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Financial Considerations When Starting a New Job

Financial Considerations When Starting a New Job

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Landed a new job? Congratulations. From a new daily routine and responsibilities to your paycheck, starting a new job can mean lots of changes. Whatever your reason for starting a new job, however, you are likely to see an impact on your finances. Here are a few considerations to keep in mind while you transition into your new position.

New job location. Take a look at how your commute will be impacted. Will you be traveling farther? Or perhaps you may be moving to another city altogether. If that is the case, consider how the move will impact your cost of living. Where will you live and will you rent or buy? When at work, what do your lunchtime options look like? Will it dictate whether you’re brown bagging it daily versus eating out? All of these factors will have an impact on your bank balance.

Effect on significant others. If you are married, have a significant other, or have a family, there are a number of additional considerations. For example, will your spouse be looking for work in the new location? If there is a lag in obtaining the second household income, make sure to note how this will impact your finances.

Working remotely. As many of today’s jobs have made it more convenient for work to be done remotely; perhaps your new position will allow you to do the same. How many days you work from home is up to you and your employer. Just remember that having a home office presents a host of financial considerations. You might consider asking your employer if they will help defray the cost of office furniture, equipment, or supplies.

Wardrobe refresh. Will you need a wardrobe re-do? Your new job might land you in a corporate culture that dictates a different type of clothes you’ll wear. In addition to your look, don’t forget to factor in any new tools or resources to set yourself up for success.

Remember your 401(k). One of the most important tasks is to properly address your 401(k). Here, you have a few options. You can rollover your retirement assets to an Individual Retirement Account, which could afford you the opportunity to structure a portfolio more customized to your financial needs. Or, you can roll the assets to your new employer’s 401(k) plan. As a current employee, you will receive notices of plan investment changes and educational events, thus helping to keep you current with your new 401(k) assets. If you are considering cashing out your plan, keep in mind that early withdrawals (before age 55) will result in taxes and penalties.

Adjust savings and investments. With any change in financial circumstances, taking the time to reevaluate your long-term financial goals is always a good idea. With your new salary, and the considerations above in mind, you might think about increasing the amount you are setting aside for retirement and savings or the amount you contribute on a regular basis to your investment portfolio.

Being keenly aware of the financial implications of your new job is key. Not only will it help you with your short-term goals, but also in meeting the long-term goals of retirement and your broader financial plan. Good luck to you as you move on to greener pastures.

kristen-fricks-romanKristen Fricks-Roman CFP®, CRPS®, is a financial advisor and senior vice president at Morgan Stanley Wealth Management, Atlanta. She can be reached at kristen.fricks-roman@morganstanley.com.

This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Morgan Stanley. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account.

The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.

Morgan Stanley Smith Barney LLC, member SIPC

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