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PREPARE FOR A CAREER CHANGE TODAY

A job change always creates financial impacts no matter what your age.

Article published: August 30, 2021

It鈥檚 no secret that technology has reshaped the workforce. Elevator operators have disappeared while software app developers have emerged.

The average American works 12 different jobs throughout their career, according to the U.S. Bureau of Labor Statistics. Some people seek a career change while others are thrust into new fields as technology and societal trends render some jobs obsolete.

The key to earning an income is having the knowledge, training and skills to allow you to be marketable in the workforce. As you prepare yourself for the transition, you also need to prepare your finances. Regardless of your motivation for changing careers, talk to your Edelman financial planner. We can help you prepare financially, from assisting with rolling over retirement accounts, finding opportunities to reduce expenses and planning for supplemental insurance coverage changes. In the meantime, here are some things to consider when changing jobs.

Follow these 11 steps to prepare for a career change:

  • Eliminate credit card debt.听Pay your mortgage, auto and college loans according to your schedule if the interest rate is low.
  • Revisit your monthly expenses to see where you can cut back.听Ask your financial planner if refinancing your mortgage is worthwhile.
  • Fund your cash reserves account with at least 24 months of expenses.听Be prepared to miss paychecks due to the transition.
  • Do you anticipate any large expenses?听Consider if these can be postponed. If not, prepare and set aside money now.
  • Research salaries in your new desired field.听What is standard in the industry and what is a reasonable salary to request?
  • Will your career change involve additional education?听Talk to your financial planner about Lifelong Learning Accounts, which can help you plan for needed education so you can make a career change.
  • Can you learn while working at your current job?听Enroll in courses now. Getting more skills will give you an advantage when applying for new jobs.
  • Will a career change involve relocation?听If yes, research the cost of living in the new area. Will relocation expenses be covered?
  • Take care of medical visits before leaving your current position.听Gap health insurance (COBRA or the Healthcare Marketplace) might cost substantially more and covered benefits may be less.
  • Replace benefits you may lose when you leave your employer.听If your insurance is tied to your employment, investigate replacement听coverage for disability or life insurance.
  • Build a network in the new industry you are seeking to join.听Seek out friends, neighbors or family in the new industry you are exploring.

Watch: learn more about how to prepare your finances for a job change.

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