Morningstar Money Challenge: Day 12

Today's Task: Keep an eye on the benefits you get from your employer

Ruth Saldanha 16 November, 2020 | 3:13PM

Family at beach

This article is a part of a month-long Morningstar Money Challenge. You can find the details here.

One of the keys to making money is to make sure that you’re not giving away free money. No, that doesn’t mean that you should go and spend all your savings on lottery tickets. It just means that you should make sure you’re taking full advantage of the opportunities you get to maximize your savings potential.

An important source of ‘free money’ is the benefits you get from your employer. It's important to make sure you know what kind of savings programs your company offers.

Some of the common benefits that employers may offer include insurance (dental, eye-care, life, disability), a retirement savings program, educational stipends, and employer stock option purchase benefits.

It is important to point out that employers may offer some, all, none, or more of these. Since there is no set rule, it is imperative that you check and read the fine print, so that you don’t end up losing out.

Additional Reading
How to Adult? Don’t Ignore Workplace Pension
6 Investment Lessons for Everyone

Insurance
In Canada, both employers and employees must pay into employment insurance, and the Canada/Quebec Pension Plans. Workplace Insurance Coverage is also required. But this apart, many employers offer some other forms of insurance such as life, disability, dental, or more. How much insurance you need depends on your personal situation, but knowing what you get from your employer will help you decide if and how much you want to add on. 

Remember though, once you leave your employer, your benefits also cease.

Retirement Savings
Many employers offer retirement savings options for employees and offer to match contributions up to a certain amount. This is free money – you should take it! If you’re an early-stage investor, you might think that retirement is a long way away, but you'll be glad you started early. The money in these group plans gets invested in the market to generate even more money, and then the power of compounding takes over! 

Education
At Morningstar, we are fortunate to get an education stipend, which allows us to continue to upgrade our skills. Check if your employer offers this benefit – you could save money while also improving in your career! 

Stock Options
You might also be offered to buy shares of your employer, sometimes at a discount. This gives you a chance to become an owner in your company, if that is what you want. 

Other Benefits
Your employer may offer you a pot of gold when you complete 5 years. Most likely, it won’t. But you won’t know unless you find out, will you! So research your company benefits! 

Additional Reading
-          Investing Dos and Don’ts
-          A Simple Plan for Financial Independence
-          Do Millennials Need Life Insurance?

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About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor at Morningstar.ca. Follow her on Twitter @KarishmaRuth.

 
 
 

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