CHANGING JOBS ?
INDUSTRY INSIGHT
YOUR FINANCES 4 Tips to Keep Your Financial Life on Track
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The economic expansion in the U . S . since 2009 has presented opportunities for many Americans to explore new job possibilities . If you are among those looking to make a change in your career path , you should know that switching employers can have a substantial impact on your financial life . Here are four tips to help keep your finances on track through the transition :
1 . REVIEW YOUR ENTIRE COMPENSATION PACKAGE
When considering a new position , it ’ s important to review the base salary offered in the context of the full compensation package . Many U . S . companies offer competitive benefits that could help you manage everyday expenses , such as health and disability insurance , on-site health clinics , fitness centers , or a company car . Financial benefits , including a pension plan , company matching retirement plan contributions or employee stock options , can also be important pieces of your financial plan . Consider the benefits you and your family use and value most from your current compensation package as you make your career decision .
2 . MAINTAIN HEALTH INSURANCE If you currently have health insurance through your employer , make it a priority to sustain coverage through the job transition . Depending on your new employer , you may begin to receive coverage on your first day or after a waiting period . Unexpected health issues or accidents can happen any time , so it ’ s not worth the risk to be uninsured — even for just a few days or weeks . To retain coverage , consider the following options :
• Staying with your current insurance until the new plan is in place . COBRA federal law ( the Consolidated Omnibus Budget Reconciliation Act ) allows you and your qualified beneficiaries to remain on your employer ’ s plan for up to 18 months if you were not terminated for cause . You are responsible for up to 102 percent of the plan ’ s costs – the full expense for coverage plus a possible administration fee .
• If you ’ re married , check to see if you can secure coverage with your spouse ’ s employer . The qualifying events for enrolling in your spouse ’ s plan may vary , but it ’ s worth exploring whether this option is available to you .
• Purchasing insurance through the open market . If you ’ re considering this option , research the costs and benefits of each plan thoroughly so you know what ’ s covered before signing on the dotted line .
3 . PRIORITIZE YOUR LONG-TERM FINANCIAL GOALS
If your new position comes with a salary increase , use the additional dollars from each paycheck to solidify your financial future . It can be easy to spend the extra money if you don ’ t have a plan in place to save it . Commit to applying your bump in income to your key long-term goals , such as retirement , college tuition or another important milestone .
If you choose a job with a lower salary — which may make sense for a variety of reasons — update your budget accordingly to ensure you ’ re able to live within your means each month . Saving even a modest amount on a regular basis will help you make meaningful progress toward key goals .
This Industry Insight was written by Jonathan D . Martin .
4 . TAKE CARE OF YOUR RETIREMENT PLAN DOLLARS
The vested balance in your employer ’ s retirement plan is yours . As you change jobs , it ’ s important to make an informed decision about what to do with these retirement savings . You typically have several options : keep the money in your previous employer ’ s plan ; roll it into the plan offered by your new employer ; or roll it into an individual retirement account ( IRA ). There are pros and cons to each option , and no one choice is right for everyone . As you review your options , consider discussing your decision with a financial advisor who can evaluate your specific situation from an objective perspective .
It ’ s worth noting that another option is to take the retirement funds in cash , although bear in mind that choosing cash will incur steep tax and early withdrawal penalties . In addition , taking a distribution results in a loss of tax-deferred savings and the potential growth that could come from keeping the money invested .
A career change presents many choices that could impact your financial situation . Being thoughtful about the decisions you make through the transition can help position you to meet your future financial goals .
Jonathan D . Martin is a Financial Advisor with Ameriprise Financial Services , Inc . in Bethel Park . He specializes in financial planning and asset management strategies . Contact Jonathan ’ s office at 412.831.6240 , extension 202 , located at 88 Fort Couch Road , Suite 210 , Pittsburgh , PA 15241 , or visit his website at www . ameripriseadvisors . com / jonathan . d . martin . Jonathan is licensed / registered to do business with U . S . residents only in the states of PA , OH , WV , AZ , CA , FL , IL , IN , NC , NJ , OR , SC and VA .
Investment advisory products and services are made available through Ameriprise Financial Services , Inc ., a registered investment adviser .
Ameriprise Financial Services , Inc . Member FINRA and SIPC . © 2018 Ameriprise Financial , Inc . All rights reserved .
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Jonathan D . Martin Financial Advisor
88 Fort Couch Road , Suite 210 Pittsburgh , PA 15241 412.831.6240 ext . 202 jonathan . d . martin @ ampf . com ameripriseadvisors . com / jonathan . d . martin
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Ameriprise Financial Services , Inc . Member FINRA and SIPC . © 2018 Ameriprise Financial , Inc .
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