• 3-Minute Article
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  • Oct 06, 2017

Is a Retirement Gap Year Right for You?

Taking a formal ‘time- out’ can bring retirement goals into focus. Ask these four questions to gauge whether it makes sense.

Created in Collaboration with Kiplinger as a part of our Moving in Retirement series.

Traditionally reserved for college-bound teens, the idea of taking time off to regroup and refresh is catching on with pre-retirees. Inspired by the freedom that these retirement “gap years” can bring, people are using them as a bridge to an encore career, a way to explore potential retirement homes , or a transition step between work and a well-planned retirement.

Increasing numbers of people are curious about gap experiences, according to the Center for Interim Programs, which helps individuals of all ages design gap years. And what they are learning is that taking a break is about discovering what they truly want to do with their time and talents — and then developing a plan to pursue those dreams.

Ask the following questions to assess whether a retirement gap-year transition makes sense.

Have I Determined What I want to Do?

Consider what you enjoy most about your work, and think about how you want to spend your time in retirement. Could you use your skills in a new way?

Maryland resident Gloria Chiantella, 60, took a gap year after taking a voluntary buyout from her job in professional development training. She used the time to complete the licensure for her original dream career: counseling. That step prepared her for a second career at a mental health practice. “I’m finally doing exactly what I wanted to do all along,” she says.

What's My Timeline?

Think about whether you are prepared to take a year off and then return to your job before retiring. If you’re not returning to your old job, do you have new opportunities lined up?

Bill O’Brian of Virginia, 62, who made a late-career leap from journalism into wildlife conservation, has given some thought to a gap year as an extension of his work. The concept? Traveling around the country visiting its cultural and natural wonders. “For me, it would be a yearlong road trip,” he says, “to see or re-see all of America's nooks and crannies.” To fund his adventure, O’Brian would use a portion of personal savings built up over the years – and focus on keeping costs low.

A gap year can and should be tailored to whatever time, resources, and goals are available.


Where Do I Want to Be?

Some use gap years to visit new destinations in meaningful ways, such as exploring places they may like to retire.

Gap years also can be used to scope out potential retirement spots — or to plan lengthier “trial” visits than vacation time typically allows. Annette Licitra, 60, took advantage of her Washington, D.C.-based employer’s sabbatical policy to take a year off at half pay and full medical benefits, if she agreed to return to work for at least two more years. She used some of the time off for road trips to places where she might like to retire, with a focus on living in the mountains. “One weeklong stay convinced me that even though I really liked my would-be neighbors who took me boating on a lake,” she says, “that community wasn’t the place for me.”

Can I Afford to Take a Gap Year?

Discuss plans with your financial advisor to determine whether your retirement plan allows for a gap year.

Cost, time, and obligations are key considerations; having the financial means, job, and family flexibility to take time off are just a few of them. Advance planning is required: Examine income and savings in the context of keeping your overall retirement plan intact.

As a next step, review workplace options. For example, 17% of employers today offer paid or unpaid sabbatical programs,1 and more companies are embracing the chance to offer retirement-eligible employees the option of continuing to work part-time. Plus, a gap doesn’t have to be a full year—choose more time or less, according to your schedule. Breaking up a gap year into smaller chunks or working for part of the year can help reduce overall costs.

Just as there is no one-size-fits-all retirement, there is no one formula to pursue a time-out tactic. A gap year can and should be tailored to whatever time, resources, and goals are available.

If the idea appeals to you, contact your financial professional, who can help map out a strategy.