Leaving an old job and starting a new one can be a stressful and financially confusing time. To take full advantage of all the employee benefits available to you and to ensure that you don’t lose any money, it’s important to prepare.
Here, we at The Sum take you through a checklist to help you move from one role to another without any headaches.
Before you leave your old job
Use up your health savings benefits that you can’t take with you
For those with HRAs or FSAs: When you leave your old job, you lose the money in your health reimbursement account (HRA) or flexible spending account (FSA). So before you go, use that up on medical expenses that qualify.
If you have an HSA: Health savings accounts are different when you leave your job because the money in there is yours after you leave. At your new job, if you’re not offered a high-deductible health plan (HDHP), you can’t contribute to your HSA, but you keep the money in that account.
Contact your plan administrator to find out your options. They can be:
- Roll over your HSA to your new employer’s plan.
- Roll over your HSA to another provider.
- Leave your HSA with your former employer.
Plan for interim health insurance
This is one of the most worrisome parts of leaving an old job and getting a new one. What happens if you need health insurance in the meantime if you need to go to the doctor? You can opt for COBRA coverage if you qualify. Or you can purchase health insurance on the Marketplace to cover the gap.
Repay any outstanding 401(k) loans
If you’ve borrowed against your 401(k) — and you should only do that as a last resort — you will need to pay that back within a certain time of leaving your job. Check with your loan administrator to find out your terms.
When you start your new job
Set up your direct deposit
Set this up first thing if you don’t have one — generally, you can direct deposit into any checking or savings account, as long as your bank allows it. By having this set up, it’s faster to get your deposit on payday and you won’t have to deal with getting mailed checks or picking them up somewhere. You can also split your direct deposit between your checking account for regular purchases and automate transfers to your savings account, creating a set-it-and-forget-it mentality to build up that account.
Go over your benefits
Check out the details of the company-sponsored retirement plan (and your employer match), and the benefits offered including your health insurance. Also, ask about the additional benefits such as life insurance, pet insurance, commuter benefits and more that could be offered.
Take care of your retirement account rollovers
If you previously had a 401(k) plan with your last company, you’ll receive a notice of what your options are. They could include:
- Roll it over into another 401(k).
- Roll it over into an Individual Retirement Account (IRA).
- Leave it in your former employer’s plan for now.