You’ve found a new job, and you’re ready to move on. As pilot, we know how important your career and hobbies are. Whether you fly professionally or recreationally, there is a lot to consider. It’s important to take a good look at your existing company benefits. You need to know what you can take with you … and what you’ll have to leave behind. The best place to find this information is in your employee handbook. Chances are you received this information your first day on the job but haven’t looked at it since. Reviewing your benefits before you leave a company can be just as important as looking at them the day you start.
Here are four things to consider.
One of your most important company benefits is your health insurance. Not all employers offer the same benefits … or pay as much of the cost. Before taking a new job, ask about the benefits available to you and how much you’ll be required to contribute toward them. Ask, too, if the doctors you know and trust will accept your new coverage plan.
Don’t assume you’ll be covered from your first day on the job. You may have to wait a period of time for your health insurance to start. If that’s the case, ask your current employer if you can extend your existing benefits. If not, you’ll need gap coverage. You may be able to sign up for a temporary COBRA health insurance plan. If married, switching to your spouse’s plan may be an option. Or you could purchase a policy on your own through your local broker on the healthcare exchange.
When you change jobs, you need to decide what to do with your 401(k) or pension plan. Tempting as it may be, withdrawing your money isn’t advisable. You may be subject to income tax and early withdrawal penalties. Other options are to leave your money in your old plan; roll it into an individual retirement account; or move it to your new company’s plan.
If you’ve taken a loan against your company plan, your entire loan balance may have to be repaid within 60 days. If you fail to do that, the outstanding balance will be considered a distribution and will be subject to income tax and, possibly, a 10 percent penalty. Talk to your human resources department or plan administrator to learn what rules apply to your situation.
Another thing to consider is the timing of your job change. Some employers won’t contribute to your retirement plan, if you’re not employed on the last day of the year. Learn how your plan works, so you can get the most from it.
Keep in mind, too, you may not be able to contribute to your new employer’s plan right away … or you may have to wait a few years to be vested. If you are in a position to bargain, negotiate with a prospective employer to make up for lost benefits.
Like most employee benefits, the life insurance your employer provides is not yours to keep. Chances are you’ll lose it the day you leave the company—whether that’s to take a new job or retire, or because you’ve been laid off or your employer has gone out of business. For pilots and aviation enthusiasts like yourself, this may be even more true. AOPA members often have incomes higher-than-average, leaving you with more substantial financial responsibilities.
The only way to be sure your family will be protected is to purchase a policy on your own. And it makes sense to buy that coverage now. If you wait until later, your age and any changes to your health may make it difficult … or cost prohibitive. Your AOPA membership gives you access to up to $1 million in benefits, for you and your spouse in the Group Term Life Insurance Plan.
About half of all states require employers to pay employees for accrued vacation time when they leave a job. Check your state’s bureau of labor to see what your state requires … and your employee handbook to see your company’s policy on unused vacation and sick time.