How to Take a Mini Retirement Without Ruining Your Real One
“Twenty years from now, you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” — H. Jackson Brown
Have you heard about the new retirement trend sweeping the nation? Instead of waiting until traditional retirement age, workers young, old and everything in between are taking “mini retirements,” periods of work alternated with shorter periods of time off. It’s longer than a vacation and shorter than, well, a retirement.
The concept behind a mini retirement is to space out your career, giving you the opportunity to explore personal interests, recharge or enjoy activities while you are still young and healthy. Joe Hearn, who runs the blog Intentional Retirement, sees retirement as a lifestyle, not a life stage. “Why should living the life you truly want to live depend on how many birthdays you’ve had or whether or not you punch a time clock?” Hearn wrote.
Related: How Much Should I Save for Retirement?
Rethinking Retirement
Mini retirement poster child Timothy Ferriss penned one of the most popular books on the subject, “The 4-Hour Workweek,” where he offers a step-by-step guide to taking the mini retirement of your dreams, as well as tips on how to negotiate with your boss and travel in luxury on a budget.
The New York Times bestseller has an impressive 3,200+ Amazon reviews, averaging 4.5 stars. If that isn’t enough to convince you that the concept resonates with Americans, here are what other experts have to say on the subject.
Tara Russell, a life sabbatical and long-term travel coach based in San Francisco, told U.S. News, “I think people are starting to ask the question about traditional retirement. You front-load all of your work experience and make it to 65 and hopefully you get time off.”
Can You Afford a Mini Retirement?
Retirement (mini or full) should not be confused with financial freedom. One is the absence of work; the other is the presence of sustainable wealth. Although, wouldn’t it be great if there was a correlation between the two?
You should finance your mini retirement without dipping into your actual retirement funds, and your financial needs will vary, depending on if you want to travel or stay home, the types of activities you want to pursue, and whether you have a job secured at the end of your time off.
Here are some ideas on how to fund a mini retirement without sacrificing your real one.
1. Have three financial plans.
Ideally, you will have a financial plan for three lifestyles: mini retirement, full-time employment and traditional retirement. You will fund each of these plans differently, adjusting the types of investments in your portfolio, analyzing the risk of those investments, and increasing or decreasing your rate of saving. Your financial plan should also account for inflation, tax implications and time spent in each phase. Consider consulting with a licensed financial advisor who can help you properly plan for this lifestyle.
2. Work hard, rest and repeat.
The most practical way to afford a mini retirement is to work hard, very hard. Then stop, rest and work again. Think of it as interval training for a sport — frequent bouts of intense training followed by periods of rest. You will also need to constantly flex your savings muscle while working and resting, so be sure to keep that in top form. This lifestyle requires financial discipline and your budget should reflect that. Alternating work and leisure time also means you should probably expect your actual retirement to happen past the age of 65.
3. Negotiate with your employer.
If you want to stay with your current employer, see if you can negotiate a sabbatical. If that isn’t an option, you might be able to save up your paid vacation and sick time and take it all at once. For some companies, depending on your role and how long you’ve worked there, this can add up to four weeks or more. You can also try to trade your yearly bonus or raise in exchange for extra time off.
Your employer might allow you to work longer hours, like 50-hour weeks with 12 weeks off. It adds up to the same number of hours as a traditional 40-hour workweek/two-week vacation schedule. Finally, see if you can transition your role to admin work or work that can be done exclusively online. You might have to take a pay cut, but if it affords you the opportunity to take a mini retirement, it might be worth it.
Related: How to Jumpstart Your Retirement Savings Late in Life
4. Stay connected.
If you decide you make a clean break from your employer, consider doing some freelance or consulting work on the side. A major ingredient in Timothy Ferriss’s ability to take multiple mini retirements is his mobile lifestyle, which is perfectly suited for the self-employed.
Look for ways to enhance your professional experience by volunteering for an international organization or lending your expertise to help local charities. This is also an excellent opportunity to pursue other interests and build skills in those areas. You will re-enter the workforce with a resume full of fresh skills and unique experiences.
5. Pick your destination wisely.
Spending your mini retirement in a city with a low cost of living might actually save you money. Ferriss says he actually saved $32,000 in the first 12 months of his 18-month mini retirement. “When you recognize that the costs of travel are mostly transportation and housing costs, and that you can rent a posh apartment for three to four weeks for the same price as staying in a mediocre hotel for four days, things start to get very, very interesting,” he said.
While that might not hold true for every situation, the point is you can stretch your mini retirement dollars by keeping your cost of living as low as possible. For this to work, you also probably need to give up your current housing situation, put your belongings in storage, and give up on dreams of luxury hotels and four-star restaurants. In other words: Live like a local.
Photo source: American Advisors Group
