Employment has evolved a lot over the last few years in the United States. What is more, the working conditions have improved a lot. However, some beliefs have remained with us over time. People used to believe that changing jobs now and then could be bad for your savings. Some still believe that, but for younger generations, this has become a habit.
It is true that some people have to change their job because their employment conditions are not fair. Others cannot cope with the stress and need to give it up as soon as possible. Sometimes it is a temporary or seasonal job. It is true that it may have both advantages and disadvantages. No doubt it will depend on the type of job and the circumstances.
What could be the main disadvantage of changing jobs too frequently?
As there is a lack of workers and many people can find employment easily, there is a tendency to change jobs. This is what people commonly know as job-hopping. People who change jobs frequently and voluntarily are job-hoppers. Despite the fact that it might sound cool, it may have some disadvantages. Employers tend to offer incentives if you stay longer.
Therefore, those incentives that you could get for every year you stay will be gone. Take for example the 401(k) matching contributions. Apart from that, there might be other interesting bonuses depending on the employment you have. If you are happy with the job, being loyal could pay off. This money will certainly come in handy for retirement. Missing out on perks could be painful.
What are the advantages of changing your employment regularly?
If you are changing your job very often because you are paid more, you get more money every month. Therefore, you may get more cash when you get your check. On the other hand, there are people who are never willing to look for a new job. They hate changes and they will remain there even if they are not happy. This could be bad for your well-being, so get better employment conditions.
Work out if you would earn more money by staying or leaving. It is more than likely that it is worth getting better employment conditions and a higher wage. Therefore, it could be beneficial in the long run. Saving money and making contributions to your retirement savings plan are key. Investing that extra amount you are getting could make a strong nest egg. Check if a 401(k) rollover is better than withdrawing all the money you have there.