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Financial Planning

Financial Planning Meets Big Job Changes During the Great Resignation

Chase Squires

Why It Matters:

● American workers are leaving their jobs in record numbers. Financial professionals can help clients understand the pros and the cons.
● Work is about more than wages. Consider the impact to retirement plan vesting, insurance, and paid time off.
● Employers may be ready to adjust to a client’s needs. Is a job change truly a better opportunity, or could something be worked out with the current employer?

If 2020 was the year of COVID-19, then 2021 was the year of The Great Resignation. By the third quarter, the government reported some 10 million job openings, the rate of people resigning from work reached a series high, and employers were left scrambling for workers.1,3,4

Many are burned out from the pandemic, and jobs are being left vacant.

This may sound like great news for clients eager to boost their career with a job change. But for those leaving one job for another — or simply leaving a job for mental well-being — there may be consequences. Financial professionals can help clients consider every angle when a recruiter dangles a higher salary or an impressive new title, or even when early retirement beckons.2

Talking with clients before they are tempted could help them avoid leaping before they look.

What’s going on? The Great Resignation

The pandemic shook up the American workforce, and numbers tell the story. Some 20 million Americans left jobs in just the second quarter of 2021, up 60% over the same period in 2020. Searches for quit-related terms spiked, and nearly half of all workers are looking for something new. This is real.3

Workers aren’t just quitting. Many are getting new jobs. Employers are hunting for new workers, and wages are seeing the biggest bump in 40 years. And while higher wages, signing bonuses, and better hours might be enticing, a sudden surge in inflation may also be making higher wages a necessity.4

This can all be good news for clients looking to improve their financial position. But financial professionals can be a valuable sounding board to help clients sort through the pros and the cons. Because there can be cons.

And the Great Retirement

It’s not just job shifts that are catching on. Some “younger older” folks are simply calling it quits. The “Great Retirement” has seen more than a million older Americans toss up their hands and retire.5

It’s unclear whether that’s because of COVID fears, frustration, or if rising investment values finally made it possible. The average 401(k) value was up about 24% over the past year. Some may be realizing they can’t take it with them.5

Clients looking for an early exit may need help understanding tax implications (and potential penalties) for taking money out of a retirement account. There are exceptions, but it can get complicated.6

And clients may not be up to date on how claiming Social Security benefits early can affect monthly benefits and may not have considered how they’ll pay for health insurance prior to Medicare eligibility. For those planning an early exit, financial professionals may want to discuss income strategies or guaranteed lifetime income solutions.7,8

What are the cons? “Leaving it on the table”

Clients who enjoy employer contributions to their retirement savings in a company 401(k) or other plans may look at their account and think that’s their money. But is it? Financial professionals can help by reviewing plan rules for those employer contributions. Workers with “graded vesting” may only get a portion of that match if they leave a job too soon — even if they leave a week too soon.

And for those in a “cliff vesting” situation, leaving a job too early may mean leaving all of that employer contribution on the table. Ouch.9

And there are other workplace benefits as well. Some employers still offer pension plans, especially government positions. There are also so-called “money purchase plans,” sometimes tied to profit-sharing, that may be subject to vesting requirements.10,11,12,13

And then there are the intangibles such as paid time off (PTO) accumulations or other benefits. Employees with lengthy service with an employer may enjoy more time off and could go back to square one with a new company. Paid time off is money for not working, and clients may want to think about that. Additionally, clients may consider available health insurance benefits and potential changes to their care, their network of doctors, deductible levels, and costs for dependents, as well as health savings accounts or flexible spending arrangements availability and add-ons such as life insurance, accident, and hospital indemnity insurance.14,15,16,17,18,19

There are also considerations such as commute times, gym memberships, parking policies, even benefits such as public transit cards or tuition reimbursement. About 40% of companies offer some kind of bonus, whether that’s a year-end, holiday, or other. Leave before that bonus is issued, and there’s potentially more money left on the table.20

Bottom line, there’s more to a job than a paycheck. Clients may be enticed by higher pay, but a financial professional can help compare the true value of an offer.

How are companies reacting?

When employees don’t feel valued at work, more than three-quarters of the time they’ll look for another gig. That’s important, because it costs on average a third of that salary to obtain and train a replacement.21

Companies are reacting to the Great Resignation with a variety of benefits. But sometimes we don’t get what we don’t ask for. Having heart-to-heart, proactive talks with a client can help uncover what really is driving a potential job change. Some things could be fixed at the current workplace simply by asking.

Under the hammer of the pandemic, companies adapted to work-from-home arrangements, and some are planning to extend home-office situations, at least for part of the work week. COVID also focused employers on worker well-being and health benefits.22

Having “the talk” with clients

As the pandemic shakes up the status quo like a giant snow globe, financial professionals may find opportunities to demonstrate their value as a sounding board. A proactive discussion could help keep clients from jumping ship too fast or retiring from the workforce without a complete understanding. Consider:

  • The reasons — and benefits or pitfalls — for potentially changing jobs, or even careers, before making a rash decision.
  • Explore a client’s full employee benefits package, including bonus dates, retirement plan vesting, paid time off and medical leave, as well as medical and other insurance options. It’s possible a client doesn’t fully realize how good she or he has it.
  • In the middle of the home-buying or refinancing process? A job change mid-stream could tangle that process.23
  • While the FIRE (financial independence, retire early) movement has gathered attention, maybe not everyone is clear on IRS rules, and potential penalties, for withdrawing from retirement accounts prior to age 59 ½. A big retirement nest egg might not be all that if it means a potential tax penalty.24 Would getting the help of a qualified tax professional be beneficial?
  • Has the client thought through Social Security benefits and options and customized strategies for optimizing benefits?
  • Medicare, private insurance, and Affordable Care Act options for health insurance prior to Medicare.
  • And next steps. Is there a plan? Rolling the old 401(k) into an IRA? Tapping a retirement plan early under the Rule of 55? There’s a lot to think through.25

It has been a crazy couple of years. A steady stream of online and on-air news could have clients confused or anxious. A sense of “musical chairs” as new jobs open up could entice a client into making a rash decision. Financial professionals aren’t career counselors, but in a period of turmoil, they can start some proactive discussions to help clients understand the consequences of career and retirement decisions.

Things to Consider:

  • The “Great Resignation” is on, and American workers are quitting or changing jobs in waves. 

  • As a financial professional, you can have a proactive talk with clients that may help them make a reasoned decision about job changes and not leave behind valuable benefits. 
  • A workplace may offer more than a paycheck, including insurance and retirement savings options that may not have figured into a client’s decision.

1 “Job Openings and Labor Turnover Summary,” US Bureau of Labor Statistics, December 2021
2 “The Great Recession & The Benefits of Quitting,” University of Colorado Denver, October 2021
3 “America’s Workers Are Leaving Jobs In Record Numbers,” Wall Street Journal,
4 “American workers now have the upper hand as employers rush to raise hourly wages,” Fortune, August 2021
5 “America's new retirement age is 62 — or younger. The 'Great Resignation' is giving boomers their golden years back,” BusinessInsider.com, October 2021
6 “Retirement Topics - Exceptions to Tax on Early Distributions,” IRS.gov, accessed December 2021
7 “Retirement Benefits – Starting Your Retirement Benefits Early,” SSA.gov, accessed December 2021
8 “Estimate My Medicare Eligibility and Premium,” Medicare.gov, accessed December 2021
9 “Retirement Topics – Vesting,” IRS.gov, accessed December 2021
10 “Jobs With Pensions,” MoneyRates.com, August 2021
11 “Choosing A Retirement Plan – Money Purchase Plan,” IRS.gov, accessed December 2021
12 “What Is a Money Purchase Plan?” TheBalance.com, October 2021
13 “What Is a Money Purchase Plan,” Forbes.com, December 2021
14 “The Pros and Cons of Paid Time Off Policy – PTO,” TheBalanceCareers.com, January 2021
15 “In the War for Talent, Employers Hold The Line on Health Benefit Costs,” New York Times (NYTimes.com), October 2021
16 “Healthcare HSA Vs. FSA – Understanding the Differences,” Forbes.com, July 2021
17 “Facts About Life 2021 Workplace Benefits,” LIMRA, September 2021
18 “Glossary of Insurance Terms,” NAIC, accessed December 2021
19 “What Is Hospital Indemnity Insurance?” Forbes.com, October 2021
20 “Employer-provided bonuses: what are they, what types of businesses offer them, and who receives them?” Bureau of Labor Statistics, December 2020
21 “19 Employee Retention Statistics That Will Surprise You (2021),” ApolloTechnical.com, July 2021
22 “How Employers Can Overcome The Great Resignation,” Worth.com, November 2021
23 “Can I Change My Job Prior To Buying A Home – 2021,” MyMortgageInsider.com, September 2021
24 “Financial Independence Retire Early (FIRE),” Investopedia.com, November 2021
25 “How To Retire Early With The Rule Of 55,” Forbes, February 2021


Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical or financial advice or guidance. Please consult your personal independent professionals for answers to your specific questions.