Today’s average Baby Boomer has held more than 12 jobs in their lifetime—almost half of them by the time they were 24.1 Assuming later generations are following suit, taking a little time off between jobs can provide a much-needed “reset” button.
Burnout, stress, and anxiety have all intensified in the workplace, and they’re taking their toll on workers.2 If you feel drained from your job on a day-to-day basis, the thought of waiting until age 65 to retire might be too much to handle. While a week or two of vacation can help recharge some of your battery, what you really crave is an opportunity to reset your mindset and bring stress down.
In recent years, more Gen Zers and young professionals have found opportunities to step away from work for an extended period of time in order to pursue some of their greater goals early on in life—hiking bucket-list mountain ranges, exploring new continents, or otherwise pursuing personal passions. They’re calling this time away from work a “micro-retirement,” and with a little preparation, you may be able to enjoy one too.
A micro-retirement is, really, just as it sounds—a tiny version of the traditional retirement you’re accustomed to hearing about. Rather than a whole phase of life spent out of the workforce, the idea here is to condense down the experience of retirement into shorter bursts between jobs. These intentional breaks can last from several weeks to many months, depending on your ability to financially support yourself without earning a paycheck.
Actually, the concept of a micro-retirement isn’t new. “Mini” retirements were first introduced in the popular book The 4-Hour Workweek by Tim Ferriss back in 2007.
As for why it’s gaining popularity now? Simply put, levels of burnout are high, and micro-retirements appear to be the younger generation’s direct response to battling that burnout.
Amid persistent post-Covid economic pressures, geopolitical tensions, rising costs, the climate change crisis, and other external factors, younger professionals are feeling less compelled to work continuously for decades with little to no breaks—in other words, the road to 65 is long, and they’re looking for ways to help ease the journey.
Micro-retirements give young professionals something to look forward to in the more immediate future. They’re an effective way to help relieve workplace burnout and stress mid- or early-career, especially following the pressures of completing college, graduate school, and other higher education requirements or certifications.
Micro-retirements also give people an opportunity to pursue passions or specific goals while they’re still physically well. Health tends to decline as we age, and there’s no guarantee that by your mid-60s or 70s you’ll be physically able to do the things you dream of in your 20s.
As you age, your responsibilities tend to increase as well, and competing priorities make it harder to put your own pursuits first. By your 30s and 40s, you’re generally in the throes of raising a family or taking on a higher-pressure position at work. That makes it much harder to drop everything and jet off to Europe or hit the hiking trail—not to mention your financial obligations tend to grow as well.
Micro-retirements aren’t right, or possible, for everyone—and they’re met with some fair critiques.
When you aren’t earning income, you’re much less likely to contribute to your long-term savings goals. But as a young professional, your early years can be the most lucrative time for saving and investing (thanks to the long-term benefits of compounding interest).
On the flip side, you have plenty of time left until your real retirement—it’ll be possible to recover from a brief period of not contributing. You might want to consider doubling down on contributions when you do start work back up again, if you’re able.
Living for an extended period of time without a paycheck requires a fair amount of financial discipline and preparation. Unless you have ample savings to support yourself during a micro-retirement, it may be tempting (or even necessary) to take on additional debt. However, credit cards impose high interest rates that can be difficult to recover from.
Speaking of debt: Consider any potential upcoming purchases that may require you to take out a loan (say a mortgage or car). Typically, lenders need proof of employment in order to approve a loan—making it difficult to pursue a major purchase in the middle of a mini-retirement. Plus, you’ll want to consider how new debt could impact your mini-retirement fund, since you’ll have to factor in the additional monthly payments.
While micro-retirements aren’t limited to 20-somethings, that is the time in life when they may be more feasible—fewer responsibilities, parents’ health insurance plan, and more time to recover from the savings gap for your long-term goals.
That being said, there are other scenarios in which someone might take time away from work throughout their career. These include:
Career break: Unfortunately, a career break isn’t always a carefully planned or intentional pause in work. They’re often unexpected and necessary—despite your feelings or thoughts towards leaving work.
A career break may be necessary to care for an ill or aging loved one, grow a family, or otherwise navigate a major life change. Rather than a response to burnout, it’s more often a consequence of managing personal circumstances.
Sabbaticals: If you work for a higher education institution or large corporation, you may have opportunities to take a paid sabbatical—though sometimes, sabbaticals come with the expectation of continued research or learning.
Taking an extended period of time off work requires extensive planning. Realistically, not everyone will be able to do this.
First and foremost, you’ll need to figure out key details including:
Like a real retirement, you’ll need to consider how much you’ll realistically need to sustain yourself while off work. In fact, this can be a good “dry run” for real retirement—helping you figure out how accurate your estimates and planning projections really are.
Consider how long you’d like to take off work and what your estimated monthly expenses are. These should include all recurring costs like:
If you’re trying to accomplish a certain item off your bucket list (say, hike the Appalachian mountains), you’ll also want to factor in the costs associated with your goal. In this case, hiking equipment, permits, new clothes and shoes, and anything else you’ll need during your travels.
Once you have your “number” settled on, consider adding an additional buffer amount (20% or so). Remember, those usual 40+ hours a week you spend at work will now be yours to spend how you please. You’ll likely want to travel, get out of the house, and do things—all of which cost money. This extra “buffer” can also help in the event you have trouble reentering the workforce.
So far, we’ve been focusing on the idea of incorporating elements of retirement into your professional journey. But it’s also worth noting that more retirees are finding ways to reintroduce work back into their retirement.
Micro-retirement: Meet “unretiring,” another increasingly popular retirement trend.
In 2020, COVID drove an extra 2.4 million people into retirement, but around 1.5 million of those COVID retirees went back to work by 2022. Today, around 20 percent of retirees are either working full-time or part-time in retirement.3
While around half of today’s working retirees do so for the financial benefits, particularly following a few years of tough market and economic conditions, around 45 percent work because they enjoy the social and emotional benefits of doing so.3
Just as micro-retirements can serve as a period of restoration and recovery for burned-out employees, unretiring can help those who are bored or restless feel more purposeful and connected to their communities throughout retirement.
The takeaway here? A traditional path to and through retirement may work for some people, but it’s not the only option available. With some diligent saving and planning, you can forge your own financial journey—whether that means incorporating micro-retirements into your professional life, or enjoying an active and work-focused lifestyle in retirement.