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The Art of Resigning Pt 2 - Paperwork!
Although it may not be on your immediate to-do list, you need to make sure you have all your ducks in a row in relation to your transition paperwork.
Get ready for the deluge of admin tasks due once you’ve handed in your notice. Alongside the numerous conversations you’ll be having with bosses and customers, workflow planning and succession, and dealing with the inevitable counter offer, you should prepare or start thinking about the following paperwork:
Letter of Resignation
- This should be top of your list, and prepared ahead of any other announcement or conversation with your seniors or HR team. There are plenty of resources and frameworks you can find online to help draft a resignation letter, and there is scope for you to be glowing in your assessment of your time at your employers, what you’ve learned and, of course, why you feel you’re leaving. Although it’s not totally necessary to detail this, it starts the process of exiting a job with courtesy and respect.
Healthcare Insurance Plan
- Although you will have gathered all the information needed during the interview process in regard to your new employers healthcare insurance plan, it’s worth making a note of your current employers’ policy plan, any details or items of interest in regards to exiting or transitioning onto a new policy, and if there will be any administrative efforts needed to guarantee no black spots in coverage during your transitional phase.
- Compare coverages and remember that COBRA and short term insurance or health savings accounts can be used in the interim.
401(k) and Retirement Fund
Your retirement pot should never be forgotten. If you are on an employer-sponsored 401(k), there are four main options available:
- Leaving a job is as much mental as it is physical. Unlearning routines and ways of doing business, distancing yourself from work colleagues, even having to consider NDA’s and non-competes (which is especially acute in Sales) is all part and parcel of preparing yourself mentally and emotionally to leave an employer.
- Although this sometimes can make sense, and if you have over $5000 in your account you can continue to roll on in your previous employers plan, you may lose out on a plan match or better option with your new employer, and it’s worth remembering if you have less than $5000 your old employer can cash you out or transfer it to a new, less favourable plan.
- Move the money to a new employer’s plan
- If there are great investment options then this is a great move, plus most of the time you can do this without taking a tax hit.
- Job Acceptance Hack! - If you’re unsure about your new employer, or don’t want to pull the trigger on moving your 401(k), automatic opt-ins don't happen for 1 - 3 months. You have wiggle room to make sure you know this job is permanent long term, so sign up for the company plan, continue to receive contributions and move the rest of your fund when you’re ready.
- Move the money to a self-directed retirement account (known as a rollover IRA)
- It's worth noting you can only do an IRA once a calendar year, but this method consolidates all your existing 401(k)s into one pot.
- Cash out
- Exactly what it says - you will however be subject to tax as per your state law, an early release fee and federal income tax too.
References:
https://www.dol.gov/general/topic/health-plans/cobra
https://www.bankrate.com/retirement/8-tips-on-moving-401k-after-leaving-job/