When changing jobs, even to a higher paying job, there are many financial issues for you to consider. A financial plan can help organize your thoughts and make the transition less stressful.
Will you have a gap between paychecks, and if so, what do you need to save to cover this time? What about any changes to or gaps in your insurance coverage, including life, health, and short-term and long-term disability? When will the old benefits end and new benefits begin?
You’ll also need to decide what to do with your employment-based retirement savings. With a defined benefit plan, if you leave after being vested in the plan but before the plan’s retirement age, the benefit generally stays with the employer’s plan until you file a claim for it at retirement. Some defined benefit plans offer early retirement options.
Defined contribution plans, such as 401(k)s and 403(b)s, allow the following options:
For additional information on rollovers, contact the U.S. Department of Labor’s Employee Benefits Security Administration.