What Should You Do If You Are Facing A Job Change?
Submitted by Watters Financial Services, LLC on June 13th, 2014What Should You Do If You Are Facing A Job Change?
Whenever one of my clients is in a job change situation I always feel it's important to highlight the following issues in helping guide them through this transition:
1. If you do receive any severance, it's an important time to take stock of your cash flow expenses and look carefully at what is an essential bill and to cut out any excess discretionary spending.The goal of a severance package is to help you to survive the period of being unemployed. It can take quite awhile to find another job, thus by cutting your expenses, it will allow you to cover your expenses for a longer period of time.
2. Many people feel that they need to move quickly to make changes to their 401(k) and/or to rollover the money. I often encourage clients to slow down and make no decisions on their 401(k) plan, until they see where they land. You can always roll the money over, and there is no time limit on rolling it over. As long as you have $5,000 or more in the plan, there is no reason you cannot leave it there indefinitely. At a later point you could roll it over to your new employer or roll it over to an IRA rollover account.
3. As long as your employer has more than 20 employees, you are eligible to be covered by your employer health plan through COBRA. This is a great advantage because it give you more planning options for the future. Many people are surprised to see how expensive the cost of COBRA is. This is because often when you work for a company your health insurance has been heavily subsidized. Also, now with the Affordable Care Act there are health exchanges available that offer options as well. That may make it easier to obtain an individual policy that might be cheaper than COBRA.
4. Many people don't realize that as soon as you lose your job you are no longer covered for disability benefits. Thus, if you were disabled during the time you are job hunting, you would have no coverage in place. If you have a private disability policy this would not be the case.
5. Often, people don't realize that you may have the option of converting the group life insurance coverage you have with your employer. If you have any outstanding health issues and want to keep the life insurance, this could be a very valuable option to consider.
6. Review you Flex Plan benefits. Once you leave your employer, you may lose those benefits. Perhaps it is time for some new glasses or quickly scheduled medical/dental care.
7. Stock Options usually end with termination of employment. Do you feel bullish about the company? Are your options under water? Are they Nonqualified or Incentive Stock Options? There are many considerations here.
Please call me if you have any follow-up questions in regards to any of these issues and I'd be happy to discuss these issues with you further.
