A job change is an exciting milestone, filled with new challenges and opportunities for growth. Scheduling a time to check in with your Vision Capital Client Relationship Manager can ensure the transition is as smooth and beneficial to you as possible. From evaluating compensation packages to helping you understand possible tax consequences, taking a holistic approach is imperative. Here are some essential financial aspects to think about when you’re contemplating your next job.
Evaluating the New Job Offer
When you receive a new job offer, it’s natural to focus on the salary first. But don’t stop there. Look closely at the entire compensation package. How does the health insurance compare to what you currently have? Consider the level of coverage, premiums, deductibles, and out-of-pocket maximums. What about retirement benefits like a 401(k) contribution or match? And are there bonuses, stock options, or other incentives such as paid parental leave or tuition reimbursement for professional development? These extras can often make a significant difference to your overall financial picture and job satisfaction. Evaluating them with your Client Relationship Manager can help you maximize what’s being offered.
Considering the Hidden Costs
A job change can come with unexpected costs – and sometimes savings, too. Updating and reviewing your financial plan can assess how these changes may affect your cash flow and longer-term planning goals. For instance, will your commute be longer, increasing your transportation expenses? Or perhaps your commute will go away completely and you’ll need to furnish a work from home setup. If the job change necessitates relocating, think about the possible changes to the cost of living in addition to the expenses involved in moving, setting up a new home, and adjusting to a new area. If you plan to continue seeing specific doctors and healthcare providers, check to see if they are in-network under your new insurance plan.
Covering All Your Bases and Tying Up Loose Ends
Have a plan to ensure that there is no gap in health insurance coverage during the switch. When COBRA continuation coverage is elected, it is often more expensive than the amount paid as an active employee because the employer typically has subsidized part of the cost as an employee benefit. If you plan to take time off between positions, consider what expenses may be incurred during that time and how they will be paid for. Don’t leave benefits behind! Your options for benefits such as Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) can vary when you leave an employer, so learn what they are well before you leave so that funds aren’t lost. Consult with your Client Relationship Manager to assess the best course of action for retirement benefits such as vested stock options, 401(k) plans, and deferred compensation.
Tax Considerations
A higher salary might push you into a new tax bracket, and if you’re relocating, you’ll need to understand the tax implications of potential state and/or county tax differences. Severance pay or unemployment benefits may also impact your taxable income while the possible taxation of any new benefits is worthwhile to understand in advance. Keeping your tax professional and Client Relationship Manager abreast of these changes can help mitigate any surprises at tax time.
Conclusion
Changing jobs is an exciting journey. As with most major life changes, it is an ideal time to meet with your Vision Capital Client Relationship Manager so you can enter this stage ready to embrace new opportunities while feeling supported in both your career aspirations and your financial well-being. Taking a strategic, holistic approach will set you up for long-term success and peace of mind.
