Finding internal balance: taking sabbatical or mini retirement for actuaries

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In the demanding world of actuarial science, where numbers, risk assessments, and financial modeling dominate daily life, the concept of taking an extended break might seem daunting. However, sabbaticals or mini-retirements can offer actuaries a valuable opportunity for personal growth, skill enhancement, and renewed perspective.

Some actuaries have worked hard, reached a strong position in their careers, or perhaps inherited wealth from family, putting them in a position to consider early retirement. But life isn't just about work. Instead of making a final decision to retire permanently, why not explore a mini-retirement or sabbatical? Taking a 3- to 6-month break could help you gain new perspectives, explore different interests, or even reignite your passion for work. You might return wanting to continue with reduced hours, flexible arrangements, or with a renewed drive to push even further in your career.

This article explores the benefits, considerations, and strategies for actuaries contemplating a career break.

Some of the benefits of a sabbatical for actuaries are:

• Stress Reduction and Burnout Prevention: The actuarial profession often involves high-stress situations, tight deadlines, and complex problem-solving. After years or even decades of such intensity, a sabbatical offers a critical opportunity for rest and rejuvenation. It enables actuaries to step away, recharge, and return with renewed focus and motivation. Think of it as a strategic "stop-loss" measure that activates when burnout threatens to surpass an actuary’s capacity to cope, preventing long-term damage to both personal well-being and professional effectiveness.

• The Power of Career Longevity: Taking a six-month to one-year break is far more beneficial than allowing stress to build up and ultimately choosing early retirement. Early retirement comes with its own set of challenges, particularly when longevity in one’s career is a key factor. To put it simply, time in the career is more valuable than timing the career. Typically, the last few years of a career are the most impactful, and significant achievements often take longer to materialize than we anticipate. By cutting a career short, we risk missing out on many meaningful opportunities. Additionally, opting for early retirement due to burnout may seem reasonable when we believe we have enough savings. However, this can be a moving target, influenced by factors like long-term inflation and evolving family responsibilities.

• Skill Development: Time away from work can be a valuable opportunity to develop new skills or deepen existing ones. It’s a chance to pursue interests that have long been on your list but never seemed to fit into a busy schedule. Whether it’s learning a new programming language, exploring advanced data visualization techniques, or diving into emerging fields like climate risk modeling or cybersecurity risk assessment, a sabbatical can provide the dedicated time needed to expand your expertise and stay ahead of industry trends.

• Broadened Perspective: Taking a break from daily routines can provide fresh insights into both career goals and personal priorities. Actuaries may uncover new areas of interest within their profession or find innovative ways to apply their expertise, opening doors to unexpected opportunities and expanding their professional horizons.

• Personal Growth: Sabbaticals provide an opportunity for meaningful personal development through travel, pursuing hobbies, or spending quality time with family. This period of growth often enhances soft skills and emotional intelligence, traits that are highly valued in leadership roles. Many individuals use this reflective time to clarify their vision and even launch their own startups aligned with their true aspirations. A sabbatical offers the chance to step back from the constant rush of deadlines and escape the “urgency” mindset, allowing you to think deeply about what you truly want from your career. What is often dismissed as a “mid-life crisis” can actually be a healthy turning point—shifting focus from merely meeting financial obligations to pursuing a more fulfilling path that aligns with your personal and professional goals.

• A sabbatical can sometimes find you, rather than the other way around. It might be prompted by unexpected circumstances, such as a serious illness—either personal or affecting a close family member—that requires constant care, or a career break for starting a family. For those with extensive experience but unfinished actuarial exams due to competing priorities, a sabbatical can offer the time needed to focus on completing the remaining papers. Improving one’s health is another often overlooked but essential reason to consider a break. While it’s true that higher income and education are linked to longer life expectancy, chronic stress, lengthy commutes, and long hours at a desk can take a serious toll on health over time. The hectic pace of a typical workday often leaves little room for exercise, sleep, or maintaining overall well-being. A sabbatical can provide the time and space needed to focus on health, reversing the negative effects of a high-stress lifestyle before it leads to long-term consequences.

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Foundational pre-requisites for sabbaticals

The underlying assumption behind taking a sabbatical is having the financial capacity to support it. For individuals living paycheck-to-paycheck, dealing with loans, managing significant family responsibilities, or having little to no savings, even a single missed paycheck can cause financial chaos, making a sabbatical unfeasible despite feeling burnt out. This is a challenging reality that many can relate to. In such cases, alternatives like transitioning to a less demanding role with better work-life balance might be more practical solutions. This financial barrier is why sabbaticals are more common among seasoned professionals with established careers and substantial savings. Just as actuaries perform stress tests for insurers, it’s essential to apply a similar stress-testing framework to personal finances to determine if taking time off is a viable option.

Taking a sabbatical or mini-retirement requires careful financial planning. Actuaries, with their expertise in financial management and risk assessment, are uniquely positioned to evaluate the monetary impact of stepping away from work. It’s essential to have sufficient savings to cover living expenses during your break, especially if your employer doesn’t offer a paid sabbatical. Additionally, consider budgeting for health insurance costs if you won’t be covered while away. A sabbatical can also disrupt contributions to retirement funds, so plan ahead to address any shortfalls when you return to ensure your long-term financial goals remain on track.

It’s crucial to take a sabbatical for the purpose you originally intended. For example, if your goal was to travel the world but instead you got absorbed in a long-term passion project, you might end up spending most of your time on that instead. After a year or two, you could find that your burnout hasn’t improved and your travel aspirations remain unfulfilled. To avoid this, stay aligned with your initial goals and ensure your sabbatical is used as planned to achieve the rejuvenation or experiences you set out to pursue.

There’s also value in simply being and finding contentment in that. In a culture where self-worth is often tied to productivity, it’s important to remember that just existing—without constantly striving for more—holds its own significance. Every moment of life is a gift that deserves to be cherished, especially given how fleeting our time truly is. During this period of stillness, our perception of luxury can shift from extravagant lifestyles to the simple pleasures we often take for granted¹:

Mini retirements

The concept of the mini-retirement was popularized by Tim Ferriss in his book The 4-Hour Workweek. He introduced it as an alternative to traditional retirement, advocating for taking shorter, more frequent breaks throughout one’s career to enjoy life experiences rather than deferring them until old age.

Mini-retirement is an alternative approach for those unable to take an extended sabbatical. The concept of mini-retirements, shorter, more frequent breaks throughout one's career – can be an attractive alternative that allows actuaries to enjoy many benefits of a sabbatical without the extended career interruption.

Mini-retirements can take various forms, such as taking a month off between projects, working part-time for a period, or negotiating a flexible work arrangement that allows for extended time off at regular intervals. This approach offers ongoing opportunities for rest and personal growth while preserving career continuity. However, implementing this kind of flexibility requires a supportive work environment and a career structure that allows for it. For many actuaries, this might not be feasible, as it could conflict with employer expectations and disrupt client relationships. The reality is that "out of sight, out of mind" can quickly make an actuary less relevant, and some companies may not even be willing to approve standard vacation time, let alone mini-retirements.

Other important considerations

Whether you choose a traditional sabbatical or periodic mini-retirements, remember that investing in yourself is one of the most valuable decisions an actuary can make. However, it’s important to approach it thoughtfully—don’t burn bridges, and keep a flexible mindset to ensure a smooth reentry if unexpected challenges arise. Just as we evaluate reserves and measure actual outcomes against expectations in our professional work, we should apply this mindset to life decisions as well. The gap between expectations and reality can be significant, and there may be unforeseen factors that only become apparent once you take the plunge. Having a contingency plan is crucial if your actual experience turns out to be more difficult than anticipated.

While a sabbatical is a time to disconnect from work, staying somewhat connected to the actuarial community is wise. This could mean attending webinars, keeping up with industry news, or maintaining relationships with peers, ensuring you’re not completely out of the loop when it’s time to return.

Consider documenting your experiences through a journal or blog. Reflecting on what you’ve learned can deepen your understanding and serve as a valuable reference when you re-enter your professional life.

Additionally, have a clear return strategy in place. Whether you plan to go back to your previous role, explore new opportunities, or transition into a different industry, a well-thought-out plan will ease the transition. If you’ve developed new skills or perspectives during your break, consider how to leverage them in your career to enhance your professional value.

Conclusion

Taking a sabbatical or mini-retirement as an actuary is a bold but increasingly popular decision that can have profound long-term benefits. Whether you’re seeking to combat burnout, pursue personal interests, or realign your career goals, a break from the daily grind can offer clarity and refreshment. With proper planning, financial preparedness, and clear goals, actuaries can use this time off as a springboard to greater personal fulfillment and professional success. It can be a transformative experience for actuaries, offering opportunities for personal growth, skill development, and renewed professional passion. While it requires careful planning and consideration, the benefits can far outweigh the challenges. As the workplace continues to evolve, embracing these career breaks may become increasingly common, allowing actuaries to lead more balanced, fulfilling professional lives.

1.https://www.reddit.com/r/simpleliving/comments/1bmu7n1/a_cool_guide_to_real_luxuries/ 

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