Employee benefits are an integral component of a physician’s overall financial plan, and your financial advisor should review these benefit offerings with you to determine which of those options best meet your needs.
When discussing with your advisor, covering every aspect of your potential benefit package is the goal, but here are a few highlights to pay attention to:
- Retirement plans: Most employers offer a retirement plan to their employees. Your financial advisor should discuss the plan offerings to ensure you are maximizing matching dollars and your total contribution. For many physicians, their retirement plan will be one of their largest assets to fund retirement. Additionally, many employers offer a Roth option for employee deferrals in addition to the typical pre-tax or Traditional employee deferral. Your advisor should discuss the tax implications of each option and how it fits into your overall investment strategy.
- Long-term disability: If your employer provides disability benefits, it is important for you to understand the coverage offered and how it integrates with any existing individual disability insurance you own or are considering purchasing. Most employer long-term disability plans have a definition of disability that only protects physicians in their specialty for a limited time. If you are required to pay a portion of the cost of coverage, you can often opt out of coverage to increase the amount of individual coverage you can purchase, which may be the best option for many physicians. For others, the long-term disability benefits could fill a gap in their financial plan and your advisor should help you maximize this offering as necessary.
- Medical coverage: Many employers now offer a high-deductible option in the medical coverage choices. Depending on your family situation, a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) option may be optimal. However, it is important to understand the benefits of choosing a plan with current tax savings even though there may be higher out-of-pocket expenses.
Reviewing benefits for a new job is important, but don’t limit the benefit review to a new job only. Open enrollment is an important time in the ongoing financial planning process, and your financial advisor should take an active role in helping you determine which employee benefits to adjust as your individual or family circumstances change over time.