Changing jobs can be an exciting time and with so much happening, it’s not surprising that most people forget about the financial ramifications of moving on. Two of the most important issues to consider are your superannuation and life insurance so here is a financial checklist to keep in mind for when you make your next career move.
1. What happens with my super? If you’ve been in an employer fund, it’s possible you may need to move your superannuation and select a new fund. This may be an opportunity to set up a new fund that’s more suited to your long-term needs and risk profile.
2. Notifying your employer about your choice of super. With most employers now, you can generally choose your own superannuation fund so don’t forget to notify your new employer of your preferred fund. By completing a “choice of super” form, your employer will be required to make all compulsory contributions to this fund. This will keep your super consolidated as opposed to having multiple super funds.
3. Review your life insurance. Looking closely at your insurance is important, particularly if you’re changing superannuation funds. Be mindful that if you roll your funds over to another super fund, that the insurance usually lapses on doing so. The insurance may also only be in existence whilst you are working so if you are out of work for a period of time, you may find yourself uninsured. Most life insurance companies offer a “continuation option” which allows you to continue your insurance cover without the need for reapplying. Don’t make the move until you have the new insurance cover in place otherwise you may find yourself in a position where you aren’t covered.
4. Review your income protection insurance. If you are moving up in the world, make sure you increase your level of income protection insurance to reflect your higher salary. If you don’t have income protection insurance, now is the time to get it!
5. Is salary sacrifice available? For most people, superannuation is one of the best environments in which to accumulate funds for retirement. Ask your new employer if they will allow you to make higher contributions to superannuation from your pre-tax income. Consider contributing a little bit extra to your super as it can make a big difference to your retirement.
6. Start a savings plan. If you have something to save for, you may be able to arrange for a regular deduction from each pay packet to be paid into a high-interest savings account or managed fund. If you are gaining a salary increase, then there is no better time to set some goals in place and save away!
After all the excitement has died down, a change of job can have a significant impact on your financial plans and future. Give your financial adviser a call to talk about how you make the most of it.
Olivia Maragna is the co-founder of Aspire Retire Financial Services and has been recently named the Australian Adviser of the Year. She is providing finance advice as part of brisbanetimes.com.au's Good Advice project. Olivia's advice is general in nature and readers should seek their own professional advice before making any financial decisions.
Send your finance questions to Olivia at scoop@brisbanetimes.com.au or contact@aspireretire.com.au
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