If you’re thinking about quitting your job this year, you’re not alone. With a record number of job postings recently, the nationwide “quit rate” remains near historic highs as the “work from anywhere” trend appears to persist.
And even beyond basic employees, your company’s CEO may leave before you do. According to a recent study published by Deloitte and Workplace Intelligence, nearly 70% of senior executives said they were seriously considering leaving their jobs this year, compared to just 57% of all employees surveyed.
If you count yourself among the millions of Americans who are considering changing jobs, you have many decisions that could have a significant impact on your finances.
Six steps to take before quitting your job
The landscape of American workers has undoubtedly changed. These significant changes in the way we do business and manage work-life balance can be nerve-wracking. You need to think about a potential job change to make sure you don’t inadvertently leave money on the table. Here are several things to consider before leaving your current job:
1. Seek help from a finance professional
A mid-career job change involves many moving financial elements. There might be items you won’t see coming. This is why it is so important to work with an experienced fiduciary advisor. Although you may choose to work with a local financial adviser, consider whether a specialist adviser familiar with your particular circumstances might offer better advice before submitting your notice of resignation.
2. Look at (your acquisition schedule) before jumping
Timing is everything when you leave an employer, especially during your peak years. You want to make sure your exit is not immediately before a vesting deadline. Maybe staying just a month or two longer will mean one last outing with a lot more money.
3. Prepare to ride
According to Capitalize, Americans have accumulated over $1 trillion in “forgotten” 401(k) assets. Don’t be part of the statistics! By rolling your old 401(k) into an IRA or rolling it over to your new employer’s plan, you can keep your financial situation in order when you start a new business.
4. Review your options
Set the stock options you have won and plan to hit them. Stock option strategy is one area where working with an advisor familiar with this type of benefits common among high-paying workers can pay off.
5. Don’t bail out before your bonus
Be sure to work with your current employer to receive any variable compensation you deserve. Know the qualifying periods and payment dates. It would be unfortunate to overlook a key date and miss out on the bonus money for just a few days.
6. Don’t forget your health care benefits
When you change careers, the elephant in the room is what will happen with your health care coverage. This can be a significant risk if you have a growing family. It would be best if you worked with your current and new employers to have continued insurance.
What to do when starting a new job
Fast forward, and you skipped jobs while making sure all your financial ducks were in a row. Now you need to get your house in order in the new business. There are several boxes to check before settling into a financially secure position.
First, sit down with a financial advisor to prioritize your situation. They can help you assess your goals, risk tolerance, time horizon, tax situation, and any unique considerations for you and your family.
Next, make sure your payroll deductions are correct — the last thing you want is to find out next tax-filing season that you owe the IRS a sizable amount (with possible penalties).
It’s also prudent to ensure that part of your new salary is dedicated to long-term savings. For example, you can use your new employer’s pension plan to invest in the future and take advantage of matching contributions.
While most people know they should contribute to a 401(k), the investment benefits of a health savings account are a little less understood since it’s a relatively small type of account. new.
So check with your HR department to find out how the company’s HSA works – there may also be an employer match with this account. HSAs offer the “triple tax advantage” not found in any other savings vehicle.
Certified Financial Planner Emily Rassam of Archer Investment Management said, “Consider and evaluate any unvested 401(k) correspondence, stock options or restricted stock units before leaving a company. You can leave funds on the table. Additionally, if you leave a position with a nonqualified deferred compensation plan, it may become 100% taxable upon departure.
Your head may be spinning. There are many considerations before, during and after your job change. The good news? You’re not alone.
More and more Americans are taking the bold (and often lucrative) turn to a new job or career. Whether you’re just transitioning from one employer to a similar position at another company or starting your own business, working with a financial advisor means you don’t miss a step.
Managing risk, making the most of your old and new benefits, and keeping tabs on your long-term financial plan are critical areas sometimes overlooked by today’s job changers.
This article comes from the Wealth of Geeks Network and is distributed via The Associated Press.