In addition to your salary and health insurance, your employer may offer other benefits that will help you address your financial challenges. One is a retirement plan. It could be an IRA, a 401(k) or a similar plan that allows you to save and grow your savings. You won't pay taxes on the savings until you withdraw them in retirement. Some employers will match your contributions to your retirement plan up to a certain amount. The earlier you start saving, the more you'll have when you retire.
Life insurance is another important employee benefit. It offers a safety net for your family if something should happen to you. Financial security comes from knowing that your loved ones will be taken care of when you're gone. Your employer may offer coverage, which generally pays beneficiaries one or two times your salary if you die while your policy is in effect. In some cases, you can purchase more protection through a special arrangement between your employer and a life insurance company.
Another workplace benefit an employer may offer is disability income insurance. Often called paycheck protection, these policies replace some of your income if you are unable to work because of an injury or illness. A disability happens more than most people think. The Social Security Administration estimates that 1 in 4 20-year-olds in the workforce today will suffer a disability before they retire. Disability income insurance benefits help cover rent or mortgage, buy groceries and take care of other necessities while you are out of work.
Your employer also may work with an insurer to offer long-term care insurance. It helps pay for the high and rising cost of long-term care services. Today, the median cost of a one-year stay in a nursing home is more than $90,000. The median cost of a one-year stay in an assisted living facility is more than $40,000. Most people cannot cover these expenses on their own. Health insurance and Medicare generally don't cover these costs.
Check with your employer for benefits offered at your work. More information about employee benefits is available on the American Council of Life Insurers' website, www.acli.com.
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