Have you ever thought of slamming the door to your life one last time and never to look back?
Have you ever thought of escaping the9 to 5rat race for a year to find your inner self?
Have you ever thought of taking a sabbatical leave?
What’s a Sabbatical Leave?
FB has recently written on how “spending 20K for a year long vacation worth it“. This is roughly the definition of a sabbatical leave 🙂
This is a concept that is gaining a lot of traction lately due to the very demanding and ever changing work environment we evolve in. A sabbatical leave is a sort of one year “vacation” where you leave your job without quitting it.
This means that you can leave your position for a year to do something else and still have the possibility to have your job back upon your return. During that period, you are obviously not paid by your employer but at least you know that you can come back!
Why Would You Take a Sabbatical Leave?
A sabbatical must not be confused with a burn out or any other type of “medical leave”. When you on a sabbatical, you are feeling well; you just need to change your ideas. There are many reasons that can be accepted by your employer to let you go:
- Return to school (doing an MBA)
- Community work overseas
- Travelling around the world
- Working on a special project (such as research)
- Taking care of a relative
It is important to detail the reason why you leave and why you will come back. If you simply tell your boss that you want to take off on sabbatical just because you are sick of your job, I doubt he will guarantee you a job when you come back!
Why I Would Take a Sabbatical Year
I have thought of taking a sabbatical from time to time over the past 18 months. The reason being is that I have a very interesting sideline growing while I continue to work full time. Sometimes, I dream of what my life could be if I was to quit everything and work full time on this sideline. I dream of liberty, independence and… money!
I know I’m not ready yet to take off on sabbatical, yet. I’m too scared at the moment to leave and not look back for a year. Also, I like my day job even though I’m not my own boss. And I know I couldn’t present my true motivation as a reason to leave. Why would my boss let me go with a fool proof guarantee that I will have my job back if I want to leave to work elsewhere? This surely doesn’t qualify under the “acceptable” reasons an employer would accept to grant a sabbatical!
I’m also not ready because I haven’t planned my leave, neither have I saved for it. A year without income is definitely a challenge when you have a family and mortgage to support.
How Much Do You Need To Go On a Sabbatical Year?
This is a great question with many answers. In fact, we can start the answer with another question: “What will you do during your sabbatical?”. If you plan on traveling around the world, you probably need a lot more money than if you plan to go overseas to do community work (they usually don’t pay you but offer you food and a place to stay).
The first step one must do is to elaborate a budget that goes along with his project. In my situation, I would need to put the equivalent of 6 months of lifestyle aside in order to feel safe. This would give me enough room to start generating cash flow for the last 6 months.
Since you won’t be making any money during this year, you can take money out of your retirement account if you have savings. Withdrawing rules vary depending on the country. InCanadafor example, you can withdraw from your RRSP or from your TFSA. The RRSP withdrawals will be taxed as income but since you don’t make any, your marginal tax rate will be quite low. In theUS, you are entitled to withdraw from your ROTH IRA but not from your 401k as there are penalties for early withdrawals. There are also some government programs allowing you to withdraw money from these accounts to go back to school without having to pay tax (but you must put it back over time).
If you don’t have many financial responsibilities, you can estimate that $2,000 per month should be enough to cover most of your needs. Then, if you need more, it’s up to you to save as much money as you can in a money market fund prior to your sabbatical leave.
My plan for now is to focus on paying down my debts in order to provide me more flexibility. Since I have a home equity line of credit, I will always be able to take money from the line of credit to finance my sabbatical leave. I think I will reconsider this option in 5 years (at the age of 35) to see if I can finally try to work only for myself.
Right now, what’s holding me back is my young family (I have 3 kids; 6 yrs, 4 yrs and 2 months). Since my wife stays at home, I feel heavy pressure to bring home the dough.
Readers, have you ever taken a sabbatical leave. How did it go?
Have you ever or would you consider it? What is holding you back?