A Sabbatical May Be a Smarter Move Than Early Retirement

By Jacob Schroeder
From Kiplinger’s Personal Finance

If your soul yearns for a sabbatical, you are not alone. According to Occupational Safety and Health Administration (OSHA), over 80 percent of American workers report experiencing workplace stress, and more than half feel it affects their home life. With burnout on the rise, how can people create a healthier work-life balance?

A smarter and more achievable alternative to retiring early might be a sabbatical—an extended break from work, often for rest or personal growth. A sabbatical can deliver enduring benefits that go beyond basic self-care, without the long-term commitment of leaving the workforce.

While not yet the norm, sabbaticals are becoming more popular, especially as workers prioritize mental health.

Harvard Business Review identified three types of sabbaticals: “working holidays,” where people pursue a passion project and return with greater independence; “free dives,” intense explorations typically involving travel, helping people discover their authentic selves; and “quests,” where individuals take time to recharge before pushing their limits, often by learning new skills.

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Across all types, sabbatical-takers report greater confidence, clarity, and renewed enthusiasm. Some, like Harrison, use the experience to pivot careers, while others bring fresh energy and skills back to their roles.

Employers increasingly recognize these benefits, with some offering paid sabbaticals to attract talent and support well-being.

One such employer, Morningstar, offers six-week sabbaticals, a perk that director of personal finance and retirement planning Christine Benz has taken twice, one of which was a “working holiday” to write a book on retirement.

She calls it “an opportunity to reflect” and “experiment with activities different from work to see how you like them and if they provide a different sense of purpose.”

Planning Your Sabbatical

The planning required for a sabbatical varies depending on your employer’s support.

Paid sabbaticals, which may include health coverage, simplify things. Several industries are more likely to offer paid sabbaticals, such as academia, law, finance, and ministry. Research your employer’s policies and ensure you understand what will be covered and if you will receive full or partial pay.

Unpaid or longer sabbaticals require more planning. Jamie Clark, CFP® and founder of Ruby Pebble Financial Planning, advises those considering an unpaid sabbatical to carefully examine their finances.

“You should first understand your assets and liabilities, income, and both fixed and discretionary living expenses,” Clark says.

Clark recommends setting aside three to six months of expenses as an emergency fund, plus additional funds for sabbatical costs and post-sabbatical job searches.

Health insurance may be another consideration. Options include continuing your employer’s health plan through Consolidated Omnibus Budget Reconciliation Act (COBRA), joining a partner’s plan or qualifying for Affordable Care Act (ACA) subsidies.

Clark cautions against dipping into retirement savings, which can derail long-term goals.

Beyond financial preparation, thoughtful planning is essential to a fulfilling sabbatical. Benz emphasizes the importance of structure, advising, “Be deliberate and realistic about what you’ll be able to get done.”

©2024 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.

The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.