Jan 6, 2022
With the new year comes fresh starts. Maybe you are thinking of changing careers or retiring early. A recent Forbes article names the rise in people quitting their jobs the “The Great Resignation.” On today’s episode, we’ll explain this term and what it can mean for your retirement.
4.2 million people quit their jobs in October of 2021 alone. A lot of workers were able to re-evaluate their working lives these past few years. Many don’t want to commute back to the office. People are starting to value new priorities when it comes to working. If they are forced with the choice, many are choosing to retire early rather than return to the office.
Social Security Impacts
Whether you are changing jobs or retiring early you should think about how it will impact your Social Security.
If you spend time unemployed that’s money you are not putting into Social Security. This can impact how they calculate your payments later on. Develop a plan to cover this income loss if you need to.
A significant amount of people took money out of their retirement accounts in 2020. Most of them did it to cover living expenses. If you are doing this as a respite from work, know this may harm your long-term retirement plan.
If you do have the opportunity to change jobs, should you leave your 401(k)? We generally recommend rolling it over to an IRA. With an old employer, it’s harder to manage and you can be subject to new fees. Oftentimes people even forget where their 401(k)s are.
You’ll also want to consider employer matching programs too. Is your current employer due to match your contributions? How long will it take for your new employer-sponsored plans to take place?
When you are making these big changes, you want to ask the right questions. Asking your advisor about retiring early is a great place to start.
Forbes Article: https://www.forbes.com/advisor/retirement/great-resignation/
What we discuss in this episode:
1:17 – Forbes article on “The Great Resignation”
3:20 – 4.2 million people quit in October
5:45 – Everything has a ramification
7:12 – Social Security impacts
10:32 – 401(k) impacts
11:53 – Procrastination quote
13:23 – Rolling over your 401(k)
16:15 – Will your old employer be matching?
19:22 – Medicare and health insurance
For more, visit us online at http://flemingfinancialservices.com