Understanding The ‘Micro-Retirement’ Trend

The concept of work is evolving, and younger generations are leading the charge. Enter micro-retirement, a growing trend that flips the script on traditional career paths. Unlike full retirement, micro-retirement involves taking an intentional, extended break from work with the goal of returning to the workforce later.

According to Pew Research, only 44% of those aged 18-29 and 51% of those 30 to 49 reported being very satisfied with their jobs in 2023, a stark contrast to the 75% satisfaction rate among those aged 65 and older. This dissatisfaction has sparked a shift, prompting many young professionals to step back, reflect, and reconsider how work fits into their lives.

But what’s behind this trend, and should you consider a micro-retirement as part of your own career journey?

Micro-retirement seems to be gaining momentum due to evolving workplace dynamics and personal well-being priorities. According to Forbes, it’s reported that the younger generations may now be expecting to work well past their 70s, and they believe taking a break now may extend their savings and their overall quality of life as a result.

Additionally, digital platforms and financial technology have made micro-retirement more accessible, enabling individuals to strategically plan career breaks without substantial professional risk. For instance, those who are planning on either taking a break or retiring all together can rely on the digital layout of their financial health with the use of financial planning apps or auto-investing tools.

There are several advantages as to why so many employees have taken a long hiatus away from full-time employment, many of which are unique to each person.

Katie Gielata, a former full-time employee who did micro-retirement for nine months before returning back to contract work, said she was was feeling burnt out both professionally and personally.

“Between an average of 75% travel for 15 years and not wanting to work in the morning because I knew I would feel defeated at the end of the day, the burnout was real,” she said. “I decided it was time to re-evaluate what ‘work’ meant to me. It did not mean working 50-60 hours a week anymore.” Gielata went back into contract work as a way to ease back in and test out the job she chose to make sure it would be a true fit for herself.

In other cases, life events pushed others to pause work with little notice.

“What prompted me to take a break was the sudden death of my sister,”said Danielle Venturino, founder of Venture Ahead, an executive coaching business. “She was young, 36, and it was completely unexpected.”

Danielle had previously worked in an environment where colleagues crossed professional boundaries during her grief, which ultimately led her to quit and manage her loss privately. By being able to take personal time off, she positively redirected herself into launching her own company. 

By taking an extended period of time off, Investopedia reports that many may have the ability to rest and obtain mental clarity, travel more, and gain a more well-rounded personal perspective to live and work with defined intention, which could lead to a career pivot.

While there have been various noted benefits, taking a long break away from work also comes with its own set of obstacles. 

Katie said the one thing she learned from taking a step back from work is the judgement she received from peers.

“They think I was irresponsible, but I believe these particular people could actually learn more from talking to me about it than they are from living in jobs that they either hate or have poor work-life balance,” she said.

For some, taking a leave of absence may be a difficult choice from a financial perspective.

“Taking time away from work requires thoughtful planning to ensure your financial security remains intact,” said Melissa Murphy Pavone, Founder of Mindful Financial Partners. “As a Certified Financial Planner, I encourage women to think proactively about how to fund a micro-retirement without sacrificing their long-term goals.”

To ensure the best outcome for those who are considering micro-retirement for themselves navigating financial stress and communicating career transitions to future employers are key areas to review before making the final decision, as experts told USA Today.