Switching jobs? Six financial decisions to make before you go

You got a new job. Congratulations! There’s a lot to do, from saying goodbye to your favourite co-worker to packing up your extra shoes. It’s an exciting time, and you’re likely eager to start your new adventure. Before you bid farewell to your old team, there are a few important decisions to make. Make sure you carefully consider your choices to avoid potentially expensive mistakes.

1 Your group retirement plan—staying where you are

It’s sometimes easiest to keep your investments where they are. Most providers will have a plan specifically for employees who leave the company. Often you can keep the same funds, fees, and sign-in details. You can always opt for this choice for now and move your money later, once you get settled in at your new place.

2 Your group retirement plan—moving your money to your new employer

New job, new retirement fund. You may wish to move your current investments over to your organization. If their plan is with a different provider from your current one and allows you to transfer your account, simply give your old one a call to initiate a transfer to the new one. Just keep in mind that fees and fund options might be different, and there could be a cost for the switch.

3 Your group retirement plan—cashing out your plan

Some plans are locked in, but others may allow you to take your money out as cash. This isn’t usually advised, but if you’re in urgent need of money right away, it’s an option. Only take out the funds you need and keep the rest invested. Also, you might have to pay fees and taxes on withdrawals.

4 Your group benefits

Depending on your new organization, your health benefits might start immediately, require a few months of employment, or you may not have access to any at all. Although your province may cover hospital and doctor visits, group benefits can support prescription drugs, dental care, and eyeglasses, among other medical costs. If you’ll be without coverage for any length of time, consider getting your own. Often, your current provider will offer various types of insurance specifically for this scenario. 

5 Relocation costs

If you’re heading to another city or province for a new role, you need to budget for the costs of the move, which could quickly add up. Some businesses will help pay for your relocation but, generally, that expense is undertaken by you. Set aside money for unexpected costs such as renovations, furniture, or a replacement of items broken during transport.

6 Time between paycheques

Different organizations pay employees at different times; some may even issue paycheques monthly instead of biweekly. It’s likely that your first paycheque at a new place could be a few days later than you’re used to. It’s best to prepare in advance, especially if bills such as rent and phone are automatically withdrawn from your account on a set date. Be sure you have a little extra money in that case so your account doesn’t become overdrawn.

Leave your job with confidence

A new position can be the start of an amazing journey. It’s easy to be excited and focus on what’s next and forget about the details you need to wrap up at your old job even though there are several financial matters that you need to consider. Your group retirement plan may hold a significant amount of money, so weigh your options of leaving it with your old provider or moving it despite the potential of associated fees. And be extra careful with your group benefits so that you’re not left without coverage for a period of time. For any coverage gaps, it might be wise to find a temporary bridge solution, and with some job changes, other costs can sneak up on you, such as moving expenses. Regardless of your specific situation, it’s best to take a bit of time to consider these factors before starting your next job.