Can you imagine turning down a pay raise without realizing it? That is essentially what happens when employees do not take advantage of their employer benefits. From retirement matching to wellness programs, billions of dollars in employee benefits go untouched every year, simply because people don’t know what is available or how to take advantage of their benefits.

According to a study done by the Plan Sponsor Council of America, 25% of employee respondents reported that they feel “a little” or “not at all” informed on their employee benefits. This same study found that 73% of employee respondents want more education on their company’s benefits. This lack of knowledge around employer benefits is costing Americans large sums of money and they have no idea.

Feeling uninformed about your employee benefits? We’ve put together practical tips for intentionally using them to help build financial security—and avoid leaving money on the table.

The Basics

The first step to understanding your employer-sponsored benefits would be to review your basic benefits package. Some of the most common benefits many employers offer include insurance, retirement plans and 401(k) matching.

Insurance

Employers typically offer several kinds of insurance for their employees, including health, dental, vision, disability and life to name a few. With various coverage options, it can help lift a massive financial burden off your shoulders.

While many individuals already understand the importance of having these insurance options, some may overlook the importance of disability or life insurance offered through their employer.

The first type of insurance that employees tend to not participate in is disability insurance. Disability insurance essentially replaces a portion of your income if you are unable to work due to an illness or injury.

According to the Social Security Administration, 1 in 4 workers in their 20s may experience a disability before reaching retirement age. As a result, disability insurance can be an important part of your financial protection strategy. If your employer offers disability insurance, it is worth understanding the coverage available to you and the level of protection and benefits it will provide. In some cases, employees may discover limitations in coverage only after filing a claim. These limitations may include a reduced percentage of income replacement, the cessation of retirement plan contributions, potential changes to health insurance coverage, and limited flexibility regarding return-to-work options. Before enrolling in your employer’s disability insurance, take the time to review the plan’s provisions, exclusions, benefit amounts and duration of coverage to ensure you understand what would happen if a disability event were to occur.

The other insurance typically offered by employers that is not always utilized is life insurance. Life insurance can be simply defined as a financial product that will pay a lump sum to your designated beneficiaries if you pass away to help replace income and cover expenses. Many employers offer the option for their employees to participate in the company’s group life insurance policies. These policies can offer many advantages particularly for those that do not yet have individual coverage. These advantages include a lower cost for employees, ease of qualification, lower rates and payments through a simple payroll deduction. However, similar to employer-sponsored disability insurance, life insurance also has limitations. It is important to fully understand these limitations and the impact they can have on your personal financial situation.

Retirement Plans and Employer Matching

Most employers offer their employees the opportunity to participate in the company’s retirement plan. These plans enable employees to save for retirement while at the same time offering tax advantages and employer matches. The most common type of retirement plan offered is the 401(k) plan. This is a defined contribution plan where the employee contributes, and the employer often matches a portion.

How employer matching works is you contribute a percentage of your paycheck to your 401(k) plan, then your employer will either match that percentage or contribute up to a certain percentage. If the employee does not contribute to their company’s 401(k), they may not receive a matching contribution from the employer. This is where many employees leave money on the table.

Due to personal circumstances, some may rather have access to their entire paycheck instead of contributing to a 401(k). However, even contributing a small amount to maximize your employer match can significantly increase your retirement savings over time. When you decide not to contribute to your employer-sponsored retirement plan you are losing out on additional income from your employer.

Other Employer Benefits

Employers often offer additional benefits outside of the basic benefits mentioned above. These additional benefits differ between employers, but some of the common additional benefits seen today include remote work options, wellness stipends, student loan repayment, child/elder care assistance and paid time off (PTO). When employees do not look into the benefits provided by their company they are missing out on not only benefits that could improve their personal balance sheet but also benefits that could make day-to-day life easier. Taking advantage of these benefits can ease not only an employee’s financial burden, but their emotional burden as well.

How to Take Action

1. Review your benefits annually during open enrollment
2. Understand both advantages and limitations of each offering
3. Ensure you’re maximizing your employer contributions, especially matching contributions
4. Align your selection with your personal financial goals and needs

Many employers offer a wide range of benefits that employees may not fully utilize or even realize are available. Taking the time to review your benefits package and staying informed about annual updates or changes can help you better understand both the opportunities and limitations of your employer-sponsored benefits. By fully understanding and leveraging these benefits, you can make more informed decisions, maximize the resource available to support your financial well-being, and create a life you want to live.

At Busey Wealth Management, we’re here to help you create a financial roadmap to success. To learn more about our expert guidance and tailored solutions, visit busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.