Are you thinking about changing your career this year? You’re not alone — many professionals are trading a traditional 9-to-5 work schedule for something with more freedom and flexibility
But should you downshift your career this year and try a new path from the “traditional” corporate or professional path? How do you know whether a career change is right for you? What financial factors should you consider before making the shift?
There are so many questions rattling around your head, and for good reason! That’s why we created this blog, to help you get clearer on your next step.
Why Many Professionals Are Considering Career Shifts in 2025
The COVID-19 pandemic changed priorities for many professionals, especially those who enjoyed remote work. Work/life balance is a higher priority for many people, and more professionals (especially those experiencing burnout) are looking for alternatives to high-stress roles.
Side gigs and income diversification
Finding a full-time work-from-home role isn’t the only alternative to a traditional career path. Technology has made it easier for professionals to build a second career with freelancing or consulting. Despite the initial challenges of building a clientele, having multiple income streams can offer more stability than sticking to one full-time job.
Semi-retirement and early retirement
There’s also been a shift in retirement attitudes. Many late-career professionals are choosing semi-retirement, which can offer more income and mental stimulation than full retirement. On the other hand, high-earners may choose to retire early and pursue their personal goals and hobbies instead of staying in the workforce until they are eligible for Social Security benefits.
Whether you want more flexibility, a different income structure, or simply a change from working 40 hours a week in a stressful office, downshifting your career can offer many benefits. However, it’s crucial to consider all the potential consequences — especially the financial ones — before making any permanent decisions.
Are You Financially Ready to Downshift Your Career?
Is now a good time for a career change? Follow these steps to assess your current financial situation and determine whether you can afford to make a change right now:
- Run the numbers: Take a hard look at your debt, financial goals, and retirement plan. Can you afford to earn less without losing progress?
- Review your cash flow: Look at your budget, especially your expenses. If you reduce your income, will you have to make significant spending cuts that impact your lifestyle?
- Check your emergency fund: While it’s always a good idea to have an emergency fund that can cover 3 to 6 months of living expenses, you might want a bigger cushion before making a career change. Consider saving 6-12 months of expenses before taking the leap.
- Understand your healthcare options: If you quit your current job, will you and your family lose health insurance coverage? Do you know what the alternatives are and how much it would cost to cover your own health insurance?
- Review your retirement plans: Consider your retirement goals and strategies. Will a career pivot impact your retirement contributions and investments?
- Evaluate your debt: Do you have any high-interest debt? If so, it can be a good idea to make a detailed plan to pay it off before downshifting your career.
Wondering exactly how to figure out if you can financially afford a career change right now? We’ve got a free Career Change Calculator for you. Download it to get a clear view of your financial numbers and determine whether now’s the right time to make a career move.
How to Maintain Wealth-Building Momentum During a Career Shift
Let’s say you’ve decided to downsize your traditional career into something that requires fewer hours every week. How do you keep your financial goals on track?
The good news is that you don’t have to choose between a satisfying career, financial security, and the work/life balance you want. With the right preparations, you can make a change to your career without losing progress on your financial goals.
Follow these steps:
- Make the most of multiple income streams: Even if you aren’t planning to freelance full-time, there are several ways to bring in additional revenue. Consider side gigs, rental properties, and dividend investments.
- Shift to a phased retirement model: Instead of going from full-time work to full-time retirement, consider moving down to part-time or shifting into a consulting role.
- Optimize investment strategies: Ask your financial advisor if there are ways to adjust your portfolio to accommodate a lower salary without stopping growth.
- Adjust your spending: Look at your budget and identify any expenses that you could trim without sacrificing your overall quality of life.
- Discuss “bridge accounts” with a financial advisor: Taxable investment accounts may be useful to cover income gaps and prevent tapping into your retirement funds early. A CERTIFIED FINANCIAL PLANNER® will be the one to help you decide if these accounts are right for you.
Your financial situation is unique, so consider working with a financial planner to find an approach that works for you.
Start Financial Planning Before You Downshift Your Career
Remember, downshifting your career doesn’t mean just quitting your job. It’s more of a process — identify what you want to change, find potential alternatives, and make a comprehensive plan for the transition. Ideally, a career shift is a chance to design a financially stable future that also accommodates the work/life balance you want.
If you don’t already have a financial planner, now can be the perfect time to start working with one. A professional can help you analyze all the potential scenarios so you can make an informed decision.
Additionally, your financial planner can help you understand how changing your income can impact your immediate and long-term financial goals. They can also help you avoid common mistakes, like cashing out your investments too soon or missing out on tax-saving strategies.
Get Expert Guidance to Make a Confident Career Pivot
A career shift is an exciting goal, and it can be a great way to adjust your work/life balance or improve your financial stability via multiple income streams. Whether you’re thinking of partial retirement, freelancing, or consulting, it’s crucial to understand the potential impacts to your income, retirement, and financial goals.
By planning ahead, you can minimize the negative consequences of lowering your income. Start by analyzing your current financial situation, and then explore all the possibilities before you make any final decisions.
Would you like additional support as you consider downshifting your career? We are here to help!
At Guiding Wealth, we’ll work with you to understand your career goals and concerns. Then, we’ll help you develop a comprehensive plan to transition into your new career while still progressing toward your goals.
Are you ready to get started? Schedule a consultation with our team!