Hi Reader ,

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Can you believe its October?

Which means your employer is going to be giving you an opportunity to boost your compensation by almost 32%!

No, this won’t be in cash, but according to the Bureau of Labor Statistics (BLS), your benefits make up about 32% of your total compensation.

Which means you need to be deliberate about selecting benefits during Open enrollment!

Don’t worry though my fellow/aspiring immigrant millionaires, since you subbed to my newsletter, here is are some quick tips on how to hack your benefits!

Here is a general list of common benefits that are often part of open enrollment (along with how to save money:

Healthcare Benefits:

• Health insurance plans (e.g., HMO, PPO)
  • Preferred Provider Organization/PPO = Choose from a big network of doctors, but pay more for out-of-network care.
  • Health Maintenance Organization/HMO = Get affordable care in a set group of doctors, but need referrals to see specialists.
  • Point of Sale/POS (rare) = Mix of HMO and PPO, need a main doctor, some out-of-network coverage.
  • HDHP = Lower monthly costs, but higher bills if you get sick, often with a special savings account (HSA).
  • Immigrant millionaires usually pick the HDHP plan. Here are 3 reasons why
    • In MOST cases, the TOTAL cost (premiums + deductible) is lower than if you had an HMO or PPO plan. Here are some calculators: Wex & Doctored Money​
    • Access to an HSA - These are triple tax advantaged, which means you dont pay tax on the money going into the account, coming out of the account (if its for health related expenses) or on the growth (yes, you can invest some portion of it!)
    • Access to the Stealth Retirement account - The REAL hack is to actually use the HSA as an investment account. So instead of spending your HSA on medical expenses immediately, you just pay cash out of your emergency fund and scan all your medical receipts to use later. Since the HSA is invested, it will grow uninterrupted, and in a couple of years, you can file the claim so that your claim is a smaller % of the account! At age 65, the HSA gets treated like a 401k, so it is a super attractive account.

Retirement and Savings Plans:

• 401(k) or other retirement plans
  • Usually there are 3 type of 401k options available:
  • Traditional pre-tax 401k = You save money from your job for later, and you pay taxes when you use it in retirement.
  • Roth 401(k) = You save money from your job, pay taxes now, and use it tax-free when you retire.
  • After-Tax 401(k) = You save extra money after taxes, and you might pay some taxes when you take it out later.
  • Immigrant millionaire always maximize their traditional 401k and prioritize their after-tax 401k.
    • Limits go up each year, so make sure your contributions are up to date.
    • Make sure your investments are diversified and low cost.
    • Traditional will save you taxes now.
    • After-tax will save you taxes in the future. (Check if your company offers this. It is widely offered at big tech companies, with the opportunity to do a Mega Backdoor Roth, which prevents you from paying any taxes later! But if it is not, you can always do a Roth IRA or Backdoor Roth IRA)
• Employer match or contributions
  • Employers offer to put some money, usually a % of your salary into your HSA/FSA/401k to incentivize you to save to these accounts. I have seen anywhere from a 3%-50% match.
  • Immigrant millionaires ALWAYS take the match. It is money that your employer has already set aside for you. By not taking it you are effectively saying no to money that is owed to you!
• Flexible Spending Accounts (FSAs)
  • If you do NOT have an HSA, you should have access to an FSA. It is also tax advantaged (you dont pay tax on the money going into the account, coming out of the account if its for health related expenses) but unlike an HSA that rolls over each year, the FSA is use-it-or-lose-it each year. It is great if you know that you DEFINITELY will have medical expenses.
  • If you do have an HSA, then you have some other FSA options available
    • LP-FSA - Use-it-or-lose-it FSA which can only be used for dental and vision expenses.
    • Dependent care FSA - Use-it-or-lose-it FSA which can only be used for eligible expenses in caring for dependent children or adults and vision expenses.
• Health Savings Accounts (HSAs)
  • See above

Insurance Coverage:

• Life insurance
  • An employer will usually provide a multiple of your salary (1x-2x) in payout to your family in case something were to happen to you.
  • Immigrant millionaires usually get their OWN term life insurance policy. Here are 3 reasons why:
    • 1-2x is typically not “enough” if you have to pay off the house, fund college for kids, and make sure your partner does not have to back to work. This is even more important if you are the sole earner in the family. 10x income is a good rule of thumb.
    • If you leave or get laid off, you dont have any coverage to take care of your family
    • If you are healthy, chances are that seeking policies outside your workplace might be cheaper.
• Disability insurance (short-term and long-term)
  • Immigrant millionaires know that these are important to have. You also need to check if your policy will pay out if the disability occurs outside the country or if there are any other rules being an immigrant.
• Accidental death and dismemberment (AD&D) insurance
  • A must-have, especially if you are a sole income earner in the family.

Other perks to look into

• Paid time off (vacation, sick leave)
  • Immigrant millionaires take ALL their paid time off since they realize it is not just about making the most money, but also about making memories!
• Wellness incentives or rewards
  • I know some health plans are offering an Apple Watch if “walk off” the cost by burning calories to stay fit!
• Gym memberships or wellness discounts
  • Immigrant millionaires realize that taking care of your body is the single most important factor in their wealth building journey.
  • Imagine you had to drive only ONE car for 50-60 years. Would you take care of it by servicing it regularly or just drive recklessly and never take it to a mechanic?
  • Some employers have gyms in their office location, so you have no excuses!
• Education assistance or tuition reimbursement
  • Immigrant millionaires respect that skill development is one of the single most important ways to increase your income! If your employer is willing to pay for it, then why not use it?
  • HR is often willing to work with you on what will count as education assistance, so if you can make a case as to why you think “Linkedin course” will be useful to your career and organization, they are likely to pay for it!
• Legal assistance services
  • I have talked about the need for having a will/trust or some kind of estate documents in place. Immigrant millionaires realize the importance of this as well and leverage attorney paid for by the company to ensure all of this is taken care of!
• Commuter benefits (e.g., public transportation subsidies)
• Voluntary benefits (e.g., pet insurance, identity theft protection)

Make sure to take the necessary time during open enrollment and pick the best options for you!

Are you making changes to your enrollments based on this email?

Write to me, and I would love to know!

Overwhelmed?

I can help you too! Reply to this email and I am happy to answer questions!

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That’s all for today.

See you next month!
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P.S. - I also do Ask-Me-Anything Fridays on Linkedin, so join me there if you have questions in the future!

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Fun Corners of the Internet

• I visit Vermont last weekend and I am obsessed with how fall looked over there! Here is a video revisiting it.
• Doing stuff is hard. Being successful is harder. This TED talk made me reexamine what it takes to get ahead of most people.

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