I refer to my job as “my velvet handcuffs”. I’m tied to it because of all the comforts it provides me: a steady paycheque, extended medical benefits, and a building retirement pension to name a few. Another benefit my employer offers is a prepaid sabbatical option. It allows employees to take a pay cut for a specified period of time, and then take extended time off work while continuing to collect a steady paycheque. In my case, I will be taking a 20% pay cut starting January 2014, for four years. In the fifth year, I have the year off, while 80% of my pay continues to get deposited into my bank account every 2 weeks.
There are pros and cons to taking a prepaid sabbatical. The bottom line is that over the course of 5 years, you only get 4 years’ pay. Also, the year off is considered a “break in service” to my pension provider. Therefore, I will have to pay not only my contribution during the year off, but also my employer’s. I will also lose my extended health benefits during the sabbatical year. The more you read the policy, the less attractive this option becomes. But for me, not taking the year off to travel the world will be a choice I would always regret.
“No man ever said on his deathbed I wish I had spent more time in the office.”
– friend of Paul Tsongas
About 10% of large Canadian companies offer some type of sabbatical program. If yours doesn’t, consider the benefits to the employer, and prepare your own proposal. Giving me the year off will cost my employer nothing. In fact, they will save money while offering a secondment to my position for less pay. This will give someone a year to gain experience in a job they may want to be promoted to some day. It’s win win win.
If a prepaid sabbatical isn’t an option for you, then create your own. Put 20% of your pay aside for 4 years, then quit your job, and take a year off to travel (while living off your savings), and then find yourself a job when you’re done. Preferably one that offers prepaid sabbaticals!
I realize most people would never do this. It’s scary to take a big cut in pay or to quit your job. But my passion for travel runs very deep. What am I willing to give up for this experience? Stay tuned while I cut, cut, cut my spending. It’s now countdown to pay cut. In just over 4 months the cutting begins. I’m kind of weirdly excited about that!