George Kamel has noticed that Gen Z is aiming for early retirement through a concept called “micro-retirement.” This involves taking periodic time off, usually 6 to 12 months, throughout one’s career instead of working nonstop until traditional retirement age. The idea is to take breaks for leisure, hobbies, and rest, allowing people to enjoy life while they are young. Those who have embraced micro-retirement report feeling healthier and more rested.
Kamel explained that micro-retirement is similar to taking a sabbatical but does not require waiting for years to accumulate the time off. Despite its appeal, micro-retirement involves financial uncertainty. Kamel’s tips for those considering it include getting out of consumer debt, saving 3 to 6 months’ worth of expenses in an emergency fund, saving enough cash for daily expenses and activities during the micro-retirement, planning for health insurance premiums, and making a detailed budget.
Kamel emphasizes that micro-retirement should not be an excuse for laziness.
Micro-retirement planning tips and risks
The period should be used for both personal and professional growth, and it’s crucial not to rely on debt to fund this time off.
He points out several risks associated with micro-retirement, such as financial stability challenges, pausing retirement savings, potential difficulty maintaining career momentum, and the possibility that frequent breaks might indicate deeper dissatisfaction with one’s career. Kamel advises caution when considering micro-retirement. Alternatives include taking regular vacations and making full use of available paid time off.
Micro-retirement offers an appealing way to take breaks and rejuvenate without waiting for traditional retirement age. However, it demands careful financial planning and consideration of potential career impacts. Those interested should ensure they are financially prepared and aware of the potential risks before taking the plunge.
Image Credits: Photo by Chen Mizrach on Unsplash
