Thinking of Quitting Your Job? Be Certain You’re Prepared

The pandemic has created what’s being called The Great Resignation – millions of Americans are redefining their work/life balance, work conditions, work environments, and job conditions. They’re deciding to quit their current jobs in search of better conditions.

Everyone has daydreamed about walking out and never looking back. If you are considering making a major change, there are things you can do to make the period after quitting your job smoother and more successful. Creating a financial challenge might be worse than suffering through a job you don’t enjoy.

Before quitting, make a plan and be sure all the necessary pieces are in place first.

Consider these items before quitting your job:

1. Make a budget. This is a short-term, no-thrills budget. It includes items like your rent or mortgage, utilities, food, insurance, and car payment. Eliminate all the non-essentials. This is the amount needed each month to survive.

• Look at all of your expenses and determine which are indispensable and which can be eliminated for a while. Then take another look and be sure.

2. Investigate your health insurance options. Medical coverage is expensive. The coverage is expensive because healthcare is so expensive. Having coverage is also the law at this time. There can be expensive tax consequences if you don’t have qualifying coverage.

• Be sure to check out the federal health care website. You might qualify for subsidies you never expected.

3. Roll over your retirement account. Your employer-sponsored account will need to be transferred to an account you can manage yourself. If you’re taking another job with a 401(k) plan, you can have the money transferred to that new account.

• If you’re self-employed, you have many retirement account options available to you. You might find you’re in a better position than you were before your left your job. Your options can vary, depending on whether or not you have employees.

4. Save at least six months of living expenses. If your business idea fails or you can’t find another position quickly, this money will keep you going for at least six months.
    
5. Have an idea of how you’ll earn money. Six months can go by quicker than you think! Ideally, you’ll have another job lined up if you’re planning to work for someone else again.

• If you’re going to work for yourself, have a detailed plan of how you’re going to generate income. Do you have the resources to put that plan into effect? What is your back up plan? Can you drive your uncle’s fish delivery truck until your business takes off? Would you be willing to work part-time until the situation improves?

6. Get advice. Speak with someone that quit their job and see what advice they would give to others about the experience. You might gain some insight into what lies ahead.
    
7. Quit gracefully. You might want to let your boss really have it, but this approach often backfires. It’s impossible to know how your actions will affect you in the future. Maybe you and your boss will cross paths again. Perhaps your current company will have a perfect job opening in the future.

• Give at least two weeks’ notice and leave uneventfully. Nothing has ever been gained by upsetting someone.

 

While walking out may be appealing, making a major change goes more smoothly if you prepare in advance. Take your time and put all the pieces in place before you walk away from a regular paycheck.

“You might be frustrated with your current situation, but being unemployed is a substantial risk,” cautions Darren Nomberg, Senior Vice President Investments for David Lerner Associates. “Ensure that you’re ready to take the plunge.”.

 

 

 

IMPORTANT DISCLOSURES

 

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.

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