This article is part of our “What Now?” series that helps multigenerational families prepare for life changes. With access to all the capabilities of Bank of America, the Private Bank is uniquely situated to help with whole-family wealth plans so that every generation may leave their lasting legacy.
Starting your first job can be an exciting but anxious time. You’ll be faced with multiple financial decisions, many of which can affect both your present and future financial situations.
We’ve gathered some quick and helpful details and resources for you to make more informed decisions.
Navigating your different choices
As you begin your professional journey, you may not be familiar with many of the terms associated with income, the different types of compensation and their outcomes.
Something you may be faced with is negotiating compensation, including equity or additional benefits, like extra vacation days — particularly as companies find creative ways to compensate employees in competitive industries.
Questions to keep in mind:
- Are you paid hourly or on a salary?
- Do you receive paid overtime, bonuses or commissions?
- Do you receive any equity or options?
- Is your compensation performance or metrics-based?
For more on income, read the basics of a paycheck.
If you have questions, consider consulting your advisor to get prepared for the workforce.
Understanding the big picture
Taxes can be complicated. As you start in your first full-time job, you’ll have to make tax-related decisions, like completing Form W-4 for tax withholding.
It's important to understand how taxes and withholding work in relation to your holistic financial picture. Consider consulting your tax professional about your compensation, to avoid errors like underpaying or over-withholding taxes.
You might not be aware that you can update your tax information with your employer at any time, like if you were to get married or have a baby.
Questions to consider:
- What is income tax and how does it work?
- Why is it important to pay taxes accurately?
- How do expenses and deductions work?
- How should you approach refunds and deficits?
Here’s more about the basics of income taxes.
Bank of America Private Bank does not provide tax or legal advice.
It's important they understand how taxes and withholding work in relation to their holistic financial picture. Consider consulting your tax professional about your compensation, to avoid errors like underpaying or over-withholding taxes.
Navigating your different choices
As you begin your professional journey, you may not be familiar with many of the terms associated with income, the different types of compensation and their outcomes.
Something you may be faced with is negotiating compensation, including equity or additional benefits, like extra vacation days — particularly as companies find creative ways to compensate employees in competitive industries.
Questions to keep in mind:
- Are you paid hourly or on a salary?
- Do you receive paid overtime, bonuses or commissions?
- Do you receive any equity or options?
- Is your compensation performance or metrics-based?
For more on income, read the basics of a paycheck.
Your advisor is available to help your family members be prepared and answer questions so they feel confident on setting up their retirement plan that's right for them.
