Being a tech professional has a plethora of benefits; competitive salary, high-quality benefits, and many opportunities for career growth. On the flip side, working in tech does have its long work hours so you may put personal matters on the back burner, such as financial planning. With the financial benefits you receive, you need to take advantage of the opportunity to have a good financial standing. Learn more about the financial moves to make as a tech professional.
Start off by reviewing your compensation letter. Within your compensation letter, you will see your salary, your bonus payment structure, and any Restricted Stock Units you receive. By having an understanding of your overall compensation, you will be able to move forward with how you want to manage it.
Next, take a look at the long term savings vehicles that your company provides for you. These long term savings vehicles include 401(k), Health Savings Account, Employee Stock Purchase Plan, After-tax 401(k), and Deferred Compensation Plan. Know which ones are available to you to move forward with which ones you would like to utilize.
Develop a savings plan for yourself. Prioritize contributions to your 401(k) because the key to retirement savings is compounding. The more time your money has to compound, the more money you will have in your retirement fund. Aim to front load your contributions in the first six months of the year. By doing this, you are not stretching the payments out over a year and providing more time for a higher amount of money to compound for longer. With an Employee Stock Purchase Plan, allocate a small percentage of each paycheck. Once the shares are purchased, immediately sell so you can move the profits to another investment account. Make contributions to your Health Savings Account to get the tax deduction to lower your taxable income. To utilize your deferred compensation plan, you’ll want to choose from one of the investment options and what deferral period you want. Once the deferral period is over, you get the original agreed on amount and any earnings and growth that was gained. This is a great way to contribute to your savings and lower your taxable income.
After developing your yearly savings plan, make sure that you are revising it each year as your finances and lifestyle changes. Having a priority list of savings options that you stick to ensures that you are putting away your money for later.
If you need assistance with what financial moves to make as a tech professional, Eagle Grove Advisors are here to help. We will go over your income and savings goals with you to develop a savings plan what works best for you. Go ahead and give us a call to get started today!