Amazon Benefits Package

Amazon Benefit Package

What are RSUs?

RSUs are Restricted Stock Units your company is an offering made (‘grant’) as part of an incentive to build company value.  One unit’s value equals one share of stock’s value and these units are released to you in ratable chunks over time (‘vesting’) during employment.  When one unit is released to you, you receive one share of company stock.

RSUs are taxed like your salary and wages (at ordinary tax rates).  This income, and any tax withheld, is reported on your IRS Form W-2 in the year the units vest to you.

For more information, check out my article Offer Letter Basics: RSUs

Amazon's 401(k) Recommendation

Amazon matches up to 2% of base salary for an employee.  Company contributions are made in Amazon stock and equal $0.50 they contribute for every $1.00 you contribute.  I recommend reviewing your 401(k) periodically to determine whether you wish to hold on to the Amazon stock or sell it to reduce company specific risk.

You may choose a more aggressive or conservative allocation of stock versus bonds held in your 401(k).  This will depend on the risk you can, and are willing, to take with your retirement funds.  The below allocations are based on asset type and expense ratios for each available investment option at the time of review.

The plan recommendations below are based on choices available as of March 31, 2017.

Aggressive Allocation

  • Vanguard Total International Stock 50%
  • Vanguard 500 Index Fund 6%
  • Vanguard Windsor II Fund 19%
  • Vanguard Explorer Investment Fund 11%
  • American Beacon Small Cap Value Fund 14%

Stock

Moderate Allocation

  • Vanguard Total International Stock 30%
  • Vanguard 500 Index Fund 4%
  • Vanguard Windsor II Fund 11%
  • Vanguard Explorer Investment 7%
  • American Beacon Small Cap Value 8%
  • Vanguard Total Bond Market Index 40%

Stock

Conservative Allocation

  • Vanguard Total International Stock 20%
  • Vanguard 500 Index Fund 3%
  • Vanguard Windsor II Fund 7%
  • Vanguard Explorer Investment 4%
  • American Beacon Small Cap Value 6%
  • Vanguard Total Bond Market Index 60%

Stock

Health Benefit Plan

What is an HSA? 

A health savings account (HSA) is a tax-advantaged savings account available under the high-deductible health plan option.  Funds are contributed to this account on a pre-tax basis and can grow tax-deferred over time.  You may also use these funds for qualified medical expenses now, and for retirement later.  If you are maximizing your 401(k) contributions, this may be a good option for further tax deferral.

For the 2017 plan year, Amazon is making a contribution to employee’s HSA accounts.

What is an FSA?

A flexible spending account (FSA) is tax-advantaged account available under some plan options.  Funds are contributed to this account on a pre-tax basis and can be used for eligible medical expenses within the plan year.  These funds cannot be accessed after the plan year.  If you have set qualified medical expenses you will be spending during the year, this option may be helpful.

Check out Amazon’s benefit enrollments decision tool – ALEX – for your best option based on your personal situation.  You can find the tool at benefits.amazon.com or amazon.ehr.com.

Helpful Articles

Other questions?  Reach out to me at rjconner@seedsafefinancial.com

Disclosures

This information is provided by SeedSafe Financial, LLC, a registered investment advisor, and is believed to be from reliable sources, but no guarantee is made as to accuracy or completeness. The investment securities and strategies discussed are not suitable for all investors. Recommendations are of a general nature, not based on knowledge of any individual’s specific needs or circumstances, and there is no intent to provide individual investment advisory, supervisory or management services.

SeedSafe Financial, LLC is not an authorized representative of the company sponsor and its retirement plans.