Post-Graduation Employment

When comparing multiple job offers, start by focusing in on your career priorities, then compare pay rates and benefit packages for each position.

1. Evaluate your career priorities. Consider which job offer best matches your values and career goals. Do you want to live in a particular city? Do you want a more flexible work schedule that allows you to travel or pursue other interests? Consider which job fits best with your career aspirations. To decide what’s most valuable to you in a job offer:
   • Rank your career priorities using the Job Offer Decision Worksheet.
   • Review each job with your career priorities in mind.
   • Make a list of the pros and cons of each job.
2. Compare pay rates. Salary is a key component of any job offer. To evaluate a salary offered by an employer, you’ll need to compare it to salary offers for similar positions in your field. You also will want to factor in cost-of-living expenses (see below) for the city where each job is based.
   • When comparing pay rates associated with multiple job offers, you will want to consider:
     • The specific job responsibilities tied to the pay rate
     • The number of hours an employer expects you to work each week, and whether the job pays overtime, grants comp time, or provides some other compensation for extra hours worked
     • The salary review process of each employer
3. Compare benefit packages. Pay is not the only thing to consider in a job offer. Some employers may try to compensate for a lower base salary with a rich benefits package.
   • When reviewing job offers, consider each company’s employee health plan, retirement plan, vacation and sick-day policies, and other benefits. (See below for more details)
   • Some employers also may offer flexible hours, telecommuting, employee discounts, tuition reimbursement, or other perks.

Salaries are important, but they are not the complete picture of a job offer. In an expensive city such as Washington, D.C., where food, transportation, and housing costs are high, your salary won’t go as far as it would in a less costly location.

That’s why, in addition to evaluating the job’s benefits and employee perks, you should be sure to consider the cost of living in the city where you’ll work.

Do Your Research

You can see just how far your salary will go in a particular area of the country using a cost of living calculator, like this one from Bankrate.com.

Investigate how much you’ll pay on average for each of your essential expenses, such as housing, food, transportation, and sales tax. Once you have an idea of those expenses, you can estimate your prospective budget, using your approximate monthly after-tax take-home pay.

Reference: https://www.cashcourse.org/Topics/Earn

Good health care plans can protect you against paying for big medical expenses on your own, out of pocket. So when you are evaluating a job offer, consider the employer’s health care plan along with the salary.

The Basics

When reviewing your health benefits package, you’ll likely come across these key terms:

• Copay: A fixed amount of money that you pay the service provider for a visit or prescription (your health insurer covers the rest).
• Deductible: The amount of money that you have to pay upfront before your health insurance provider begins paying.
• Monthly premium: A monthly fee that you have to pay to your insurer to be covered for doctor visits, hospital visits, or prescriptions. Often, this fee is taken directly out of your paycheck.

What Are Your Health Care Coverage Options?

The following list outlines different types of plans, which vary based on how you pay for the coverage:

Fee-for-service plans allow you to see any providers of your choosing, and your insurance company will pay for a portion of the cost of service. These types of plans generally require you to submit a claim to get reimbursed, and some services are not guaranteed (like services from some independent practitioners at the hospital).

Managed care plans require you to see a certain provider based on a preapproved list. While more restrictive in provider choice, these plans cover more preventive care than the fee-for-service option. There are three different types of managed care plans:

• Health maintenance organization (HMO): This plan has a limited number of physicians and hospitals in its network, and you pay out-of-pocket costs at the time of care. HMOs are very comprehensive, cover most preventive care services, and don’t require much paperwork.
• Preferred provider organization (PPO): PPOs require you to see only providers selected by the insurer. If you see providers that haven’t been selected by the insurer, you pay more out of pocket.
• Point of service (POS) plan: A POS plan is a combination of HMOs and PPOs. You select a primary care physician— a “gatekeeper” who coordinates your care and refers you to specialists as needed. If you see plan-approved providers, you will have a lower copay or deductible than if you go to non-approved providers—unless you were referred by your coordinating physician.

How Much Will It Cost Me?

Determining the overall cost of your health care isn’t always straightforward. It’s important to weigh the coverage benefits against the amount you’ll pay. Consider the following expenses when you compare plans

• Premiums: Sometimes your employer will cover all or part of this cost for you and/or a dependent. Be sure to ask your company about who pays what.
• Cost at time of service: This can be the copay or any out-of-pocket costs you’re responsible for before you reach your deductible. Consider your disposable income when determining if the coverage is affordable.

Determining the Option That Is Best for You

When evaluating an insurance plan, you already may have certain needs or personal preferences that you should take into account. Consider the following:

• The affordability of premiums, out-of-pocket expenses, and upfront costs
• If you or a family member has a pre-existing condition requiring treatment or medications
• How often you or your family typically visits the doctor every year
• Prescription drug needs
• Dental and vision benefits

Ask the Right Questions

Consumer Reports recommends that you get the answers to these key questions about the company health plan:

• What are the plans benefits and limitations?
• What do you have to pay for and what does the employer pay for?
• What providers are covered under each plan and whether your current doctor(s) are covered?
• What tax-free accounts are available?
• When can you and/or your family join the plan?

Before selecting a health care plan offered by your employer, do your homework and ask the right questions so you select the most affordable and comprehensive plan. Keep in mind that if your employer doesn’t offer health insurance, you still have options for getting insurance independently.

Reference: https://www.cashcourse.org/Topics/Earn/Comparing-Jobs/Healthcare-Through-Your-Job-What-You-Should-Know

In addition to health care coverage, your employer may offer you retirement benefits. In many cases, you must choose to contribute a portion of your wages to the plan account at each pay period. Before you skip the retirement savings in favor of a little more money in your pocket each month, think about how much your savings may be able to grow over the years. Bring a more-secure retirement within reach by taking advantage of your employer’s retirement plans.

Here’s what you need to know:

Pension Plans

Pension plans pay you a specific amount of money when you retire from work. This amount is guaranteed to you for the rest of your life. Not many employers offer a pension plan anymore. If yours does, ask your manager or human resource specialist about how you can become eligible to receive benefits after retirement, and whether you are required to contribute to the company’s pension fund.

Defined Contribution Plans

Two common defined contribution plans are the 401(k) and the 403(b):

With a 401(k) plan, your employer allows you to choose a set amount from each paycheck to contribute automatically to your plan account. You also can choose how you would like the plan manager to invest the money, among various options—such as stocks and bonds— the plan offers. You don’t pay taxes on your money when it goes in to the plan, but you will owe taxes on the money when you withdraw it, usually during retirement.

403(b) plans, also known as “tax-sheltered annuities,” are available only through certain public-sector employers and nonprofit organizations. They function the same way as 401(k) plans, allowing you to make contributions and decide how you would like to invest your money among plan-offered options.

As of 2016, the federal government limits both 401(k) and 403(b) contributions to $18,000 per year, or $24,000 for employees age 50 and older.

How Do I Evaluate My Employer’s Plan?

If your current or potential employer provides matching funds for 401(k) or 403(b) contributions, that’s a valuable benefit. This means that your employer will add even more money to your retirement account each pay period above and beyond what you contribute. An employer may set requirements for how much you must contribute to qualify for the matching funds.

If the match is set at 4 percent, for example, it means that the employer will match your contributions dollar for dollar, up to 4 percent of your paycheck. Employer matching is like getting free money for retirement, so if your company offers this benefit, take advantage of it!

You also should investigate the kinds of investments available to you through the plan. Having a wide range of investment options gives you the flexibility to make your retirement plan work for you.

Why Plan for Retirement Now?

Statistics show that the longer employees wait to start systematically saving for retirement, the harder it is for them to set up solid retirement plans. And the younger you start, the more you earn through the magic of compounding interest. Poor retirement planning is a recipe for hardship during what might otherwise be one of most enjoyable periods of your life.

Avoid this predicament by talking to your HR manager or a retirement specialist at your bank or credit union today about how you can plan for a secure retirement.

*The Office of Student Financial Success does not advise on retirement planning or investment advice. This information is provided for educational purposes only. Retirement or investment advice should only be provided by a licensed professional*

Reference: https://www.cashcourse.org/Topics/Save-and-Invest/Retirement-Planning/Retirement-Benefits-101