How should you prepare financially for a new job or career change? Adon Beddoes has put together a comprehensive list of financial planning must-dos when you move company, change career or get a promotion.
With the excitement and responsibility of taking on a new role, financial planning can slip down the priority list. However, omitting to review your financial planning when your financial situation changes because of a career change can lead to undesirable consequences for you, your family, and your money!
Don’t worry though, I’ve got you covered with this comprehensive list of seven financial must-dos when you get a new job to ensure that your wealth remains protected, and your financial planning stays on track throughout the transition and beyond.
Seven financial planning must-dos when you change job
Check your health insurance cover
When you leave a job your employer-sponsored coverage will come to an end. If your new remuneration package includes health insurance, it’s a useful exercise to compare your old and new coverage to ensure that you are not losing any benefits. You may be able to top up to guarantee equivalent coverage.
If you no longer benefit from health insurance via your employer, it is essential to take out a private medical insurance policy to protect you and your family. You should shop around to find a comprehensive cover that suits your needs – which won’t necessarily be the cheapest. I have a lot of experience in helping expatriates in Asia find the best health insurance for them based on their medical history and any pre-existing conditions and I’d be happy to help.
Whatever your situation, make sure that there is no period when you are uninsured to avoid risk. Unlikely as it is, you don’t want to find that disaster comes calling when you are between policies. Medical emergencies can erode savings frighteningly fast.
Check your life insurance
The same applies to life insurance. Employer cover can often be converted to an individual policy and it may be in your interest to consider this and pay the premiums yourself directly to the insurance company.
Or your new employer may provide life insurance as a benefit. Even so, I recommend talking to a professional to check that you have sufficient coverage. Many people are underinsured.
Again, avoid a situation where you are uninsured during the transition period. You never know when disaster could strike and without life insurance, your family could be left vulnerable financially.
Life insurance is a key element of any financial plan and getting it right is important. If you have any questions or concerns about your cover, I would be happy to conduct a review.
Review your short-term liquidity
Check whether a difference in the date your salary is paid between your old and new company will impact your budgeting in the short term. You may need to plan ahead and shift money around to see you through the interim period and avoid getting into debt.
Review your retirement planning
You’ll need to review your retirement planning going forward. Ensure you understand the options open to you for your existing pension savings. Is it advantageous to keep them where they are, move to your new employer’s plan or consolidate them into private investments?
If your salary has increased, it’s also a good idea to boost your monthly retirement savings. I recommend a full financial planning review with a professional to reassess your long-term goals and make sure your plan remains aligned with them.
Don’t forget stock options
If you have stock options, check when they expire. This is often within 90 days of an employee leaving a company. You may need to exercise your options quickly to avoid losing them. There may be tax implications depending on what you decide to do. If in doubt, consult a professional for specialised financial advice.
Beware of lifestyle creep
While a promotion should be celebrated, lifestyle creep can be a real threat when your salary increases. Keep discretionary consumption on non-essential items in check to ensure that the odd treat doesn’t turn into extravagant habits that could derail your retirement plans.
A solid financial plan can provide a roadmap that balances current and future needs enabling you to enjoy your new financial stature while staying on track to achieve your long-term goals.
If you have recently changed jobs or are about to, it’s a great time to get a full financial review done. I can assess your current situation and finetune your plan to make sure your wealth is protected and your money is working as hard as possible to build wealth to guarantee your future financial security.
I have many satisfied expatriate clients and would love to count you among them!
Contact me for a free, no-obligation chat to discuss the financial questions that are bothering you.
Chartered Financial Planner
It is my fundamental belief that financial planning makes life better. I enjoy helping my clients work towards their financial goals to give them freedom and choice.