By Jonathan Chevreau
National Post
FP Money
Saturday, September 14, 2002

The bear market may have delayed many dreams of early retirement. But if you can't afford a permanent vacation, perhaps you can improve on the normal two or three week respite.

Consider a sabbatical a "rehearsal for retirement," a phrase which may be familiar to fans of the 1960s folk singer Phil Ochs.

Since the events of last September, middle-aged investors and even their financial advisors are rethinking the typical North American attitude of "living to work." As they consider the more European stance of "working to live," they're making room in their lives for extended sabbaticals, which may range from three months to a year or more.

Vancouver-based fee-only financial advisor Adrian Mastracci took a cue from his clients and underwent a 17-month sabbatical before creating his KCM Wealth Management.

"I can attest from personal experience that a sabbatical is magnificent," Mastracci says, "It's one of the best personal investments I've made."

Diane McCurdy, another B.C.-based advisor [what is it about that laid-back province?] has just begun a sabbatical to write a follow-up to her first book, How Much Is Enough? The clients she's helped take sabbaticals tend to be successful driven Baby Boomers between the ages of 45 and 55. None have regretted it, she says.

It wasn't so much that these clients didn't love what they were doing. They were very successful "but what they were doing consumed them totally," McCurdy says, "They wanted to explore other aspects" of their selves.

While 55 is the average retirement age for those in the public sector, it's 65 for those in the private sector. "Most people in the private sector can't retire at 55," McCurdy says. But they can take stock of their life and careers, and a sabbatical is a rejuvenating way to do so.

The sabbatical is most common in the academic world. If you don't think so, plug the word "sabbatical" into the search engine at www.google.ca. Ninety per cent of your hits will be from Canadian universities, describing how you can live for a year on anywhere from 80% to 100% of your normal salary.

It struck me that if university staff -- many of whom already enjoy longer vacations than most office workers -- can benefit from sabbaticals, the case is even stronger for those tied to their desks for 48 to 50 weeks a year.

Indeed, while talking to Mastracci and McCurdy, a twinge of regret came over me that this very newspaper abandoned the sabbatical program it provided to employees when it was under ownership of Sun Media Corp. Those approaching the time they could qualify for one were paid cash instead, but I for one would have preferred the time over extra money taxed at the top marginal rate.

Money is, not surprisingly, the key to sabbaticals. One way is to have your employer deduct 20% of your gross pay for four years, then release it in the fifth year.

Neither McCurdy or Mastracci advise plundering RRSPs to free up the cash.

"It's important to arrange one's portfolio to be able to successfully navigate a sabbatical," Mastracci says. "It may require a shift in investor profile, perhaps to a more conservative one." This is especially the case if you're out of the country or less plugged into the media, the Internet and your broker.

The re-entry strategy is also important. If you think returning to the office after a two-week break is difficult, multiply that by 20 or 30 in the case of resuming the grind after a sabbatical.

Those who took one find the time "just flew," McCurdy says.

At the end, you will probably be a different person than you were before embarking on this quest. Those who finish a sabbatical don't always return to their former profession. One of McCurdy's high-powered clients was at the top of the executive ladder but became a consultant and artist after his sabbatical.

Others may discover that if they make adjustments to their lifestyle and consumption patterns that they can pull off retirement earlier than they may have contemplated.

She stresses the importance of advance planning. "You can't do it because you're stressed out and want out [now]. I planned this for six years."

There are half a dozen books on sabbaticals listed at www.amazon.ca. Two of the more self-explanatory titles are Six Months Off: How to Plan, Negotiate, and Take the Break You Need Without Burning Bridges or Going Broke and Time Off from Work: Using Sabbaticals to Enhance Your Life While Keeping Your Career on Track.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.