May 19, 2022

A Guide to Quitting Your Job

Make a list of your nonnegotiable monthly expenses — mortgage, rent, food, utilities, insurance, car payments, other debt, child care — and a list of what you can do without. If you don’t already have an emergency fund, you should save at least three to six months’ worth of expenses. Even if your job search doesn’t take that long, that sum doesn’t account for costs you can’t anticipate.

If you own a home, applying for a home equity line of credit before you quit (and lose your pay stubs) can provide added security. “You may not need it, but it is a nice thing to fall back on for extra cash because it is much cheaper than drawing on credit cards,” said Laura Rotter, a financial planner in White Plains, N.Y.

A Roth individual retirement account can also act as backstop: Contributions, but not earnings, can be withdrawn without penalty.

Before you leave, be sure to use (or lose) the money you’ve set aside in your flexible spending accounts, whether for medical or dependent care expenses. Expenses must be incurred before you leave.

There’s good news for employees here, and it may surprise you: You’re entitled to the full health care F.S.A. amount you elected to set aside — even though the money is taken out of your paycheck over the course of the year. If you elected to set aside $2,000 for medical expenses but have had only $1,000 taken out of your checks by the time you leave, you can still spend the entire sum. And your employer can’t make you pay back the difference.

“An employer is stuck with the bill,” said Karen Burke, an adviser with the Society for Human Resource Management, or SHRM, a trade organization.

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