Liz Weston: How to take a career break

Back in 2016, Jamie Clark of Seattle was a software engineer who planned to take a year off of work to finish a master’s degree in computational linguistics. One year turned into three and a career change into financial planning.

Nowadays, Clark, who uses they/them pronouns, believes the experience makes them a better advisor – particularly since their career break didn’t turn out as originally planned.

“Part of our job as financial planners is to help people be prepared,” says Clark, now a certified financial planner who recently launched their own firm, Ruby Pebble Financial Planning. “And I want to help people build that flexibility.”

Career breaks are extended and usually unpaid stretches of time off work. Such breaks can be aspirational — giving you time to travel, pursue a degree, change careers or launch a business. Or, they can be prompted by life events, such as caring for a child, nursing a family member or dealing with an illness or burnout.

Whatever the cause, some planning can help you make the most of your break.

SAVE AND BUDGET DILIGENTLY

CFP Henry Hoang of Irvine, California, doesn’t believe most people need detailed budgets, as long as they’re saving adequately for their goals. But career breaks are an exception, he says. When your paychecks stop, you’ll want to have enough savings to sustain you. That starts with knowing precisely what you’re spending today and estimating what your expenses will be during your break. Some costs might decline, such as commuting or child care. But you also might have new costs, including higher health insurance premiums if your current coverage is employer-subsidized.

Once you calculate how much you need to save, consider adding a fudge factor equal to two or three months’ worth of expenses in case it takes longer...