RESOURCES
Resources for a financial transition
Clear terms and sharper questions make it easier to evaluate a major decision. Use these as a starting point.
Key terms, defined
A quick reference for terms that often come up during a career transition.
Severance package
Pay or benefits an employer may provide when employment ends. Terms vary, and some details may be time-sensitive, so it helps to review them carefully.
COBRA
A federal law that may let you continue employer-sponsored health coverage for a period after leaving a job, usually at your own cost.
Liquidity
How easily you can access money without penalties or losses. During an income change, liquidity often becomes a priority.
401(k)
A retirement savings plan offered through an employer. Contributions are usually made directly from your paycheck.
403(b)
A retirement savings plan similar to a 401(k), commonly offered by schools, hospitals, and nonprofit organizations.
IRA (Individual Retirement Account)
A retirement account you open on your own rather than through an employer.
Rollover
Moving money from one retirement account to another, such as from a former employer's plan to a new plan or an IRA. Rules and tax treatment vary, so it is worth asking questions before making any change.
Vesting
How much of your employer's contributions you own. Money you contribute yourself is always yours, but employer contributions may become fully yours over time.
Fees
Costs charged by a plan or the investments inside it, such as administrative fees or fund expenses. Fees reduce what stays in your account over time, so it helps to know what you are paying.
Time horizon
How long until you expect to need the money. Your time horizon often shapes the questions worth asking about risk.
Retirement income
The money you will live on once you stop working, which may come from savings, pensions, Social Security, or other sources.
Questions worth asking before you decide
Strong decisions start with the right questions.
After a layoff or career change
- 1Which decisions are time-sensitive, and which can wait?
- 2How long might my savings need to cover expenses while my income changes?
- 3What does my severance or benefits package include, and what deadlines apply?
- 4How might a change in income affect my taxes this year?
About an existing retirement account
- 1What type of account is this, and who manages it?
- 2How much am I paying in fees, and what are they for?
- 3How is the money currently invested, and does that match my comfort with risk?
- 4Am I fully vested in my employer's contributions?
- 5What are my options if I leave this employer, and what happens if I do nothing?
- 6When will I need access to this money, and are there rules or costs for withdrawing it?
- 7How does this account fit with my other savings and retirement goals?
Have questions about your own situation?
Bring them to a private conversation with Mei or a member of our team. We'll help you understand your options and what deserves your attention now.
Private Zoom conversation. No cost. No obligation.