A recent survey conducted by ResumeLab reveals that 83% of Gen Z workers consider themselves to be job hoppers. This generation sees frequent job changes as a way to acquire new skills, face new challenges, and find work environments that align with their values. However, while job hopping may offer short-term benefits like higher salaries and faster career progression, it is crucial for these workers to not overlook the long-term savings programs associated with their previous employers. Certified financial planners warn that it’s easy for job hoppers to forget about old retirement accounts and recommends taking action to ensure these accounts are not lost over time.
Despite the potential advantages of job hopping, it is important for Gen Z workers to be mindful of their retirement savings. Shaun Williams, a partner and private wealth advisor at Paragon Capital Management, explains that it’s easy to forget about older accounts when constantly changing jobs. Workers should make sure to move or roll over their retirement accounts when switching employers. Additionally, CFP Sophia Bera Daigle advises workers to be aware of the potential consequences of cashing out retirement savings, calling it the most detrimental thing job hoppers could do. Instead, workers should explore options like rolling over their old 401(k) into an IRA or transferring it to their new employer’s plan.
Job hopping offers certain benefits to Gen Z workers, but it’s essential for them to consider the long-term implications on their retirement savings. While job hoppers tend to earn higher salaries and experience faster wage growth, they must not overlook their retirement accounts associated with previous employers. It is recommended that workers keep track of their old workplace accounts to ensure they don’t lose them over time. Rolling over 401(k) plans, opening Roth IRAs, and understanding vesting schedules of new 401(k) matches are important considerations for job hoppers to manage their retirement accounts successfully. By being proactive and mindful of their long-term financial goals, Gen Z workers can achieve both short-term career growth and long-term financial stability.