An Executive’s Guide: Financial Steps When Changing Jobs

By Brian Bloxom, ChFEBC^SM

Stepping away from a leadership role to pursue a new opportunity is a defining moment. Between the high-level negotiations and the focus required to land your next seat, it’s easy to let the personal side of the transition take a backseat. While your professional energy is focused on the move, your personal capital should be managed with the same level of precision you apply to a boardroom strategy.

Helping your personal wealth maintain its momentum during this shift is vital. The following guide outlines the financial steps every executive may want to consider to help prevent a change in employer from leading to a gap in their long-term strategy.

The Exit Strategy: Decoding Your Departure Package

Before you pack up your office belongings, meticulously scrutinize your departure package. It’s a vital step in understanding how your job transition affects your finances.

• Severance agreement: Do a deep dive of your severance agreement. Understand the timetable, the payout structure, and (crucially) the tax ramifications. Are the payments made in installments or as a flat sum? What effect does it have on your tax bracket? For optimal tax efficiency, consider consulting a tax advisor. 
• Equity compensation: Equity compensation is typically a sizable portion of the wealth of many executives, so it’s important to understand the vesting schedules of your stock options, RSUs, or other equity grants. What happens to unvested shares? What are the vested option exercise deadlines? Ignoring these details can lead to unexpected tax responsibilities or significant amounts of money being left on the table.
• Retirement accounts: Seriously consider your pension, 401(k), and other retirement programs. What are your options? Should you take a payout (which could have significant tax ramifications and penalties), roll your funds into an IRA or your new employer’s plan, or leave them in the current plan (if allowed)? The tax-smart option here is usually a direct rollover, which keeps your tax-advantaged growth intact.
• Healthcare and COBRA: Losing health insurance provided by your work can be a significant worry, and often requires urgent attention. Take the necessary steps to navigate your options. Understand the duration and cost of COBRA coverage. Explore alternative choices like your spouse’s plan or the healthcare marketplace. Don’t let a gap in coverage lead to unanticipated medical expenses.
• Additional perks: Don’t forget about things like deferred compensation programs, disability insurance, and life insurance. What options do you have for portability or continuation? Understanding these details can provide a comprehensive financial shield during and after your transition.

Laying the Foundation: Financial First Steps in Your New Role

As you transition into your new role, establishing a solid financial foundation is necessary for long-term confidence and growth. Here’s how to build a strong monetary base that’s aligned with your new position:

• Comprehensive compensation: Your new salary is only one piece of the pie. You need to have a thorough conversation about signing bonuses, equity grants (and when they vest), and other perks. Understand the performance metrics tied to bonuses and the long-term value of equity. Essentially, negotiate with a holistic view of your compensation. 
• New benefits: Thoroughly examine your new employer’s life insurance, disability insurance, retirement plans (pay particular attention to company matching and vesting schedules), health insurance alternatives, and other benefits. Take note of enrollment dates and make decisions based on your family’s needs and financial objectives. Maximize your new employer’s retirement match; it’s basically free money invested in your future.
• Revised budget: A new job usually means changes in income and expenses. Use this opportunity to go over and improve your budget. Take into account any changes to your lifestyle, your new salary, and any potential shifts in the cost of commuting. Prioritize savings and verify your spending is in line with your financial goals.
• Refreshed financial plan: A major life event like a job change, especially at the executive level, requires a reassessment of your entire financial plan. Reevaluate your investment strategy, retirement timeline, estate planning documents (will, trusts, power of attorney), and insurance coverage. Confirm that your plan still matches your current circumstances and your long-term aspirations.

Strategic Financial Steps for the Next Phase of Your Career

Transitioning at the senior level involves more than just swapping one benefits package for another. It’s an opportunity to realign your resources with your evolving goals. By being proactive with these financial steps, you may be able to shield the wealth you’ve already built while setting a stronger foundation for what comes next.

The key takeaway?

A career move is a major milestone, and it should be treated as a strategic opportunity for your personal balance sheet. At Sentinel Wealth Partners, we give your future as an executive the financial clarity you need to step into your new role with confidence. 

Reach out to us today by calling our office at 703-832-0164, sending an email to brian@sentinelwealthpartners.com, or using our online calendar.

About Brian

Brian Bloxom, CRPC®, ChFEBC℠, is the founder of Sentinel Wealth Partners and a veteran advisor with over 30 years of experience specializing in complex retirement plans and federal benefits. He is dedicated to relieving client anxiety by providing highly accessible, customized guidance that helps retirees and pre-retirees transition confidently into their next chapter. Outside of his practice, Brian serves as the President of his local Salvation Army Advisory Council and enjoys golfing and coaching youth sports.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser.  Sentinel Wealth Partners and Cambridge are not affiliated. Sentinel Wealth Partners is not engaged in the securities business. Cambridge does not offer tax or legal advice.