When looking for a job, people often focus on finding a job that pays the most salary. Unless the difference in pay is significant, more income does not always determꦦine the best job offer. There are even some salaries without benefits offered to job hunters.

When choosing between a job with benefits versus high pay, it is essential to consider the entire package: sal🏅ary, medical and dental benefits𓂃, insurance coverage, and especially retirement plans under which an employee would be covered.

Healthcare Benefits

If it comes down to a job with benefits versus a job with no benefits, it is usually best to take the job with benefits, which millions of American workers have chosen. According to the Kaiser Family Foundation's 2022 Employer Health Benefits Survey, employer-sponsored insurance covers approximately 159 million people.

The cost? In 2022, the average annual premiums for employer-sponsored health insurance were $7,911 for single coverage and $22,463 for family coverage, according to the Kaiser Family Foundation's 2022 Employer Health Benefits Survey.

These premiums are usually paid in full by the employer or treated as a shared cost between the employer and employee. In addition, not all healthcare benefits are the same. Premium plans may offer lower d♑eductibles, no copays, or a wider network. Understand not only what proportion of healthcare your employer may cover but the quality of services offered.

Retirement Benefits

The retirement plan program is an integral part of you𝔉r compensation package and could determine the lifestyle you can afford during your retirement years. Below are some choices you may face.

Higher Salary vs. Retirement Plan

An employer that does not offer a retirement plan might not be worth considering unless the salary being offered is such that it will allow you to comforﷺtably add contributions to your nest egg on your own. These contributions should be comparable to those provided by other 🐷companies with a retirement plan.

If your employer offers a 401(k) plan, the IRS allows you to contribute up to $22,500 in 2023 and $23,000 in 2024. Besides the benefit of your retirement account being funded with pretax dollars, some employers offer 澳洲幸运5开奖号码历史查询:matching contributions, matching the amount the employee contributes up to a ꧅certain percentage.

Any matching contributions, 澳洲幸运5开奖号码历史查询:profit-sharing contributions, and the income tax you would save thr൲ough salary deferral should be considered when comparing job offers. For example, consider that some companies offer a 50% on all contributions up to the IRS limit. In 2023, this may end up being an extra $11,250 (not considering catch-up contributions).

Defined-Contribution vs. Defined-Benefit Plan

If potential employer A offers a 401(k) plan and potential employer B offers a 澳洲幸运5开奖号码历史查询:defined-benefit program, employer B is often the better choice. With a defined-benefit plan, your plan benefits are not affected by market performance. Instead, investment risks are borne by your employer, and unless your employer files for 澳洲幸运5开奖号码历史查询:bankruptcy and cannot fund the plan, your pen🥃🅘sion is guaranteed.

Some may argue that, by nature, defined-benefit plans are risky given the probability of the employer being unable to fund the plan. However, these plans are protected by the 澳洲幸运5开奖号码历史查询:Pension Bene🤪fit Guar𓂃anty Corporation (PBGC).

While your benefits may be reduced, you are guaranteed to receive a minimum percentage of your promised benefits. With a 401(k) plan, you accept responsibility for the investment risks and potential los🉐ses due to market fluctuations.

Guaranteed Contributions

澳洲幸运5开奖号码历史查询:Money-purchase pension plans and 澳洲幸运5开奖号码历史查询:target-benefit plans include guaranteed contributio🌠n features. As such, the employer is mandated to ꦬcontribute to the plan each year for as long as the plan is maintained or subject to stiff penalties.

Profit-sharing pꦰlans often include discretionary contribution features, which means the empl൲oyer is not required to fund the plan each year. This makes the money-purchase and target-benefit plans more attractive than a profit-sharing plan. There are exceptions to this general rule, as an employer can include a mandatory contribution feature in its profit-sharing.

Salary Deferral

If both plans include a 澳洲幸运5开奖号码历史查询:salary deferral feature, check to see if there is a cap on the amoun𓄧t that can be deferred other than the statutory limit. For instance, the employer may limit deferrals to 10% of compensation. If that is what you will be deferring anyway, it is not an issue, but if you want to defer more than that amount, the plan may be too restrictive for your retirement needs.

Qualified Plan vs. an IRA-Based Plan

Qualified plans usually include distribution-restriction features that may force you to leave the funds untouched until you retire or change employers. This can be a good feature because it prevents the removal of funds from the nest egg for non-necessit🅠ies.

IRA-based plans, such as SEP IRAs and 澳洲幸运5开奖号码历史查询:SIMPLE IRAs, have no distribution restrictions, which means that withdrawals from the fund are allowed. However, there are early-withdrawal fees and taxes that will be assessed, with the amount determined by when a plan beneficiary withdraws money. A plan that has a loan option may be worth considering. Other features, such as contribution limits and creditor pro🍌tection, should be consider🍬ed if you need to choose between the two potential plans.

Suppose you are weighing two employers, and neither one offers a retirement program. In that case, you can consider looking elsewhere or determine whether the compensation package will allow you to fund your retirement accounts, such as traditional IRAs, Roth IRAs, tax-deferred 澳洲幸运5开奖号码历史查询:annuities, and other savings programs.

Cafeteria Plan Benefits

Choosing the employer with the better 澳洲幸运5开奖号码历史查询:cafeteria plan benefits may mean fewer 澳洲幸运5开奖号码历史查询:out-of-pocket expenses for medical and dental needs, as well as better insura🍰nce prot꧟ection for your dependents. A cafeteria plan is an employee benefit plan that allows staff to choose from various pre-tax benefits. It is also referred to as a "flexible benefit plan" or Section 125 plan.

Cafeteria plans include benefits such as:

• 澳洲幸运5开奖号码历史查询:Flexible spending accounts (FSAs), which can pay for several medical or dependent care expenses on a pre-tax basis
• Medical and dental benefits
• Assistance for dependent care and adoption
• 澳洲幸运5开奖号码历史查询:Health savings accounts (HSAs), which allow employees to pay for 澳洲幸运5开奖号码历史查询:medical expenses on a pre-tax basis
• 澳洲幸运5开奖号码历史查询:Term life insurance coverage

The Bottom Line

Bear in mind that your total employment compensation is not limited to your salary. Consider🍬ation must be given to the benefits an employer offers.

If you want to get a good understanding of a potential employer's benefits package, ask for a copy of its 澳洲幸运5开奖号码历史查询:summary plan description (SPD), which is usually provided to current or former employees and 澳洲幸运5开奖号码历史查询:beneficiaries.