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How to plan for a sabbatical leave – 5 tips to make it a success

I came across an article recounting a woman’s experience with taking a unpaid sabbatical, in which she expressed regret due to feeling financially strained and falling behind her peers in achieving milestones after. However, despite such challenges, a sabbatical can offer valuable respite from the daily routine, providing an opportunity for personal growth. Particularly in the Asian context, where work culture often emphasizes long hours and high stress levels, embracing a sabbatical and embracing a slower pace can promote mental well-being and overall health.

So how can you have your cake and eat it too? This is part 1 of a 2 part series – 5 simple tips to make your sabbatical leave a roaring success!

5 Tips not to miss!

  1. Start your sabbatical from mid year.
    If you are considering a 1 year sabbatical leave, it is better to do it from the mid of the year than start of the year. This is due to the way income tax is calculated, which assesses income earned over a full calendar year. By initiating your leave in the middle of the year, your chargeable income—and consequently your income tax liability for the preceding year—would be lower
    Additionally, you may not have to contribute to SRS for tax savings (for a year or even two!), thus reducing your financial commitment.
  2. Utilise passive income instead of drawing down on capital fully.
    I have come across many people who drawdown on their savings during their sabbatical. However, watching your hard-earned savings diminish can evoke feelings of unease rather than the desired sense of rejuvenation and contentment.
    Rather than risking insecurity, anxiety, and a rushed return to the workforce, consider living off passive income streams. If you don’t already have passive income sources, focus on building them before embarking on your sabbatical journey. This proactive approach can ensure financial stability and peace of mind during your time away from traditional employment.You may not be able to fund your expenses fully, but even a partial amount is good.
  3. If you have a mortgage, always leave a float in your CPF OA Account.
    Never wipe out your CPFOA when purchasing a property. Whenever possible, leave at least 18-24 month’s worthof mortgage repayment in your OA (example: if your monthly mortgage is $2K. Keep at least $48K in your CPF OA).
    This ensures that you do not have to fork out additional cash for loan repayment when your monthly CPF contribution ceases.
  4. Set clear intentions & set boundaries
    Define your goals and objectives for the sabbatical. Whether it’s for rest, personal development, travel, or pursuing a passion project, the clarity will guide your journey to be a more fruitful one.
    If you are returning to the same job, inform clients, colleagues & partners about your sabbatical plans well in advance. This will help to set clear boundaries regarding communication and work expectations during your absence.
  5. Conduct a thorough review of your finances post-sabbatical.
    Assess any changes in income, expenses, or financial goals, and adjust your financial plan accordingly. It is not bad to take a break but it is bad when taken irresponsibly.


That’s all for now. Look out for the next article for the step by step process to planning for it!
 

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Published By:

Lim Zhiwen Yvonne

I believe that “Worrying is not planning and Hope is not a good strategy”, and that the purpose of Financial Planning is to allow us to lead fulfilling lives while being financially wise.

As such, my role as a Certified Financial Planner CFP® is to help my clients build those sound financial strategies and design action plans that put them on track to their financial goals so that they can live the best possible life for themselves.

This is done via a systematic approach of ongoing cash flow management & asset allocation, as well as investment management, estate planning, and tax optimization.

I also ascertain that I stay up-to-date with industry trends and policies changes to ensure that my clients benefit from the latest strategies and opportunities available.

Over the years, I have developed a specialty in comprehensive financial planning for busy legal professionals & educators. I also particularly like assisting working mothers & young families to achieve their long term financial goals. Working with the largest independent financial advisory (IFA) firm in Singapore also frees me from product pressures and allows me to only recommend solutions that suit my client’s needs. And client’s interest, is always the core of my FA business.

Being a wealth planner is my dream career and this is what I hope to do for a long time.

Other than financial planning & investment, I love to travel, read, bake and I am an adrenaline enthusiast. I am most looking forward to the day my children join me on my adventures.

 

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  • 鑫盟理财私人有限公司( “鑫盟理财”)持有由新加坡金融管理局(“MAS”)所颁发的牌照，并许可在新加坡共和国境内依据财务顾问法（第110章）和证券与期货交易法（第289章）进行财务咨询等相关业务
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In compliance with the Personal Data Protection Act, Financial Alliance Pte Ltd (“FAPL”) seek your consent to collect and use your personal data (e.g. name, NRIC, contact numbers, mailing addresses, email addresses and photograph) for the purposes of and in accordance with FAPL’s Data Protection Policy, which can be found on FAPL’s website at https://fa.com.sg/data-protection-policy/.

根据《个人数据保护法》，鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料（例如姓名，证件号码，联系电话，邮寄地址，电邮地址和照片）。 该政策可在本公司网站上查寻，网址为 https://fa.com.sg/data-protection-policy/.

By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.

提交此表格，即表示您已阅读并理解鑫盟理财私人有限公司的个人数据政策