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If you are one of the millions of Americans who have quit their jobs in the past few months, you might be anxious to take the next step for yourself.
Yet, since our work and the rest of our lives are often linked in several important ways, you will likely need to take a few steps before you can completely wash your hands of your old job.
Here are a few:
Almost half of Americans get their health insurance through their employer. If you’ve just quit your job, you’ll want to find out how to get new coverage as soon as possible.
Most people who quit will lose their employer-sponsored health insurance at the end of the calendar month, said Laurier Lucie, director of the health care program at the Center for Labor Research and Education at the University of California at Berkeley.
If you don’t have another job in sight that will provide health insurance, you may be eligible for Medicaid or a subsidized market plan under the Affordable Care Act. Medicaid typically involves low or no monthly premiums, Lucia said. And the plans in the market are the cheapest they’ve ever been for a lot of people, thanks to relief legislation past in the pandemic.
You can compare your options on Healthcare.gov.
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The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows people who work in companies with 20 or more employees to pay to continue their workers’ compensation insurance plan during certain periods. The option is expensive – $ 600 per month, on average – because you are now paying for the cost of the entire plan. (And although the latest stimulus package allowed people six months of free COBRA coverage, you wouldn’t be eligible for this grant if you voluntarily left your job.)
Even if you plan to start a new job soon with new insurance, these options may be worth exploring if there is a gap in your coverage.
“It can help people continue to access the health care they need and avoid big bills if they have an interruption in coverage and use the services during this time,” Lucia said.
Many people also save for retirement through their jobs. Once you’ve quit, if you’ve had access to a 401 (k) plan, you’ll need to decide what to do with that account.
“The choice you choose is extremely important whether you are planning to change jobs or take time off,” said Rita assaf, Vice President of Retirement Services at Fidelity.
You may not want to do anything. Most employers allow you to keep your plan with them after you leave, Assaf said. (However, if you have less than $ 5,000 in the account, the money can be sent to an individual retirement account for you, she added.)
Even if your money will continue to grow, you will not be able to continue to contribute to it. And you may be limited in how much you can borrow or withdraw from the account, Assaf said.
Another option is to transfer the account to an individual retirement account, which can be opened at a bank or brokerage firm. This would allow you to continue to save. You will also be able to withdraw money from this account if you are under the age of 59 and a half without any penalties, she added, if you are using it for the purchase of a first home or for spending. ‘graduate studies.
“Be sure to research the fees and expenses when choosing an IRA provider, if you do, as they can really vary,” Assaf said.
If you immediately switch to another job, you may have the option of replacing your old 401 (k) plan with a new one. Having just one retirement savings account can seem more manageable.
“It’s important to note that not all employers will accept a renewal of a previous employer’s plan, so you should check with your new employer before making a decision,” Assaf said.
What you don’t want to do, if possible, is cash out the account, she said. You will likely fall victim to taxes and penalties, not to mention risking your financial security when you quit work for good.