Whether planned or unexpected, changing jobs can result in some big decisions to make. Should you take your old employer’s retirement plan money with you? Which benefit options should you choose? How will your job change impact your financial situation and future goals? These are just a few of the questions you’ll need to consider.
One of the ways we partner with clients is to help plan for future possibilities like a job change, and we’ve pulled together a couple of checklists to help you manage the transition. Because these decisions can be complex, they should be considered with care. If you’d like objective help evaluating the options, please be sure to talk with your financial planner to determine the best course of action for you.
I’m leaving my job – Where do I begin?
- List all monthly income and expenses to see where you stand
- Do you have funds in place to cover any shortfall?
- Save all documents relating to your separation from your former employer
- Calculate unused vacation, sick pay and other compensation that may be due
- Proactively manage your insurance benefits to avoid a lapse in coverage
- Ask when your health, disability and life insurance will expire
- Decide whether to continue your previous coverage or shop for new coverage
- Check the status of any pending claims under your old provider
- Submit all eligible expenses for reimbursement under your old program(s) before you leave and find out if you have a grace period for submission
- Find out how much time you have to exercise any vested stock options
- Evaluate the options for your old 401(k) plan
- In some cases, your plan may require a decision within 60 days of separation
- If you moved for your new job, tie up loose ends
- Notify your former employer of your new address
- Keep track of moving expenses, as they may be tax-deductible
- A job change may affect the amount of taxes you’ll owe for the year
- Talk with your financial planner or tax preparer to see if tax withholding needs to be increased or decreased
I’m starting a new job – Where do I begin?
- Review your new employer’s total benefits package to familiarize yourself with the various options available for retirement, insurance and 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 and medical costs, as well as provide some tax savings
- Request direct deposit of your paycheck 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
