Getting Your First Job For Dummies

Chapter 18

Ten (Or So) Potential Benefits Besides Salary

IN THIS CHAPTER

Understanding retirement benefits

Becoming familiar with stock plans

Knowing about perks that help you save

Your salary is only a part of your compensation. Many employers offer other ways for you to earn money or to save it. You can also avoid paying taxes on these savings, increasing the money you set aside. This is because when you save money to a pre-tax account, you aren’t paying taxes on that amount of money; instead, you’re using that money you would have paid in taxes for medical, commuter, or childcare expenses. Or you can save it for retirement.

Knowing about these perks will help you get a better grasp of your compensation package and your full earning potential. In this chapter, I offer details about some of the most commonly offered benefits.

401(k), 403(b), and 457

These employer-sponsored plans allow you to save for retirement by setting aside “pre-tax” dollars from your paycheck. This is a big advantage because these savings are not taxed as you store them away. Only when you retire do these funds get taxed — but not before many years have passed, and the power of compounding interest has ...