When you’re toiling away at work for months and years on end, the idea of retirement feels very vague and far away.
That’s why more workers are exploring alternative approaches to their career timelines. Enter: micro-retirement.
What exactly does this term mean and how does it work? Below, career and finance experts break down micro-retirement, from the pros and cons to the best practices for trying it out in your own life.
Of course, this approach isn’t realistic or accessible for everyone ― especially workers in certain types of jobs or those in financially precarious positions where taking extended breaks simply isn’t an option. Still, for those who do have the flexibility, micro-retirement offers a way to rethink the traditional career arc.
What is ‘micro-retirement’?
“Micro-retirement is about taking short, intentional breaks from work throughout your career, rather than waiting until later in life to take a more permanent step back from professional life,” said Julie Guntrip, head of financial wellness at Jenius Bank. “Gen Z in particular is rethinking the traditional path to retirement as they’d rather use these ‘micro-retirement’ pauses to travel, recharge or explore passion projects while they have the time and energy to enjoy them.”
The experts who spoke to HuffPost likened it to a self-funded sabbatical that gives workers a chance to reset by resting, traveling or pursuing personal goals they’ve put off. It’s more substantial than a long vacation and isn’t the same as paid leave.
“Depending on the length of the micro-retirement, it may involve taking PTO, leaving your job or both,” said Sam Taube, the lead investing writer at NerdWallet.
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There are many benefits to micro-retirements but important downsides to consider as well.
The appeal of “micro-retirement” is clear to Ben Markley, a personal finance educator and host of the budgeting program YNAB’s YouTube series “Sketchy Advice.”
“Traditional retirement is the idea that in your 60s or 70s, you transition out of the workforce when you’ve built up enough savings to support yourself for the rest of your life without having to work again,” he said. “Micro-retirement suggests that rather than waiting most of your life, why not get a taste of retirement now? When you micro-retire you voluntarily leave your job and take extended time off, maybe four or six months, and live as if you’re retired by traveling or doing what you want with your extra free time.”
He noted that some people might be curious about micro-retirement because they’re skeptical about ever being able to retire permanently.
“Or they’ve come to realize that life isn’t always as certain as we think and they don’t want to wait 30 or 40 years to make the most of it,” he noted.
The micro-retirement trend is in line with other shifts in people’s approach to work in recent years.
“One of the driving forces behind micro-retirements is the growing demand for flexibility ― now widely seen as the new currency in the modern workforce,” said the CEO of workplace management company Deputy, Silvija Martincevic, who pointed to the rise of “micro-shifts” among Gen Zers. “The message is clear: Flexibility isn’t just a perk, it’s a priority for a younger generation of workers.”
What are the benefits of micro-retirement?
“The big benefit is being able to enjoy your life now, not just later,” said Bola Sokunbi, the founder of the personal finance platform Clever Girl Finance. “It’s a great way to recharge, avoid burnout and experience more joy and purpose throughout your career.”
It’s a great opportunity to rediscover your identity outside of work.
“So many of us wrap up our identity in the job we do, but taking a micro-retirement to separate from that and consider what you care about when you’re not working could be really beneficial for your well-being and sense of self,” Markley said.
Whether you want to spend more time with your family or travel the world, you can get in touch with the things in life that matter the most to you.
“A micro-retirement could be a worthwhile way to take a break in the midst of a year where your vacation days feel more like obligation days with weddings, graduations, family reunions,” said Julie Beckham, aka “Ms. Money,” the assistant vice president and financial education development and strategy officer at Rockland Trust. “Most of us have a limited number of PTO days, so saving up to fund your own time off to pursue something you want to do during a time in your life when you are young and active may be very worthwhile.”
Indeed, the opportunity to follow certain dreams while you’re in good health and have fewer family obligations is also a major benefit.
“Many people envision themselves traveling the world, gardening, making art, taking up new hobbies or doing other intensive recreational activities in retirement, but old age can make these things physically challenging,” Taube said. “Micro-retirements allow people to ‘front-load’ some of these bucket-list items and enjoy them while they’re still near peak physical fitness.”
Micro-retirement can also be a means to boost your overall happiness and motivation when you get back to work.
“The benefit of micro-retirement is that it gives employees the kind of extended pause that a weekend or short PTO simply can’t,” Martincevic said. “It allows them to truly reset, reflect on what they need from a manager or workplace, and come back with fresh energy and clarity.”
You might even gain the clarity to realize you’d benefit from a career change.
“In those cases, the opportunity cost of a micro-retirement in terms of resume gaps may be moot,” Taube said. “Career changes often involve starting over with little or no relevant experience anyway. A micro-retirement may provide a good ‘stopping point’ for your old, unhappy career.”
What are the downsides?
For many people, the biggest downside is that micro-retirement isn’t even on the table. Depending on your socioeconomic status or the type of job you have, taking extended breaks may be simply unrealistic.
“The downside is you need to plan ahead financially,” Sokunbi said. “Without savings or a clear return-to-work plan, it can create financial stress or disrupt long-term goals.”
You run the risk of possibly stunting your financial and professional trajectory if you leave too big a gap in your resume or miss out on peak earning time.
“For example, taking time off could interrupt your income growth and slow down the pace of retirement savings,” Guntrip said. “Depending on your industry, you may also face challenges with getting back into your job type or level after time away. With the right plan, these breaks could be career enhancers. But it’s important to have realistic expectations for reentry after micro-retirement.”
As a result, you might feel some anxiety about job security because there’s no guarantee that you can jump back into the workforce at the same level you were before micro-retirement. As a result, you might have trouble calculating how much of a savings cushion you’ll need for this period of your life as you search for a new job.
“That could cast a shadow over your micro-retirement if you are increasingly anxious that you are burning through your savings or you might have to take a pay cut when you return to work,” Markley said.
Taube also spoke about the potential mental health risks, noting “work can be an important source of structure for our days, and earning money and finishing projects can be a valuable self-esteem booster.” He also pointed to the issue of health insurance.
“Employer-sponsored health insurance premiums are usually automatically deducted from your paycheck and are partially paid by your employer,” he said. “Individual health insurance plans are available through the state marketplaces, but depending on what state you live in, the sticker shock on those can be severe.”
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While Gen Z might be driving this trend, micro-retirement can be beneficial to workers of any age.
What’s the best way to approach micro-retirement for getting the most out of it?
“Treat micro-retirement like any big financial goal,” Sokunbi advised. “Save for it in advance, budget for your time off, and think about what you really want from the break. Are you trying to reset, travel, take care of family or work on something personal?”
Gaining clarity around these questions can help you plan, prepare for and then use the time away intentionally. Guntrip recommended thinking of micro-retirement in four parts: the pre-planning, the workforce exit, the time away and the reentry.
“Once you define the vision, then you’ll need to fund it,” she said, suggesting high-yield savings accounts and flexible income options like freelancing or side hustles. “Then, you’ll need to plan your exit from work. Exiting gracefully and with integrity could be important to maintaining your network, future recommendations and potentially even a job when you return. Explain why you’re stepping away and give your current team plenty of notice.”
Guntrip added that your colleagues will likely be excited for you and interested in remaining connected.
“Don’t forget to explore opportunities at your company like sabbaticals or unpaid leave, depending on the length of your time away, to potentially maintain your employee status,” she added. “As you’re enjoying time away from your previous work, it may not hurt to consider experiences and skill building that could enhance the next stage of your career, like learning a language or taking an online class.”
During your micro-retirement, allow your budget to guide your spending to avoid running out of money. Talk to a financial advisor about the strategy that will work best for you.
“Stay-at-home micro-retirements oriented around rest, creative projects, gardening or family time are probably the cheapest kind, but even for travel-oriented micro-retirements, there are gradations,” Taube said. “One popular form of micro-retirement involves some kind of domestic, outdoorsy adventure such as hiking the entire length of the Appalachian Trail or Pacific Crest Trail.”
Although there are expenses for gear and supplies, these trips tend to be less expensive than jetting around Europe.
“For micro-retirees under the age of 30 who are staying in the U.S., catastrophic health insurance plans ― cheap, bare-bones health insurance plans with very high deductibles ― are a potential workaround for the health insurance problem,” Taube noted, adding that those over 30 who don’t qualify might need to shell out for a comprehensive health insurance plan instead but can make it more affordable with the premium tax credit.
He also recommended considering travel insurance for micro-retirement adventures outside the U.S. Otherwise, focus on spending mindfully and keeping some emergency funds.
“Make sure to factor in some buffer money in case getting back into the workforce takes time after micro-retirement so that you can feel more secure while looking for your next opportunity,” Markley advised.
Try to strike a balance between staying connected with your circles and getting some reflective alone time as well.
“My biggest advice is to truly disconnect during that time ― not just from work but also from the noise of the outside world,” Martincevic said. “It’s not easy, and it may sound cliché, but there’s nothing more powerful than giving yourself the space to be alone with your own thoughts in nature.”
She recommended asking yourself what brings you joy, what frustrates or drains you, and what your ideal future looks like.
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“That clarity is what will help you decide what’s next ― whether it’s returning to a traditional 9-to-5 or choosing an alternate path,” Martincevic noted. “What matters most is that you reenter with a clear sense of what you want for yourself and the environment you want to be part of.”