What Employee Benefits Should I Take?

Oct 18 / Jay Zigmont, PhD, MBA, CFP®

New jobs come with all sorts of perks that you can opt into (and pay for, in many cases – but your employer often subsidizes a large part of the cost). For benefits like insurance, you can generally sign up when you start your job, and your coverage will begin after a waiting period, sometimes of 30 to 60 days, or on the first day of the following month after you're hired. Here's a closer look at some of the benefits you can expect to be offered as a new employee, and whether they're worth paying for.

All Kinds of Insurance

Your employer will typically offer at least a few different kinds of insurance coverage. Health insurance is a common offering – the Kaiser Family Foundation found in 2021 that employer-sponsored health insurance covered 155 million non-elderly Americans. This is likely your least expensive option for this coverage, so it's a good idea to opt in. You might get the choice between less expensive plans that don't cover as much, or have a higher deductible, or a plan that costs you more but offers better coverage at a lower price point for when you use it (a co-pay plan versus a high deductible plan, for example). The expensive plan is likely a better bet – we suggest that you ask yourself if you're lucky. If you hesitate when you answer, opt for the costlier plan to give yourself more peace of mind.

In addition to health insurance, you might be offered a few other types. If your employer has a lower-cost disability insurance plan, this is worth signing up for, as it'll help you cover the bills if you're injured and can't work. Group life insurance is another common benefit, but if you're Childfree, you likely don't need it anyway – if it's very inexpensive, take the coverage and make your spouse the beneficiary, if you have one. Dental insurance is also worth it, even if it doesn't cover much beyond preventive teeth cleanings and a percentage of your costs for fillings and other dental work. Vision insurance coverage isn't necessary if you don't wear glasses or contacts, but if you do, it'll save you money.

Accidental death and dismemberment insurance (AD&D) or other specific insurance policies like it could be a waste of money, even if they only cost a few dollars per month. Those costs can add up. Pet insurance could be worth it if you have a young pet and can get coverage for not very much money per month. If your pet is older or in poor health, you either won't qualify or it will be very expensive. And pet insurance likely won't cover as much as you hope, either.

Other Benefits

In addition to different types of insurance, you might also be offered other benefits. A retirement plan, such as a 401(k), is a big one. If your employer will match a portion of your contributions, say 3%, absolutely sign up for this and add enough money to get the match – free money! Note that you may have to work for that company for a period of time (often a few years) before you'll be fully vested in the plan (meaning, you have access to all the funds in it).

You might be offered a flexible spending account (FSA), where you can set aside money for health expenses. You'll have to spend it down every year, however, so these can be risky. A health savings account (HSA), on the other hand, serves the same purpose, but the money can be carried forward year after year, and can even be invested to become a back-up retirement plan. Your health insurance plan will have to meet certain qualifications for you to be eligible for an HSA, however.

You might be privy to all kinds of discounts, such as on cell phone service, restaurants, and more. Some employers offer an EAP (employee assistance program), which could give you access to mental health and financial benefits. Your employer might also have a host of parental benefits that you won't be able to use as a Childfree person, like leave and other perks.

You'll need to remember to update your benefits as your life changes, such as getting married or divorced. And if you have questions about which benefits you should sign on for (or skip), reach out to your CERTIFIED FINANCIAL PLANNER™ for help.
Jay Zigmont, PhD, MBA, CFP® is the Founder of Childfree Wealth, a life and financial planning firm dedicated to helping Childfree and Permanently Childless people. Dr. Jay is a CERTIFIED FINANCIAL PLANNER™, Childfree Wealth Specialist, and author of the book “Portraits of Childfree Wealth.” Dr. Jay is the co-host of Childfree Wealth Podcast. His Ph.D. is in Adult Learning from the University of Connecticut.

He has been featured in Fortune, Forbes, MarketWatch, Wall Street Journal, New York Times, Business Insider, CNBC, and many other publications.