Take time to understand how a job or career change will
affect your current finances and benefits.
Evaluate Your Finances
Answer the following questions before committing to a new job or career.
- How will a job or career change affect my finances and standard of living?
- Do I have an emergency fund that can cover 3 to 6 months of basic living expenses?
- How will this affect my long-term savings plan, including retirement goals?
- Will I have adequate life, health and disability insurance coverage throughout the transition?
Understand Benefits
Make sure you understand the value of your employee benefits
and how they will be affected if you leave the company.
- What benefits will you be able to keep or transfer?
- Which benefits will you need to replace?
- Will you receive compensation in the form of
pay owed to you, vacation days, sick days or future pensions?
- What will happen to stock options and retirement
plan assets invested in your employer’s company stock?
Prior to your resignation, meet with your employee benefits
coordinator for details on your employee benefits.
Address Medical Needs
Before leaving your current employer make sure you address your medical needs.
- Ask when your current health insurance will expire.
- Find out when your new employer’s health insurance plan takes effect.
- Schedule needed medical, dental and optical appointments.
- Make sure the new plan can cover your family as well.
- Acquire copies of medical records from your physician.
- Determine whether to purchase COBRA continuation coverage.
- Obtain a certificate of creditable coverage from your employer.
Creditable Coverage
When transferring from one health insurance plan to another, the Health Insurance
Portability and Accountability Act (HIPAA) of 1996 protects you from being subject
to a pre-existing condition exclusion if you can show “creditable coverage.”
To ensure your rights, ask your current employer for a certificate of creditable
coverage, which provides your new employer with proof of prior health coverage.
COBRA Facts
Generally, your current employer must allow you to extend health and dental
coverage up to 18 months after employment ends under the Consolidated Omnibus
Budget Reconciliation Act (COBRA) of 1986. Compare COBRA costs to those of a
major medical or short-term medical policy.
For more information on COBRA, visit the U.S. Department of Labor Web site
at www.dol.gov.
Evaluate Life And Disability Insurance
Ensure you have adequate life and disability insurance. Determine whether to
purchase new insurance or convert your employer’s group policy to an individual policy.
Manage Retirement Plan Savings
If you participate in an employer-sponsored retirement plan and are changing
companies, talk with your employee benefits coordinator about your options for
handling accumulated assets such as:
- Checking on potential penalties and taxes on cash withdrawals.
- Transferring or rolling over to an Individual Retirement Account
(IRA) or other qualified plan.
- Transferring to a new employer’s retirement plan.
- Leaving assets with the current employer’s plan.
Are You Fully Vested?
Determine when you will be fully vested. Remaining in your job a
few months or a year longer could increase the amount of money you
can take with you.
Funds you contribute to your employer-sponsored 401(k) plan,
are part of your “vested” balance, but your company match usually
does not vest until a specified number of years of employment have passed.
Most companies have a vesting schedule to indicate when you are vested.
Upon leaving the company, you forfeit unvested portions of your account balance.
Unemployment?
If you have lost your job, you may qualify for unemployment compensation. You
can find the nearest state employment office in your local telephone directory.
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Basic Money Management
Basic Money Management
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