5 Things to Consider When Weighing a Job Change
Financially speaking, the decision to stay or go is about more than just salary. Take a holistic look at your offer before deciding to take the leap to a new job.


It’s no secret that it’s a job seeker’s market right now. As companies continue to search high and low in the race for talent, employees may feel overwhelmed about whether to change jobs – particularly when it comes to how it’ll impact them financially.
While a new base salary can be enticing, it is important to evaluate a new compensation package holistically in order to best weigh your options. Considering factors like insurance, retirement plans and stock options can be critical to your long-term financial health.
Here are five things you should consider financially when deciding whether you want to change jobs:

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Have a plan for your former 401(k)
When you leave a job, there are four options for your 401(k) or similar retirement savings plan. You can leave the money where it is, cash it out, transfer the funds into a new retirement plan, or roll it into an IRA. Understanding the implications of each of those options is crucial.
Withdrawing retirement funds under the age of 59½ comes with a 10% penalty, and any tax-deferred distribution is taxed as ordinary income on top of that. It is better to keep the funds in a retirement account to benefit from the tax-deferred growth and compounded accumulation over time. Leaving the money in the plan is a better alternative than taking it out. However, we often recommend consolidating when you can.
We typically advise clients to transfer the funds into their new retirement plan or roll them into an IRA. Having fewer accounts will help you keep track of what you have saved. If you like your new company’s 401(k) investment options, transferring the funds there may be the best option. It also leaves the opportunity for a more straightforward backdoor Roth IRA conversion.
2. Look at the fine details of the offered insurance plans
Health insurance, dental and vision can be complicated, and they can differ vastly from employer to employer. Before you decide to accept a job offer, be sure to learn the details of the insurance plan you are being offered. If you are leaving a big company for a smaller one, confirm first whether or not they offer health insurance. Under the Affordable Care Act, employers with fewer than 50 employees are not required to provide health insurance. If your potential employer doesn’t offer insurance, now is the time to evaluate what private options you may have.
Once you know if the company provides insurance, it’s important to understand what you are responsible for paying in terms of premiums and deductibles, and to determine if treatments you may need are covered. For example, if you see a therapist, check to see if mental health services are covered under the policy. The same would apply for other medical needs, such as infertility treatments or acupuncture. If some of your priorities aren’t covered, can you cover the costs with your new salary? Determining this prior to accepting an offer will help you better plan financially for the future and weigh the overall financial impact of taking the job.
3. Know the rules of the road associated with your stock ownership
Offering equity as part of a compensation package has become increasingly common. How should you factor an equity offer into your decision? First, familiarize yourself with the basic rules around the equity offer. What type of stock is being offered— a Restricted Stock Unit (RSU), Performance Shares, Incentive Stock Option (ISO) or Non-Qualified Stock Option (NSO)? Each of these has different tax implications. From there, make sure you read the fine print of the vesting schedule, payout rules and blackout periods, if applicable. And if you leave the company, it’s good to understand if you will be leaving equity on the table, or if you will have the ability to purchase your options. In some instances, your company may be willing to work with you on purchasing shares.
4. Account for all benefits, no matter how small
Do you currently put away money in a health savings account (HSA) or a flexible spending account (FSA)? In an HSA, the money is yours, and any amount not spent can be used in the future. However, if you have multiple HSAs it’s easy to lose track of what you have saved. Like your retirement, it may be better to consolidate and roll prior HSA funds into your new HSA plan, if you have one. Be sure to consider and compare fees of the old plan vs. the new.
With an FSA, if you fail to spend down the account before switching jobs, you lose that money. Make it a priority to spend those funds before you leave.
Think through your current day-to-day activities. How much will your new company contribute to your gym membership? Will you receive a stipend for your commute and transportation? Is lunch provided, or will you have to factor that into your budget? Thinking beyond true finances will help you plan holistically ahead of starting a new job.
5. Treat yourself
Getting a new job is something worth celebrating. Especially if your new gig comes with a signing bonus or a large salary increase, don’t be afraid to treat yourself. That could include a vacation, a special purchase or something else you have been looking forward to.
A new job is a big life decision that can often feel overwhelming. But thorough consideration of how your finances will change under new employment and weighing your options holistically will ultimately result in an easier transition in the event you decide to make the leap.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Julia Vanzler, CFP® CPWA® specializes in working with individuals and families to manage and protect their assets. She is committed to delivering individualized, fully integrated financial solutions that aim to solve personal challenges and provide security and peace of mind. As a senior private wealth adviser at SVB Private, Julia works closely with her colleagues and her clients’ external advisers to provide thoughtful advice and guidance on investments, retirement income, philanthropic, estate and tax planning.
-
Stock Market Today: Tesla Drags on Stocks Amid Musk-Trump Feud
Sentiment has soured between President Trump and his once-loyal ally, Tesla CEO Elon Musk.
-
7 Rules Frequent Flyers Swear By
From dodging long lines to avoiding bad coffee, these clever travel rules can help you save time, stay healthy and reduce stress every time you fly.
-
My Professional Advice: When It Comes to Money, You Do You
This is how embracing the 'letting others be' and 'learning to surrender' mindsets can improve your relationship with money.
-
Direct Indexing Expert Explains How It Can Be a Smarter Way to Invest
Direct indexing provides a more efficient approach to investing that can boost after-tax returns, but is it right for you?
-
Smiley Faces in Serious Places: Emoji Use Pops Up in Legal Battles Over Inheritances
Estate planning attorney notes how emojis are crossing over from casual conversation to litigation. What was once dismissed as 'just an emoji' is now carefully scrutinized.
-
When Downsizing, Does a Continuing Care Retirement Community Make Sense?
The idea that you'll never have to move again may sound tempting, but how about the costs? A financial planner explores the pros and cons of this style of retirement living.
-
Fortune Favors the Gold: Expert Highlights a Little-Known Game-Changing Investing Strategy
Rather than only owning gold bullion itself and investing in gold mining companies, consider adding gold royalty companies to your gold investing strategy.
-
An Expert's Guide to the Estate Planning Documents Everyone Needs
Estate planning is more than just writing a will. These are the documents you'll need in order to protect your family if you're seriously injured or worse.
-
Three Financial Planning Tips for the LGBTQ+ Community From an LGBTQ+ Financial Adviser
In light of social and political uncertainties, it's crucial that LGBTQ+ individuals review their estate plans, manage cash flow and savings and plan ahead if they want to expand their family.
-
The High Price of Skipping Workers' Comp Insurance
Two labor and employment attorneys highlight the penalties (fines, reputation damage and even jail time) that small businesses risk if they opt not to carry workers' comp insurance.