Changing jobs can be a very exciting time in your life. There are somethings you should consider before signing the new job offer.
Come to terms with the terms
A basic understanding of the following terms will help you better understand your offer:
Cost to Company
The cost to company figure is the total cost that the company will incur on a monthly basis to employ you. This amount includes benefits such as contributions to medical scheme, pension or provident funds.
Your pensionable salary is used to calculate your contribution to the company pension or provident fund and the benefits of your risk cover. This is often a percentage of your gross income and usually excludes any variable income such as commission and bonus payments
Preserve your pension/provident fund
When you leave your employer you will be able to take your pension or provident as a lump sum. The tax on lump sums paid to you before retirement attracts higher tax than at retirement. If you preserve your retirement fund, in either a preservation fund or a retirement annuity you enable your money to grow and defer the tax payment.
If your new job offers you a higher salary, you should consider increasing your savings. With your higher income, you might become accustomed to a new lifestyle and you should plan your future accordingly.
You should always consult with a CFP® professional when changing jobs to ensure that you have taken into account.