Consider these tips to financially prepare for participating in the Great Resignation

The Great Resignation, also known as the Big Quit or the Great Reshuffle, is a popular topic of discussion. Some are choosing to retire early, while others are voluntarily leaving their jobs for new opportunities within the workforce.

It’s unclear if the cause for this mass exodus is associated with wage stagnation, job dissatisfaction, the desire to work remotely or a mix of all three, plus other factors.

The national quit rate is trending at an all-time high since December 2000 when the rates were first measured by the Department of Labor. It’s clear that this reshuffling is currently taking place, and there seems to be no end in sight.

If you are considering being a part of the Great Resignation, you’re not alone. Changing roles may seem like a daunting or intimidating process, but with a bit of planning, this life change can be more than manageable.

Here are a few thoughts to consider if you are feeling ready for that next career move:

Build a spending plan

Commonly interchanged with budgeting, a spending plan is a projected breakdown of monthly spending that includes all your required and desired expenses.

If you don’t currently have a spending plan in place, now would be a great time to implement one. If you do have one, take it a step further by evaluating how it may be impacted by the potential career change. A few questions to ask yourself are:

▪ Is there a change in salary or compensation structure and how will this impact both my earned income and spending habits?

▪ Will there be a gap in pay due to the timing of the potential career change, which means I should have additional cash on hand?

▪ Do I have any big expenses coming up that may fall within the “transition” period?

Having a spending plan in place and understanding how a job transition may impact this plan should allow you to focus more time on your new role and less time worrying about your finances.

Understand which benefits may be lost (or gained)

As part of the job search process, you may naturally have focused more on potential earning adjustments and less on the potential benefit adjustments.

Before making a move, put a financial value on the benefits you currently receive and how they may be impacted by your career change. A few questions to ask yourself are:

▪ How will my health insurance coverage be affected by this change?

▪ Are there uncommon employee benefits that I am currently receiving that I may lose, such as cell phone reimbursement, access to a company vehicle or health and fitness reimbursements?

▪ Will my sick leave or paid time off be paid out to me upon my departure or do I need to use all these days before I leave?

Depending on your employer, there may be other benefit questions to take into consideration. You should be able to read up on all your company’s benefits in the employee handbook.

Don’t leave retirement savings behind

You may be contributing to an employer-sponsored retirement plan. It’s important to understand where these assets are held as well as your options for these assets if you leave your current employer.

Here are a few other questions to ask yourself:

▪ Which financial accounts have I been contributing to through my current employer? (Any money you have contributed to retirement plans should be yours to keep)

▪ Has my employer been contributing to any retirement benefits on my behalf? If so, are these contributions fully vested or will I lose them?

▪ Do I need to use up the funds within my flexible savings account (FSA) before my exit or am I able to continue this account through COBRA?

There are plenty of matters, both financial and non-financial, to consider while thinking through this potential life transition, not the least of which is quality of life. If you have decided now is the time to participate in the Great Resignation, remember to take your time to plan for your exit, because it’s a decision that could impact your life for years to come.

Jack Giardino is a CERTIFIED FINANCIAL PLANNER professional and a member of Financial Planning Association of Greater Kansas City. He is an associate wealth advisor at Mariner Wealth Advisors in Overland Park.

This story was originally published May 25, 2022 at 5:00 AM with the headline "Consider these tips to financially prepare for participating in the Great Resignation."