Thinking of quitting your job?
Be sure to tie up your loose financial ends before you make any big moves.
- Fidelity Viewpoints
- – 09/13/2022
- Before you make up your mind to quit, think through your real reasons for doing so.
- Consider exploring whether a raise, a new role, or a sabbatical might change the way you feel about your current job.
- Make sure to evaluate the full compensation package of a new job, instead of only focusing on salary.
- Don't forget to wrap up any outstanding expense reimbursements and spend down any money remaining in a flexible spending account (FSA) before your last day.
We can all use a change of scene in our professional lives from time to time. And with the job market still strong, some workers may be in a good position to hop up to the next rung on their professional ladders.
Change can be refreshing and energizing. With the right moves, it can be financially rewarding too. But before you hit "send" on that resignation letter (or perhaps, even before you make up your mind), take a moment to think through a few financial nuts and bolts of your decision.
Here's what you should be considering at different steps in your decision-making process.
Step 1: Before you make up your mind to leave
Maybe you're feeling stuck or unhappy in your current position, and you're starting to get serious about making a move. Before you commit to leaving, back up your thinking and spend some time exploring the real reasons why you think you need something new.
Are you feeling undervalued, and looking for a bump in compensation or recognition? Are you feeling bored and in need of a new challenge? Are you dreading going back to the office, and hoping for a new fully remote role? Or are you just feeling burnt out—and in need of a real break from the daily grind?
Whatever your reasons, consider (respectfully) raising your needs with your current employer. See if they're willing to work with you to find a way for you to stay (and feel good about staying). After all, many employers are having a hard time finding skilled employees right now, and most managers would prefer to hang on to their trusted employees rather than find and train someone new. A raise, promotion, new role, remote role, or sabbatical might be more in reach than you realize. But you'll never know if you don't ask.
Step 2: Before you accept an offer
So you've found a new opportunity that you're feeling pumped about, and you have an offer in hand. Hopefully, it even comes with a nice boost in pay.
Before you get too dazzled by that salary figure, however, pause to think about how the move would affect your finances in total. A higher pay number might be misleading if you'd be moving from an employee role to a contractor role, or if you'd be relocating to a more expensive area. And salary may be only one part of each role's total compensation package, which might also include bonus or stock compensation potential, matching retirement contributions, insurance, or even tuition or childcare assistance. (Read more about evaluating a job offer.)
Fidelity's job offer evaluator tool can help you better understand how the new job and your current job compare on total compensation (even factoring in differences in the cost of living of different areas). Consider running the numbers carefully before you make a final decision, or even using the results to give yourself added leverage as you're negotiating.
Step 3: Before you set your last day
You've accepted an offer, and you're looking forward to those greener pastures you see up ahead. Once again, consider taking a beat before you finalize your exit plans, as setting your last day strategically might help you maximize your benefits. In particular, look into the following:
- Bonus dates—Employers often have a set policy that determines when a departing employee will or won't still be eligible for a bonus, like a date that you must still be employed through.
- Vesting dates—Typically, if your employer makes matching contributions to your 401(k) or other retirement account, that money isn't yours right away—you have to stay employed for a period of time for it to vest. You might also have vesting dates to consider if your employer offers stock or stock-like compensation, like stock units, stock options, or profit sharing.
- Vacation policy—Like other benefits, policies on unused vacation days can vary pretty widely. But take a moment to check on whether you might be reimbursed for unused vacation days, or if it makes sense to take a few vacation days before your last day.
- Health insurance coverage—You'll want to avoid gaps in your health insurance coverage, so make sure to check when your old coverage will end and new coverage will begin. (Your old coverage might end on your last day, or might extend through the end of the month you quit in, even if you quit on the first day of the month.)
- Any benefits you might need to repay—If you received a signing bonus or had your relocation expenses covered when you started at your new job, then be extra careful in setting a last day. Some employers require you to repay all or a portion of these benefits if you quit before you reach a year of employment or other work anniversary.
If you have any doubts about your old or new employer's policies, find someone in HR who can answer your questions (or point you in the right direction). You might find that you're still going to miss out on some benefits, even after finagling your last day, or decide that leaving sooner is still worth it for you. But at least you'll be making a fully informed decision.
Step 4: Before your last day
You're busily finishing up projects, developing transition plans, and making the rounds at farewell happy hours. But make some time also to tie up any financial loose ends at your old job, like outstanding reimbursements for expenses, tuition, or childcare you may still be entitled to.
This can be a good time to make plans for any retirement or other accounts you opened through your old employer (see the box below for more details). It can also be a good time to get to any medical appointments on your to-do list. After all, you'll soon be busy with a new job (plus potentially a new insurance network and new deductibles to consider).
Step 5: On and after your last day
You're firing off your last emails and riding off into the sunset. Even if you're crying "good riddance" inside, make sure to leave on a positive note. Reach out to the people you've worked with to tell them about your move. And make sure your goodbyes are gracious and appreciative.
Careers are long, and you never know when you might cross paths with someone again or end up needing a reference. Burning bridges only means you'll have fewer paths open to you in the future, so leave them standing strong.
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