If you think that your paycheck shows your worth to your employer, you could be selling yourself seriously short. According to the Employee Benefit Research Institute, only 80.6 percent of total compensation in the U.S. goes to wages and salaries. The rest pays for employee benefits, such as retirement plans, health and disability insurance, and other perks.

So if your salary is $50,000, your company may be shelling out another $12,000 to provide you with benefits. And if you're not taking full advantage of the benefits, you're walking away from some of your compensation.

But maximizing those perks may not be easy. "Benefits packages are getting thicker and more wordy, so some people miss important areas," says Patricia Raskob, a principal at Raskob Kambourian Financial Advisors in Tucson.

Two-career couples face challenges--and potential opportunities--coordinating the benefits offered by each of their employers. (See "Coordinating benefits for two-career couples.")

Here's a guide to help you sort through the areas with the most potential.


Retirement plans

No. 1 on the employee-benefits list, from the standpoint of dollars spent, are retirement benefits, which account for 46 percent of the total, according to the EBRI. That's where the money is, so you should be sure to get full value from your company's 401(k) or similar plan.

Unfortunately, other parties might already be reaping rewards from your retirement plan. The fees in 401(k)s "may significantly decrease" participants' retirement savings, says the Government Accountability Office. For example, if your 401(k) plan's investment offerings include variable annuities or funds that carry 12b-1 fees, you may be paying more than you should to save for retirement.

"Variable annuities mean high fees," says Greg Plechner, a principal at Greenbaum and Orecchio, a wealth-management firm in Old Tappan, N.J. "For every mutual fund with a 12b-1 fee, there is a carbon-copy investment without the extra layer of fees. That savings will go straight into the employee's pocket via a higher return."

What to do: If your company has a high-cost 401(k), you should contribute at least enough to get any employer matching contribution. The value of any further contributions depends on your individual circumstances. If you qualify for traditional IRA deductions or for Roth IRA contributions, those are better choices than unmatched contributions to a 401(k) plan that offers only funds with 12b-1 fees or variable annuities, Plechner says.

But high-income 401(k) participants won't qualify for traditional IRA deductions or Roth IRA contributions. For them, "the value of the tax deduction becomes harder to beat, even with higher fees," Plechner says. The maximum tax-deferred contribution to a 401(k) in 2007 is $15,500; $20,500 if you're 50 or older.

Employees stuck with expensive 401(k) plans need not accept their fate meekly. "As with anything they buy, they are entitled to know exactly how much it costs," says Matt Hutcheson, an independent pension fiduciary in Tigard, Ore. "If participants feel their plan costs too much, they can make their views known to the plan fiduciaries."

Typically, the 401(k) fiduciaries might include the CEO and perhaps the director of human resources in the case of public companies, or the company owner in the case of privately held ones. Participants' complaints may cause those fiduciaries to negotiate lower fees for the 401(k).


Health benefits

Close behind retirement benefits are health plans, which account for 44 percent of the total dollars spent on fringes. "Everyone needs health insurance," notes Molly Balunek, vice president and director of financial planning at Spero-Smith Investment Advisers in Cleveland. "While it is possible for people to purchase individual policies, often they are more expensive and less comprehensive than the group plan. Also, for people with pre-existing health conditions, group coverage may be the only option."

Your company may offer a choice among several types of health plans, with varying costs and features. To make the best choice, you need to evaluate your health-care needs, says Peg Downey, a founding partner in Money Plans, a financial-planning firm in Silver Spring, Md. "Do you use a therapist? Alternative medicine? Many prescriptions? Find the plan that is the best match for your circumstances," she says.

Most employers offer at least two types of health plans: one with a preferred provider organization and another with a health maintenance organization. PPOs contract with doctors, hospitals, and other providers, whom members must use in order to avoid higher co-payments. Generally, there are annual deductibles to meet before the plan will pay benefits. HMOs offer members a range of health benefits for a monthly fee with no deductibles or maximums. A member who goes outside the HMO without a referral from a primary-care doctor may be responsible for the cost of services received.

"HMOs tend to be less expensive than PPOs," says Eleanore Szymanski, a certified financial planner in Princeton, N.J. "Younger families with relatively good health, little money, and little knowledge about health matters are usually content with HMO-type coverage. Older persons usually prefer to choose doctors, are more likely to need the coverage, and may have the money to pay for a PPO."

What to do: Review your claims history and make a projection for the coming year. Preventive-care and prescription-drug expenses are predictable for many people. See how those costs are likely to be covered in each of the plans, and compare monthly premiums and out-of-pocket costs. If you are considering an HMO or PPO, see if your doctors, hospitals, and diagnostic labs are in the network. "These steps can help employees choose the best plan for the lowest cost," Balunek says.

You may also want to consider Section 125 plans, also known as flexible spending plans, now offered by many employers. The plans allow you to defer earned income and pay out-of-pocket health costs with untaxed dollars. (See Don't lose money in flex plans.)

Some companies offer a low-cost, high-deductible health plan coupled with a health savings account, which is designed to allow workers to save for current and postretirement qualified medical expenses tax-free. In general, these arrangements work better for individuals and families with low annual medical bills.


Disability insurance

If retirement and health plans together make up 90 percent of the typical benefits package, that leaves only 10 percent for other perks. Even though they are backed by fewer dollars, those benefits can be vital. Disability insurance, which will provide you with income if you're unable to work, is one example.

"Disability is more likely to occur than death in any one year," says Bill Baldwin, president of Pillar Financial Advisors in Waltham, Mass. The probability that a professional, executive, or white-collar (nonmedical) worker will be disabled for 90 days or longer sometime between the ages of 35 and 65 is 27 percent for men and 31 percent for women, according to Milliman, a Seattle consulting firm.

Disability coverage of one sort or another may be on your benefits menu. According to the U.S. Department of Labor, 39 percent of workers have access to employer-sponsored, group short-term disability coverage, and 30 percent to long-term coverage. Short-term disability coverage provides employees who can't work with a percentage of predisability income (typically 60 percent) once their sick leave is used up. This coverage may not last more than six months.

Generally, group long-term disability benefits start when short-term benefits are exhausted and continue anywhere from five years to life. Those benefits also replace about 60 percent of salary.

In some cases, group disability coverage is fully paid for by employers. In others, employers fund a basic plan and employees can buy supplemental coverage. "Sometimes the employer-provided coverage isn't enough to cover family needs when long-term disability strikes," says Ginny Stanley, a principal at REDW Stanley Financial Advisors in Albuquerque.

What to do: If you decide you need more disability insurance, you can buy group coverage offered by your employer or look outside your company for an individual policy. But if you're older or your health isn't up to par, you might not be able to find an affordable individual policy.

On the other hand, someone in good health might do better looking beyond the group coverage to the individual market for supplemental disability coverage. A policy you purchase on your own may not only be more liberal in approving benefits but will also be portable, so you can retain the coverage if you change jobs.

Either way, if you pay the premiums with after-tax dollars, any disability benefits you receive won't be taxed. "This can help you get more coverage," says Baldwin, "because insurers generally won't provide more than 60 percent of earnings." That is, someone earning $100,000 might be able to buy coverage that pays up to $60,000 a year. If you get that coverage through employer-paid premiums, you'll net only $45,000 or so after taxes. Buying coverage on your own can deliver untaxed benefits, increasing the amount you'll get to keep.


Life insurance

Your employer may offer some free life insurance as well as the opportunity to buy more coverage through a group plan. Assuming you think you need more insurance than your employer is paying for, should you opt for the group plan?

What to do: If you have health problems, use the group plan. It will have limited, if any, screening for medical conditions. You might not be able to get outside coverage or it might be too costly.

"Healthy employees may do better passing up life insurance offered by their employers," says Kathy Longo, a principal at Accredited Investors, a financial planning firm in Edina, Minn. "Group life insurance lumps everyone in one category to cover both the healthy and nonhealthy." Also, individual policies may have premiums that are guaranteed for up to 20 years, while group premiums rise as you get older.

Advisers warn against having employer-provided insurance serve as your basic policy for family protection. "If a group policy can't be converted to individual coverage when you leave the company, it could be disastrous," Stanley says, "especially if you have medical issues."

Instead, your group life insurance might be used to provide coverage for purposes such as making sure your college-age kids can finish their education.