Post-pandemic stress, inflation, and changes in the workplace have negatively affected American workers’ focus and productivity, with a majority of the stress caused by their financial state. According to a recent study from MetLife, 70% of workers feel financial stress, with 48% of workers affected by a stressful financial situation.
Employees have several pressing financial concerns and priorities, from student loan repayments to retirement contributions. At the same time, employees also have a surplus of unused PTO sitting in their employee portal, just waiting for them to use it. To meet their financial goals, employees can convert their unused PTO into benefits to support their financial health. Here’s how.
Increase your retirement contributions
A recent Bankrate survey found that 55% of Americans are behind on retirement savings. Additionally, 9% of those with retirement accounts reduced their contributions in 2022 due to other financial strains. If you need to catch up on your retirement contributions, consider converting your unused PTO into retirement savings. You could benefit from this if you had to reduce your contribution in the past or want to give yourself the best chance to max out your account for the year. Either way, boosting your retirement savings is better than losing the value of your PTO by the end of the year.
Pay off your student loans
The average student loan borrower owes $28,950, and with repayments slated to resume later this year, Americans will have an extra monthly expense that will add additional financial strain. To ease the burden of these repayments, consider using your unused PTO to help pay off your student loans. Your PTO is going to a good cause by helping you reduce your debt, one payment at a time.
Contribute to your 529 college savings plan
If you have kids or want to return to school, you can use your unused PTO to contribute to a 529 college savings plan. A 529 college savings plan is a tax-advantaged savings account for education expenses. You can use the funds in the account for various college expenses, tuition expenses for K-12, apprenticeship costs, and even student loan repayments. Your PTO can pay you to expand your skillset with a master’s degree or certification or allow your children to follow their dreams.
Fund a health savings account (HSA)
Healthcare expenses are another area that causes much financial stress for employees. One way to alleviate that is through a health savings account (HSA). With an HSA, you can set aside money on a pre-tax basis to pay for qualified medical expenses, such as deductibles, copayments, coinsurance, and more. Depending on your company, you may or may not have an HSA as a part of your health insurance coverage. Whether you have an HSA as a part of your company or not, you can still use your unused PTO to fund the account to help lower your overall healthcare costs.
Create an emergency fund
Due to all the financial uncertainty we’re facing, an emergency fund is growing in popularity among American workers. An emergency fund is a dedicated savings account where you can set aside money for financial emergencies such as a broken cellphone, a fender bender, or an unexpected medical bill. In addition, an emergency fund can prevent you from going into debt or having to pull from other accounts—like your retirement account—to make ends meet. To build up your emergency savings, consider using your unused PTO to fund that account. It’s an easy way to start saving money without having to pull from other savings goals you may have.
Protect your financial health
If you’re the type who always has PTO left over at the end of the year, consider putting it towards your financial goals and initiatives. Whether you need to boost your retirement savings, pay off debt, or want to save more, your unused PTO is a great place to start. Learn how to use your unused PTO to support your financial health with PTO Exchange.
Published on Apr 19, 2023 by Josh Reinhard
