What Should You Do Before You Quit Your Job
You have officially decided that you want to quit your job. While all of your emotions tell you to write the resignation letter and head to your bosses office, you muster up the energy to consider the pros and cons of making this important decision. Are you quitting this job and going to open up your own business? Will you quit to move to a higher paying job with better benefits? Is quitting this job just for a complete career change? Quitting a job can be one of scariest career decisions you ever have to make or it can be an empowering situation. It all depends if you have your ducks in a row. Here are some your smart money moves considerations before you tender that resignation letter.
1) Where will my income come from next month? If you quit a job, you should really be thinking about where the next six to twelve months of income will be funneling into your household. If you are on an action plan with your company, is quitting the best idea? Perhaps your company would give you some severance or there are other benefits if they fire you. Do you have a cash reserve built up just in case your paycheck gets completely shut off? All the anger in the world won’t make next month’s mortgage payment.
2) Maximize your health insurance plan- Your health insurance plan is the most important piece of your overall risk management plan. Before you quit your job, you should have an overall understanding of what might happen with your health insurance plan even with the federal exchange in place. You should be certain to get in the doctor, dental, and eye visits so all of your health matters are squared away before you make the move.
3) What about your life and disability insurance? Hardly anybody these days actually reads their benefits manuals from work. You should determine what happens to your disability and life insurance should you quit your job. Are the insurance plans convertible? What happens if you have new health problems that prohibit you from getting outside life and disability insurance? These types of questions are paramount to ask yourself before you pull the trigger to quit.
4) What do you have lined up for the future? If you haven’t updated your resume or your Linkedin profile, it’s probably a good idea to make sure you are ready to get on the job hunting scene again with full force. You should have been doing some of this three to six months in advance of quitting your job. Or, if you were going to start your own business you should have set up your LLC (or corporation) and got your business plan up and running before you quit.
5) Do I have any contractual obligations? If you’ve signed an employment agreement, you need to know that HR has it on file. Make sure you talk with an attorney or clearly understand issues such as proprietary material, non-complete clauses, or other stipulations that may prohibit you from what you are thinking about doing next. In addition, consider what may become of unvested stock options or pension contributions if you pull the rip cord before a specified date.
6) Get all of your 401(k)’s in one backyard- When you quit your job, you may have a 401(k) at your former employer. I often refer to these as orphan 401(k)’s because most participants don’t pay attention to these once they leave their employer. It is really important for you to make sure you either get old 401(k)’s all rolled over into one Individual Retirement Account or get them all into the 401(k) of your new employer. You should consider investment choices and think about whether or not you may need to borrow money from your 401(k) at some point, but I believe getting all of your 401(k)’s in one backyard is a key financial decision to make upon a job change.
If you are in a battle with HR, quitting your job can be even more stressful than under regular circumstances. You need to be 100% confident that you are documenting each and every conversation because you can be certain that they are doing this on their end. Quitting your job is a difficult decision no matter what stage you are at in your career. Making smart money moves can be the key to success or failure in your overall financial plan. Use these tips when considering quitting your job.
oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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