Navigating a job transition: Your job change financial checklist

Making a career move can be a step forward professionally and bring with it new financial opportunities. Whether you're considering changing jobs, evaluating a new offer or have recently started a new position, it's a good idea to think through the full financial picture to ensure a smooth transition.

This checklist can help you prepare, breaking down what to consider before you leave your current role and what to do when you start your new one.

Before you decide to change jobs

As you prepare to move on from your job, these steps can help protect the assets you've earned and ensure you don't leave any money on the table.

1. Review your current compensation and benefits.

Make sure you understand what happens to your compensation and any benefits you're owed before you leave—including any unused vacation days, insurance and retirement contributions.

If you have a pension, you'll need to decide what to do with the funds. Your options may include leaving it with your current employer, taking a lump-sum payment, or a combination of the two. Understand the vesting rules for your plan—"cliff vesting" means you get your full benefits on a specific date, while "graded vesting" means you gain ownership over time.

2. Evaluate outstanding commitments, such as RSUs.

If you have equity compensation you haven't exercised, such as Restricted Stock Units (RSUs) or stock options, check if they expire when you leave. Also, review your vesting schedule carefully. If a bonus or stock grant is coming up, you might want to time your departure to take advantage of it.

3. Consider negotiating with your current employer.

If you like your role but the salary or benefits are lacking, think about negotiating before you look for a new job. If your employer can meet your requests, staying put allows you to continue building toward being fully vested in your pension, stock options, or 401(k) match.

What to review in a new job offer

When you receive a job offer, it’s important to take time and assess how the role and compensation package align with your long-term goals.

1. Compare compensation packages.

Look at your complete compensation picture by comparing salaries, bonuses (including sign-on bonuses), commission structures, stock options, and RSUs. Make sure you take into account the full value and timing of each component, such as any potential clawbacks or vesting requirements.

2. Assess retirement and long-term benefits.

Review retirement plan options, including employer matches, and pensions or other long-term benefits. Also review your options for health, dental, vision, life, and disability insurance. Note any waiting periods before coverage begins.

Evaluate how these benefits align with your financial objectives and contribute to the overall value of your total rewards package.

3. Determine if you'll need temporary insurance coverage.

Gaps in health, disability, or life insurance can leave you exposed to risk. If you're taking time off before starting a new job, find out when your current coverage ends and new policies begin, and consider purchasing COBRA or a private plan if there's a coverage gap.

4. Consider tax differences if relocating.

If you're evaluating a job offer that requires a move, factor in the change in cost of living, state and local taxes, and any relocation package offered by your employer.

Starting a new job: your financial checklist

Starting a new job can be exciting and overwhelming all at once. Here are the key financial steps to take when starting your new job.

1. Enroll in benefits.

Make the most of open enrollment windows for health insurance, disability coverage, life insurance, and other valuable benefits. Missing these enrollment opportunities may limit your options for the remainder of the year.

2. Consider your existing 401(k) options.

If you have a 401(k) or other retirement savings plan with your current employer, you generally have four options:

• Leave the money in your current plan.
• Roll the funds into your new employer’s retirement plan (if allowed).
• Roll the funds into an outside Individual Retirement Account (IRA).
• Cash out your earnings (though this often comes with taxes and penalties).

There are pros and cons to each option, so you may want to consider talking with a financial professional to help you navigate your choices and provide guidance on how to allocate assets in your account.

3. Discuss stock options and next steps.

Confirm the details of any equity grants, stock option plans, or award vesting schedules. Having this information upfront helps you plan for future liquidity and tax considerations.

4. Review and determine your investment strategy.

A job change is a good time to review your overall investment approach. Start by evaluating how your new compensation, benefits, or equity grants may affect your broader financial picture.

A change in your income or employer-provided benefits presents an opportunity to revisit your asset allocation—the mix of stocks, bonds, cash, and real assets in your portfolio. Consider whether your current allocation still reflects your financial goals, time horizon and risk tolerance.

Reviewing your investment strategy when you begin a new job allows you to make thoughtful adjustments—like rebalancing your portfolio or increasing contributions to tax-advantaged accounts—to help keep you on track.

5. Update your beneficiaries.

Once you're enrolled in your new plans, take a moment to add or update your beneficiary designations on all retirement accounts and insurance policies. This ensures your assets are distributed to the right people in case of the unexpected.

Review your financial plan after a job change

A new job marks a new chapter, and it's an ideal time to revisit your financial plan. A financial professional can help you navigate your options, from consolidating retirement accounts to adjusting your investment strategy.

Learn how our approach to financial planning can help you see a full view of your financial picture.

A rollover of qualified plan assets into an IRA is not your only option. Before deciding whether to keep an existing plan, or roll assets into an IRA, be sure to consider potential benefits and limitations of all options. These include total fees and expenses, range of investment options available, penalty-free withdrawals, availability of services, protection from creditors, RMD planning, and taxation of employer stock. Discuss rollover options with your tax advisor for tax considerations.