Changing Jobs? What You Need to Know (Part 2 of 2)
Last week, we focused on the items that should be reviewed upon departure from an employer: Changing Jobs? What You Need to Know (Part 1 of 2). But there are financial aspects to consider as you look forward to starting a new job, as well.
Part 2 of this two-part series goes over a list of items to think through as you get underway with your new employer.
Part 2: I’m Starting a New Job – What Do I Need To Do?
Where do I begin?
- Review your new employer’s total benefits package to familiarize yourself with the various options available for retirement and insurance, as well as other perks.
- Are there any irrevocable decisions associated with your position, such as selection of pension plan? If so, carefully consider the pros and cons of each option before locking in.
- Sign up for the company 401(k) plan as soon as you’re eligible. Ask if there is a company match– if there is, be sure to contribute enough to receive the maximum match. Keep up your retirement savings efforts at the same level (or more, if you received a pay increase with the new job) in order to achieve your retirement goals.
- Evaluate insurance coverage options, costs, and start dates.
- Will you have a Flexible Spending Account (FSA) or Health Savings Account (HSA) available? Participating in one or both could reduce your child care & medical costs and also provide some tax savings.
- Request direct deposit of your paychecks to maintain continuity of your income. Payments will reach your bank account the day your paycheck is issued, and many banks offer free or low-cost checking with direct deposit.
- Estimate your federal and state income tax liabilities. A change in salary may change your tax bracket, and may require you to update your withholding amounts and investment strategies.
As you can see, there are a lot of choices to think through on the job-starter’s end! Because the decisions can be complex, they should be considered with care. If you’d like help objectively evaluating the options to see which are best for your particular situation, please be sure to talk with your financial planner.
Written By Kimberly S. Baker, CFP®