Move over, quiet quitting! There’s a new work-related trend everyone seems to be talking about all of a sudden: micro-retirements. Unfamiliar but intrigued? According to Sam Taube, a lead investing writer at NerdWallet, “Micro-retirements are leisure-oriented breaks from work that typically last a few months.”
Taube stresses it’s not the same as paid parental leave or a health-related leave of absence. Instead, the micro-retiree intentionally chooses their own adventure, like traveling or — get this — resting. Yes, micro-retirements are a massive departure from “rise-and-grind” culture, which often involved proudly wearing burnout and never taking sick days as badges of honor.
Where did that get us, anyway?
Arguably, at a baseline of burnout. A 2023 Gallup Poll found that at least three-quarters of Americans reported experiencing workplace burnout “at least occasionally,” and 1 in 4 say the struggle is real “very often” or “always.”
Opting out for a few months or years sounds dreamy, but are micro-retirements possible especially in
What is a micro-retirement?
A micro-retirement is usually a voluntary decision to end your employment with a company (or as an independent contractor). People often use the time to travel, explore hobbies and personal interests, and “basically reap the benefits of a typical retirement,” explains Paula Parrish, a senior financial advisor at Ally Invest Advisors. However, the micro-retiree can be any age.
Since you’re generally not eligible for full social security benefits until age 67, Parrish says people will self-fund their micro-retirements and living expenses with personal savings. These pauses can last a few months to a few years and happen at various points in a person’s career.
Here’s what a micro-retirement is not: It is not the same as self-funded (read: unpaid) parental leave following the birth of a child, nor is it akin to opting to become a stay-at-home parent. Micro-retirements are taken to prevent burnout, reset, and explore, explains Christine Parisi, CFP, a senior wealth advisor at R.W. Rogé & Company.
“Stay-at-home parenting is far from time off,” Parisi says. “It’s a full-time commitment to caring for others, often at the expense of your own well-being and free time…it’s unlikely that anyone views stay-at-home parenting as a vacation. It’s simply a different type of work.”
Ditto for caring for a child during parental leave. Also, Parisi points out that people have some job protection under the Family Medical Leave Act (FMLA), but do not during a micro-retirement.
Why are people taking micro-retirements?
Before we go on, let’s address the elephant in the room: People take micro-retirements because they can.
“Having the flexibility to step away from work without risking your housing, healthcare, or ability to feed your family is a form of privilege,” says Paul Miller, CPA, a managing partner at Miller & Company, LLP. “Not everyone has a job that pays enough to save for a break, or a safety net to fall back on.”
People who can take a micro-retirement may have several reasons, but Parrish says the trend marks a cultural shift.
“There’s an increased focus on well-being and work-life balance, especially among younger generations,” says Parrish. “Micro-retirements can be a way to prioritize yourself and pursue interests you may not have time for while working. Many look at this as an opportunity to invest in themselves.”
Miller adds that the benefits of a micro-retirement are:
- Mental health reset
- Career clarity
- Stronger personal relationships
- Long-term burnout prevention that can extend your career
- Opportunity to pursue passions
However, ironically, micro-retirements can drain more than your savings. “Although work can be draining, it can also give purpose to our days, and a self-esteem-boosting sense of accomplishment,” Taube says. “I know a few former ‘micro-retirees,’ and some of them, paradoxically, really struggled with their mental health during their time off due to the lack of structure.”
Taube says other drawbacks of micro-retirements include:
- Hard-to-explain resume gaps
- Lack of health insurance
- Longer-than-expected re-entry into the workforce that extends beyond your savings cushion
- Loss of career momentum upon re-entering the workforce
- Not saving for actual retirement during your peak earning years
How do you even go about taking a micro-retirement?
Yes, it’s a privilege to take a micro-retirement, but you don’t need to be a multi-billionaire to opt in. “Micro-retirements are not only for the wealthy — some people plan and save for years to make it happen,” Miller says. “It’s not always easy, but it is more accessible with thoughtful financial planning and realistic expectations.”
Consider this your roadmap.
Know Your Why
Intentional time away from work requires… intention. “Know what you’re taking the time for. Is it to rest? Learn something? Travel?” Miller suggests asking yourself. “ Without a clear goal, it can quickly feel unstructured or like you’re drifting.”
For instance, Miller says common signs you could use a micro-retirement include:
- You wake up dreading work daily.
- You feel stuck, uninspired, and like you’ve hit a career plateau.
- You’re chronically physically or emotionally exhausted.
- Feeling disconnected from goals or personal values.
- Needing time to heal from a significant life event, like a loss.
- You’ve been saying, “Someday I’ll….” for years, but someday hasn’t come.
So, perhaps your “why” is to make “someday” two weeks from the day you give notice.
Cast Your Vision
One way to guard against structureless-induced blues is to envision how you’ll spend your micro-retirement, like spending mornings in the garden and afternoons painting and napping, or for three months on the Appalachian Trail.
“You’ll need the discipline to disconnect from work, say no to new opportunities that may arise during your break, and unplug from social media, Netflix, or other digital distractions,” Parisi says. “Go into the break with a plan for how you want to spend your days — having a clear vision will help you avoid slipping into old routines and make your time off truly restorative .”
Create a Timeline
What will your micro-retirement “bookends” (start and end dates) be? Miller suggests answering this question to the best of your ability. “Even if it’s flexible, having a general framework makes it easier to manage emotionally and financially,” he says.
Develop a Solid Financial Plan
Now that you’re clear on your goals and vision for micro-retirement, ensure you have a financial plan to support yourself without a regular paycheck hitting your bank account.
“Start by estimating your expenses, including housing, food, travel, entertainment, and any debt payments,” Parisi says. “Then, build up a dedicated savings cushion to support yourself throughout your break. Consider using a budgeting app or spreadsheet to track your monthly spending in advance so you know exactly what to expect.”
Expect the Unexpected
Importantly, you’ll also want to budget for what you can’t expect, like global pandemics, stock market swings in the wrong direction, or a longer-than-expected job hunt when you’re ready to re-enter the workforce.
“When creating your budget, it’s also smart to build in some cushion to cover emergencies and expenses for a few additional months,” Parrish says.
Consult a Financial Planner
A micro-retirement can be one way to devote more time to personal, solo pursuits. However, you don’t have to plan for it alone. A financial planner is like a seasoned coach who can help you crunch numbers and customize your micro-retirement playbook, including determining how much you need to budget and what a “good” emergency fund looks like.
“It’s important to understand how the temporary loss of income may impact your long-term financial goals so you can plan accordingly,” Parrish says. “Recently, the stock market volatility has increased the anxiety for people trying to save enough to pay for expenses during the micro-retirement. A financial advisor can bring peace of mind and validation of your plan, so time is not wasted worrying about expenses.”
Secure Health Insurance
While it may not be as exciting as discussing all the destinations you hope to cross off your travel bucket list, securing health insurance is crucial.
“Don’t let a gap in health insurance become an unexpected stressor,” Parisi says. “Medical emergencies can happen at any time, and ensuring you’re protected will give you peace of mind so you can focus on rest, growth, or exploration during your micro-retirement.”
Parisi recommends researching options, which might include:
- COBRA
- Coverage through a spouse’s plan
- Private insurance through the healthcare marketplace
Stay Connected
Taking a step back from work may be your primary objective in micro-retirement, but Miller doesn’t recommend falling off the radar. “You don’t want to disappear completely,” Miller suggests. “Stay in touch with colleagues, attend industry events, or even freelance a little. This keeps your professional ties warm for when you re-enter.”
Even if you don’t plan to re-enter the industry you were in before micro-retiring, your former colleagues may have family, friends, and other contacts who can help you land a fulfilling new adventure.
On that note…
Be Intentional With Re-entry
It’s essential to bookend your micro-retirement plans before handing in your work laptop.
“One of the most overlooked parts of a micro-retirement is what happens next. Consider how you’ll re-enter the workforce or transition into your next chapter,” Parisi says. “Will you go back to your old job? Start something new? Update your resume or LinkedIn profile?”
It’s OK not to have all of the answers right now. “Consider using a portion of your break to reflect on what you’ve learned and how it might inform your future. That way, you return not just rested, but with renewed purpose and direction,” Parisi says.
When the time to return to work nears, be ready to execute practical (and yes, intentional) steps to ease the transition. “Update your resume, identify roles you’re interested in, and line up conversations,” Miller says. “Re-entry can be rough if you don’t plan.”
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