Understanding Your Employee Benefits Package

Cody Niedermeier: [00:00:00] Hello everyone. And welcome to our webinar series here at BFG financial advisors. My name is Cody Niedermeier and I am the host of said webinars near, uh, webinars series. Uh, today we’re going to be discussing, understanding your employee benefits package. And, you know, we timed this up to be at this portion of the year, because this is where a lot of companies have their open enrollment. Um, so we thought it would be perfect to discuss. Um, at BFG, we keep track of, you know, when all of our clients’ employee benefit, um, opportunities are open to them. Uh, cause it’s really something to take advantage of and have a full understanding of, um, just to help you reach your goals.

Cody Niedermeier: And we are lucky enough to have Lena Nebel. One of the principals back who I think has joined us the last three webinars, and I think it’s going to be the last one she joins this year. So, uh, she’s gracing us with her presence again. Uh, Lena welcome back.[00:01:00]

Lena Nebel: Hi, Cody. It’s good to be here again. This is actually one of my favorite topics, because I know it impacts a lot of people, regardless if they’re full-time or part-time and every stage of their career.

Lena Nebel: So I’m happy that we can, uh, end my, my webinars series with you on, on this. Yeah,

Cody Niedermeier: this is a, this is our parting gift to you. So this is a big, thank you for all the times you’ve been able to jump on with us and just as a reminder to those tuning in for the first time or tuning in again, uh, all of our previous webinars are actually recorded.

Cody Niedermeier: So you’re going to be able to watch them, you know, whenever you see fit and they get uploaded to YouTube and you can find, uh, all access to them through our website bfgfa.com. Um, but without further ado, uh, I think we, we jump into this Lena and start with our fun disclosure side that, uh, everyone enjoys so thoroughly, but, uh, I think we really get started with, uh, kind of an overview of everything that gets incorporated in benefit options.

Cody Niedermeier: And I love this slide, [00:02:00] uh, that you actually were able to put together. And if you don’t mind, it’s a, it’s a good entrance.

Lena Nebel: Sure. Sure. So, um, it’s interesting. We have been, uh, revisiting with our company, some of our benefits and everything. So I just ended up Googling, you know, top 10 benefits offered by employers, and it’s amazing to see the types of benefits that are out there these days compared to just a few years ago.

Lena Nebel: So, um, what we did is. Basically lumped, the more popular ones into really three categories. There’s your career benefits, there’s personal. And then of course there’s financial, which is where we’re going to probably spend the majority of the time because that’s where people tend to focus on. Their employer benefits, um, really is on the, on the financial side.

Lena Nebel: So this, like I said, it’s just, um, kind of, uh, a hit list of some of the more popular ones, but there’s just a ton of different benefits that are out there these days, um, with, with various companies.

Cody Niedermeier: I mean, I just know, based [00:03:00] on our relationships with our clients and, you know, personal experience first, you know, getting into the, the first job is people get overwhelmed with this.

Cody Niedermeier: You know, you get a big benefit packet and it’s got all this information in it. And you know, a lot of people don’t take the time to read through it, but you know, it’s extremely important to know the resources that you have out there to you. So I think we start at the top of the triangle and jump into, you know, the career benefits.

Cody Niedermeier: Yeah,

Lena Nebel: absolutely. So the, the career benefits are anything that can further your career with the help of your current employer. And, uh, it’s interesting just yesterday, actually I saw this commercial for Amazon, um, where an individual is using, um, Amazon, Amazon. Tuition reimbursement plan to go into nursing.

Lena Nebel: So it’s not that Amazon has nurses, but this is a career that this individual wanted to pursue. So a lot of the times some of the educational assistance programs are designed to benefit your current field that you’re in. But there are employers that will. [00:04:00] Um, uh, provide some type of reimbursement, even in a completely different field.

Lena Nebel: Um, so some of the more popular ones, just again, in house training programs, which are, you know, mentorships or a path to partnership at some level, um, as an example, you know, internally we have a growth plan for many of our employees that outlines the steps they need to take to get to their level and, and their career path.

Lena Nebel: So when somebody. Interviewing they want to know, well, what are my next steps? How can you get me from a to B? Um, versus just kind of being stuck in, in that, um, Um, professional registrations, you know, that allows you to highlight your knowledge, understanding and competence in a particular area. Um, and with designation, you know, usually there’s a fee for that designation that needs to be covered.

Lena Nebel: Uh, we have in our office, we have many advisors who have the certified financial planner designation. Um, we’ll soon have another one in November and there’s an annual fee that’s required [00:05:00] every year to maintain that designation. Our company pays. And so for a lot of individuals, if they’re pursuing different designations or licenses, it’s important to understand that the employer going to pay that, or is the employee going to be responsible for that?

Lena Nebel: Because that can cost money, um, for the employee. They have to do that, uh, memberships to professional organizations and societies. Uh, so things related to your industry, uh, you know, if there are certain organizations, um, in, you know, the, the medical community, the financial community, the, the legal community, um, the employer will pay for it.

Lena Nebel: Memberships to, again, further your knowledge. Sometimes it’s a lot of business development is why people want to get into some of those organizations. Um, but again, that can be very pricey depending on the organizations that you’re involved in. Um, so this is, uh, this can be a great benefit that your employer can offer.

Lena Nebel: Um, and then obviously the, the, um, more popular one, um, would be [00:06:00] educational assistance programs. So part of this could be what I had just mentioned, tuition, reimbursement. Um, so very common for individuals looking to get a master’s or a PhD, or again, further designations. Um, this wouldn’t be relating to paying off student loans.

Lena Nebel: You know, we can discuss later because there’s been a lot of changes in that area over the past year. Um, but it’s about, uh, paying for classes that are more than likely related to the field that that individual is in. Um, there can also be assistance for continuing education. Uh, two continuing education classes.

Lena Nebel: So as an example, in the financial industry, um, we have a lot of CE, a lot of continuing education needed for securities insurance, our designation. So if the employer is willing to pay for all of those good for all those courses to keep you in good standing. And that’s great. Again, these are all different types of benefits that a lot of people really don’t focus on when, uh, [00:07:00] interviewing.

Lena Nebel: For a job. And I would say the career benefits are really focused on when somebody is first starting out in their career, kind of the, you know, graduated from college and wanting to look at what all of these options are. I think for individuals who are already established in their field, Um, really where they’re going to be focused on is probably the professional registration.

Lena Nebel: And then of course, you know, membership to professional organizations and societies. Um, but the, the career benefits I would say is kind of the individuals who are, are first starting out. Th these are pretty big to look at. Um, and so as you said, you know, things can be a little overwhelming. When you get all that information, but it’s important to take the time and really going through that and understanding what your new employer can offer you to get you to where you want to be in your career.

Cody Niedermeier: Yeah. And like you said, I think for individuals just starting off in a career, this is, you know, you’re at the end of the interview and they asked, do you have any questions for us? I think this is a great route to go, [00:08:00] just to stimulate that conversation rather than saying, Nope, I’m good. And then you’re out, you’re out the door versus, you know, what tools can you provide me to help me grow, uh, in order to achieve my dreams.

Cody Niedermeier: I think that goes a long way. And, uh, when you’re actually doing those interviews or giving the interview of saying, oh, this person’s really inclined and, you know, tuned in ready to go. Absolutely. And from there, we, uh, we got done at the top of the triangle and we start to work our way down into, uh, the more personal benefits and different things like wellness programs and, uh, PTO or paid time off.

Cody Niedermeier: If you wouldn’t mind diving into this little.

Lena Nebel: Sure. Um, so this, I think is one area that a lot of people overlook. Um, there are so many different ad hoc programs that the employer offers that people just don’t take advantage of. Um, years ago when, um, my husband and I were having a family, his employer offered a ton of benefits related to.

Lena Nebel: The [00:09:00] pregnancy process, whether it was counseling, um, whether it was somebody I could just call to ask, you know, is this normal? How do you do this? How do you do that? Um, it was great to be able to have those resources. Um, there’s a lot of different wellness programs that have discounts towards fitness centers, weight, loss, education, um, quitting smoking, uh, again, personal story.

Lena Nebel: My, my husband gets reimbursed if he needs to buy. For working out. So there’s a certain amount of credit he gets towards athletic equipment. Um, which is interesting, but, and you would never know that there could be other types of benefits that are not covered under wellness. But maybe discounts for vet insurance or adoption benefits, um, legal services or counseling.

Lena Nebel: Um, I know we have a program, um, at work to where we get a credit within our health savings account based upon how many. Um, steps we take, so we have a tracker that’s part of that, which you have, and there’s a leaderboard [00:10:00] that’s on that. I’d never see you on that. Leaderboard. have to have to work on that.

Lena Nebel: Right. But there’s, um, there’s credits towards gym memberships and things like that. And there’s a lot of, uh, a lot of different types of personal benefits that they’re usually in the back of the booklet that you have to go through just to kind of see, okay. What’s some of that free stuff that’s out there that your employer is offering.

Lena Nebel: You definitely want to take advantage of, of those wellness programs. Um, pay time off, paid time off has become a bigger topic of conversation. I would say since, you know, COVID showed up about 18 months ago. Um, more and more companies, including ours went to unlimited, paid time off. Um, we call it responsible time off, um, so that, you know, the employer stops tracking everyone’s time off really just treating everyone almost as an adult and being responsible for their scheduling and making sure you’re still getting your work done.

Lena Nebel: Um, a lot of people can do it remotely now or possibly not during business [00:11:00] hours, but yeah. A great benefit because it allows individuals. If they’re parents and they have a sick kid or they want to go see a soccer game or, um, their house is getting a repair. And, um, the contractor’s going to be there between the hours of 11 and three.

Lena Nebel: Uh, you know, you don’t want to have to sacrifice vacation hours or vacation days for things like that. So this is. That a lot of employers have started to offer, um, personal benefits. It’s basically a, um, work-life balance is how you can look at it. So for some individuals, they may be applying for a job and it may be, uh, a lower salary than the one that they’re in right now.

Lena Nebel: But their current employer may be offering two weeks where their new employer could be offering four weeks or unlimited PTO. You have to factor that in when looking at total compensation. So a lot of employers put together the total compensation summary for you. To show you what all of those benefits are and how they do factor into that total compensation.

Lena Nebel: I think you’re going to be seeing more and more about, um, [00:12:00] pay time. You know, especially more in the, in the upcoming years, just with everything, uh, you know, kind of how our, our work life is changing, being remote. Um, but other, other items of pay time off is, you know, you you’d be able obviously to have, you know, jury duty, military leave.

Lena Nebel: Um, we had volunteer day to where if you wanted to go help out for, let’s say habitat for humanity for a day, that was your volunteer day and employers have those types of things. So it’s important to understand, okay, what are, what are the times off that. That you have now I would say I would caution you don’t necessarily ask that question on the first interview.

Lena Nebel: You know, how much time do I get off that can be a turnoff for some employers, but it is an important question to ask, hopefully in the second interview.

Cody Niedermeier: No, absolutely. And I’m already seeing, we’re getting a few questions from some people from the audience, keep those coming in. We’re going to have a Q and a at the end of this, where our marketing director, Sarah is going to come on and.

Cody Niedermeier: You know, as Selena and I have these questions, so please keep those. [00:13:00] And, uh, this leads us into the base of the triangle or where we think there’s a lot of meat to this conversation of open enrollment, um, and employee benefits. Uh, so starting with financial benefits and, you know, the idea of retirement plans, you know, some people have a 401k, some people have a 4 0 3 B some people think I’m just making up numbers and saying it on camera right now.

Cody Niedermeier: But, uh, if we could dive in a little bit to these, I think it would be helpful for our.

Lena Nebel: Sure. I think this is where, um, you know, you and Jackie who’s, um, another advisor in our office where you guys spend a lot of your time, especially with the children of clients who are entering into to their career or their first job and trying to find out, okay, what do I contribute into this retirement plan?

Lena Nebel: What is a 401k? What is a forestry B what does a match mean? What’s a vesting schedule. So there’s a lot of education that, um, Provide for, uh, you know, individuals just starting into their career and [00:14:00] everything, but even people who have been working for 20 and 30 years, it’s important to understand what the financial benefits are and your retirement plans in particular.

Lena Nebel: Um, this, I would say is the one area that people gravitate the most towards when looking at their individual benefits. Um, so the, the key difference between a 401k and a forestry B is the forestry B is for tax exempt organizations. Churches and school systems and local governments, federal governments.

Lena Nebel: Um, so you may typically hear a TSP, which is a thrift savings plan, which is part of the federal government. Um, but if we just kind of summarize them as employer sponsored retirement plans, that’s kind of the umbrella for whether it’s a Tia crest, a TSP, a 401k, a forestry, be a deferred comp. There’s all this type of, uh, lingo that’s out there.

Lena Nebel: But like you said, the most common ones are 401k and four, three bids. So these retirement plans, um, are accounts where you can contribute each pay [00:15:00] period into some type of investment vehicle. Um, You usually have a consultant that can walk you through how to invest, or if you have any advisors, they’re going to walk you through how to invest.

Lena Nebel: But each payroll you’re going to have some money. That’s going to go directly into these retirement plans. Um, if you’re lucky enough, you may have either matching or you could have a profit sharing contribution. So a matching is where an employer is giving you money into your 401k based upon what you’re putting into the forum.

Lena Nebel: So we call that free money. So as long as you’re making some type of contribution, your employer may make that contribution. It just depends if they have that match set up, um, there could be a profit sharing contribution where regardless if you’re contributing or not, They’re putting money into the 401k, um, because of the profit sharing contribution.

Lena Nebel: So, um, for a lot of employers, a profit sharing contribution could be more than what the match is, or it’s actually more for the employees [00:16:00] because the employees aren’t required to make that contribution. So that’s kind of an added benefit, especially for people who may have, um, tight cashflow. And then they’re getting a down, like I say, some free money that’s going directly in there.

Lena Nebel: Um, so another form of a match could be student loan matching. Um, so some employers will allow the employees to direct their match into their student loan to make a payment. So that’s been fairly new. Um, I’d say in the past one to two years that had come out to where the IRS has allowed employers to make matches on the student loan versus going directly.

Lena Nebel: Into the 401k. Um, and then another key term is a vesting schedule. So the vesting schedule is how long you have to stay with your employer to get their money. So let’s say it’s a three year vesting schedule. You have to be there for three years to get that full match or that full profit sharing contribution your money.

Lena Nebel: Always vested. So you can always take your money if [00:17:00] you leave your employer. But it’s important to understand those rules when it’s, when you decide that you were leaving your employer, what’s your vesting schedule. Are you leaving a month before you’re fully vested and then you’re leaving all of this on the table.

Lena Nebel: Um, that’s important to find out what that vesting schedule. On the investment option side. Um, we’ll actually, I’ll talk about the Ross piece, um, right now, um, because I’ve been talking about putting contributions into your retirement plan, they can either be what’s called pre-tax, which helps to reduce your overall taxable income, or they can be, uh, after tax.

Lena Nebel: Usually the Ross option, which there’s no tax benefit right now, but it allows that money to grow tax free for you down the road. So for a lot of younger individuals, it may make sense to do a Ross option. Also, it makes sense for older individuals too, because they may have too much in some tax buckets.

Lena Nebel: So when it comes time to retire and they’re drawing their [00:18:00] income, all of their income is going to be taxable. So it’s nice to have some tax diversity. In retirement. And I always stress to work with the financial advisor or tax professional to determine the best allocation between pre-tax and Ross. Um, I’d say the majority of companies now have the Roth option within the plan.

Lena Nebel: Um, we see it more, more now. Um, but a few years ago there were still a ton of employers who didn’t. I mean, the federal government just came out with a Roth TSP and that took quite some time, um, to get to that point. So, um, you want to look at both of those options. Where you want that money to go? Do you want it to go pre-tax or do you want it to go Ross?

Lena Nebel: And then once you make that decision, you then have to determine, well, how am I going to invest that money? So based upon your risk tolerance, your financial plan, what you’re comfortable with, um, that’s where you’re going to allocate, you know, particular, uh, funds within, within your 401k. For some [00:19:00] employers, they have, you know, 20 different options for others.

Lena Nebel: They only have seven. So it’s important to make sure that you’re picking the right allocation. The allocation is going to determine, um, the majority of your purchases. In that account. Um, it’s also important to understand you’re not touching this money for quite some time. So a lot of people can stomach the risk if they have a long time period ahead of them.

Lena Nebel: And it’s not going to balloon overnight, it takes time. But consistency and, um, uh, just staying with your contributions and monitoring that allocation and rebalancing it over time. That’s when you’ll start to see the growth within that, you can either work with the advisor that’s part of your retirement plan, or you can, um, work with, if you have your own advisor, they can be able to provide an allocation based upon all the other assets that they may be managing in conjunction with, uh, with the retirement.

Cody Niedermeier: Yeah. And then, uh, actually think of a question that was addressed by [00:20:00] one of, uh, the listeners that came up is perfect for right now. So if you don’t mind, just the idea of, okay. You say let’s make a contribution to the 401k and get that free money. What if you’re making the contribution to the Roth? Does that, do they make the contribution of the Roth or do they.

Cody Niedermeier: They’re matching contribution. That goes to the traditional account.

Lena Nebel: Great question. Um, so you still get the free money, but it’s not going into the Roth side is going into the pretax side. So you’ll still get the match regardless of where you’re contributing the money, but the match will always go onto the pre-tax portion.

Lena Nebel: And then when it comes time for you to leave your employer, and let’s say you want to roll that retirement account to your management. A variety of reasons. Um, the trustee of the plan will basically send two checks to be deposited into your retirement account. One will be the Roth portion and then the other will be the pre tax portion that included if you had pre-tax contributions and included the match.

Lena Nebel: And as long as you deposit those checks within [00:21:00] 60 days, No tax event, um, that would be needed. And that can also be rolled into your new employer plan because the majority of employer plans allow for incoming rollovers. So sometimes when we’re going through somebody’s financial plan, if we see that they have.

Lena Nebel: Um, some frozen retirement plans out there that they’re not contributing to anymore from prior employers will determine, is it in their best interest to consolidate them all into the new plan because of other strategies we can leverage or is it beneficial for them to roll that out? Into, let’s say their own IRA, or even do some conversions into a Roth.

Lena Nebel: So there’s, as you know, Cody, there’s a ton of strategies that you can do within the retirement plans for people who are working and for people, um, who are no longer with that employer, um, you know, the. In service distribution rules that people are unaware of. When you get to be certain ages, when still working for the employer, they allow you to take that money out and control it.

Lena Nebel: And then [00:22:00] you can have all the investment options available to you. And there’s not a taxable issue. If you move that money directly into, let’s say an IRA account. So for many individuals, let’s say. You know, with the government, they have to TSP plan to have a handful of options. Um, when they’re 59 and a half, they can roll that into their own IRA.

Lena Nebel: They, they still can contribute to their TSC. They still can keep their match, but it allows them to really, um, control, have some more flexibility, have some more oversight on that asset. So there’s, um, there’s a lot of strategies. And so as you know, one of the things that, um, you know, we do, and quite honestly, a lot of advisors do is request the plan summary.

Lena Nebel: Let’s understand the rules of those retirement plans. That’s really where you’re going to get into the meat of vesting schedule, notching, loan options, distribution options, et cetera. Um, the other thing that’s important to, to talk about also regarding retirement plans is your beneficiary designate. [00:23:00] Who is going to inherit these assets, should something happen to you?

Lena Nebel: A lot of people forget to put the beneficiaries on here. You want to make sure you have that listed properly. Um, within your beneficiaries, they are not going to remind you of that. You forgot to list somebody and that could cause adverse consequences to your heirs. Um, so you list them when you’re setting up the place.

Lena Nebel: And then revisit it every year because you can get married, you can get divorced, you could have children, you may want to incorporate charity. So it’s important to revisit your beneficiaries at least once a year. I can’t tell you how many times we’ve reviewed beneficiaries and people are convinced that their spouse is that person.

Lena Nebel: Sometimes it’s the former spouse. Sometimes it’s nobody listed at all. So it’s important to look at, get confirmation of who that beneficiary.

Cody Niedermeier: Yeah, life happens. And you know, when those changes happen in life, there’s there’s adjustments that need to be made at kind of all aspects of your financial plan.

Cody Niedermeier: So I [00:24:00] think that was really important to, uh, to definitely touch on, especially at the end of the retirement accounts, but also when it comes to. You know, the insurance benefits, that’s a, that’s another type of financial benefit that are offered through employers. And there’s a, as everybody can see on the PowerPoint right now, you know, there’s, there’s a lot of different options and different ways that employers can offer different types of insurance to their employees.

Cody Niedermeier: Yeah,

Lena Nebel: absolutely. This could be a whole webinar of itself of the different types of insurance benefits. Um, depending on your stage in your career, this may be more important or less important than let’s say the 401k, you know, for, um, a family they may be more concerned about, well, what’s your health insurance coverage versus.

Lena Nebel: You know, what’s my match on the 401k. Somebody just starting out. They may say what’s the match on the 401k. So again, we keep emphasizing, revisiting all the benefits available to you. Um, health insurance, again, that’s obviously a very popular, we all know what health insurance [00:25:00] is. As far as coverage covering medical.

Lena Nebel: Dental vision. They can have various plans, um, with different deductibles, copays, prescription coverage, um, you know, something that’s becoming more common is offering an incentive. If an employee doesn’t take the insurance. So let’s say, um, my spouse is on my health insurance on his employer may give him a credit in his paycheck for not taking their insurance, which in the end would save that company some money.

Lena Nebel: Um, so that’s been popular over these past few years. Um, when comparing different health insurance plans, you don’t always want to look for the cheapest. You want to find something that works for you and, or your family based on the needs of your family, just like dental and vision insurance. So, um, when we had young kids, we didn’t really have any dental insurance or vision, you know, wasn’t necessary, but as they got older, realizing braces are in our future.

Lena Nebel: We made sure. During open enrollment, we signed up for that dental plan, um, and having two kids that are going [00:26:00] through that. It’s good that we did that. And same thing with vision as they get older, you want to be able to have, have something there. So as your life changes, you’re going to make changes to the health insurance, which is why it’s important to understand when your open enrollment is also under, uh, health insurance is, you know, a more and more popular type of plan is what’s called a health savings.

Lena Nebel: So some people think the health savings account is like the flexible savings account, which is a use it or lose it. But it’s not think about it like a Roth IRA for your health insurance. It allows people covered by high deductible plans to receive tax preferred treatment when making contributions into that plan.

Lena Nebel: And then when you’re using it for medical purposes, it’s all tax free. The key to the HSA is if you can. Don’t take distributions from the HSI, let that grow and compound and roll over each year so that you have a very healthy HSA balance. By the time you are retired. You have money in the bank that can [00:27:00] pay for the copays or prescription coverage, use the money in the bank.

Lena Nebel: Don’t use the HSA, let that money compound. That’s how you’re getting the maximum benefit from that HSI, um, flexible savings account. That’s the use it, or use it or lose it. So that could be used for a dependent care summer camps, uh, health insurance, or health co-pays co-insurance dental bills, et cetera.

Lena Nebel: The issue with the flexible spending account is you need to estimate what that amount is that you’re going to spend the next year. So that’s why there’s usually a rush in the dental offices, or when you’re going to get glasses or contacts, there’s this big push in November and December, because everyone’s trying to use their FSA benefit so that they don’t lose that.

Lena Nebel: Um, so those are kind of the more popular options. Under health insurance. Um, and then under, uh, with the HSA, the contributions have been increasing a little bit each year. And then if you’re over [00:28:00] 55, you get to put a little bit more money away into that plan. Um, but it’s, it’s a great plan that hopefully continues to get expanded upon and, and more and more individuals.

Lena Nebel: Um, Under the, um, basic and term life, that’s just your life insurance. And so life insurance, there could be, you know, a few different options, um, that can cover the employee. It can cover the spouse, it can cover the dependence. It’s typically free up to a certain amount. There’s usually no underwriting up to a certain level, but the issue with employer life insurance is it increases.

Lena Nebel: So for some people, it may make sense to buy an insurance policy outside of their employer, because they may be able to get more, um, that won’t be increasing each year. Um, so the other type of insurance could be accidental death and dismemberment. Um, we’re not expands of that insurance just because you have to die a certain way or lose a limb for it to pay out.[00:29:00]

Lena Nebel: But, um, you know, a lot of people think the accidental death and dismemberment, which a D and D is their life insurance. They may say, oh, we have $4 million in life insurance. When they only have $50,000, the rest is covered through a D and D. And again, you have to go a certain way, which is unfortunate. Uh, we have travel and accidents.

Lena Nebel: So for a lot of people. Who are traveling. There could be some type of payout if they get into a car accident or pass away in the event of, of them traveling, um, through, you know, with work. So there could be some additional insurance there. And then, um, workers’ comp workers’ comp is if you get injured on that, How are they going to help you?

Lena Nebel: So you see a lot of worker’s comp um, programs in the, whether it’s in the construction space and, you know, like FedEx ups, delivery, drivers, people where there’s, um, more of, of a way to, you know, injure yourself. Um, it’s very hard for them. Uh, you and I to injure ourselves when we’re, you know, [00:30:00] sitting behind the computer sometimes, so.

Lena Nebel: Right, exactly. Exactly. Uh, and then another popular one is disability insurance, disability. Insurance is one. I would say that the majority of people don’t take advantage of unfortunately, um, disability insurance is what, if you can’t perform your job to a certain level, uh, your employer will still pay you.

Lena Nebel: A percentage of your salary, there is short-term disability and there is long-term decision. And again, there could be a, what’s called a waiting period. You know, how long do you have to be disabled for, for the benefits to be paid out? Um, they could limit it based upon income. Um, and like I said, there could be short-term versus long-term.

Lena Nebel: So short-term is typically, um, starts on day one. If you getting injured, let’s say you break both your legs and you can’t come into work at all. Um, short-term would kick in and usually pays up to 90 days. And then if you’re still disabled after 90 days, That’s when the [00:31:00] long-term disability kicks in. We see a lot of people not getting the disability insurance because they think that’s not going to happen to them.

Lena Nebel: Um, we’ve seen a lot of people get sick with it. And we’ve seen a lot of short term disability and unfortunately, things that have turned into long-term disability that has to get paid out. Um, so I encourage people to look at their disability programs. Um, some things are offered from the employer, as far as the cost is concerned, the employer will pay for it.

Lena Nebel: And other times the employee has to pay for it. There could also be supplemental disability insurance that can pay more. Disability then that’s currently provided like your life insurance. You have a basic amount and you can apply for more. Um, you want to look to see what your coverage for what your current salary is, what they’re going to pay up to.

Lena Nebel: And you may want to get a supplemental disability plan as well. Uh, disability insurance is typically how maternity leave is paid for, for a lot of females. Um, and you know, a lot of people tend to [00:32:00] waive the short-term disability, but that’s what’s needed. You’re going to want to start a family and everything.

Lena Nebel: Um, it, you know, minimal costs, but it can have a pretty big impact if you don’t have that. Another type of insurance that’s not listed on here, um, is also long-term care insurance. So a lot of employers have started offering long-term care insurance, um, to pay for nursing home, assisted living, adult daycare, things like that.

Lena Nebel: They can cover the employee and the spouse. And when you leave that employer, you can take that insurance with you. It’s called porting the insurance. Um, disadvantage is it increases each year. Just kind of like the life insurance, but it’s limited underwriting. So for some people who may not be able to get qualified on their own, possibly looking at a long-term care insurance policy within the employer would be a good benefit.

Cody Niedermeier: Yeah, no, I think that’s a great overview of, you know, all of that. The insurance options that employers have to offer to their employees. And it kind of leaves leads into another one of just, you know, there are [00:33:00] more benefits that employers can offer and some of them are offered through, um, you know, employee assistance programs, student loan assistance, like we’ve touched on already as well as, you know, different types of stock ownership plans.

Cody Niedermeier: That kind of like what we said before, we could go into a completely its own webinar with, but uh, I’d appreciate it. And I’m sure a lot of listeners would, if you can give a kind of brief overview of each.

Lena Nebel: Sure. So the employee assistance program, um, as we kind of talked a little bit before, it could be offering financial and legal services.

Lena Nebel: So let’s say you need to get a, will done. They may have some type of legal plan offered, um, to where you’re paying a very cheap amount per pay, to be able to, you know, contract with an attorney who is able to draft all of those documents and everything. There could be, as I mentioned things about, um, maternity services adoptions, um, so there could be a lot of different types of programs.

Lena Nebel: Those employees, um, covered under those, those different areas. Um, student loan assistance. We talked about the matches into the 401k, but [00:34:00] something too that’s been, um, uh, becoming more popular is different states or employers are doing something regarding the reimbursement, um, of their actual student loans.

Lena Nebel: So this is different than tuition reimbursement, but helping to pay off a student loan. Excuse me. Um, so as an example, Has a public service loan forgiveness program for their state employees, um, to where, if there’s any balance left after the term of 10 years, the loan is forgiven. So for some of our Texas clients that, um, are working for the state, we have that counter on there because we don’t want them to quit on the ninth year.

Lena Nebel: And then give up all of that, um, that loan that could be paid off federal government also has a program. A lot of people aren’t aware of, um, that allow the agencies to make up to $10,000 of student loan payments per year. Of course you have to be eligible for it. You got to file all the fun paperwork. Um, But if you know, anybody, you know, currently works for the federal government and they want more [00:35:00] information about that, um, please reach out to us.

Lena Nebel: We’ll send you the links and everything. Um, but there’s different states that that offer different plans and then employee stock ownership plans, um, that Cody that we can go on and on for, um, regarding all the different types of plans, but just to kind of give you. A high-level view. There could be an employee stock purchase plan.

Lena Nebel: There could be restricted stock units. There could be an Aesop. There could be stock options. There could be a ton of ways in which the employer is offering shares of that company. Um, as a supplemental financial. And you want to incorporate your CPA, your financial advisor, to understand the tax impact too.

Lena Nebel: You absolutely need to understand the vesting schedule because you could leave money on the table. If you leave your employer. And those shares have not yet vested. It’s important too, to understand that a lot of tech firms offer these as kind of a sign on bonus they’ll [00:36:00] offer some shares within the company.

Lena Nebel: Um, so again, this, as I said, um, some ideas for webinars in the future, we could definitely go down the rabbit hole on, uh, employee stock, stock plans. Yeah.

Cody Niedermeier: And in regards to your discussion about the student loan reimbursement with Texas or federal government agencies, we, you just gave the brief overview.

Cody Niedermeier: We actually dove into these a lot deeper in one of our previous webinars, uh, for those who haven’t listened, it was creative ways of paying off debt and student debt. Um, and those are one of the recordings and, you know, one of the free tools for you guys to check out that, you know, can hopefully provide you with some information, but, um, Okay.

Cody Niedermeier: I guess moving on is, you know, there are some companies out there that are starting to realize the importance of financial planning. Uh, their employees and, you know, they’re establishing different types of corporate financial wellness programs for them because, you know, they’re, they’re trying to, you know, go above and beyond to, you know, get the employees that are the most sought after.

Cody Niedermeier: So, [00:37:00] uh, can you talk a little bit about, you know, what these corporate financial wellness programs are, how they work, um, and kind of dive in.

Lena Nebel: Sure. So a lot of times for, I would say your, your larger companies, um, they’re going to have some type of whether it’s a financial advisor, financial company of fidelity is a big one where you can call their 800 number, speak to somebody over the phone and ask it.

Lena Nebel: You know how you should be allocated, what are some things you should be aware of within the retirement plan? And that’s usually where it stops, unfortunately. Um, they don’t really take the blinders off and think about your whole financial world. Um, we saw that that was an area that, um, was untapped. So we wanted to be able to offer more companies, the ability to have a true financial wellness program.

Lena Nebel: Um, and so. It’s been extremely successful for our firm and being able to offer, um, these types of programs [00:38:00] to companies, small or large that allows, um, individuals like us to meet with the employees. One-on-one as a, as a free consultation to talk about beneficiary planning, um, student loan, payoff mortgages, um, how to buy a house, how to save for education, beneficiary, designation, 401k allocation, um, all of those areas that encompass somebody’s financial.

Lena Nebel: Besides just how you should be allocated. So. Um, I encourage everybody that’s listening or watching this right now. If your employer does not offer this, try and push them to offer this, it’s no cost to them. Um, it’s just so a value add that can provide a significant benefit. To a lot of, a lot of their employees because, um, as you have it right here on the, um, slide, you know, financial stress, um, it, it’s a big thing for a lot of employees.

Lena Nebel: And if employees don’t have that stress anymore, um, if by offering something like this, where they have a resource where they can call somebody and speak to [00:39:00] somebody who knows their situation, um, that’s huge for a lot of people. So I think you’re going to see more and more of this over these upcoming years, just because of how, um, people’s financial lives have become more and more complicated, especially right.

Lena Nebel: New tax laws out there that are constantly changing and, um, all these different types of benefits. And, and again, as I said in the beginning, this is just kind of a highlight of the benefits. There’s each slide. You could have a webinar to really go through it. That’s why I love this topic because it can really impact everybody in a pot in a very positive.

Lena Nebel: No.

Cody Niedermeier: I, I agree with you completely. And, you know, for those of you that have joined us, you know, what are some of the top career tips or, you know, summation of, you know, what they should take away from this way?

Lena Nebel: Yeah. So here’s just kind of a, a list, um, regardless of your stage in life that you’re in, um, whether it’s contributing enough to get the retirement account to the full match, you know, if you were, let’s say I’m about to retire.

Lena Nebel: We may want you to [00:40:00] increase those contributions. If you’re retiring September 1st on January 1st, we’re going to want to make sure you max out your plan from January to September. A lot of people don’t think about that. Um, you want to make sure that you’re, um, with each pay, raise that you’re increasing the contributions that you’re putting into your retirement plan as well.

Lena Nebel: Um, so that will allow you to kind of budget that raise and have that money go in there. Part of the pay yourself first and spend less than, than you make, um, read your benefits package. I can’t stress that enough. You know, it’s important to get all the PDFs, sit down with the HR coordinator, understand everything that you have, and obviously paying attention to that vesting schedule.

Lena Nebel: Um, beneficiary information is, is a big one. You know, we, um, as all the employees here, we have our own financial plan where we sit down with an advisor. And as I mentioned, every year, we look at beneficiaries and I do this for my husband and I, we sit down with our advisor. When it was time to prove our [00:41:00] beneficiaries, I was, well, I knew what this was because we selected them together.

Lena Nebel: And, um, what I didn’t realize is that my employer, my husband’s employer, um, eliminates that beneficiary every year. You have to basically check the box during each enrollment to confirm that beneficiary. So if you forgot to check the box, there’s no beneficiary listed that. Right. So it’s important to make sure your beneficiaries are updated and they’re who you want, that who you want it to be.

Lena Nebel: Um, Again, disability, even though it costs money, it’s important to sign up for things like that. It’s not fun stuff insurance never is, but it can have a dramatic impact to your life by, by missing some of these things. Um, so, you know, understanding the value of having time on your side, all of these benefits, whether it’s career personal financial can benefit you over the course of your, you know, of your working life and can benefit, not just you, but also your family.

Cody Niedermeier: Oh, I think that’s absolutely [00:42:00] spectacle killer. And you know, when we have, you know, listeners to this webinar or anybody, what we tell them to look for in a financial advisor is a lot of things that, you know, we do. And, you know, at BFG, we take a look at identifying both your short-term and your long-term goals to start a cause that kind of stems into everything else.

Cody Niedermeier: We look at your portfolio as a whole, we look at your 401k. We look at, you know, assets that are possibly held with us. Um, we analyze, um, where you’re at, how to get there. Uh, take a look at that insurance, like you talked about, that’s offered through open enrollment or possibly you might have to get individual.

Cody Niedermeier: And like you said, Insurance is really a lose to win category. So it’s not fun to talk about, but it’s something that’s necessary to kind of create that moat around your castle and protect what you have. Uh, if you know, the bad thing were to happen. Uh, we also take a look at those tax returns because kind of everything is shown in there in ways that a lot of people can’t [00:43:00] read.

Cody Niedermeier: So we work with CPAs and, you know, we work on lowering that stress level that we talked about in the beginning with. You know, different relationships with financial wellness programs of, you know, it’s not just, you, you have a team around you to help you reach those goals. And, you know, BFG, we take a lot of pride in that.

Cody Niedermeier: So these are some of the things that we do before we hop into a little bit of Q and a. So, uh, I believe we have Sarah on the line who, uh, has been organizing and getting together all the questions that we, that I’ve seen that we’ve received. Uh, and she’s going to pull a few of them for Lena and I to go through before, uh, before we let you guys go from this webinar.

Lena Nebel: Yes, sir. Um, we, we did get a really

Sara Lohse: good question that I think will be relevant for a lot of people with that, um, health savings account. Um, they’ve heard a lot of good things about it, but you could only get it with that high deductible plan. How do you know if that’s the right one for you? Um, and if you should go with that high deductible or go with a lower [00:44:00] deductible and spend less out of it,

Lena Nebel: Hmm.

Lena Nebel: Yeah, that’s a, it’s a very popular question for a lot of individuals when they first get the opportunity to have an HSA. And I always tell people, if you see the doctor, maybe once, twice a year, you maybe have one prescription, um, you don’t need any regular, um, injections. You don’t have, um, you know, monthly checkups with the doctor for various ailments.

Lena Nebel: Then the HSA is. Plan for you because you’re able to, you know, put money into the HSA. Your premium is lower on the high deductible plan versus if you had a ton of prescriptions, if you had family members that had to see doctors, um, you know, monthly or quarterly, You’re going to be spending a lot of money.

Lena Nebel: And the HSA is probably not going to make the most sense. One thing with an HSA that people can do is they can actually kick start that account with a rollover, um, directly from their IRA. So for, um, some older individuals, um, that may make the most sense to where [00:45:00] we transfer a portion of their IRA into the HSA so that they have some money in there.

Lena Nebel: So if on January 10th, They have some major medical event and they have to hit that deductible. They can take it right out of the HSA, which is all tax free. And you can only do that once in your lifetime. You can’t do it each year to make that roll over. Um, but that’s why HSA tend to be more popular with younger individuals because they don’t have, you know, a lot of prescriptions or a lot of, um, regular visits that may be needed.

Cody Niedermeier: Yeah. And lean on. Other thing with HSA is that I think you kind of alluded to, but just a little more specific of, you know, that account can accumulate if, especially if you’re not touching it and you continue to make contributions of a lot of HSEs have a minimum of about a thousand or $2,000 that, you know, once that amount is in there, every amount over that can be invested.

Cody Niedermeier: So you’re going to be given investment options. So you definitely want to take a look at that, like a lot of your other accounts to make sure it’s invested properly for, you know, [00:46:00] what your goals are.

Cody Niedermeier: You got something else for Sarah.

Sara Lohse: All right. Thank you for that. Um, for, um, the vesting schedule, how does that work? Is it. All everything gets vested, but once you hit that number or what exactly

Lena Nebel: does that mean? So there’s different types of vesting schedules. Um, there could be a cliff vesting schedule where at the end of let’s say that three-year time period, everything is vested at three years, or it could be gradual to where it’s a percentage each year.

Lena Nebel: So let’s say it’s a four year vesting schedule. It could be 25% each year. So it really depends on the. Um, there’s no one size fits all. It’s really what, how they designed the plan, um, within, within that. But it’s important to know what that vesting schedule is. And it’s traditionally listed out in the plan summary document with the percentages listed.

Lena Nebel: So if, again, my example of three years, it could say year one, [00:47:00] 0%, year two, 0%, year three, a hundred percent. That means those first two years, that you’ve satisfied employment there. You’re not vested. You have to be there for three full years. To get a hundred percent of that employer match.

Cody Niedermeier: Keep them coming, Sarah,

Sara Lohse: um, going through the list, um, if you are, um, handling your investments in your 401k yourself, how often should you be? Switching them up and

Lena Nebel: changing your investments, not daily or monthly. I will tell you that don’t even look at it every day. Um, minimally, you want to do it at least once a year.

Lena Nebel: You want to rebalance it. A lot of retirement plans have an automatic rebalancing feature. Um, that’s good and bad because it’s good because it’ll automatically happen for you. You don’t have to think about it. It’s bad because you’re not thinking about it. You may want to change the allocation. Um, so I would [00:48:00] say one to two times a year, depending on if there’s new investment funds that have come through, if your risk tolerance has changed, if you are contributing more, if the employer is starting to put more in, um, but no less than once a year, um, please, please, please try not to look at it every day or every month you will drive it yourself nuts.

Lena Nebel: And, um, when people do that, then they react with emotion. And that then causes them to fall further behind.

Cody Niedermeier: We got time for one more, Sarah.

Sara Lohse: All right,

Lena Nebel: let me pick a

Sara Lohse: good one.

Cody Niedermeier: Yep. Make sure it is.

Sara Lohse: Um, this is kind of a two-part question for, um, another question on 401ks. Um, how do I know if I should be like what my risk tolerance should be? Um, so we’ll start with that.

Lena Nebel: Okay. So sometimes, um, within your benefit booklets, there [00:49:00] is some type of questionnaire that you can go through to understand your risk tolerance.

Lena Nebel: Um, a lot of the risk tolerance can be dictated by your timeframe. So if you’re younger, you can stomach more risk, so you can be more aggressive. So let’s assume you went into an aggressive portfolio and after the first year, Let’s say the market did not do what you anticipated it to do, and you actually lost money.

Lena Nebel: If that caused you sleepless nights, if that gave you pains in your stomach, if that got you really frustrated, that tells you, you cannot stomach that risk. Okay. And so that’s why having some type of financial advisor or advocate to kind of walk you through what’s appropriate and what’s not. And how you change that risk tolerance over time, depending on your needs.

Lena Nebel: Isn’t it. Um, but sometimes there is some type of questionnaire when you’re going through your open enrollment that will, uh, kind of hone in on what your risk tolerance is, and that will help you pick an appropriate investment. [00:50:00]

Sara Lohse: Okay. So that was that first part of that question. And the second part, um, they want to know if it’s more important to be putting a lot into their retirement, even if they don’t have, um, very strong cash flow.

Lena Nebel: Great question. No, if you do not have strong cashflow, and if you need to build up your emergency reserve, build up your emergency reserve, pay off any unwanted debt. That’s like high interest rates, like credit cards, et cetera. Um, so don’t feel like you have to pile money into the retirement plan. The only caveat I would say to that is if your employer is offering a match.

Lena Nebel: Try to put something in so that you can get some free money, even if it’s one to 2% of, you know, it’s forcing you to save, forcing you to put some money in, and then your employer is putting some money too. But, um, having a game plan of how to build up your emergency reserve, how much to put into your 401k, your employer, retirement [00:51:00] plan.

Lena Nebel: And as I said before, as you get a rate, Increase your contribution with each raise that forces you to not spend that money and forces you to put that extra money into the retirement plan. But you want to set up your foundation. You need that emergency reserve set aside, especially if cashflow is not.

Cody Niedermeier: Yeah, well, Lena can’t thank you enough. Um, just finding the time to be not only on this webinar, but like the ones before, uh, I think everybody was able to take a lot of information from you and, you know, we’ve all been educated, so thank you. Um, On the screen now, uh, that I left on for a little bit is a QR code.

Cody Niedermeier: So if you actually scan that with your phone, if you pull out your phone, take a picture of it. Uh, you’ll actually see a link to set up a free consultation with one of our advisors here at BFG. Uh, in, you know, you can ask these questions, some of the ones that we weren’t able to get to maybe, or. You know, start identifying some things that, you know, you need to work on in order to reach your financial goals or even, you know, set [00:52:00] those goals.

Cody Niedermeier: But, uh, if you take a picture of that and this last screen, I believe it’s the last one. I just wanted to make sure that everyone had Lena’s information. Um, And we’ve already thanked her and her. Email’s on here, our office phone number, if you guys want to call in, um, but no set up that free consultation or send in, or email us your, your followup questions and we’ll do our best to get back to everybody.

Cody Niedermeier: But, uh, the next time we’re going to be on one of these webinars is going to be October 27th, just in time for Halloween. And we’re going to have one of the other principals, Eric Brotman back on and we’re going to be discussing, um, how. Not scary, uh, to start planning for your retirement and your twenties.

Cody Niedermeier: So thank you so much for everybody, uh, tuning into this webinar and, uh, we’ll see you at the next one.

Lena Nebel: Thanks Cody.

Cody Niedermeier: No problem. Have a good day.