Meet The Speakers. Kathy Sweedler Consumer Economics Educator University of Illinois Extension

Transcription

1 Welcome to 1

2 Meet The Speakers Kathy Sweedler Consumer Economics Educator University of Illinois Extension Andrea Pellegrini Assistant Director Student Money Management Center 2

3 In what state and/or county are you located? 3

4 Where are you in the job seeking process? Not started Applying Interviewing Receiving Offers Have a Job

5 Why Do Benefits Matter? Increase Your Standard of Living Make the Most of Compounded Interest Informed Employees are Best-Suited for Making Decisions on Employee- Sponsored Retirement Plans. 5

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7 Retirement Plans Credit bureaus Time collect Off From information Work about your credit use Savings & Investments Others Defined Benefit Vacation College Wellness 401(k) Sick Leave Mutual Funds Insurance Etc. Maternity Stock Options Etc.

8 Insurance Health Dental Vision Disability Life Unemployment

9 HOW MUCH IS HEALTH INSURANCE WORTH AS A BENEFIT OF EMPLOYMENT?

10 Value of Employer Health Benefits ~ $6,435 annually for single coverage ~ $18,142 annually for family coverage Employer Health Benefits: 2016 Summary of Findings, The Kaiser Family Foundation and Health Research and Educational Trust, 2016, 10

11 100% 80% 60% 40% 20% 0% 63% 31%* 14% 15% 12% 16% 20%* 6% 11% 2001 to to to 2016 Premium Increases Overall Inflation Workers' Earnings * Percentage change in family premium is statistically different from previous five year period shown (p <.05). SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), ; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, (April to April). Premium Increases Cumulative 11

12 Increasing Employee Costs 12

13 Cumula&ve Increases in Health Insurance Premiums, General Annual Deduc&bles, Infla&on, & Workers Earnings, % 60% 50% 40% 30% 20% 10% 0% Overall Infla&on Workers Earnings Single Coverage Deduc&bles, all Workers Single Coverage Premiums % 19% 11% 6% NOTE: Average general annual deductible is among all covered workers. Workers in plans without a general annual deductible for in-network services are assigned a value of zero. SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), ; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, (April to April).

14 Keep in mind that employers may not have all the benefits, AND you may not be eligible for some benefits.

15 Access to Job Benefits Benefit All Workers Management & Professional Retirement 66% 81% Medical Care 67% 86% Life Insurance 55% 75% This slide shows the percent of people with access to job benefits: For All Workers and Management, Professional & Related Occupations in private industry, National Compensation Survey: Employee Benefits in the United States, Bureau of Labor Statistics, March 2016.

16 Discussion What kind of benefits do you need? What kind of benefits are most valuable to you? 16

17 Retirement Plans Access Participation Type Professional & Management All Professional & Management All Defined Benefit 25% 18% 21% 15% Defined Contribution 77% 62% 63% 44% 17

18 Tax-deferred Savings Plan Save in Tax-Deferred Plan Take Money Home Salary $100 $100 Pay Taxes $0 $28 Save $100 $72 18

19 More Money to Grow Tax-Deferred Non-Tax-Deferred Money from Salary $5,000 $5,000 Investment Year 1 $5,000 $3,600 Value in Year 20 $28,022 $12,368 Value After Withdrawing Money & Paying Taxes $20,176 $12,368 19

20 Steps For Success ü Compare benefits when looking for a job ü Review your budget before choosing ü Coordinate benefits with spouse s benefits ü Review choices annually 20

21 Alphabet Soup? Simple 401(k) 457 SEP 401(k) Simple IRA Roth IRA SURS 403(b) Roth 401(k) 21

22 Employer Match: A Bonus $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $50/$75 $100/$150 $200/$300 Your Contribution's Value at Retirement Value With Employer's Match 22

23 Comparing Job Benefits Job A 1 day/month paid vacation 1 day/month paid sick leave On-site child care + $100 discount monthly Option to buy group health insurance; costs $300 Job B 1 day/month paid time off for vacation OR sick leave Paid health insurance worth $300 per month Free lunch daily Job C 2 days/month paid vacation 1 day/month paid sick leave 5% salary ($180) contributed to retirement plan Which job would you recommend Jenna take? Why?

24 Comparing Job Benefits Job A $160 1 day/month paid vacation $160 1 day/month paid sick leave $100 On-site child care + $100 discount monthly $? Option to buy group health insurance; costs $300 Job B $160 1 day/month paid time off for vacation OR sick leave $300 Paid health insurance worth $300 per month $100 Free lunch daily Job C $320 2 days/month paid vacation $160 1 day/month paid sick leave $180 5% salary ($180) contributed to retirement plan

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26 Time Makes a Difference When you re saving for the future, starting NOW makes a big difference. 26

27 Invest $100 at 5% Interest for 30 Years and Watch Your Money Grow Money Time Value of Dollar Amount 27

28 Retirement Plans Age Contributions Made Early Contributions Made Later (9 Years) $4,000 annually $ (35 Years) $0 $4,000 annually Total Saved $36,000 $140,000 Amount Available at 65 $1,063,244 $862,843 28

29 Turn Your Dreams Into S.M.A.R.T. Goals S = Specific M = Measurable A = Agreed Upon R = Realistic T = Timely 29

30 Example of a Financial Goals List Date Goal Total Dollar Amount Target Date to be Done Date Done Dollar Amount Needed 1/1/2017 Have house down payment $6,000 12/31/2020 $167/ mo. Or $42/ wk. 1/1/2017 Sign-up for retirement savings plan 9/15/2017 $250/ paycheck

31 As a result of today s webinar, what do you plan to do? a. Ask questions about benefits from future employers. b. Set financial goals. c. Save money for retirement within two years of graduating from college. d. More than one of the above. e. None of the above. 31

32 Financial Literacy Badges Program Take a step towards the Earning Badge. What s Your Job Worth Quiz: go.uillinois.edu/jobworthquiz More information about the Financial Literacy Badges Program can be found here: GO.UILLINOIS.EDU/FLBADGES

33 Stay in Contact with Us! Financial Wellness web.extension.illinois.edu/financialwellness Student Money Management Center studentmoney.uillinois.edu 33

34 Questions?

35 Increased the waiting period before new employees are eligible for health benefits Reduced the number of full time employees the firm intended to hire because of the cost of providing health benefits Changed some job classifications from full time to part time so employees would NOT be eligible Changed some job classifications from part time to full time so that employees WOULD be eligible 3% 2% 5% 4% 3% 4% ǂ Firms were asked if they took the relevant action in response to the Employer-Shared Responsibility Provisions. Firms with 50 or more full-time equivalents and that offer health benefits were asked these questions. A significant number of employers (mostly large employers) did not know how many FTEs they employed. In these cases, firms with 50 or more workers were asked these questions. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, All Large Firms (200 or more Workers)ǂ All Firms (50 or More FTEs)ǂ 13% 10% 0% 10% 20% 30% Actions Taken by Firms in Response to ACA s Employer Mandate,