Shifting Gears

Kyle McIntosh

AFTER 23 YEARS working in corporate finance for companies such as Amgen and Patagonia, I’m making a career switch this fall, becoming a fulltime lecturer at California Lutheran University. While I always enjoyed my corporate roles and liked my colleagues, I’ve long had a passion for teaching and wanted to make it my fulltime work.

While some co-workers and friends assumed this change was an impulsive decision driven by a midlife crisis or brought on by some epiphany while working at home during the pandemic, it was actually years in the planning. Hoping to make a similar career shift? Based on my experience, here are five important steps to take.

1. Develop a plan with your family. Depending on your personal situation, a career change may impact more than just you. While there should be positives to aligning your passion with your daily work, there could also be downsides, including lost income or a new work schedule. For the downsides that are an unavoidable part of your new career, such as a lower income, you need to decide whether the negatives are outweighed by the positives—and you need to do so as a family.

2. Test-drive your new career. Before making a significant job change, it’s critical to check that you’re truly interested. This may involve taking a class, doing part-time work or volunteering. You may have a blind spot, seeing only the benefits. Your best bet to identify unseen issues is with hands-on work in your new chosen career. In my case, I was able to teach four semesters on a part-time basis, while continuing my corporate role. This time in the classroom—as well as behind the scenes grading papers and preparing for classes—showed me that this was the career path I wanted to pursue. On top of that, I gained valuable experience that made me a viable job candidate.

3. Reconsider retirement contributions. A career switch may come with a short- or long-term cut in pay. To help offset that reduction, you may need to scale back contributions to tax-advantaged accounts like 401(k) and 529 plans to maintain your lifestyle. While I know that this approach is heresy in the financial planning world, I see such reductions as a reasonable choice if it’s necessary to pursue your passion, provided you can still achieve your long-term savings goals. In my case, I’m somewhat ahead of where I should be financially, thanks to maxing out contributions to my 401(k) for most of the past 23 years. While more will be needed for retirement, I believe I’ll be in a good long-term position, even if I don’t contribute up to the IRS limit over the next few years.

4. Defer income. While not available to everyone, some companies offer deferred compensation plans that allow you to defer current income into the years following your departure, which can have tax benefits if you expect your income to be lower in future years. Knowing I’d likely be making a career shift to a lower-paying role, I saved a small amount of my salary in the company’s deferred compensation plan over the last five years. In 2021 and 2022, I’ll receive this deferred compensation, which will be taxed at a lower rate than when I was in my corporate job. This income will also partially offset my new teaching position’s reduced pay.

5. Just do it. I’d urge readers not to overanalyze their situation. There’s always more you could save, as well as countless reasons you can think up to resist making a change. My view: If you have a well-thought-out plan, you’ve gotten yourself to a good place financially, and your gut tells you it’s the right choice, you should take the leap when the right opportunity comes your way.

Kyle McIntosh, CPA, MBA, is a fulltime lecturer at the California Lutheran University School of Management. He turned his career focus to teaching after 23 years working in accounting and finance roles for large corporations. Kyle lives in Southern California with his wife, two children and their overly friendly goldendoodle.

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