A new type of retirement is being talked about these days – the mini-retirement. Rather than a traditional retirement, which typically begins sometime after you turn 65 and lasts for the rest of your life, mini-retirements are a bit different. I first heard about mini-retirements in a TED Talk, but the concept is often credited back to Tim Ferris’ book “The 4-Hour Work Week.”
A mini-retirement is an intentional break from your career that can last a couple of months to a couple of years. Similar to a sabbatical or a gap year, they are a planned period of time away from your job. Mini-retirements can help you recover from burnout or allow you to pursue activities that can not be experienced while working 40+ hours a week. Unlike a traditional retirement, mini-retirements have a planned end when you return to the workforce.
In 2018, long before I had ever heard of the term mini-retirement, I took a 4-month break between jobs. I spent 3 of those months road-tripping to many of the US National Parks. It was a bucket list road trip and I created so many memories from that experience that will last a lifetime.
I re-entered the workforce as planned after that experience, but it only took a few years of working full-time for me to begin dreaming about more adventures – many of which require extended periods of time off to accomplish. Think of a road trip to Alaska or thru-hiking a long-distance trail like the PCT.
There are really only 4 ways to find the time for these adventures:
- Pick up a teaching job and get summers off
- Save these adventures for a traditional retirement when I am in my late 60s or early 70s
- Step up my savings and downsize my living for the next 10-15 years as I work towards FIRE. (FIRE stands for Financial Independence, Retire Early.)
- Consider a series of mini-retirements.
I haven’t found a teaching job I’m interested in so that option is currently off the list. These adventures could be saved for a traditional retirement, but I can’t guarantee that my body will be up for big hikes later in life. Stepping up my FIRE plan is a legitimate option, but still delays these adventures until I am in my late 40s/early 50s.
That essentially leaves option number 4, and consequently, I have been researching mini-retirements.
Benefits of a Mini-Retirement (AKA why you should consider one)
There can be many benefits to a mini-retirement, especially if your mini-retirement is well-planned out and budgeted.
Take a Break from Work and Recover from Burnout
A mini-retirement can be an opportunity to reduce stress and recover from burnout. Many careers involve a high level of stress and long working hours, which can contribute to work-life imbalance and job burnout.
While burnout is not a medical diagnosis, Mayo Clinic’s website defines job burnout as “a special type of work-related stress — a state of physical or emotional exhaustion that also involves a sense of reduced accomplishment and loss of personal identity.”
Depending on the severity of your work stress, you may be able to institute changes in your day-to-day to combat your work stress and prevent significant job burnout. But if you are feeling some level of job burnout, a mini-retirement can be a chance to change your day-to-day routine and take the time to recover.
Hopefully, after some time away from your career, you can recover enough to rediscover all of the reasons you enjoy your career in the first place. And if you find that your job truly does not hold joy for you anymore, a mini-retirement can give you the time to re-evaluate and investigate new paths for your work life.
In this way, mini-retirements also help keep life balanced. You can spend several years working 40+ hours a week and focus on your career, and then take a mini-retirement to focus on non-career accomplishments.
Accomplish Some of Your Bucket Lists Items
While mini-retirements don’t have to include traveling, at this point in my life, I do hope to have a decent amount of travel as part of my retirement. And a large section of my bucket list is dedicated to hiking trails I want to explore.
We live in an uncertain world and are never guaranteed tomorrow. Health could deteriorate or other life circumstances could change. Mini-retirements can help provide an opportunity to enjoy experiences that may be harder in older age.
Some personal examples are goals like hiking to Machu Pichu, completing a 5-month thru-hike of the PCT, or road-tripping to Alaska.
A well-planned mini-retirement strikes a balance between a YOLO (you only live once) immediate gratification mindset and delaying the gratification that can come with retirement until you are in your 70s.
Test Out Retirement
For those closer to the traditional retirement age, a mini-retirement can also allow you to test out your retirement plans.
Think you want to do a lot of traveling, but then spend a year traveling and decide it’s not for you? Planning to retire on a hobby farm, but realize that might be more work than you want in retirement? A mini-retirement can help you get a better sense of what you want to spend your retirement doing.
Important Considerations Before Taking A Mini-Retirement
While a mini-retirement sounds appealing, it is not for everyone. It is important to consider the following before scheduling a mini-retirement for yourself.
Budgeting is a very important step toward making a mini-retirement happen. And how you budget can determine how long your mini-retirement lasts.
Because you will not be working during your mini-retirement, you will need to have enough money saved to cover your expenses throughout the entire time period. A good way to start to figure out how much money you will need is to track your current spending.
Personally, I used Google Sheets to create a spreadsheet that tracks all of my expenses per month throughout the year. I have been tracking my income for 3 years now, so I have a good idea of how much money I spend on food, housing costs, clothing, eating out, pet care costs, and other expenses.
When trying to determine how much money I will need to finance a year-long mini-retirement, I was able to take all of my average expenses per month to help form this budget. Some expenses will stop for me during my mini-retirement, but others will be new.
And don’t forget to factor in expenses that are currently paid for by your employer, such as a 401 K match, health insurance, and/or other benefits you receive from your current job.
Planning for Re-Entry into the Workforce
Have a plan for how your mini-retirement will end. Do you want to have a fixed end date? Or will your mini-retirement end when your finances are running low? If you choose to end when your money is running low, make sure you pick a fixed amount ahead of time so you know when it is wise to return to work.
Also, consider ahead of time how easy it will be for you to re-enter the workforce. Some careers are easy to jump in and out of, while others may be harder to take a break from.
Currently, I work as a small animal veterinarian. A gap of a year shouldn’t be a big problem in the current economy, as there is a fairly high demand for veterinarians. Especially if I am not picky about location. But the economy could change.
Delaying Traditional Retirement
Another factor to consider is that a mini-retirement may delay your traditional retirement. When you take a year off from work in your 30s or 40s, this may mean that you need to work a year longer than the traditional retirement age. This will depend on your personal financial situation. If you pause your retirement savings during your year off or if you are using money you would have placed in a retirement account to help fund your year off, you are essentially delaying your traditional retirement.
The question to ask yourself is if you are okay with a delay of traditional retirement. If you are not, then double down on your retirement savings and only take a mini-retirement if you have adequate savings to stay on track for your previously determined target retirement date.
Is a Mini-Retirement Right for You?
Only you can decide if a mini-retirement is right for you. But personally, it is an interesting option to take a mini-retirement/gap year in my career in order to accomplish some of my bucket list items. And who knows, maybe I will even be able to use some of that time to grow this blog and YouTube channel.