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Career and Job Change Considerations

man with a cardboard box containing office things like plants and documents symbolizing losing a job

Even if a career move isn’t in the plans, now is a good time to review things like insurance, your emergency fund, and more.

Author: Martin Lundgren

For our friends in the tech industry, it can feel daunting with layoffs circling around — it seems like weekly announcements of mass departures are flooding our social media channels and news outlets. The old adage goes, “It’s easier to find a job when you have one,” and while that might be true to some extent, there are quite a few career and job change considerations that will play into your decisioning as you make a career-based move.

As financial advisors, we hope you’re finding this article in the before times, (and we certainly explored this topic in our Preparing for the Unforeseen article). But whether you’re planning on making a move intentionally or bracing for one getting forced upon you, we’ve rounded up a few financial considerations you don’t want to forget about.

With Layoffs in The Air, Get Proactive Before It’s Too Late

If you are looking for a new role or perhaps a change in your career trajectory, there are plenty of things to think about before leaving a corporate job for a consulting gig or small business opportunity. A few other good best practices that aren’t necessarily financial include getting active on LinkedIn, contacting recruiters, and tapping into your network. 

Pro tip: You can reengage your network by reaching out to old colleagues and managers, inviting folks out for a coffee date, attending local networking events, or posting more frequently on LinkedIn and connecting with people you know.

Try Not to do Anything Without an Emergency Fund

Having a well-established emergency fund is the foundation of a strong financial plan. An emergency fund acts as a financial safety net, providing a cushion in case of unexpected expenses or a sudden loss of income. Aim to save at least six months’ living expenses in a liquid and easily accessible account to help you navigate unforeseen circumstances without derailing your long-term financial goals. Forbes has a simple living expense calculator to help you do the math.

Unemployment: You Can’t Get It If You Quit

We’ve all been there: you want a new job yesterday. But quitting before the next thing is lined up isn’t an option for many of us, and if it seems like it is, understanding the nuances of unemployment benefits is essential, especially in times of economic uncertainty. You should note that unemployment benefits are typically available to those who involuntarily lose their jobs — aka layoffs. If you voluntarily quit, eligibility for unemployment benefits may be compromised. As such, it’s advisable to carefully consider your financial situation and future plans before making decisions that could impact your eligibility for unemployment benefits.

Make Sure You Have Disability Insurance

Prioritizing disability insurance is a key step in safeguarding your financial well-being. A private disability insurance policy ensures that you and your family have income protection in case of a disability that prevents you from working. Before you encounter health issues or face a disability, you should consider a comprehensive policy. This coverage can provide peace of mind, knowing that you have a financial safety net to cover essential expenses during challenging times.

Life Insurance Policy

Life insurance is an essential component of a comprehensive financial plan, especially if you have dependents or outstanding debts — and you might need more than you think, as broken out in this New York Times article. Before life’s uncertainties unfold, securing a life insurance policy is critical. Life insurance is a financial tool that offers a death benefit to your beneficiaries, helping them cover expenses, including mortgage payments, education costs, and everyday living expenses. Take stock of your life insurance needs based on your financial obligations and ensure your policy aligns with your long-term financial goals.

Cobra? Spousal Coverage? Get a Handle on Your Health Insurance 

Navigating health insurance, especially during transitions like job changes, requires careful consideration. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals to continue their employer-sponsored health coverage for a limited period, usually up to 18 months, after leaving a job. Understanding how to handle your health insurance during this transitional period is crucial. Evaluate alternative options, such as individual health insurance plans or coverage through a spouse’s employer, to ensure continuous and adequate healthcare coverage for you and your family. Planning ahead can prevent gaps in coverage and potential financial burdens associated with medical expenses.

Don’t Skip the Conversation With Your Financial Advisor

At Northern Lights Advisors, one of the last things we want for our clients is for them to unexpectedly lose their employment, especially if they haven’t taken the time to put a few safeguards in place. A layoff paired with unexpected expenses can rapidly change your financial situation. If you’re thinking of making a move, we recommend speaking with your financial advisor so they can help you make sure you cover all your bases. 

Northern Lights provides financial planning and investment management services as a fiduciary, fee-only, Registered Investment Advisor (RIA) firm. If you’d like to talk more about the financial implications of switching jobs or career change considerations, schedule a call with a Northern Lights advisor today.

The information in this article is not intended as tax, accounting, or legal advice. Read the full disclaimer here.