You’re ready to leave your job and you’re not sure what to do. We’ve all been there.
While my area of expertise isn’t in helping you find your next job, I can guide you through financial matters. Take a deep breath. Try not to leave angry. And get your finances in order before starting your next venture.
- Save now. Create a personal budget and review it at least once a month. Include income and expenses. One of your expenses should be non-retirement savings. Designate an emergency account where you save at least a few months of household expenses. In the event that you lose your job without warning, you have enough to pay the bills until you find something else.
- Dipping into savings. “I cashed out my 401k,” is the last thing I want to hear when someone moves from one job to another. Try not to leave your current job without a plan and non-retirement savings. Not only are there tax consequences to cashing out a retirement account before the age of eligibility, you’re dipping into money meant for later in life. You’ll need to save even more to get caught up.
- 401k Rollover. Instead of dipping into your retirement account, call Heritage Financial Strategies to review your employer sponsored account to determine if you should leave your money where it is or roll it over to another retirement account. You won’t incur a tax event as long as the money goes directly from one retirement account to another.
- Health Insurance. COBRA and the Affordable Care Act make it possible to purchase health insurance even if your employer isn’t providing it. Consider having your own policy while you’re out of work, starting your own business, or as an alternative to an employer sponsored plan.
- Life Insurance. The life insurance provided by your employer doesn’t go with you when you leave. Consider purchasing your own policy to cover medical, funeral, household, and mortgage expenses to protect your family in the event of your death.
Leaving your job doesn’t have to be a financial burden if you’ve planned ahead, have savings, and get the insurance you and your family need.
**Please be sure to speak to your advisor to carefully consider the differences between your company retirement account and investment in an IRA. These factors include, but are not limited to changes to availability of funds, withdrawals, fund expenses, fees, and IRA required minimum distributions.
Interested in learning more? Call 480-397-1184 to schedule an appointment with Heritage Financial Strategies today!