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Changing careers can be an exciting but also stressful time for clients. According to Resume Now’s 2025 Career Gridlock Report, 60% of Americans have stayed in roles longer than they’d like because transitioning careers felt too difficult.
Whether seeking higher long-term earning potential or downshifting to reduce stress, advisors can play a pivotal role in helping clients make a career change. Here’s how I’m guiding clients through these transitions.
Key Takeaways
- Encourage early planning while still employed to maintain stability and reduce future financial stress.
- Map out the new path: skills, income expectations, and ramp-up costs.
- Reassess financial goals, cash reserves, debt management, and benefits.
- Support the emotional side of the transition with mentors, peer groups, and professional guidance.
1. Plan Ahead of Time
The best time to plan a career pivot is while clients are still on their current payroll. It can feel tempting to shed all current responsibilities, but the loss of a paycheck can cause strain and pressure.
Help clients organize all relevant facts related to their possible next career. Ask them to explore if they’ll need to skill up with additional education or certification. Plug in a realistic income range and timeline for profitability. If they’re entrepreneurial, discover the investment required to launch their business, then pad that number significantly.
2. Build a Financial Cushion
Career transitions can strain finances, especially if clients expect a gap in income or a decrease in future income. To combat this, build a more robust cash reserve of 12+ months of expenses, more if the ramp-up time is longer. Ahead of the transition, encourage clients to pay down or pay off high-interest-rate debt.
Important
Consider a HELOC (home equity line of credit) while still employed. Even if unused, access to liquidity offers peace of mind.
3. Reevaluate Benefits and New Expenses
Switching careers can mean losing employer-paid benefits such as a 401(k) match, health care benefits, life insurance, and disability insurance. Price out and model the cost differences in a financial plan. To prevent future surprises, ask your clients to explore expected costs for new professional memberships, licensing fees, or new work-related expenses in their financial plan.
Important
Determine if a career shift will cause your clients to think differently about their retirement date, next home purchase, vehicles, or vacation goals.
4. Support the Emotional Transition
Leaving a successful career can trigger an identity shift. I recommend considering talking with a career coach, therapist, and/or mentor. Many new career paths come with potential networking or peer groups more aligned with the next chapter. These resources become invaluable to clients needing help seeing potential pitfalls and blind spots. The more conversations and connections clients can build, the smoother the transition.
The Bottom Line
Switching careers can be rewarding, but thoughtful, proactive planning is needed. By organizing the facts, strengthening their financial foundation, modeling the new path, and supporting the emotional shift, advisors help clients step confidently into a more aligned, sustainable, and fulfilling future.
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