Published 13 May 2023
They say change is the only constant in life; however, that doesn’t make it any less challenging to navigate even under the best circumstances. This is especially true when it comes to career transitions. Work is often the foundation of our financial stability—not to mention a key resource for our overall health, mental well-being, and sense of identity. Therefore, even positive career transitions to pursue a passion or take a leap into something bigger can bring the stress of uncertainty.
Whatever your circumstances, there are steps you can take to harness a career transition, stay proactive, and safeguard your financial health even when things feel out of control. Here are three tactics that can help you regroup and find your footing for the next phase of your professional journey.
1. Refocus
Making a career change can be turbulent, whether it was voluntary or unplanned. If you’re facing a job loss, remember that curveballs like this are unfortunately a part of life. Take the time to refocus your attention on your financial health, approaching it one step at a time.
2. Fill the Gaps
Once you have a clearer picture of your workplace situation and choices, it’s essential to connect the dots to your personal finances. Divide and conquer important areas of your financial health by identifying your needs and planning to cover any gaps between your prior job’s coverage and your next career step:
- Budget: Check your typical monthly expenses as well as any additional costs on the horizon. Take steps to preserve your assets and reevaluate your budget. If you’ve been laid off and meet certain work and wage requirements, you may qualify for unemployment benefits from the government, though this will vary by state. It may also be time to rely on your rainy-day fund, knowing how long you can reasonably expect to depend on any emergency savings you have.
- Health Insurance: Investigate your coverage choices. You might consider extending your former employer’s group plan through the Consolidated Omnibus Budget Reconciliation Act (COBRA). Additionally, purchasing a different policy through the federal Health Insurance Marketplace under the Affordable Care Act can be viable, or you may list yourself as a dependent on a partner or parent’s plan if you’re under 26.
- Retirement: While your short-term financial transition should be prioritized, it’s essential to resist the urge to make early withdrawals. Monitor your prior workplace accounts. You generally have options: leaving assets in your former employer’s plan, rolling over savings into a new employer’s plan (if allowed), rolling over savings into an Individual Retirement Account (IRA), or taking a cash distribution. If you’re unsure which route to take, consulting a financial adviser can be beneficial.
- Equity: If you received equity awards from your former employer, the impact of your employment status will depend on the type of plan you had. Therefore, find out how your former employer is managing the transition and any resources they’re providing to avoid leaving any money on the table.
3. Dare to Dream
You don’t have to navigate this journey alone. Professionals such as personal counselors can assist you in managing the human side of your career transition, while financial advisers can provide insights around the specifics of your finances. Moreover, an accountant or estate attorney can help safeguard your assets and plan ahead.
Once you’re clear on what you want, it may be time to reconnect with your network, enhance your résumé, or work on acquiring new skills. Remember that while much of life happens beyond our control, you remain in the driver’s seat when it comes to the choices ahead of you. With these strategies and best practices, you can maintain a sense of control over your financial health.
This material has been prepared for informational and educational purposes only. It does not provide individually tailored investment advice. Therefore, it is recommended that investors independently evaluate particular investments and strategies. Individuals are encouraged to consult their tax and legal advisors regarding any potential tax implications or legal considerations.
Disclaimer
This article presents the views of our contributing adviser, not the iBestTravel editorial staff. You can check adviser records with the SEC or FINRA.
