As we move into 2025, it's the perfect time to review and take full advantage of your employer benefits. Whether you're a new hire or a seasoned employee, understanding the various benefits available can significantly impact your financial well-being. Many employers offer valuable perks that can help you save money, plan for retirement, and manage your health more effectively. This blog will highlight key benefits to review and maximize in 2025, ensuring you make the most of what’s available to you.
1. Retirement Contributions and Employer Matching
One of the most important benefits many employers offer is a retirement savings plan, such as a 401(k) or similar retirement account. Contributing to your retirement early and consistently is essential, and many employers offer to match a portion of your contributions.
Maximize the Match: If your employer offers a 401(k) match, aim to contribute enough to take full advantage of this benefit. For example, if your employer matches 50% of your contributions up to 6%, contributing at least 6% will ensure you receive the full match. Not taking advantage of this is essentially leaving free money on the table.
Contribution Limits: In 2025, the IRS has set contribution limits for 401(k)s at $23,000 ($30,000 if you’re 50 or older). Make sure you're aware of these limits and are contributing as much as you can to benefit from the tax-deferred growth of your retirement savings.
Roth Options: Some employers offer a Roth 401(k) option, where you contribute post-tax dollars, and your withdrawals are tax-free in retirement. This can be a good option for those expecting to be in a higher tax bracket when they retire. Ensure you review which option makes the most sense based on your current tax situation.
2. Health Benefits and Insurance Coverage
Healthcare costs continue to rise, and employer-sponsored health plans are a valuable resource. Take the time to review and optimize your health insurance options for the year ahead.
Review Your Plan Options: Many employers offer a variety of health plans with different levels of coverage. Ensure you select a plan that best meets your needs based on your healthcare usage and financial situation. You’ll likely have options for different tiers of coverage, including high-deductible health plans (HDHPs) paired with health savings accounts (HSAs), traditional PPOs, or HMO plans.
Health Savings Accounts (HSAs): If your employer offers an HDHP with an HSA, this can be a powerful tool for saving on healthcare costs. The money you contribute to an HSA is tax-deductible, grows tax-free, and can be withdrawn tax-free for qualifying medical expenses. For 2025, the contribution limit for individual coverage is $4,150, and for family coverage, it’s $8,300.
Dental and Vision Coverage: These are often offered as supplemental plans to your health coverage. While dental and vision may not always seem urgent, they are important for maintaining overall health and preventing expensive procedures down the road. Review whether these are included in your plan or offered as optional add-ons.
3. Flexible Spending Accounts (FSAs)
Many employers offer flexible spending accounts (FSAs), which allow you to set aside pre-tax money for medical and dependent care expenses. These funds can be used to pay for out-of-pocket medical costs, including copays, prescriptions, and dental and vision care.
Use It or Lose It: The IRS typically limits the amount you can contribute to an FSA, and any unspent funds may not roll over to the next year. Make sure you’re using the funds before the end of the plan year to avoid losing any unused balance.
Dependent Care FSAs: If you have dependents, you can use a dependent care FSA to pay for eligible child care expenses. This can be a great way to reduce the cost of daycare, after-school programs, or elder care.
4. Employee Stock Purchase Plans (ESPPs)
Some companies offer employee stock purchase plans (ESPPs), which allow employees to purchase company stock at a discounted rate. This benefit can be a great way to build wealth over time, especially if the company’s stock is likely to grow.
Discounted Stock: Typically, ESPPs allow you to purchase stock at a discount of up to 15%. If you’re offered this benefit, it can be a good way to take advantage of your employer’s stock and build long-term value. However, it’s essential to monitor the stock’s performance and avoid overconcentration in a single asset class.
Tax Considerations: Be mindful of the tax implications of selling ESPP shares. While the discount is a great perk, selling the stock too soon may result in higher taxes. Talk to a financial advisor to help you create a strategy for selling your stock at the most favorable time.
5. Employee Assistance Programs (EAPs)
Employee assistance programs (EAPs) are another valuable resource that employers often offer. These programs provide confidential counseling, legal assistance, financial advice, and other services to help you navigate life’s challenges.
Mental Health Support: In today’s world, mental health is just as important as physical health. Many EAPs offer free counseling services or help you find support for stress, anxiety, and other challenges.
Financial Counseling: Some EAPs also offer free consultations with financial advisors, helping you plan for big expenses, manage debt, or work toward your retirement goals. This can be a great opportunity to get professional financial advice at no additional cost.
6. Life Insurance and Disability Coverage
Review your life insurance and disability coverage to ensure they meet your current needs. Many employers offer group life insurance and disability insurance as part of their benefits package, but the coverage may not be sufficient if your personal circumstances have changed.
Life Insurance: While employer-sponsored life insurance is often a low-cost benefit, it may not provide enough coverage if you have dependents or significant debts. Consider supplementing this with additional personal life insurance if necessary.
Disability Insurance: Review whether your employer offers short-term and long-term disability insurance. This coverage can provide crucial income replacement if you become unable to work due to illness or injury.
7. Educational Assistance and Professional Development
Many employers offer education assistance programs, which can help pay for tuition, certifications, or continuing education courses. This benefit can be a great way to enhance your skills and advance your career without the financial burden.
Tuition Reimbursement: If your employer offers tuition assistance or reimbursement, consider pursuing courses that align with your career growth. This can be an excellent investment in your future.
Professional Development: Employers may also cover the costs of professional certifications or membership fees for relevant industry organizations. Take advantage of these opportunities to expand your knowledge and network.
Final Thoughts
2025 is a great opportunity to review and maximize your employer benefits. From retirement savings to healthcare options, employee stock plans, and education assistance, these benefits can be powerful tools in achieving your financial and personal goals. Make sure to take the time to understand what’s available to you, and consider consulting with a financial advisor to optimize your benefit strategy.
By taking full advantage of these offerings, you’ll be well on your way to a more secure financial future. If you have any questions or need assistance navigating your benefits, feel free to reach out to our team!
