If you don't have a job offer and are hunting for a job, this question may rightly make you feel uncomfortable. But it is a perfectly fair question, once you've been offered a job. Moreover, it is your right to know.
Once a value is put on to the benefits, they could be worth a few thousand dollars, you will know in dollar terms, what your total compensation package is worth.
Which are two of the benefits, generally offered to new college grads? They are health insurance and retirement plans.
Your Health Plan Will Make A Difference - Don't Overlook It
You were so keen on health insurance that would accompany your job, that when you got the offer, after months of desperate searching, you just did not bother to look into the intricacies of the health plan. You were happy to have one and that is all that mattered.
Beware; you could pay a heavy price.
Let me elaborate. Presume that you have two job offers. Job A pays $30,000 plus health benefits, while Job B comes in at $32,000 plus health benefits.
Which job would you opt for? That's easy? Not necessarily. Suppose the employer of the first job covers 100 percent of your monthly health premium and your share, towards the insurance plan's annual deductible, is $500.
Coming to the employer of Job B, he covers 80 percent of monthly health insurance premium, with the remaining 20 percent, at $200 per month deducted at the end of each month from your salary. The annual deductible comes to $1000. Recollect, that in the Job A scheme the annual deductible was $500.
Sounds very complicated and knotty, lets simplify things with a little arithmetic.
In the first job, with a $30,000 salary and no annual cost for health insurance, your net salary is $30,000, whereas in your second job with a $32,000 salary and your annual cost for health insurance at $2,400 ($200/month times 12 months), your net salary is $29,600 ($32,000 minus $2,400). Moreover, this could get further depleted if you have to spend $500 on doctor's visit the first year and worse, if some ailment requires more trips, it will impact your salary negatively even more.
Of course, you are young and fit and health conscious as most teenagers in your age group are and these figures may not mean much to you now because your medical expenses are virtually zero. But talk to someone who has been struck by sickness and you will realize how quickly your medical bills can swallow a major portion of your salary.
Don't Think What It Is Now, Think, What It Will Become
Retirement plans are also very important and the discerning employee will look into them very carefully. After all you are peeping into an unknown future and with a few decades between then and now, the vision may not be very clear - but that does not make it less important.
Just as in health plans, here to you can be confronted with similar contradicting scenarios that make it difficult to choose between them. The two commonly offered retirement plans are the 401k and 403b.
What's makes them dissimilar? A simple straightforward explanation is that a 401k lets you invest in any publicly traded securities, mutual funds and options. The 403b limits you to annuity contracts, mutual funds and money-market funds.
Let's get back to our two hypothetical jobs, Job A and its $30,000 salary and Job B with its $32,000 salary. Job A offers a 401k plan that lets you contribute up to $2,500 a year toward retirement and as per rules the company will match your contributions starting on day one. The second job offers a 403b plan that allows you to put in up to $1,000 a year toward retirement. Here the organization will match 50 percent after a year.
Supposing you put the maximum amount of money possible into your retirement plan the first year:
In the first scenario, on a $30,000 salary, if you set aside $2,500 for retirement, plus a $2,500 employer match, your net salary would be $32,500. In the second scenario, on a $32,000 salary, if you set aside nothing for retirement, your net salary would be $32,000.
In figures, in front you, the question becomes a no-brainer, decision making becomes simple. Hence, it is always advisable to ask for precise and detailed figures for health insurance, retirement plans and other benefits when evaluating an offer.
Most employers, will not hesitate to provide the details, they see it as a sales tool for trumpeting the worth of your compensation package. But what if the employer does not part with the information? Well, he's hiding something for you, and we don't really want to work for such an employer, do we?
