Most people ask one big question when evaluating a job offer: What’s the salary? While that single number tends to get all the attention, it only tells part of the story. According to the Bureau of Labor Statistics, benefits account for nearly 30% of private-sector employers’ total compensation costs on average. Yet, as a financial professional, I regularly see clients overlook that value, either by underusing their current benefits or comparing job offers based on salary alone.An extra $10,000 in salary would get your attention. The same amount in benefits should, too. Here’s how to evaluate your full compensation package, whether you’re reviewing a new offer or making sure you’re getting the most from your current benefits.1. Calculate the value of your health benefitsHealth insurance can be one of the most valuable parts of a compensation package: After all, according to the KFF Employer Health Benefits Survey, insuring a family in the U.S. now costs nearly $27,000 a year.About Adviser IntelThe author of this article is a participant in Kiplinger’s Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.But the complexities inherent in the U.S. healthcare system can make putting a number on it challenging. To evaluate your benefits, compare the health plans available to you based on the employer contribution, premium, deductible, out-of-pocket maximum and provider network. A plan that saves you $100 a month in premiums, for example, could still cost more overall if its deductible is $2,000 higher and you expect to use enough care to reach it.Also review preventive care options, fitness incentives and wellness programs that could add value.2. Capture the full value of your 401(k)While the employer match for a 401(k) is maybe the most obvious form of noncash compensation, many fail to maximize its value.In my practice, annual employer retirement contributions have ranged from about $3,000 to $30,000 — a difference that can become enormous over a career. Contribute enough to receive the full match, consider automatic annual increases and check for nonelective or profit-sharing contributions. 3. Understand what equity compensation is really worthEquity compensation, such as stock options and company shares, can create a significant wealth-building opportunity. That doesn’t mean you should take the number listed in the offer letter at face value. Review when the award vests, when taxes may be due and whether you could lose unvested shares or face a deadline to exercise options if you leave the company.4. Put a dollar value on paid time offMost people know to ask how many vacation days they will receive. Far fewer calculate what those days are worth. For an employee earning $100,000, 15 days of paid time off represents almost $6,000 worth of paid time (based on roughly 260 working days per year).Consider paid holidays, sick leave, parental leave and caregiving leave, as well as what happens to unused time: Does it carry over into the next year?Is there a cap on how much you can accumulate?Will accrued time be paid out if you leave?5. Review employer-paid life and disability income insuranceLife and disability income insurance are easy to overlook because you might not use them for years, if ever.For disability income insurance, review the percentage of income replaced, the waiting period before benefits begin and how long payments can continue. For life insurance, determine whether the employer-provided benefit would be enough for your family’s needs or whether you’ll need additional coverage.6. Remember commuter and other tax-advantaged benefitsSome benefits look small but still add up. Commuter benefits, for example, may allow employees to pay eligible transit or parking expenses with pretax dollars. That is particularly valuable for workers in bustling cities like New York.Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.Other benefits may include flexible spending accounts (FSAs), health savings accounts (HSAs), tuition reimbursement, student loan assistance and professional development funds. Crucially, the value of these benefits depends in large part on whether you’ll actually use them. A tuition benefit may be worth thousands to one employee and very little to another. Look at the complete pictureAt the end of the day, this is a simple math exercise.Add up the salary, health benefits, employer retirement contributions, equity compensation, paid leave, insurance and other benefits each position offers. Then consider what those benefits could be worth across the five or more years you might remain with the employer. A bigger salary is appealing, but there is far more to building a financially secure life than what lands in your checking account every two weeks. A lower-paying job could ultimately provide greater total compensation — if you know how to value its benefits correctly.While this discussion summarizes, for your convenience, certain information about employee benefit plans, it is not an official explanation or discussion of these programs, and any information provided directly by your employer will prevail. Related ContentDon’t Let Your Equity Compensation Trip You Up: A Financial Expert’s GuideWhy Company Stock May Be Riskier Than Employees RealizeHave Equity Compensation? Strategies to Handle Stock Market VolatilityWorried About an AI Bubble? 5 Ways to Ensure Your Portfolio is Prepared — Whether It Bursts or Not2 Awkward Talks to Have With Your Kids Before They’re 18 (Not ‘That’ One)This article has been written by an outside source and is provided as a courtesy by Stephen B. Dunbar III, JD, CLU (AR Insurance Lic. #15714673), Executive Vice President of the Georgia Alabama Gulf Coast Branch of Equitable Advisors LLC. This information does not constitute an offer, solicitation, or recommendation and should not be relied upon as employee benefit or financial advice or a recommendation of any particular courses of action. Equitable Advisors LLC and its affiliates do not make any representations as to the accuracy, completeness or appropriateness of any part of any content hyperlinked to from this article. Your unique needs, goals and circumstances require the individualized attention of your own financial advisors and financial professionals. Stephen B. Dunbar III offers securities through Equitable Advisors LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN), offers investment advisory products and services through Equitable Advisors LLC, an SEC-registered investment adviser, and offers annuity and insurance products through Equitable Network LLC (Equitable Network Insurance Agency of California LLC). Financial professionals may transact business and/or respond to inquiries only in state(s) in which they are properly qualified. AGE-9078992.1(08/26)(exp.08/30)This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
