Purpose

Details some things for me to think about when (for my current employer, I mean "if") I need to make a job change. These things can easily be forgotten, and took me some time to gather when I made my first job shift, so I want to document them here to remind myself.

Disclaimer

The information provided here does not constitute advice, and you should seek advice from a professional and do your own research when making decisions that impact your financial future, instead of depending on some random guys blog on the internet. The information is believed to be accurate as of the time of writing, but rules/laws change all the time and mistakes may have been made. Please, do your own research to ensure what is said here is accurate.

No sources are sited in case laws/links change and a quick Google search should be enough to confirm this information.

Contacts

Collect contact information from folks you wish to have continued relationships with, and don't forget to provide your contact information as well

PTO

If you have accrued PTO ensure you check the company policy and state law, but most should pay out your accrued PTO on your last paycheck. If they do not, ensure you use it all before leaving as you earned it.

Insurance

TL;DR: If less than 60 days between jobs. Don't worry about it, you can pay for COBRA if a claim comes up.

Below is what I learned when researching what to do about the gap in insurance when switching jobs.

• COBRA is a law/act which requires the option for old employer benefits to be extended in cases of employment termination

• COBRA can cover medical, dental, and vision insurance

• You can elect COBRA within ~60 days of termination

• COBRA coverage is retroactive since date of termination (assuming all premium payments are caught up till current when elected)

  • Note: this effectively means when switching jobs within ~60 days you shouldn't elect or pay for COBRA insurance coverage unless a claim event actually happens

HSA

TL;DR: Transfer HSA funds from your old employee provider to a personal Fidelity HSA

• Your HSA may charge a fee when your relationship with your former employer is terminated
• Unless you are satisfied with your provider and investment options, you should transfer your funds to a free and flexible HSA provider such as Fidelity
• You can open an HSA without a HDHP for the sole purpose of transferring HSA funds from another provider
• Transferring HSA funds between providers is tax free as it does not count as a withdrawal

401K

Guidance

1. Compare fees and options of old 401K provider and new provider
2. If satisfied with minimal options and fee differences, keep the funds in the old 401K and now you have (at least) 2 to track
3. If dissatisfied move funds from old 401K to new 401K, which should close the old one

Background and reasoning

• You have 4 options for an old 401K upon employment termination

  1. Leave it be
  2. Transfer to a new employer 401K
  3. Transfer to a personal IRA(s)
  4. Withdraw funds (don't do this unless you really need to or are old enough to do it without penalty)

• Transferring funds to a personal IRA makes them fully under your control and they can be invested in more asset types, but it has risks

  • Money isn't as well protected from from creditors in an IRA compared to a 401K under the law
  • If you transfer money from a 401K into a traditional IRA, backdoor Roth IRA contributions may be less/not tax efficient because of something known as the pro-rata rule

• Transferring funds from one 401K to another is tax free with a trustee to trustee transfer/check transfer within a time limit

• The paperwork to transfer assets from one 401K to another is cumbersome...

• If the benefits in the new 401K aren't significant compared to the old 401K, you can just leave the funds invested in the old 401K...MAKE SURE YOU DON'T FORGET ABOUT THE ACCOUNT!