The Sabbatical

Buried deep in your company’s HR polices you might be surprised to learn that there is one for taking an unpaid leave of absence or sabbatical.  Which depending on your travel plans or other longer term projects might be  a very good way for you to get some serious practice of being retired prior to actually getting there.  Yet these leaves can also have some serious downsides.  So the question becomes should you take one if you could? And if you do what are the costs?

Well on the positive side of a sabbatical is the ability to get done a larger project like traveling to Europe for three months or building your own cabin or taking some classes to expand your education.  You also get the ability to learn what it is like to not have a job and how that makes you feel over a longer period than your typical vacation.  There really isn’t much of a limit of what you can do as a project, but usually you need to have something specific in mind.  Why?  In almost every case you have to be able to explain why you want the leave to your boss and sometimes their boss as well.  So saying your going to lounge around the house for six months likely isn’t going to work to get your papers signed off.

Yet let’s say you do manage to get the time off, what are you paying in real terms to do this.  Well here’s a list of some more obvious issues:

  • No or low income.  If you don’t do anything during your leave that brings in some money you are going to be living off your savings so you are going to need a sizable pool of cash to live off for that time period.  The longer you are off the more savings you will need in advance.  For example, if I wanted to take off six months I would need about $19,000 for living expenses and that does not include any money for any major projects or travel.
  • Will push off retirement.  Since you are moving a larger amount of savings to take your leave now, you will lose compounding on that money towards retirement and any contributions during this time.  So depending on the amount of time you take off and when you could be losing a few years off your retirement date.  In my example of taking off six months, my rough estimate was it would cost me an 18 to 24 months of working to make up the difference.
  • Reduction or lose of benefits.  Depending how long you are taking off and why you might be losing some or most of your benefits while you are off.  So if you have dental or eye coverage and you smash out one of your teeth or bust your glasses you might be on the hook for the full amount to fix them.
  • Career fallout.  Let’s face facts taking off a period of time off has the potential to leave a negative impression with your boss and/or your co-workers and cost you in your career.  How exactly this falls out is almost impossible to predict, but it is important to be aware that some kind of backlash is possible from doing this.  If you take the leave for educational purposes often these backlashes can be less, but there really is no guarantees.

So that’s my short summary of taking a sabbatical.  If you have taken one, please leave a comment on how it worked for you and what tips you would offer to others to do the same.

5 thoughts on “The Sabbatical”

  1. Interesting look at the implications of taking extended periods away from work.

    Workign for the Federal government, employees have two options:

    i) once in your career, you may take up to one year unpaid sabbatical, or;

    ii) leave with income averaging: allowing you to schedule between 3 and 12 weeks off in one stretch, and have your annual salary deducted by the time off, and averaged over the following year: this way you still get paid during your time off, but at a lower rate, and there’s less effects on your pension and benefits

  2. Sean,

    Those are interesting options to have. I like the idea of the averaged pay so if you plan carefully you won’t really notice it.


    Well you will have to let me know how the longer leave turns out.


  3. I had a bit of a different approach. I applied for a one year personal leave from my employer, since there was downsizing on the horizon (large telecom firm) and I hoped to attract a severance package thereby. 8 months into my leave, our whole group was cut, and I was offered a severance package, so am retired at age of 50. (although won’t collect any pension until I turn 60, but had planned for that)

  4. I’m going to take a 2 month break (“Paternity Leave”) at the end of the year. I am worried that it will have career implications. I work in a very traditional industry and although a year long maternity leave is now accepted and normal, I will be one of only a few taking advantage of parental leave for the father.

    2 months is not that long, and since it is parental leave I will be getting EI although at a huge pay cut.

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