A new job? Don't forget this!
Depending on how you look at it, changing jobs can either be an exciting time or a stressful one. With so much happening, you can be forgiven for being more focused on the new job than on sorting out your superannuation and life insurance. However, both need attention at this time, so here are a few tips for when you make your career move.
- Do you need to move your superannuation? If you’ve been in an employer fund, it’s possible you may need to 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.
- Notify your new employer of your preferred superannuation fund. In most cases, you can choose your superannuation fund. Once instructed, your employer will be required to make all compulsory contributions to this fund.
- Review your life insurance. This is particularly important if you’re changing super funds and you held life insurance with the old fund. Most life insurance companies offer a “continuation option” which allows you to replace your former cover with personal insurance cover (to the same amount) without the need for underwriting. Don’t make the move until you have new cover in place.
- 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 might be the time to get it.
- Is salary sacrifice available? For most people, superannuation is the best environment 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, but don’t forget there are annual limits.
- 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 investment fund.
After all the excitement has died down, a change of job can have a significant impact on your financial plans. Talk to your financial planner about how to make the most of it.