The Great Resignation: What to consider when making a change
At a glance
- What is the Great Resignation?
- Why is it happening now?
- What to consider before resigning or retiring.
What is the Great Resignation?
For over a year now, a phenomenon known as the “Great Resignation” has been making headlines. It refers to the growing number of professionals who are either seeking a new role or retiring. It’s being driven in large part by workers who are age 55 and above.
But, younger individuals are also resigning, although for different reasons.
Helping clients—especially those nearing retirement—manage their portfolios so they’re financially secure when they leave their current roles either to retire or pursue another employment opportunity is one of my specialties. As a professional with over 2 decades’ experience in the financial industry, I’ve seen how the workplace (and how we work) has changed.
At one time, employees didn’t necessarily expect to get personal fulfillment from their jobs. But, that’s changed, and it’s helping to fuel the Great Resignation. If you’re thinking of resigning from your job or retiring early, let’s see how it could affect your financial health.
Why are people leaving their jobs?
Based on conversations with clients, I’ve learned they’re not usually leaving their jobs to open small businesses or pursue other passion projects. Rather, the COVID-19 pandemic has fueled a general sense of burnout, exposed a desire for something new, and, in some cases, caused tension between employees and corporate leadership.
The motivation is simple for many: Maybe they’re simply bored and crave a change. Or, in this case, a change in their career track. They’re ready for something new—especially if they’re close to retirement and feel they can find something more fulfilling.
Other reasons may be:
- The pandemic has changed the ways in which people live and work.
- Remote working has impacted employees and their thoughts about how they work.
- With more time for self-reflection during the pandemic, feelings of unease or unhappiness about work may have surfaced.
Technology and changes in how—and where—we work have also played a part, significantly shifting employees’ expectations and values in recent years.
How resigning could impact your finances
No matter when you resign or retire, there are many factors to consider.
If my clients are considering resigning, retiring, or partially retiring, they want to know they can do so comfortably. So, if you’re considering any of these moves, let’s take a look at some things you’ll need to think about:
- What is your access to health insurance going to be like?
- Will you be able to start contributing to a 401(k) plan right away?
- If not, have you considered rolling over your 401(k) into an IRA?
- If you're moving to a new job, will it be secure?
- What impact will resigning or scaling back have on your long-term financial plan?
- Will you encounter out-of-pocket expenses while transitioning into a new role?
- Is this a good time to sell your home or downsize?
Ready for your next move?
Don’t let the numbers do all the talking.
Whether it’s for a job change, retirement, or partial retirement, consider making a checklist with at least 4 or 5 benefits you hope to gain by moving. Though it may sound counterintuitive, especially if they’re resigning to look for a higher-paying job, I advise my clients not to go just for the money. Don’t leave just for a raise. I’m speaking from personal experience here: Look for red flags when considering a move. If the change only checks off one box, it may not be wise to make the move.
“There’s no need to compromise,” I tell my clients. “You’re established, professional, and not a recent graduate. You shouldn’t have to compromise at this stage in your career. And, you don’t want to find yourself in a new career with the same disappointments you experienced in your old position.”
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