Too often when reviewing a job offer, we focus just on the salary or the number of vacation days. However, it’s important to evaluate the entire offer package and consider what benefits a prospective employer is offering not just yearly but also over time.
Specifically, an employer’s retirement benefits can add more value to a job offer than you think – if you ask the right questions and take advantage of their offerings.
However, many employees don’t make the most of this opportunity. For example, recent report by Pew Charitable Trusts found that only 49 percent of employees sign up for their retirement plan when eligible.
To help you discover what prospective employers have to offer here are 4 questions to ask when evaluating a job offer:
- Are employees offered retirement savings vehicles? The first question to ask is what types of retirement plans the company offers to employees and how long you need to wait to have access to them. Employers commonly offer 401(k)s, but there may be other plans available to you.
- Does the company match contributions? An employer may offer to match a percentage or all of your contributions to a retirement account. Some employers may even contribute to your retirement account each year whether you save or not. Any match your employer is willing to make could be considered “free money.”
- What is the vesting period? Often matching retirement contributions are not fully vested until you’ve worked at the company a set amount of time. This is something to consider if you’re not planning on staying with the company long or if you’re preparing for retirement in the near-term.
- Ask yourself, are the retirement offerings sufficient for my retirement goals? An employer sponsored 401(k) may not be enough savings to last you through retirement and will likely need to be supplemented by another product. It’s important to manage and keep your savings strategies current and mitigate risks with a balanced portfolio. One option to consider is a Fixed Indexed Annuity (FIA), which can help diversify your portfolio and protect your principal from market volatility while generating guaranteed income.
Lastly, don’t forget about previous retirement accounts and consider if you need to transfer any savings from retirement plans with your last employer.