Many of us fantasize about quitting our jobs. In 2021, more people than ever turned that dream into reality. The latest U.S. Bureau of Labor Statistics data show that 4.53 million Americans voluntarily left their jobs last November. This was both a new monthly record and the eighth successive reading above the pre-pandemic high.
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In the U.K., the story is a little more nuanced. Nevertheless, the number of job vacancies as of November 2021 stood at a record 1.21 million, according to the Office for National Statistics.
It would appear that the Great Resignation is alive and well and likely to continue into 2022. If you’re considering jumping ship, one of the first things you should ask is: Can you afford to?
In the U.S. and U.K., many quitters actually had new jobs to go to, or at least good reason to believe they weren’t taking a huge risk with their careers or finances. Indeed, positions were aplenty. Similar to the U.K., the U.S. JOLTS job openings report showed vacancies remained far above pre-pandemic levels at 10.6 million in November.
But not everyone resigning has their next gig lined up. In these cases, it is vital to consider the costs involved in voluntarily leaving the workforce, even on a temporary basis.
If you choose to quit simply because you’ve had enough and want a career break, you stand to lose far more than just your regular wage. Studies of mothers leaving work to raise children show that taking even short periods off can put a dent in lifetime earnings. A 2018 paper calculated the life-cycle career cost of children to be equivalent to 35% of a woman’s total earnings.
Time not working can also diminish your wealth, in ways that are not immediately obvious. For example, in the U.K., if you miss one year of National Insurance contributions, the cost to your overall state pension could be more than 9,600 pounds ($13,129).
Read the full article here by Stuart Trow, Advisor Perspectives
