Changing jobs often brings excitement, new opportunities, and—inevitably—paperwork. But beneath the surface of offer letters and onboarding tasks, there are hidden financial pitfalls that can quietly cost you more than many people realize. Three of the most common issues involve flexible spending accounts (FSAs), old 401(k) accounts, and how multiple retirement plans interact within the same calendar year.
Interestingly, those who reliably contribute and take advantage of benefits they are offered by their employer are most likely to encounter issues, if not followed closely.
Why is that?
Tax-advantaged savings vehicles are governed by IRS rules that need to be carefully followed, and as you might hope, former and current employers don’t communicate with one another about your finances.
Here’s what you can do to avoid running into any issues.
Don’t Leave FSA Dollars Behind
FSAs are a classic “use it or lose it” benefit. If you change jobs mid-year and don’t spend down your account, the remaining balance is typically forfeited to your employer.
So if you plan to leave your employer for a new opportunity, make sure you’ve submitted claims for eligible expenses before your last day. If your termination was unexpected, you may still be able to submit eligible expenses for a brief period of time following your last day, as long as the expenses had occurred while you were employed.
Even stocking up on over-the-counter medicines, glasses, or routine health services can help you capture value before it disappears. Unlike HSAs, FSAs are tied to your employer—not you—so the timing of a job change is critical.
Roll Over Old 401(k) Accounts (Instead of Forgetting Them)
It’s surprisingly common for employees to leave behind retirement accounts when they switch jobs. Over time, these “orphan” accounts can add up, creating administrative headaches and missed opportunities for growth. It’s not uncommon for an employer to change 401(k) plan vendors periodically, and when that happens not only can your account be difficult to locate, but it will automatically be moved into new investment options.
Rolling over your 401(k) into either your new employer’s plan or an IRA keeps your retirement strategy streamlined and under your control. Each option has pros and cons—such as investment flexibility vs. simplicity—but the key is to make a deliberate choice.
Early in their career, many people are comfortable sticking to their current employer plan. As people advance in their career, and meaningful assets begin to accumulate, many people prefer to implement an investment strategy across all their accounts which has been engineered to meet their personal financial goals.
Watch for 401(k) Overcontribution Across Jobs
Another less obvious trap: contributing too much across multiple 401(k) plans in the same year. The IRS sets annual limits on employee deferrals ($23,500 for 2025, plus $7,500 if you’re over 50, or $11,250 if you’re 60-63 and your plan allows it). These limits apply to you—not each employer.
If you maxed out contributions at your old job, then start contributing again at your new employer, you will go over the limit. To avoid tax penalties for doing too much of a good thing, excess contributions (and any earnings on them) will need to be removed prior to filing your tax return.
Pro Tip: Do you normally reach contribution limits for your 401(k) well in advance of year end? Even if you don’t setup contributions in your new plan, you may be automatically enrolled by your new employer.
The solution is proactive tracking. Keep a record of what you’ve already contributed during the year, and coordinate with your new employer’s HR team so contributions don’t exceed the cap.
The Bottom Line
Changing jobs is a major life transition, and it’s easy to focus only on what’s ahead. But overlooking benefits details can create costly mistakes that are entirely preventable.
By spending down FSAs before you leave, rolling over old 401(k) accounts intentionally, and carefully monitoring annual contribution limits across employers, you can preserve the value of benefits you’ve already earned.
And as with many financial decisions, the fine print matters. A bit of planning now ensures that your career transition strengthens—not detracts from—your long-term financial picture.
If you’ve got questions on how to avoid these issues, please pick a time using the scheduling tool below.
This blog was written by Jeremy Bohne, Principal & Founder of Paceline Wealth Management. Paceline is a fee-only investment advisor serving clients in the Boston area, and on a remote basis throughout the country. Paceline specializes in helping tech and biotech executives, business owners, physicians, and those seeking financial planning services.