Even with all of the media focus on “The Great Resignation,” deciding to quit your job is a big decision — one that requires a lot of reflection and intentional decision-making.
One of the biggest challenges to leaving an employer is finding health insurance after quitting. And health benefits aren’t the only perks that prevent people from resigning.
Now may be the right time to reprioritize and finally say goodbye to your status quo. But making a hasty decision could lead to remorse. You might not be factoring in some costly aftermath in your desire to quit.
We’ll cover five important questions to ask yourself before making the final decision. We’ll also cover factors to consider, like how quitting affects your insurance and other financial responsibilities.
Do I have another job lined up?
One of the best reasons to quit one job is to start a better job. Ask yourself what job opportunities quitting would allow you to pursue. If a new job improves your quality of life, now might be the time to tender your resignation.
If the new opportunity you seek is just hypothetical, be cautious. Finding a new job can be more difficult than you expect. Consider postponing your resignation until you’re offered a new job.
Keep in mind that if your new job requires moving, you need to budget about $3,000 for moving expenses. This estimate can vary based on the distance of the move, but moving costs add up. Research the area you might move to because living expenses vary greatly depending on location.
Perhaps your new job opportunity lets you stay where you are and offers a perk like remote work opportunities or a significant pay increase. Quitting one job for a better job is a no-brainer.
If you hesitate to sign your resignation letter, chances are you need to ask a few more questions.
Am I realistic about a new job?
We all suffer from the “grass is greener on the other side of the fence” complex at different points in life. If you think a new job will solve all your problems, think again.
Being realistic about your expectations for a new job will improve your perspective on your current situation. A new job might make life better, but it’s also possible you are ignoring potential problems in that new job.
To get an inside view of a prospective job, find people who work there and ask them about the pros and cons. If you anticipate an interview with a new employer, make a list of questions about the company and position that will paint the whole picture.
Asking three different people you trust what they think about your potential new job helps with perspective. Reality might set in, and your current job might look better and better. Or you might get the reinforcement you need for quitting.
Will I be able to replace my job benefits?
If you are savvy enough, you certainly can replace your current benefits after you quit. You might even come out ahead, but it takes work to figure it all out.
You can get health insurance through state programs, health shares, and even temporary insurance. However, these options are generally more expensive than job-provided health insurance because employers get group discounts.
You will not lose your retirement account, but you do need to move it. If you don’t roll over your 401(k) to a new employer’s plan, you can move it to an individual retirement account (IRA), or you can cash it out.
If you rely on your current employer for college debt relief or education reimbursement, it may make it harder to quit. Working full-time and going to school is stressful. But if your job pays for your degree, it may be worth hanging onto a little longer.
Consider postponing your job move until you finish your degree or get your school debt paid off. Unfortunately, these job perks are becoming harder and harder to find.
If you already have a new position in the works, compare benefits. If your new job has a better pay scale but only offers limited benefits, stop and take a closer look.
Can I collect unemployment insurance if I quit?
Of course, unemployment is available if you get laid off. Also, most of the time, people who get fired can still collect. Quitting, however, is a different issue. The quick answer to whether you can collect unemployment if you quit is no.
It is possible in some cases for you to qualify for unemployment benefits after quitting. The key is to prove a good enough reason for leaving. Often you might face an initial denial of benefits.
You can appeal a denial and eventually get funds. First, contact your local unemployment office. Often these offices are swamped and the process will take time.
But if you think your case might need extra help, you can call your local government representative’s office to get prompt attention. They can pull strings and get your file to the top.
If you can prove you are being forced to quit or facing wrongful termination, you will be eligible for unemployment benefits. Sometimes employers or coworkers intentionally make your job miserable to encourage you to leave. It may be hard to prove this, so beware.
Quitting because of extenuating circumstances will still leave you eligible for unemployment. Most states consider situations such as caring for family members in crisis, escaping domestic violence, or your own medical emergency as good reasons to quit
Is my budget flexible enough to handle an employment gap?
Even if you are quitting to take a new job, you may experience a financial gap. Carefully consider how much you have in savings and make sure it’s enough to cover a temporary gap.
Sometimes new jobs do not pan out how you expect, and you may find yourself financially stretched. If you quit a current job to take a new job that never comes to be, you might still be eligible to collect unemployment.
If you plan to take a break in employment, save up enough to cover basic costs in the meantime and look for ways to save money. These breaks often last longer than you initially planned, so leave plenty of wiggle room in your budget. You may even be able to lower your car insurance rate, especially if you’re no longer doing a daily commute.
Sometimes, quitting is the only right answer. Maybe you need to change your job to work from home while caring for a loved one. You can’t quantify the pros and cons of quitting in some of these situations.
It’s always a good idea to keep yourself current on the job climate. Even if you don’t plan on immediately applying for jobs, it’s wise to have a resume ready and get comfortable with online job search tools.
Before you quit your current income, carefully count the potential costs of quitting. Line up a new job if at all possible.
When you sit down to work out the figures, factor in moving expenses or financial strain between paychecks. Finally, ask some trusted friends for some advice. They might see things a little more clearly standing outside the situation.
About the author:
Maria Hanson writes and researches for the insurance comparison site, Clearsurance.com. She is passionate about empowering individuals to navigate insurance topics confidently and competently.
