Some tips if you decide to take a career break

Back in 2016, Jamie Clark of Seattle was a software engineer who planned to take a year off of work to finish a master's degree in computational linguistics. One year turned into three and a career change into financial planning.

Nowadays, Clark, who uses they/them pronouns, believes the experience makes them a better advisor – particularly since their career break didn't turn out as originally planned.

"Part of our job as financial planners is to help people be prepared," said Clark, now a certified financial planner who recently launched their own firm, Ruby Pebble Financial Planning. "And I want to help people build that flexibility."

Career breaks are extended and usually unpaid stretches of time off work. Such breaks can be aspirational — giving you time to travel, pursue a degree, change careers or launch a business. Or, they can be prompted by life events, such as caring for a child, nursing a family member or dealing with an illness or burnout.

CFP Henry Hoang of Irvine, Calif., doesn't believe most people need detailed budgets, as long as they are saving adequately for their goals. But career breaks are an exception, he said. When your paychecks stop, you will want to have enough savings to sustain you. That starts with knowing precisely what you are spending today and estimating what your expenses will be during your break. Some costs might decline, such as commuting or child care. But you also might have new costs, including higher health insurance premiums if your current coverage is employer-subsidized.

Once you calculate how much you need to save, consider adding a fudge factor equal to two or three months' worth of expenses in case it takes longer than expected to land your next job, Hoang suggested.

Extended breaks could mean you will need to work past normal retirement age or increase your savings rate significantly to retire on time. If you are planning to take more than two years off, use a retirement calculator or consult a financial planner to see how that might affect your plans to retire, Hoang says.

"There are always surprises, but it's good to try and minimize them, or at least minimize impact on your finances," Clark said.

Hoang has another cautionary tale from a client who started his break with a strong desire to change careers and spend more time with his young children. His days quickly filled up with parenting duties, and he never made time to explore other jobs, Hoang said. When his savings ran out, he ended up going back into his same field.

The details of your plan will depend on your career break goals, but consider scheduling lunch with a professional colleague every month or so to maintain your network and stay abreast of developments in your field. If you are considering a career change, make a timeline for when you will accomplish certain steps, such as meeting with a career counselor and determining what education or certifications you will need.

An extended career break may not be possible. You may have too much debt, too many bills or too many people depending on you to go months or years without a paycheck.

But that doesn't necessarily mean you are stuck.