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What Is a "Mini-Retirement," and Should You Take One?

By Jamie Cattanach – Nov 17, 2018 at 2:34PM

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Ready for retirement right now? You can take a small one before jumping back into the workforce, but doing it right takes some planning.

If youth is wasted on the young, you might say retirement is wasted on the old. Leaving the workforce behind is a worthy financial goal, but it can be discouraging to realize you'll probably be covered in wrinkles and liver spots by the time you get there.

That's why some people are trying a different approach: breaking up their career timeline with a "mini-retirement" -- an intentional break from work or a series of them.

Golf ball approaching hole with putter's shoes and club in the background

Image source: Getty Images.

"Mini-retirement"? What?

Coined by Tim Ferriss in his well-loved book The 4-Hour Work Week, a mini-retirement is a planned career or industry break, wherein you leave your current job while planning to re-enter the workforce later. In other words, it's a fancy new term for something that workers have done for decades: a career hiatus or sabbatical.

Taking a mini-retirement (or three) is an attractive option for a host of reasons. It may allow you to pursue your most coveted life experiences while you're still young enough to enjoy them, whether that means climbing Kilimanjaro or going on a tasting tour of every wine region in France.

A mini-retirement can also serve as a clearly defined fork in your career path, giving you the headspace and time you need to jump into a new industry, or even finally start that business of yours.

But the key here is planning. To pull off a mini-retirement, you'll need to lay some pretty extensive groundwork before you punch out for the quasi-final time.

Here are some important things to think about.

Leaving is one thing -- but what about coming back?

The thing that differentiates a mini-retirement from a real one is the intent to rejoin the workforce at a later date. But as anyone who's ever been in the job market knows, finding a new position isn't always easy -- especially if you have a resume gap to explain.

If you're lucky, you may be able to work out some sort of extended leave of absence with your current employer, simply picking back up where you left off after your break. But if you're quitting your job entirely or hoping to make a major career change, you'll want to have a plan to ensure you'll be able to come back into the fold once you're ready.

To that end, you might consider using some of your newfound free time for relevant career training and educational opportunities. After all, next time you're in the interviewee's chair, a perfect golf swing or a golden tan probably won't cut it.

Some of the most easily accessible self-teaching options include online courses through platforms like Coursera, Udemy, or Codeacademy, all of which offer both free educational tools and relatively affordable paid options. You might also use your mini-retirement as an opportunity to go back to school full-time -- though one might question whether that would count as a "retirement."

Don't neglect your permanent retirement goals for a glorified vacation

Although a mini-retirement might sound tempting, there's one major hitch: It can be really hard to budget for. Even basic living expenses add up fast when you're not earning an income, and chances are you'll want to use your newfound free time for some worthwhile yet expensive extras, such as extensive travel.

Keep in mind, too, that you'll be missing out not only on your wages, but also on those oh-so-valuable benefits that are part of your compensation plan. You may suddenly find yourself having to pay out of pocket for healthcare, for example -- and you won't have access to your 401(k) or other employer-sponsored investment plan.

You can roll your 401(k) savings into an IRA and allow them to keep growing, but if you're not making regular contributions, you're missing out on valuable earnings. And you certainly won't be able to take advantage of that sweet free cash from your company's employer match.

My advice? Unless you're a planning wizard, a very high earner, or independently wealthy, a career break may cost more than it's worth, especially in the long term. So if you ever want to take a retirement without the "mini" attached, you may want to think twice about taking an extended leave from work.

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