Why Millennials and Gen Z are Taking Micro-Retirements—and How You Can Too

Zach Lytle, 26, worked as a software engineer for three years before quitting in April 2024 to hike the Pacific Crest Trail, a more than 2,600-mile trail that spans from Mexico to Canada.

Lytle isn’t alone. Many Gen Zers and millennials are taking career breaks despite having relatively short careers. On social media, influencers have coined these breaks “micro-retirements” or “mini-retirements.” Rather than waiting until you’re retired to take an extended period of time off, micro-retirements involve taking multiple breaks that last many months throughout your career.

So why have some embraced this trend, and is it right for you?

Key Takeaways

• Some young people are taking ‘micro-retirements’ or ‘mini-retirements,’ which are career breaks lasting a few months.
• To take a career break, you’ll need to determine how much money you’ll need to live off of. One expert recommends calculating that number and then adding an additional 20% cushion to account for the time it might take to find a new job.
• Taking a micro-retirement can involve a lot of planning and can be costly, but some find the tradeoffs worthwhile.

“The way we think is changing. Millennials specifically [are really changing]. We don’t need to sit in an office 40/50 hours a week,” said Leona Marlene, a travel content creator, in a 2024 TikTok. 

@leonamarlene

This is one of my favorite topics and I could talk about it forever. Do you need to quit your job? Absolutely not. But if you want to, and can make it happen. Taking these mini breaks are ao healthy for you. If this is something you’ve been thinking about and can swing it – its definitly worth it. There are lots of things I did to prepare and can talk more about that – paying off debt, saving emergency fund, cutting unnecessary expenses, etc.

♬ original sound – Leona | Travel + Money

Lytle had toyed with the idea of quitting his job months before he officially resigned. Sitting in front of his computer all day made his migraines worse, and he felt that he hadn’t had a proper break between graduating from college and starting his new job.

“I saw a YouTube video about [the Pacific Crest trail] when I was really not liking my job, and I thought that was exactly what I should do: quit my job and walk,” he says.

Note

The idea of micro-retirements isn’t entirely new. Tim Ferriss, author of “The 4-Hour Workweek,” advocated for mini-retirements more than 15 years ago, and in academia, sabbaticals, or leaves that professors take for research or other activities, have existed for more than a century.

Priya Malani, founder of Stash Wealth, thinks the trend has become popular among young people because some have become disillusioned with the idea of working for a lifetime before enjoying their retirement.

“After seeing our parents just struggle and grind until 65, we realized that there’s another way to manage our time and money,” says Malani.

Planning for a Micro-Retirement

For most people, micro-retirements involve a lot of planning–you’ll need to figure out how much to save, determine health insurance coverage, and think about how you’ll explain the break to future employers.

Malani says that whether someone is able to take a micro-retirement ultimately depends on whether they’ve saved enough money to forgo working for a period of time.

To determine whether a micro-retirement is an option for you, Malani recommends determining how long you want to take off work and then estimating your monthly costs. After you’ve determined how much you think you’ll spend during a mini-retirement, she suggests adding an extra 20%. 

“Why the cushion? It helps account for the re-entry period. Even if you’re actively networking while you’re off, it may take some time to find the right role or get your next income stream flowing again,” Malani says.

Consider Your Health Insurance Coverage

For health insurance, Malani says that some of her clients who have taken micro-retirements have opted for catastrophic health plans, which are insurance plans for young, healthy people that are meant to cover unexpected illnesses or accidents. These plans have high deductibles and low premiums.

Before Lytle quit his job in tech, he had $20,000 saved up in a checking account and had budgeted $8,000 toward hiking the entire trail, though he planned to hike only half of it. Lytle didn’t have to worry about health insurance, since he was still on his parents’ health insurance plan at the time. He ended up being uninsured only for a brief period after he turned 26.

Prepare for Re-entry to Work and Retirement Savings

After Lytle spent roughly three months hiking half the trail and another month visiting his family and friends, he returned to the job market.

It took him longer to find a job than anticipated, so he ended up working at a restaurant in the meantime. Eventually, five months after starting job hunting, he landed a job he liked more than the one he quit.

“I ended up somewhere I was really happy, so it worked out,” says Lytle.

As for whether people should be concerned about lost retirement savings during a career break, Malani assures people not to stress too much, especially if you’re young and already have some retirement savings built up.

“When you’re in your 20s and 30s, and you miss a year of saving, it’s not hard to play catch up—so don’t stress about the fact that you’re not saving for retirement,” says Malani. “[A micro-retirement] is an investment in yourself—there’s so much to life beyond work.”

The Bottom Line

If you’re considering a micro-retirement, take it slow. This isn’t something you can just jump into. It takes some planning. You’ll need to have enough saved to cover your expenses for the time you’re in ‘retirement’, and you should also add a 20% cushion to account for the amount of time it will take to find a new job. Make sure to figure out health insurance, and determine how you’ll explain this break to future employers. Once you have your plan in place, go for it—and enjoy. Your time is yours.