Leaving a job or changing careers is a big decision. It’s more than just updating your résumé or finding a new role—it’s about protecting your financial well-being, understanding the impact on your future and mental well-being, and making sure you’re set up for success.
Things to consider when changing jobs in the same field
Switching jobs within the same field can feel like a smaller leap, but there are still a few practical and financial aspects to consider.
What happens with my pension contributions and retirement savings?
If you’re part of a pension plan, find out what happens to your contributions when you leave. Some pensions are portable, meaning you can transfer the funds to a personal retirement plan like a Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF), Tax-Free Savings Account (TFSA), or roll them over to your new employer’s plan. If there’s no transfer option, you may be able to keep the funds with your old employer’s pension plan, depending on the terms.
Additionally, if your employer offers a group RRSP or other investment options, you’ll want to understand what happens when you leave. Many plans allow you to roll over funds into a personal RRSP, helping preserve tax advantages and keeping your financial goals on track. It’s worth checking if there are fees or penalties for transferring accounts and if your new employer offers similar options.
For example, Emma has been contributing $200 per month to a group RRSP through her employer for the past 5 years. Over this time, with contributions and investment growth, her account balance has reached $15,000. Emma is also leaving her current job and must decide what to do with these funds.
She can transfer the balance to a personal RRSP, allowing the full $15,000 to move tax-free while continuing to grow, keep the funds in the group RRSP if her current employer allows it, or withdraw the funds entirely and pay taxes on it.
Emma ultimately decides to transfer the $15,000 into her personal RRSP to help her maintain the tax advantages and continue to grow her retirement savings.
Reviewing your options can help ensure your retirement savings continue to grow as you transition.
What happens with my health and insurance benefits?
If you’re changing jobs, your new job may offer similar health benefits to what you had, but with some differences. Find out if your new job has a waiting period before health and dental benefits kick in. If there’s a gap, consider personal health insurance to cover any unexpected needs during this time.
Freedom to Choose health and dental insurance could be a good option to help bridge any gaps left by public healthcare systems. Also, review if your new employer offers life insurance and disability insurance, as these can vary from job to job, and these insurance products can't be carried over to your new job.
What do I do about any relocation costs?
If your new position requires a move, relocation expenses could be a factor if the new job is in a different city. Some companies provide relocation assistance to cover costs like moving, temporary housing, or even transportation. It’s helpful to clarify these benefits upfront to avoid unexpected expenses during the transition.
What if I experience a gap in paycheques?
Sometimes, moving to a new job can create a gap in your income. For instance, if you leave your current role mid-month, your final paycheque might not align with your first one in the new position. Putting money away each month or having a budget could be effective strategies to help you plan for a possible gap in income while you transition to your new role.
What happens with my vacation and other benefits?
Unused vacation days or other leave benefits may be paid out when you leave a job. However, your new position might have a probation period before you can start accruing leave again. Checking the new company’s policy on vacation time and other benefits, like bonuses or retirement matching, will help you budget your time and expenses accordingly.
Things to consider when changing careers
Changing careers—moving into a new field—can involve bigger shifts in your finances and lifestyle. It’s an exciting journey, but planning carefully can help make it smoother.
What do I do about education or training costs?
Entering a new field often means learning new skills or getting certified. Going back to school or taking specialized courses may come with out-of-pocket expenses that can add up. Before making a change, check if there are options for part-time classes or online programs that fit your budget.
Additionally, some professional fields have training programs that allow you to work while you learn. Budgeting for these costs ahead of time can help you start your new career on solid footing.
What if I have a lower starting salary?
Many career changes involve starting at a more junior level, which can mean a lower income, at least initially. This potential temporary pay cut might feel challenging, especially if you’re used to a certain salary level.
Planning for this shift in advance by reducing discretionary spending, increasing your emergency fund, and having a budget can help ease the transition.
Would I have to adjust my investment contributions?
With a reduced income or higher education costs, you may find yourself investing less during this period of transition. This doesn’t mean you have to halt progress on your financial goals.
Adjust your contributions to fit your new budget, by connecting with your advisor that can help you alter your retirement plan to fit your new needs. Once you’ve gained experience and income in your new field, you can refocus on building your savings.
How would my long-term financial growth be impacted?
While there may be short-term sacrifices, changing careers is often about long-term fulfillment and growth. Research the income potential in your new field and set realistic goals for advancing within it.
If you already have long-term financial goals like paying off a mortgage, saving for your child’s education, or retirement planning, in the short-term, you could connect with your advisor who can help you adjust your plan to address your new short-term needs. This way, you can view the transition as an investment in your future, helping you feel positive about the trade-offs you may be making now.
Whether you’re changing jobs or pivoting to a new career entirely, thoughtful planning can help you make choices that support both your short-term needs and long-term goals. It’s your journey—make it one that feels right for you.