Changing Jobs in Your Earning Years
By Saghir A. Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
When it comes to changing jobs, there is always a lot to consider. And for some, there’s plenty of advice to help with that transition. Millennials, relatively new to the workforce, easily found tips on how to climb the ladder or how to find a fulfilling or meaningful career. Those approaching retirement age can also find lots of available advice on what to do in case of a late-career job loss or how to plan for a second career in retirement.
But what about workers in the age group between those two? Some want a better salary, some are bored and want a challenge, some have hit a ceiling with no hope of upward movement, and those simply want to follow their bliss. This group may face the most daunting scenario. Making a change during your prime employment years is not to be taken lightly. Such a switch may alter the trajectory of your career, your financial security, and even your life.
High net worth planning with Wells Fargo Advisor, has seen the merits and pitfalls of a mid-career job change, and offers his advice on four critical issues to consider.
For starters, “it’s very important to make sure your medical insurance is not interrupted. If you are leaving a job, make sure to quickly make arrangements for few coverages.” while COBRA-temporary, transitional health coverage- will likely be available - it’s bound to be far more expensive than what you were paying. “You may also lose other benefits such as disability, life insurance and vision coverage.” While it might be OK to risk a gap in these other benefits, not having medical coverage is one risk far too great to take.
In your middle years and beyond, retirement saving is crucial to your future well-being. Leaving a job in the middle of your career could set you back if you’re not careful. “… if you aren’t fully vested when you leave an employer, you may forfeit a portion or even the entire amount the employer has contributed.’’ And if you’re considering leaving your current job because you’re being wooed by another firm, that you compare the contribution amounts of both companies when weighing salaries and benefits.
Think about negotiating with your new employer to compensate you up front for lost benefits. If the job requires relocation, will your new employer cover moving expenses or temporary housing? Don’t forget about other costs of changing reports. How you accrued vacation time that you will lose with your new employer? If you have restricted stock and/or stock positions, what might you forfeit? Don’t just compare the salaries of your current and prospective employer - examine all of the factors that will define your financial picture going forward.
If your new job pays less, McKown cautions that you should have enough saving to manage the shortfall. Otherwise, you will have to consider whether the decrease of cash flow is worth the perks of the new job. Will your commuting cost change? Make sure your factor is hidden costs like tolls, parking fees, or public transportation.
Finally, if you need to move, think about factors such as costs of living in your new location, any change in travel expenses to visit family, and potential loss of fee for club memberships or children in private schools. With or much on the line in what are typically prime earning years, making smart choice is imperative before you take a leap, now all of the differences between your current situation and the new one you’re considering. Your future depends on it.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
