Airbnb

 
 

Brooklyn FI started working with some Airbnb affiliated clients in late 2020 in anticipation of their IPO. Here’s some insights we’ve gleaned from their employer-sponsored benefits.

Airbnb provides a robust benefits plan for its full-time employees. We’re especially big fans of the after-tax 401(k) offered at Airbnb which can enable employees to contribute over the typical $19,500 annual limit to this unique retirement account.

Here we’ll provide you with some key highlights on your benefits and planning tips to consider this year. Making educated choices this open enrollment can save you money and help you navigate whatever challenges lie ahead next year (let’s hope that 2021 is a little less unprecedented than 2020 though). We’ve put together this guide to help as you make these choices - feel free to share it with your colleagues and friends who may find it helpful.

Please note that benefits are subject to change at any time.

HEALTH, Dental, and Vision

For a full glossary of terms that you may find in your benefits plan documents, check out our page on health insurance coverage here.

Which healthcare plan you choose depends on a variety of factors:

  • How often you anticipate using your insurance

  • Cash flow needs

  • Tax considerations

If you rarely go to the doctor aside from an annual physical, and don’t take prescription drugs, an HSA-compatible plan may make sense - and allow you to stash away savings tax-free for medical costs later in life. However, if you want to know that a few trips to a specialist will simply cost your co-pay, and not a few thousand dollars, the PPO plan will have minimal impact on your cash flow. 

Should you choose a plan that’s not HSA compatible, you may still be able to contribute to a Flexible Spending Account (FSA). FSAs allow you to pay for out-of-pocket medical costs on a pre-tax basis.

BKFI Tip: If available, consider electing the HSA plan, maxing it out every year, and paying for your expenses out of other savings to maximize the tax-free growth of the HSA!

LIFE INSURANCE

As part of your robust benefits plan, Airbnb provides coverage based on your salary.

BKFI Tip: Diversification matters. No, we aren’t talking about investments, we’re talking about life insurance. If you need life insurance, be sure not to link all of it to your employer’s coverage. Consider getting your own policy that you can keep even if you leave your job. 

Bonus BKFI Tip: Don’t forget to name a beneficiary when setting up your employer-sponsored life insurance coverage. Make sure the funds go where you want them, should something happen to you. 

DISABILITY INSURANCE

Airbnb also provides both disability insurance coverage. It typically covers up to 60% of your pre-disability salary, with a monthly benefit maximum.

BKFI Tip: When your employer pays the premiums for disability insurance, the benefits are taxable to you when you receive them. Consider what 60% of your pay is, and then imagine income taxes coming out of that - that’s what your take home would be under a long-term disability plan. 

RETIREMENT PLANNING

Airbnb’s retirement plan is administered by Fidelity and does offer a variety of contribution options. The plan allows for both pre-tax and Roth contributions, up to a maximum of $19,500. Employees age 50 or older can make a catch-up contribution of up-to $6,500 annually. 

The plan also permits after-tax contributions that allow you to contribute above the annual maximum. By using the after-tax contribution feature, you can potentially save an additional $37,500 in a tax-advantaged manner that can later be rolled into a Roth IRA - also known as a Mega Backdoor Roth. One thing to note is that Airbnb caps your contribution to the after-tax account at 10%.

BKFI Tip: Have you maxed out your 401(k)? If not, there’s still time to go in and update your contributions.

Bonus BKFI Tip: Review your 401(k) beneficiaries annually and make sure they match your wishes.