How to maintain your retirement plan when changing jobs

Median job switchers see a 10% increase in pay, but their retirement savings rate often drops nearly 1%, according to a Vanguard report. Vanguard Investment Strategy Group head of retirement research Kelly Hahn joins Wealth! to break down how you can keep up with your retirement savings while switching jobs.

“We find that, typically, a worker who’s changing their jobs, their income goes up, but their savings rate, as you said, it goes down by one percentage point. And many of those really are related to the employer-sponsored design. Oftentimes, people forget to sign up for their employer-sponsored retirement savings, like 401(k), or oftentimes, employers are defaulting people at a rate that is a lot lower than what they were saving previously. So people are losing the savings momentum as they go through the job transition cycle,” Hahn tells Yahoo Finance.

To avoid losing the savings momentum, Hahn encourages taking more ownership of your retirement planning. This means not only laying out your savings goals, but understanding what your employer is offering in terms of retirement plans and benefits. When switching jobs, Hahn emphasizes the importance of understanding how that retirement plan may change and whether it affects your savings goals.

Watch the video to learn more about how Social Security’s cost-of-living adjustment (COLA) will be changing and how that will affect retirement savers.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Melanie Riehl