So far we’ve looked at what you need to do when you meet with the business office. One area that we did not discuss were the benefits. This post will just give the big concepts of these benefits and we will follow up in the future with a more detailed analysis of each one.
There are a few big areas that you need to focus on:
- Health Insurance
- 403(b)
- Life Insurance
Health Insurance
Whether or not you use health insurance benefits from your school will depend on your relationship status and the amount your school pays toward your health insurance premiums. Some schools will pay only a fixed cost for employee health insurance. This has actually become more common with the quickly rising costs of health insurance. Larger districts may cover the full cost. Our district will pay $400/month to the cost of insurance. If we decide to take coverage through a spouse, like I do, we are just out that $400/month. It’s a benefit that I decline because it would cost me more than it’s worth. See my example below.
For example, my wife works as a nurse. The company she works for requires us to pay $450/month in health insurance premiums. Sounds like a lot of money, BUT if I were to get a family plan through our school, we would have to pay over $1,200/month for premiums since our district will only cover $400 worth of costs. Now if we didn’t have our kids on our health insurance, I might take the school insurance since the cost for a single premium would be $100/month, and my wife would be able to get a single premium at her work for $150/month. This COULD be more cost effective depending on our health condition. We will deep dive into health insurance in a later post.
Your health insurance premiums could vary wildly depending on the plans available to you. Details of these different plans will come in a later post.
Life Insurance
Some schools will also have a small life insurance policy, usually under $50,000, for their employees. These policies are usually covered completely by your district, or requires a very small payment from the employee. If you join the union, your state association or the national association may also have a small policy paid as part of your dues. The T.A. and I do not have life insurance policies at our school, but we do have $25,000 policies through the national union.
403(b)
This will be a brief overview of the 403(b). The 403(b) benefit is one where the school district will match a portion of your contributions to this retirement investment. An important part of this idea is that the district will deposit this money into your account ONLY if you put money in yourself. Our district will match up to $700 for any teacher. So the minimum you would want to designate would be $700 or you would be giving up that 100% return on your investment. One of our colleagues didn’t contribute anything to his 403(b) his first year. Needless to say, the T.A. and I assigned him many detention sessions for his misbehavior!
Now contributing to this 403(b) account involves a little more than just filling out the form and putting the money in. You will have to meet with an advisor from a 403(b) company and figure out where this money is going to go. We will cover this important area in its own post in the future.
In Review
These benefits may not seem very important when you get your first job. Everyone focuses on the salary, but the sooner you learn about them and use them to your advantage, the earlier you will be on the path to financial freedom.
KEEP STACKIN!
