There are plenty of reasons why people may choose to shift gears mid-career. Maybe your current role is under stimulating, there’s little opportunity for growth, or you’re just itching to try something new. But before you give your two-week notice, consider how a career change could impact your current financial standings and long-term goals, such as retirement.

Here are a few ways to keep your financial life and future goals top-of-mind when making your next career move.

Evaluate Your Current Position

First, you’ll want to take a look at what is lacking from your current position. You may find yourself resonating as part of the statistic of four in ten U.S. workers that feel they’re underpaid. Leveling up to better pay is an excellent reason to switch careers.

Look at your current company or position and ask yourself if it meets your future needs and financial goals. For example, if advancing to a leadership position is the only way you can make more money where you’re currently at, is that a path you can pursue now or in the near future at your company, or might you need to go somewhere else to make it happen? 

It’s worth noting that beyond income, so many factors go into whether someone is satisfied at work. Office environment (remote versus in-person), schedule flexibility, culture, vacation and paid time off policy, equity compensation, and insurance benefits can all make a big difference in your overall satisfaction. 

Evaluate Your Current Financial Situation

Before making any significant moves, evaluate your current financial situation. Determine how long you can get by with what you have, especially if you plan on leaving your job before you have your next one lined up. The more you can cut expenses before making the switch, the better.

Even if you plan on job searching after leaving your current position, there’s no telling when the right opportunity will come. Prepare to live off your current assets for at least a few months.

If you want to pursue self-employment and start your own business, you’ll need some money upfront. It’s also wise to get it going on the side while you’re still working so that you can shorten the time period of having little-to-no income.

It can take time to get your bearings in a new field or build up a small business, so you want to make sure that you have enough runway in terms of finances.

Consider What Needs to Change

A change in income is an excellent time to reevaluate your investment portfolio. A pay bump could allow you to contribute more to your retirement savings. On the other hand, a decrease in salary may require you to tweak your budget to keep your savings goals on track.

Also, it’s important to figure out how your career change may impact your retirement goals. 

For example, if you’re not fully vested yet for perks at your company, your unvested funds would be forfeited once you leave the company, and you will only be able to disburse the vested portion of your account. 

If you plan on rolling money into an account such as a Roth IRA, you’ll want to do so while you’re still working for your current employer. You can also see about rolling into an account through your new employer. For this option you’ll still need to consider:

If you’ve been saving the maximum to your retirement savings since early in your career, you may be able to skip a few years of adding to your retirement nest egg without hurting your eventual retirement income too much. Just make sure to start saving again when you build your income back up. 

When it comes to the logistics of a new job, you’ll need to factor in expenses involved with moving. You may need to sell your home or break your lease and relocate in a relatively short amount of time.

Lastly, if you’re looking at taking a huge leap, such as completely switching gears with your career path, consider taking on training for your new field while you’re still in your current role to help smooth the transition. 

This expense could pay off especially if it allows you to advance earlier on in your career trajectory once you’re at your new job. 

Think About Your Benefits

For many employers, base pay is only the beginning of their employee compensation package. You may enjoy insurance, parental leave, yearly bonuses, paid time off, stock options, and more. 

As you contemplate your next move, remember that all those benefits add up and can significantly increase your total compensation. 

Prepare to Pivot Your Financial Plan

A good financial plan should have the ability to evolve and adapt as needed to your life changes. The fact of the matter is life always goes differently than we plan it to. But your financial plan is flexible and designed to maintain a long-term outlook.

The good news is, changing your job doesn’t have to derail your financial goals. We can work together to discuss the potential impact, reevaluate your plan, and make adjustments as needed. 

After a successful career in high-tech, Sheila McGinn, CFP® followed her passion and became a fee-only Financial Planner, where she helps clients navigate complex financial decisions and reach their financial goals.

Disclaimer: This content is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. For advice specific to your situation, consult a financial planner, accountant, and/or legal counsel. Reproduction of this material is prohibited without written permission from Brightview Financial Solutions, LLC, and all rights are reserved.