Congrats on getting a new job offer! You’ll be adjusting to new coworkers, new job responsibilities, and more. In the middle of these changes, don’t let your financial goals start slipping.
As you’re making the transition to a new job, or if you’re deciding if you should take a job offer, talk with your financial advisor. Financial planners have the expertise to help you see beyond the salary and reveal what your bigger financial picture looks like. So before you get too excited about the new gig, here are some things you should run by your financial planner.
Ensure Your Investments Are On Track
Before you switch jobs, you need to make sure that your investments are on track.
Whether it’s saving for retirement or saving for that vacation home, you should always do a quick check to make sure everything’s still going according to plan. This is where asking a financial advisor will come in handy.
When you are considering a new job, a 401(k) is one of the first things you should ask your potential employer about. Even if the job offers you a high salary, you may not want to take it if they are not offering you a 401(k). Other investment plans might be available as well. Ask about profit sharing, company stock options, pensions, and other types of investments that could be involved. Should you be contributing more to retirement at this new job? Would a Roth 401(k) make a difference? These are great things to consult a financial advisor about before you fill out that new W-4.
Optimize Your Benefits
One of the first things you’ll talk about in job negotiations is money. Of course, you want to know the hard numbers–your salary, your retirement contributions, etc. But there are other perks of the job that may not seem like financial decisions on the surface, but can certainly end up influencing your spending. Your financial planner can also help you consider how your finances will be impacted by other job benefits.
For example, what does your new healthcare insurance look like? If you have to pay more for a deductible, a financial advisor can help you plan that into your monthly budget. Does your new employer offer an HSA or FSA? If they do—or if you already have ones from your old job—you’ll want to take into account how likely you are to use those funds and how much you’ll want to contribute. Remember that FSA money usually expires at the end of the year.
You’ll likely also ask about how much time off you’ll get. If you don’t use all your PTO, will the company pay it out at the end of the year? An employee assistance program (EAP) can also be a huge money-saver by paying for counseling, therapy, and other support that would normally have to be paid out of your pocket.
These benefits don’t seem money-related on the surface, but they can end up changing your budget drastically. Talk to your financial advisor about how to optimize these benefits. Once you decide what will be best for you, talk to your employer and HR to see if those benefits are negotiable.
Create a Safety Net
Switching to a new job might be the best thing for you and your career goals. However, it can be scary if you have a gap in paychecks. A financial advisor will be able to help you plan for this gap and make sure that you have enough in savings.
If you don’t officially have the job yet, you should also make sure that you have a safety net in case the offer falls through. You may also have a gap in your health insurance. If this is the case, you may need to pay for COBRA insurance to cover you and your family until you can get health insurance from your new job. Talk to your financial planner about the best way to create a safety net for these upcoming income changes.
Plan For Your Taxes
One of the best things a financial advisor will be able to help with is to plan your taxes. If you take the new job, you’ll have another W-2 form you’ll have to report, as well as extra forms for any work-related investments. Taxes can also get tricky for lump-sum money—think sign-on bonuses, PTO payouts, and other similar payments that tend to happen when you leave one job and start another.
While your CPA will know what to do with these taxes, you should also take them to your financial advisor. Financial advisors plan for the long term. They can help you create a tax-efficient strategy so you’re not paying any extra taxes. They will make sure that you aren’t blindsided by any costs in April, as well as ensure that your taxes and expenses are keeping you on track for retirement.
Consider the Commute
Did you know that your commuting distance affects your car insurance rates? If your new job is farther away than your current one, your car insurance payments could spike. There are other unseen costs as well. Gas mileage gets pricey, and your car will wear down faster.
Ask your financial planner how these costs will affect your goals. Together, you and your financial advisor can estimate what your new costs will be. Ask your new employer if you can be reimbursed for miles and ask if working from home is an option. You and your financial advisor can consider the commute to see if the new career step is worth taking.
Get Peace of Mind
You already have a lot going on with the added stress of getting a new job. The adjustment can take a toll on you. Get some peace of mind by talking with a financial planner. A financial planner can help you create an updated budget for your new salary. They can also help you solidify a long-term investment strategy with your 401(k), manage your savings, and keep track of your cash flow so you don’t have to. You can focus on impressing your new manager while your financial advisor takes care of the money details.
Set Yourself Up for Career Success with a Financial Advisor
Only about 17% of Americans have a financial advisor. If you don’t have one yet, a job change is a critical time to get one. From company stock options to 401(k) rollovers to the gap in health insurance, a financial advisor can help you navigate the changes that come with joining a new company. Set yourself up for career success and get matched with a financial advisor today!