A short vacation can give you a boost in energy and allow you to recharge your batteries for work, but sometimes we need more than a quick break. A sabbatical can provide the time needed to assess your personal and professional life, complete career and educational goals that were put on the back burner, and reevaluate your career. For some, a sabbatical can even lead to a reassessment of their retirement horizon and new retirement goals and objectives. Read on as we explore what a sabbatical can do for you and what you need to know before you dive in.

Sabbatical Defined
A sabbatical is an extended break from your job that gives you time to enhance your academic qualifications, reflect on your accomplishments and decide how to prioritize your life and career, or to simply take an extended rest period due to professional burnout. The duration for a sabbatical is typically one year. This is unlike a vacation, which is usually short term, ranging from a few days to a month, and is usually used to de-stress and rest so as to return to work rejuvenated.

Caution: Your Job Function May Change
Many employers who allow employees to take sabbatical leaves do so with a stipulation that while the employee is guaranteed a job at the end of the leave, the employee's job functions may change. If you are considering taking a sabbatical leave, a careful assessment of how it may affect your job should be performed, so as to ensure you make an educated decision.

A Sabbatical's Effect on your Life
A sabbatical can give you more than a year-long vacation to catch up on your soap operas and work on your golf handicap. Some of the primary benefits include:

Exploring New Career Opportunities
People who are fired from their current job, or who need to find a new career either because they have no choice,or because they are disillusioned with their previous career. A sabbatical can also provide opportunities to explore new career options, and unlike being fired, you may have the option return to your same job if you determine that a new career path is not suitable. If your goal is to explore new professional opportunities, research the job market in your area of interest before making a decision. Finding the job you want can take several months, or even longer.

If you are able to secure a higher paying job, it may allow you to increase your retirement savings and could allow you to take an earlier retirement. (For help exploring a new career path, check out Six Steps To Successfully Switching Financial Careers and Career Shift: Get In The Driver's Seat.)

Educational Advancement May Mean More Income
If your sabbatical is taken to advance your academic qualifications, it could lead to better job opportunities and/or professional advancements such as promotions. Higher level jobs usually mean higher salaries, longer vacations and a better benefits package. This too could mean more income allowing you to increase your retirement savings and thereby shortening your retirement horizon. (To learn about the benefits of higher education, read Invest In Yourself With A College Education.)

Opportunities for a New Perspective
For some people, time away from work can provide a different perspective on the importance of work and career growth versus quality time with family and friends. These individuals may choose to change to a career that is less demanding of their time and energy, even if it means less income. Where quality time is more important than high-income, a semi-retirement may be more important than working longer and saving for a full retirement. (To read about semi-retirement and finding a balance between work and happiness, see Money Can't Buy Retirement Bliss and Stretch Your Retirement Savings By Working Into Your 70s.)

Before You Decide To Take a Sabbatical
When you consider the benefits it can provide, a sabbatical may seem like a perfect fit. However, the idea should be given careful consideration before a decision is made, especially if you will not receive your regular salary and benefits during the sabbatical. The following are some points for consideration:

Financial Readiness
If you will continue to receive a full salary while on sabbatical, then financing is a non-issue. If not, then consideration must be given to how your time will be financed. It is recommended that you earmark a savings account to which amounts are added to finance your sabbatical. Ensure that it is sufficient to cover your living expenses, before embarking on your sabbatical leave. Failure to do so may cause financial problems, including depleting your regular savings, your retirement savings and increasing outstanding debts.

Health Benefits
You health benefits may be reduced while you are on sabbatical leave. Check with your human resources department to determine their policy for providing coverage for medical, dental and vision care during sabbaticals. If you will not receive coverage during your sabbatical, you will need to cover health care expenses out of pocket. (To get started on your search, read Find Secure And Affordable Post-Work Health Insurance.)

Your Retirement Savings
A sabbatical can affect your retirement savings in several ways, including the following:

  • In order to be eligible to participate in an employer-sponsored plan, such as a 401(k), profit sharing plan or defined-benefit plan, you may need to perform a certain number of years-of-service with the employer. Your years-of-service may also affect your vesting schedule for your retirement contributions made by your employer. If you take a sabbatical, your employer's policy will determine whether the sabbatical is treated as counted service for eligibility and vesting purposes. Generally, if you continue to receive a full salary, then your sabbatical is considered counted service. (To learn the retirement plan basics, check out The 4-1-1 On 401(k)s.)
  • If you receive a partial salary, your "years of service" may be proportionate to the percentage of salary you receive. For instance, if you receive six-months worth of salary for a year of sabbatical leave, you may be considered to have accumulated only six months of service.
  • If you receive a reduced salary, or no salary, that will hurt the amount you can afford to add to your retirement nest egg during your sabbatical leave.

Insurance Coverage
Most employers provide insurance coverage for their employees. This includes life insurance, and long- and short-term disability insurance. This is especially important if you are the primary breadwinner in your family, and the one through whom the coverage is provided. You will need to determine if coverage still applies during sabbaticals, and if not, make alternative arrangements. (For reading on disability insurance, check out Protecting Your Income Source.)

If you need to take time off to pursue goals and objectives, a sabbatical can provide this without jeopardizing the security of your job. Regardless of the purpose for which it is taken, it's important to use the time to explore other areas. For instance, if you are a teacher who has taken sabbatical leave to pursue additional academic qualifications, use the time to also reassess other aspects of your life. And, if you are only a few years away from retirement, but you feel you will not want to retire at that time, consider taking a course that could lead to a second career. If planned correctly, a sabbatical is the perfect way to prioritize your goals and find that spark in life once again.

To learn how to convince your boss to let you take a sabbatical, read Negotiating For Employment Perks.

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