Financial Checklist for Starting a New Job

Quick Answer

To make the most of your finances when starting a new job, you should:

  1. Use up your benefits from your previous job
  2. Enroll in employee benefits at your new job
  3. Roll over any retirement accounts
  4. Select the correct tax withholding status
  5. Create a budget that fits your new income

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Leaving an old job and starting a new one can be a financially confusing time. You don't want to leave any money on the table by not taking full advantage of employee benefits your current job offers. You'll also want to ensure you get paid correctly, make the most of your employee benefits and note other financial perks available with your new employer.

You can make the right financial moves when starting a new job by using up benefits from your current job, enrolling in employee benefits at your new job, choosing the correct tax withholding status and creating a budget.

The following step-by-step checklist will help you transition smoothly from your old job to your new one and make the most of all your financial opportunities.

Steps to Take Before You Leave Your Job

1. Use Up Health Savings Benefits You Can't Take With You

  • When you leave your job, you lose the money in your health reimbursement account (HRA) or flexible spending account (FSA). Try to use the money for qualifying medical expenses before you leave.
  • Money in a health savings account (HSA) is yours after leaving your job. If your new employer doesn't offer a high-deductible health plan (HDHP), you can't make contributions to your HSA, but you keep the money in your account. You may choose to invest that money if you have better health insurance at your new employer.
  • Talk to your plan administrator about your HSA options, including:
    • Rolling over your HSA to your new employer's plan.
    • Rolling over your HSA to another HSA provider.
    • Leaving your HSA with your former employer.

2. Exercise Any Stock Options

  • Vested stock options must typically be exercised within a limited time after leaving your job.
  • Check with your employer to confirm the terms of your stock option agreement and purchase stock if desired.

3. Plan for Interim Health Insurance

Find out when health insurance coverage at your new job starts. Until then, protect yourself by:

  • Opting for COBRA coverage if your former employer offers it.
  • Purchasing health insurance on the health insurance Marketplace.
  • Enrolling in your spouse's, domestic partner's or parent's health insurance plan.

4. Repay Any Outstanding Loans From Your 401(K) Plan

  • You must pay back any money borrowed from your 401(k) within a certain time after leaving your job—usually just a few months. If you can do it before you leave, you'll have one less thing to think about when you start your new job.
  • Review your loan terms or ask your 401(k) administrator for the specifics.

Steps to Take After You Start Your New Job

1. Set Up Direct Deposit

  • If you don't already have a checking account, open one so you can use direct deposit. Most employers offer direct deposit of your paycheck, which helps you get paid faster.
  • Consider automating transfers from your checking to your savings account to boost your savings.

2. Go Over Your Employee Benefits in Detail

  • If your new job offers a retirement plan with an employer match, contribute at least enough to the plan to max out the match.
  • If your new job pays more than your old one, consider putting the extra money into your retirement savings or shoring up your emergency fund.
  • Set up contributions to HSA, FSA or HRA accounts.
  • Enroll in health insurance. If your employer offers different plans, consider the costs and benefits of each to find the best plan.
  • Find out how any group term life insurance plan works and whether you can buy additional coverage if this is a priority for you.
  • Ask about additional benefits that can save you money, such as commuter benefits, student loan repayment assistance, free gym memberships, free lunches at work or discounts on purchases.

3. Take Care of Retirement Account Rollovers

  • If your former employer cashed out your 401(k) and gave you a check for the balance (a distribution), you must roll over the money within 60 days or pay taxes on it.
  • Your former employer's 401(k) plan administrator will provide a written document explaining your options for your 401(k) balance or distribution. You can:
    • Roll it over into another 401(k), such as your new employer's plan.
    • Roll it over into an Individual Retirement Account (IRA).
    • Leave it in your former employer's plan (you may want to do this until you're sure you'll stay at your new job).

4. Get Clarity on Your Take-Home Pay

  • Before filling out your W-4 form for tax withholding, check last year's tax return.
    • If you got a refund, you may want to lower your withholding to keep more of your money.
    • If you owed taxes, you may want to increase your withholding.
  • Ask the payroll department to estimate your net pay, including tax withholding and contributions to retirement plans, health savings accounts or other employer accounts.

5. Create or Revise Your Budget

  • Update your budget (or make your first budget), considering:
    • Your new take-home pay.
    • Any employee benefits that can save you money, such as free lunches or gym memberships.
    • One-time job-related expenses, such as buying new clothes or paying back a 401(k) loan.
    • Ongoing job-related expenses, such as a longer commute, higher health insurance premiums or higher child care costs.
  • Make sure you have enough money to last until your first paycheck; tap your emergency fund if necessary.
  • If you're making more money at your new job, understand how lifestyle creep can happen and how to prevent it, such as by tracking your expenses.
  • Decide what to do with your newfound income, such as:
    • Building an emergency fund if you don't have one.
    • Saving for financial goals like a new car or a down payment on a home.
    • Paying down debt, especially revolving credit such as credit cards.
    • Contributing more money to your retirement plan.

6. Monitor Your Credit

A new job offers a new chance to reach your financial goals. Consider setting up free credit monitoring through Experian to track your credit score, get alerts to changes in your credit report and use other financial tools to help you budget and protect your personal information.

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