Check these tasks off your to-do list if you’ll be taking part in the Great Resignation.
- A lot of people are changing jobs during the Great Resignation, which can affect many aspects of a person’s financial life.
- Considering your retirement accounts and health insurance options are some of the financial steps you should take before making a career change.
Millions of Americans have changed jobs recently, or are planning to do so soon. The pandemic forced changes in the labor market, including allowing more employees to work remotely. And many employers are having difficulty finding skilled workers, so there are ample opportunities for those with the right qualifications.
So many people are actually making a career shift that the phenomenon is being referred to as the “Great Resignation.” If you’ll be taking part in this movement, though, there are a few key financial steps you should be sure to complete before switching to a new position.
1. Increase your savings rate
A job change can cause disruption in your financial life, even if the switch is voluntary.
You may have a period when no paychecks are coming in, for example, since your new employer may have a different pay schedule than your old one. Or your new job may not work out as planned and you may even find yourself facing a period of unemployment.
You don’t want to find yourself in debt because of your job change, so be sure you have plenty of emergency money saved in case there is a disruption in your income.
2. Learn your 401(k) vesting rules
If your employer at your old job contributed to your 401(k), you need to know if those contributions are fully vested. If they aren’t, then you may lose some of the contributions your employer has made to your account if you change jobs too soon.
You’ll want to know up front what impact the career change will have on your retirement savings so you can take this into account when deciding if a switch in jobs right now makes financial sense.
3. Decide what to do about your retirement accounts
You’ll also need to decide what to do about your retirement plan with your current employer if you’re moving into a new position.
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