Editor’s Note: This story originally appeared on Penny Hoarder.
If you’re willing to say goodbye to your 9-to-5, you’re not alone.
Millions of workers have left their jobs in the last year, resulting in the term “big resignation”. Countless others are considering this move. According to the Human Resources Management Association, more than 40% of workers in the U.S. are actively looking for or planning to find a new job soon.
If you’re burned out or frustrated with things at your current job, it may be tempting to give it up quickly without doing any preparatory work. But the more you plan your exit, the better prepared you will be to deal with the consequences.
In addition, shouting “I’m fired” or simply going to work will burn bridges and could hurt your quest for a future job.
This employee resignation checklist describes the important steps to take before you leave work.
1. Determine your next step
If you are not financially independent and do not need a job to afford your lifestyle, you will need an earnings plan after you leave the job. It is better to review your options before you lose your current income.
Consider applying for jobs before notifying your resignation. You may be able to avoid losing income if you can start working in your new role as soon as your old one ends.
If you have an entrepreneurial dream and you don’t care about working for another boss, visit ours the ultimate guide to setting up a business. This list of home business ideas can help you get started with a little capital.
You may decide that you really want to take some time before embarking on your next job. Taking a career break can mean you won’t see a salary, but free time can be invigorating and can help you focus better on what you’d like to do.
2. Save money for the transition
It is wise to create a financial cushion before you leave work. Even if you have another performance in line, it may take a few extra weeks until you receive your first paycheck – or you may find that your new job is not exactly what you imagined it to be.
At least three to six months of cost of living saved in emergency fund is ideal, but it’s best to save that money for real emergencies, such as unexpected medical bills.
Instead, set up a dive fund to save specifically for the costs you will have if you are out of work for a while.
3. Take care of all the upcoming big expenses
Big expenses seem to hurt more when you’re unemployed and living off savings. Before you leave work, think about the estimated high costs – such as new tires for your car – that you can pay now that you are still employed.
It is also important to keep in mind that losing a job can hinder your ability to qualify for funding or credit. For example, if you are in the middle of the process of buying a home, losing your job could harm your chances of getting a home loan, even if you plan to use your spouse’s income to cover payments. You may want to reconsider your plans or time so that your loan is already gone before you leave the job.
4. Use your PTO or other benefits
Before submitting a notice of resignation, make sure you make the most of the benefits provided by your employer.
Some companies will pay bills and sick days when they leave the company, while others will not. If your company does not pay accrued paid leave (PTO), make sure you take advantage of your vacation for as long as you can.
Be aware that your employer may not comply with your request to use the PTO after you have given two weeks’ notice.
It is also best to take advantage of any other employee benefits that you will lose. For example, if your child gets braces, you may want to do so while you still have dental insurance with your employer.
5. Gather the information you will need to flip your 401 (k)
When you leave your job, you will lose the opportunity to contribute to your employer-sponsored 401 (k) plan. Of course, you can continue to save for retirement with an individual retirement account (IRA) or a 401 (k) plan through your next employer – but you may want to roll over money from your old 401 (k) so you don’t have to manage multiple accounts.
If you typically sign in to your retirement account from your work computer, make sure you have your login information and know your account number so you can easily access your account from home.
6. Find out how you will get health insurance
For most people, losing their job means losing access to health insurance, although there is still the possibility of continuing or gaining new coverage.
One of the easiest options may be to include your spouse or home partner in a health insurance plan if he or she has coverage through his or her job. Loss of health insurance (even if it is a voluntary loss of job) is considered a qualified life event, which means that your spouse or partner can add you to their insurance without waiting for an open period for enrollment.
However, you can choose to extend your current health insurance for 18 months through COBRA (Consolidated Consolidated Budget Act). However, when covering COBRA, you will have to pay the employer part of the cost of the premium and the administrative fee.
Since further coverage with COBRA can be expensive, another option is to find a more affordable health plan in the health insurance market. Legislation to stimulate the coronavirus pandemic has simplified the conclusion of health insurance under the Affordable Care Act.
7. Find out how you will receive your last salary
Your last paycheck may not come with a direct deposit according to the schedule you are used to. For information on how they issue final salaries, consult the Human Resources Department or the Employee Handbook of your company.
Some companies will send you a paper check, even if you have been registered for direct deposit in the past. Make sure your address and other contact information are updated in your employee records.
Also, write down the contact information for your manager or HR representative if you encounter any problems or inconsistencies when it comes to final payment.
8. Create a professional resignation letter
Although it is best to communicate the news to your boss in person, you will want to proceed with an official resignation letter.
Your resignation letter must include the date of your last working day and other important details, such as any projects you intend to complete. You may want to include a reason to leave the company, but it’s better to keep things unclear than to burden your employer and potentially burn the bridge.
See this article for smart tips write a complete resignation letter.
9. Tie loose ends
There may never be an ideal time to leave work – after all, work never ends – but your resignation will be accepted more favorably if you don’t resign during a busy season or in the middle of a big project.
If possible, try to time your resignation so that you can commit to the loose ends of the work you are currently doing. You are more likely to receive a positive recommendation from your employer if you can spend time training a new employee or ensuring knowledge transfer so that your colleagues can step into your role when you are gone.
It is also helpful to use this time to collect contact information to stay in touch with your co-workers. Remember to ask your manager to use it as a reference for the job.
If you work in an area where you need to gather evidence of past work experience in the portfolio, gather what you need before filing a notice. Your employer may choose to terminate your relationship with you immediately instead of waiting until the selected end date. You don’t want to lose access to files you may need for your portfolio.
10. Prepare for the exit interview
Before you leave, your employer may want to sit down with you and discuss your reasons for dismissal. While exit interviews can also serve as a way for businesses to gain information on what they could improve, remember to handle things professionally to get on good terms.
Prepare for a tactful conversation about why you’re leaving, what you think about your time at the company, and what constructive criticism you could offer your future former employer.
Once you’ve gone through all the things on this list, you’ll be well prepared to leave the job without regret.
Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click the links in our stories.