What 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.
