Switching Jobs in 2024? Don’t Make This Mistake

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Getting a new job could do great things for your finances. But read on for one big blunder to avoid. [[{“value”:”

The start of a new year is a pretty popular time to contemplate a job change. In fact, a recent Monster report finds that 95% of workers are looking for a new job in 2024, or plan to look.

Switching jobs could mean getting a role that offers a higher salary and better workplace benefits, like superior health insurance and more paid time off. And that could improve your overall financial picture.

Now, there are certain mistakes you’ll want to avoid when getting a new job. First, don’t burn bridges at your old company. You never know when you may need to call in a favor to your old boss or even want your old job back.

Also, make sure to give ample notice — two weeks’ worth is usually the standard. That makes you look more professional and increases your chances of getting hired again, should you have that need in the future.

But there’s another mistake you’ll want to avoid in the course of leaving a job. And it has to do with your long-term savings.

Don’t leave your 401(k) behind

If you’re leaving a job where you had money in a 401(k) plan, your first inclination may be to simply keep that money where it is. That way, you don’t have to deal with paperwork or any sort of hassle.

But leaving an old 401(k) behind is often a big mistake. For one thing, you might forget about the money you have if it’s not a particularly large amount. But also, with an old 401(k), you’re less likely to keep tabs on your investments. And that could mean losing out on serious gains over time.

What to do with your 401(k)

If you’re truly miserable at your current job and have enough money in a savings account, you may be inclined to resign before lining up a new position. This isn’t necessarily a terrible idea. Focusing on a job hunt without having to juggle work commitments could help you go about the process more efficiently. And if you’re able to pay your bills all the while, why not?

In that situation, though, what you may want to do is open an individual retirement account (IRA) and transfer the money from your old 401(k) into it. That way, you can manage that IRA yourself, and you won’t be leaving money in an account managed by a company you no longer work for.

However, if you do manage to line up a new job in conjunction with your resignation, you may want to see if it’s possible to roll your old 401(k) into your new employer’s 401(k). This, of course, assumes that your new employer has a retirement plan and that new employees are eligible to participate right away. That may not be the case. But if it is, that’s another good option.

Just as you’re probably going to clear out your desk when you leave your job and take your belongings with you, so too should you always aim to take your 401(k) funds with you. And if you don’t have a new 401(k) to deposit those funds into, an IRA works just as well.

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