Job Change Decisions

During or immediately following a job or career change there are several key decisions that need to be made. These decisions can have a major impact on your long term wealth which makes this a great time to create a custom financial plan. Here are some key decisions that job changers face.

  1. What should I do with old retirement accounts?
    You may have old 401K’s at previous employers or you may have an IRA (Individual Retirement Account). You have four options available with those accounts now that you have a new employer.
    • Leave the money in his/her former employer’s plan, if permitted;
    • Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted;
    • Roll over to an IRA; or
    • Cash out the account value.  

  2. Which savings plans should I participate in at my new employer?
    Employers offer a wide array of different savings plans in order to attract and retain employees. Some examples are 401K with company match, Roth 401K, Defined Benefit Pension Plans, 403B, 457 Plan, SEP Plan, SIMPLE Plan, Stock Purchase Program, Employee Stock Ownership Plan, Equity or Phantom Equity. Choosing which options depends on your situation and goals.

  3. How much should I contribute to my retirement or savings plans?
    Choosing how much to contribute to each plan can be a difficult decision. Some companies have more options than others but the employee will always need to make a decision on how much they’d like to contribute.

  4. What investment options should I choose in my retirement plans?
    Again each plan is different in what it offers but there is almost always a choice to be made regarding retirement plan investment options. Many investors choose standard target date funds but that may not be best for their individual goals.

  5. How much should I withhold from my paycheck?
    This seems like a simple decision but many individuals end up with owing the IRS at the end of the year or even worse, getting a substantial tax return. You want to avoid these scenarios so that you can put your money to work during the year and ensure that you don’t have any surprises when you file your taxes.

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