A checklist to review before, during, and after your transition to a new position
Congratulations on your new job! Now it’s time to take action to maximize the financial benefits of this new opportunity and review your current financial plan.
As a fee-only financial advisor, I work with people every day to make sure their financials are in order during times of transition. What follows is a checklist of some of the important items to review when changing jobs. This is not comprehensive or personalized advice, and you may want to consult a qualified financial professional before making any major decisions, but you can use it as a general guide to cover your bases when changing jobs.
Financial Checklist for Changing Jobs
BEFORE YOUR JOB TRANSITION
- Understand the benefits and the perks your new employer offers
Flexible spending accounts (FSAs), health savings accounts (HSAs), employee stock purchase plans (ESPPs), tuition reimbursement, and wellness programs are just some of the benefits your employer may offer. These can help you save money on taxes and expenses, or even increase your income and overall wealth. Learn what is available to you, how they work, and how to use them to your benefit.
- Review the insurance benefits of your new employer
Take a close look at the plans your new employer is presenting. Then, sign up for the ones that suit your needs and budget. This may include health, dental, vision, life, disability, and long-term care insurance. Compare the coverage and costs with your existing plans and decide whether it’s better to keep or cancel them. Also, if you have dependents, make sure they are also covered adequately.
- Review your retirement plan, consider your options, and enroll (quickly)
If your new company offers a matching contribution, try to contribute at least enough to get the full match. For example, if your employer offers to contribute up to 6% of your pre-tax income, take advantage (if you can) and contribute to that amount. If you have an old 401(k) or IRA from your previous job, consider rolling it over to your new plan or a rollover IRA to avoid fees and simplify your accounts.
DURING YOUR JOB TRANSITION
- Create a new budget for new income and expenses
Transitioning to a new job brings a new income and expenses that need to be accounted for. Create or update your budget based on these changes. Track your spending and saving habits and adjust them as needed to meet your financial goals. Always aim to spend less than you earn and try to save at least 10% of your income for your long-term goals.
- Update your budget for past and pay off high interest debt – fast
Creating a revised budget is the perfect time to review your debt situation and create a plan to pay it off as soon as possible. Prioritize high-interest debt, such as credit cards, over low-interest debt, such as mortgages, or student loans. Consider refinancing or consolidating your debt if you can get a lower interest rate or better terms. Lastly, avoid taking on new debt unless it’s absolutely necessary.
AFTER YOUR JOB TRANSITION
- Review your credit report
At least once a year, review your credit report and credit score and correct any errors or discrepancies. This is vital to your financial well-being. Your credit history can affect your ability to get loans, mortgages, insurance, or even future jobs. You can get a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) every 12 months through AnnualCreditReport.com.
- Revisit your financial goals
Review your financial goals and progress regularly and adjust them as needed. Whether you want to save for retirement, college, a home, a vacation, or anything else, you need to have a clear vision of what you want and how to get there. Set SMART goals (specific, measurable, achievable, relevant, and time-bound) and track your performance. Celebrate your achievements and learn from your mistakes.
- Seek the help of a fee-only fiduciary financial advisor
Seeking the services of a trusted professional will provide insight, helping you create a comprehensive financial plan that suits your unique situation and needs. A fee-only fiduciary advisor is paid only by you for their advice and services, not by commissions or incentives from selling products. They are also legally obligated to act in your best interest at all times. You can find a fee-only fiduciary advisor through the National Association of Fee Personal Financial Planners or the Fee Only Network.
- Consider working with a certified financial planner (CFP)
A CFP brings with them the highest education, experience, examination, and ethics requirements possible to offer quality and trustworthy financial planning services every time. A CFP can help you with various aspects of financial planning, such as tax planning, estate planning, risk management, investment management and more. You can find a CFP through the CFP.net or the Let’s Make a Plan website.
At Winthrop Partners, we are proud to be a fee-only fiduciary financial advisory firm that specializes in helping individuals and families with their wealth management needs. We’re also certified financial planners (CFPs) and chartered financial analysts (CFAs) which means we have the highest level of education and experience in the financial planning industry.
Whether you need help with retirement planning, investment management, tax planning, estate planning, or any other aspect of financial planning, Winthrop Partners can help you create a plan that works for you.
To learn more about Winthrop Partners can help you achieve financial wellness, contact us today for your free consultation.
The views, opinions, and content presented are for informational purposes only. They are not intended to reflect a current or past recommendation; investment, legal, tax, or accounting advice of any kind; or a solicitation of an offer to buy or sell any securities or investment services. Nothing presented should be considered to be an offer to provide any product or service in any jurisdiction that would be unlawful under the securities laws of that jurisdiction. All investments involve risk, including the possible loss of some or all of the principal amount invested. Past performance of a security or financial product does not guarantee future results. Investors should consider their investment objectives, risks, and risk tolerances carefully before investing. The Firm has made every attempt to ensure the accuracy and reliability of the information provided, but it cannot be guaranteed.
Brian Werner is a Managing Partner at Winthrop Partners. He has more than 25 years of experience in investments, financial planning, entrepreneurial ventures, corporate finance, and banking. Prior to joining Winthrop Partners, Brian was the First Vice President and a Senior Wealth Advisor for First Niagara, where he led the development of First Niagara’s Western Pennsylvania Private Client Services and served on its western Pennsylvania operating committee. He also held roles with PNC/National City, Greycourt Investment Advisors, and Linnco Future Group, Chicago Board of Trade. Brian is a Chartered Financial Analyst and Certified Financial Planner. He earned his MBA from Duquesne University, Magna Cum Laude.