first time getting health insurance through a job — am I missing something about how my premium will impact my post tax income?
single 26 y/o M, no dependents for context. there are a few options available with the cheapest premium being around $220 and the most expensive at $320. I used two different websites to input my salary, 401k contribution, and each of the different annual…
single 26 y/o M, no dependents for context. there are a few options available with the cheapest premium being around $220 and the most expensive at $320. I used two different websites to input my salary, 401k contribution, and each of the different annual premium contributions (one based on $220/month and the other based on $320/month). I won’t have any other deductions, just 401k and health insurance premium. To my surprise, my post tax income was slightly higher with the $320 premium. I’m confused because I thought the higher the premium, the lower the post tax salary. The $320 is a slightly better plan so I’d love to know if this has just worked out nicely or if I’m missing something and the estimates won’t ultimately be correct. any insight is appreciated
Collected discussion
Moderator Announcement Read More » Welcome to r/personalfinance! Comments will be removed if they are political, medical advice, or unhelpful (subreddit rules). Our moderation team encourages respectful discussion. You may find our Health Insurance wiki helpful. I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
I used https://smartasset.com/taxes/maryland-tax-calculator and https://www.adp.com/resources/tools/calculators/states/maryland-salary-paycheck-calculator.aspx My salary is $72k with a 401k contribution of $2,160. With the $220 premium I’d pay $2,640 and with the $320 premium I’d pay $3,840. This is my first salaried job so I’m new to the ins and outs of all this, thank you!
The $220 premium made the salary come out to $53,488 and the $320 salary made it come out to $53,844. I know it’s not a huge difference but I’m just surprised
My salary is $72k with a 401k contribution of $2,160. With the $220 premium I’d pay $2,640 and with the $320 premium I’d pay $3,840. The $220 premium made the salary come out to $53,488 and the $320 salary made it come out to $53,844. I know it’s not a huge difference but I’m just surprised
List the entire breakdown with the same time unit, from $72000 to $53488, and from $72000 to $53844, so that a 5 year old with a calculator can arrive at the same conclusion.
List the breakdown for both options, i.e. show your work.
That sounds like the calculator is somehow capturing the tax "benefit" of paying an extra $100/mo for pre-tax insurance... but not capturing the actual extra expense itself?
You're probably mixing up true "post-tax" income vs "post-withholding" paychecks. Make sure you understand whether those "two different websites" are showing true post-tax situations vs withholdings on paychecks. If you don't know the difference, then share the websites and the data you're entering and we can talk more.