Give it a purpose and an end
A break with a stated reason, such as caring for a relative, a long trip, a project or recovery from burnout, is easier to fund, easier to explain and easier to finish. Set a length before you begin. Three to twelve months is typical, and an open-ended break tends to end only when the money does.
Ask before you resign
Some employers have a formal sabbatical or unpaid leave policy, often tied to five or more years of service, and many will arrange one for a valued employee. Propose specific dates, a plan for covering your work, and several months of notice. If the answer is no, time the resignation: leave after a bonus pays and after any vesting date for retirement contributions or stock.
Build the budget
- Price the break itself, month by month.
- Add health insurance for every month.
- Add a re-entry fund of three to six months of normal living expenses, because a job search commonly takes that long and the first paycheck arrives weeks after the offer.
- Add the obligations that do not pause, such as loan payments, insurance and storage.
A six-month break at $3,000 a month, plus $500 a month for insurance and four months of re-entry money at $3,500, comes to $35,000. Do not plan to fill a shortfall from retirement accounts. Withdrawals before age fifty-nine and a half generally bring income tax plus a ten percent penalty.
Keep health coverage
Under the federal COBRA law you can usually keep your employer's plan for up to eighteen months by paying the entire premium plus a small administrative fee, which often runs to several hundred dollars a month for one person. Losing job-based coverage also opens a sixty-day special enrollment period on the health insurance marketplace, where a low-income year may qualify you for subsidies. Price both.
Plan the return
Keep one professional thread alive, whether a course, a freelance assignment or volunteer work in your field, and stay in touch with half a dozen contacts. Begin the job search two to three months before the money runs out. List the break on your résumé with dates and one plain line, and prepare two sentences for interviews: what you did and why you are ready to return.
Tip Write down the account balance that ends the break before you leave. When savings fall to the re-entry fund, the search starts, whatever the view from the hammock looks like.
