Wealthy Americans Are Taking Multiple Mini-Retirements: Should You?
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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The traditional idea of working for decades and retiring at 65 is losing traction. For some, it’s no longer financially viable. For others — especially the wealthy — it’s a conscious lifestyle choice.
A growing number of affluent Americans are embracing “multi-retirements” — planned career breaks taken throughout life. According to an HSBC survey of affluent adults, 49% who intend to take a mini-retirement plan to take two to three over their lifetime. The preferred duration is six to 12 months, with age 47 cited as the ideal time for the first pause.
But is this trend only for the rich? Here’s how anyone can explore the multi-retirement lifestyle.
Why Multi-Retirements Appeal To More Than Just the Wealthy
Multi-retirements can appeal to anyone who is feeling the urge to take a career break.
“Taking time off, whether to travel, study or be with family, can help mitigate burnout and boost overall well-being,” said Nancy Anderson, CFP, director of wealth planning programs at Key Private Bank. “A break can recharge your energy and bring a fresh perspective to your career, allowing you to assess your lifestyle preferences, health needs and spending patterns before officially leaving the workforce.”
There are both financial pros and cons to this retirement structure.
“Taking multiple breaks offers you the chance to extend your earning years and can optimize tax planning while having periods without a full income,” Anderson said. “Of course, the biggest challenge is funding your lifestyle without a paycheck while keeping your retirement savings on track. However, with thoughtful planning, it’s possible to take a break and still meet long-term goals.”
Smart Ways To Fund a Career Break Without Derailing Retirement
There are a number of ways you can fund your lifestyle during a mini-retirement without sacrificing your long-term savings. Anderson offered a few options:
- Treat your work break as a short- or mid-term goal in your financial plan, separate from retirement.
- Use accessible accounts that offer liquidity, like brokerage or high-yield savings accounts, for short breaks.
- Align your investments with your timeline and let your savings guide the length and scope of your sabbatical.
One thing Anderson does not recommend is making withdrawals from your 401(k) or other retirement savings accounts, as they can carry penalties for early withdrawal.
How To Maximize Employee Benefits Before Taking a Sabbatical
Anderson advised making the most of the employee benefits you have before taking a career break.
“Max out your 401(k) to get the full employer match, use FSA and HSA accounts to cover upcoming expenses, and talk with your employer about options like unpaid leave, family leave or combining PTO with flexible or remote work,” Anderson said.
“Depending on your role and relationship with your employer, there may be creative ways to structure your time off that support your break and a smooth return.”
Affordable Mini-Retirement Strategies for Everyday Americans
Many affluent households use investment income to fund their breaks, and average Americans can do the same.
“The same principle can apply to those at any income level if you scale it properly,” Anderson said. “Reduce fixed expenses, prioritize debt payoff and automate your savings.”
It may also be more feasible to enjoy multi-retirements if you have a partner.
“If you’re married, a ‘tag team’ approach could help, where one spouse works while the other takes a break,” Anderson said.
Another option is to try a “faux mini-retirement” by using paid time off or remote work to slow your pace without leaving your job.
“Renting out your home for extra income is another option for funding a longer break,” Anderson said.
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