Mini Retirement — Planned vs Unplanned

Have you considered taking a mini retirement? I’ve written frequently about semi-retirement as a more-feasible option than FIRE (Financial Independence, Retire Early). However, mini retirement offers many of the same benefits — arguably, even more benefits! 

Mini retirement can be a solution for several common financial questions.

How can I retire and travel the world?

For many of us, retiring to travel the world is the dreamI find myself fantasizing about it, too. With work, responsibilities, and bills though… that dream can feel impossible.

With proper planning (and good timing), retiring to travel the world can be very feasible — with a mini retirement.

How can I retire cheaply?

Financial feasibility is a major obstacle to reaching retirement for many people. Because of that, and desperation to leave the work force, retiring “cheaply” is a common goal.

Mini retirement can offer the best of both worlds. (1) A goal that’s achievable with just a few years of saving and (2) a way to leave work and do anything you want before your 60s or 70s.

Mini retirements throughout life

Clearly, taking multiple mini retirements throughout your career is a feasible, yet untraditional option. Mini retirements can be a great way to take advantage of career changes or to take a break from a draining job.

Taking mini retirements throughout life can be a cost-effective way to live your dreams and inject variety into your calendar.

Let’s discuss the details.

What is a mini retirement? 

A mini retirement is a period of not working in the middle of your career years. It’s different from both traditional retirement and FIRE since you are intending to return to work.

Traditional retirement delays your retirement years until after your career is fully completed. 

FIRE harshly compresses your working years as much as possible through an ultra-high savings rate so you can retire earlier. 

Semi-retirement is a moderate approach that brings retirement closer. If you accept part-time work you enjoy as part of your retirement lifestyle, you can reach your retirement years earlier.

retirement comparison

I have not personally taken a mini retirement, but I find them to be fascinating. 

I recently talked with two mini retirement veterans to learn about their experiences. They took different paths, but both had very positive things to say about their mini retirement periods.

How to take an unplanned mini retirement

First, I talked with a couple that I know well… my parents! 

While I was in college, they took an unplanned mini retirement after my dad lost his job. They made the most of a difficult situation, and it’s a period they reflect on fondly, now.

Here’s what my dad had to say when I asked him about the experience.

Mr. SR (MSR): You took a mini retirement of sorts after you were laid off a few years ago. How did you decide to do that? 

Yes, that was a challenging situation. 

I was with the company for over 20 years. Then I came in one day, and I was let go with no advance warning. It was challenging in many aspects. When that happened, I went through the emotional cycle from disbelief, to anger, to acceptance. 

Once I got to acceptance, we decided to look at it as an opportunity. We considered it to be an opportunity to take an extended vacation — something we really never had a chance to do when I was employed, because I had various constraints like limited vacation time.

MSR: Did you intentionally prepare for this scenario before getting laid off? Or was the mini retirement an impromptu opportunity? 

It was impromptu to a great extent. 

One of the benefits of having big dreams is you that you can act on them when the time comes. That was the case here. We had long talked of experiencing the National Parks so we decided to go for it when the constraints were lifted. 

mini retirement yellow stone
Yellowstone National Park

MSR: What financial circumstances made the mini retirement possible for you?  

We were blessed with good income and employment for a couple of decades.  Diligent saving and investment gave us the freedom to do what we wanted to do.  

MSR: What did you do during this mini retirement period? What was your favorite part? 

We traveled across 15 or so states and visited National Parks. We had a rough plan, but we flexed when we wanted to. I think the freedom of being able to go and do as we pleased was the best part. It gave us a chance to pray, dream, and reconcile a lot of things. At the end, coming home was nice, too!

MSR: What would you do differently, if you were going to take a mini retirement period again in the future? What advice can you give to others considering this?  

In our case, the financial planning we did afforded us the opportunity to do something we had always wanted, albeit as the result of an unplanned circumstance. We had the flexibility to act and make the most of an unpleasant situation. 

If you intend to take a self-inflicted mini-retirement I would recommend planning the what, where, and how in advance… but leave room for adventure and changes in course along the way!

Key takeaways

  • Give yourself the opportunity to process your job change. Once you reach a point of acceptance, view the opportunity as a positive.
  • Identify a dream or goal you can uniquely fulfill during this mini retirement period.
  • Embrace the freedom and flexibility.

How to take a planned mini retirement

I also had the chance to speak with M from the blog Radical FIRE. She has now taken two planned mini retirements, so I wanted to get her insight on the topic.

I have talked with M before in a Sitting Poolside interview. You can read that previous interview here

MSR: What initially motivated you to pursue a mini retirement?

M from Radical FIRE (MRF): Since I was in high school, I wanted to travel for an extended period of time. When I was in university, I studied in California for a semester and I had the time of my life. I was traveling everywhere in the weekends, and traveled with several friends in the last month we were there.

The thing with traveling is; once you have done it, you’ll want to do it for the rest of your life. It’s addicting.

Once I came back home to the Netherlands, I started to plot immediately how I could travel again.

I decided that I wanted to travel after I had finished my master’s degree. I was writing my thesis and I was starting to feel burned out. I was working on my thesis daily for 8-10 hours, working at university to actually pay for my master’s, and still trying to see my friends and family.

When I almost finished my thesis I was so done that I booked a flight to Colombia. That was my hard deadline for my thesis — and it was only two weeks away (that illustrates how “done” I was, emotionally).

I finished my thesis and went on traveling around South America. I visited Colombia, Ecuador, and Peru.

mini retirement 3
Photo provided by M, from her mini retirement travels.

This was my first mini retirement and I LOVED it.

It was such a steep learning curve, which is something I’m still grateful for. 

I learned to make decisions continuously without pleasing anyone in the process. My decisions were completely based on what I wanted, instead of my previous decisions that were mostly driven by a lack of confidence– trying to please others.

After I took another four months to find a job I liked and go to work, I went all in.

I’ve always been a driven person who wants to achieve the maximum possible. I aspired to a big career at that moment, leading to me working long hours and completing big projects.

It worked. I got a promotion within 9 months of starting my job, I got a 20% pay raise, and I got a shitload of high expectations. I no longer enjoyed working like I did in the first few months.

I found FIRE (Financial Independence and Retire Early) and I wondered why I would keep working so hard? Why would I keep working toward something that was never going to be enough? I want to have freedom, and one thing you certainly don’t get when aspiring a corporate career is freedom.

I decided to hit the brakes for the time being and go for another mini retirement. This time with my partner.

At this moment we’re traveling for 5 weeks, enjoying every moment and soaking everything in. We’ve visited Curacao, Colombia, Panama, Costa Rica, and are currently in Nicaragua. We’ll go up to Mexico by bus, flying to Orlando for a week and going back to the Netherlands just in time for Christmas!

travel 2
Photo provided by M, from her mini retirement travels.

MSR: How far in advance did you start to plan your mini retirement?

MRF: About a year before my partner graduated, he told me that he wanted to travel. He said that he would love to have the same adventures I had, BUT he didn’t want to do it alone. 

We were planning on me visiting him for a month, and some other friends visiting him for some period of time as well.

As we were having that conversation, I noticed that I wanted to get away for an extended period of time as well. That’s when I proposed to join him for his entire trip.

How to tell your boss you’re planning a mini retirement

As soon as we knew, I asked my boss what was the procedure around a sabbatical or unpaid leave. As the company is still growing, there weren’t any procedures yet. That opened a great door for me.

I knew that they wanted to keep me, so I told my boss around 6 months before we went; “I would love to stay and work here, but if there are no options – there are no options”. At that time, I decided that if I couldn’t get my unpaid leave I would go on my mini retirement anyways and leave my job.

Around that same time I asked my current project if they would be able to extend me until the day before I left. They informally said yes.

After that, my and my boss had a formal conversation about if this was going through and in what form. I told him that I would appreciate the opportunity to go abroad for my own personal development. Besides that the form that I choose (unpaid leave) with an extension of my project, wouldn’t cost the company any money.

My boss told me that he would do everything in his power to keep me there, which is something I’m very grateful for to this day.

About 3 months before I went, I managed to get the signed contract from my project and formally extended my project until the day before my flight left. They happily accepted and were sad that the project would come to an end – I had taken over a great deal of responsibility from my manager at that point.

Here’s the timeline:

  • 12 months before mini retirement — first mention to my manager.
  • 6 months before mini retirement — formally asked my manager for permission, they said would do whatever they could to keep me there.
  • 6 months before mini retirement — extended my project verbally until the day before my flight departed.
  • 3 months before mini retirement — formally extended my project including signed contract.

MSR: How did you work out your mini retirement plans with your employer?

MRF: I’m very happy I was able to negotiate this mini retirement with my employer!

I am all about open communication and I am a very direct colleague. That’s what people in the Netherlands are known for in general. We don’t sugarcoat and say it how it is.

Luckily my manager is the same, so it’s very easy to communicate. We both express our opinions and we try to come up with a mutual solution for the situation that would benefit both parties.

It also went like this when I asked if I could get my mini retirement.

I talked about this mini retirement with my manager and mentioned my love for traveling a few times before shortly in other conversations. That opened up the conversation for when we formally started talking about it. 

By the time we started talking about it, I already had informal confirmation from my project that they would extend me until the day my flight boarded. That meant it didn’t cost the company any additional money.

I would take my remaining holidays (about 5 weeks) and the rest I would take unpaid leave.

Before I went to talk with my manager I already thought things through and I already had a plan. I think that is the biggest thing on how to come to terms with your employer: know what you want and know how to present that to your employer in a way that is mutually beneficial.

In my situation: I knew that I wanted to go on a mini retirement for four months and I knew when I wanted to return. I already arranged for my project to be extended, costing the company no additional money. On top of that, I took unpaid leave, which also didn’t cost the company any additional money.

These were all factors contributing to the fact that I got to go on my mini retirement.

MSR: What did you learn during your past mini retirement and what are your plans for your future mini retirements?

MRF: During my first mini retirement in 2017, I traveled in Colombia, Ecuador, and Peru. I had traveled for four months and stayed at home for another four months. These months at home I have largely spend learning about myself, the world, and what kind of work I wanted to do.

What I learned from my mini retirement

I’ve lived most of my life on autopilot up until that point and the mini retirement learned me a lot. I learned about myself as a person, what kind of things I like, how I can make decisions independently of others, and I learned how valuable each and every one of us is.

The planet we live in is filled with abundance, there is enough to go around.

If you’re living in the Western world it can be hard to remember, since we’re continuously hearing the message that there isn’t enough to go around.

If I’m living thinking that there isn’t enough on this planet for everyone, I remember the avocado trees along the roads, the fields of bananas, and the beautiful mountains full of trees and plants.

After I returned home, I deliberately took the time between starting to work. I spent about a month seeing my friends and family, catching up with them, and celebrating the holidays.

I also spent a lot of time figuring out my personality and who I actually was. It was hard for me before to pinpoint who I am. I was a little bit of everything and could identify with many people.

I listened to TedTalks, I’ve done a LOT of personality tests, and I asked myself a lot of questions. It was something I enjoy and absolutely something I needed.

I guess it’s good to know who you are and what you want before you start working in the corporate world.

Current mini retirement

During my current mini retirement, I’m only traveling. My last working day was one day before my flight, and my first working day will be directly after new years. I’ll be back home for about a week at that time.

Future mini retirement plans

In future mini retirements, I hope to travel more. I want to see so much more of the world, I love to explore new places, and I love getting to know different cultures.

Perhaps there will be a mini retirement where I combine traveling with working on the blog, which is something I would love to do. Slow travel while working on the blog every day.

That would be my ultimate dream!

MSR: Looking back on your past mini retirement, what was the best part? What advice do you have for other considering a planned mini retirement?

MRF: On my last mini retirement, in 2017, I learned a great deal about who I truly am and what I want. I started to listen to myself, cancelling out the noise and opinions of others.

I got to know my true self, which I’m eternally grateful for.

The best thing about travel is that you learn a lot about yourself in your interaction with others. You meet people along the way that are teaching you great lessons. They have a different perspective on life, which is valuable when you’re like me: only used to the Western perspective.

In my current mini retirement I’m traveling with my partner, which is very different. You have more short-term interactions as people assume you only want to be with the two of you. You still learn a lot about yourself, but now in relationship with the other.

That is not to say we don’t meet any people, but you’re not traveling with people for extended periods of time (more than a few days).

I’m forever grateful that I got my last mini retirement experience in 2017 and my mini retirement experience currently.

Just being away from your job for such a period of time is a breath of fresh air!

travel
Photo provided by M, from her mini retirement travels.

You get to do whatever you want, wherever you want. This to me is the greatest feeling of freedom and the greatest benefit of taking a mini retirement. You get away from the busyness that is everyday life and you can take your time to look around and reflect.

I don’t think that I would do anything different. I am grateful for how the process went and that I have a job lined up if I come back.

Not that I like my job so much that I would love to continue working, but just the fact that I don’t need to think about what we’re going to do after we come back!

I would highly recommend mini retirements as a way to slow down on your way to FI. You don’t need to travel, you can do whatever you want. Take up that old hobby you didn’t have time for in too long, work on your blog, read a lot of books, it’s up to you!

Go follow your dreams!

4 steps to a successful mini retirement — Baruch from The Smart Investor

Finally, I talked with Baruch Silvermann, founder of The Smart Investor. He offered 4 key pieces of advice for planning your mini retirement.

  1. Plan and set a budget

Understand your budget. Calculate your expected costs, especially if you’re planning to travel. You don’t want to find yourself in a big financial hole.

  1. Consider setting up a passive income source

Whether it’s a rental property, mutual funds or peer-2-peer lending investment — passive income sources can help you achieve your goal. Passive income can help extend your mini retirement and help you prepare for your long-term retirement plans.

  1. Remember your financial responsibilities

Plan to stay on track for your long-term financial goals, like saving for your children’s college or your future full retirement.

  1. Enjoy it!

Enjoy the opportunity — this is a unique period to spend your time however you want to.

Are you planning to take a mini retirement in the future? What questions or concerns do you have?

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