As you’re preparing to launch into your career, there are a few important things to consider in a compensation package. The wage or salary you’ll earn is just one piece of the puzzle. With student loans breathing down your back and housing expenses on the rise, it’s tempting to take a package with good dollar signs attached and ignore the other pieces. Do your future-self a favor and consider the following:
- Does your potential employer provide disability insurance? There may come a day when you’re sick or hurt and can’t work. Do they provide short-term and/or long-term coverage if you’re disabled? Look into what percentage of your income the policy will replace (60% is common), and how long it will take the insurance company to begin paying. Make sure you have enough savings to (at least) cover the gap before they’ll start to pay.
- Is there life insurance available? Some companies provide basic life coverage as a part of the compensation package. You may also be able to buy more for a reduced rate as a part of the group plan. Make sure you know how much insurance you can opt into when you’re hired, the costs to purchase additional coverage, and that you coordinate any policies you own personally with what is available from your employer. Some companies will even let your spouse or children be covered up to a certain amount for a reduced rate.
- What health insurance coverage options are available? Are they offering a traditional HMO or PPO plan? Or is there a high-deductible health plan available? Some employers offer multiple plan options. Think about which would work best for you. Consider your typical medical expenses for the year, any medications you take, and any procedures or treatments you may be anticipating. Don’t just look at premium prices – although that’s important! – look at coverages, deductibles, co-pays, etc. Potential employers will provide more information on these plan offerings, but you must ask! Do the research so there aren’t any surprises after your hiring date.
- Does the employer have a retirement plan? If they do, find out if you must maintain a certain numbers of hours to have access to the plan, or if you are only eligible after some specified numbers of days. Look into the plan type and the rules associated with it. Does the employer do a match? Or employer contributions? How long does it take to be vested (meaning you can take the employer’s money with you if you get a new job)? Again, if you have questions – ask! They have a plan administrator or a Human Resources coordinator that can get you the answers you need to be able to make an informed decision.
If you find yourself in the position of having multiple offers on the table, that is an especially good time to consider all these details. What appears to be the best at first glance, may not be the best overall choice. Good luck in your pursuit!
