For those feeling the distance of retirement, 'Micro-Retirement' could be a suitable alternative

Micro-retirement, a concept that encourages individuals to take short, intentional breaks from work throughout their career, is gaining traction as an alternative to a more permanent retirement later in life.

According to Bola Sokunbi, the founder of Clever Girl Finance, the big benefit of micro-retirement is the ability to enjoy life now, not just later. It's a great way to recharge, avoid burnout, and experience more joy and purpose throughout one's career. However, she warns that without proper planning, it can create financial stress or disrupt long-term goals.

Micro-retirement can be likened to a self-funded sabbatical, offering workers a chance to reset by resting, traveling, or pursuing personal goals. Julie Guntrip, head of financial wellness at Jenius Bank, notes that Gen Z is rethinking the traditional path to retirement and considering micro-retirement as a means to travel, recharge, or pursue personal projects.

However, there are potential risks to consider. Taking time off could interrupt income growth and slow down the pace of retirement savings. There's a potential risk of job security, as there's no guarantee of returning to the same level after micro-retirement. The length of a micro-retirement may involve taking PTO, leaving one's job, or both.

To mitigate these risks, careful planning is essential. This includes saving in advance, budgeting for time off, and defining the vision for the break. It's also important to factor in some buffer money in case getting back into the workforce takes time.

Micro-retirement may pose a risk to one's financial and professional trajectory if there's a big gap in the resume or missed peak earning time. However, it can provide an opportunity to rediscover one's identity outside of work, according to Ben Markley. Reflective alone time and disconnecting from work and the outside world during micro-retirement can help with deciding the next steps in one's career.

Moreover, micro-retirement can boost overall happiness and motivation when one returns to work, according to Silvija Martincevic, the CEO of workplace management company Deputy. It allows people to 'front-load' some of their bucket-list items and enjoy them while they're still near peak physical fitness, according to Sam Taube, the lead investing writer at NerdWallet.

The potential mental health risks include a lack of structure, loss of self-esteem, and health insurance issues. Anxiety about job security and calculating savings cushion for the micro-retirement period could be a concern. However, these risks can be managed with careful planning and preparation.

In conclusion, micro-retirement offers a unique opportunity for individuals to take a break, recharge, and pursue personal goals without completely abandoning their careers. With careful planning and consideration of potential risks, it can be a rewarding and enriching experience.

Despite the growing interest in micro-retirement, there are no specific or publicly available data on the number of companies in Germany offering micro-retirement programs. As the concept continues to gain traction, it will be interesting to see how it evolves and how it is adopted by businesses and individuals alike.

For those feeling the distance of retirement, 'Micro-Retirement' could be a suitable alternative