Changing jobs at any age can present challenges you must overcome. However, changing jobs or your career path at age 50 or later in life requires an even greater level of preparation. When you’re starting a new career or in between jobs there are a few key things you can do to help stay financially secure during the transition.
From adjusting your budget to speaking with a financial advisor, we’ll go over what to do in between jobs to help keep you on track.
Let’s get started on how to make a financial plan and tackle this new career chapter with ease.
Talk With a Financial Advisor
Whenever you’re changing careers or in between jobs, you’ll want to consult with a financial advisor. A professional financial advisor can help you develop an actionable plan to help you establish and reach new goals.
When it comes to retirement, for example, job transitions can present many questions on how to keep or rollover your existing retirement money. Whether it is enrolling in a new 401(k) or rolling over your existing plan, a financial advisor can help you understand what makes the most sense.
If you’re 50, chances are you’ve been enrolled in a retirement plan for quite some time. In some cases, it may make more sense to roll existing money over. Now that you are closer to retirement than you were at 25, you might also want to ramp up your retirement savings amount as well?
A financial advisor can also help you understand how to budget and manage any loss of income or a change in income. You may have more money to invest or you might need to be a more conservative with spending during your new job transition.
Get Your Emergency Fund in Order
One of the best things you can do during a career or job change is to build up your emergency fund. Your emergency fund is there to carry you through any crisis or unforeseen expense you may not consider.
An emergency fund can also help with day to day living costs or act as income if you need it to temporarily make ends meet.
If you are aware that a significant job transition is coming up, you can begin planning in advance. Start by understanding exactly what your total monthly expenses are, what your debts are and how much you need to live.
Your job transition plan should also include how long you need to use your emergency fund until you’re back on your feet or stabilized at a new place of employment.
Collect Your Paid Time Off
If you know that you are leaving a job for a new one, you may not want to use any paid time off days and instead take a lump sum payout of these accrued days. Speak to your HR Director to acquire an estimate of how much this payment would be.
Once you know how much your paid days off are worth, decide whether you would like to collect or not.
You can use this type of income towards your emergency fund, bills, or to even kick start a new endeavor.
Your Budget and Financial Security
Adjusting your budget can be an important factor to manage during a career change or job transition. Begin by adding up all of your fixed expenses. Then, take a look at how much debt you have and what your monthly payment totals are.
Next, compare how much your income is increasing or decreasing. If your income is going down, you’ll need to establish a plan on how to keep up with your existing expenses. We recommend keeping a line item or two in your budget to allocate for things you enjoy as well.
Avoid slashing your budget too far by consulting with a financial planner or life planning coach. These professionals can help you figure out what is most important in life to you. Sometimes having time to spend home with your children or significant other, is more valuable than treating yourself to that triple shot, vanilla creme latte 5 days a week during your morning commute.
If your income is increasing, it is equally important to not start overspending. If you can keep your spending habits the same, you can use this extra income to pay down debts, invest, or save for retirement.
Is Your Healthcare in Order?
When changing jobs, you should always review your current health insurance. If you are self-employed or becoming self-employed, explore a variety of different options available.
If you’re getting a new health insurance plan, compare it to your current one. At age 50, chances are you may still have children at home or perhaps in college. Are these dependent still included in your existing and/or new healthcare plan? If they are not, what options to you have available to continue their coverage too?
We always advise taking time to do some discovery to make sure your healthcare coverage doesn’t suffer during your career transition.
When You’re Starting a New Business
Quitting a job and starting a new business is an entirely different level of change to prepare for. This exciting time will be filled with ups and downs.
Be prepared for a little uncertainty by developing a plan for the good and the not-so-good situations. While you may have your business plan and financials in order, don’t forget to plan around your own personal finances.
Consult with an advisor about how much income you should really take for a personal salary, how much you should set aside to invest in your own retirement, and what the options are there to leverage for being self-employed.
Do You Have a Plan For Your Loved Ones?
When you’re changing jobs or starting a new business, it is important to consider your loved ones. Did you have access to life insurance from your employer? If so, what can you do to replace this to protect your loved ones in the event of your loss?
Whatever your legacy plan, a professional advisor can help you to make sure your loved ones are covered while you make your career transition.
Whether you’re still a full-time employee or a retiree, gain peace of mind knowing that your children, spouse, or grandchildren are secure.
Embarking on a new career journey is exciting and equally scary at times. Make sure you take time to de-stress and enjoy yourself. De-stressing will also help you stay fresh and focused on your new career and financial goals.
Most importantly, having a plan will help you stay focused on what’s most important.
Changing Jobs at 50
When you’re changing jobs at 50, planning ahead is the best thing you can do. It will help keep you as financially secure as possible, and it will back you up for the expected as well as the unknown.
A financial advisor is trained to help you know and understand how to construct an appropriate road map for success during this next phase in your life.
From retirement to healthcare, working with a professional will help you stay on track.
If you’re ready to start working with a financial professional, simply complete the contact form here to request a no-obligation consultation.