8 Important Financial Steps When You Leave A Job
When you get a new job at a new company, it's very exciting. It was be so exciting that sometimes it's easy to forget about some critical financial tasks that need to happen. Even if you're on the best of terms with the employer you're leaving, they're only going to do so much to help with these decisions. To help make the most of the transition for your family, make a plan for these critical to-dos. This is post doesn't cover everything, but use it as a starting point to help your transition. Keep reading for 8 Important Financial Steps When You Change Jobs.
"And whatever you do, whether in word or deed, do it all in the name of the Lord Jesus, giving thanks to God the Father through him." Colossians 3:17
Confirm Your Last Paycheck
This may seem rudimentary, but don’t ignore it. Double check with HR on when your last payday will be. This will give you clarity on when pay at your current job ends and when pay begins at your new job. If the dates line up nicely, then it should be easy. If there’s a gap, this gives you time to plan accordingly and avoid unexpected stress. Also, be sure to confirm other details on your last paycheck like pay or any accrued benefits that will be paid out.
Don’t Forget About Your 401k (Or other retirement plan)
If you’ve accumulated some money is a retirement plan offer at work, then well done. Millions of Americans, however, abandon their 401k when transitioning to a new job so don’t make that same mistake. For a 401k, you will have the option to rollover the money to an IRA held at a provider of your choosing. Some retirement plans will allow you to continue holding money in the same employer account even after you stop working there. If offered, there are situations where this could be beneficial. Whatever you decide, don’t let a choice be made for you just by ignoring this important part of your financial life.
Understand Health Insurance Dates and Gaps
Medical insurance is one of the most valuable job benefits you can have with a family. Check thoroughly to see the details about what happens with health insurance when you leave your current company. Timing will be important. Coverage often ends on your last day of employment, but don’t assume. You’ll want to compare these dates with when coverage begins with your new job. If there’s a gap, you may need a short-term health insurance plan or another solution to make sure your family covered. It’s also important to check if there is any unused medical benefit associated with the plan. Some benefits, like a Health Reimbursement Account (HRA), can be use it or lose so it may be worth pursuing any elective procedures you’ve been putting off. It might also be worth checking to see if children are up to date on well visits before transitioning to a new plan.
Review Employer Provided Life Insurance
If you opted into employer-provided life insurance, check the specifics on how your job change will affect this important way to protect your family. Some employer policies will give you the option to continue the coverage on your own. This is sometime referred to as converting a group policy to an individual policy. Even if this option is allowed there may be better or more cost-effective policies you can get on your own. Investigate your options to see what will be best for your family and ensure they are protected in the event you or your spouse passes.
Keep Pay Stubs
While you still have access, print and file your last few pay stubs. This includes your final pay stub. In the event you needs pay stubs for a loan or other transaction, this will save lots of headache. A scanned copy is fine, but keep a backup and let your spouse know where to find it.
“Do the hard jobs first. The easy jobs will take care of themselves.” Dale Carnegie
Check Accrued Time Off
Some companies offer Paid Time Off (PTO) or vacation time that can be reimbursed in some circumstances. Depending how much time has accrued at the point in the year you plan to leave, this could be a meaningful amount of money. Most mid-size of large companies have written policies on this, but still confirm. It’s common practice to include PTO reimbursement with your final paycheck. One additional note, rules around this practice different in some states so even if your company offers it, the location your work may be different. To be certain, check the policy and ask human resources or benefits.
Update Contact Information
You may have additional business with your employer after your last day. At the very least, you need to receive a tax form, usually a W-2. There could be other reasons as well, so make sure your company or HR department has up to date information including mailing address, phone, and email. Also, make sure you have any critical contact information for benefits or HR in the event something comes up later.
Ownership in the Company You’re Leaving
Some companies offer different forms of ownership as an employee benefit. This could be in the form of stock options, company shares, or another program. Your departure could have an effect on this benefit so be sure to check and see the specifics. Given the complexities of some equity-based compensation programs, this decision could be worth seeking the help of a professional.
Miscellaneous and more
Company benefits are far from standardized so be sure to ask if you’re not sure. If something doesn’t seem quite right get it in writing. You’re entitled to understanding so feel confident if you need to ask for clarification or help with something. Best wishes to you in your new job!
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