Today's workplace is far from traditional — it's dynamic, evolving, and anything but business as usual. From remote or hybrid work, to flexible schedules, side hustles, and the new growing trend, micro-retirement, younger generations are embracing change, and it's Gen Z who are leading the charge.
Even though the term may be unknown to some employers and employees, micro-retirement isn’t new. Academia has been taking sabbaticals or leaves for decades to study and for research.
Jillian Johnsrud, author of Retire Often, has written about mini-retirements for over a decade, and some believe the term was popularized by Timothy Ferriss in his book "The 4-Hour Workweek" over 15 years ago.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
So, what are micro-retirements, and why are workers welcoming this growing trend with open arms?
What is a micro-retirement?
Micro-retirement is all about taking short, regular breaks from work, typically lasting a few weeks to a few months. The time off is usually taken to travel, work on a personal project, or relax, with the plan to return to the job afterward.
Unlike traditional retirement, micro-retirement is not a permanent exit strategy, but a deliberate pause, often chosen by younger workers, especially Millennials and Gen Z. The idea has gained traction in response to burnout and evolving work-life balance priorities.
“Just like retirement, many people financially plan for micro-retirement to ensure they have the proper funds in place to support their time away from work,” adds Steve Sexton, CEO of Sexton Advisory Group.
“For some people, micro-retirement can mean completely logging off and dedicating the time to anything but work," he said. "Others may choose to take on remote projects during their micro-retirement to stay relevant in their field of work and/or to ensure a steady flow of funds during this period.”
Who takes a micro-retirement?
Generation Z includes individuals aged 13 to 28. Although they are the furthest away from retirement, this age group has begun to normalize a heavier focus on a good work-life balance. And with that comes this new career trend.
As of 2025, millennials (born 1981–1996) make up the largest share of the workforce, accounting for 34-40% of workers. Gen X (born 1965-1980) follows with about 27-33%. Gen Z, (born 1997–2012) comprises about 18–20% of the workforce, and baby boomers (born 1946–1964) consist of around 7–12%. The number of baby boomers in the workforce can fluctuate, however, with some returning to work after retirement, or "unretiring."
“As a financial planner, I see growing interest in micro-retirement as a proactive lifestyle choice, especially among Gen Z and Millennials, says Melissa Murphy Pavone of Mindful Financial Partners. “For many, it’s not about opting out of work altogether but about opting into intentional living. Taking an extended break, whether to travel, care for family, or simply reset, can be a smart and fulfilling strategy when it’s financially planned for.”
Are you financially secure enough to micro-retire?
The primary drawback of micro-retirement for many is the absence of a regular paycheck. In a recent study by Allianz, 61% of respondents said that they feel confident about meeting their savings goal for retirement. That number has decreased every year since January 2020, when 83% said they felt confident. Only 61% feel confident specifically about meeting their savings goal for retirement.
Micro-retirement means stepping away from a paycheck, but it doesn't mean giving up on your goals. "With the right planning, you can take time off without wrecking your financial future," said Michael Rodriguez, CFP at Equanimity Wealth.
"Maybe you need to build up 6–12 months of living expenses. Maybe it’s downsizing for a year or cutting back in other areas, or getting out of debt before you take a break," Rodriguez said. "The aim of micro-retiring isn't about adding to your stress, it's about creating a plan that gives you permission to pause without fear that you're falling behind financially."
Are employers also embracing this growing trend?
An increase in employees taking micro-retirements coincides with the lowest workplace engagement rate in a decade, according to Gallup. For companies, replacing an employee can cost thousands of dollars, from recruiting and interviewing candidates to lost productivity and the time it takes to train replacements. Salary.com estimates that replacing an employee can cost a company half or as much as twice the employee's annual salary
Asking companies to adopt workplace changes may seem impractical, but it helps to remember that taking extended breaks from work, such as a micro-retirement, is not necessarily a new phenomenon. Regardless, employee retention, an organization’s ability to hold on to its people and reduce turnover, is vitally important to a company's success.
To improve retention and hold onto younger employees, businesses may want to rethink “doing business as usual” by offering these sorts of breaks as a workplace benefit, akin to an employer-matched 401(k) or health insurance, especially as younger workers have demonstrated they have no qualms with quitting and job hopping.
To prove that point, the average number of years that either wage or salary workers were with their employer was 3.9 years in January 2024, down from 4.1 years in January 2022. That’s the lowest number since January 2002, according to the U.S. Bureau of Labor Statistics.
Micro-Retirement vs. Sabbatical
Micro-retirement is a new spin on the traditional sabbatical. However, there are differences. First, micro-retirement isn’t employer-funded, so you can say goodbye to your paycheck while you’re away. On the other hand, sabbaticals can be either paid or unpaid, depending on the employer. Second, you don’t have a guaranteed job upon your return when you micro-retire. If you take a sabbatical from work, your job is almost always there when you return.
"Unlike a sabbatical, which is usually structured and sometimes paid by an employer, micro-retirement is self-funded. You're stepping away from a job entirely, without a guaranteed position waiting for you afterward,” said Equanimity Wealth's Rodriguez.
He adds, “It takes financial planning. And it’s not just for trust fund kids. I’ve seen everyday professionals, even those on modest salaries, build up a buffer to step away with intention.”
Why are Gen Z and Millennials embracing micro-retirement and FIRE?
Essentially, the goal of the FIRE — Financial Independence, Retire Early — movement is to aggressively invest and save, often up to 75% of your income. That means if you play your cards right, it could be possible to retire early in your 30s or 40s. The goal of micro-retirement is much the same, except it involves brief pauses from work, intending to return to the workforce ultimately.
“A lot of the younger clients I work with aren’t interested in climbing the corporate ladder just for the sake of it. They want meaningful work and a life that doesn’t burn them out,” Rodriguez explains. “Many came of age during the pandemic, saw layoffs hit their parents, or experienced mental health struggles firsthand. They’ve realized that waiting until 65 to finally 'live' isn’t the goal.”
Rodriguez acknowledges that while some are pursuing FIRE with aggressive savings strategies, others are taking shorter, micro-retirement breaks and then returning to work refreshed. “I think both approaches reflect the same mindset shift: they’re redefining success as flexibility, freedom, and fulfillment — not just titles and tenure.”
Add in the rising trend of returning to work after retiring, or unretiring, and micro-retirement and FIRE become even more compelling options. If people are working well into their 70s (and beyond), younger workers may be even further driven to plan periodic rest-stops rather than deferring all extended time off into their later years.
“What I love about the micro-retirement conversation is that it reframes success,” says Pavone. “It’s no longer just about saving enough for the last third of your life; it’s about aligning your financial life with your values throughout your life. And that’s a trend I fully support.”
Pros and Cons of Micro-retirement
While there are compelling reasons to take a micro-retirement, there are also reasons why it may not be ideal for everyone.
Pros | Cons |
Young workers can experience life on their terms while still in their prime | Earning no salary while you're away could hurt you financially |
Helps establish a healthy work-life balance | Your job isn’t guaranteed upon your return |
Provides the opportunity to travel, be with family or study new things | May affect your chances for a promotion and/or raise at work |
Improves mental health and helps prevent burnout | Your company may not support micro-retirement |
Allows for the exploration of career options | Could make it hard to stay up-to-date on changes at work |
Could reignite a passion for work | May increase workload upon your return |
How to find a work-life balance
The workplace has significantly transformed in the last decade, yielding to remote, hybrid, and flexible work schedules while prioritizing employee mental health and well-being. These shifts have occurred at what seems like a remarkably rapid pace.
As the workforce has evolved, so have the expectations of workers. From conscious quitting, sunlighting, and moonlighting, to phased retirement, flexible retirement, and micro-retirement, business as usual is anything but. And generally speaking, if you have a solid financial plan in place, that’s probably a good thing.
Related Content
-
Here's Why I'm Dropping Peacock After the Price HikePeacock announced it will raise its plan prices starting on July 23. Here's how much they'll charge and ways to save if you want to keep it.
-
New Trump Gambling Loss Deduction Change: Who Pays More Tax Soon?Tax Changes A gambling losses tax deduction cap in Trump’s “Big Beautiful Bill” is causing an uproar. Here’s what you need to know.
-
Here's Why I'm Dropping Peacock After the Price Hike
Peacock announced it will raise its plan prices starting on July 23. Here's how much they'll charge and ways to save if you want to keep it.
-
What Will the Fed Do at Its Next Meeting?Rate cuts remain on hold this summer, experts say.
-
How to Tell Your Own StoryYour life told well could be the best gift you can leave.
-
What Would You Like to Leave Behind? A Financial Planner's Guide to Family Wealth DiscussionsCommunicating about your assets and plans for passing them on increases clarity while preventing surprises and family disputes.
-
The Surprising Truth About Loneliness and LongevityWe've all heard about the epidemic of loneliness that can shorten lives and make retirement miserable. But there's more to the story.
-
How Four Families Handled Natural DisastersFour families whose homes were damaged or destroyed share their stories.
-
Seven Financial Considerations When Downsizing for RetirementWith prices going up on everything, you may be looking for a cheaper place to live. To truly evaluate costs, take a hard look at taxes and intangibles.
-
I Have Plenty of Money: Why Do I Need a Long-Term Care Plan?Long-term care planning, whether through insurance or self-funding, is crucial not only for financial protection but also to preserve family relationships and reduce the emotional and logistical burdens on loved ones.
