When transitioning to a new career or employer, remember to evaluate options for your 401(k) and maintain your insurance coverage.
Whether it's moving up the career ladder or switching industries entirely, the average American will change jobs approximately 12 times or more.1 There's usually a lot to celebrate with a professional move, but there's also a big to-do list, and it goes well beyond tying up loose ends at your old job and saying your goodbyes.
While you may see an upgrade in your paycheck, you'll need to take a close look at your benefits package, which can prove critical to your financial future. You may want to consider the following three things as part of any changing-jobs checklist.
1. Health Insurance.
Is your new health coverage more comprehensive than your previous coverage? You'll want to weigh your costs under your company's new plan, including deductibles and coverage for your family, and whether it includes dental, vision, and additional benefits.
If you have a spouse with a job that offers healthcare, do the math to see if it makes more sense to shift everyone to the new plan or to use your spouse's existing one.
2. Retirement Plan.
Will your new company contribute to your retirement plan? You should determine your contribution, based on whether your new employer provides a matching amount and how much it is. You probably will also have to decide how to handle the money in your previous retirement plan—whether to leave it where it is, roll it over2 into your new plan, or roll it over into an IRA.
If you have received a salary increase and have the income flexibility, you may want to contact a properly licensed financial professional to discuss what additional financial products may fit your future needs.
3. Life Insurance and Disability Insurance.
Does your new job provide life and/or disability insurance, and will it bridge the income gap if you're unable to work? How much will pass to your beneficiaries in the event of your death?
Perhaps you've recently married or divorced, have added children to your household, or now have an empty nest. This is a good time to review your needs and reboot your financial strategies accordingly, based on how your family has evolved. We can help.
1“Number of Jobs, Labor Market Experience, and Earnings Growth: Results from a National Longitudinal Survey,” Bureau of Labor Statistics, August 22, 2019. BLS.gov
2 When considering rolling over the proceeds of your retirement plan to another tax-qualified option, such as an IRA, please note that you may have the option of leaving the funds in your existing plan or transferring them into a new employer’s plan. You may wish to consult with your new employer, if any, to learn more about the options available to you under your plan and any applicable fees and expenses. You may owe taxes if you withdraw funds from the plan. Please consult a tax advisor before withdrawing funds.