Times are changing, and so is the American workplace. Companies no longer offer pensions to employees today. Generation Xers carry the most student loan debt of any generation at nearly $40,000 per borrower. Baby boomers have the second-highest average student loan balance, while millennials come in third. Dwindling employee benefit options and high student loan balances have created a perfect storm for today’s professionals: taking the highest paying job you can find after graduation, working in an environment you don’t truly enjoy, and finding yourself in full-blown burnout soon after.
There is a silver lining in all of this, though. If you’re in this situation, feeling stuck in a career that lacks personal meaning and purpose for you, it’s not too late to switch careers. You can seek truly gainful employment with a company that values your individual talents, passions, and aspirations. Navigating a job change can be stressful, but a financial planner or advisor can guide you through the transition.
Do Your Homework First
Before you start searching for a new career, take some time to understand WHY your current job is no longer a fit for you. Are there limited opportunities for promotion or career development? Do you have a hard time working with your coworkers or managers? Do you feel like your work lacks meaning, or that you’re just another cog in the machine? Keep in mind every job you have will have bad days, weeks, or even months. But if you can’t envision your future in your current career, it’s probably time to make a change.
The next question you have to ask yourself is: Can I change careers and maintain my current lifestyle? If you’re not sure, a financial advisor can help you find the answer.
Affording a Career Change
A comprehensive financial advisor has a great understanding of how to structure cash flow for periods of time where your income may be interrupted, like during a career transition. Generally speaking, financial advisors will recommend having a certain amount of money saved up before leaving, just in case you have trouble finding a job or would like to take a little time off to clear your mind before starting a new position elsewhere. Your current budget and lifestyle needs will depend on how the financial advisor will guide you to ultimately getting out of your current career.
Finding the Right Career for You
Financial advisors see clients from all walks of life. From their experiences, they’ll probably have a reasonable idea of what your experience level, education, and specialties can fetch salary-wise across the job market. If you’re looking to move to a different city or state, they can help you understand what impacts the location change may have on your budget, as well as prepare any assets like real estate, land, or other property for relocation.
Understanding Employee Benefits
Understanding employee benefits can be tricky. Financial advisors can explain what you are leaving behind, what benefits you can take with you after changing careers, and what benefits questions to ask your new employer. You’ll want to understand how health, dental, and vision benefits will be affected when you leave.
And what about those old 401(k) accounts? While it sometimes makes sense to bring those funds to your new place of employment, a financial advisor can educate you about the expenses associated with the 401(k) plans, and potentially find you a better alternative with lower expenses and a wider selection of investment options. If you find yourself with any type of employee stock option, stock plan, or stock bonus, working with a financial advisor may be extra valuable to you, as those plans usually have more restrictions, provisions, and tax consequences associated with them.
Choosing the Right Financial Planner
Big life events like a job or career change are a perfect time to sit down with a trusted financial advisor, preferably one who works on a fee-only basis. A financial planner who works on a fee-only basis, commonly referred to as a fiduciary, must act in your best interest at all times. Fee-only planners do not sell you insurance, investments, or any type of financial product because they are only being paid a fee for unbiased advice.
Hiring a fee-only financial advisor may seem like an extra, unnecessary expense, but the benefits of working with a trusted financial planner more than outweigh the cost. Your advisor can help you make sense of your finances, employee benefits, and retirement accounts. Navigating a career change can be stressful enough on your own, and a financial advisor can help you do it the right way.