Making the Move for a Better Position

We all know that the days of people staying with one employer for their lifetime is, for most of us, a thing of the past. Many have opportunities to move on to bigger and better things, but it also plunges us into the unknown, and into a period where many of our financial matters are in transition.

Consider these issues you must deal with as you prepare to move to a new job.

Insurance coverage
If you change employers, your health insurance coverage is likely to change as well. Be sure to compare policies so you know what benefits you'll gain and whether you'll lose any, and pay careful attention to how much of the cost will come out of your pocket in the form of monthly premiums, deductibles and co-payments.

In addition, your former employer or new employer may include group life insurance coverage. Make sure the coverage you have from work is consistent with what you had under your previous employer. If you end up with less group coverage, you'll need to replace that with personal insurance policies. In either case, now is a good time to review your overall protection plan, and determine if you have sufficient coverage for your family's needs.

Retirement plans
You have several choices with the retirement plan savings you accumulated in your former employer's plan. They include:

• Taking the money in a cash payment. This can be a big mistake, as you will pay taxes on the distributions and, if you are under age 59-1/2, a 10% tax penalty. Avoid this temptation.
• Keeping the money in the workplace plan. You can let the money continue to work in the former employer's plan even if you no longer work there.
• Having the money rolled into your new employer's plan.
• Having the money rolled into your own IRA.

You can lose a lot by taking a cash distribution of retirement plan assets
Assumes $50,000 in plan at time of distribution
Taking distribution in cash	$31,000
Continuing tax-deferred growth	$280,220
This example assumes taking the distribution in cash is subject to a 28% federal income tax rate plus a 10% tax penalty (total tax payment owed is $19,000). Continuing tax-deferred growth assumes the $50,000 stays in a tax-deferred account earning an average annual return of 9% for 20 years. This example does not represent a specific investment and assumes no fees, expenses or taxes during the accumulation period.

Personal finances
A major consideration is to make sure your cash flow remains consistent while you make the transition to a new employer. Be sure you have sufficient assets on hand (or access to cash) in case a pay period is missed. Also, you may need to adjust the way you pay bills based on when you receive your paychecks.

Investments
If you arranged for systematic savings from your paycheck with your old employer, you will want to continue such a plan under your new working arrangement. If you can't make deductions directly from your paycheck into savings or investment plans, arrange to do so directly through your checking account so that the plan you've put in place is not interrupted.

If you are boosting your pay, think about putting a percentage of that money to work for your future. Saving an extra $100 per month can build to a tidy sum given time. The more you can afford to save today, the better prepared you'll be for the future.

An extra $100 per month can make a big difference

Assumes 9% average annual return on monthly investments over 20-year period

$67,289

This is a hypothetical example, and does not represent a specific investment. Assumes no fees, expenses or taxes.

Content is for informational purposes only and may not accurately reflect your specific situation. Information is not intended to provide financial, legal, tax, or accounting advice. You should consult a qualified advisor for advice specific to your own circumstances.