Changing jobs? Time for a financial health check

04 May 2017

By John Dacker

Changing jobs and setting new career goals can be an exciting time. It’s also the perfect time to do a financial health check. Your income will likely change and there will be impacts on your superannuation, personal insurance, leave entitlements, employee benefits and even your estate planning. It’s much more involved than you might initially think.

Here are just a few areas to think about when changing jobs.

Remuneration
Everyone loves a payrise! But it’s what you do with it that matters. The only way to build wealth for the future is to spend less than you earn. So, what is the best use of your savings capacity?

Super
No matter what your age, your superannuation shouldn’t be ignored. Almost 10 per cent of your pay goes into it every year! Small decisions made now will compound over the rest of your working career and impact your financial health at retirement. It’s important to know what you should be paying attention to.

Personal insurance
Your biggest asset is your own ability to earn an income! If you have taken out income protection, or if it is provided by your employer, check how long the benefit period is. It may only be for up to two or five years. If you are permanently disabled, beyond the two or five year period, the income replacement will stop, potentially leaving a large income gap to the normal retirement age of 65.

Leave entitlements
Unfortunately, your leave entitlements don’t follow you when you change employer, and all income protection policies have a waiting period before benefits are paid. Therefore, without any leave entitlements going into your new job, it’s important to make sure you have enough funds that you could meet your needs in the event of disability until the waiting period is met.

Employee benefits
Many large employers have employee benefits schemes where you can access discounts from a range of providers. These really add up over time if you take advantage of them. A five per cent discount at supermarkets could save you over $500 pa if you spend $200 per week on groceries.

Estate planning
Superannuation, including personal insurance held in your super account, does not actually fall into your estate unless you nominate for this to be the case. It can be paid directly to a beneficiary such as your spouse or children. Accordingly, your super beneficiary nomination needs to take into account your wider estate intentions and the different tax outcomes and levels of flexibility that apply for different nominations.

Are you prepared?
It can be hard to find time to address all of these financial issues whilst preparing for and starting a new job. A financial adviser can help you navigate these changes and make informed decisions. Make sure you start out on the right foot.

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