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9 Things to Do When Changing Employers

John Hagensen, MSFS, CFP®

Director of Financial Education

Last Updated
May 04, 2022
Woman shaking hands and accepting job offer

Tips for Ensuring a Smooth Financial Transition

Beginning a new job is an exciting and challenging life change. You may have new responsibilities, new colleagues and new expectations to get used to. With all there is to consider, don’t forget about your finances. The following checklist can help ensure nothing gets overlooked.

Spend any unused FSA funds

Before leaving your current employer, be sure to spend the balance in your flexible spending account (FSA). Failure to do so may mean you forfeit those funds. The IRS provides specific guidance on eligible expenses.

Adjust your budget

If you’re taking a lower-paying job or plan to have a gap between paychecks, it’s important to set aside money to cover any potential shortfalls. If your salary is increasing, you should still have a budget in place to prevent overspending or lifestyle creep.

Collect your accrued vacation or sick days

Most employers will pay out any unused vacation and sick days. This can add up to a large sum if you regularly accrued time off, so don’t miss out on this payment.

Make a plan for your employer-sponsored retirement plan

When leaving an employer, you can decide whether to leave your retirement plan assets, such as those in your 401(k) plan, 403(b) plan, etc., in the current plan or roll them over. While the right answer for you depends on your particular financial situation, it typically makes sense to complete a direct rollover to an IRA. The benefits of doing so often include more control and investment choice, as well as lower fees. Your wealth manager can help you decide the best course of action.

Remain covered by health insurance

If you plan to experience a gap in health insurance between jobs, you’ll want to make a plan for continuing coverage. You may be able to maintain coverage under your former employer’s plan for 18-36 months through COBRA. Your wealth manager can help evaluate your options and establish a plan that makes sense for your situation.

Decide what to do with your health savings account (HSA)

If you continue with a high deductible healthcare plan (HDHP) at your new employer, you may be able to transfer your HSA balance to the new account. If not, you can typically maintain your current HSA to cover future eligible expenses.

Enroll in benefits

It’s important to enroll in your new employer’s benefits as soon as possible. Consider the following, if available.

  • Health insurance
  • Dental and/or vision insurance
  • Health savings account (HSA)
  • Retirement plan
  • Disability, death and life insurance

Carefully consider your W-4

A job change is a great reminder to review your W-4 withholdings as you complete your new employer’s paperwork. Making the wrong withholding elections could mean you owe money to the IRS at the end of the year, so it’s important to get it right. Your wealth manager can help.

Update your financial plan

As with any major life event, it’s important to reevaluate how your job change may impact your financial goals. Your wealth manager can help you make any necessary adjustments to your financial plan.

If you’ve recently experienced a job transition and could use some help ensuring your finances are in order, Creative Planning is here for you. Our experienced professionals work to ensure every aspect of your financial life is well cared for and working to help you achieve your long-term goals. Schedule a call to learn more.

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This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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