Leaving a Job? Here Are 3 Key Financial Steps to Take

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Leaving a job, whether planned or unexpected, certainly brings many changes — neither all good nor all bad. This is especially true when it comes to your finances. From health insurance to retirement savings, there are certain steps you ] should take to keep your financial life on track (as best you can, given the circumstances).Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. By handling these three key issues, you’ll avoid financial pitfalls and potentially a big hit to your bank account while also positioning yourself for long-term success.1. Make smart healthcare decisionsOne of the most pressing concerns when leaving a job is maintaining health insurance coverage. Without careful planning, you could find yourself uninsured. Fortunately, you have several options for coverage.COBRA: If your employer provided you with health coverage, you might be eligible for a government transition program called COBRA. Enacted during the Reagan administration, COBRA allows employees to continue with their employer-sponsored healthcare plan for a limited time, usually 18 to 36 months. However, COBRA can be expensive, as you will be responsible for the full premium.Healthcare.gov: Another option is enrolling in a plan through the Affordable Care Act via the online health insurance marketplace. These plans are typically far more affordable than COBRA, especially if you qualify for subsidies based on your income.Whatever you decide, enrolling in a health insurance plan as soon as possible is important so you avoid a lapse in coverage.2. Roll over your 401(k)Obviously, when you leave a job, there’s a lot to do and think about: unemployment, updating your resume, networking, finding a new position. It all can be a bit overwhelming. But even so, one critical thing you shouldn’t overlook is your retirement account.If you had a 401(k) with your previous employer, you couldCash it outLeave it in your old IRARoll it over into your new job’s planRoll it over into an IRAExperts say that one of the best moves you can make is to roll it over into an individual retirement account (IRA) or a new 401(k) with your next employer. Why do you want to do this? Rolling over your 401(k) allows you to maintain control of your retirement savings while avoiding penalties and taxes.One important tip: Be sure the rollover process is done properly, since failing to do so can trigger unwanted tax consequences. The smart move would be to speak with your financial advisor to see which move is best for you.Need a new IRA? Click here for our picks for the best IRA brokers and enjoy a tax break in the year you make contributions.3. Roll over your health savings accountNot all employees have health savings accounts (HSAs). In fact, only about 34% of eligible employees sign up for an HSA. But if you’re one of them, ensure you manage it in the wake of leaving your job. Since HSAs offer tax advantages for medical expenses, they shouldn’t be forgotten when you leave a job.The way to do it is to find a new HSA provider, then request of the old HSA provider that the funds be rolled over into the new account (they may be sent to the new account or to you directly). Follow up to make sure it happened, and then keep contributing.By rolling over your HSA, you can continue to use the funds for qualified medical expenses, or you can invest them for future growth. Since HSA funds never expire, you can even save them in retirement, definitely making this a valuable asset you’ll want to protect.Yes, leaving a job is a major life change. But during that potential tumult, thoughtful financial planning is still needed. Take the proper steps outlined above promptly to avoid unnecessary costs and stress during this important transition.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Leaving a job, whether planned or unexpected, certainly brings many changes — neither all good nor all bad. This is especially true when it comes to your finances. From health insurance to retirement savings, there are certain steps you ] should take to keep your financial life on track (as best you can, given the circumstances).

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

By handling these three key issues, you’ll avoid financial pitfalls and potentially a big hit to your bank account while also positioning yourself for long-term success.

1. Make smart healthcare decisions

One of the most pressing concerns when leaving a job is maintaining health insurance coverage. Without careful planning, you could find yourself uninsured. Fortunately, you have several options for coverage.

COBRA: If your employer provided you with health coverage, you might be eligible for a government transition program called COBRA. Enacted during the Reagan administration, COBRA allows employees to continue with their employer-sponsored healthcare plan for a limited time, usually 18 to 36 months. However, COBRA can be expensive, as you will be responsible for the full premium.Healthcare.gov: Another option is enrolling in a plan through the Affordable Care Act via the online health insurance marketplace. These plans are typically far more affordable than COBRA, especially if you qualify for subsidies based on your income.

Whatever you decide, enrolling in a health insurance plan as soon as possible is important so you avoid a lapse in coverage.

2. Roll over your 401(k)

Obviously, when you leave a job, there’s a lot to do and think about: unemployment, updating your resume, networking, finding a new position. It all can be a bit overwhelming. But even so, one critical thing you shouldn’t overlook is your retirement account.

If you had a 401(k) with your previous employer, you could

Cash it outLeave it in your old IRARoll it over into your new job’s planRoll it over into an IRA

Experts say that one of the best moves you can make is to roll it over into an individual retirement account (IRA) or a new 401(k) with your next employer. Why do you want to do this? Rolling over your 401(k) allows you to maintain control of your retirement savings while avoiding penalties and taxes.

One important tip: Be sure the rollover process is done properly, since failing to do so can trigger unwanted tax consequences. The smart move would be to speak with your financial advisor to see which move is best for you.

Need a new IRA? Click here for our picks for the best IRA brokers and enjoy a tax break in the year you make contributions.

3. Roll over your health savings account

Not all employees have health savings accounts (HSAs). In fact, only about 34% of eligible employees sign up for an HSA. But if you’re one of them, ensure you manage it in the wake of leaving your job. Since HSAs offer tax advantages for medical expenses, they shouldn’t be forgotten when you leave a job.

The way to do it is to find a new HSA provider, then request of the old HSA provider that the funds be rolled over into the new account (they may be sent to the new account or to you directly). Follow up to make sure it happened, and then keep contributing.

By rolling over your HSA, you can continue to use the funds for qualified medical expenses, or you can invest them for future growth. Since HSA funds never expire, you can even save them in retirement, definitely making this a valuable asset you’ll want to protect.

Yes, leaving a job is a major life change. But during that potential tumult, thoughtful financial planning is still needed. Take the proper steps outlined above promptly to avoid unnecessary costs and stress during this important transition.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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