Invest in Your Career: How to Maximize Your Benefits

If you’re struggling to understand your employee benefits, you’re not alone. As your career evolves, it can become increasingly complex to navigate and optimize the extra benefits that are available to you beyond just your base salary. Modearn™ Advisors Mike Rudow and Beau Wirick discuss what you should know when it comes to 401(k) plans, Health Savings Accounts (HSAs), equity compensation, and life and disability insurance to help ensure you are getting the most out of your career benefits.Here are some key takeaways from their conversation:•   401(k) Plans: Traditional 401(k)s offer tax benefits now but are taxed upon withdrawal, whereas Roth 401(k)s are taxed upfront but grow tax-free. •   Therefore, traditional 401(k)s are beneficial for those in higher tax brackets currently, while Roth 401(k)s are advantageous for individuals who are younger in age or expect to be in a higher tax bracket in retirement.•   Traditional 401(k)s can impose a tax burden on beneficiaries as they must withdraw the entire balance within 10 years, potentially incurring taxes.•   Equity Compensation: Restricted stock units (RSUs) are a form of equity compensation where employees receive company stock as part of their salary, usually with a vesting schedule. Non-qualified stock options (NQSOs) give employees the right to buy company stock at a predetermined price, also according to a vesting schedule.•   Health Savings Accounts (HSAs) offer triple tax benefits: tax deduction on contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.•   Life and disability insurance have different tax implications based on if the employer or employee pays the premiums. Furthermore, employer-provided group policies may not be portable, leaving the employee without coverage if they leave the company. Private individual policies can be kept regardless of employment status.*Keep watching towards the end to catch our “This or That” segment where Beau and Mike ask these rapid fire questions to each other:* • Roth or traditional 401K?• High deductible health plan with an HSA or low deductible health plan without HSA?• Have your employer take care of your benefits or take care of it yourself?• Keep up with the Joneses or find new friends?