What your advisor can learn from your paycheck


Your paystub, or earnings statement, can provide worthwhile information to your financial advisor. In most cases, high-level facts and figures are discussed in-person or captured via data-gathering forms. But, details on benefits or deductions may be missed – or simply misunderstood. With an acronym soup of ESPP, FSA, HSA, LTD, and AD&D, it’s no surprise there can be confusion. The paystub does not answer every question on these topics, but it can help your advisor ask the right questions in the first place, and uncover missed or new opportunities.

Examples of uncovering financial planning details with your paystub:

1. Those age 50 or over who have not increased their 401(k) salary deferral to allow for the additional catch-up contribution, which could increase retirement savings and lower current income tax liability

2. Individuals who may be better off contributing to a Roth 401(k) vs. a traditional 401(k)

3. A 401(k) loan or other systematic repayments for an advance or debt

4. A retirement-plan match or safe-harbor contribution that an employer makes on your behalf

5. Multiple retirement plans, such as those who are eligible for both 403(b) and 457(b) plans

6. Not taking advantage of employee stock purchase plans with generous discounts on the price of the company

7. Signing up and paying for supplemental benefits that aren’t needed or being used

8. Missing out on group benefits that are subsidized or do not require medical underwriting

9. Thinking that one has a particular benefit, when one actually does not; such as benefits that terminate at a certain age

10. Thinking that one receives a benefit paid by the employer, when one is actually paying for it themselves

11. Tax savings that could be available with a flexible spending account for dependents or health care

12. Health savings account paired with a high-deductible health insurance plan

13. Taxable income other than ordinary wages, such as restricted stock units or bonuses

14. Tax withholdings that are not consistent with the level of income being earned

15. Special tax withholdings, such as a local income tax or Medicare surtax for high earners

16. Updating benefits for a life event, such as marriage or divorce

17. Coordinating benefits with spouses

Your paystub, like your tax return, tells a story about your financial picture. In fact, it is often what is not on your paystub that is informative for discussion and analysis. If you haven’t provided a copy to your advisor in some time, or if you have changed jobs or undergone a change in benefits or lifestyle, consider bringing a copy with you to your next review meeting. We may learn something together.

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