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How to Prevent Financial Troubles When Changing your Job

Last modified: 23 Jun 2013

Changing jobs is often an exciting time since a lot happens when you look for a new avenue. This being said; most people forget about the financial impact of changing jobs. Before changing jobs, it is a must to remember two important issues so that you do not suffer from financial troubles later on. These two issues are your superannuation and your life insurance.

Important Points to Note about Superannuation and Job Changes

  1. If you have an employer fund then you will have to move your super. This means that you will have to choose a new super with your new employer. Moving your super can be a good thing since this allowed you to set up a new fun that is better suited for your future needs and new risk profile.
  2. You will have to notify your new employer about your preferred choice for super since most employers these days allow employees to choose their own super. Be sure to notify your employer as soon as possible and by filling out a “choice of super” application, your employer will be required by the law to make mandatory contributions to the fund of your choice. Doing this will also ensure that you have a consolidated fund; which is better than have multiple super funds.
  3. Superannuation funds allow people to accumulate funds for later on when they are retired and do not have an income flow. If you are interested in securing your future then you can ask your new employer if he is willing to let you make higher contributions to your fund from your gross income.
  4. Starting a savings plan can help you ensure a financially secured retired life. If you choose to do this, then you can ask for a periodical deduction from each to pay packet that is deposited into a high interest savings account. This amount can also be deposited into a managed fund.

Important Points to Note about Life Insurance and Job Change

  1. Life insurance is a need and not a luxury. If you have a life insurance policy in place, then you should review it especially if you are choosing to change your super fund. You should note that if you decide to shift your funds from one super to another then there are chances that the insurance may lapse on it. The insurance may only exist when you are employed hence when you are temporarily unemployed during the migration period, you will be uninsured. Majority of the life insurers in Australia, offer a continuation option which gives you the option to continue your existing insurance plan without having to reapply. As far as possible you shouldn’t shift the funds until your new insurance cover has been purchased and is active, because shifting the funds too soon can cause you to be uninsured.
  2. If you are moving up the ladder at work then you should increase your level of income insurance as per your current risk level and income level. Income protection plans are a must for employed and self employed individuals, hence if you are uninsured then it’s time to buy an income protection insurance plan.

After the initial excitement of changing jobs has reduced, a change in your employment history can have an impact on your current and future financial plans. Always make sure that you talk to a financial advisor who can guide you according to your current and future financial needs.


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