There’s plenty of financial advice out there about saving for retirement. You know the drill: Work hard, save and invest consistently, and — if all goes according to plan — you can stop working and enjoy some freedom around age 65.
But what if your retirement dreams can’t wait that long? What if you aren’t confident you’ll ever be able to stop working? Enter: mini-retirements.
Mini-retirements are just what they sound like: Smaller career breaks you take throughout your working years. Though they take some strategizing and planning, mini-retirements might be more accessible than you think.
Read on to learn more about what constitutes a mini-retirement, its benefits and drawbacks, and how to financially plan for one.
Mini-retirement, micro-retirement, career break, sabbatical — these all refer to an extended time away from work.
There’s no official definition of a mini-retirement, but usually, these breaks involve stepping away from your primary job for at least a couple of months and are self-funded.
Importantly, the “how” of a mini-retirement can vary. Some people take a mini-retirement after getting laid off. Others may quit a job they’re unhappy with and take a break before getting another. Some people may even negotiate time away from a role they want to return to.
Jillian Johnsrud, author of “Retire Often,” has taken a dozen mini-retirements and coaches her clients to do the same. To her, one key aspect of a mini-retirement is that it involves spending time on something that matters to you — be that travel, your health, or even planting a garden.
“People can accomplish a lot of different things during a mini-retirement, whether it’s longer adventures, personal goals, or even professional goals,” Johnsrud said.
If a mini-retirement sounds far-fetched, consider the following benefits. They may be enough to convince you it’s worth the necessary planning:
Chance to reassess career goals: By stepping away from your work for an extended period, you may realize you’re ready for something new. That could be a similar role at a new company, a position in a new industry, or even starting your own business. A mini-retirement can also give you the chance to negotiate a higher salary upon your return to the workforce.
Opportunity to do things while you’re physically able: If your retirement dream is hiking the Appalachian Trail, you may want to do so when you’re in your physical prime. You can’t predict illness and health complications, so having these adventures when you’re younger may be the safest bet.
More time with friends and family: Mini-retirements can give you priceless time with the people you love — time that may not be available decades from now. “I did a 10-week trip to 10 national parks with my five kiddos in a pop-up camper,” Johnsrud recalled of one of her mini-retirements. “[It was] an absolutely memorable and incredible experience.”
Recovery from burnout: One study from Aflac found that 72% of employees experience at least moderate workplace stress. A mini-retirement lets you step away from those stressors for a while and reset. “Being able to come back to work refreshed and excited and motivated is also a huge boost professionally,” Johnsrud said.
Time to focus on physical and mental health: For many, work takes precedence over exercise, eating well, and getting enough sleep. A mini-retirement can give you the time to prioritize your health and establish new habits that can benefit you for decades to come.
A “practice run” at retirement: Everyone’s heard the story of the retiree who stops working, panics at having nothing to do, and returns to the workforce. And no wonder — if you’ve never taken a career break before, why should retirement come easy? A mini-retirement allows you to practice retiring by giving you a chance to explore your interests outside of work.
Read more: Retirement planning: A step-by-step guide
Regardless of how great a break from work may sound, you might have hesitations. Here are some potential drawbacks to weigh and plan for if you’re interested in a mini-retirement:
Intensive planning: Planning a mini-retirement can be heavy on logistics. Negotiating leave from your job (or quitting entirely), budgeting for your time off, and saving enough money are just a few of the obstacles you’ll have to tackle before taking a mini-retirement.
Difficulty getting rehired: If your mini-retirement involves leaving a job, you’ll have to navigate the hiring process after your break. Depending on the state of the economy and your industry, it may take longer than you planned to get a new job, which can cause financial stress.
Pausing retirement contributions: One of the biggest benefits of employer-sponsored retirement plans is the employer match you may earn when you contribute to your 401(k). But if you stop working, you’ll miss out on those extra contributions, whether or not you continue saving for retirement yourself.
Missing out on employee benefits: In addition to retirement contributions, your employer may offer a range of benefits you’ll give up by taking a career break. For instance, if you currently receive health insurance through your employer, you may need to find it elsewhere during your mini-retirement.
Read more: 9 ways your employer can help you save money
If you’re excited about the idea of a mini-retirement but don’t know where to start, take it step by step. According to Johnsrud, anyone can take a mini-retirement with the right planning. Here are three crucial steps to financially plan for a career break:
“The first step is to brainstorm a list of possibilities of what you might want to do,” Johnsrud said. “That will give you the scope of how much time you would need off, what the budget would be — but it also provides you with the motivation to take the steps necessary once you can imagine this cool thing that you’re going to go do.”
Whether you plan to hire a nutrition coach, travel to South America, or enroll in an art class, give some thought to how you’ll spend your mini-retirement, and let yourself get excited.
Once you know how you’ll spend your time, you can start to outline a budget for your time off work.
When making your budget, you’ll have to decide which of your current expenses you’ll keep up with during your break. For instance, will you continue making contributions to your savings and investment accounts, or are you comfortable pausing them? Will you keep paying rent, or will you arrange a lease takeover? Answering these questions can help you determine how much you need to save to fund your “regular” life while you’re off work.
Next, consider how much any extra activities — like hiring a coach, traveling, or taking that art class — will cost. Add these costs to your baseline budget to find out how much you’ll need to fund your mini-retirement.
3. Form your exit plan (and consider your reentry plan)
Once you have an idea of how you’ll spend your time off — and how much it’ll cost — it’s time to form an exit plan.
Your motivations for a mini-retirement will determine how you approach this step. Do you want to quit your job entirely? If so, there’s not as much to plan. But if you’d like to negotiate paid or unpaid leave, you should approach your boss with a solution-oriented conversation about how to take an extended break.
If you’re anxious about reentering the job market after your mini-retirement, create a loose plan before you go on leave. Decide how you’ll approach the job search, when you’ll start looking for a new role, and how you can stay engaged with your network during your time away.
