Switching jobs? Here’s how to keep your finances on track.

There’s much more than salary to consider when weighing a new job offer — and many financial decisions to make after you accept. These insights can help.


THE FIRST QUESTION MOST PEOPLE ASK when they get a job offer is: How much will it pay? While salary is clearly important, there are other factors you might not immediately consider — including location, benefits and the potential financial consequences of leaving your present employer. Each could have a significant impact on your long-term financial security.

As Las Vegas–based Merrill Financial Advisor James Taylor puts it, “Your upfront salary is just the starting point when considering a job offer. If you accept the position, you’ll need to make other important financial decisions to help ensure that you’re staying on track to meet your financial goals.”

Whether you’re just weighing an offer or have already decided to take it, your financial advisor can help guide you through key considerations in the decision-making process. In fact, as with all big life changes, switching jobs can be a convenient time to review and update all of your financial plans. Use the questions below to shape your conversations with your advisor.

Ask these questions BEFORE you accept a job offer

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If a portion of your current compensation is tied to an annual bonus, equity compensation or deferred compensation plan, such as a retirement plan or stock option plan, you may have to forfeit those assets if they are not fully vested and, in the case of stock options, also unexercised, if you move on.

Knowing that you’re leaving assets on the table may give you leverage to negotiate with your future employer, says Taylor. On the other hand, if you’re exercising your vested stock options or taking a lump sum distribution from a retirement plan when you leave your old job, you’ll want to discuss with your financial advisor and tax professional how to manage them in the most tax-efficient way.

“You need to find out not just what’s available but what you actually qualify for — and when,” says Debra Greenberg, director and product management executive, Investment Solutions Group, Bank of America. “A pay hike is important, but if you lose access to benefits like a company-funded pension or end up with a smaller matching amount for your retirement savings account, you may end up worse off.”

Conversely, over the years, a more generous retirement plan can offset the impact of a slightly lower salary. Ask your financial advisor how a prospective company’s retirement or profit-sharing plan, as well as its other benefits, could affect your finances, both now and in the future.

If there’s a waiting period before health insurance kicks in for the job you’re contemplating, you may need to sign up for COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage with your current employer or other short-term insurance to bridge the gap. Consider the various healthcare coverage options the potential new job offers, including the benefits of enrolling in a high-deductible health plan in conjunction with a health savings account (HSA).

You might also weigh benefits that may be funded through payroll deductions, such as education savings accounts, dependent care flexible spending accounts (FSAs) or HSAs. And look at the life and disability income insurance offerings of the employer you’re considering — if they’re not as generous as those of your current company, you might need additional coverage. Some companies now offer student loan repayment assistance plans — something your current employer may not offer, notes Greenberg.

If a job involves relocating, look closely at housing costs, says Taylor — they can vary widely by region. City, state and local tax rates can also have a significant impact on your net income. See if your new employer might be willing to pick up the relocation costs, and ask your financial advisor to help you calculate what your net income and cash flow might look like in a different area. If the employer is not willing to cover moving costs, consider how they — or the cost of a long-distance commute until you get settled closer to your new workplace — might affect your bottom line. “Keep in mind that it may take a while to sell your old home, and a job change can make it more difficult to immediately qualify for a mortgage, so you may need to manage rent for a period in your new location while still paying household costs at your previous location,” Taylor says.

Ask these questions AFTER you start your new job.

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According to a 2023 article published in the Harvard Business Review, more than 40% of U.S. workers cashed out their 401(k) plans when they left their jobs, with most draining the entire balance.1 But you have other choices about what to do with your 401(k) or other employer-sponsored retirement accounts. Depending on your financial circumstances, needs and goals, as well as plan design, you may be allowed to 1) leave the funds in your existing retirement account under your old employer’s plan; 2) roll the balance into a traditional IRA or Roth IRA (including converting pre-tax funds to a Roth IRA or rolling over a designated Roth account to a Roth IRA); 3) roll over your 401(k) account under your prior employer’s plan to a 401(k) account under your new employer’s plan; or 4) cash it out (i.e., withdrawing your balance as a lump-sum distribution) — though that may not be advisable from a tax or retirement-readiness perspective, notes Greenberg.

Your financial advisor and tax professional can help as you decide the best course of action for your situation, which will depend on your 401(k) account balance, the investment options and fees in your old and new accounts, your tax bracket and other considerations.

Each choice may offer different investment services, fees and expenses, withdrawal options, required minimum distributions and tax treatment (particularly with reference to employer stock), and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care.

“When you open a retirement account under your new employer’s plan, take a look at the company match, the plan’s investment options and your new salary. And consider increasing your contribution,” says Greenberg. “Try to contribute enough to receive the maximum match, at the very least.”

That depends. Overall, job transitions present a good opportunity to meet with your advisor to assess your progress toward specific financial planning goals and to consider potential adjustments. They can help you fine-tune your portfolio to ensure that your investments are still aligned with your time horizon and level of risk tolerance and are appropriately diversified to help you manage market fluctuations.

A private wealth advisor can help you get started.

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1 Harvard Business Review, “Too Many Employees Cash Out Their 401(k)s When Leaving a Job,” March 7, 2023.

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