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  • This could be the start of something great

    A new job is something to get excited about. But it can also come with a lot of questions. Fortunately, helpful information can be easy to find.

  • Ready to take the next step? 

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  • Evaluating your job offer

    Take a good look at your total benefits package — not just your salary — before you accept any job offer.

  • Managing benefits when changing jobs

    What will you do with the money in your prior employer’s retirement savings plan and what will happen with your health insurance?

  • Insurance protection: life, health and disability

    These can be great added benefits, but beware relying entirely on your employer to protect yourself and your family.

Topics and resources

Evaluating your job offer

Yes, salary may be the first thing you think about once you’ve landed a job offer. But your total benefits package can make a huge impact on your financial life. So understanding the value of your benefits is essential.

Retirement plan

Pensions — also called defined benefit plans (because they define up front the financial benefit you would receive in retirement) — are growing increasingly rare.

If you’re offered one, count yourself lucky. But be sure you understand the details of your plan, including eligibility requirements, vesting period and how length of service affects benefits.

Workplace retirement plans are more commonly offered today.  They are also known as defined contribution plans because they define how much will be contributed to your savings.

These generally come with tax advantages and are named after the parts of the tax code that define them, such as 401(k), 403(b) and 457 plans. Generally the type you are offered depends on the type of organization you work for, as defined by the tax code. Take the time to understand how they work to ensure that you make the most of it.

Traditional 401(k), 403(b) and 457 plans — These tax-deferred options let you make contributions before you pay taxes. In other words, the money you contribute does not count toward your taxable income and lowers the net impact of taxes on your take-home pay.

For example, if you’re in the 25% federal income tax bracket, every $100 you put into your plan will reduce your take-home pay by $75.

What’s more, any growth on the money you invest will also be tax-deferred for as long as it remains in your plan. You will eventually pay income taxes on your distributions, when you may be in a lower tax bracket. Please note, if you take distributions prior to age 59 ½, you may also be subject to an additional 10% federal income tax penalty.

Your workplace savings plan can be a significant source of retirement income — but only if you participate. And the sooner you begin making contributions the better off you are likely to be. That gives your money more time to potentially grow. See for yourself:

The power of time — a hypothetical example

If you save And assuming you earn In 10 years you’ll have In 20 years you’ll have In 30 years you’ll have
$100 per month 6% annually $16,766 $46,791 $100,562


That’s a difference of up to $83,796!

Even a single year matters — a hypothetical example

If you contribute $200 a
month starting at age
At age 65, you could
end up with
A difference of
25 $400,289 $25,590
26 $374,699
35 $201,907 $14,065
36 $187,842
45 $92,870 $7,730
46 $85,140


This example assumes an annual rate of return of 6% compounded monthly. This example does not reflect possible taxes and product-related charges. Does not include any company match or profit sharing contributions.

Roth 401(k), 403(b) or 457 plans — Contributions come out of your paycheck after you pay taxes, but your withdrawals will be tax-free when you retire (assuming you meet the requirements), potentially reducing your tax burden in your old age.

Learn more about the tax implications of Roth and traditional 401(k)s.

Company match or profit sharing — Many employers supplement employees’ retirement plan contributions by directly matching some percentage of them, or through a profit sharing plan contribution. These very important benefits can give your retirement savings a nice boost, potentially adding up to more money in the future.

TIP: It’s never too early, or too late, to start saving for retirement. Between compounding (the investment return you earn on your reinvested earnings), pre-tax contributions and tax-deferred growth potential, you have plenty of reasons to save — no matter how near or far you are from retirement.

Bonuses

Does your offer include any kind of bonus? If so, think about how to best use that extra money for things like retirement savings or funding a child’s education.

Insurance

Insurance offered through your company often gives you the benefit of lower groups rates along with employer subsidies.

Health insurance — Consider what kind of health insurance plans are included with your offer, how much each would cost you and how much is subsidized by your employer. In light of recent increases in healthcare costs, the quality of any health insurance offered can be a very valuable benefit — and may tip the balance between competing job offers.

Life insurance — Does your new employer offer life insurance? If so, what kind? Does it provide a cash value that can be borrowed against for future needs like retirement income? Is supplemental insurance also available through your employer to better serve your financial needs?

While employer-provided life insurance can be a great benefit, it is not a replacement for your own permanent insurance, since if you leave your job, you probably won’t be able to take your policy with you.

Disability insurance — Short-term or long-term disability insurance can prove to be indispensible since it can provide you with an income if you can’t work due to injury or illness. If your employer doesn’t offer it, you may want to purchase a policy yourself.

Company stock

Whether in the form of stock options or an employee stock purchase plan, the ability to acquire company stock may provide you with an investment opportunity that could add considerable value to your total compensation. You should, however, be careful to avoid investing too heavily in any single company stock, as keeping a well-diversified portfolio is essential.

Learn more

Taking advantage of employer-sponsored retirement plans

The bottom line

Carefully considering any job offer you receive and weighing the full value of your total benefits package can help ensure you make a career move that will keep you happy for years to come.

Changing jobs

What happens with your retirement savings and health insurance when you change jobs?

Your retirement savings — All of the contributions you made to your prior employer’s retirement savings plan as well as any vested employer contributions are yours. And you have a few options when deciding what to do with them.

  • Roll the funds into your new retirement plan or your own IRA.
    • This option helps ensure that you can manage all of your savings through one consolidated account.  It can also be an opportunity to make a change if you aren’t happy with the choice or performance of your old plan’s investment options.
  • Leave the funds in your prior employer’s plan.
    • If you leave your savings in your old plan, you won’t be able to make any new contributions. And if you also enroll in your new company’s plan, you’ll have more than one account to manage. But if your former employer’s plan offered better funds than your new employer’s, you may want to consider leaving your money right where it is.
  • Take a lump-sum payment.
    • Beware: You’ll end up paying income tax at current rates on the withdrawal, plus a mandatory 10% penalty (if you’re under age 59) if you choose this option. That can make taking a lump-sum distribution a costly proposition.

Health insurance — When you change jobs, it is advisable to research health insurance options as you make your job transition. 

Source: United States Department of Labor

Take the next step

Rolling over your retirement savings   <link to TBD rollover article>

Learn more about COBRA

The bottom line

Carefully considering any job offer you receive and weighing the full value of your total benefits package can help ensure you make a career move that will keep you happy for years to come.

A new job

Getting married

Getting married

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Disability/Serious illness

Disability/Serious
illness

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Divorce

Divorce

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Becoming a parent

Becoming a parent

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Life insurance contains exclusions, limitations, and terms for keeping it in force.  For costs and complete details contact a financial professional.

This information is provided for informational purposes only. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Please be advised that this document is not intended as legal or tax advice.  Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.  The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.

AXA Equitable Life Insurance Company (New York, NY) issues life insurance and annuity products. Securities offered through AXA Advisors, LLC, member FINRA, SIPC. AXA Equitable Life Insurance Company and AXA Advisors are affiliated and do not provide tax or legal advice.

GE 90907 (09/2015)