Family Gap Year: Is Quitting Your Job Worth It?

“So to me, this is not a money management question.” That’s what I told Jamie, a 42-year-old PA with $686,000 saved, right after she described her plan: quit the job she loves and take her husband and kids on a family gap year while they’re still young enough to remember it. She wasn’t asking if she could afford it — her numbers already answered that.

She was asking something harder: is it worth walking away from a job she loves, when she’s not sure it’ll be there when she gets back? Then we help a father of four decide whether to stop maxing his IRA to pay down a future mortgage faster — even when the math argues for investing instead. We close out with a longtime listener’s case for sinking funds: why setting money aside in its own bucket beats trying to cash-flow a big expense like college.

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Listener Questions

In their own words

Jamie asks: I’d like to know if it would be financially reasonable to take a sabbatical for a family gap year and how close we are to Coast FI, since I would feel better about the sabbatical if our retirement is mostly secured.

I’m 42 and earn $140,000 as a PA. I’ve occasionally worked as a locum provider at $160 an hour as an independent contractor, which brings in extra cash but increases stress for our family due to travel. My husband is a stay-at-home dad to our kids, ages 7 and 8, and has several flexible part-time ways to bring in some extra money.

Here is how our $686,000 in savings is split up:

$180,000 in a target retirement fund in my 403(b)
$110,000 in Roth accounts
$216,000 in traditional IRAs (mostly in Vanguard low-cost index funds, though some is managed in mutual funds with a financial advisor)
$33,000 and $28,000 in our children’s 529 accounts
$57,000 in a money market fund
$62,000 in a high-yield savings account

Our home is valued at $425,000, and we have $95,000 left to pay down over the next 14 years at around 3% interest. We will not sell it as it’s on family land, but we could consider renting it out. Our vehicles are paid off. We currently spend approximately $96,000 a year, which includes generous vacations.

While I used to love the idea of early retirement, I’m starting to think it may be better to work less now in exchange for working longer later. I decreased to 36 hours a week a few years ago and love it. Right now, our kids still want to spend time with us, and my husband and I are healthy enough to pursue adventures. We want to do a family gap year, balancing destinations like Japan and New Zealand with more affordable countries, and I feel confident homeschooling the kids during that time.

My biggest hangup is that I love my job and don’t think it will be available when I return. Are we financially ready to pull the trigger, and what should we focus on over the next year? Should I try to take shorter trips of 3 to 4 weeks a year instead, or quit, take the big trip, and keep an open mind for future job opportunities?

Kevin asks: Should we suspend maxing out our IRAs while we pay down a house? I know mathematically it might make more sense to invest, but I would feel less anxious if I buried the debt. We’re expecting to buy a $400,000 to $500,000 home in the near future and have about $130,000 set aside for a down payment.

Our family has a net worth of $1.1 million. We are a single-income family with a $96,000 salary, plus side hustles that bring in approximately $2,000 to $6,000 per year. We spend about $55,000 to $60,000 annually supporting our family with four children, and I think we are currently Coast FI. I’m aiming for a net worth between $2 million and $3 million to close the gap with our term life insurance policy and fund college expenses. We got here by aggressively investing and cutting costs over the last decade. We live in a large, relatively affordable American city with great walkability and public transit. We saved a lot by staying car-free until our third child was born; now we only have one car that we drive maybe 10 miles a week.

My goal is to maximize the time my wife and I spend with our children. She isn’t interested in full-time work right now, I live a 15-minute walk from work and don’t want to change jobs, and we love our neighborhood. I’m currently getting my 6% employer match and maxing out our HSA contributions, but I’m finding it harder to also max out our IRAs at the same time. I’d like to continue maxing out our IRAs, but I also think the money might be better put toward a house, especially with today’s high interest rates. What would you do?

Joe asks: In podcast episode 736, you answered a caller, Mike, who was looking to retire early in 12 years with a daughter entering college roughly around the same time. I’m surprised you didn’t mention sinking funds, which is what I used for my kids as they were going through college and setting themselves up. I figured I needed a couple hundred thousand dollars to take care of my daughters and niece. If I had tried to cash flow it, I would have needed five to six times more capital, and then I would have had several thousand dollars a month more than I needed for my household once they finished college. Why not suggest sinking funds if the college costs are going to be $100,000 to $120,000? It’s much easier to set aside $120,000 in a sinking fund than to amass the five to six times more capital needed to cash flow that amount over four years.

Key Takeaways

The biggest ideas from the conversation

Job satisfaction hinges on three predictable factors: Two separate studies point to what makes people love their jobs: autonomy, mastery, and purpose, plus how you feel about your direct boss. Before quitting a job you love, get specific about which of these it’s actually giving you.
A precious window closes when your kids grow up: Value comes from scarcity, and a family gap year with kids who are seven and eight only happens once. Waiting for a more convenient time means missing a window that will never come back.
Financial readiness and life readiness are different questions: Jamie’s $686,000 in savings already answered whether she could afford a family gap year. The harder question wasn’t about money at all — it was about what she wants the next year of her life to look like.
Peace of mind is worth pausing IRA contributions: Kevin already had his employer match and HSA maxed out, so pausing IRA contributions to pay down a future mortgage isn’t abandoning retirement — it’s redirecting one bucket toward the debt causing him the most anxiety.
Preserve cash flow over chasing low rates: With four kids and one income, Kevin can’t afford a mortgage payment that eats his flexibility. Taking a 30-year loan but paying it off on his own accelerated schedule keeps the lower required payment while still killing the debt faster.
Sinking funds beat cash-flowing big future expenses: Setting aside money in its own labeled bucket, like a 529 for college, takes far less capital than trying to cash-flow that same expense later. It’s also behaviorally easier: money bucketed for one purpose is money you’re less tempted to touch for anything else.

Resources

Links, tools and references mentioned

The Money Mindset Quiz
The real question behind quitting a job you love or paying off debt anyway? Your money mindset.
Take our free quiz to find yours

Camp Fi
The financial independence retreats Paula and Joe swap stories about this episode.
campfi.org

Heavy Metal Money
Chris Luger’s personal-finance podcast.
heavymetal.money

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