The case for taking mini retirements along the way in your career

Mint

26-07-2025

Calli Brannan, 30, had been working for a grocery deals app for four years when she realized she needed a break.
The start-up had grown since she joined, she was satisfied with what she had accomplished as vice president of customer success, and she was about to plan her wedding. A few weeks of paid time off weren't going to cut it; she needed to step away from her career to regroup.
'It was a bit of a risk but I knew I needed to take this time if I wanted to be able to continue on in corporate or start-ups or start my own business," said Brannan of Royal Oak, Mich. 'I was ready for my next step." She is now a little over a month into a sabbatical that she plans to extend into fall.
Brannan isn't alone. Many millennial and Gen Z workers are opting to take a temporary step back from their jobs for as long as months at a time. The trend has been dubbed 'mini-" and 'micro-retirements" or simply sabbaticals. Social media is filled with young professionals talking about voluntarily quitting their jobs, asking for unpaid time off or taking a long pause before job hunting after a layoff. One in 10 Americans are planning one of these breaks in 2025, according to a survey of 1,000 workers from job board Sidehustles.com.
The problem: The average micro-retiree doesn't have as strong a financial plan in place as they should before taking a step back from work, says financial coach Annie Cole, who has worked with people taking these career breaks. She is founder of the resource website Money Essentials for Women.
'When not planned well, you're going to feel the pain not only way down the road in your financial future but potentially a year or two from now," Cole says. 'If you pull a lot of money from your investments to have this fun moment and then you come back a year later and are suddenly going to have to work five to 10 more years to make up for that, that's a huge reality check moment that's going to cause a lot of shock and pain."
Burning through money for your retirement—especially when it is decades away—can be tempting when you are desperate for a break. It isn't a great idea. Missing just a few of the market's best days can take a massive chunk out of your savings: A $10,000 investment in the S&P 500 would have grown to $71,750 between Jan. 3, 2005 and Dec. 31, 2024 if it stayed fully invested, but just $32,871 if it missed the market's 10 best days and $12,948 if it missed the 30 best days, according to J.P. Morgan Asset Management's Guide to Retirement. Add to this the taxes and penalties you face from yanking money early from retirement savings accounts like 401(k)s, and it's clear why you should avoid going this route.
But it's also possible to stay more or less on track with your contributions, despite taking time off. Linda To Yonemoto, 38, had been working in marketing for 14 years when she was wrestling with the death of her grandfather and dog, as well as her own near-death experience during open abdominal surgery, and decided she needed a break. Yonemoto, who is based in Las Vegas, revved up her savings so she could max out her 401(k) retirement contributions in 2023 before she took off for a four-month trip across Southeast Asia and an eight-month break in the U.S.
'It gave me a lot of peace of mind," Yonemoto says. She now has saved and invested enough so that she could retire permanently if she wanted to.
Taylor Anderson, a financial advisor in Vancouver who works with workers taking sabbaticals, says that a lot of people focus on budgeting to cover their living expenses during their time away from work. But she says that it is equally important to take a long-term view, taking advantage of tax-savings opportunities and saving in multiple accounts.
That could include having your sabbatical span two tax years so that there is income in both years, making you still eligible to contribute to IRAs and Roth IRAs but with a lower tax bracket due to the lower income. It can also include converting pretax savings to a Roth IRA at a lower tax rate, Anderson adds. Or you might rebalance after-tax accounts with concentrated positions by selling winners and paying lower capital-gains during a period of low income.
She says it also is essential to have a buffer in your budget for the time away, especially if you are traveling, since unexpected expenses will come up. She learned this the hard way after a career in information technology consulting during her own 'mini retirement"—which included 20 months as a volunteer in Kyrgyzstan with the Peace Corps and six months of traveling. She had to lay out $1,000 for an unplanned helicopter flight necessary to get out of the mountains in Nepal due to a cancelled flight that left her with the choice of waiting days for open seats on another flight or hiking for four days.
Anderson, who was 29 when she started her sabbatical in 2013, also recommends saving enough for three- to six-months' worth of expenses for your re-entry back into the job market, since it can often take longer than you think to find a new gig.
Brannan prepared for her time off while staying on track for a more permanent retirement down the line by selling a house she had been renting out in Florida to make sure her expenses would be less once she wasn't working (the money she was making by renting the house didn't cover the mortgage).
'I want to join the workforce again with that renewed excitement and dedication so I can grow my savings and retire permanently as soon as possible," she says.
Write to [e-mail]