Navigating a Career

New job? New benefits.

Starting Your New Job Can be Exciting – and a Little Scary

As you look forward to your new role, carefully consider how you will manage your employer-provided benefits while transitioning from one workplace to another.

While you may receive benefits from your new employer, they will most likely differ from your previous employer’s benefits package. So if there are any benefits you want to take with you, such as accumulated savings in a 401(k) plan or similar retirement account, you will need to decide how to manage those funds before you exit.

Insurance Conversions

Your new employer may not offer health insurance or there could be a waiting period before health coverage begins. To avoid becoming uninsured, even for a short period of transition, explore the possibilities of continuation or conversion under your former employer’s health insurance.

You may also have the option of converting other types of employer-sponsored insurance into individual policies. Be sure to talk with your employee benefits administrator about all your options.

Know Your Options

If you have a retirement savings account in your current employer’s retirement plan or comparable account, there are generally four options available when you leave your company.
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Retirement Plan Rollovers

Although this is a fairly easy option, you also won’t have control over the service provider or the investments made available to you (your former employer will still make those decisions). Also, additional fees may be added if you are not an active employee on the plan and you may not be able to add new contributions since you’re no longer employed by that company.

It is important to find out what types of investments are available to you before choosing a financial institution to open your Rollover IRA. 

Another way to preserve the tax-qualified status of your retirement account is to roll the balance to your new employer’s retirement plan. While most employer plans allow new employees to roll their accounts in, it’s important to ask first just in case.

For most people, withdrawing your money as a cash distribution is not the best choice. After cashing in, you owe taxes on the funds, and you may also be required to pay a 10% tax penalty if you are under age 59½. Further, you forfeit the long-term benefits associated with potential tax-deferred earnings, making it more difficult to build the financial resources for your retirement income. 

Your decisions regarding benefits when changing jobs can have a great impact on your financial future. Before making such important decisions, be sure to discuss your circumstances with the benefit administrators at both companies and consult your professional advisors. 

Meet Your Planners

David Batchelder

Senior Investment Officer

Dan Bernardo

VP, Financial Planner, Private Client Group

James Bremis

Financial Planner

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Need Help?

Speak with one of Sentinel's Financial Planners today! We can help you better understand your employee benefit options:

  • Health, wealth and retirement planning
  • Life insurance and long-term care planning
  • Health care planning strategies
  • And other major financial considerations

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