Early retirement is something most of us dream about. But it is usually just that — a dream. However, have you considered a sabbatical? A sabbatical can be a meaningful and highly satisfying way to to get an early, albeit temporary, retirement.
The definition of a sabbatical leave is a year or shorter period of absence from work.
More and more people in their 50s and 60s are taking anywhere from a few months to a year off. The temporary break from work gives you the chance to enjoy the benefits of retirement.
You Deserve the Break!
Americans are some of the longest working people in the world. We apologize for taking a hard-earned vacation, sometimes putting one off for years, we work longer and longer hours, and generally frame life around the job. While Americans are just beginning to embrace a year off, it’s not as radical an idea as it might seem.
Furthermore, time off is proven to energize you and make you a better worker in the long run.
You Are Probably Going to Keep Working for a Long Time.
Seventeen percent of boomers say retirement financing will come from continued employment, according to a 2014 analysis of data from a survey by Merrill Lynch. And, new data from the Department of Labor suggests that the number is rising dramatically. The Department reports 39.2% of Americans over 55 were working this year, the largest portion since 1961. And the trend suggests even more growth in workforce participation by older Americans.
“While many of today’s retirees say they can count on Social Security and employer pensions to fund most of their retirement, future generations are far more likely to say they will need to rely primarily on personal savings and income from working during retirement,” Merrill Lynch says.
Long Term Breaks Are Becoming More Popular
The road to retirement is changing dramatically, with more older Americans taking a long vacation, or a work sabbatical, for a period of time and then rejoining the workforce –often by switching careers — to delay full retirement.
More than half (52%) of working retirees say they took a break from working when they first retired and then returned to work, Merrill Lynch data show. This sabbatical, which also functions as a career intermission phase, lasts on average more than 29 months.
- Some seem pretty confused and scared.
- And some say, ‘I need to work, because I can’t afford not to.’
- And then some of them also say, ‘What would my life be like if I didn’t work? Money aside, will that feel good?’”
Is a Sabbatical Possible for You?
1. Start by Assessing Your Goals for a Sabbatical
Traditionally a Some people take a sabbatical or a mini retirement because they simply want the rest and relaxation — they want to get away from the rat race or escape burnout. Other people take a sabbatical to try something new — they want to try a new job or a different way of life.
Consider your motivations for an early retirement. Knowing what you want out of the experience will help it to be a success. And, as with any goal, the more specific the better.
“Baby boomers are very active,” says Jennifer Harris, president of CR Search, a Gurnee, Ill.-based executive recruiting firm. “Just stopping work won’t be attractive to many of those who are older. They want to still be a part of that bigger purpose and know they are contributing.”
Taking a long vacation can help soon-to-be retirees reassess their goals without forgoing the satisfaction and financial security that comes with continuing work.
2. Taking a Sabbatical? How Long Will You Be Off the Clock?
A sabbatical could be a week, a month, three months, a year, or it could be longer. How much time you take off for your mini retirement might be dependent on your goals for the sabbatical. The length of time might also be determined by your finances and the needs of your employer.
3. Will You Return to Your Existing Career After Your Early Retirement or Something New?
To many people, a mini retirement is time off from their existing job. For others, this is an opportunity to quit their job and start a new way of making money. One former teacher, a passion for educating others inspired a return to the work force after retiring from a full-time teaching career.
“There’s lots of opportunities in terms of volunteering, which you can do in a part- or full-time basis,” Lansky says.”I ask clients when making the decision to retire: ‘What’s important to you? What are your values? What are your skills?”
While your current job being available following a sabbatical-like break might be unrealistic, the joy of pursuing a new path re-engages many older Americans not yet ready for full-time leisure.
Nearly three out of five retirees launch into a new line of work, and working retirees are three times more likely than pre-retirees to be entrepreneurs, Merrill Lynch data show. “We all have to be our own job coaches these days and look out for ourselves,” Harris advises, adding that few people remain with the same company for more than five years.
4. Think About the Financial Considerations of Your Early Retirement
- Does your company offer a specific sabbatical program? While not common, you could talk by talking with your human resources manager about your plans.
- Do you have any vacation time saved up? Could you combine vacation time with unpaid leave for your sabbatical?
- Is your company offering any severance packages that you could volunteer for?
- What is your plan for health insurance during time off? Might your employer be willing to continue your coverage?
- What will happen to your retirement savings if you take time off? Can you continue contributing to your retirement savings? Do you need to?
- What are your plans when you return to work? Would a mini retirement invigorate you enough so that you work longer — making your ultimate retirement financially viable? Will you have a new career when you return to work? One that you love?
- Will you be earning money while on sabbatical? Part time and full time jobs are possible.
- If you will be traveling while on sabbatical, could you rent out your home to help fund your time off?
- Are you ready to downsize your home to help fund your early retirement?
- What could you do to minimize costs during your sabbatical?
How Will You Spend Your Time in an Early Retirement Trial Run?
Volunteer: Giving back is a big goal for many baby boomers. In fact, a Consumer Reports study found that two thirds of respondents ages 55 to 70 who hadn’t yet retired, said they expected to volunteer in retirement. And volunteering can be a really gratifying way to spend time away from work.
Turn a Hobby into a Business: Many of us have fantastic hobbies that take up all of our time in the evenings and weekends. Wouldn’t it be great if you could spend all your time on that hobby and what if you could turn that hobby into a money maker?
Experience Teaching English Abroad: You speak English, so why not use your native language to teach others? Go Overseas, an international destination and activity organization, explains that English teachers are in such high demand around the world, speaking English is the only requirement for finding placement as a teacher.
If you have a TEFL of Teaching English as a Foreign Language certificate, you’re a step ahead of the game. Go Overseas says the certificate could open up an even wider choice of job opportunities. Some areas where English teachers are in highest demand are Latin America, Southeast Asia, Eastern Europe and the Middle East. Some programs are much more retiree friendly, so be sure to do your homework before making a commitment.
Travel Just for Fun: You’ve certainly earned it, and retirement is the classic time for it. Make your retirement gap year more of an extended vacation, and see the world or just your favorite parts of it.
Kick Back and Plan the Rest of Your Life: Who says the gap year means you have to leave home at all? Travel might be the most common way to spent your year away from work, but you could spend it actively planning the rest of your life.
Do you want to start a business in retirement? A year away from your regular job lets you daydream, plot, scheme and formulate a business plan to make it happen. When there isn’t any other pressing business, such as a day job, you won’t have to squeeze in planning. You can really enjoy the process.
Or maybe you want to take up a new hobby, learn about fine gardening or any of a number of things.
The retirement gap year or sabbatical idea could change the way that you think about transitioning away from your regular 9 to 5 and into the next phase of life. Instead of opening one door and closing another, think of it more as a bridge.