Microretirement

What is Microretirement?

If the thought of working nonstop for 40 years only to retire in your 60s feels like a bad deal, you’re not alone. Before I heard the term microretirement, I called this season in my life a One Way Ticket Sabbatical.

Microretirement has a nice ring to it. It's a modern approach to work-life balance where you take multiple small retirements throughout your life instead of one big retirement at the end. Think of it as a financial and lifestyle strategy that lets you give you back the luxury of time, while you’re still young, healthy, and energetic.

Why is Microretirement trending?

The traditional retirement model assumes that you should delay leisure and adventure until after your prime years. This is something I noticed while working in the personal finance industry. Many of my clients would retire only to start their bucket list to find that health issues limited their ability to travel and other activities.

The system I grew up in was all about checking off the boxes of what we were taught "success" was. "Get your degree, stay at your job for 2+ years, buy a house, settle down, start a family, retire at your social security age etc." As our income increases, discretionary expenses typically rise too, Whether it's dining out more, buying toys, vacations, or enjoying more expensive hobbies, etc. This can lead to more anchors and make life-changing decisions harder. When I decided to quit my job, the most common reactions I received were: "Good for you, I wish I did that" or "If I could go back in time, I would've loved to do that."

Microretirement challenges this by allowing you to periodically step away from work for months or even years at a time to explore through travel or other creative outlets, pursue passion projects, avoid burnout, heal and recharge.

Here’s why microretriement is gaining traction: We want to get out of the cage and live more.

• Avoid Burnout: Recharge before you’re too drained to enjoy life.

• Flexibility: You’re not stuck in a rigid career path for decades.

• Work-Life Balance: You return to work with renewed energy and fresh perspectives.

• Maximize Life Experiences: Travel, learn new skills, or spend time with family when it matters most.

How to experience Microretirement yourself

The key to experiencing microretirement lies in planning, smart investing, and a bit of lifestyle design. Here’s how to make it happen:

1. Get creative with your Income Streams

Instead of relying solely on a paycheck, set up multiple income sources, such as:

• Real Estate Rentals: A well-placed Airbnb or long-term rental can provide consistent cash flow.

• Online Businesses & Digital Products: Create a digital product, course, or subscription service that earns passive income.

• Freelancing & Consulting: Work in bursts, then take extended breaks without sacrificing income.
  

2. Budget appropriately

Microretirement requires financial discipline. Save aggressively during your work periods to fund your breaks. This means:

• Avoiding unnecessary bad debt.

• Automating savings and/or different investment vehicles

• Reducing expenses or find better pricing while maintaining a high quality of life.
  

3. Optimize Investments for Passive Income

If your money isn’t working for you, you’re working too much. Invest in:

• Dividend Stocks for steady cash flow.

• Real Estate (BRRR or Fix & Flip) to build long-term wealth.

• Crypto to invest steadily over time to mitigate market volatility.
  

4. Test the Waters

Start small to see if you enjoy it, before quitting your job and fully diving into microretirement:

• Take a month-long leave to see how you handle financial and lifestyle adjustments.

• Work remotely while traveling to balance income and adventure.

• Experiment with a part-time or seasonal work schedule.
  

5. Embrace Geoarbitrage

Taking a microretirement in Bali or Mexico will stretch your dollars further than in New York or San Francisco. By choosing low-cost, high-quality-of-life locations, you can extend your time off without financial stress while meeting like-minded individuals.

6. Build a plan

It's important to build a plan as a foundation. You have permission to change your mind and can only go with the wind for so long. Map out when and where you want to take your breaks. An example plan could be:

• A 3-month break every 5 years.

• A 6-month sabbatical after a big project.

• A full year off after reaching a financial milestone.
  

A group of friends I made in Mexico City shared a great ice breaker along with getting your wheels turning:

• If you could live anywhere for 1 year where would it be and why?

• If you could live anywhere for 5 years where would it be and why?
  

Making Microretirement a Reality

The concept of retirement is no longer about waiting for your pension or social security —it’s a flexible, evolving concept, similiar to life. While the trending term microretirement sounds appealing, it’s not a one-size-fits-all solution. Consider your financial situation, career flexibility, and long-term goals. However, if you prioritize experiences over conventional career trajectories, microretirement could be the perfect way to live life on your terms.

Have Questions?

If microretirement sounds intriguing but you’re unsure where to start, I’d love to hear from you! Whether you have questions about financial strategies, investment options, or how to structure your own microretirement, feel free to reach out. Let’s turn your dream lifestyle into a reality!