When you’re young, saving for retirement often seems futile. Escaping the rat race is motivating enough, but what if you’re too old to enjoy it once you get there?
It’s the reason some folks are embracing mini-retirements—or shorter breaks throughout their career.
Taking a break from your career isn’t a new concept, but mini-retirements took off after Tim Ferriss wrote The 4-Hour Workweek. It’s all about temporary sabbaticals to make the most of your life now—while you’re still young and healthy to savor it.
If you’re looking for real-life examples, we spoke to folks who pulled off their own mini-retirements.
Here’s a look at why they took a break, how they saved for it, and the impact the break had on their long-term financial plans.
Traveling the world for ten months
The desire to travel sparked a mini-retirement for Kimmoy Matthews of Keeping Up With Kimmoy. After squirreling away $20,000, she left the workforce to spend ten months exploring the world. As she was running low on cash, she scored a well-paying gig at Google and kicked off the next phase of her career.
“Even though I started over, I don’t think my mini-retirement delayed my actual retirement. It was worth every penny,” says Matthews. She says time is on her side and credits her lucrative new career for her high savings rate.
Once you start traveling, it may be tempting to join the ranks of other full-time digital nomads.
But before making the leap, Matthews says you should consider your long-term financial goals. “My dad once said to me, ‘you’re going to be fifty one day.’ It was a great reminder to enjoy the present but still plan for my future self,” she adds.
Taking eight months to heal after losing a spouse
After serving in the Air Force, Daniel Kopp of Military Life Planning knew he was ready for a break. He dreamed of exploring national parks by RV with his wife. But unfortunately, she passed away before they could do it together.
With her blessing, Kopp stuck with the original plan.
He took eight months to travel across 38 states, seeing 12 national parks. The total cost was around $32,000, which took them about two years to save. He also did a little freelancing for some income to supplement his savings.
Kopp admits his sabbatical didn’t happen without trade-offs.
For eight months, he stopped adding to his investments. Also, the $32,000 he spent could have put him closer to his goal of financial independence. He says his detour set him back by about two years—but he would do it again. “Instead of a mad dash to financial independence, I prefer to enjoy the journey with shorter sabbaticals along the way,” he says.
If you’re planning your own trip, Kopp suggests talking to others who have done it. Try to be realistic about all the places you want to go. Before quitting your job, crunch the numbers and make sure you are comfortable with what you see.
Before quitting your job, crunch the numbers and make sure you are comfortable with what you see.
Downsizing to travel by the country RV for a year
Jacob Wade of I Heart Budgets downsized to fund his family’s year of traveling. They fixed up and sold their home for a $160,000 profit. They also set aside $25,000 to buy an RV and vehicle to tow it.
He expects to spend about $60,000 for their upcoming year-long trip.
“To keep yourself motivated, print out pictures of what you want during the time off. Put them in your cubicle, on your fridge, everywhere, to remind yourself why you are saving aggressively,” says Wade. They made a habit of saving 40% of their income and getting a month ahead on each of their bills.
On paper, Wade’s family is draining 35% of their savings, which sounds risky.
But he believes their choice to downsize will help them achieve retirement sooner. The RV plan was a major shift because they originally planned on buying a home twice the size.
“You will not regret it for a second. It will truly clear your mind, and may even help you reach financial independence sooner as you discover what is really important to you,” Wade adds.
Before turning in your resignation, there is planning to do.
It’s more than setting aside enough living expenses for the number of months you want to take off. You will need to weigh the long-term cost of your decision. Can you really afford to give up your income? Are you willing to cut back on investing? Only you can decide.
If the decision feels too complex, don’t be afraid to run it by a second set of eyes. You may enjoy your mini-retirement a lot more knowing it’s not going to derail your financial future.
Kate Dore is a freelance personal finance writer based in Nashville, TN. She is a Candidate for CERTIFIED FINANCIAL PLANNER™ Certification and serves as the Director of Public Relations for the Financial Planning Association of Middle Tennessee.
Disclaimer: These are personal accounts of individuals who are not clients of JHPFS, LLC and nothing contained herein is intended as investment advice