Life 2.0: Financial Considerations When Exiting the Corporate Life

If you’re a C-suite executive who plans on exiting the corporate life, you may want to take your foot off the proverbial accelerator.

While visions of sipping a margarita by the beach alongside your loved ones may be filling your daydreams, we also know you’d like the peace of mind that financial security brings when you do make your departure.

Before making life-altering decisions like retirement or career changes, you’ll want to make sure your finances are in order and that your timing is right. Your investments will need to be able to support your desired lifestyle for the next two (or more) decades. They’ll also need to withstand the myriad of possible futures that could play out in the economy or with your health. Ultimately, you want to make sure an early exit isn’t propelling you headfirst into a financial nightmare.

The Pandemic: An Awakening for Executives to Reevaluate their Careers

For many executives, exiting corporate America can bring up a flood of conflicting emotions. On one hand, you’re likely looking forward to spending more time with your family and doing the things you love; on the other hand, you may be feeling fear and uncertainty creeping in.

If that’s you, you’re not alone.

According to the Bureau of Labor Statistics, 47 million Americans took the leap in 2021 to quit their jobs, and two-thirds of American C-suite executives considered quitting their jobs early in 2022.^[1]

Experts have attributed this to a host of reasons, including a desire for remote work and widespread feelings of being burned out.

Spontaneous job transitions can result in an immediate feeling of relief. They can just as easily result in financial distress down the road if you don’t have the right pieces of the puzzle in place.

Let’s break down some different types of exits.

The Squishy Exit

Even if you’re not planning on it, your early exit may come sooner than you’d like. The unfortunate reality is sometimes the timing of an exit is decided for us.

Even if you have a retirement date in mind, your employer may let you go before you reach that point. You could be a C-suite executive who has been loyal to your company for decades, but your board may decide it’s time for you to step down and take on a different responsibility. Pushing executives out of the way during their 50s to make way for the “next generation” is a common occurrence in many industries.

In alternative scenarios, your company may have a mandatory headcount reduction that results in your role being eliminated. Even if you’ve performed well above expectations, you can still find yourself facing an exit.

Saving for emergencies and creating a backup plan with the help of a financial advisor is crucial at all times. Even if you’re someone who makes half a million per year in your mature career, if you don’t save well, you may have to sacrifice your current lifestyle.

The guidance of a financial advisor can help you rest assured that in the case of an unexpected lay off, you and your family will be taken care of.

The Stress-Reducing Exit

You could be looking to exit your job early due to a sudden increase in workload or work stress. You may be willing to sacrifice pay to find a slower-paced role with fewer responsibilities and drains on your time and energy.

If so, you’ll be joining the one-third of Americans who switched jobs during the pandemic due to stress, according to a recent survey by Prudential.^[2]Keep in mind that the “grass is greener” mentality can get you into trouble.

The luring melody of the self-employment piper may sound like a delightful change of pace, but building a business from the ground up means making sure you’re protected against the possibility of income fluctuations.

An industry-shifting move could put you working for a company that more closely aligns with your core values, but it could also mean starting over at the bottom rung of the career ladder alongside a cast of recent college graduates.

The Early Exit

If you’re a younger executive who is years, or even decades, from the traditional retirement age, you may have a vision of working extremely hard now so you can retire early.

In fact, an early exit has become increasingly popular with cohorts like millennials, who according to one survey want to retire on average at age 59.^[3]

Another consideration is to have a plan of what retirement will look like if one exits early. It may be possible that you will get bored, and so we recommend having a vision of your post-exit years.

Questions to Ask Yourself When Planning Your Exit Strategy

If you connect with any of these sentiments, or are considering a career shift or exit for whatever reason, here are some key questions to consider before handing in your resignation:

• What work (or other activity) would be your ideal focus for the next twenty years?
• Are you physically able to continue working for the next five, ten, or twenty years?
• Are you feeling overwhelmed because you are burned out of corporate life or simply need to transition into a role that is less demanding of your time, energy, and focus?
• Would your financial goals remain on track if you changed careers to a lower-stress or lower-paying job?
• Can your reduced income support your lifestyle and family’s needs?
• What are you leaving on the table (i.e., stock options) as a result of the shift?
• Are you able to justify the cons that come with starting over in a new organization?

The Bottom Line

If you’re ready to start planning your exit, SYM can help. Using our financial planning expertise and other proprietary processes, SYM can provide thoughtful analysis on when a career change is possible without altering your lifestyle and financial goals. We believe we can help you navigate the next chapter to make your vision a reality.

Click here for your Free SYM Life 2.0 Readiness Assessment and schedule time with a financial advisor.

Prefer to call us instead? Feel free! 800-888-7968

Sources:

https://abc7ny.com/great-resignation-quit-job-resignations-remote-work/11814095/

^[1] https://www.cnbc.com/2022/03/14/one-third-of-job-switchers-took-a-pay-cut-for-better-work-life-balance.html

https://nypost.com/2022/06/22/many-c-suite-executives-want-to-quit-over-burnout-survey/

^[2] https://news.prudential.com/presskits/pulse-american-worker-survey-entering-year-three-pandemic-american-workers-face-new-challenges-and-changes.htm

^[3] https://www.altoira.com/researchi