You wrapped up old projects. You had your goodbye lunch. You met your new coworkers and smiled for the photo on your new employee ID badge. Ending one job and starting a new one can be a whirlwind of excitement, emotion, and exhaustion. And while it may seem like your mental to-do list is already in overdrive, it’s important to pay attention to the endless paperwork streaming in from the HR department. Shoring up benefits options, doing a financial audit, and making some financial moves now will save you time, and possibly money, later.
Here, some financial moves to consider as you begin a new job. They are at least as important as learning the route to the nearest bathroom.
Consider your retirement strategy
If you had a 401(k) at your old job, you might be thinking about rolling it over into another investment vehicle like an IRA. If you feel overwhelmed with options, it’s fine to leave your old 401(k) in place for now or look into rolling it into your new employer’s retirement program. While you can’t contribute more money to an old 401(k), you can still shift around investment options.
If your new company offers a 401(k), or you’re considering an IRA, it’s a good idea to take some time to compare your old plan with any new plan you’re considering, for differences in investment options, fees, withdrawal options, and tax treatment. For example, if your new employer 401(k) offers a match to a certain percentage, that’s “free money.” Consider contributing enough to get the maximum match to avoid leaving the employer match money on the table.
Of course, you can opt to cash out the account value, but that option has tax consequences you’ll want to take into consideration or discuss with a tax professional.
You may also want to consider how you will oversee your retirement savings going forward. For example, you might want to consider robo-options like Blooom that can be a low-touch way to manage and keep track of your employer-sponsored 401(k) or the performance of other retirement accounts.
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Decide on your health and dental insurance
If you haven’t already, take a long look at the health insurance options that come with this job, making sure to look into the coverage that may be of particular interest to your family, such as infertility treatment options, maternity care, dental and vision options for kids, and any other care you feel may be relevant to your lives in the upcoming year.
You should also look at the expense associated with each plan choice. Some health plans have a low deductible. That means you will pay less money out of pocket before coverage kicks in. These plans come with a higher monthly premium. A high deductible plan, on the other hand, is cheaper each month but you’ll pay more out of pocket before you get any coverage. If you don’t have health or medical expenses, you could save money. However, before you choose a high deductible health plan, carefully consider how much of a hardship you would experience if you had to pay the deductible in the event of a medical emergency.
Since changing jobs is a qualifying event, you may decide to shift to a partner’s health insurance or have your partner shift to yours. Also, it could make sense for your kids to switch plans as well, depending on your choices.
Decide on FSA or HSA accounts
If your employer offers a Flexible Spending Account (FSA) and/or a Health Savings Account (HSA) this is a good time to explore what option might make the most sense for you and your family. You probably won’t have the option to revisit this decision until the next open enrollment period. Funds in an HSA typically roll over year to year, while FSA funds usually must be spent by the end of the year.
Depending on your plan, when you make the withdrawal, and whether it is for a qualified medical expense, an HSA might be a good long-term savings vehicle.
Both FSAs and HSAs can cover expenses like copays as well as supplies like glasses, band-aids or breast pumps, and chiropractic services.
Flexible Spending Accounts also allow funds to be used on child and dependent care.
Assess any additional or optional benefits
Look over the benefits package and see what’s being offered that may be new to you. These benefits could include subsidized child care, backup childcare, gym memberships, or subsidized commuting options. You may also be offered life insurance coverage, disability coverage, or other insurance coverage.
Employer-provided life insurance is a nice perk, but keep in mind that it typically only provides coverage that is equal to one or two times your annual salary. Also, you’ll lose the coverage if you ever separate from your employer. You can get term life insurance online, and it’s often more affordable than you might think.
It’s important to pay attention to what may be covered, keeping in mind that some insurance coverage provided through group insurance plans may not be adequate if the worst were to happen.
Additional benefits to keep an eye out for include opt-in services that may cost a small amount of pre-tax pay. For example, many employers offer opt-in legal services, which can subsidize personal legal needs, like having a lawyer oversee a will or estate plan.
Plan your taxes appropriately
As you work through your W-4, make sure that you are withholding the right amount for taxes. The new 2018 tax law means a new W-4 form, so it may be a good idea to pay extra attention to how you fill it out and consider talking with a tax professional if you have any questions.
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Do a personal financial audit
A new position usually means a new salary, and now can be a good time to look at your personal financial goals and re-set some goalposts based on your new financial picture. It can also be a good time to adjust your budget, hit some financial milestones, like paying down student loans or padding your emergency fund. Mindfully deciding where a salary increase will go can help ensure that the additional money brought home each paycheck won’t be lost to everyday expenses like Target runs and dinners out.
Know what you’ve got — and use it
In the flurry of beginning a new job, it can be all too easy to check boxes, sign papers, and then forget how, exactly, you’re covered. To avoid spending hours tracking down passwords and information, consider putting everything in one place, and printing out paper copies of your benefits enrollments to keep in a file. And remember that answering questions about benefits is part of the job of your HR department, so don’t feel shy about reaching out if you have any questions in the future.
Anna Davies is a writer, editor, and content strategist living in Jersey City, NJ with her family. She has written for New York, Cosmo, Glamour, Salon, Men’s Health, Women’s Health and others and also has written 13 young adult novels under various names.
Haven Life Insurance Agency (Haven Life) does not provide tax, legal or investment advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or investment advice. You should consult your own tax, legal, and investment advisors before engaging in any transaction.