By Jessica Spaulding

Have you ever considered taking a mid-career break; starting a new business, going back to school, travel, a research sabbatical, maternity/paternity leave?  A mid-career break can be full of uncertainties, but starting with a well thought out plan can reduce your anxiety. 

How much money do you really need?

Your past spending history may not be a relevant starting point. You’ll be surprised at the expense of simply staying home with a new baby.  If you sell your house and car to travel, you’ll get rid of your mortgage and car payments, but you’ll have the new cost of hotels and flights.  (Note: renting an apartment for a month while traveling is a great way to save money on accommodations.)  Look at the big picture to save money.  You will likely burn through a lot more money in Europe vs. South America. 

You may need to keep an open mind- don’t think of a low cost meal as a sacrifice, but as a trade off.  For example, instead of dinner at a fancy French restaurant downtown decide to have lunch at a cafe in Paris.  It is also a good idea to find other people who have done something similar and use their experience as a guide.

Where will money come from while you’re away? 

Generally, it comes down to a few options; Living off of your savings, the return on your investments or working part-time/seasonally.  For most people, a combination of these is what works best.  If you are going back to school, can you still work part-time?  If you are starting a new business be realistic about when it will start to cash flow. 

Plan to push as much income from the years you’re working to the year you’re taking off to save on taxes.  (Don’t sell stock in 2013 to fund time off in 2014.)  You may be surprised at some of the ways you can generate money from investments you didn’t think of as cash-flowing.  If you are no longer working in the city think about selling or renting out your house and living somewhere cheaper.  (This is a great plan for long-term travelers.)

How will this affect your retirement plans? 

Can you still save for retirement?  Talk to a financial planner about getting the most savings bang for your buck.  If it comes down to it, are you willing to postpone your retirement to take time off now?

What is your plan for coming back to work? 

A mid-career break is just that – a break.  Unlike planning for retirement, you need to think about how (and when) your break will end.  For some, this is obvious, such as going back to school or starting a new business.  Others will need to consider this gap on their resume and how future potential employers will view it.  Attending seminars and conferences is a good way to stay up to date on your industry and the networking you do at there will give you contacts for when you start working again.

It’s impossible to plan for everything, but it’s important to remember to set up an emergency fund and have a plan B just in case.  Always keep your goal in sight by reminding yourself of why you are doing this. Following through with your plan is likely to reveal many pleasant surprises you never expected.