Navigating Changing Jobs and Careers, While Staying on Course with Financial Planning

Navigating Changing Jobs and Careers, While Staying on Course with Financial Planning

Employment changes will happen to every one of us and more than once in our lifetimes. Working for one employer or keeping one career is not viable anymore.

The era of lifelong employment with just one employer is long gone.

The Bureau of Labor Statistic reports that the average person changes jobs 10 to 15 times over his or her career. Those are a lot of transitions to go thru; not just emotionally, but financially as well. I am not even going to mention how many people start their own businesses or opt in to the on demand Gig economy and set up side hustles to earn extra income.

My job as a financial planner is to guide my clients thru these types of transitions and help them make smart financial choices. Here are a few guidelines to put in place to embrace these transitions.

Maintain Curveball Account

Love me or hate me, but I will not leave you alone until you can show me that you’ve got a Curveball account in place. Yes, that’s my cute name for an Emergency fund; 3 to 6 months of living expenses stashed away in a boring savings account. I notice with a lot of my clients that many of those who have this type of account forget that it’s not a “done & forget” event. It needs to be maintained. What I mean by that is that if you used some of the funds for “emergency” related expenses, I suggest you consider replenishing that account back to the reserve level to which you originally committed.

Maximize Employment Benefits

When you are in transition for employment maximizing the benefits available to you is one of the steps you should not forget to take. I review hundreds of benefits packages with my clients each year, so let me highlight some of the most overlooked benefits you should be on the lookout for:

1.    Saving enough in a retirement plan to get a matchThis is the most basic step. If there is a match offered by your employer, without a doubt at least contribute the minimum amount to qualify for a match. This is “free” money!!!

2.    Enrolling in long-term disability

Disability insurance coverage provides income protection, up to 70% of your salary, if you are not able to work. You typically get a chance to enroll in this coverage when you start working for a company or around “Open Enrollment” season.

If you are young and healthy, you might wonder why you would need it. But you never know what might happen, and it’s a good idea to be protected.

Let’s look at what disability means for your financial picture. If you can’t work, you have no income and you can’t pay your bills. You might have some savings set aside, but what if you can’t work for a long time?

3.    Take advantage of a legal group plan

This is a fairly new employee benefit that more companies are offering. A group legal plan provides access to a network of attorneys who provide various legal services at discounted rates.

An employee usually pays for this benefit with payroll deduction.

The No. 1 reason I like group legal plans is because you can get basic estate planning documents drafted for a reduced fee.

Now, being self-employed or owning a business affords you the same options, except the cost might be slightly more and you have the flexibility to shop around among providers and compare costs and features, which is not always the case with employer-provided coverage.

And lastly, don’t forget your old retirement plan with your previous employer. If the investment choices are good, keep it there; if not, you can always roll it over to an IRA or to your new retirement plan.

Regardless of the number of employment changes you will make in your career, please don’t forget to focus on these basics of your finances along the way. Be sure to revisit and re-assess, because ultimately that’s what makes a successful financial plan.

Anna Sergunina
Anna Sergunina

I'm Anna Sergunina, CFP®, President & CEO at MainStreet Financial Planning, Inc. My passion lies in serving others through financial planning, helping clients achieve their dreams like buying a home, saving for education, or retiring early. With over two decades in the industry and a CFP designation since 2009, I'm dedicated to excellence and continuous growth. Beyond work, I cherish moments with my son Liam, prioritize self-care, and engage in content creation for my Money Boss Parent Podcast and Money Library blog.

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