Considering quitting your job? Here's what to do first.
Your job likely comes with a number of financial strings attached


As tempting as it may feel at times, quitting your job is something that is better to avoid doing on a whim. With a well-considered plan in place, however, you can not only strategically free yourself up to pursue new opportunities — you can also make sure the financial transition between positions goes smoothly.
Whether you have been at your place of business for just a few months or are a long-tenured employee, your job likely comes with a number of financial strings attached. There is your regular paycheck, of course, but there may also be benefits, health insurance coverage and a retirement account you are leaving behind. Here is how to navigate all of these things amid your departure.
Make sure your savings is well-stocked
Before you say goodbye to the place you get your regular paycheck, make sure you have some backup funds in place. Even if you have another job lined up, there may be a little bit of a gap between receiving paychecks. Savings also opens up the option of taking some downtime between workplaces.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
As for how much to stash away, "'if you can go from one position to another, six months to a year is a safe bet,'" said Sally Brandon, the vice president of client services at a retirement and investment management firm, to Discover. Keep those funds "stashed in a high-yield savings account so you can earn higher amounts of interest on your balance," said CNBC Select.
Use up any remaining benefits
Prior to making your escape, try to take advantage of any benefits you can't take with you. For instance, "are there opportunities for you to save on commuting expenses, family care, pet insurance or fitness memberships? Are there discounts on financial services?" said Morgan Stanley.
You might also investigate whether your employer pays out unused PTO — "if you have unused days that won't pay out when you quit, now is the time to use them," said NerdWallet. Same goes for any leftover FSA funds, which "won't follow you to the next job."
Figure out a plan for health insurance coverage
It is also key to have a plan in place so you have uninterrupted health insurance coverage. "Figure out when your employer-paid insurance is going to end, and who will insure you after it does," whether that is by "temporarily extending your coverage through COBRA" or starting your new role a little sooner to avoid a gap, said NerdWallet.
Also remember that "switching to a new insurer will reset your deductible, so if you have met or are close to meeting your current deductible, now may be a good time to get any health care you've been putting off," said NerdWallet.
Consider how to handle your retirement account
"It is estimated that so-called 'orphaned' retirement accounts [which are left behind when an employee changes jobs and neglects their funds] total a staggering $1 trillion," said Discover — so make sure yours does not join the ranks.
You have a few options for what to do with the funds, including "leaving your assets in your former employer’s plan, if permitted," or rolling over your funds to your new employer's plan or an IRA, said Morgan Stanley. You can also "cash out and take a lump sum distribution," though "this would be subject to mandatory 20% federal tax withholding as well as potential income taxes and a 10% penalty tax."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.
-
The best historical fiction of 2025
The Week Recommends Let these compelling tales whisk you away to another century
-
Taz Sarhane's mallard with pine nut sauce and boulangère potatoes
The Week Recommends Bold duck, crispy potatoes and silky pine-nut sauce come together in this earthy yet refined dish
-
Cambodian pork and rice recipe
The Week Recommends This street-food dish is traditionally eaten for breakfast, but makes a delicious dinner, too
-
What to know before cosigning a loan
the explainer Consider the long-lasting implications before helping out a loved one
-
How often should you check your credit report?
The explainer Contrary to what you might expect, your credit report does not contain your credit score. But it does offer a lot of other valuable information.
-
The basics of credit scores: how they are determined and why they matter
The Explainer A higher credit score is better than a lower one
-
How to invest for short-term vs. long-term goals
The Explainer You may want to implement a planned home improvement project in the near future while also saving for your eventual retirement
-
Standard vs. itemized deductions: Which should you take?
the explainer The deduction you choose can impact how much you save on your taxes
-
Are bonds worth investing in?
the explainer They can diversify your portfolio and tend to be a safer investment than stocks
-
What are your retirement savings account options?
The explainer The two main types of accounts are 401(k) plans and individual retirement accounts (IRAs)
-
What is your net worth and why is it worth knowing?
the explainer Take stock of your assets