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An increasing number of people are choosing to leave steady careers or jobs to take a 'gap year' in order to pursue new interests or skills. And while this bold move may have long-term benefits, such an adventure comes with risks, so it's important to have proper financial plans in place before you take the leap!
Bev van Nijkerk, segment specialist for Sanlam Young Professional Market, advises you speak to a financial planner before making any decisions. 'They can advise you on how your sabbatical will affect your current and future life.
For instance, what should be done about your insurance policies and savings plans if you stop earning an income for a while?
Some providers will give you a premium "holiday" on retirement annuity for a pre-arranged period.' According to her, South African professionals often take mid-career breaks to gain experience overseas while others take time off to further their education.
Taking a sabbatical is also increasingly popular with the 50 to 60 year age group. As people reach compulsory retirement age, they're reskilling themselves to pursue a second career as very few people can realistically afford to retire at 60 or 65.
This second career phase can continue for another 25 years. Warning against taking premium breaks at this age, van Nijkerk says, 'At a younger age, you have a better chance of recovering from financial loss, but in your 50s and 60s, not keeping up with your premiums could be hugely damaging in terms of the compounding factor on your savings.'
- If your job isn’t doing your social life any good, it’s probably time for a change. For the biggest selection of available jobs in South Africa, visit Careers24 today.
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