The decision to retire is a big one. In addition to affecting your financial picture, it also changes your lifestyle. Taking an extended break from work as a “retirement test-run” may prevent retirees’ remorse.
If you do this, you will be able to determine what you should do with your free time.
When you leave the workforce, you’ll have 40-plus extra hours to fill weekly. Taking a sabbatical will allow you to figure out what you would like to do with that time.
Jay Zigmont, Ph.D., CFP, founder of Childfree Wealth, regularly recommend a sabbatical to his clients. Sabbaticals are a great way to ‘Marie Kondo’ your life – discover what makes you happy. In retirement, it’s more important to know what you’re retiring to than what you’re retiring from.
In retirement, you don’t have to work, volunteer, or do anything, but you should have some activities instead of just stopping work. This is because if you don’t have something to do in retirement, you will run out of shows to watch on Netflix after about a month.
You can use it to determine how much money you will need in retirement.
You may not be completely unaware of how much you are spending when you receive money every week or two. You can determine how much money you need to cover housing, groceries, and healthcare by taking an extended break from work.
Plan for a retirement that you will enjoy by having enough financial wiggle room. Are you interested in traveling? Would you like to try new restaurants? Have you considered taking up a new hobby that costs a lot? Your retirement budget should allow you to do the things you enjoy.
You can take this time to consider ways to generate additional income in retirement if you realize that you won’t be able to cover these costs with your current retirement savings. You may have to increase your investments or take on a part-time job to accomplish this.
It Can Test Your Emotional Readiness
If you’ve never taken a sabbatical before, it’s a great time to find out what it’s like not to work. Can you live without a regular schedule? Are you satisfied with the new ways you have found to fill your free time?
A career can be a significant part of an individual’s identity, says Touchdown Money founder Scott Lieberman. A retirement test run can help you find hobbies, good causes, or places to volunteer that inspire you. Without this, boredom may lead to depression and self-destructive behavior.
Professionally, it can help you if you return to work.
Taking a sabbatical may make you realize that you don’t want to retire. If that’s the case, you may benefit from taking an extended work break when you return to work. Human Interest, a 401(k) provider’s chief experience officer Kristina Wallender, has taken a sabbatical every six years and says it has helped her career.
During her first sabbatical, she focused on non-career goals such as travel. The professional benefits were many and unanticipated. Sabbaticals allow you to travel to places you wouldn’t otherwise be able to visit. Through it, you can make new connections, strengthen your identity and explore new pathways – including those you might want to pursue before retiring. She said that this experience makes you a better leader and more productive contributor once you return to work.