Before you barge into your manager's office, tell him where he can stick this job, and post on social media about it. Read this article!
You are now making the change you always wanted and in the middle of what some are calling “The Great Resignation.”
But this new sense of freedom may come with a new sense of anxiety, especially if you don’t know if you are returning to work: how will not having a job affect your retirement fund?
You may not know much about matching contributions. Should you do a lump sum or leave it there? And what about tax consequences?
These questions may start to consume you. Now that you are not participating in your company’s plan, what do you do?
Luckily, you have some help.
By just taking a few extra steps to protect your money as you enjoy your retirement or find a new job that fits you, you can help protect the money you worked so hard to save.
Ask yourself, "Do you have enough money to retire or change jobs?"
It may feel good in the moment to tell your manager where he can stick the job and post it on social media for likes. But it may not feel so good when your moneys starts running out because you couldn’t afford to leave.
Following your heart is not a bad idea, but making a decision bases solely on emotion without facts and numbers can possibly cause more pain.
Before you quit, consider this:
Where is your income coming from?
How will you be covered for insurance? (medical, dental, vision)
How large is your emergency fund just in case your projections are off?
There are other considerations, but these are a good start.
We have been spoiled for years with high returns in the stock market and the valuation of homes has increased but this “it will always be this way” thinking may be dangerous.
You want to strive for 3 to 5 years of living expenses in a conservative holding, so when the market is very volatile, you can use that money and wait for the market to recover.
To be honest, when it comes projections, we tend to overestimate what we have, and underestimate what we need. Things such as: rising health care cost, inflation, and longer life expectancy are just some things you may want to consider before you say, “I’m done!”
Now you may be asking, "What do I do with my retirement account when I quit?"
When you leave a job that means you are leaving that retirement plan as well.
With that said, when you leave, take your money!
You will be surprised how many clients find “lost” accounts from old jobs. Or how many more never find them at all due to the company no longer being in business.
Out of sight, out of mind.
So here are a few things you can do:
Leave it there, but because you are not there, you can’t contribute and won’t be getting a match.
Take a lump sum distribution (check on taxes and penalties that may apply)
Convert it to a Traditional IRA or a Roth IRA (there are pros and cons to both)
Roll it over into your new jobs retirement plan
If you need help deciding if you should think about retiring you can always schedule a consultation with a Christian Financial Advisor. They will sit down and help you go over these options if all of this is a little overwhelming at the moment.
Don’t Stop Until You Get Enough
I couldn’t help but have that Michael Jackson refence in one of my posts.
But seriously, you shouldn’t stop contributing to your retirement plan. Not thinking about your future and only about the NOW will hurt you.
Saving for retirement is the ability to replace income when you are no longer working. Think of it as the ability to pay yourself when your employer is not.
Even when you leave your job, you have a steady income from other sources, pensions, social security, or even dividends from your investments, you still want to save.
I think the best thing anyone can do before they make an irrational decision is to just stop, reflect, and speak with someone they trust and get some feedback. This is a huge decision you are going to have to make, and you shouldn’t have to do it alone.
Thank you for reading!
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About the blog:
Many Christians struggle with the seemingly conflicting views about our faith and the pursuit of financial gain. They were taught that poverty was piety and that a lack of money was the only way to truly detach themselves from the love of money. Our blog debunks some of those claims, teaches you that you can be rich and righteous, and at the same time fulfill your obligation to tithe and give to the less fortunate. We are dedicated to helping you become cheerful givers by organizing your personal finances, providing investment tips to help you create wealth, and encouraging you to create a gifting strategy that will make your family and God proud.
Meet the Author:
A.B. Ridgeway, MBA (firstname.lastname@example.org) is the owner and Christian Financial Advisor with A.B. Ridgeway Wealth Management. With a decade in the finance industry, his goal is to give believers clarity around the most confusing topic in the Bible, money, and tithing. A.B. Ridgeway helps tithing Christians become cheerful givers but unlocking their money-making potential, so they can prosper and be the great stewards of the wealth God has entrusted them with.
This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. This is strictly for information purposes. We recommend you speak with a professional financial advisor.