Who doesn’t love free money? No one right? Then why are there so many people who are passing up free money? Crazy right! If there is one thing that drives the personal finance geek in me crazy, it’s when people lose out on benefits because of laziness.
Now I’m not talking about paying a delivery fee to have your groceries arrive on your doorstep. I’m talking about the people who are missing out on employee benefits. If that’s you, my wrath is coming for you! And trust me, it happens ALL the time. It might even be happening to you, right this second.
Your salary isn’t the only thing that matters when it comes to compensation for the work you do. Many employers offer additional perks that to make the job more desirable.
Pension Plan or Matched Savings
The best perk you can get is a pension plan other savings plan. For many of these plans you are required to make a minimum contribution, and then your employer will match it up to a certain amount. That matched contribution? FREE MONEY! Why would you ever say no to that?
These plans could be defined contribution pension plans for retirement, profit sharing (where you get a portion of company profits) or discounted company stock. All you have to do is get enrolled in the plan and start making contributions.
Yes, you will usually have to contribute some of your own money to get the free money, but you 100% need to do that! I know, I know…you’re probably thinking that you might not be able to spare that extra $50 or $100 per month, but I’m here to tell you that you can. It’s going to automatically come off your paycheque, and I promise you won’t even miss it. You’re doing yourself a favour by getting a jump on saving, and if you add the matching contributions to your salary, it’s like getting an automatic raise.
If your boss is matching your $100 per month contribution that’s like an extra $1,200 added to your salary every year. You wouldn’t think twice about it if your boss offered you a $1,200 bonus, would you? By not enrolling in your group plan that is exactly what you are doing. Plus, if you’re saving into an RRSP, you’ll also get a bump on your tax return.
Most people know whether or not they have extended health benefits through their employer. But are you actually taking advantage of it? Read through your benefits booklet, so you know what is and isn’t covered and then get your boss’ money’s worth. Make regular appointments with your dentist, doctor and optometrist. Buy new glasses every couple of years to max out your coverage. Have a nagging back injury that won’t go away? Go see a physiotherapist. Or go for massages…everybody could use a good massage every few months.
Many benefit plans also include travel insurance. Instead of seeking out additional insurance you should check and see what your work coverage offers and you might be able to knock one expense off your vacation.
Side note: Another place to look for travel insurance you might not know you have is on your credit card. Quite a few credit cards (especially travel reward cards) also offer travel insurance.
You could also have life and/or disability insurance built into your plan. That means if something happens to you and you’re unable to work you will still have some income coming in the door. Usually, the amounts are limited, especially for life insurance, so you may need to top it up with an additional policy, but it’s still worth knowing.
If you work for a large company, you might access to group discounts. These could include preferential pricing on cell phone plans, gym memberships or even hotel bookings. Many companies are signed up for discount plans like Venngo that give group discounts for a variety of stores and services. For example, I always order movie passes through Venngo, and they are almost 40% off the price at the theatre.
It’s worth asking your colleagues or HR department if your company has any such deals.
Just Say YES!
Finding and using your employee benefits is as easy as doing a little research and signing up the plan. Sounds simple, but a lot of people don’t take the step.
There was a study done in the States in 2005 by James J. Choi, David Laibson, and Brigitte C. Madrian called ‘$100 Bills on the Sidewalk‘. They studied this exact phenomenon in the US and found that between 20% and 60% of participants lost up to 6% of their salary by passing up matching plans offered by their employers. Six percent might not sound like a lot, but it’s money that’s owed to you. I certainly wouldn’t throw away 6% of my salary just for being lazy or uninformed.
The typical process for employer-offered plans is that the employee has to ‘opt-in’. I would love to see this changed so that the default option is automatic enrollment, and if you don’t want to contribute you have to actually ‘opt-out’. That way people aren’t forced to save, but it makes it that much more challenging not to, and laziness would impact you positively for once! You can understand why employers would be against this; right now they get to boast about having a good pension plan but don’t have to pay out the benefit to all of their employees.
If you’re not sure if you’re missing out on a plan at work, then it is 100% worth your time to find out. You likely have an employee package from when you first started your job, pull that out and read it if you still have it. If not, talk to your HR department or your boss and see what perks are available that you might not be using.
Have I convinced you to double check with work and make sure you aren’t missing out on any benefits? I sure hope so!
This post was proofread by Grammarly.