Many Canadians have recently realized it’s time for a change, leading to a reassessment of their values in pursuit of more fulfilling lives.
Whether this trend is a byproduct of the world slowing down during the COVID-19 pandemic or a shift away from traditional North American work culture, which emphasizes the belief that one must tirelessly work until
, a focus on personal fulfillment is here to stay.
For many, mid-career gaps have become a viable solution, whether it involves taking time off to travel, pursuing a passion, going back to school or making a career change to fight
. However, a common worry remains: Does taking a mid-career gap jeopardize long-term financial health?
The good news is that it doesn’t have to; with proper planning, these breaks are not only feasible, but can lead to a more value-focused life without compromising future financial security.
Showing your cards
No matter your dreams, conducting a values assessment is essential in finding the right path toward personal fulfillment. These assessments can be done independently with online software or with the guidance of a wealth adviser and can help you reprioritize your actions around your core values.
Methods such as the “deck of cards” approach — where values such as religion, family and philanthropy are assigned onto cards and narrowed down from 50 options to your top five priority focuses — can be helpful exercises in identifying what truly matters most to you.
Narrowing down top priorities can be challenging, especially for couples as they navigate differing priorities while needing to compromise on financial decisions. By effectively using these tools, couples can better understand their priorities, make more agreeable compromises and align their financial plans accordingly.
Mind the gap
Once you’ve identified your top priorities, it’s time to consider any implications associated with taking an extended leave so that intentional preparations can be made.
Whether it’s leveraging online financial planning resources or seeking guidance from an adviser, proper planning can set you at ease, allowing you to enjoy your time off while ensuring your long-term financial goals remain on track.
The planning process should involve assessing your current finances, identifying short- and long-term financial goals, and projecting expected costs during the career gap. To create a comprehensive plan, variables such as current savings, the rate of return on investments,
,
, retirement goals and other considerations should all be included.
Conducting different what-if scenarios by adjusting variables can also be a valuable way of stress testing the plan. Generally, it’s best to take a conservative approach to prepare for contingencies. After all, having less than expected could create unwanted stress and counteract the benefits of taking an extended break in the first place.
Those concerned about how a mid-career gap might impact their career progression can keep in touch with colleagues and their industry, facilitating a smoother workforce re-entry.
Another rule of thumb is to set aside immediate cash needs for monthly expenses into a high-yield savings account. This strategy avoids market risk and prevents selling investments at unfavourable prices when funds are needed most.
Taking time back
Wealth encompasses far more than monetary assets; it includes overall physical and mental well-being, which often comes from living authentically and aligning with your values. People are realizing that the traditional path of working continuously until retirement before enjoying an extended break isn’t the only option available.
The bottom line is that it never hurts to crunch the numbers to see if taking a mid-career break fits within your overall financial plan.
Even for those who can’t afford such a gap, identifying your values and stress testing your financial situation and long-term goals can be an invaluable exercise in realigning your focus on what matters most, such as spending more time with family or pursuing other goals.
Moreover, a mid-career gap does not always have to mean taking time off as an extended vacation. For some, it can be a valuable opportunity to start a new career and pursue their passions, which can lead to a more meaningful vocation.
Priorities change throughout our lives, and with today’s resources — online assessment tools, wealth advisers and even something as simple as a deck of cards — preparing for a change is not only possible, but empowering.
With the right financial planning, you may return from your time off in better shape than expected and with a renewed sense of purpose.
Mary Ellen Byrne is a senior wealth adviser and portfolio manager at Richardson Wealth Ltd.
