Financial planning tools and services to put you on the path to the future you want
Your guide to financial planning and retirement
Connect with peers and experts
Get to know the people behind the company and the mission behind the work
Offer financial wellness to the people at the heart of your business
March 2, 2023
The data is clear, many of us are burned out and ready to quit our jobs. However, are you really ready for a life of leisure: emotionally? financially? Have you considered a sabbatical as a way to reassess or re energize your work? A sabbatical can be a meaningful and highly satisfying way to to get an early, albeit temporary, retirement. The long break from work could be a more productive and meaningful alternative to quiet quitting or retiring too early.
Sabbaticals, also known as mini retirements and gap years, are not new concepts, but they have gained popularity as an alternative to an early retirement.
The definition of a sabbatical is that it is an extended break from traditional employment. The break usually lasts about a year, though it can be shorter or longer.
They were originally offered almost exclusively in the academic world as a way to give professors a break from teaching and enable them to dive into research and thinking. However, sabbaticals are slowly gaining in popularity and an increasing number of companies offer formal sabbatical programs. It is believed that McDonald’s was the first company to offer sabbaticals, starting in 1977. Now somewhere between 14-30% of U.S. companies offered some form of a sabbatical policy.
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.
Financial security and lifestyle considerations should drive the decision as to whether take a break and then continue working, or engage in full retirement, says Chicago, Ill.-based Judi Lansky, president and founder of Lansky Career Consultants.
“I’ve worked with some people who say they retire too early,” Lansky says. “People I’ve seen [facing retirement] are unclear about what to do next.
The temporary break from work gives you the chance to enjoy the benefits of retirement and re energizing yourself for your work in some way.
Here are some of the many reasons to consider a sabbatical:
The World Health Organization defines burnout as a syndrome resulting from workplace stress that has not been successfully managed. It’s characterized by three dimensions: feelings of energy depletion or exhaustion, increased mental distance from one’s job or feelings of negativism or cynicism related to one’s job, and reduced professional efficacy.
The American Psychological Association’s Work and Well-being Survey found that:
While burn out is a huge problem, suffering at the job or retiring too early is not the best solution. Taking a break and gaining perspective through a sabbatical may point you to an option that is better for your overall wellness.
The sabbatical project is an advocacy group for sabbaticals. Their research suggests that sabbaticals are peak life experiences. Respondents to their survey describe the impact of their sabbatical on their lives in the same category as the birth of their child and their wedding day.
Learn more in their Ted Talk.
Seventeen percent of boomers say retirement financing will come from continued employment, according to a 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.
But before entering an extended period of employment, many older Americans are taking a sabbatical.
Burn out is often accompanied by stress, depression and anxiety and just a feeling of being stuck in a life you don’t really want. Taking a break to rewire your brain may be all that is needed to overcome your negative emotions.
Many employers report that employees who come back after the sabbatical are more engaged and creative than they were before. However, it is also possible that you won’t ever return to that job. You may find another line of work that is more in keeping with your interests that also provides the income you need.
Intrigued by the idea of a sabbatical? Go through these 8 tips for planning your break:
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.
You’ll want to be mindful of and have enough time away from your job to experience the different phases of an effective sabbatical.
Those phases include:
Disengagement and Healing: Whether you are escaping burnout or taking a sabbatical due to some kind of negative event in your life, you’ll want to take time to heal. This can take awhile. Getting out of your work patterns and ways of thinking can take months, not days or weeks.
Exploring: On a sabbatical, you’ll want to explore new activities, places, and experiences. You can try on different identities and discover who you want to be and in what context.
Reintegrating: After exploring comes figuring out what you’ve experienced fits into the life you want. Can you return to the job you had? Or, will you embark on some new endeavor? Time Magazine interviewed people who had taken a sabbatical and one person said, “I don’t think I can overstate the shift from feeling like I was just a cog in the wheel to feeling like I was a grown-up with power, with skills that were in demand, that people actually wanted to pay for—like I had more self-worth.”
Another responded, “The sabbatical enabled me to question my reality and my path, and gave me permission to think about my priorities in life. I can’t imagine living another 30 years until retirement without those lessons.”
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 and just how burned out you really are. The length of time might also be determined by your finances and the needs of your employer.
For many people, a mini retirement is time off from their existing job. For others, this is an opportunity to quit and find a new way of making money.
For one former teacher, a passion for educating others was rekindled by travel and she returned more passionate than ever about helping kids through the awkwardness of middle school.
However, many people start a second career after a sabbatical. “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.
Employers are looking for ways to retain their work force and sabbaticals give them options. So, even if you think your company doesn’t offer a formal sabbatical program, they may create something for you. Here are some considerations for figuring out how to take a sabbatical:
With the answers to the above questions, you can run a scenario in the NewRetirement Retirement Planner to assess the financial viability of a sabbatical. The tool enables you to set start and stop ages for work income, retirement savings, spending levels, and more so you can feel confident about the financial implications of your break from work.
To an overwhelmingly large degree, the most popular way to spend a retirement gap year is travel. But that doesn’t just mean hopping on a plane and staying in a hotel. You might be surprised by the number of creative and meaningful ways to see the world. Or then again, maybe your idea of a nice break is all about the break itself.
There’s no right or wrong way to spend a gap year. Here are some ideas for making it the time of your life.
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?
Technology has made self employment possible for greater numbers of people in a wide range of fields. A sabbatical might be an ideal time to turn your passion into a way of life.
Become a Road Scholar: Most people don’t have the distinction of being a Rhodes scholar with a pass to Oxford University. But you could become a Road Scholar and combine travel with a rich learning experience.
The Road Scholar program has been around since the mid 1970s. Previously known as “Elderhostel,” it offers learning trips throughout the United States, Africa, Asia, Australia and the South Pacific, Europe, and more. They cover 150 countries in all.
You choose what you want to learn about, choose the country where you want to travel, and sign up. For example, if you want to learn about food and wine in Argentina, Road Scholar offers a program where you’d get a cooking lesson with an Argentine chef, travel to wineries and discover how to pair food and wine. If you prefer history and culture in Greece, you can take a learning trip that highlights Athens and the Greek islands by ship.
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.
If the cost of extended hotel stays seems a bit daunting, think about this: A home exchange service can make your lodging costs abroad nearly disappear.
Senior Home Exchange is one that’s devoted exclusively to the over-50 set, and there are many others, but do your due diligence on the service first. While you live in someone else’s home, they’ll be living in yours.
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. If you gap year at home, you can take your time and peruse all of your options instead of making hasty plans in the off hours after work that might or might not stick later.
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.
The Sabbatical project offers a quiz to help you kickstart your sabbatical exploration.
Take the quiz here, then come back to NewRetirement to run the financial scenarios.
Do it yourself retirement planning: easy, comprehensive, reliable
Take financial wellness into your own hands and do it yourself retirement planning: easy,
Share this post:
Do retirees have an obligation to work? Are the benefits of a retirement job worth it? Many say no way.
If you want a secure retirement, you need to go about estimating retirement expenses. Get 9 great tips for succeeding at this difficult task.
Post pandemic there are unprecedented numbers of people who are quitting their jobs in search of a better work life balance. Why are they rethinking work and what is next for them?
Our weekly newsletter full of inspiration, podcasts, trends and news.
© 2023 NewRetirement, Inc. All rights reserved.
Disclaimer: The content, calculators, and tools on NewRetirement.com are for informational and educational purposes
only and are not investment advice. They apply financial concepts in a general manner and include
hypotheticals based on information you provide. For retirement planning, you should consider other
assets, income, and investments such as equity in a home or savings accounts in addition to your
retirement savings in an IRA or qualified plan such as a 401(k). Among other things, NewRetirement
provides you with a way to estimate your future retirement income needs and assess the impact of
different scenarios on retirement income. NewRetirement Planner and PlannerPlus are tools that
individuals can use on their own behalf to help think through their future plans, but should not be
acted upon as a complete financial plan. We strongly recommend that you seek the advice of a financial
services professional who has a fiduciary relationship with you before making any type of investment or
significant financial decision. NewRetirement strives to keep its information and tools accurate and up
to date. The information presented is based on objective analysis, but it may not be the same that you
find on a particular financial institution, service provider or specific product's site. All content,
tools, financial products, calculations, estimates, forecasts, comparison shopping products and services
are presented without warranty.