Brooklyn FI has several clients at Facebook and has helped them navigate their generous benefits program and develop a plan for their RSUs. Here are some insights we’ve gleaned from their employer-sponsored benefits
Facebook provides a robust benefits plan for its full-time employees, and it’s time once again to make your elections for the upcoming year. Making educated choices this open enrollment can save you money and help you navigate whatever challenges lie ahead next year. 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
Facebook offers health, dental, and vision coverage to employees and their families. For a full glossary of terms that you may find in your 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!
Dependent Care Benefits
Facebook provides a Dependent Care FSA as well. This allows pre-tax funds to be set aside for childcare expenses - up to $5,000/year. If you have kids in daycare, or after-school care, this can save you some money in taxes.
BKFI Tip: Both Dependent Care and Healthcare FSAs are ‘use it or lose it’ meaning the contributions must be spent before March 15th of the year following your contributions. For example, 2021 contributions must be spent by March 15th, 2022 or they’ll be forfeited to your employer.
Life Insurance
As part of your robust benefits plan, Facebook provides up to 3x your annual salary in life insurance. You can purchase additional coverage of supplemental life insurance. You can purchase additional “Voluntary” life insurance - we often recommend this for parents of young children or when there is only one working spouse.
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
Facebook provides both short-term and long-term disability coverage at no additional cost to you. Long-term disability typically kicks in when the short-term policy runs out and pays a percentage of your base salary up to a set monthly limit. Long-term coverage typically stops paying when you’re no longer disabled, or reach retirement age.
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
Facebook’s retirement plan is administered by Fidelity and offers a company match - 50% up to the first 7% - up to 3.5% of pay. The plan allows for both pre-tax and Roth contributions, up to a maximum of $20,500. 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 $38,500 in a tax-advantaged manner that can later be rolled into a Roth IRA - also known as a Mega Backdoor Roth.
BKFI Tip: Have you maxed out your 401(k) for this year? 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.
Legal Plan
For a modest monthly fee, you can access a nationwide network of attorneys via the legal plan for a range of legal issues and chat with an attorney on the phone or in-office.
BKFI Tip: Starting a family? Buying a home? You’ll likely need an attorney to draft estate planning documents or review your real estate contract. Legal plans like these often provide this service at little additional cost.