Changing jobs? 12 things you can do with your money before you go—and after you get there

Accepted a new job offer? Congrats! Here’s a checklist to make sure your finances are in order as you make the transition.

Your checklist at a glance

Before you go:

  1. Determine employee benefits termination date.
  2. Browse health insurance options.
  3. Check flexible spending account (FSA) balance.
  4. Review final paycheck.
  5. Revise budget.
  6. Review stock option rules.
  7. Confirm tuition reimbursement rules (if applicable).

When you start:

  1. Explore retirement plan decisions.
  2. Handle health savings account (HSA) funds.
  3. Check for gaps in disability and life insurance coverage.
  4. Review student loan repayment details.
  5. Update financial plan.

What to do before you leave your job

1. Find out which employee benefits you’ll need to replace, and which you can take with you.

“First, find out when your benefits terminate. Is it the day you leave? Or the end of the month?” says Heather Winston, assistant director of financial planning and advice at Principal®. “Then find out when your benefits take effect at the new company.”

  • Health insurance: Know how your current coverage compares to the new coverage. If you’re in the middle of treatment and not covered by insurance at your new job, plan and budget accordingly. (Examples: fertility treatment, specialty medications)
  • Dental and vision insurance: If you have dental or vision insurance now, but won’t in the foreseeable future, schedule appointments before you leave. Need new glasses or contacts? Check!
  • Life insurance: If you bought or were provided extra life insurance coverage (called a voluntary policy) through your employer and want to keep it, start the paperwork to convert it from a group to an individual policy, if that’s offered. You’ll pay the premium directly to the insurance company, rather than having it payroll deducted.
  • Retirement: You could have decisions to make about your retirement plan, such as a 401(k) or 403(b). More on that below.

Graphic of a thumbtack. Tip: Browse your company intranet for employee benefits information. Still have questions? Call your human resources (HR) contact or benefits administrator.

2. Look into your health insurance options if you’ll have a gap in coverage.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. Passed in 1985, it allows you and your family to continue health insurance for a while after losing your coverage through work. COBRA can be pricey because you’ll pay the full premium (rather than having your employer covering part of the cost), but an unexpected health issue could have huge financial implications if you don’t have insurance. If you have dental and/or vision insurance in your old job, that’s included as part of COBRA, too.

An alternative is a Health Insurance Marketplace plan. Available plans vary from state-to-state, and depending on your household income, it may cost less than COBRA. Visit to learn more.

You may be able to join the insurance plan of a spouse/partner if you’ll have a gap in coverage. Usually you need to sign up within 30 days of your last day on the job.

3. Check your flexible spending account (FSA) balance.

Brush up on the rules for your company’s FSA benefit and deadlines. Submit claims for dependent care or health care expenses through your termination date so you’ll get reimbursed. If you have a balance, what you don’t use, you lose. In other words, it's time to shop for FSA-eligible items. (Your employer has a list.)

4. Know what will be in your last paycheck.

Clarify this, if possible, before your last day so there are no surprises. It could include back pay, vacation/sick days, commissions, or a bonus.

5. Revise your budget.

If there’s lag time between your old job and your next paycheck, budget for it. This might mean spending less before you leave so you build up more in your savings. If you run short, you could tap your emergency fund, but try not to use credit cards to finance day-to-day expenses.

6. If you have stock options or restricted stock awards, find out the rules for vesting, what you get when you leave, tax implications, and so on.

If you get non-salary compensation, know the vesting period and what percentage is available to you, if any, when you leave. Many companies require you to exercise stock options within a certain amount of time, often 90 days from your termination date.

7. Check your company’s tuition reimbursement program if you’re taking classes.

If your last day on the job is in the middle of a semester, find out if you’ll be reimbursed for that semester’s expenses. Some companies require you to remain employed for a certain length of time or you pay back the funds you received. Don't get caught unaware!

What to do when you start your new job

1. Sign up for your new retirement plan, such as a 401(k) or 403(b), and decide what to do with your old one.

New company, new plan. “Did the new job come with a higher salary? If there’s an employer match, how much do you need to save to get it? Is now a good time to consider increasing how much you’re saving from each paycheck?” Winston says.

Find out how long you have to make a decision about your old retirement plan. Check with your former employer on specific timing guidelines. Then you can generally choose among these four options:

  • Roll your savings from your 401(k) into an IRA. Combining retirement accounts gives you flexibility in decision-making to help ensure your assets are supporting your goals. Learn how to start a rollover IRA.
  • Move your money to your new employer’s plan. This is typically an option if you’re joining a company that offers a retirement plan and allows roll-ins.
  • Keep your money where it is, if it’s allowed under your old plan. Check with your former employer if you have a lower account balance. Many retirement plans don’t allow you to stay in the plan if your account balance is under a certain amount ($5,000 is common).
  • Cash out your account balance. There are definite downsides to that. You may lose up to 30% of it to taxes and penalties, it could bump you into a higher tax bracket, plus you’ll miss out on any future growth or earnings. It may be tempting to have the money now, but there are better options for emergency cash than an early 401(k) withdrawal.

If you’re still unsure, read more about the pros and cons of each option. If you have questions about investing and market volatility, learn more from our FAQ.

2. Decide what to do with Health Savings Account (HSA) funds if you have a High Deductible Health Plan (HDHP).

If you expect to enroll in a HDHP at your new employer, you can often transfer a balance in your HSA. If you don’t plan to enroll in a HDHP, you can generally leave remaining funds there and use as needed for future eligible healthcare expenses.

An advantage of having an HSA is it’s “portable” when you leave a job. Plus, you can contribute to it for long-term savings in addition to your retirement plan and IRAs.

Graphic of a thumbtack. Tip: If you use HSA funds for unapproved health care expenses, there are tax implications.

3. Look at options to fill a gap in life and disability coverage if your new job isn’t as generous.

Life insurance: When you enroll for benefits, you may be able to contribute to a group life insurance policy through your employer, with the premiums deducted from your paycheck.

“Buying additional life insurance through work can be a simple, inexpensive option—especially when you’re younger,” Winston says. “The cost will typically increase as you get older, of course.”

This is also a good time to double-check the beneficiaries on your life insurance (and retirement accounts.) If you have life insurance through Principal, download the forms to choose or change your beneficiaries.

Do you have enough insurance?

Our quick calculator can help you do the math.

Icon of a calculator. Disability income calculator

Disability income insurance: You may have short- and/or long-term disability coverage as a benefit from your new employer. But it may not be enough to cover your income if you’re unable to work due to injury or illness. Winston says most plans will cover about 60% of your income; that equals significantly less take-home pay after taxes (down to about 40–50% of your income).

First, find out if you have any disability coverage, and if you do, how much of your income it covers. Then, talk to a financial professional who may be able to help you get a larger amount of coverage in addition to what your new employer offers, customized to what you need.

4. Be prepared if you have student loans with income-based repayment programs.

Log in to your student loan account to see if your monthly payment is based on your income. A new, higher income could mean a new, bigger payment. Visit the Federal Student Aid site for more information.

5. Update (or create) your financial plan.

When you have a big life event, such as a new job, it’s a good time to review your financial goals and make adjustments to your savings.

“If you have a bigger paycheck, be wary of lifestyle creep where the more you make, the more you spend,” Winston says.

This is a time when you can make progress on your financial goals. Maybe you could save more in your 401(k) or IRA, or add to a 529 college savings plan, or pay down some debt?

We can help you get started. Read “Build your own financial plan: A step-by step guide.”

Next steps

  • If you have a Principal retirement account or insurance from your employer, log in to to check it, learn about rollover options, access personalized planning, and sign up for our newsletter. First time logging in? Create an account. If you have questions about your insurance with Principal, visit our help page.
  • A financial professional can talk you through your options after a job change. Don’t have one? Check with your HR contact or employer to see if your company’s retirement savings plan offers this service. Or, we’ll help you find one.
  • Interested in an IRA to keep saving for retirement? To learn more, read how to start a rollover IRA or see if an IRA with Principal may be a good fit for you.

You should consider the differences in investment options and risks, fees and expenses, tax implications, services and penalty-free withdrawals for your various options. There may be other factors to consider due to your specific needs and situation. You may wish to consult your tax advisor or legal counsel. 

The subject matter in this communication is educational only and provided with the understanding that Principal® and its employees are not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., 800-247-1737, member SIPC and/or independent broker-dealers. Principal National, Principal Life, Principal Funds Distributor, Inc., and Principal Securities are members of the Principal Financial Group®, Des Moines, IA 50392. Principal Global Investors leads global asset management and is a member of the Principal Financial Group®

Disability insurance has limitations and exclusions. For cost and coverage details, contact your Principal® representative.

Principal, Principal and symbol design, and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

Principal® does not make available products related to Health Savings Accounts.