By Ford Stokes, RSSA, MBA
Changing jobs can be an exciting time—new challenges, new goals, and often, new compensation. But it’s also one of the most crucial moments to make smart financial decisions that can profoundly impact your long-term retirement success. Whether you’re transitioning to a new employer, launching your own business, or just exploring what’s next, these seven essential strategies will help you take full control of your financial future.
- Take Control of Your Old 401(k)
When you change jobs, one of the most overlooked financial decisions is what to do with your old 401(k). Too often, people leave their retirement savings behind in a plan that they no longer contribute to or monitor.
Why Rolling Over Makes Sense:
- More Investment Options: A rollover into an IRA managed by a licensed financial advisor gives you access to a wider variety of investment options beyond the limited mutual funds in most 401(k) plans.
- Lower Expense Ratios: Many 401(k) plans include high-fee mutual funds, often with 12b-1 fees that eat into your returns. A managed IRA often allows you to lower your expense ratio significantly.
- Reduced Risk Through Diversification: Professional advisors can help you construct a diversified portfolio with a lower standard deviation—a statistical measure of risk—tailored to your goals and time horizon.
Taking the time to move your 401(k) to an IRA can mean more personalized service, better investment choices, and potentially stronger performance over time.
- Set a Monthly Expense and Income Budget
A job change is the perfect time to reset your financial habits. Start by creating a clear monthly budget that outlines your new income and expenses.
Goal: Save at least 15% of your total compensation.
- Track all sources of income.
- Account for new job benefits and deductions.
- Categorize your expenses into essentials and discretionary.
This isn’t just about budgeting—it’s about future planning. One of the most critical long-term financial goals is building consistent retirement income.
The Case for Fixed Indexed Annuities (FIAs):
If you’re in your 40s or 50s, it’s time to look seriously at replacing bonds in your portfolio with FIAs. Why?
- Principal Protection: FIAs protect your principal from market loss.
- Income for Life: FIAs can generate consistent income with higher payouts than the standard 4% withdrawal rule.
- Deferred Income Options: By delaying income withdrawals, you can increase your future retirement income.
- Immediate Bonuses: Some annuity products offer 15% to 27% in immediate account bonuses that vest over time.
If you move 20% to 40% of your portfolio into a well-structured FIA, you’ll reduce market volatility risk while building guaranteed income streams for your later years.
- Max Out Your IRA or Roth IRA
One of the fastest ways to accelerate your retirement savings is to invest the maximum allowable into an IRA or Roth IRA.
- In 2025, individuals can contribute up to $7,000 (or $8,000 if you’re over age 50) into a traditional IRA or Roth IRA.
- This tax-advantaged growth compounds over time, giving your portfolio a powerful boost.
Why This Is Essential:
Your new job may offer a 401(k), but diversifying your retirement savings with an IRA allows you to take more control of your investments, choose lower-cost funds, and have flexibility if your job situation changes again.
- Eliminate Outstanding Debt
Debt can be a silent killer of wealth. A new job and new salary is your chance to get ahead.
Start with high-interest credit card debt, personal loans, and any outstanding medical or auto bills. Then set a timeline to pay down any remaining student loans or other long-term obligations.
Every dollar spent on interest is a dollar that’s not working for your future. Reducing debt enhances your credit score, lowers financial stress, and allows you to direct more income into savings and investment.
- Make a Plan to Pay Off Your Mortgage
Housing is typically the largest expense for most Americans. Paying off your home—or at least making a plan to do so—can significantly improve your retirement outlook.
Options to Consider:
- Accelerate Your Mortgage Payments: Make one extra payment per year or increase your monthly payment.
- Downsize After Children Move Out: Selling your home and buying a smaller home in cash eliminates your mortgage entirely.
Being mortgage-free by the time you retire means less stress, more cash flow, and greater freedom.
- Get an RSSA Roadmap to Maximize Your Social Security
Too many retirees leave money on the table when it comes to Social Security. The difference between an optimized claiming strategy and a basic one can be tens of thousands of dollars over your lifetime.
That’s why you need a customized RSSA Roadmap.
As one of only 23 Registered Social Security Analysts (RSSAs) in the state of Georgia, I specialize in helping people across all 50 states make the most of their benefits. We examine factors like:
- Your full retirement age (FRA)
- Spousal benefits
- Delayed retirement credits
- Tax impacts of Social Security
We integrate this into your broader financial plan, ensuring your income streams—from annuities, IRAs, and Social Security—are all optimized for tax efficiency and longevity.
- Start Deleting the IRS from Your Retirement Portfolio
When you leave a job and enter a lower-income year—or just have fewer deductions—that’s the perfect window to implement Roth Ladder Conversions.
How It Works:
- Convert portions of your Traditional IRA or 401(k) into a Roth IRA gradually.
- Pay taxes now while you’re in a lower tax bracket.
- Enjoy tax-free withdrawals later in retirement.
This strategy is especially effective from the time you stop working until age 73, when Required Minimum Distributions (RMDs) kick in.
Doing this over time helps you “delete the IRS” from your future retirement withdrawals and maximizes what stays in your pocket.
Let’s Recap: Smart Moves to Make When Changing Jobs
|
Strategy |
Key Benefits |
|
401(k) Rollover |
Lower fees, more investment options, risk reduction |
|
Budget & Save 15% |
Build discipline and a consistent path to retirement income |
|
Invest in IRA/Roth |
Diversify savings, grow tax-advantaged wealth |
|
Pay Off Debt |
Improve financial health and free up cash flow |
|
Pay Down or Eliminate Mortgage |
Lower housing costs, increase retirement flexibility |
|
RSSA Roadmap |
Maximize Social Security and lifetime income planning |
|
Roth Conversions |
Tax-free income in retirement, avoid large RMD taxes |
We’re Here to Help
Changing jobs is a moment of opportunity. At Active Wealth Management, we’ve helped thousands of hardworking Americans take advantage of these transitions to build smarter, stronger retirements.
As the President of Active Wealth Management and Host of the Retirement Results radio show and podcast, I’ve made it my mission to simplify retirement planning and help everyday investors thrive. I’m a licensed fiduciary financial advisor, an RSSA, and a licensed life insurance and annuity agent in all 50 states.
Let’s get started on your plan:
📞 Call me at 770-685-1777
📧 Email me at ford@activewealth.com
📚 Download a free e-book copy of my new book, The Smart Retirement Plan
🎧 Or listen to the audiobook on Audible.com
Changing jobs isn’t just about your career. It’s about shaping your future. Let’s shape it wisely.
All the Best,
Ford Stokes, RSSA, MBA
President, Active Wealth Management
ActiveWealth.com | RetirementResults.com | ManufacturingRetirement.com
