Financial Checklist Before Changing Jobs: Benefits, Retirement, and Taxes

Quick orientation

Changing jobs often improves career growth and pay, but the administrative and financial details can create avoidable costs. Use this checklist as a working plan to lock in health coverage, protect retirement savings, understand tax changes, and preserve equity and other benefits. I’ve guided hundreds of clients through this process and find a methodical approach prevents most common pitfalls.

1) Health insurance and short-term coverage

• Identify your current plan’s end date and new plan’s effective date. Many employers impose a waiting period before new benefits start.
• Evaluate COBRA as a bridge if there is a coverage gap. COBRA typically allows you to continue employer coverage for 18 months (longer in some situations); it can be costly, but it preserves the same network and deductibles (U.S. Department of Labor, Employee Benefits Security Administration: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra).
• Compare total out-of-pocket costs (premiums, deductibles, copays, provider networks) — not just the premium.
• If you or a dependent use specialty providers or medications, confirm they are in-network under the new plan.
• If you have a Health Savings Account (HSA), confirm new-plan HSA eligibility and plan contribution limits; HSA funds remain yours even if you change employers.

Practical tip: Request the new employer’s Summary of Benefits and Coverage (SBC) before your start date and run a side-by-side comparison.

2) Retirement accounts: rollovers, vesting, and contribution strategy

• Check vesting schedule for employer contributions. If you’re not fully vested, leaving early can forfeit employer matches or profit-sharing. Review your plan’s vesting terms now and ask HR for a written statement of vested balance (see our primer on 401(k) vesting rules: https://finhelp.io/glossary/401k-vesting-rules/).
• Decide what to do with your current 401(k) or qualified plan:
• Direct rollover (trustee-to-trustee) into your new employer’s plan or an IRA avoids mandatory 20% withholding and is usually the simplest (IRS rollover guidance: https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions).
• Indirect rollover (you receive the check) must be completed within 60 days to avoid taxes and penalties; your employer will generally withhold 20% for federal taxes on eligible rollover distributions.
• Cashing out is rarely optimal: you’ll owe income taxes and, if under age 59½, possibly a 10% early-distribution penalty.
• If you have multiple small accounts, consider consolidating for lower fees and simpler asset allocation — see our guide on consolidation strategies for multiple retirement accounts: https://finhelp.io/glossary/consolidation-strategies-for-multiple-retirement-accounts/.
• Review contribution rates and employer match at your new job and update your payroll elections promptly.

Example: A client rolled a former 401(k) directly into a traditional IRA and avoided the 20% withholding and the 60-day timing pressure that caused stress for another client who tried an indirect rollover.

3) Stock compensation, RSUs, and stock options

• Confirm how termination affects unvested awards and the post-termination exercise window for options. Many plans shrink the exercise window (commonly to 90 days) or accelerate vesting in limited circumstances — read your grant agreement carefully.
• Understand tax events for RSUs (taxed as ordinary income when vested) and options (incentive stock options vs. non-qualified options have different tax consequences).
• If you’re leaving and have a concentration in employer stock, evaluate diversification to manage company-specific risk and tax-efficient sale strategies.

4) Taxes and payroll changes

• Anticipate how a new salary, signing bonus, or commission structure will affect withholding and marginal tax rate. Signing bonuses are typically treated as supplemental wages and may be subject to federal withholding rules — see IRS Publication 15 (Employer’s Tax Guide) for supplemental wage guidance (https://www.irs.gov/publications/p15).
• Update your state tax withholding if you move across state lines; you may owe part-year resident taxes in both states. Check state revenue department rules for reciprocity or credits.
• If you expect a large one-time income item (signing bonus, vested equity), consider a planned estimated tax payment or increased withholding to avoid underpayment penalties.

Practical tip: Use your company’s payroll estimator or an online withholding calculator to model take-home pay under different withholding scenarios.

5) Benefits beyond health insurance

• Disability insurance: Confirm short-term and long-term disability coverage, elimination periods, and benefit amounts.
• Life insurance: Employer life policies are often group-term and may end at termination — check portability or conversion options.
• Flexible Spending Accounts (FSA): FSAs are usually “use it or lose it” within the plan year; confirm eligible carryovers or grace periods and spend remaining balances before leaving.
• Tuition reimbursement, professional licenses, and continuing education credits: Learn the employer’s repayment terms if you leave shortly after receiving reimbursement.

6) Paid time off, bonuses, and severance

• Verify how accrued vacation, sick leave, and paid time off are treated at separation — laws vary by state and employers’ policies.
• Clarify bonus timing and any performance or separation conditions that could affect payout.
• If the offer includes severance, ensure the terms (duration, COBRA subsidy, non-compete clauses) are documented and fair; consider consulting an employment attorney for unusual or restrictive terms.

7) Cash-flow and emergency fund planning

• Build or maintain an emergency fund that covers 3–6 months of expenses if your new job has variable pay or delayed benefits.
• Time your final paychecks and any vacation payouts so you won’t experience a gap in meeting recurring bills.

8) Administrative tasks (don’t forget the small things)

• Update direct deposits, 401(k) beneficiaries, and retirement-plan beneficiaries.
• Transfer employer-provided devices and return company property per HR instructions to avoid deductions from final pay.
• Change your address for W-2 and other tax documents.

9) Negotiation and total compensation analysis

• Don’t compare salaries in isolation. Add the cash value of benefits (retirement match, health premium differentials, PTO, equity) when negotiating.
• If the new offer has inferior benefits, try to negotiate a higher base, sign-on bonus, or a delayed start that lines up benefit eligibility.

Common mistakes I see

• Failing to check vesting schedules and losing employer matches.
• Assuming health coverage starts immediately with the new employer.
• Cashing out retirement accounts instead of rolling them over.
• Overlooking tax withholding changes after a large sign-on bonus or equity vesting.

Quick one-page checklist (printable)

• Health: Confirm end date and new plan start date; request SBC; evaluate COBRA cost. (See COBRA coverage basics: https://finhelp.io/glossary/what-is-cobra-continuation-coverage/)
• Retirement: Check vesting; decide on direct rollover vs. IRA; update contributions and beneficiaries. (See IRA rollover basics: https://finhelp.io/glossary/individual-retirement-arrangement-ira/)
• Equity: Read grant agreements; note exercise windows; plan for taxes.
• Taxes: Model withholding; plan for state tax changes; estimate tax on signing bonus.
• Benefits: Confirm disability, life insurance, FSAs/HSAs; check tuition repayment clauses.
• Cash flow: Confirm final pay dates; build/maintain emergency fund.

When to get professional help

• Complex equity compensation (large option positions, early-stage company equity).
• Significant pension or defined-benefit rollover decisions.
• Cross-state tax residency changes or high-income tax planning.

Authority and sources

• IRS — Rollovers and distribution rules: https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions
• IRS — Publication 15, employer tax guide (supplemental wages): https://www.irs.gov/publications/p15
• U.S. Department of Labor — COBRA basics: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra
• Consumer Financial Protection Bureau — general consumer guidance on employment and benefits: https://www.consumerfinance.gov/

Professional disclaimer

This article is educational and does not replace personalized financial, tax, or legal advice. Rules for retirement accounts, taxes, and benefits can change and often depend on plan documents and state law. Consult a qualified tax advisor, financial planner, or employment attorney for guidance tailored to your situation.

Final note

A deliberate, documented review before you change jobs prevents many costly mistakes. Start this checklist as soon as you get an offer and keep a folder (digital or paper) with plan summaries, grant agreements, and HR correspondence. In my practice, clients who prepare with this checklist avoid rushed decisions and save both money and worry during the transition.