Have You Considered These Things When Changing Jobs? Superannuation, Personal Insurance & Cash Flow.
There is quite a lot to think about when changing jobs. From how will you remember everyone’s names on the first day, to where the lunch room is and will someone steal your lunch from the communal fridge.
Not to mention learning a new role in a new company and getting off on the right foot. Here is an extremely simple post from a Sydney based financial adviser.
While it’s an exciting time, there are a few very important things to keep in mind from a financial housekeeping perspective with the key points on ‘why.’
Your hard-earned Superannuation Money
Do you know where your Superannuation contributions will be going to?
Take a look at your new employment contract to see all the benefits you have access to, that way you can make an educated decision before choosing what to take advantage of or not.
If you have a Corporate Super Plan that’s awesome, your employer has struck a deal with a Superannuation provider to give you some extra benefits!
This is typically in the form of discounted fees, a variety of investment options and even automatic and discounted personal insurance cover.
However there are some risks to consider here; most of these policies won’t continue if you change jobs to a different firm.
What normally happens is you will be moved to a standard/ ‘Personal’ superannuation plan with higher fees, in a ‘default’ investment option and your very important insurance cover will be cancelled, or you start paying some hefty premiums for cover you that don’t know is good, average or ugly.
Being issued a new superannuation fund is not a bad thing as once again this time is ‘super’ important to make sure you take up all the positives you can – accepting many of these extra benefits have a 30-90 day period where you will need to contact them to accept a) b) or c) options.
It’s important to keep in mind that if you have never reviewed any of your policies, you may not know what currently have in place, you won’t know your balance, the multiple sets of fee’s and premiums you are paying or the strategy behind the investment option you have in place.
Get some clarity!
Another part of your superannuation that many people forget about is knowing who you have nominated to receive all your funds (plus any insurance benefits) from your Superannuation account in any unfortunate circumstances.
Keep an eye on this with change in circumstances such as new partners, ex-partners, family relationships changing etc.
If you don’t have this set up as a Binding Nomination, then the Superfund Trustee will make the decision on who those funds go to. Are you happy with that?
Personal Protection – Insurances within these Superfunds
Many Superannuation policies come with ‘Automatic Acceptance Insurance Cover.’
Typically, there is no ‘Medical Underwriting’ with many of these policies which can be a great thing or a terrible thing…all depending on the wording in the fine print details and your personal circumstances.
Some policies will give you a certain amount of cover marking prior health issues irrelevant and ‘already acknowledged’ through the claims process where others will state you aren’t covered for any pre-existing conditions – this is where knowing all the facts helps you make an informed decision that can deliver you a positive outcome.
If you are anything like me with prior health conditions, it’s so important that you check these finer details – there is a chance you may be covered for a condition insurers have excluded you for.
Multiple super funds can mean duplication of personal protection cover especially with respect to Income Protection cover where there is a limit of what you can be paid (let’s go with 75% of your income package).
Just because you have 5 different Income Protection policies paying premiums through your Superannuation, doesn’t mean you will get paid all those amounts – you will only get up to that Income Protection limit from ONE of those providers, who will all argue that they shouldn’t have to make the payment.
Make sure what you have in place has a purpose!
Cash at call
There is a good chance that your ‘pay cycles’ wont completely match up when heading to a new company so be prepared to go without a pay coming through for up to 2 months in some cases.
Make sure you have access to cash to make it through day to day and a long term budget in place to make sure things like future mortgage payments don’t fall behind.
It may not be the sexy side of advice, but it is important to have your foundation in place before you continue to build.
This same article was also written on my personal LinkedIn account https://www.linkedin.com/pulse/have-you-considered-things-when-changing-jobs-kristian-zuza/
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I have the pleasure of working with Kristian. First things first, Kristian takes a step back from the typical approach when it comes to peoples financial affairs - he wants to know about you as a person first, then how he can help. It is refreshing and easy to relate because it mimics the way I operate as a Personal Trainer. The things are extremely obvious with Kristian; he genuinely cares, he's easy to talk to about anything (especially sports and cars), for a lively guy he's very relaxed and composed (not a usual mix), and when it comes to his job there is no doubt that he really knows what he is doing. I recommend anyone to make contact.
Senior Personal Trainer