So we got the employment data today and actually the job picture looks extremely strong. And it's not surprising because I actually am seeing quite a few people change jobs in the biotech industry. I wanted to shoot this quick video just to give you guys an idea of things that you need to be thinking about when you're changing jobs.
So the first thing that you want to check on is your 401K vest dates. And this is the date that the money that your employer put into your 401K actually becomes yours. So check with your HR. Make sure that either you're fully vested. Or if you just waited a month and you would vest fully, you might want to think or reconsider the date that you leave the company.
The other thing you want to look at is any after tax contributions that you made to the 401K. A lot more 401K's are allowing after tax contributions. I'm seeing that more and more. So you want to check and see if you've made any after tax contributions. And if so, it's an opportunity that you might have to roll over those funds into a Roth IRA. So you want to check on that too. Especially if you're going to be moving your funds.
Look at the new plan that you have at your new job. See what the auto enroll feature is on that. Typically, new 401K's tend to do an auto enrollment these days. And maybe the company matches, say, up to a 5% or 6% and the auto enroll is 3%. So you just want to check and see if add in a couple or a few more percent to your withdraw will allow you to get the match. And you want to make sure you're not leaving that money on the table.
Also a mistake that I see when the new plans are looked at is clients often don't look at the cost of the funds that they have available to them. So check out those costs because they really are a way that you ... One of the few things that you can control and they really can increase your returns because it's just going to be your returns minus your expenses is going to be your net return. So looking at the funds that you have available at the new job and what those expenses are on those funds.
For healthcare, obviously, look at the new plan. Things I like to look at are is there a high deductible plan? These can be really good for saving, especially for high earners. If you don't have a new plan or a new job just yet but you left your job involuntarily, you want to look at the COBRA or other types of government assistance like the Affordable Care Act. Or also look at your spouse's insurance. It's a qualifying event if you lose your job. So look and see whether you can apply for your spouse's healthcare.
On the stock compensation, again, check your vest dates. See when the next one's coming up. You don't want to walk away from your job and leave a bunch of money on the table. So check those vest dates. And also if you do leave your job involuntarily, I find that a lot of companies are providing vesting shares ahead of time. So that's kind of nice. And then when you get those shares, I do find a lot of people tend to sell those for whatever reason. Maybe tied to the strategy or not. But making sure that you have paid the taxes. And if not, just make sure you put some money aside for that. Also severances can trigger you to be in a higher tax bracket if they give you all the funds up front. And so just look at that making sure that you have enough set aside for taxes because you don't want to pay your taxes next year and find yourself having a big tax bill and not having enough money put aside.
So I hope this is helpful. Not an exhaustive list. If you'd like a more detailed list, I do have one. And you can just message me on LinkedIn. I'm happy to provide that to you. Take care.
*For informational purposes only, not meant to be specific advice.