What is a Mini-Retirement and can I afford [not] to take one?

We live in an age where traditional notions of retirement are being questioned. Here are some of the most common:

• Does it really make sense to spend the majority of your life working and wait until you are 65 to do all the things you love?
• If your goal is to travel to a distant country, does it really make sense to do it when your health could be an issue?
• Would it be more economical to travel when you are young and can take more risks?
• Could your earning potential actually rise after taking a period of reflection and hitting the “reset” button?

The theory behind a mini-retirement is that you don’t have to wait until you are “retired” in the traditional sense to cross things off your bucket list or to spend an extended period of time doing the things you love. As an entrepreneur, you are always pushing the boundary of conventional thinking. Mini-retirements are simply another way our generation is changing perceptions about how your personal life and work life interact.

At WealthJar, we believe these are important concepts to consider. Perhaps you’re an employer who is trying to find an effective way to reinvigorate your employees and ensure a healthy and productive workplace. Or perhaps you’re the sole employee of a company you founded. Either way, incorporating the concept of mini-retirements into your business can have profound effects on the happiness, productivity, and longevity of yourself and your employees. Studies show that taking over two weeks off work at a time can actually boost your earning potential once you get back.

Mini-retirements can be thought of as short periods of reflection, travel, or time to work on passion projects in between longer periods of income producing work. It’s a time to recharge and pursue personal interests so you can come back to work with a renewed sense of purpose. Mini retirements can range from taking 2 weeks to 3 months off work at a time.

Few ambitious people understand that one of the biggest drivers of productivity is taking a step back and recharging your mind and body. Studies show that performance can increase after a breaks of all durations, even if it’s just 30 seconds. As humans, we have a limited pool of cognitive resources. Entrepreneurs are constantly tapping into these resources to come up with creative ideas and solutions to their business. However, few out of this ambitious bunch are inclined to take the time needed to replenish those resources.

We’d like to share a few tips that can get you moving towards a mini-retirement state of mind and in turn help you create more successful business.

• Put it in writing. If the idea of a mini-retirement is something that peaks your interest, start to think about what you would do with the time off and where you would go. Make it official by putting it in writing. Prioritize your list by feasibility and start with the mini retirement plan that you think will be the least disruptive to your work. This will increase the probability you will make time for it, now.

• Set a goal. From a resting and refueling standpoint, the goal of a mini retirement is to detach from the stresses that can cause negative outcomes in your work. Moving away from stress, dissatisfaction and fatigue, and engaging in positive actions that drive your motivation and focus. Actions like learning, fun, pleasure, and mastery. It’s important to ask yourself what kind of positive action you want to engage in during your mini-retirement. Is it a time for fun? Time for growth in your current industry outside the office? Crossing a memorable experience off your bucket list? Whatever your goal is, setting one will help you get the most out of your time outside the office.

• Map it out. How much time will you take and when will you take it? What will your expenses be? Keep in mind that you can actually save money by taking a mini retirement. For example, if you live in a city with high rent, subletting your apartment or putting it on Air bnb can help you produce income while you’re away. If you’re currently renting, think about the possibility of leaving when your lease is up to avoid paying two rents. If you’re traveling to a foreign country, chances are rent and food will be cheaper where you are going. If you’re a homeowner or want to stay at home, your expenses will likely remain the same or increase. Put a little of your “fun money” away each month so you have adequate padding once your mini-retirement arrives.

Planning for your expenses is an important element in your ability to take a mini-retirement. It is important to ensure that all of your bases are covered during your time off, so you are not faced with financial issues when you return to work. Instead of looking to your nest egg or retirement fund for the cash needed, decide how much of your discretionary income you are willing to save each month for this goal. Determining how much you are able to save will determine how long you will need to save for before taking time off.

• Talk to your people. Make sure your employer or employees are on board with your plan. If you work for yourself, make sure your absence is in line with your yearly strategy and goals for your business. Is there “down time” in your market or industry? If so, take advantage of it and plan your mini retirement to correlate with the natural ebb and flow of your business and the people you work with.
• Determine the next phase of your career. Take time to unplug, reflect, strategize. For example, next time you’re on the road, network with the idea of seeking new ways to enhance your professional experience. Here are some other ideas that might help take you to the next phase.
  • Explore different volunteer experiences or work experience that can enhance your knowledge of your industry.
  • Identify the elements of your life that you don’t want to take a break from. Plan to continue those things during your mini retirement.
  • Discover inner truths: are you itching to get back to your business? Do you feel motivated to take on a new role or responsibilities at your company?
  • Negotiate with your employer to help you realize your next chapter.