Benefits are setting records for employees
Bottom Line: I’ve had a series of great job-related stories this week. It includes the fourth lowest real unemployment rate in recorded American history. Record low real unemployment rates for Hispanics and black adults. And the highest number of hiring's in a month along with the biggest gap of job openings to unemployed people on record. With all of this good news for employees and job seekers – you've got to imagine that there’s a highly competitive corporate landscape to attract talent. And there is.
If you’re hunting for a new job, evaluating opportunities or just curious to see how your benefits compare – know that companies are paying record benefits across the board. Employers are now averaging spending record amounts of money on benefits per employee for full-time employees. The average hourly income is now $27.83. Factoring in the average total compensation wage with benefits. My estimate is $39.21. That’s right, employers are now paying about 40% more than hourly wages in the form of benefits. If you’re not making use of them, this could be a good time to review what you have available. Especially 401k’s.
The average employer not only offers a 401k but is averaging a record match of about 5%. This is up from an average of just over 3% ten years ago. To put this another way, with the average person making the average income with the average employer match, there’s an extra $2,489 tax free dollars waiting for you as long as you’re at least contributing enough to your 401k to take advantage of your employer match. Because employers have still been raising incentives in this tight labor market, it’s also a good time to remind you that even if you setup a 401k contribution to hit the company match previously, it’s a good idea to check to see if it’s changed. Many employers have increased what you’re eligible for and if you weren’t paying close attention you might leave additional free money on the table. Great news stories like these never get old. Until the next one...