It's exciting to start a new job and to learn the perks and benefits that your new employer may offer. A typical benefits package varies depending on the employer, and understanding these packages can be confusing for someone new to the workforce.
Getting started with company benefits
Most companies provide documents or direct you to employee portals that outline benefit packages. As a starting point, read through the material carefully. Make notes about anything that isn't completely clear.
If you're working at a smaller company, the HR department may sit down with you on your first day to discuss benefits and show you what paperwork you need to complete. Larger companies may conduct an orientation to explain the benefits to a group of new employees at once.
Regardless, you usually won't have to complete all the paperwork and make the decisions on your first day, and it's important to ask questions before you choose an option. You want a package that best addresses your needs.
Below are benefits that companies commonly offer their workers and a few issues to consider.
Typical full-time employee benefits
Health insurance: Many companies, especially large ones, offer health insurance. You might have a choice in plans, and typically you’ll cover some of the costs yourself. Your employer may also cover a spouse or domestic partner and children on the plan. Some companies activate health insurance on the first day of work, while for others you must wait a specified period of time before the coverage kicks in.
Dental insurance: What does dental insurance cover? It may cover routine cleanings and X-rays plus dental care, including cavities, root canals and periodontal (gum) work. Some plans also provide coverage for orthodontics, including braces. If your employer doesn’t offer dental insurance as a company benefit, individual dental plans are available to people of all ages.
Vision insurance: This insurance pays for eye exams and sometimes allocates an amount toward glasses or contact lenses each year. Disability insurance: If you’re unable to work due to injury, disability insurance pays you a percentage of your salary for a period. Employees sometimes have the option of increasing the percentage or the length of payment and covering that additional cost themselves.
Life insurance: With this benefit, the company covers an amount, such as one or two times your salary, to be paid to your beneficiary if you die while employed at the company. You can pay for additional insurance under this policy, though the policy ends when you leave the company. For that reason, it’s recommended to get a freestanding life insurance policy that's not tied to your employer. You can also shop for better rates than what the company policy might offer.
Retirement plan: Though retirement may seem a long way off when you’re just starting to work, contributing to a retirement plan consistently and at an early age means you’re more likely to meet your financial goals and retire in comfort. Companies often contribute to retirement plans. If the company matches some of your savings, that’s like getting a bonus or raise.
Don't panic if your employer doesn't offer a plan. There are plenty of ways to prepare for retirement without a corporate retirement plan or company match.
Volunteer benefits plan: Some companies support their employees with a volunteer benefits plan. That might mean allowing employees to volunteer at a school, food bank or other project during work hours without needing to take time off. The company might also have a charity matching program, where it matches funds donated by the employee to a qualified charity.
Time off: During your interview or at the orientation, ask for details about the company's various policies for taking time off. Find out if sick days are paid or unpaid and how paid leave is earned, if it's available. Ask about any separate vacation policies and if there are time limits imposed on when you need to use your accrued days. It’s important to use that vacation time every year, as it’s a chance to enjoy well-deserved time off after your hard work and to recharge.
Lastly, inquire about maternity or paternity leave, and find out about how the employer handles emergency or family-related days off. For example, will you need to use a sick day, or does the company have a separate policy for employees who need to attend funerals?
Use company benefits to prepare for the future
Starting a new job, especially a first job, is a great time to learn about financial planning and to start saving for your future. Creating a savings plan, whether for retirement or for other investing, is easily done through direct deposits.
You can have money from your paycheck invested each month into accounts you establish, whether through a company-sponsored retirement plan or a mutual fund elsewhere, and it happens automatically. By taking advantage of the work benefits your company provides, you'll put yourself in a great position to meet your financial goals.