Top Ten Personal Finance Mistakes - Part 7

ublished by Eugene S. Melchionne, Attorney at Law August 5th, 2007 in Personal Finance, Financial Resources on the Web and Connecticut. Tags: 401k plans, cheap term life insurance, employer contributions, free money, health insurance, retirement funds, retirement plan, term life insurance.

Your employer provides access to a retirement plan and has life insurance as part of a benefits package, but you don’t take advantage of it. What? Yes, it costs money an it will reduce your take-home pay, but consider the advantages: cheap term life insurance will pay death benefits to your dependents and retirement funds are often matched by employer contributions. No matter how you calculate the amount, every dollar your employer contributes to your retirement plan is FREE MONEY.

Most financial advisors recommend taking the full benefit of employer provided perks even if you have to contribute to them. Health insurance is easy to understand because the monthly cost of health insurance will seem puny compared to the bill you might get for an uninsured illness. But life insurance and pension or 401K plans will also get you free money. As my brother often says to me, “Free is free and that’s for me!”

When interviewing for a new job, consider the availability of such employer-paid or subsidized benefits. A lower salary may actually be higher pay when you consider the cost of savings plans and insurance.

Got savings, got retirement, got a great employer? Go on to Part 8, Life Insurance.