Every time we meet with new clients, we ask them what motivates them to succeed. Besides financial benefits and personal fulfillment, the answer we hear the most is freedom. Even successful individuals who love their jobs want to spend time not working and pursuing other interests, too. The Gap Year is often the perfect midlife break that hard working Gen Xers need to enjoy the freedom their financial success has afforded them.
The problem, then, is making this Midlife Gap Year a reality. There is no reason to make the process overly complicated: you can break down your plan into three simple steps.
1. Design your ideal career break
Planning your Midlife Gap Year is part of the fulfillment. You have a unique and exciting chance to explore all types of possibilities for your time off. No theoretical ideas are off limits. Spend time in a comfortable space or outside where you can ponder these questions without interruption:
- What is something you’ve always wanted to try?
- Where is a place you’ve always dreamt about visiting?
- Is it time in your life for a career change? What training or education can you pursue to help with that transition?
- Would you prefer to stay home and enjoy the fruits of your labor? Focus on your health and fitness? Spend time with family?
Whatever your fancy, this is the time to let your creativity flow. For many, it’s also an opportunity to re-visit personal priorities and identify the things in your life that are most important to you as you hit a peak in your career, your children grow older, and you begin thinking about the last leg before retirement.
2. Stress test your plan
The “what if’s” often keep people from taking time off. If you find yourself resisting the Midlife Gap Year, you can usually get past “No” by stress testing the worst-case scenario.
One thing we’ve all learned throughout the pandemic is that there will always be uncertainties in life, no matter how well you plan things ahead of time. Outcome testing — like we run for our clients — can help you prepare for unfavorable events. This exercise often reveals that there are safety nets or workarounds you can put in place that remove some or all of the “worst case” risks.
To help you begin this exploration process we have put together a set of “stress test” exercises that you and your spouse can begin to fill out together, separately, or with your financial advisor. Putting the ideas on paper can reveal gaps you can fill or adjustments you can implement to make the Gap Year a reality.
3. Meet with a financial advisor to fine tune the details
The financial portion of your Midlife Gap Year may very well be the most labor-intensive part of your journey. A specialized Advisory Group Certified Financial Planner™ can help you take the steps to plan and answer important questions:
- Assess your resources. What do you have available?
- Calculate the investment you need to make. How much do you need?
- Determine how to fund the Gap Year. What is the best way to utilize your resources?
- Explore tradeoffs that might need to be made. Do you need to take less time off? Can you take more? What are alternatives?
- Plan your re-entry strategy. What will ‘returning’ look like? How long should you plan for?
- Keep your other long-term financial goals on track. What is the financial impact on your retirement or other goals? How much longer will you have to work or what adjustments to you need to make?
What surprises many people who plan for taking time off is that the impact to their overall financial picture may not be as significant as they anticipate. If you’ve been saving regularly for retirement and have built up your net worth through other investments or your business, you are likely already in a good financial position and do not need to seek “maximum financial return.” When you add in the benefits of taking a break, you may even come out ahead.
An objective fiduciary can oversee your plan to check your assumptions or suggest more prudent alternatives. With their expertise, it’s likely there are any number of possibilities you haven’t explored and/or aren’t even aware exist!
Is it time to make a life-changing decision?
If you’d like to learn more, we encourage you to download our free Gap Year Planning Guide and schedule an introductory call with one of our advisors today.
We are happy to help guide you to make your post-COVID lifestyle what you have been envisioning during this relentless period. We will help you work through the considerations and help you keep your long-term financial plan on track.