Smart ways to manage your money before a career change

By WP Creative Group

It’s important to organize your finances and get the most from your savings when switching to a new job.

So you’re starting a new job. Congratulations! Before you pack up your stuff and head for the door, check this list to make sure your finances are in order first. There are also a few money and benefit items to cross off your to-do list when you start that new gig.

Quick tip: Browse your company intranet for employee benefits information. Still have questions? Call human resources (HR) or your benefits administrator.

1. Which employee benefits will you need to replace, and which can you take with you?

First, ask HR when your insurance benefits terminate—is it the day you leave or the end of the month? Then find out when your benefits take effect at the new company (Day one, or in 30 days, for example).

-Health insurance: Know how your current coverage compares to the new coverage. If you’re in the middle of treatment and not covered by insurance at your new job, try to plan and budget accordingly.

-Dental and vision insurance: If you have dental or vision coverage now, but won’t in the new job, schedule appointments before you leave.

-Life insurance: If you bought (or were provided) extra life coverage through your employer and want to keep it, start the paperwork to convert from a group to an individual policy, if that’s offered. You’ll just pay the premium directly to the insurance company, rather than having it payroll-deducted.

-Retirement: You could have decisions to make about your 401(k). More on that below.

2. Will you have a health coverage gap between jobs?

COBRA stands for Consolidated Omnibus Budget Reconciliation Act, and it allows you and your family to continue health insurance for a while after losing group coverage. COBRA can be pricey because you’ll pay the full premium, but a health crisis could have huge financial implications if you aren’t covered. If you have dental and/or vision in your old job, that’s included in COBRA, too. An alternative is a Health Insurance Marketplace plan. Available plans vary from state-to-state, and depending on your household income, it may cost less than COBRA. Visit healthcare.gov to learn more.

3. What will you do with Health Savings Account (HSA) funds if you have a High Deductible Health Plan (HDHP)?

If you expect to enroll in an HDHP at your new employer, you can often transfer a balance in your HSA. If you don’t plan to enroll in a HDHP, you can generally leave any remaining funds there and use them as needed for future eligible expenses.

4. What’s your flexible spending account (FSA) balance?

Brush up on the rules for your company’s FSA benefit and deadlines. Submit claims for dependent care or health care expenses through your termination date so you’ll get reimbursed. And remember that if you have a balance, whatever you don’t use, you’ll lose.

5. What will you do with your retirement plan?

First, find out how long you have to decide. In most cases, you get 30–90 days. Then you can generally choose among these options:

1.Roll your savings from your 401(k) into an IRA. Combining retirement accounts can help you simplify your money. Learn how to start a rollover IRA.

2.Move your money to your new employer’s plan. This is typically an option if you’re joining a company that offers a retirement plan and allows roll-ins.

3. Keep your money where it is if it’s allowed under your old plan. Check with your former employer if you have a lower account balance. Some retirement plans force you to take out a balance that’s under a certain amount ($5,000 is common).

4. Cash out your account balance. There are some downsides to this, including immediate tax consequences. While it may be tempting to have the extra money now, there are better options for emergency cash than an early 401(k) withdrawal.

If you’re still unsure, read more about the pros and cons of each option.

6. What will be in your last paycheck?

It could include back pay, vacation/sick days, commissions, or a bonus.

7. Do you have a “transition” budget?

Budget for that lag time between your old job and your first paycheck at the new one. If you run short, you could tap your emergency fund.

8. Are you prepared to handle student loans?

Log in to your student loan account to see if your monthly payment is based on your income. A new, higher income could mean a new, bigger payment. Visit the Federal Student Aid site for more information.

9. Do you know the rules for vesting your equity?

If you get non-salary compensation, know the vesting period and what percentage of compensation is available to you, if any, when you leave. Many companies require you to exercise stock options within a certain amount of time, often 90 days.

10. What’s your company’s tuition reimbursement program?

If you’re taking classes and your last day on the job is in the middle of a semester, find out if you’ll be reimbursed for that semester’s expenses. Some companies require you to remain there for a certain length of time or force you to pay back the funds you received.

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This content is paid for by Principal Financial Group® and published by WP BrandStudio. The Washington Post newsroom was not involved in the creation of this content. Learn more about WP BrandStudio.