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If you have thought about hiring a financial advisor but don’t know where to start, contact me and I would be happy to have a free, no obligation discussion on what kinds of services we can provide!

Taking A Year Off? Considerations For A Mid-Career Sabbatical

For an increasing amount of younger workers, the prospect of working 40 straight years just to retire with a large sum of money is becoming unattractive. We are more and more aware of how large and diverse the world is thanks to technology. We are also able to travel inexpensively with discount airlines and Airbnb. Finally, when some of us lose a loved one at an early age, we start to think about all of the things we would miss out on if that happened to us, our spouse, our parents, or our children.

Think about it and you might understand the philosophy behind a “gap year.” Let’s say we took money and career completely out of the equation for a second. If I gave you one year to spend doing exactly what you wanted to every day with who you wanted, when would you take it? Would it be:

A) One year before you plan to have children, traveling with your spouse or parents before committing to starting a family.

B) Sometime during your children’s formative years, such as in their early teenage years, where you could travel as a family before they start to prepare for their own careers.

C) At age 64, starting your retirement one year early.

I believe most of us would pick option A or B. Waiting until age 64 comes with risks. One would be losing a loved one before making the jump. Another might be having your own health deteriorate to the point that you couldn’t enjoy the time you have.

When I work with young professionals, I find that many will set a goal to “retire early,” such as age 55 or 60. However, when I work with baby boomers or Gen X, I find it very rare that those with the financial ability to retire early actually end up doing so. After all, if you retire at age 55, what will you do with yourself for the next 35 years? How can you guarantee you won’t run out of money? Some have a utopian fantasy of saving $2 million and living off 4% withdrawal rates ($80k a year that won’t erode principal). I would fear a health event occurring in those 35 years that would make the plan impossible.

As a financial planner, I look to challenge the life planning goals of my clients to ensure they are making conscious decisions with their money. Instead of saving blindly, we will have much more success if we have purpose. Let’s stay away from money for a minute and talk through what a one year sabbatical would look like.

Is This Right For YOU?

In 2009, Stefan Sagmeister gave a TED Talk titled “The Power of Time Off.” It goes a little too far into his development as an artist, but the basic idea was that he looked at the “standard life” as having three stages: up until age 25 was focused on gaining an education, age 25-65 for work, and age 65-85 for retirement.

He rethought that model and decided to put off retirement into his 70’s. Instead, he would sprinkle five years off into his working life, taking one year off every seven years. Thus, at ages 32, 39, 46, 53, and 60, he would take his sabbatical.

What he found was that those years off allowed him to fully recharge and approach his work with new ideas. He’s not alone in this sentiment. According to this article discussing the benefits of mid-career breaks, of the 500 people surveyed for the book Reboot Your Life, not one regretted the decision to take a break (which lasted from one month to two years). “Everyone reported that their careers were enhanced as they were enhanced in their attitudes and work ethic.”

Now, that may sound well and good for an “artist,” but even before diving into the financial plan, you should consider what duration would be appropriate for your lifestyle. Those seven years of working may be frugal years. They may not consist of many vacations or other financial commitments, depending on your ability to save. If you have children, you would have to consider how time away might affect their education or summer activities. Finally, you may have other family members to care for that might affect the duration of your break.

Of course, many of us could likely take a 1-3 month break without drastically affecting those factors. The big question, or fear, is “how would my employer feel about this?” If you run a business, you might be terrified about leaving for someone else to run for just one week, nevermind three months!

What Would You DO?

The answer to this shouldn’t be “anything but work.” It also probably shouldn’t be “lay on the beach.” While those who work in challenging fields with high stress may simply want to relax, it’s likely that after a few weeks, boredom and regret would sink in.

Instead, you should have a specific plan for the time off. Think about what you would truly enjoy doing on a day to day basis if money and time were no issue. You may even find that the exercise will guide how your next few 1-2 week vacations are spent.

Other areas may require the full year off. Here are a few mid-career sabbatical ideas I have found people taking part in:

  • Worldwide boating or sailing trips
  • Volunteer work or joining a charitable organization
  • Living abroad and learning a new language
  • Working abroad informally within your field to gain a new perspective
  • Studying glaciers or volcanoes
  • Travel or nature related photography
  • Cross country bikes or hikes
  • Ski trips
  • Religion-related trips or research
  • Going back to school
  • Crossing off bucket list items
  • Writing a book or a blog
  • Starting a business
  • Hunting, fishing, and living off the grid

I could go on, but you get the idea. It goes without saying that an extended period of time in any of these areas could either:

A) give you a new appreciation for the work you left, or

B) send you in an entirely different direction.

Anticipating Transition

This is where a true self-assessment is necessary. Have you made yourself so indispensable to your employer or your customers that they would be willing to take you back after your sabbatical?  Even if you have, some employers may  have a policy for the purpose of continuity to not accommodate your request. If that were the case, could you find a similar position within three months of returning? Customers of your business may also need to find someone else to service them. How fast could you build back up if you left? Could someone be trained to take your place?

One of the more natural times for a mid-career sabbatical would be in a time that you anticipate leaving a job or entering a graduate program. There are many scenarios where this could make sense. If you have spent 15 years in a certain industry, you may have developed a unique expertise. A gap year won’t matter to those who need you.

If your intention is to completely change careers, it may require a new form of education. Taking a gap year before your classes begin likely won’t hurt your job prospects upon graduation. Depending on the program you choose, you may even find times within the curriculum where you can use a break or take an online course to fulfill your travel desires.

Making the Money Work

Certainly this will vary based on your current expenses, savings, and aspirations. This is where a good financial advisor can help you to stay realistic if your dreams are too big. They also may give you the proper confidence and road map if you are being too conservative.

A great way to start would be to work backward: “I want to leave my job on January 1, 2020 and be gone for two years. Now, how do I make THAT work?” You would start with the date and the amount of money required. You would assess where your savings stood today and what would be required to make the big goal happen. This is a great way for those determined, risk seeking individuals to wipe out everything that is unnecessary for short-term expenses in order to hit the goal.

Others might simply be unsure if this is right for them. In those cases, I would consider an evaluation of what you are saving toward and how you are investing. I have seen many who just don’t know where else to go with their money. They max out their retirement plan because they were “supposed to.” The remainder of their savings sits in cash or goes into an illiquid investment. If you want to leave the door open for a gap year, avoid real estate that might not sell in a recession. Also, consider if the tax deduction in a retirement account is worth the early withdrawal penalty.

Once you have a broad idea of what the sabbatical might look like, you can start answering some of the following questions. This will help you to get your big savings number:

  • How much can I save per month?
  • How risky should my investments be?
  • Should I sell my home or pay off my debts?
  • When I return, how long should I plan for financially to find a job?
  • How much will health insurance cost?
  • If my spouse will join me, how can we align our respective plans together?
  • Should I convert pre-tax retirement money to after-tax?

On that last bullet point, the idea here is that we want to pay the least amount in taxes as possible. When you defer money to a retirement plan pre-tax, generally you will pay taxes on it when you take it out for retirement. However, if you will have little or zero income during your sabbatical, your tax bracket will be low and it will make sense to convert some of that money now. This may mean budgeting some amount of cash to pay those taxes but could be well worth it!

Not As Hard As You May Think

In conclusion, if you’re in a rut career wise or have an itch to explore your passions while you are young, don’t count the mid-career sabbatical out. Chances are, if you read this blog, you are already careful and mature with your money. I see more instances of people being financially secure and qualified enough to pull this off than you might imagine.

The bottom line is to live your entire life with purpose and intention. Whether it’s to retire early, take a mid-career sabbatical, or live large every year without the early retirement or the gap year. I’m not here to judge. I’m simply here to make the financial plan that works for each individual.

If I have your attention and your wheels are turning, feel free to reach out to me at for a free consultation on how you can take control of your money to make it work for you.

Preparing for the Rising Cost of College

The rising cost of college has been well documented in the last few years. With wages only rising incrementally, the amount of student debt that a graduate walks out with can feel insurmountable. Thus, it can feel like running on a treadmill that only gets faster when trying to save for your children’s college education.

The following presentation is meant for anyone with children who intend to go to college. Whether your child was just born or they are starting to apply, I think this will be helpful. Even if you do not intend to save a dime toward their education or are simply unable, there are many steps and strategies you can implement to help reduce their burden. For those that have the means to save, there are some very specific tips in the webinar to get you started while saving on your tax bill.

The webinar is about 20 minutes long, but here is a snapshot of the topics I cover:

0:00 Intro to FNC and Disclaimer
1:15 Overview
1:58 Benefits of College
3:15 Cost of College and Sources of Payment
6:20 Scholarships, Financial Aid
9:46 The Advantage of Saving Early
11:53 Investment Options
12:41 529 College Savings Plans
16:25 Reducing the Cost of College
18:10 Kiplinger’s “Best College Values”
19:56 Conclusion


The Quick and Dirty Personal Finance Checkup

As part of our business at First National Corporation, we work with several employers to manage their 401(k) and 403(b) retirement plans. Included in that service is our financial wellness program where we look to educate employees on a variety of personal finance issues. I am happy to make these presentations to your company if you find them helpful.

Below is my first presentation in the series of eleven: The Quick and Dirty Personal Finance Checkup. I look to cover a variety of financial planning topics in 2-4 minutes each. This is meant to be simply an introduction to some concepts, though each topic could have its own presentation by itself. If you would like to skip around the video, here is a guide to where you will find each topic:

0:00 Introduction to FNC and disclosure
1:15 Four phases of saving and investment
3:10 The Wealth Pyramid
4:03 Student Loans
8:35 Building Credit
11:34 Emergency Fund
13:09 Disability Insurance
17:33 Term Life Insurance
21:18 Big 3 Of Estate Planning
23:42 Housing and Debt Ratios
25:04 Retirement Savings Benchmarks
26:58 Planning Your Income Stream
29:04 Investment Allocations
30:24 Long Term Care
31:39 College Savings Benchmarks
33:30 Wrap Up

I hope you enjoy the presentation!