Changing jobs can be exciting: new colleagues, more money (perhaps), better benefits, and the opportunity to learn new things. But changing jobs can also be stressful. Not only do you have a lot to learn, there are also many financial issues to consider. The FAQs below will help you to address them.

• If my employer goes out of business and discontinues its health insurance plan, am I still eligible for COBRA benefits?
• I'll be changing jobs next month, and I'm pregnant. Will I qualify for health insurance coverage with my new employer?
• If I leave my job, will I lose my employer-sponsored health insurance?
• If I leave my company, can I take my life insurance policy with me?
• What's so special about "special" enrollment?
• Why should I consider Automatic Payroll Deduction?
• Why are 401(k) plans called “401(k)s”?
• Should I contribute to my 401(k) plan at work?
• How can I plan for retirement if my employer doesn’t offer retirement benefits?
• Can I roll a retirement plan distribution into an IRA?
• Can I still have a traditional IRA if I contribute to my retirement plan at work?

Probably not. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals who lose their jobs to continue group health-care coverage under their employer's plans. However, if your company goes out of business and no longer maintains a group health insurance policy, then no COBRA coverage is available because there is no group plan to attach it to. (There's an exception if you're a union employee covered by a collective bargaining agreement, if the agreement provides for a medical plan.)

If you're not eligible for COBRA coverage, don't despair--you may still be able to obtain health insurance coverage. If you don't find a new job right away, you may be able to purchase low-cost or no-cost health insurance coverage through your state's unemployment office. When you do find a new job, your employer may provide health insurance. You may even be eligible for coverage through a family member's employer-sponsored health plan. Or, you might look into purchasing an individual health insurance plan.

©2003 Forefield, Inc.

That depends on several factors. If your new employer offers a group health insurance plan, the federal Health Insurance Portability and Accountability Act (HIPAA) may apply. This act prevents your new group health plan from treating your pregnancy as a pre-existing condition if you were covered by group health insurance through your previous employer. But read your new policy carefully. Although most health plans cover maternity care and pregnancy, your new plan is not required to do so if it doesn't normally offer such coverage.

Unfortunately, you won't qualify for the protection offered by HIPAA if you had an individual (nongroup) health policy or if you had no health insurance at all. In either case, your pregnancy could be considered a pre-existing condition, and you may be subject to a waiting period under your new health plan.

Even if your new employer's group plan includes pregnancy and maternity care, you may be subject to such a waiting period before you become eligible for coverage. So, if you need prenatal care during this period, you may need to pay for the doctor's visits out of your own pocket. Remember that you may need more care near the end of your term. You may be able to continue health coverage through your previous employer under the Consolidated Omnibus Budget Reconciliation Act, but you'll have to pay the full premiums yourself.

Of course, your new company may not provide health insurance coverage. In this case, you can apply for an individual health insurance policy, but it will be difficult to find an insurer that will cover you at an affordable price due to your pregnancy. Therefore, before you take a new job, make sure that you understand the coverage and eligibility requirements of your new employer's health insurance plan. Plan carefully for the protection of your health and the health of your baby.

©2003 Forefield, Inc.

If you leave your job, voluntarily or otherwise, you may be able to continue your employer-sponsored health insurance under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985. Eligibility does come with some restrictions, however.

Employers with 20 or more employees are required to offer continued health insurance for up to 18 months to employees who leave the company. The employer must make this offer in writing within 14 days of an employee's last working day. To qualify, you, the employee, must have been covered by the employer's health plan on the day before your employment status changed. There may also be state laws that affect your options. You should be aware that you are responsible for paying the premiums for COBRA, and the coverage is usually expensive. Your employer may also charge a fee, up to 2 percent of the monthly premium, for administrative costs.

If COBRA is not applicable in your case, other options are available. For example, you may be able to convert your employer-sponsored health plan to an individual health plan. Although you may not have to pass a medical exam, a pre-existing condition could be excluded.

Another option is to purchase a short-term health policy that covers your health costs on a temporary basis, usually two to six months. Short-term policies are generally not expensive, but you will not be covered for any pre-existing conditions. Insurance companies provide this coverage at reduced administrative costs and then pass the savings on to their customers.

A fourth option is to continue your health coverage through a professional association that offers health insurance to its members at reduced rates. This is a particularly good option if you are self-employed.

©2003 Forefield, Inc.

If you leave your company, you can often continue your life insurance coverage with the same insurance company. The group life insurance contract under which you are insured may have a conversion privilege available to all employees who are insured under the employer's group plan. A conversion privilege will be subject to certain conditions described in the master contract. Typically, these conversion rates are more expensive than an individual policy you could buy on your own if you are healthy.

You generally have 31 days from the day you leave your employer to submit an application. In most cases, you can apply for any kind of individual life insurance that the company offers. The insurance company generally will not include any supplemental coverages, such as disability insurance, that may have been included with your group life coverage.

If you decide to convert to a permanent life insurance policy, the premium will be based on your current age and the same amount of insurance that your group policy provides. The premiums must be based on standard or regular rates. No medical exam is generally required. This is especially important if you are not in good health when you leave employment.

Even if you don't take advantage of a conversion privilege when you leave your company, your group life coverage generally continues for 31 days after your last day of work.

Check with your human resources manager or financial advisor.

©2003 Forefield, Inc.

Special enrollment allows you to make changes to your health insurance selections. Normally, changes can be made only during the annual open enrollment period. But you may be eligible for special enrollment if:

• You or a dependent loses current health coverage benefits.
• You gain a new dependent through either birth, adoption, or marriage.

©2003 Forefield, Inc.

A good way to begin saving is to pay yourself first. One way to do this is to have your employer automatically deduct money from your paycheck and deposit it directly into your savings or investment account. You'd be surprised--over time, regular savings can really add up.

©2003 Forefield, Inc.

Did you know that the term 401(k) comes directly from the Internal Revenue Service tax code? Section 401, paragraph (k) allows employers to offer these tax-deferred plans as a way for employees to save for retirement.

In 2007, you can contribute up to $15,500 of your pretax salary per year to your 401(k) plan, plus an extra "catch-up" contribution of $5,000 if you're 50 or older. If your employer matches contributions, the total amount that you and your employer can contribute in 2007 cannot exceed $45,000 per year, or 100 percent of your annual compensation, whichever is less.

©2003 Forefield, Inc.

Yes. Unless you absolutely cannot afford to set aside any dollars whatsoever, you should contribute to your employer's 401(k) plan. A 401(k) plan is one of the most powerful tools you can use to save for your retirement.

The first benefit is that your contributions to a 401(k) plan are not taxed as current income. They come right off the top of your salary before taxes are withheld. This reduces your taxable income, allowing you to pay less in taxes each year. You'll eventually pay taxes on amounts contributed when you withdraw money from the plan, but you may be in a lower tax bracket by then. You may even qualify for a partial tax credit for amounts contributed.

Furthermore, money held in a 401(k) plan grows tax deferred. The investment earnings on plan assets are not taxed as long as they remain inside the plan. Only when you withdraw those earnings will you pay taxes on them (again, possibly at a lower rate). In the meantime, tax-deferred growth gives you the opportunity to build a substantial 401(k) balance over the long term, depending on investment performance.

If you're lucky, your employer will match your contributions up to a certain level (e.g., 50 cents on the dollar up to 6 percent of your salary). You typically become vested in your employer's contributions and related earnings through years of service (the details depend on the plan). Employer contributions are also pretax and are basically free money (once you're vested), so you should try to take full advantage of them. If you fail to make contributions and receive no match, you are actually walking away from money your employer is offering to you.

Another beneficial feature that many 401(k) plans offer is the ability to borrow against your vested balance at a reasonable interest rate. You can use a plan loan to pay off high-interest debts or meet other large expenses, like the purchase of a car. You typically won't be taxed or penalized on amounts you borrow as long as the loan is repaid within five years. Immediate repayment may be required, however, if you leave your employer. Loan payments are deducted from your paycheck with after-tax dollars.

Finally, 401(k)s are a very convenient and reliable way to save. You decide what percentage of your salary to contribute, up to allowable limits. Your contributions are deducted automatically from your salary each pay period. Because the money never passes through your hands, there's no temptation to spend it or skip a contribution here and there. Most plans allow for contributions as small as 1 percent of your paycheck.

: Employers can allow employees to contribute to separate IRA accounts inside the employer's retirement plan and can allow employees to make after-tax "Roth" contributions to a 401(k) plan. Under certain conditions, these contributions and related earnings may be tax free when paid out to the employee.

©2003 Forefield, Inc.

In many cases, your first step should be to open an IRA and contribute as much as allowable each year. Because of the potential for tax-deferred, compounded earnings, IRAs offer similar long-term growth opportunities as employer-sponsored plans. In addition, you may qualify for tax-deductible contributions or tax-free withdrawals, depending on whether you invest in a regular IRA or a Roth IRA.

Another tax-advantaged option to consider is annuities. Generally purchased from a life insurance company, a typical annuity features the potential for tax-deferred growth and provides either fixed or variable payments beginning at some future time (usually retirement). Depending on the type of annuity, you may have several options in how you ultimately take distributions.

Finally, don't forget about traditional investments (e.g., stocks, bonds, mutual funds). Most of these vehicles are taxable, but they can still help you over the long term. The specific types of investments you select will depend on your risk tolerance, time horizons, liquidity needs, and goals for retirement. A financial professional can help you construct a portfolio that makes sense for you.

©2003 Forefield, Inc.

If you're asking this question, you probably have a 401(k) or other retirement plan through a former employer. The short answer is yes--most retirement plans allow you to roll your plan funds over into an IRA after you've left your employer's service. However, there is more than one way to do a rollover, and how you do it can be critical.

In most cases, your best strategy is to do a direct rollover. This is a direct transfer of funds from your employer-sponsored plan to your IRA. The administrator of your employer-sponsored plan may send the check right to the trustee of the IRA you have selected. That way, the money never passes through your hands. Alternatively, the plan administrator may give the check to you to deliver to the IRA trustee. This also qualifies as a direct rollover as long as the check isn't made payable to you. Instead, it should be made payable to the IRA trustee for your benefit. A direct rollover will avoid tax consequences and penalties.

You can also do an indirect rollover, but it's rarely a good idea. Here, the check is made payable to you. When you receive the check, you cash it and deposit the funds in the new IRA within 60 days. The big drawback: Before releasing your plan funds to you, the plan administrator is required to withhold 20 percent for federal income tax. To make sure you deposit the correct amount, you must replace this 20 percent out of your own pocket. However, if you properly follow all the IRS rules for rollovers, you will avoid tax consequences and can get back the amount withheld for taxes when you file your annual income tax return.

Finally, you may not be allowed to roll over certain types of retirement plan distributions into an IRA. Consult a tax professional for details.

©2003 Forefield, Inc.

Yes. Anyone with earned income who is under age 70 can open and contribute to a traditional IRA. The contribution limit is $4,000 for tax years 2006 and 2007, plus an additional "catch-up" contribution of $1,000 in 2006 and 2007 if you're 50 or older. However, you may not be able to deduct your IRA contributions if you're covered by a 401(k) plan at work. Whether or not you can deduct your IRA contributions depends on your filing status and annual income (adjusted gross income, or AGI). Specifically, for tax year 2007:

You may also qualify for a partial tax credit for amounts contributed to your traditional IRA or your 401(k) plan.

©2003 Forefield, Inc.