What to Know Before Quitting Your Job

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Quick answer: Before you quit your job, check five things: how long your savings will last (ideally three to six months of expenses, more if you have no new job lined up); what happens to your health insurance (COBRA or a Marketplace plan); whether your 401(k) employer match is vested; whether unused PTO will be paid out; and whether you are giving the notice your contract or industry expects, usually two weeks. Quitting voluntarily usually means you cannot claim unemployment benefits unless you had a legally recognised good reason. If you can, line up your next job before you hand in your resignation.

Some days the urge to walk out is overwhelming. Sometimes it is the right call, whether because of burnout, a toxic manager or a better offer. But resigning has practical consequences that are easy to overlook in the moment, from losing employer-paid health cover to leaving thousands of dollars of retirement money on the table. A few hours of preparation can save you from expensive surprises.

Here is a checklist of what to know and do before you quit, whether you have another job lined up or not.

In This Article

Should I Quit My Job Before Finding a New One?

In most cases, it is safer to find a new job first. Job hunting while employed gives you an income, a stronger negotiating position and fewer awkward questions about gaps. But staying is not always possible or healthy. Quitting without a job can make sense if:

Your health or mental health is suffering seriously. Our guide to burnout can help you assess where you are.
You have enough savings to cover at least six months of essential expenses.
You have a realistic plan, such as freelancing, study or a career change.
The workplace is unsafe, or you are being harassed. In that case, document everything and consider getting advice first, as it may affect your rights.

What Should You Do Before You Quit Your Job?

Check your finances. Add up your essential monthly costs and see how many months your savings cover. Our emergency fund guide explains the usual three-to-six-month target.
Read your contract and handbook. Look for notice periods, non-compete or non-solicitation clauses, and rules on returning equipment or repaying training costs or sign-on bonuses.
Check your 401(k) vesting. Your own contributions are always yours, but employer contributions may vest over time. The IRS says plans can use a schedule where you become fully vested after three years (a “cliff”) or gradually over six years. Leaving a few weeks before a vesting date can cost you real money.
Ask about PTO payout. Whether unused holiday is paid out depends on your state and your employer’s policy. Some states, such as California, require it; many do not.
Time your departure around bonuses and benefits. Check when annual bonuses, stock grants and profit-sharing are paid, and whether you must be employed on that date.
Use your benefits while you have them. Book doctor, dentist and eye appointments, and refill prescriptions, while your coverage is active.
Save personal files and contacts that are genuinely yours. Do not take confidential company information.
Update your résumé and LinkedIn before you resign. Our guide to chronological vs functional résumés helps you pick a format.

What Happens to Your Health Insurance When You Quit?

Employer health coverage usually ends on your last day or at the end of that month. You then have two main options:

COBRA continuation coverage. If your employer has 20 or more employees, the federal COBRA law generally lets you keep the same group plan, typically for up to 18 months, according to the US Department of Labor. The catch is cost: you can be charged the full premium plus up to 2% for administration, as your employer no longer contributes.
A Marketplace plan. Losing job-based coverage qualifies you for a Special Enrollment Period on HealthCare.gov, usually within 60 days of losing coverage. Depending on your income, you may get premium tax credits that make it far cheaper than COBRA.
A partner’s plan, if you have one, may also allow you to join after a job loss.

Can You Get Unemployment If You Quit?

Usually not. Unemployment insurance is run by each state, and it is designed for people who lose their jobs through no fault of their own. People who quit voluntarily are generally ineligible unless they can show “good cause”, which some states recognise for reasons such as unsafe working conditions, harassment, significant unilateral pay cuts, domestic violence or following a relocating spouse. Rules vary, so check your state’s unemployment office. The Department of Labor’s CareerOneStop has a finder for state unemployment offices.

How Much Notice Should You Give?

In the US, most employment is “at will”, so there is usually no legal requirement to give notice unless a contract says so. But two weeks is the professional norm, and senior roles often expect more. Giving proper notice protects your reference and your reputation in what can be a surprisingly small industry.

How Do You Quit Your Job Professionally?

Tell your manager first, in person or on a video call, before colleagues hear about it.
Keep it short and positive. You do not need to give a detailed reason. “I’ve accepted a role that’s a better fit for my goals” is enough.
Follow up with a brief resignation letter or email stating your last working day.
Offer to help with the handover, such as documenting your work.
Be prepared for a counter-offer, and decide in advance what, if anything, would make you stay.
Stay professional in your exit interview. Honest, constructive feedback is fine; burning bridges is not.

What Should You Do After You Quit?

Roll over your 401(k) into your new employer’s plan or an IRA to keep it tax-advantaged. Avoid cashing out, which can trigger taxes and a 10% early withdrawal penalty if you are under 59½. Our guide to Roth vs traditional IRAs covers the options.
Sort your health coverage within the deadlines.
Check your final paycheck includes all hours, and any PTO owed.
Rebuild your routine if you are between jobs, and set a budget for your search.

Frequently Asked Questions

Is it better to quit or be fired?

Being fired without misconduct usually keeps your eligibility for unemployment benefits and sometimes severance, while quitting does not. But a resignation can be easier to explain to future employers. If you are being pushed out, it may be worth getting advice before resigning.

Do you have to give two weeks’ notice?

Not legally in most US jobs, unless your contract requires it. It is the professional norm, though.

Do I get paid for unused vacation when I quit?

It depends on your state law and employer policy. Some states require payout of accrued vacation; others leave it to the employer.

Will quitting affect my 401(k)?

Your own contributions and any vested employer money stay yours. Unvested employer contributions are usually forfeited when you leave.

How long does COBRA last?

Generally up to 18 months after leaving a job, and sometimes longer in certain situations, according to the US Department of Labor.

The Bottom Line

Quitting can be the right move, but do it with your eyes open: know your savings runway, your health coverage, your vesting dates and your state’s rules first. If you are leaving for more money elsewhere, read our guides on how to ask for a raise and the questions to ask in a job interview before you sign the new offer.

Sources

US Department of Labor — Continuation of Health Coverage (COBRA).
Internal Revenue Service — Retirement topics – Vesting.
HealthCare.gov — Special Enrollment Period.
CareerOneStop (US Department of Labor) — Unemployment Benefits Finder.