There are many reasons why you might be considering looking for a new job. Maybe you’re seeking more responsibility – or less. Perhaps your job is no longer rewarding – monetarily or otherwise. You might be relocating, changing careers entirely, or have had the unfortunate experience of losing a job. Whatever the reason, there are many financial factors to consider before you make a career move. Planning ahead can help ease the transition into your new job, and help secure your finances for your immediate and longer term future.
Make Sure You Have An Emergency Fund
Everyone should have an emergency fund. SageVest Wealth Management generally recommends maintaining a cash balance of at least three to six months of living expenses. This helps you to cover large or unexpected expenses, or a lapse in income, without having to go into debt. Having an emergency fund is critical if you’re changing jobs, even if you’ve secured your next employment position, as you never know how a job will evolve until you get to know the company.
Stop Or Reduce Your Retirement Savings
Ideally you’ve secured new employment. However, if you might be losing your job and don’t have adequate emergency savings on hand, consider reducing or stopping contributions to your employer retirement plan. You might choose to reduce them to the minimum amount you must contribute in order to gain your employer match. However, if you keep contributing to capture an employer match, verify that you’ll get to keep it, as most employer matches are subject to vesting schedules that depend upon your employment tenure.
Evaluate Automatic Investments
If you might have a gap in your income, take a look at any additional investment savings you’re making to other investment accounts. It might be wise to stop these investment contributions and save these amounts in cash until a future income stream is secured.
Reduce Your Expenses
If you’re not confident about your ability to support your expenses during a job transition, reviewing and reducing your expenses is a worthy exercise. Cut out unnecessary spending and add the savings to your emergency fund.
Secure A Home Equity Loan
If you’re still employed, but preparing for a transition, consider obtaining a home equity loan, as qualification is dependent upon employment, including employment tenure. We don’t recommend drawing upon the line of credit unless necessary, but having it available creates a potential financial lifeline.
Exercise Stock Options and Stock Units
If you’ve received company stock options or stock units, these benefits are often forfeited upon termination. In such case, you should sell and capitalize on this employment benefit while the opportunity exists.
Use Your Leave
Unless you’re going to be paid out for your remaining leave, be sure to use it before you depart. If you’re looking for a new job, a few days off can give you time to finesse your resume, begin job hunting, and engage in networking. The one caveat is if you’re retiring with a pension that’s tied to years of employment. In that case, it’s best to use your days rather than receive compensation, as a longer employment span helps to boost your pension payments.
Review Your Benefits
The bottom line on your paycheck is important, but so too are any additional employment benefits you receive, like health, life and disability insurance. Typically, group coverage ceases along with your employment. This can leave you and your dependents vulnerable. Explore replacement coverage options before you leave, to ensure that you and your loved ones are protected.
Network, Network, Network!
The reality is that finding another job can be easier if you know someone to facilitate an introduction. Share your resume and areas of interest with family, friends, and colleagues, to make sure your name’s being circulated and considered.
Rollover Your Retirement Account
One of the biggest financial mistakes that individuals make is maintaining fragmented investment accounts and losing sight of their bigger financial picture. Consolidating your savings to the extent possible helps you to better monitor your financial progress, investment structure, and general financial decisions. Consider rolling your existing retirement plan into a new company retirement plan or electing an IRA rollover, which gives you the greatest amount of financial freedom, while retaining tax-deferred retirement savings benefits.
Contact Your Financial Advisor
There’s a lot to think about before you begin the process of finding a new job, and especially once you have an employment offer to consider. SageVest Wealth Management can help guide your decisions before you leave your current job, during any transition period, and upon gaining new employment, including evaluating your compensation and benefit packages such as retirement, bonus structures, stock grants, insurance benefits and other options. Because SageVest advisors take the time to get to know you, our recommendations consider your career goals alongside your broader life, family, and financial goals. We encourage you to contact us if you’re considering a career move.
