BY: BYRON MOORE, CFP®
posted May 7, 2018
Every weekday morning, I do CrossFit with Tim. Tim is a young dad, probably in his early thirties, who’s busy providing for his wife and three kids under the age of five. What a handful.
Just last week, as we were leaving the gym and heading to our cars, Tim told me that he’s considering two different job offers – one pays more, but the other has better benefits.
“I am leaning towards the one with better benefits,” he said, “since I like that security. What do you think?”
I think my answer may have startled him a bit:
“Well Tim, what if your boss owned your house?”
He gave me a confused look.
I explained to him that, historically, plenty of employees have labored under this arrangement: sharecroppers, ministers, and many in the military. Each of these has the same cloud looming over their heads in their later years: “Where will I live when I can no longer work for the roof over my head?”
Like two-thirds of Americans, Tim owns his own home. When I asked why owning a home was important to him, he said he wants the freedom and satisfaction that comes with owning a thing. “I can do with it what I want, and call it ‘mine.’”
I agree with Tim. There’s a profound feeling of security that comes from owning your own home. There is the sense that, if you want it to be, it will be around as long as you are.
But can you imagine opening your employee handbook and reading, “Upon termination or separation from service, you must vacate your employer-owned home within 30 days.”
For some employees, the prospect of retirement carries with it the same realization that the benefits they took for granted will no longer be there.
The one I most often see that surprises soon-to-be retirees is the group life insurance they have. For many, this is the only life insurance they have. Upon retirement, it most often terminates or greatly reduces.
Another commonly overlooked employee benefit is disability income insurance. If group coverage exists at all, it is often inadequate to cover one’s needs and is rarely portable (you can’t take it to your next job).
I’ve met with a number of soon-to-be retirees that faced very difficult choices due to a medical condition they had. They were well enough to work, but not well enough to get an insurer to extend coverage to them for life insurance, disability insurance or long-term care insurance.
They wanted to retire, but remained chained to their current job for fear of losing a critical employee benefit.
Although Tim is far from retirement, he is wise to start thinking and acting on the future right now.
So be grateful for employers that offer a rich benefit package.
But if you get the opportunity to own your own benefits package (or a significant slice of it), carefully consider that option. And be sure to consult an experienced advisor when evaluating your options.
That may prove more stable and secure in the long-run.
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