There was a time when working for the same employer for your entire career was the assumption. Most employees could look forward to a couple of decades of job security and a pension when they were ready to retire.
But those days are long past. According to a recent report from the Gallup organization, 21% of Millennials (born between 1980 and 1996) say they have changed jobs within the past year—three times the number of non-Millennials. Not only that, but the tidal wave of change that swept over the workplace with the COVID pandemic radically shifted the way all Americans think about work: not only where they do their work, but also who they’re willing and able to work for.
While many are finding a new sense of freedom in their ability to switch employers or even entire careers, there are some challenges that go along with this new perception of independence. One of the main problems is that many Americans’ long-range financial security (i.e., retirement income) is tied to at least some degree to their employers. So, how can you make a career move—or several—without jeopardizing your financial plan?
- Create a timeline. As with most important decisions, it’s best to give yourself plenty of time to plan ahead. Think about questions of seasonality, both with your current job and the one you’re considering, and sketch out a schedule that gives you time to make orderly arrangements and minimize disruptions.
- Leverage your network. “It’s not what you know; it’s who you know” is never more true than when changing jobs or careers. Take full advantage of friends and acquaintances who are able and willing to give you a leg up with getting interviews, learning the key facts about your target employer, and other important matters.
- Build up your savings. It’s not uncommon for a career change to be accompanied by a period of unemployment or under-employment. When you start mulling a move, you should also begin building a “war chest” that can tide you over until your new source of income kicks in. And while you’re at it, you should craft a budget that reduces your expenses as much as possible during the transition period.
- Once you’ve made your move, consider your options for any funds left in a previous employer’s 401(k) or 403(b). Once you’re settled in, re-evaluate how much you’re contributing to your retirement accounts. If your new job came with an increase in pay, boost your contributions as much as you can.
At Empyrion Wealth Management–Mercer Advisors, we provide professional, fiduciary guidance for professionals at all stages of their careers. To learn more, click here to read our white paper, “Career Change Checklist.”
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