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If
you are thinking of switching jobs,
especially if you are in the middle or
late years of your career, you need to
pay careful attention to the benefits
offered by your new employer. At this
stage of your life, you have a lot to
protect.
For starters, you need to
take a close look at your new employer's
retirement plan. If your new job comes
with a 401(k), find out when you are
eligible to contribute, if there is an
employer match and if the match also
applies to catch-up contributions you
can make after age 50. You also want to
find out if your new plan will accept a
rollover of your old 401(k). If it does,
and if you like the investment options
that come with your new plan, you may
want to make this move.
In any case, if your new job
does offer a 401(k), take full advantage
of it. Contribute as much as you can
afford and increase your contributions
whenever you get a raise. Look carefully
at your investment options and spread
your money among them in a way that
reflects your risk tolerance, long-term
goals and time horizon. And no matter
how much you like your new job, do not
overload your 401(k) plan with company
stock. A downturn in your employer's
fortunes could drag its stock price down
for quite some time.
Of course, not all companies
have 401(k) plans. If your new employer
offers a defined benefit plan, the
traditional pension that pays benefits
based on years of service, you will want
to ask a lot of questions about the
plan's solvency. As you may know, many
pension plans are currently under-funded
or face other major problems. If you are
concerned about a potential new
employer's financial status, you might
want to visit the company's Web site and
search under "investor information" for
documents such as the annual report and
filings with the Securities and Exchange
Commission.
Your new employer's
retirement plan is not the only benefit
you need to evaluate when weighing a job
offer. You also want to consider the
following:
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Disability insurance. Have you ever
thought what would happen to your
family and your long-term financial
goals if you became disabled and
could not work? Disability insurance
can help protect you against this
risk. Some employers offer
short-term disability coverage as an
employee benefit. But if your former
employer offered disability
insurance, and your prospective new
employer does not, you may have to
purchase your own coverage.
-
Life insurance. Some employers also
offer life insurance as an employee
benefit. Even if you are not that
far from retirement, life insurance
can play an important part in your
financial strategy, so the presence
or absence of an employer-backed
life insurance policy is a factor
you want to consider before taking a
new job.
A new job may offer you more
money and the chance to do work that you
will enjoy. But before you make the
move, take a close look at the benefits
package; it can play a big role in your
comprehensive financial strategy. |
