Getting the Most From Your Job

Jan. 26, 2005 -- -- As the majority of your waking hours are spent on the job -- an average of 42 hours a week according to a recent Gallup poll -- ideally, work should be satisfying. Given the weakened state of the job market over the past few years, however, most people have been happy to simply have a job and have not paid particular attention to their satisfaction meters. Specifically, the U.S. economy lost 2.4 million jobs between 2001 and 2003. Last year, though, signaled a change for the better with the creation of 2.23 million jobs. That said, in a recent survey by the Society for Human Resource Management and CareerJournal.com, approximately 47 percent of respondents who were currently employed said they plan to begin or ramp up a job search this year due to the improving job market.

Moving On

If you have tried to make the best of your job situation and it is still making you miserable, it may be time to say goodbye. However, you should not make any rash decisions when it comes to quitting and you should definitely avoid leaving a job when you are angry (often a cooler head can prevail). Ideally, you should have another job lined up before you resign from your current job, and it is especially important that this new job not mirror the same environment you are trying to escape.

Keep in Mind Benefits, Savings and Retirement

It is essential to carefully plan for your departure because time off, as well as searching for a new job, can be expensive endeavors. As such, you should build up as much of a savings cushion as possible -- at minimum, three to six months of living expenses. Additionally, consider taking out a home equity line of credit before you leave your current position, as this can be a financial lifeline that is very difficult to obtain without employment.

Regarding your benefits, do a complete review of everything you currently have, are entitled to and will leave behind when you leave your firm. Specifically, you should inquire about:

Continuation health coverage (COBRA): The Consolidated Omnibus Budget Reconciliation Act of 1986 provides certain former employees, retirees, spouses, former spouses and dependent children with the right to temporary -- a maximum of 36 months -- continuation of health care coverage at group rates. This extended coverage is generally available through health plans maintained by private-sector employers with 20 or more employees, employee organizations and state or local governments. Coverage under COBRA can be extended due to certain qualifying events, such as voluntary or involuntary termination of employment for reasons other than gross misconduct; reduction in employment hours; the covered employee becoming eligible for Medicare; divorce or legal separation from the covered employee; death of the covered employee; and loss of dependent child status. Although group health coverage for COBRA participants is usually more expensive than it is for active employees, it is generally less expensive than individual health coverage, so it is worth your while to look into it.

Unused vacation days: Your company's employee handbook should delineate a policy regarding how unused vacation days are handled when an employee departs the organization due to termination, voluntary resignation or layoffs. While these policies will vary, you may be eligible to be paid for any unused days, so be sure to understand the ins and outs of the policy before you walk out the door.

Retirement savings plans: Although your former employer may allow you to keep your retirement savings invested in the company's 401(k) plan, this may not be the best choice. Instead, you may want to consider rolling over your retirement savings into a Rollover IRA. Similar to a 401(k) plan, the interest, dividends and capital gains earned in a Rollover IRA are not taxable until you make withdrawals. You can start making withdrawals without any penalty at age 59 ½. Alternatively, if you have another job lined up, you should inquire about how to roll over the money from your former employer to your new employer's plan, eligibility permitting.

Severance: While U.S. law does not mandate severance pay, many companies offer it to employees who depart under specific circumstances, such as layoffs. Essentially, severance pay provides you with a paycheck after you have left your job, offering an important financial lifeline for the newly unemployed. That said, if you have an employment contract, review it closely to determine if severance pay is owed to you given the nature of your departure. You also may want to refer to your employee handbook for additional information. Many companies include outplacement services in their severance packages -- an excellent resource to network and find a new job. Lastly, if appropriate, negotiate for as much severance pay as possible.

Flexible Spending Accounts: FSAs permit employees to contribute up to $5,000 in pre-tax dollars to an account established specifically to pay for medical expenses. Although plan policies will vary from employer to employer, covered expenses typically include eyeglasses, contact lenses, dental work (not including cosmetic), co-payments for prescription drugs and doctors visits, as well as many over-the-counter medicines, such as antacids, cold medicine and pain relievers. When you leave your job, you forfeit the money in an FSA account. In some cases, however, a COBRA plan will allow you to carry over any unused money. Therefore, to play it safe, try to use your FSA dollars before you leave your job.

Deduct your job hunting expenses: One often forgotten ally in a new job search is the Internal Revenue Service. Believe it or not, there are a number of employment search-related deductions available for the taking. To qualify, you need to be looking for a job in your current profession, but do not necessarily have to be unemployed. However, first-time job seekers are ineligible as well as job seekers who have been out of the work force for more than one year. Furthermore, you must itemize your taxes to take advantage of the deductions.

That said, if you qualify, you could be in for a bonanza of entitlements. Eligible expenses incurred during a job search include: career counseling, long distance calls to prospective employers, resume preparation costs (mailing, faxing, copying) and even newspaper subscriptions you purchase for the help wanted ads. If you plan on taking any of these deductions, it is essential you maintain all related receipts and be able to document their work-related nature.

Planning Your Escape

Once you have decided to leave, a graceful departure is important. Here are some tips to keep in mind:

Allow for a smooth transition. To avoid leaving your current employer in a lurch, attempt to provide as much notice as possible regarding your resignation. At a minimum, two weeks is recommended, but you should consider the scope of your responsibilities and the difficulty of finding a replacement when determining how much notice is appropriate. Once you have given notice, agree upon an exit a plan with your boss that includes completion of current projects and transition of your responsibilities to another employee.

Pick a strategic time to leave -- timing is everything. When deciding a departure date as well as when to give notice, consider the timing of bonuses and the granting of other benefits. For example, if stock is a part of your compensation, make sure you are not leaving before the vesting period -- as that is the equivalent of leaving money on the table.

Develop a simple reason for leaving. Oftentimes, the first question you receive after communicating your resignation is "Why?" Although it is best to be honest, you should also focus on the positive (i.e., you have a great opportunity at another company) and avoid disparaging the company, co-workers or boss.

Obtain a reference statement about why you left. Be sure there is an official agreement regarding your reason for leaving, and make sure you know who will handle calls for references about you so that they will give a fair and balanced report.

Ask for a letter of recommendation. A recommendation from your former employer will definitely help you in your future job search. As such, if possible -- and appropriate given the circumstances of your resignation -- request that your boss or another superior familiar with your work write a recommendation before your departure.

Be visible. Expand your network to include everyone you know because a job can be found literally anywhere and at any time.

Keep in touch. Before you leave, provide your contact information to your boss, human resources department and any other appropriate co-workers in case they need to reach you. You also may want to consider sending a note to your former boss thanking him or her for the opportunities you had during your employment. Additionally, set-up a personal e-mail account and make sure you notify everyone of your new address. Furthermore, notify the vendors which you work most closely of your departure as they often can be an excellent source for job referrals.

Mellody Hobson, president of Ariel Capital Management (arielmutualfunds.com) in Chicago, is "Good Morning America's" personal finance expert. Ariel associates Matthew Yale and Aimee Daley contributed to this report.