Americans seem to change jobs every few years, and that can be a good thing. It can lead to more challenging roles, greater autonomy, and yes, more money. Here are some tips to ensure a smooth financial transition as you embark on your next adventure.
You will lose your current health insurance coverage, and hopefully, your new job will offer similar or better insurance. But if this isn’t the case, or if there is a mandatory waiting period before you can sign up, you’ll have to arrange new coverage. Basically, you have two choices:
Hopefully, your new job comes with a bigger salary, but any significant change requires a new savings and spending plan — that’s right, your budget. You could use the extra money to improve your lifestyle, but you’ll thank yourself later if you redirect the added funds to your savings goals. First, establish or augment a six-month emergency fund large enough to pay your bills if you should suddenly lose your income. Second, establish or increase your retirement contributions to your IRA. If you have any accumulated debt, now’s the time to get rid of it.
Assuming you were covered by a 401K or similar plan at your old job, you must decide which of your options to exercise:
You may have earned vacation and/or sick days at the old job. Many employers provide a payout for any unused days. Speak with the HR people to clarify the company’s policies and procedures to collect what’s due you. The same is true if you have any vested stock options. Sometimes, it makes sense to adjust your departure date to qualify for the vesting of options, profit-sharing, and other benefits.
Enjoy your new job!