenses, you may benefit by having pretax money taken out of your paycheck to fund them. For example, if it costs you $100 per month to park at work, you can set aside that amount in an FSA to cover the expense. By contrast, you’d have to earn $157.36 to pay for this expense after taxes, assuming a total tax rate of 36.45 percent.

Life and Disability Insurance

Some employers provide life insurance coverage equal to a multiple of your salary. In many cases you may be able to purchase group supplemental life insurance coverage through payroll deductions. While this can be convenient, the coverage amounts and features may be limited, so I recommend shopping the market to ensure that you’re getting coverage at the best price.

Your employer may also pay for long-term disability insurance. LTD payments from an employer-paid policy are taxable to you; if you pay the premiums, you will receive LTD payments tax-free. If your company gives you the option of paying for your own LTD coverage, you should weigh the cost of covering the premiums yourself versus the benefit of receiving tax-free payments.

Additional Benefits

Some companies offer employee discounts on everything from wireless plans and vision care to movie tickets, hotels, and car rentals. Your employer may also offer reimbursement for certain education expenses.

I see far too often employees missing out on key employer benefits. Working with an adviser and doing a little research could be well worth your while! Contact Us today so we can help you maximize your benefits.