Making a major career change can feel like a big undertaking, but it is actually a lot more common than many people realize. In fact, a recent poll showed that more than half of Americans are actively contemplating a career change, with roughly 44% of those people already putting a plan into action. Consequently, many new and soon-to-be executives come to us for advice on how to manage such an important transition between different career phases.
In today’s post, we will examine some of the most important factors to consider when transitioning careers and show exactly what Merit offers to people experiencing (or considering) a major career change.
When moving to a different industry or position, it’s common to feel like you need to dive in headfirst and think about the consequences later. Why? Because many people who are contemplating a career change end up talking themselves out of the transition entirely. This, in turn, leaves millions of workers stuck in jobs that don’t meet their personal or financial needs. Alternatively, those who rush into a major career change without much research or forethought often feel overwhelmed by the experience and unprepared for the financial ramifications.
So, here are a few things to consider before making a major career change or shifting between different stages of career employment:
- Employment Benefits — A career change can often mean a change in employer-sponsored health Insurance, 401(k) options, contribution matching, childcare benefits, and business expense reimbursements. Other items, like stock options and deferred compensation, need to be reviewed as well.
- Taxes — Will you file taxes the same way at your new job? Will you receive a 1099, W2, K1, or a combination of different tax forms? What are the pros and cons, from a tax perspective, of switching careers? What tax-saving opportunities, if any, will arise?
- Moving Costs — Will you be moving states for a new job? If so, you will need to think about the potential changes in living expenses. For example, income taxes, property taxes, and home insurance costs can vary widely by location. These changes could even impact your estate planning.
While the considerations above should help get you thinking about your financial future, most people need personalized guidance when making a major career change. Whether you’re making a career change at 50 or at 30, you shouldn’t go at it alone. This is where Merit Financial Advisors can assist you.
If you’re undergoing a career transition now or in the near future, here are just a few of the services we offer:
- Cost-benefit analyses of employee benefit changes
- Tax filings and savings recommendations
- Comprehensive budgetary and expense planning
- Assessments of your short and long-term career goals
- Estate planning services
As you prepare for a potential career transition, you may want to seek the help of your trusted advisors, whether it is your financial advisor, CPA, or attorney. Whatever decision you make, make sure it is a well-informed one.
We hope you found this post on making a major career change helpful! If you’d like more personalized financial advice or assistance with your career change plan, be sure to contact Merit Financial Advisors today!