ArthaSarathi

Financial Planning During Job Change

Financial Planning: During the job switch

Jan 23, 2019 ArthaSarathi 0

Congratulations on your decision to change your current job. It’s a big change for you and you must be prepared both psychologically and financially for the same.

It will help if you can prepare your own financial plan or hire a planner before making the big change. In either of the cases, you must be careful about the following things for a good financial plan to be prepared.

Check out for

Why?

What can you do?

Financial Planning tip

Terms and Conditions in HR policy : Your Current and Future Employer

·     Notice Period

·     Leave encashment policies

·     Your leave balance

Financial impact

·     Negotiate with present/ future employer

·     Maintain healthy leave balance

Cash out the accumulated leaves

List your non-statutory benefits i.e. Medi-claim, Company leased car, Term etc.

Know the monetary value of your benefits

·     Better salary negotiations with your future employer

 

Keep provision for additional funds for continuing some of the critical benefits i.e. Mediclaim, Term etc.

Full & Final Settlement policies (F&F)

No Salary till F&F is completed

Resign post credit of the current month’s salary

Create an emergency fund kitty equal to 150% of the salary during notice period

Company owned assets

Financial impact owing to retaining the company assets

Retain or return company owned assets as per company policies

Cost / Benefit analysis post considering the depreciated value of the asset under consideration

Employee Benefit Offerings : Current and the Future Employer

Provident Fund

Major lump sum amount : Big financial impact

Transfer your kitty

Withdraw post Tax to pay large liabilities say, Home loan ( if feasible)

Be aware of

Tax-treatment

Impact on your retirement kitty

Loss of interest on unclaimed PF

Trade-off of keeping the PF v/s paying off debts

Gratuity

Lump-sum amount : Financial impact

Invest the lump-sum for long term goals or pay off loans

Benefit structure in your company

Investment options : Trade off against paying off debts

Group Term / Group Mediclaim

 Benefits are discontinued

·     Cover your risk by putting your own funds

·     Compare benefit offering from new employer

·     Risk covers should not be discontinued a because of change of employers

·     You should put extra funds to continue the same

NPS / Superannuation

Retirement kitty

·     Transfer your funds to new scheme

·     Withdraw lump sum ( if offered by the employer)

·     Risk-Return trade-off

·     Impact on your Retirement plan

·     Impact on your taxable income

·     Impact on your investment income

 

Wish you all the best. A financial planner can help you understand each one of the above aspects and help you be better planned before you resign.

To find out the financial planners who can help you visit our Financial Planner Profiles  or continue to know more by reading our Blogs and Articles Page. 

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