Top 5 Benefit Gaps After Leaving Corporate America

Leaving a corporate job to become self-employed offers many freedoms, but it also comes with the challenge of losing the benefits that were once part of your employment package. To be honest, some of the gaps we discuss below, you likely had prior to leaving corporate America… better late than never right?!:

Health Insurance as a Self-Employed Professional

One of the most significant benefit gaps you will encounter after leaving corporate America is health insurance. While you may have enjoyed comprehensive and subsidized health coverage as an employee, finding and affording a comparable plan as a self-employed individual can be challenging.

• Marketplace Plans: The Health Insurance Marketplace offers a variety of plans that can suit different needs and budgets. Be sure to compare options carefully to find a plan that provides the coverage you need at a price you can afford.
• Health Savings Accounts (HSAs): If you opt for a high-deductible health plan (HDHP), you can take advantage of an HSA. This allows you to save pre-tax dollars for medical expenses, which can help mitigate some of the out-of-pocket costs.
• COBRA: If you recently left your job, you might be eligible for COBRA continuation coverage, allowing you to keep your previous employer's health plan for a limited time, albeit at a higher cost.

Life Insurance… Yes you have it, but do you have enough?

When leaving corporate America, many are found with no or less than an ideal amount of life insurance. As a self-employed professional, you need to protect ?your own life insurance to protect your loved ones.? The main questions to determine are:

• How much coverage should you have?: The point of life insurance or any insurance is to transfer the risk of catastrophic loss.? Death comes with much grief and pain for the loved ones left behind, but there is also an economic loss.? An easy equation for determining your economic value to your family is multiplying your earned income by a multiple based on the years you plan to actively work.? For example, if you are 45 and plan to work another 20 years, multiply your active income by 20.[PC1]?[1]
• How to best structure your policy(s) for cost effectiveness: Life insurance policies can be structured in different years of length (term) and types as well as utilizing a combination of policies for different purposes such as rising income over time.? It is important to work with a qualified professional to help you structure your policy(s) based on your overall wealth building journey.?

Balance Between Types of Assets

As a corporate employee, you likely had access to various savings and investment options, including retirement accounts and stock purchase plans. Transitioning to self-employment requires a careful balance between different types of assets to ensure liquidity and long-term growth now that your income is likely variable.

• Emergency Fund: Maintain a readily accessible emergency fund to cover at least six months of living expenses. This liquidity is crucial for managing the financial ups and downs of self-employment.
• Retirement Accounts: If your assets are heavily tilted here, it may be good to slow down your retirement contributions and start pumping in non-qualified investments into the mix.
• Non Qualified Investments: Having funds that are still available to you for emergencies and opportunities but can be used for long term goals like retirement is a good idea.? Additionally, because these investments have a basis (as opposed to retirement accounts) they tend to spend better in retirement.

Lawsuit, Legal and ID Protection

In corporate roles, you might have had legal support and protections provided by your employer. As a self-employed individual, you need to proactively protect ?yourself against legal and identity theft risks.

• Liability Insurance: Professional liability insurance (errors and omissions) and general liability insurance can protect you from claims related to your business activities.? Don’t forget about protecting your personal balance sheet as well from lawsuits.? Contact your property and casualty agent to investigate personal umbrella liability protection.[PC2]?[2]
• Legal Representation: Having good legal counsel on stand by to help as matters arise and review contracts can save you a lot of time and money in the long run.
• Identity Theft Protection: Enroll in identity theft protection services to monitor your credit and personal information, helping to prevent and address identity theft issues.? Often overlooked, this service can help you stay focused on your mission rather than chasing down thieves!

Protecting Income Without Group Disability Insurance

Group disability insurance provided by employers offers financial protection if you become unable to work due to illness or injury. As a self-employed professional, you need to protect ?your own disability coverage.

• Individual Disability Insurance: Purchase an individual policy tailored to your needs. This can replace a portion of your income if you are unable to work due to a qualifying condition.
• Business Overhead Expense Insurance: This type of policy covers your business expenses if you become disabled, ensuring that your business can continue operating even if you are unable to work.

Leaving corporate America requires a strategic approach to fill the benefit gaps left behind. By protecting ?adequate health and life insurance, balancing your assets for liquidity and growth, protecting yourself legally, and ensuring your income with disability insurance, you can enjoy the freedoms of self-employment with confidence. For personalized advice feel free to reach out and our team is happy to help.? In fact you can book a complimentary 30 minute session here:? https://outlook.office365.com/book/[email protected]/

2024-177676 Exp 7/26

Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. The information provided is based on our general understanding of the subject matter discussed and is for informational purposes only.???

This material contains the current opinions of Joel Gardner and Consolidated Planning only. These are not the opinions of Park Avenue Securities, Guardian, or its subsidiaries. Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America? (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Consolidated Planning, Inc. is not an affiliate or subsidiary of PAS or Guardian.CA Insurance License #- 4122962

[1] https://www.genesiswealthplanning.com/blog/whats-the-right-amount-of-life-insurance-understanding-human-life-value#_ftn2

[2] Neither Guardian nor its subsidiaries issue Property & Casualty insurance and Umbrella Insurance.