Financial Considerations Before a Career Change

Are you considering a new career opportunity? Whether you’re moving to a new city, starting a family, or simply rethinking your long-term goals, a career change may be the right solution for you.

Leaving your current job or changing your career path requires careful consideration, particularly when it comes to your financial well-being. In this CUAdvice article, we’re going to look at what you should think about before a career change.

How much should I have saved?

A question that some may be thinking when considering a career transition is “how much money should I have saved?” Unless you’re moving into a new role immediately, a period of unemployment may occur, which could cause a financial challenge. Many experts suggest having about three to six months of savings. You’ll want to factor in rent or mortgage payments, grocery bills, and budget for any other unexpected costs that might arise. If you do have a new positioned lined up, the amount you need to save may be lower, but ultimately, it’s important to factor in the possibility that you could be without income for a short period of time. If you would like to know how to set your savings goals, you can learn here.

How will this affect my benefit coverage?

While every case is unique, you’ll want to check with your current organization to see how long you’ll be covered under your health benefits, and how long you’ll have to wait before coverage from your new employer takes effect. If you’re anticipating an extended period of unemployment, this might impact whether you need to arrange your own coverage under a new plan. You may wish to talk to your spouse or other family members to see if you qualify under their coverage. Otherwise, you might consider obtaining personal health or dental insurance.

What happens to my retirement plan?

If you’re in a company pension plan or group registered retirement savings plan (RRSP), you may have questions about what happens to those assets when you leave. You won’t lose access to your funds, but in most cases, you won’t be able to continue adding to it. If you are immediately starting a new job, you can inquire about your options for transferring your current assets to your new employer’s plan. You can also shift your funds to an independently held RRSP if you’d prefer to consolidate your accounts, or simply hold on to them until you’re ready to retire and withdraw them. If you’d like more information on building your RRSP or pension, reach out to a member of our team.

What will I do next?

It’s possible that you already know what new opportunity you’d like to pursue, whether it’s in your current field or a new one entirely. It’s also possible that you’re not sure where to go next. Either way, you’ll need to consider factors such as what kind of lifestyle you want, whether you’ll need to further your education, and what benefits you’re looking for.

If you plan to further your education, whether returning or starting for the first time, it’s important to work out how you plan to pay for tuition, especially when setting your savings goal. If you’re not going to school, determine whether there are any certifications or training courses you might require for your path forward. Mapping out what you need next is a good way to navigate both your financial future as well as how long you can anticipate your period of unemployment to last. Have questions about paying for your education? Reach out to a member of our team to learn about your options.

The path forward

Starting a new chapter can be exciting and it’s important to think through the financial considerations. Wherever you plan to go from here, remember that CUA has your back. Have financial questions about preparing for an upcoming career change? Contact a member of our team at info@cua.com or call us at 902.492.6500. 

Published Nov. 10, 2022

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