Understanding employee benefits and getting the most out of what is offered to you can be a difficult and time-consuming endeavor. Having a financial advisor to help evaluate your options and weigh them against your financial goals can be invaluable. Here are three ways a financial advisor can help with employment-related issues.
Job changes
Whenever you make a big professional move, it can impact your financial life, especially if you are changing careers or switching employers as a seasoned and highly-compensated professional. A financial advisor can help you transition your retirement assets and reassess your finances in light of your new circumstances. For instance, if you are changing employers and have a large 401(k) balance, an advisor can provide the benefits and drawbacks of keeping the old plan, moving the assets to your new plan, or rolling over the funds into your own IRA.
Salary increases
When you have more money coming in suddenly, it may be time to put together a plan. While you can use that money to raise your short-term quality of life, you should also consider using it to increase your wealth and future financial position. Financial planners can help you decide where to invest, what options you have, and what might be the best way to increase your overall wealth.
Stock options
If you receive equity compensation as part of your compensation package, you take on the responsibility of managing both the costs and benefits of the awards. Equity compensation commonly comes in the form of Employee Stock Ownership Plans (ESOP), Incentive Stock Options (ISO), Non-Qualified Stock Option (NSO), Restricted Stock Units (RSU), or an Employee Stock Purchase Plan (ESPP). The tax consequences of certain actions relating to equity compensation are typically immediate. In most cases the tax consequences are irreversible, and the IRS will expect you to pay your taxes whether or not you have the proceeds to do so. A financial advisor can help weigh the upfront or deferred tax liability and help you make the best decision for your financial future.
If you are receiving equity compensation or have questions about a job or salary change and how it affects your financial future, we would be happy to help. Please contact us here.
Our final article will focus on how a financial advisor can help with cash windfalls and with formulating a plan for charitable giving.
