by Travis Koivula, Island Savings Insurance Services –
Another company has offered you your dream job. You just completed a course and want to put this newfound learning to good use. Your buddy is involved in an exciting new software start-up and there is a new opportunity for you.
Gone are the days of working for one employer for three decades: employees are changing jobs more than ever before. According to a Workopolis report, more than half of employees don’t remain in the same role for more than two years.
From a financial standpoint, we usually think about our salary, but there are many other financial considerations when switching roles.
Pension. There are numerous complexities and tax considerations regarding your pension. Typically, your former employer will send out a pension option package which contains information that can be difficult to understand. It’s highly recommended that you run through this package with an advisor who can help you navigate these complexities.
Severance. If your employer has decided to end your working relationship, you may be receiving a severance package. Although this seems like a large chunk of money, after taxes and with no income, you can go through it quickly. Getting a financial game plan in place is a must.
Life Insurance. If you have group life insurance in your current role and are leaving the company, you have the option to convert the existing coverage (keep the insurance) or apply to get a new insurance policy privately. When changing jobs, it’s a good time to do a review of all of your insurance needs.
Benefits. If you are moving from a large organization to a small start-up, it is unlikely that the new employer will have as much coverage. Also, does your new employer offer any financial top-ups in addition to your EI benefit if you are planning on having children? Having an employer top-up for parental leave could have a major impact on your finances.
Changing jobs is an exciting time and a great opportunity to reenergize yourself. By taking into consideration all of these financial pieces, you’ll ensure that you begin this new challenge on the right foot.
Travis Koivula is a Senior Wealth Advisor with Island Savings Insurance Services, a division of First West Insurance Services Ltd. First West Insurance Services Ltd., offering financial planning, life insurance and investments, is a wholly owned subsidiary of First West Credit Union. Island Savings Insurance is a trade-mark of First West Credit Union, and is used under license. This article is provided as a general source of information and should not be considered personal advice.