Financial Planning Advice For Major Life Changes

Financial implications of switching jobs

Working closely with a CPA can help you anticipate and plan for many events with significant financial implications.

Taking a new job (or being let go and searching for a new one) can have many hidden surprises — good and bad.

It’s not just about moving up for a bigger salary. Here are a few other parts to consider.

Compare your new salary plus the total benefits package. Will it really be a bump up if you have to pay more in insurance coverage every month?

When you do make a switch: You should always have a reserve fund of 3-6 months to cover expenses. There could be a delay in your new start date, or a delay in your first check. Unexpected expenses can cause stress on a limited budget.

Maintain your insurance coverage. Life insurance and disability policies offered through your old employer will likely not be available to you after you leave the company. Examine the specific terms of the policies; you may choose to make supplemental arrangements or pay the policies on your own.

Protect the assets in your retirement plan. You can choose to use an IRA Rollover account, keep your money in your former employer’s plan, roll it into your new employer’s plan, or withdraw it (which isn’t encouraged; large penalties occur).

Financial implications of having children

Adding children to your life comes with a high financial burden.

Not only do you have to consider the basics necessities like clothing, diapers, food and furniture, but also long-term impacts like housing need changes, childcare expenses, and savings for extracurricular activities and education.

You’ll want to start saving for an emergency fund, as well as for unplanned healthcare expenses. Don’t forget about a basic estate plan including a will or trust. Review how your healthcare plan will increase with a child.

Your employer might help with some expenses, including: adoption assistance, a flex spending account (FSA), a health savings account (HSA), a dependent care flex spending account, and life and disability insurance coverage.

Financial implications of a divorce

Getting a divorce isn’t just about splitting all of your debt and assets right down the middle. There are a lot of other moving pieces to consider. Here are a few.

Remove your spouse from banking accounts, investment accounts, retirement plans, insurance policies, etc.

You’ll need to close any joint accounts or change the registrations to ensure you are not liable for expenses your former spouse may be incurring.

Be aware that your taxes are also impacted in the way you file in the next tax year.

Take the time to revisit your estate plan and will or trust, including who is named as beneficiaries on life insurance policies and retirement accounts.

When you can’t plan ahead

Morgan & Associates works to recognize the subtle changes in the lives of its clients that can result in surprising financial implications. We’ve helped clients in all of the ways on this list of life changes.

If you’d like to sit down for a consultation, give us a call today, or fill out the contact form below.