If you have landed your dream job or it’s simply time for a new chapter in your career, a job transition is an important time to think about your financial planning. It can be beneficial to ensure you cover all your needs along with maximizing the opportunities you may have ahead of you. Review the checklist we prepared with action items to help guide your way.
Considerations when leaving your current job:
- Gather the details of the payments (unused vacation pay, commissions earned, pro-rated bonuses, stock awards, profit sharing, etc.) you think will be on your final paycheck. Include items such as expected date of payment as well as any potential final deductions such as repayment for a signing bonus if you did not stay long enough. It’s a good idea to review these details with your human resources or accounting team to ensure you are all on the same page and that there are no surprises.
- Confirm all expense reimbursements have been collected.
- Do you have funds in a Flexible Spending Account (FSA) that you should try to use before you leave your current employer?
- If you were given gift cards from the company (in any amount) as a parting gift, know that it will be reported as taxable income on your W2, so you’ll owe income taxes on those amounts. Plan accordingly.
- Identify your healthcare coverage needs and options for the transition, understanding gaps that may need coverage.
- What should you do with your current retirement account? Discuss your options with your financial planner. Use this time to also ensure all beneficiary designations and other account information is current.
- Confirm that your current employer has the correct address on file for you along with any other pertinent information so that you’ll receive any future communications or forms such as W-2s.
- If you are going on unemployment or receiving severance pay, understand the details and ensure you have filled out all required paperwork. You’ll also want to check out our blog Managing Your Finances After a Sudden Job Loss for other important tips.
- If you are receiving a severance package, have you maximized the benefits you could receive? For example, if you are offered resume building services or recruiter connections, are you taking advantage of those?
Considerations before starting your new job:
- Examine any future gaps you may have in paychecks. For instance, if your final paycheck comes this month but you don’t see another paycheck for another month, are you ready for that?
- Plan ahead for new employee paperwork such as your W-4 withholding and banking information for direct deposit of your paychecks. Have the documents you need organized for your first day.
- Research and understand your options regarding healthcare and other insurance such as disability, life or long-term care. When are you eligible for coverage under your new employer? Have you analyzed your options and created a plan? Are there any gaps?
- Take time to understand new employee benefits you are interested in utilizing or understanding better, such as:
- Do you need to sign up for subsidized daycare or a gym membership?
- Do you need to review potential bonus, commission or equity compensation arrangements to understand them more fully?
- Review our blog Understanding Your Benefits Package: The Food Pyramid of Employee Compensation to take a deeper dive.
- What retirement plan options do you have? Research and plan accordingly to be prepared to make your elections when you are eligible to enroll. Remember to have your beneficiary information ready as well.
- Create a timeline and reminder system for yourself if enrollment for certain employee benefits happens after a waiting period to make certain you are prepared to participate as soon as you are eligible.
- If you relocated for a new position and it was to be reimbursed by your new employer, have you submitted the appropriate paperwork for being repaid?
- Will you need different wardrobe items for your new position? Budget accordingly.
- Were you paying for any subscriptions, like LinkedIn Premium, to find your new job that you can cancel now?
Please remember that with any life change such as leaving a job or starting a new one, it’s essential to touch base with your financial planner and discuss the transition. A job change is an ideal time to reconsider your needs and maximize opportunities – both financially and for your overall life and wellbeing. We’re here to walk with you so it is a fulfilling and smooth transition!
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