A career transition can be a challenging time for one’s finances, making it important to manage them effectively. Here are key pieces of advice to help you handle financial matters during a career transition.
Budgeting:
Creating a budget is crucial to ensure that you can meet your financial obligations and maintain stability. Start by assessing your current income, expenses, and savings. Identify areas where you can cut back on discretionary spending, prioritizing essential expenses such as housing, utilities, and food. It’s important to set aside some funds for unexpected expenses or emergencies. A good rule of thumb is to have at least three months living expenses in liquidity. By having a clear budget in place, you can better manage your finances and spending limits during this period of transition.
Managing Healthcare Coverage:
Another critical aspect to consider is healthcare. If previously covered by an employer-sponsored health insurance plan, you may need to explore alternative options. Evaluate your eligibility for COBRA coverage, which allows you to continue your previous employer’s health insurance for a limited period. Alternatively, research individual health insurance plans or consider joining a spouse’s plan. It’s essential to understand the costs, coverage, and limitations associated with each option to make an informed decision that fits within your budget.
Assessing the Impact on Retirement Savings:
A career transition can have implications for your retirement savings, so it’s important to assess the impact and make any necessary adjustments. If you had a retirement plan with your previous employer, explore options such as rolling over the funds into an individual retirement account (IRA) or transferring them to your new employer’s retirement plan. Evaluate the fees, investment options, and contribution limits associated with each option. Finally, consider adjusting your contribution rate based on your new income, budget, and financial goals.
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This informational and educational content does not offer or constitute financial, legal, tax or accounting advice. Your Unique needs, goals and circumstances require and deserve the individualized attention of your own financial, legal, tax, and other professionals. AGE- 6590924.1(5/24)(EXP.5/26)