Do You Suffer from IOS Syndrome? A Friday laugh from Xerox

Taking Financial Stock During Career Transition: Part I of II

Recently, my friend Paul Zaio and I were discussing the financial impact of job loss and career transition, and I asked Paul what the number one piece of advice he would give

to a professional in transition. Well, Paul has ten points of advice that we'll cover in this two-part series, and I hope Paul will contribute more often.

A little about Paul: Paul J. Zaio, CFS is a 17-year professional in the financial industry. He specializes in working with those who want to protect their principal and ensure that their money lasts a lifetime. He resides in Mount Pleasant, S.C., is a member of the LPL Directors Club, and teaches financial education at universities and corporations, and is a genuinely nice guy.





10 Financial Questions & Answers for Job Changers - Part 1 - One through Six

Getting you started on the next chapter of your life.

What’s the purpose of this blog posting?

Changing careers is a decision that deserves almost as much attention as starting a family, buying a home or retirement. Career changes can have a profound effect on both your finances and your lifestyle. That’s why it’s so important to approach a job change with three things: knowledge, goals, and a plan.

• Knowledge. In an era of forms and paperwork, changing jobs has become increasingly complex. There are many available options in regards to compensation and benefits, but many pitfalls as well. Knowledge of these is crucial to ensure getting the most out of both your job and future retirement.

• Goals. Changing jobs is not just about a new place of employment. It’s about living comfortably and well, about fulfilling your dreams and building a legacy. The successful job hunter sets goals that are designed to fulfill these objectives.

• Plan. Application of knowledge and reaching goals means having a plan. This report is designed to be the first step in creating that plan.

Below are ten of the most common and important questions you can ask regarding a job change – specifically in regards to how it will affect your retirement savings.

The accompanying questions are designed to be quick, helpful references to you as you begin readying yourself for new employment.

What do I do with it?

Some will use this as a handy reference from which they can always draw. Still others may use this as a kind of jumping off point – once knowing the kinds of questions to ask, they can then begin researching the answers with greater attention and thoroughness.

Finally, many people find that subjects such as 401(k)’s and IRA rollovers are easiest to manage with the help of an expert financial professional, someone who can advise them on everything from the proper investments to retirement planning to managing their existing assets. The choices are limited only by your own imagination.

A quick glossary of terms:

IRA – An Individual Retirement Account is a retirement plan that provides tax advantages for retirement savings. There are several different types, that may be either employer or self-provided.

401(k) – A retirement plan in which an employee chooses to have a portion of his wages deferred directly into a 401(k) account. The money in this account is usually tax-deferred, and most employers will provide a number of investment options that provide an opportunity for the employee to augment his savings.

Roll-over – A tax-free reinvestment or transfer from one retirement plan to another. For example, to transfer assets from a 401(k) to an IRA. Many employees, upon changing jobs, transfer the money from their previous employer’s retirement account to one provided by their new employer.


10 Questions & Answers for Job Changers - Part 1 Questions One through Six

1) What financial preparations should I make before changing my job or if I feel a layoff is imminent?

1. Stay up-to-date. Even if you aren’t actively seeking new employment, it pays to stay on top of your resume and talents. It’s the best way to both seize a sudden opportunity, and ensure your ability to bounce back swiftly should you suddenly need new employment.

2. Review vesting schedules. Double-check your retirement plans at your current job. Are you vested? If not, how much longer before you are? How much will the benefit be? This ensures that you leave your job at the right time – in other words, not a few months before you become fully vested. Knowing the right time to change jobs can guard you from the perils of a hasty decision – and potentially save you thousands of dollars.

3. Build a rainy-day account. Having cash set aside to help through your transition (no matter how smooth that transition may be) is a good idea, since you may go for sometime without a paycheck. In addition, that extra margin of safety can be a lifeline should your job be unexpectedly downsized. The last thing you want to do is find yourself unprepared and have to rely on high-interest credit cards to keep you afloat.

4. Educate yourself on finances. This report is a good first step, but one of the best things a job-changer (or pre-retiree) can do is continually educate themselves on finances. For example, research the best options for your IRA. Many people make the mistake of cashing out of their retirement plan when they leave their job. This creates a significant tax burden, and really sets your retirement savings back. It’s also unnecessary. When you move your money to an IRA, you control when and how much you take out because you now have direct ownership. It will also allow you to continue delaying taxes. Learning simple (but essential) facts like these are the best investments.

2) What about early retirement? How do I know if that’s an option?

The advantages of an early retirement are obvious. However, the financial challenges are significant, and should be carefully considered when pondering early retirement. The earlier you retire means the longer you must live off an income that does not come from a steady paycheck. Social Security is helpful but often not enough to provide the desired lifestyle. Early retirement means increased reliance on pensions and retirement savings. Thus, the only way to know if early retirement is right for you is to take a long, hard look at the numbers. Is your portfolio large enough to provide for 15, 20, 30 years of unemployment?

A person’s needs will vary, but do you know what your needs are? How much will your dreams cost? To find out, your best bet is to run a retirement budget alongside a tax-and-income projection with the help of a financial professional.

3) When can I start withdrawing money from my IRA?

The normal age at which you can begin distributions is 59 ½.

4) How do I handle a severance packages?

First you must decide how to receive your severance package, should you be offered a choice. If you would like to immediately invest your money, taking a lump sum is advisable. However, because severance pay is usually taxable, spreading out your package into multiple payouts make taxation easier to handle.

Balancing immediate needs versus your overall goals is also important. Paying bills or eliminating debt may be a necessity when receiving your severance, however it’s never a good idea to spend the entire amount. Allocate the minimum you need into your checking account, and the rest into conservative investments that will give you a higher return than a simple checking account. This balance will help you both use and grow your money should you seek a different job.

5) What are my options for the money that is in my 401(k) or other pension?

Usually there are four broad choices, each with different advantages and disadvantages:

• A. Leave it invested in what the company offers
• B. Annuitize and receive an income for life
• C. Withdraw the account balance, potentially pay a 10%penalty on top of taxes, and then invest the funds
• D. Roll over to an IRA or other pension fund, paying no penalty, and continue to defer the income tax.

6) Why should I consider a rollover to an IRA?

An IRA offers the possibility of higher returns and increasing income potential. The account can be rolled over tax-deferred to a surviving spouse with the remaining balance distributed to beneficiaries at the death of the spouse.

End of Part 1. Part 2 Monday June 21st. Have a question for Paul? Leave a comment and he'll respond and as always, our thanks.

To learn more or contact Paul Zaio:

Paul Zaio, CFS, RIS
LPL Registered Principal / LPL Branch Manager

Securities offered through LPL Financial
A Registered Investment Advisor, Member FINRA/SIPC

1156 Bowman Road, Ste 200—Mount Pleasant, SC 29464
Phone: 843-416-1144
Toll free: 888-277-0095
http://www.lpl.com/paul.zaio


Liked this? Post it to Twitter!

What Hasn’t Changed about Career Transition

We all know we’re in an interesting economic climate. With hundreds of thousands of jobs being eliminated (and not being back-filled), I’m in a unique position to do what I do best – assist people through involuntary career transition.

I’ve been doing this for more than twenty years, and of course, a lot has changed.

(Note to all of you really smart people – please stop changing things until I catch up. Thank you.)

What has not changed however is the need for a person to clearly articulate work accomplishments that give them a sense of pride and satisfaction, and why the work contributes to the overall goals of their employer.

This you must still do.

People struggle with this. I struggle with them struggling.

We struggle our little hearts out, because most people can come up with one or two instances of times when they felt they achieved a superior result, and can quantify that result. It is when I ask for fifteen to twenty examples that the struggle begins.

I worked with a terrific group of folks today, who are being transitioned from a good company under new ownership. They are some of the aforementioned smart people – Molecular Biologists. (I’ll link this blog to their Resumes as they complete them).

As we introduced ourselves, one member of the group reminded another that said other also served as Site Safety Lead for the facility.

As we really started to work, I asked the person who had been Site Safety Lead to talk about her accomplishments in that area. She said what so very many people say at this point: “I don’t know, I just did my job.”

As it turns out, she did her job very well. Through asking her questions and probing a bit deeper, she was able to articulate that she attended and completed OSHA Certification, implemented a Site Safety plan, assured understanding of policies, procedures and processes, and maintained not only 100% OSHA compliance, but an accident-free work site as well. Next, we’ll figure out the average cost for an accident and other costs related to safety violations, and she’ll be able to clearly state how much she saved her employer by “just doing her job.”

That’s important, and she feels good about it. She will not refer to it as an “oh by the way.”

When discussing in an interview she’ll sit forward in her chair; her body language will show engagement; she will enjoy discussing the subject. That makes for a much more powerful interview.
So think about what you’ve done, what you’re proud of, what gave you a deep sense of satisfaction, and write the story of it.

Start by identifying:

• The Challenge you faced
• The Action you took
• The Result

Think of the above as a CAR - moving forward (you’ll also see this expressed as STARS, PARS, etc.). Then, flip the CAR upside-down and add an “S” for Statement and edit your story down to 14 to 25 words, beginning with the Result expressed by a strong Action Verb.

Here’s an example:

Achieved more than $5 million in annual savings through complete implementation of SAP software system and communications infrastructure for all Asia-Pacific Facilities.

And another:

Saved more than $250,000 in re-keying labor hours by identifying an inconsistency in CRM application, alerting IT department to issue, assisting in troubleshooting error, and collaborating on fix testing and resolution implementation.

Once you’ve written your accomplishment statements, you'll use these:

• In Cover letters
• In Your “Elevator Speech”
• In Telephone Interviews
• In the Main Body of the Resume
• In Networking
• In Interviewing
• In your Blog/FriendFeed/Plurk/Twitter conversations/VisualCVs and every other social media tool you use

Review the statements to spot patterns of your Traits, Skills, Knowledge and Abilities. This will assist you in writing the Summary Statement which heads the resume, and also will assist you in developing your “Elevator Speech” response to the question, “Tell me a little about yourself.”

This is the foundation exercise for any career transition.

The real bottom-line here is don't wait until you are unemployed to go through this exercise.

This is something you should do once a quarter, every quarter for the rest of your work life. Come up with 3 or 4 quarterly accomplisment statements, and by the end of the year, you'll have a solid history of your work year.

Doing so creates greater engagement conversations no matter your employment status.

If you bump into the CEO in the hall, and he or she asks you “So what have you been doing?” wouldn’t it be great to say “well, I just collaborated on a team that revised our benefits processes and saved the company more than $250,000 a year,” instead of, “Oh you know, same old same old?”

Make this a habit. Go on, do it now.

Liked this? Post it to Twitter!

Great way to get introduced to VisualCV

Register now for tomorrow's VisualCV Webinar "Career Advice for 2009" Tues. Jan. 13, 2009 at 12 noon EST - http://tinyurl.com/5oaag6

http://www.visualcv.com/webinar/

An example - My VisualCV - http://visualcv.com/karenmasullo

In Times of Uncertain Employment – Don’t Panic

In Times of Uncertain Employment - Don't Panic

As a Career Transition professional with more than twenty years of enterprise-level experience, I know that many individuals will seek career advice during what is certainly a troubling time in our economy.

While the below points are true at any time in an employee's career life, they are particularly important to remember given the current unemployment market and uncertainty in Banking and ancillary financial sectors.

1: Don't Panic. Jumping ship without knowing the depth of the water is never wise. Career Transition takes assessment and planning; use this time for self-review and preparation.

2: Your Company may be in flux, but may also be planning to provide you services should a release of workforce be required. These services may include professional career transition and individual outplacement coaching services, severance and/or early retirement packages, job search workshops, career center services, job fairs, and other programs to assist you should a career transition be required. Take advantage of all services offered.

3: Your State Government will work in concert with your company and an Outplacement Services provider to assure you understand the separation process, and all benefits and services available to you.

4: Do not pull out your old resume and simply add your latest position and title. Resumes must be thoughtful and accomplishment oriented; the thought you put into this document is the foundation for your clear articulation of your value to a future employer in telephone interviews, networking conversations, and the interview itself. More important, it is the first work product example you present to your next employer - give it the effort it deserves.

5: Never underestimate the value of interview practice. Outplacement program providers may include video-taping of your interview practice, and you may be surprised what you see upon playback. It is an invaluable exercise. Never wait until an actual interview to think of your answers to important questions.

6: While at work, do not foster the rumor-mill, do not spend time online posting on job boards, or add negativity to an already highly charged, stressful environment. Continue to contribute in a meaningful way, and document your accomplishments during this time. Should a workforce transition occur, you will transition more easily if you can demonstrate to your future employer, your continued contribution to your present employer's challenges.

7: If you need help, ask for it. Employee Assistance Program (EAP) providers are there to help you. Additionally, Managers can help ease employee concerns by offering seminars covering the support services their companies provide.

8: Do not be defined by your current job title or locked in to your current industry. Look at new ways to use your skill-set within your current company, or should career transition be imminent, in alternate industries and businesses. While legacy positions leave the marketplace, new ones are created.

9: Build and maintain long-term, professional friendships. Do not "use" your network - rather, look for ways you can help others in your network; provide value. You are not alone in your fears, and this is no time to live in a bubble.

10: Learn about Social Media and Networking. NETWORK, NETWORK, NETWORK. Explore new tools like visualcv.com to enhance your Network's ability to access your information.

Our team has successfully worked with hundreds of employees and employers through challenging economic times, and we know that Career Transition requires a well-followed plan, not panic. Use your time well, and should a workforce transition occur, you will be ready to move forward successfully.

Have a question? Ask me - km@willowsmarsh.com
Follow me on Twitter: Ask me on Twitter
My Visual CV: My VisualCV