As a follow up to my post, “I Thought Quitting a Job Should Equal LESS Work”, I’ve come across some nifty tidbits that those of you who are still gainfully employed may find useful if you too ever decide to quit!
3. What happens to my 401k? (Rollover or leave it as is? Do I accumulate higher fees by leaving it in place when I’m not with the company anymore?)
I called T. Rowe Price and shockingly there are no fees associated with my 401k plan, even pass-through ones from my former employer. Additionally, the expense ratio on the mutual fund doesn’t increase beyond the current 78 basis points. So I’ve decided to keep it where it is for now, and I can always do something else with it later.
4. What happens to my employee stock purchase plan? I looked up my Fidelity account online (where our ESPP is held) and basically they just cashed me out of what I had been accumulating in the ESPP year-to-date into a cash account. So now I just need to empty that Fidelity account into some other account, or leave it where it is and earn 0%. Sounds like a wash at this moment in time.
9. Using my HSA – just keep using the debit card? How do I track it if I can’t get on the employee website? Yes! Just keep using the card and I can get on the website afterall! There is, however, a new $4.00/month service charge. Yuck. ALSO, for those who are using a limited flexible spending account (FSA), this is super interesting: You can withdraw whatever amount you indicated for the whole year for qualified purposes, on Jan 1. Okay, you knew that. But if you then LEAVE the company, you DO NOT have to pay anyone back for the difference of what you spent versus what you have put into the account year-to-date (as your deposits are spread out over each paycheck). I guess this is somehow the flip side of “use-it-or-lose-it” since you lose whatever funds are left in the account unused at the end of the year. In reading up on this, it seems that this is a risk-shifting product whereby the employer takes on the risk that you will use all the designated funds in the account. They win if you leave money sitting there at the end of the year. I read one story online about someone who designated the max dollar amount allowed for the FSA, got lasik eye surgery in early January, got reimbursed up to that max dollar amount even though they had only paid in say 1/12th, and then quit shortly thereafter. Essentially, they got a greatly reduced eye surgery! What a racket. So, moral of the story: if you are thinking about leaving your job, use up whatever’s left in your FSA before you go!