Looking for a Job? Switching Jobs? Make a Financial Plan Before You Submit Your Next Resume

WASHINGTON, Sept. 5, 2012 /PRNewswire-USNewswire/ -- On this year's Labor Day, many Americans were thinking about their employment situation and what changes they can make to better their livelihoods. While many Americans are continuing to look for work, there are still many others considering switching jobs. No matter which situation you find yourself in, assessing a move's immediate and long-term financial impact is critical to making a smooth career transition that also provides greater economic opportunities. According to Certified Financial Planner Board of Standards, Inc. ("CFP Board") Consumer Advocate, Eleanor Blayney, CFP®, both job-seekers and job-changers alike need to evaluate their financial situation and make a plan of action to make sure it brings them closer to achieving their financial goals.

"In today's economy, workers are more responsible than ever for their own financial future," says Blayney. "Taking the time to lay out a financial road map before beginning a job search provides peace of mind and direction towards choosing a job that fulfills short-term needs while moving one forward towards his or her long-term financial goals."

Creating a financial plan to inform any job search – but especially a job switch – is one of 12 steps in CFP Board's year-long "12 for '12 Approach to Financial Confidence. Blayney recommends that job-changers consider five aspects when evaluating current job situations and future employment opportunities.

  1. Choose a job based on total compensation, not just salary:  Make sure that your compensation—not just your salary—provides a benefit to your personal bottom line.  Consider everything from the 401k match to the amount your employers (current and new) will pay for benefits like health insurance. Consider that benefits can also be purchased pre-tax.  Money is money, whether it comes as more "take-home" pay or lower expenses for needed benefits.  Base a decision on which job leaves you better off, when taking all these factors into consideration.
  2. Make sure you're contributing enough to your retirement plan: Whether at your current or future job, don't leave money on the table. Contribute up to the match offered by an employers' 401k or similar retirement plan. Not taking full advantage of this match is like walking away from free money. Do what you must to make sure you are getting this match, and if you can, max out your contribution for the year. In 2012, the max contribution was $17,000 for people younger than 50 and $22,500 for those 50 or older.
  3. Reevaluate your retirement savings plan: When changing jobs you will be faced with this decision: do you keep your retirement savings in the plan of a former employer or do you move it to your new employer's plan? Or should you open a new IRA and roll it over? One of the reasons people first see a CFP® professional is because they have built up a nest egg in an employer retirement plan. They want to know how to manage it, where to invest contributions, and how to take withdrawals. A CFP® professional can help you understand your options and recommend which is best for you and your family.
  4. Be alert to changes in your tax bracket: A new job may put you into a new, higher tax bracket and/or limit some of your deductions.  Make sure you understand the implications of how your new income impacts what you owe in federal, state and your local taxes. A CFP® professional or qualified tax adviser can help you with this analysis.
  5. Evaluate an employer's insurance offerings: Determine what your new employer offers in terms of life, disability and health coverage compared to what you have now. If it's not as comprehensive as your current coverage, find out if there are other benefits, such as higher pay or better work location, which would more than compensate and leave you better off. Don't forget to consider the amount of life insurance you would need at your new salary.  And don't overlook long-term care insurance. If it's offered and costs less than a private policy, get it.

"Whether you've landed your dream job, are changing careers or getting back into the work force, you need a financial plan," says Blayney. "A CERTIFIED FINANCIAL PLANNER™ professional can help make sure all the pieces of your financial life work together to meet your financial goals as you embark on your new job."

12 for '12 APPROACH TO FINANCIAL CONFIDENCE  
In January, CFP Board launched a new initiative called "12 for '12 Approach to Financial Confidence" where all the components and steps for successful personal financial management are presented, one each month throughout the year including: establishing realistic goals, tax planning, emergency and risk management, investing, retirement, debt management, and estate planning. 

ABOUT CFP BOARD
The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP® professionals and other stakeholders. CFP Board owns the certification marks CFP®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.  CFP Board currently authorizes nearly 67,000 individuals to use these marks in the U.S.

SOURCE Certified Financial Planner Board of Standards, Inc.



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