The three most important Salesforce benefits
Wow, it has been 10+ years working for Salesforce. I've reached financial freedom. Looking back, it's actually a little astounding to me. When I left Europe and moved to the United States, I started from zero. And within 8-9 years, I managed to reach my goal of $800k. I was in the right place at the right time and took advantage of opportunities in the market.
Here are the most opportune benefits I took advantage of:
1. Employee Stock Purchasing Program
Okay, so here is the scoop: Salesforce purchases shares of $CRM at a 15% discount. The price used is the lower of either the period start or end date.
Example: On December 15, 2021, the price of $CRM was $220.15. On December 15, 2022, it'll most likely be above $300. Taking 15% of the lower ($220.15) is going to be $187.13. Etrade will take the money Salesforce put aside for you to purchase shares for $187.13.
You can set the allocation when you sign up for this benefit. I would suggest you set it to the max. Even if $CRM is lower than the period start date, you will receive a free 15% discount on the purchase.
Things to consider: the most essential thing to consider are taxes. You'll have to pay income tax on the 15% discount, and the gain will be taxed as capital gains. If you hold on to the shares for more than one year, that's considered long-term and treated at the lower tax rate.
More detailed information: Salesforce Stock Program.
2. 401k Match
It's all about the free money. Similar to the discount on stock purchases, the 401k has a matching program. For every $1 you contribute to your 401k, Salesforce will match your funds up to $5,000 per year.
But that's not all. It looks like Salesforce recently started giving a Roth 401k. Back when I started, that was not an option.
Why go for a Roth 401k? Because its tax advantages. The money you put into a Roth 401k is post-tax. Meaning you already paid income tax on that money. However, the growth from the investments in your Roth is tax-free.
So, if you put in $10,000 and it grew to $100,000, you don't have to pay tax on the $90,000 gain when you're retiring and start taking out that money.
More detailed information: Salesforce Retirement
Like those tax advantages? Then look no further than the Health Savings Account. A little disclaimer from the start, this is mainly interesting to young and healthy employees. An HSA comes with a High Deductible Health Plan. That means, if you need medical services, you'll pay a lot more.
But now, why is this an excellent tax option? Because the funds are triple tax-advantaged:
- You don't pay taxes on the money going into an HSA
- You don't pay taxes on money coming out (for medical purposes)
- You don't pay taxes on the gains of investments in an HSA
So, the earlier you start contributing and investing the funds of your HSA, the more money you'll have for medical expenses in retirement.
Here is a great article by the chaps over at Fidelity: 5 ways HSAs can fortify your retirement
Oh yeah, don't let me forget about that free money once more: Salesforce contributes $750 for single coverage!
And of course, more detailed information from Salesforce: Pre-tax Savings
Well, that's it for my favorite perks of working at Salesforce. Now I'll better get back to planning my retirement next year.