How to take a career break

Extended leave from work does not have to wait until retirement. Your career path can be aspirational, or it can be driven by life events. Regardless of the goal, a good planning before taking the break can help make it more successful and satisfying. Start by reviewing your finances and getting your career break budget in order. Next, make a rough schedule for how you will fill your time. And if you do not think that you can balance a career break, look at alternatives such as a change in job responsibilities or hours.

In 2016, Jamie Clark of Seattle was a software engineer who planned to take a year off from work to complete a master’s degree in computational linguistics. One year turned into three with a career change in financial planning.

Nowadays, Clark, who uses the pronouns, believes that the experience makes them a better advisor – particularly because their career break did not go as originally planned.

“Part of our job as financial planners is to help people be prepared,” says Clark, now a certified financial planner who recently launched her own company, Ruby Pebble Financial Planning. “And I want to help people build that flexibility.”

Career breaks are extended and usually unpaid work time. These breaks can be aspirational – giving you time to travel, pursue a degree, change careers or launch a business. Or, they may be prompted by life events, such as caring for a child, nursing a family member or dealing with an illness or burnout.

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Whatever the cause, some planning can help you make the most of your break.

SAVE AND BUDGET AND DILIGENTLY

CFP Henry Hoang of Irvine, Calif., doesn’t think most people need detailed budgets, as long as they’re saving enough for their goals. But career breaks are an exception, he says. When your paychecks stop, you’ll want to have enough savings to sustain you. This starts with knowing exactly what you are spending today and estimating what your expenses will be during your break. Some expenses can be reduced, such as travel or childcare. But you may also have new costs, including higher health insurance premiums if your current coverage is employer-subsidized.

Once you figure out how much you need to save, consider adding a fudge factor equal to two or three months’ worth of expenses in case it takes longer than expected to land your next job, Hoang suggests. One of Hoang’s friends didn’t, and ended up raiding his 401(k) to pay the bills.

And speaking of retirement: extended breaks may mean you’ll need to work past normal retirement age or increase your savings rate significantly to retire on time. If you’re planning to take more than two years off, use a retirement calculator or consult a financial planner to see how that might affect your retirement plans, Hoang says.

Clark saved enough from a well-paying job to cover living expenses for two years, and was able to stretch that to three years after getting married. The couple paid the bills while Clark used the remaining savings to pay tuition and other expenses to earn their financial planning credentials.

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Clark says that careful monitoring of expenses and thoughtful budgeting not only helped make the savings last, but also relieved some of the stress of being without a paycheck.

“There are always surprises, but it’s good to try to minimize them, or at least minimize the impact on your finances,” Clark says.

MAKE A PLAN FOR YOUR TIME

You may feel like you need a break from the strict schedules, but no plan means you can waste that precious time you’ve prepared and saved for.

Hoang has another cautionary tale from a client who began her break with a strong desire to change careers and spend more time with her young children. Her day quickly fills up with parenting duties, and she never makes time to explore other jobs, Hoang says. When his savings ended, he ended up back in his same field.

“Being clear about what you really want out of this career break could make a tremendous difference in the overall experience,” Hoang says.

The details of your plan will depend on your career goals, but consider having lunch with a professional colleague every month or so to maintain your network and stay abreast of developments in your field. If you are considering a career change, create a timeline for when you will complete certain steps, such as meeting with a career counselor and determining what education or certification you will need.

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CONSIDER ALTERNATIVES

An extended career break 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 the savings, you can understand that you must be wary of leaving the job you have without another line.

But that doesn’t necessarily mean you’re stuck.

Some employers offer paid sabbaticals, while others provide unpaid sabbaticals to workers 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 newborn, adopt or adopt a child, suffer from a serious health condition or are caring for a immediate family members. such as a child, spouse or parent with a serious health problem.

Given the tight job market, your employer may be willing to adjust your workload, transfer you to a job with less responsibility, 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 the personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Sort of Your Credit.” Email: [email protected] Twitter: @lizweston.

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