Are you sick and tired of your current job? Did you find a new one? Did you perhaps reach financial independence and you’re finally able to retire? I switched jobs about 8 months ago, so I wanted to highlight some things I did to make sure I wasn’t leaving any unused benefits on the table.
My postdoc provided a 401k with really great matching benefits (10%!) that vested in 2 service years. A service year had a different definition from the actual amount of years you worked. You’ve reached a service year if you worked 1050 service hours in a year. You earn 45 service hours for any week that you’ve worked at least 1 hour. So, if you worked 23 weeks in a year, you’ve earned 1 service year.
Each company will have their own definition of vesting period. If you don’t know what the vesting period is, contact HR to get a precise definition. I reached out to my HR department to make sure I was vested before I decided to resign from my postdoc. Otherwise, I would’ve missed out on my 401k match, which was not insignificant.
If you’re quitting your current job for a new one, and you won’t be vested by the time you quit, use the match that you would be losing out on as a point of negotiation for the new position. One of my friends did that and got a $30000 bonus, because he told them that that was the amount of 401k match he would be losing out on if he left early.
If you have been contributing to an FSA, you are eligible to use the entire FSA balance, even if you are leaving early in the year. THis is due to the uniform coverage rule, which says that the entire amount that you elected during open enrollment is available to you on the first day of the plan year. That means that if you elected the maximum amount of the FSA during open enrollment, you will have access to that amount on January 1st of the next year. It also prohibits the employer from recouping the difference between what you’ve contributed so far, and what you’ve received as FSA reimbursements if you decide to leave the employer before year-end.
I did this with my postdoc. My new job started in October and I left the postdoc mid-September. I had some unused FSA funds in August, so I needed to spend down that money before I left. I spent it on period underwear, a gum graft surgery, and medication. Even though my contributions to my FSA were, in total, less than my FSA balance, I was able to use the entire FSA balance before the end of the year. My previous employer also wasn’t able to ask me to pay back the difference.
Health insurance and benefits⌗
If you need to stock up on medication or if you have a weird mole you want to have checked out, now is the time. And if you have other health benefits that you want to take advantage of, do it now. I scheduled as many doctor appointments that I needed as possible, and refilled my prescriptions.
The health insurance at my new job wasn’t going to kick in until November, and my health insurance would run out on September 30. There was a month gap between my new and old health insurance. I could use COBRA to cover October, if there was an emergency. There is a 60 day grace period after a qualifying event to enroll in COBRA, and it is retroactive. Since the COBRA premium is high and coverage is retroactive, I decided to not enroll immediately, unless there was an emergency. If there was an emergency in that 30 day period when we didn’t have health insurance, I can enroll in COBRA and we would be fine. If there was no emergency, I just saved ourselves the high COBRA premiums.
You can also use health insurance on the marketplace to cover you while you are unemployed. We opted to not do this since there would only be a 30 day gap between my previous health insurance coverage and the new one, plus COBRA could save our ass if push comes to shove.
Unused vacation time⌗
I amassed a lot of vacation time during my postdoc. The good thing about paid time off, or PTO, is that it’s literally paid time. Typically, if you accrue PTO, you can get it paid out if you don’t use it at the end of your tenure. Of course, check your work policy to see how you can get your hands on that PTO money. For example, at my new job, I need to give 4 weeks notice in order to qualify for the PTO money. Otherwise, they don’t have to pay it out.
Some companies won’t pay out unused PTO if you don’t meet certain requirements. Or, if you have unlimited PTO, it cannot be paid out, as it is not accrued. If your company does not pay out accrued and unused PTO, or if you have unlimited PTO, use your vacation time up before you give notice. You may not get another chance to use up 2 weeks of paid vacation time for a while, so might as well use it up before you lose it.
Take advantage of any other benefits your current job offers. If you need to buy something and your employer offers discounts, use it. Some examples are dental insurance, training, fitness and wellness, reimbursements, and discounts. You won’t really know what your benefits will be at your new job, so you might as well take advantage of what your current employer offers.
In addition, make sure there are no stipulations that will affect you if you quit. For example, Sandia had a clause that if I left my postdoc within a year, we had to pay back the moving cost.
Make sure you understand the resignation policy of your current employer. My postdoc institution wanted a 2 weeks notice as courtesy, while my current employer wants a 4 week notice for the PTO payout. Also, choose your resignation day carefully, as that affects your 401k vesting period and health insurance coverage. If you need to move out of state for your new job, you can also try to negotiate with your old and new employer for a period of remote work, if needed.
Once you turn in your resignation letter, don’t be surprised if your employer asks you to leave immediately, especially in at-will states. In that case, you might be eligible for unemployment.
Finishing things up⌗
Congrats! You’re quitting your job because you found a new one or you’re retiring (early). Hopefully, the information above will help you figure out what benefits you can still use before you leave your current employer. What benefits or things do you think others should know about before quitting?
Credits: Image by storyset on Freepik