Two employee-benefit actions to take before you accept that new offer.
Are you evaluating a job transition? If not, you are part of the minority that does not had it under consideration. The 2022 Global Benefits Attitude survey conducted by Willis Towers Watson found that the majority (53%) of workers in the United States considered changing jobs and 44% had actual plans to change jobs. Imagine your co-workers or your team… more than half, surely, have considered evaluating your current job offer.
Of course, there are many reasons people look for a new job, beyond just the thought of making more money (although that’s a big one). Gone are the days when we work for a single company all our working life. In fact, we often hear that people make at least half a dozen job changes in their lifetime and multiple career changes too.
Average Job Tenure
The Bureau of Labor Statistics within the U.S. Labor Department reported, based on January 2022 data, that employees worked for their current employer for an average of 4.1 years – that alone is telling. Further, how long one works for an employer is affected by one’s age and occupation:
- Managers, professionals, and similar occupations reported the longest median tenures at 5.0
- The median tenure of workers in service occupations was the shortest at 2.8
- Workers between ages 55 and 64 have an average job tenure of 8 years.
- For workers ages 25 to 34, the median tenure is 2.8
Tips Before You Change Jobs
Again, looking for a new job can be stressful. But starting a new job can be exciting. Your future-self will thank you if you take the time to manage your employer-provided benefits while moving from one job to the next. In fact, since it is likely that your new employer-provided benefits will be different from the ones offered by your own employer, not only do you need to compare the two, but you also need to decide how to manage the changes before you leave your old employer. Here are two huge things to consider.
- Insurance Coverage
Often there is a waiting period before health coverage begins at your new employer and that wait can be upwards of 30 to 90 days. As such, you want to make sure you are not uninsured, even if you think you’re perfectly healthy. Therefore, you need to explore whether you can continue under your former employer’s health insurance.
Did you know that under a federal law known as the Consolidated Omnibus Budget Reconciliation Act (COBRA), you can continue as a member of your previous company’s health plan for up to 18 months after termination of employment, unless you are terminated for cause?
Of course, you should also know that you will be responsible for paying the entire premium, including anything your previous employer contributed. Yes, it will likely be expensive, but it will also likely be cheaper than paying for an individual policy. But make sure you know the rules ahead of time.
For example, you might not be able to continue COBRA if your former employer has fewer than 20 employees. And you do need to advise your employer that you are electing COBRA coverage in writing.
2. Retirement Plan Rollovers
Are you invested in your soon-to-be-former employer’s 401(k) plan? What do you plan to do with those assets? You can reinvest, transfer or even cash in the funds.
But to keep your retirement plan on track, you probably want to consider rolling over the funds into another qualified retirement savings account, such as a rollover IRA. But there are right ways and wrong ways to do this.
First, it depends on how old you are as to whether there might be penalties. And you must make the rollover happen within 60 days too.
It’s possible that you might even leave the funds right where they are, but you need to know your soon-to-be-former employer’s rules.
You might also roll over the funds into your new employer’s retirement options. Again, know the rules.
Check with the benefit administrators at both companies and ask your financial advisor for help. Your future-self will thank you.
For more information about planning for your future, contact Popular’s Retirement Center at email@example.com and to learn more about our services visit www.popular.com/turetiro/. If you have a 401(k) plan with Popular, remember that you can count on our group of experts at TeleBanco Popular to guide you on issues related to your retirement plan. Call us at 787-724-3657 and press option 2 three times.
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