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Are You Leaving Money on the Table? Make the Most of Your Employee Benefits

July 12, 2024

Let's start with a little thought experiment. If we offered you an instant 30% pay raise, no strings attached, would you take it? Of course, you would! Who wouldn't want that kind of influx of extra cash?


Well, here's the thing — you may already be entitled to the equivalent of a huge pay bump through your employee benefits package. The only catch is that you actually have to take advantage of the benefits to reap the rewards.


You've worked hard to earn what you have. So why leave money on the table by not fully utilizing all your employer's perks and benefits? It makes no sense! 


Keep reading to discover how you can maximize your employee benefits and unlock their full potential. We'll show you just how lucrative employee benefits can be.


Understanding Your Benefits Package


First things first — familiarize yourself with what's included in your benefits package. This might seem basic, but you’d be surprised how many people don't fully understand their benefits. Key areas to focus on include:


  • Health Insurance
  • Retirement Plans
  • Stock Options and ESPPs.
  • Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)
  • Life and Disability Insurance


Your 401(k) Match 


Let's kick things off with a big one — your employer's 401(k) match. This is easily one of the most valuable benefits out there, yet it's still sadly underutilized.


For every dollar you contribute to your 401(k) retirement account (up to a certain percentage of your salary, usually 3-6%), some employers will match those contributions with free money from their end. You're literally getting paid to save for your future!


Let's say your employer offers a 4% match, and you earn $200,000 per year. If you max out the match by contributing 4% ($8,000) annually, your employer will kick in another $8,000 on top of that. Suddenly, your original $8,000 contribution has doubled to $16,000! Where else can you get a 100% return on your money just like that?


Over 30+ years that 401(k) match money could translate into hundreds of thousands of extra dollars for your retirement. It's such an easy way to accelerate your retirement savings and prepare for the future you want.


Even if your employer doesn't match your contributions, maximize your retirement contributions if you can afford it. In 2024, employees can contribute up to $23,000 into their 401(k), 403(b), most 457 plans, or the Thrift Savings Plan for federal employees. 


Maximize Health Insurance Benefits


Health insurance (including dental and vision) is often the most complex part of an employee benefits package. However, it’s also one of the most critical. Here are some tips to help you make the most of your health insurance:


  • Preventive Care: Take advantage of free preventive care services like annual check-ups, screenings, and vaccinations. These can help you catch health issues early, potentially saving you money and hassle down the line.
  • Wellness Programs: Many employers offer wellness programs that provide incentives for healthy behaviors, such as gym memberships, weight loss programs, or smoking cessation programs. Participating in these can improve your health and potentially reduce your insurance premiums.
  • Telemedicine: Check if your plan covers telemedicine services. Virtual doctor visits can be more convenient and sometimes cheaper than in-person appointments.


Take the time to understand the different plan options offered by your employer, including deductibles, copays, and out-of-pocket maximums. Carefully review the health insurance options during open enrollment each year. Don't just go for the cheapest option — consider your family's healthcare needs and choose a plan that provides the right coverage at a reasonable cost.


Flexible Spending Accounts (FSAs) and

Health Savings Accounts (HSAs)


FSAs and HSAs offer excellent tax advantages for covering medical expenses. Here’s how to maximize their benefits:


  • Contribution Limits: For 2024, you can contribute up to $3,200 to an FSA and $4,150 to an HSA ($8,300 for a family). If you’re over 55, you can contribute an additional $1,000 to an HSA.
  • Qualified Expenses: Use these accounts for qualified medical expenses, which can include doctor visits, lab work, prescription medications, and even some over-the-counter items.
  • HSA as a Retirement Account: HSAs have a triple tax advantage (tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses). If you don’t need to use the funds immediately, consider investing the money for future healthcare costs in retirement.


Stock Options and Employee Stock Purchase Plans (ESPPs)


Stock options and ESPPs can be a fantastic way to build wealth, but they require careful planning:


  • Understand the Terms: Know the vesting schedule, the exercise price, and any stock selling restrictions.
  • Tax Implications: Be aware of the tax implications of exercising options or selling ESPP shares. Timing can significantly impact your tax bill.
  • Diversification: Avoid having too much of your portfolio tied up in your employer’s stock. While it's great to have faith in your company, you want to avoid risking your financial future on just one stock.


Evaluating Life and Disability Insurance


Life is unpredictable, and having adequate insurance coverage can provide peace of mind for you and your loved ones. Many employers provide basic group life insurance to their employees for free or at a heavily subsidized rate. However, the coverage amount is usually just 1-2 times your annual salary, which may not be enough for your needs. Review these options carefully and determine if they meet your needs or if you require additional coverage.


Here’s how to make sure you’re adequately covered:


  • Coverage Amount: Assess if the coverage provided by your employer is sufficient. You may need additional coverage to protect your family’s financial future.
  • Supplemental Policies: Consider purchasing supplemental life or disability insurance if your employer’s policy doesn’t meet your needs.
  • Beneficiary Designations: Regularly review and update your beneficiary designations to ensure they reflect your current wishes.


Take Advantage of Other Awesome Perks


We've covered some of the essentials, but there are so many other valuable employee benefits that can help you make the most of your earnings:


  • Employer-paid training, education, and professional development opportunities
  • Commuter benefits to save on public transportation, parking, carpooling options, etc.
  • Employee discounts on products, services, travel, and more
  • Childcare reimbursement
  • Tuition reimbursement
  • Generous paid time off, parental leave, sabbaticals and more
  • Employee Assistance Programs (EAPs) provide confidential counseling, legal assistance, and other valuable resources to help you navigate personal or work-related challenges.


The list goes on and on! But here's the catch — you have to take the time to learn about your benefits and what's available to you. Don't just let these valuable benefits go to waste!


Let Five Pine Help You Make the Most of Your Benefits


When it comes to your finances, small overlooked areas of inefficiency can add up to a staggering amount of money over time. Your employee benefits package represents a prime opportunity to gain additional income if you take advantage of them.


By thoroughly reviewing your available benefits each year and taking full advantage of them, you could easily inject a 10-30% raise into your household's finances. For a high-earner making $500,000+ annually, we're talking about tens of thousands of dollars in additional wealth-building power.


Of course, maximizing your benefits takes a little work and conscientious planning up front. However, the incredible value

you'll get in return is well worth the effort. After all, you've earned these benefits through your hard work and professional success.


If you need help figuring out where to start or could use some guidance, reach out anytime. As your financial advisors, we're here to help you maximize every possible resource available to you. 


To schedule a meeting, email us at info@fivepinewealth.com or call us at 877.333.1015. At Five Pine Wealth Management, we want to ensure you're taking full advantage of your employee benefits package!

Preparing for Retirement Without Compromising Today: Savings Strategies for Your 50s

February 21, 2025
Somewhere in adulthood, the old question of “What do you want to be when you grow up?” morphs into “ What do you want to do when you retire?” Some people dream about their retirement for decades, while others barely give it a thought. Either way, by the time you reach your 50s, you’ll benefit from building a retirement plan that doesn’t force you to sacrifice all of life’s joys today. Retirement planning in your 50s is less about radical changes and more about making intelligent, intentional decisions. Let’s dive in. By your 50s, you’ve likely hit your peak earning years. That’s the good news. The not-so-great news? The clock is ticking on the years left to build your nest egg. Don’t panic. With a strategic approach, you can set yourself up for a secure retirement without feeling like you’re putting life on pause. Your 50s are also a time to reassess priorities. Kids might be leaving the house (goodbye, endless grocery bills!), and you might have more flexibility in allocating your income. This decade is the perfect opportunity to course-correct and make up for any lost time. 4 Retirement Savings Strategies for Your 50s This decade is the perfect time to implement strategies that will help you coast right into your golden years. 1. Max Out Retirement Accounts The IRS gives a little extra love to folks 50 and over in the form of catch-up contributions. For 2024, you can contribute up to $30,500 to your 401(k) ($23,000 plus a $7,500 catch-up contribution). Don’t have a 401(k)? No problem. With an IRA, you can add an extra $1,000 to the usual $7000 contribution limit. These boosts may seem small, but they add up fast, especially with compounding returns working their magic. 2. Automate Your Savings Automating contributions ensures you’re consistently saving without even thinking about it. Set up direct deposits into your retirement accounts so saving becomes as effortless as your morning coffee routine. If you get a raise, consider earmarking most of it for your savings—future you will thank you. 3. Diversify Investments By now, you’ve likely heard that “diversification” is key, but what does it mean for you? In your 50s, you’re likely transitioning from a more aggressive portfolio to a slightly more conservative one. That doesn’t mean selling all your stocks and parking your money in bonds, but rather finding a balance that aligns with your risk tolerance and timeline. 4. Pay Down High-Interest Debt Interest rates on credit cards or other high-interest loans can drain funds that could otherwise be growing in retirement accounts. Paying these off first will free up cash flow for savings. Catching Up on Retirement Savings If you’re behind on retirement savings, don’t stress. There are plenty of ways to catch up while still enjoying life today: Reevaluate Your Budget : Start by taking a close look at where your money is going. Are there subscriptions you’ve forgotten about? Could dining out be scaled back slightly? You don’t have to eliminate all your “wants”—just trim the fat. Even reallocating $200 a month can lead to significant savings over time. Downsize Strategically : Empty nesters, this one’s for you. If your current home has more space than you need, downsizing could free up substantial equity for retirement savings. Smaller homes also mean lower utility bills, maintenance costs, and property taxes. Leverage Catch-Up Contributions : As mentioned earlier, these higher contribution limits for people over 50 are a game-changer. Pair this with any employer-matching contributions, and you’ve got a recipe for rapid savings growth. Delay Social Security : While Social Security might feel like a safety net, waiting to claim it can significantly increase your benefits. Your benefits grow every year you delay claiming beyond your full retirement age (up to 70). If you can, let those checks wait while your investments continue to work. Explore Additional Income Streams : Retirement doesn’t have to mean quitting work entirely. Many people in their 50s find side hustles or part-time work that aligns with their interests. Whether it’s consulting, teaching, or turning a hobby into income, these earnings can supplement savings without feeling like a burden. Balancing Retirement Planning with Enjoying Today Now for the part everyone cares about: How do you plan for tomorrow without ruining today? Here’s how to strike the balance: Set Clear Goals What does retirement look like for you? Is it traveling the world, spending more time with family, or pursuing hobbies you love? Knowing your “why” helps make the sacrifices feel worthwhile. It also gives you a clearer target to aim for. Embrace Experiences Over Things Research shows that spending on experiences—like vacations, concerts, or classes—provides longer-lasting happiness than material goods. Plus, experiences don’t have to break the bank. Look for ways to create memories without overspending. Plan for Mini-Retirements Who says you have to wait until you’re 65 to enjoy some of that freedom? Consider taking shorter breaks or extended vacations now to recharge and enjoy life. With careful planning, these “mini-retirements” won’t derail your long-term goals. Prioritize Health One of the best investments you can make in your future is in your health. Regular exercise, a balanced diet, and preventive healthcare can reduce medical expenses down the road and ensure you can fully enjoy your retirement. Celebrate Small Wins Saving for retirement is a marathon, not a sprint. Celebrate progress along the way—whether it’s maxing out your 401(k) for the first time or finally paying off that lingering debt. 3 Practical Action Steps to Get Started Calculate Your Retirement Needs : Estimate how much you’ll need to maintain your desired lifestyle. Don’t forget to factor in healthcare costs, home maintenance, inflation, and leisure activities. Review Insurance Coverage : Make sure you’re adequately covered with health, life, and long-term care insurance. These policies can protect your savings from unexpected expenses. Adjust Your Asset Allocation : As you approach retirement, consider shifting some of your investments into more stable options. This will minimize the risk of major losses as you approach the time when you will need the money. How Five Pine Wealth Management Can Help We can help you create a tailored plan, taking into account your current savings, goals, and timeline. With our experience, we can advise you on maximizing tax-advantaged accounts and minimizing unnecessary risks. Preparing for retirement in your 50s doesn’t mean sacrificing today’s joys. With thoughtful planning, strategic savings, and a focus on balance, you can enjoy the present while setting yourself up for a comfortable future. Start today, by scheduling a meeting with us. Email info@fivepinewealth.com or call us at: 877.333.1015 to take it one step at a time, and remember: It’s never too late to build the retirement you deserve.

Robo Advisor vs Financial Advisor: Why Automation Can’t Beat the Human Touch

February 14, 2025
In today's fast-paced and tech-driven world, convenience is a hot commodity. Businesses across industries have had to pivot to meet the demands of consumers who crave efficiency and ease. Think about how brick-and-mortar retailers have transformed into online shopping havens with a greatly increased selection of products, the ease of shopping at all hours from home, or how delivery services have boomed as an effortless solution to mealtime dilemmas, to name a few. If businesses don't prioritize easy accessibility and simplicity, many risk losing consumers. The finance industry is no exception — in fact, it's a prime example of an industry constantly innovating to simplify highly sought-after services like investing. Case in point? Robo-advisors. What Is a Robo-Advisor? If you're unfamiliar with the term, you could likely guess its meaning from the name alone. More officially, it refers to a software application that provides automated, algorithm-driven investment management with minimal human intervention. These platforms leverage technology to streamline and optimize the investment process. They typically offer a curated selection of investment options tailored to an investor's goals, risk tolerance, and time horizon. An automated solution for building wealth? Sounds promising! But while it might seem like an all-good, no-bad, very-welcomed shift in the industry, it's important to remember that with the positives may come some serious drawbacks. Let's explore both sides: robo advisor pros and cons. Robo-Advisor Pros First off, let's highlight the positives. A big one is that many individuals who had never even considered investing before might still be in the same position today if it weren't for accessible solutions like robo-advisors. They have opened doors for countless people to enter the world of investing, which is exciting! But let's look at a few other benefits that have fueled their increasing popularity: Accessibility and Convenience: These are two key factors that influence consumer satisfaction, and robo-advisors deliver precisely that. They are easily accessible online or through mobile apps. Their user-friendly interfaces make it easy for investors to open an account and set up automated contributions within minutes, monitor their investments, and make adjustments — all without the need for face-to-face meetings or phone calls with a financial advisor. Automatic Diversification: If you're new to investing or have limited knowledge, robo-advisors alleviate the stress of deciding how to invest. Using sophisticated algorithms, they offer diversified investment portfolios based on your risk tolerance, investment goals, and how soon you may need to access your invested money. This approach can effectively mitigate risk and minimize the impact of market volatility on investment returns. Low Cost: Robo-advisors usually come with lower fees than traditional financial advisors who actively manage your portfolio. Through automation and technology, these platforms can offer their services at a lower cost, making investment management more accessible to a broader range of investors, including those with smaller portfolios. These benefits are precisely what many investors are seeking as they begin their investing journey, positioning robo-advisors as a solution for some. Robo-Advisor Cons While robo-advisors have gained popularity for their evident and understandable benefits, it's essential to acknowledge that every innovation or advancement often has accompanying drawbacks. Let's explore some of them: No Human Touch: Finances are deeply personal. Beyond mere math, financial decisions are often emotionally driven. While a robo-advisor can efficiently manage your investments using algorithms and automation, it can't engage in comforting conversations or provide reassurance during turbulent market conditions to prevent impulse decisions driven by fear or uncertainty. Nor can it offer encouragement to keep going or remind you of your progress in your financial journey when times get tough. Sometimes, human interaction and guidance are indispensable. Limited Customization: Robo-advisors typically offer a selection of pre-built portfolios made up of ETFs (exchange-traded funds) or mutual funds. While these portfolios provide diversification that suits many investors, they're not a perfect fit for everyone. Take, for example, an investor with specific preferences, like avoiding certain companies or industries or desiring to invest in individual stocks. In such cases, robo-advisors might be too restrictive. Additionally, robo-advisors might not have the capacity to deal with more complex financial situations, such as tax optimization or retirement income planning for high-net-worth individuals. Limited Area of Focus: While the allure of robo-advisors partially lies in their simplicity, that can equally be a drawback. Because robo-advisors primarily focus on investment management, you might miss out on the holistic approach of a human financial advisor who considers various aspects of your financial situation. A robo-advisor doesn't consider factors like high-interest debt you may have, for example, which might be wiser to pay down before aggressively investing. Nor does it account for the possibility of not having an adequate emergency fund or other pressing financial obligations that take priority. When it comes to investing, having a financial advisor looking at your entire financial landscape can provide valuable insights into the most suitable account types to open, ideal contribution amounts, and the target rate of return to aim for. These drawbacks highlight the importance of understanding the limitations of a robo advisor vs. a financial advisor and considering them in the context of your financial goals, preferences, and circumstances. Robo Advisors vs. Financial Advisors: How Five Pine Wealth Management Can Add a Personal Touch to Your Finances  The balance between the positive and negative aspects is a common challenge of many new technologies, robo-advisors included. As with any financial decision, investors should thoughtfully evaluate their individual needs and preferences before opting for these platforms. As you might be able to guess, we here at Five Pine Wealth Management place immense value on the personal touch and genuine passion of a human financial advisor. It's the driving force behind everything we do. We believe in understanding your circumstances, empathizing with your concerns, building a long-lasting relationship, and providing personalized guidance for each client. While we can recognize the advantages of robo-advisors, we can't ignore the fact that they can't replicate the human element in financial planning. The relationship with a financial advisor goes beyond mere numbers. And if that's what you're looking for, we'd love to chat! Contact us at info@fivepinewealth.com or 877.333.1015 to schedule a meeting.
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