Long-term leave does not have to wait until retirement. Taking a break from your career can be a desire, or it can be the result of life events. Whatever the goal, careful planning before taking a vacation can help ensure success and fulfillment. Start by looking at your finances and plan your work break budget. Next, make a rough schedule of how you will fill your time. And if you don’t think you can take a break from work, look at other options such as changing work responsibilities or hours.
In 2016, Jamie Clark from Seattle was a software engineer who planned to take a year off to complete a master’s degree in computational linguistics. A year turned into three and the job transitioned into financial planning.
Now, Clark, who uses their personal pronouns, believes the experience makes them better counselors — especially since their career breaks didn’t come as planned.
“Part of our job as financial planners is to help people get ready,” says Clark, now a certified financial analyst who started her own business, Ruby Pebble Financial Planning. “And I want to help people build that capacity.”
Breaks from work are extended and time off is often unpaid. Such breaks can be desirable – giving you time to travel, pursue a degree, change careers or start a business. Or, they may be prompted by life events, such as caring for a child, nursing a family member or dealing with illness or fatigue.
Whatever the reason, some planning can help you make the most of your break.
LEAD AND PLAN WITH DILIGENCE
CFP Henry Hoang of Irvine, California, doesn’t believe most people need a detailed budget, as long as they save enough for their goals. But work breaks are an exception, he said. When your paycheck stops, you want to have enough savings to support you. This starts with knowing exactly how much you spend today and estimating your spending during the break. Some expenses, such as travel or childcare, may be reduced. But you may also face new costs, including higher health insurance premiums if your current coverage is employer-sponsored.
When calculating how much you need to save, consider adding a fudge item equal to two or three months’ worth of expenses if your next job takes longer than expected, Hoang advises. One of Hoang’s friends didn’t, and eventually raided his 401(k) to pay the bills.
And speaking of retirement: Taking a long break may mean you need to work beyond your normal retirement age or increase your earnings significantly to retire on time. If you plan to take more than two years off, use a retirement calculator or do a financial planner to see how it might affect your retirement plans, says Hoang.
Clark saved enough money from high-paying jobs to cover living expenses for two years, and was able to extend that to three years after marriage. Their husbands paid the bills as Clark used the remaining savings to pay tuition and other expenses to get his financial planning license.
Clark says that careful spending control and thoughtful budgeting not only helped keep their savings in check, but also eased Clark’s stress over not having enough money. availability of wages.
“There are always surprises, but it’s good to try and minimize them, or at least minimize the impact on your finances,” Clark said.
PLAN YOUR TIME
You may feel like you need a break from a tight schedule, but not having a plan means you could be wasting that precious time you’ve planned and saved.
Hoang has another cautionary tale from a client who began her hiatus with a strong desire to change careers and spend more time with her young children. Her days quickly became filled with parenting responsibilities, and she never took the time to look for other careers, Hoang said. When his savings were exhausted, he returned to his land.
“Having clarity about what you really want out of this career break can make a big difference in the overall experience,” Hoang says.
The details of your plan will depend on your goals for your career break, but consider scheduling lunch with a professional colleague every month or so to keep your network up and track progress. your domain. If you’re considering a career change, schedule a time to take certain steps, such as meeting with a career counselor and determining what education or certification you need.
THINK of others
Long-term breaks may not be possible. You may have too much debt, too many bills or too many dependents to go months or years without a paycheck. Even if you have savings, you may be wary of leaving your current job without another one lined up.
But that doesn’t necessarily mean you’re stuck.
Some employers offer paid sabbaticals, while others offer unpaid time off for employees who need a break. You may be eligible for up to 12 weeks of unpaid, job-protected leave under the federal Family and Medical Leave Act if you have a child, are adopting or raising a child, suffering from a serious medical condition or caring for someone close to you. such as a child, spouse or parent with a serious illness.
Due to a tight job market, your employer may be willing to adjust your workload, move you to a less responsible job or reduce your hours. This can free up the time and energy you need to focus on what’s important to you – and what you want next in life.
This column was provided to The Associated Press by personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.” email: [email protected] Twitter: @lizweston.
