Are Several Mini-Retirements Better than One Full Retirement?

Back in the day (yes, I’m about to date myself in two seconds) the term “retirement” meant you worked until 65, then quit work altogether to play golf and/or bowling until you died soon thereafter.

Yes, that was the “norm” for my grandparents’ retirements as well as the benchmark set for me when my career started.

Then the FIRE movement came along and started redefining retirement.

First it was simply retiring earlier than 65 to enjoy life (again, mostly recreational), then morphed into retiring to do whatever you want — work or no work.

But lately there’s another shift brewing. This one says that instead of working for however many years and saving enough to retire at the end (whatever “the end” is to you), what about taking mini-retirements throughout your career?

Sure, this will likely extend the time until you reach financial independence (or maybe not — see below), but there’s no prize for the first to FI anyway.

Besides, isn’t it possible (or even probable) that working with sporadic breaks will bring you more happiness than simply working and then not working?

It’s at least worth strong consideration.

That’s why I’m happy to have Jillian Johnsrud from Montana Money Adventures as a guest blogger today.

Jillian knows more about mini-retirements than the vast majority of Americans, having taken several herself as well as coached many through the process.

I first met Jillian at FinCon in 2017 and I can tell you she’s one of the kindest and most insightful people you’ll ever meet. A bit quirky too, but in a good way. 😉

Anyway, I’ll let her tell you about herself as well as the subject of mini-retirements.

Here’s Jillian…

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My husband and I started off with $55,000 in debt (student loans, credit cards and medical debt!). We never earned $100,000 combined in a given year, not even close, really. But by the time I was 32 we manage to pay off that debt, travel to 27 countries, adopt 4 kids, pay for our house with cash and become financially independent.

And we took 4 mini-retirements before we hit FI.

Mini-retirements have become a more popular idea because it makes very little sense to wait until you’re 65 to start pursuing the things that really matter to you. Even if we are fine with waiting, life won’t wait. Our kids keep getting older and once that time is lost, it’s gone forever. In addition, sometimes our interests change with time, so now might be your only chance to sail around the world before the opportunity passes.

There are no mini-retirement “rules” — you write the rules yourself!

A mini-retirement can be as short as a well-planned month. If you’re tired or burned out, a month off can do wonders. These are often negotiable with your current employer.

It can be a year (a sabbatical if you prefer). It can even be a well-planned 14 days if that’s all you can manage!

The idea is to take some time off, be intentional about what you want to accomplish, and see how “retirement” fits you.

Our Mini-Retirements

We did two month-long mini-retirements before we hit FI. One was a life-changing experience for me.

I traveled coast to coast with my best friend, camping all the way. Not only was it an amazing trip (and very affordable!) but now 12 years later, the window has passed for us to do that kind of trip again. If I hadn’t done it at 24, I might have never gotten the chance.

A fun picture from a long trip with a great friend!

Now I have 5 little kids and my friend runs a large non-profit. Mini-retirements allow you to have amazing experiences that could pass you by if you wait too long.

Our 5th mini-retirement was our longest at two years.

We were FI by this point and ready to step back and see what we wanted to do with the rest of our lives now that paying the bills was covered. We took a year to get caught up on home projects, travel to see family and friends, rest, and explore new hobbies. It was during that first year that I tested out writing.

A mini-retirement can be a great family event!

The Financial Impact

One of the concerns in the financial independence space is if taking these mini-breaks will postpone your FI date.

On the contrary, our mini-retirements rapidly sped up our FI date! I know, it’s counter-intuitive, but many people come out of a mini-retirement better off financially than when they went in.

We leveraged two mini-retirements to buy and renovate three homes. There is no way we could have done that if we were both working full time.

Those three homes helped lower our expenses and increase our passive income. The two rentals create 30% of our FI income.

Here’s the rental house before our mini-retirement.

Here’s the same kitchen after our mini-retirement remodel.

How to Use a Mini-Retirement

Mini-retirements can serve a lot of functions!

They can help you…

  • Recover from burnout
  • Travel or have once in a lifetime experiences
  • Get caught up with family and friends
  • Finish a big project like building a house, writing a book, starting a non-profit
  • Start or scale up a side hustle
  • Test out living in a new place or overseas
  • Tackle physical challenges like hiking the Appalachian Trail, biking across Europe or Monchu Pichu

Some things are just challenging to fit into a 4-day weekend. For people hoping to hit FI early and transition to some other kind of work or schedule, mini-retirements really help test out those ideas.

For those burned out from work, taking a mini-retirement can be one of the best ways to recover and gain the bandwidth you need to plan the next season of life.

I credit a lot of our mini-retirement success to simply being really intentional with our goals and our money.

We had money dates and life/goal planning weekends away.

We took a lot of time to figure out what we wanted out of life and create the plan to make those things happen.

How to Get Started

Want to consider a mini-retirement for yourself? Here’s one of my favorite ways to get started: Craft your ideal day.

This is a simple and fun exercise to start with.

What would your ideal day look like?

Starting from when you wake up:

  • How much sleep did you get?
  • How do you start your day?
  • Do you leave the house for work, work from home or work while traveling?
  • What would your favorite kind of work be?
  • How do you spend time with family and friends?
  • What do you do for your health?
  • Any daily hobbies or habits?

What about your ideal week?

  • Do you get together with people?
  • Any activities?
  • Are there adventures, faith activities, volunteering, or hobbies?

What are some yearly things you do?

  • Do you take a week off for the holidays?
  • Are there long trips or a certain number of weekends away?
  • Do you block off weeks for projects, travel with friends, hobbies, rest and reflection?

There are a number of benefits to looking at what your ideal life would be:

  1. You know how much it all costs! Often we think “I would love to earn $xxx amount of money.” but it’s totally disconnected from the lifestyle we really want.
  2. You can make some of these changes THIS year! It’s easy to say that you’d like to get in shape or travel someday. But there are probably things you could start right away that would bring you closer to your ideal life. You might not be able to hit the gym 90 minutes a day, but you can take a walk over lunch. You might not be able to move to Italy, but you can start learning Italian during your commute time and plan a trip there for next year.
  3. You know how to lay the foundation. Let’s say you’d love to be able to travel more. Maybe it makes sense to switch companies to one that’s more flexible about being able to work from home. Maybe it’s a great time to start a side hustle that you could do from the road. There are small steps you could take this year that would make your ideal lifestyle much more possible in 5 years.

One of the biggest benefits of a mini-retirement is that you can use that time to make progress on all of this.

You can lay the foundation that will get you closer to your ideal life. AND you can really test that out.

Some people will save for decades for a real retirement, only to figure out that all the things they thought they wanted, they don’t actually enjoy.

Start to test and scale your dreams and goals. Let yourself slowly grow into them. Then use a mini-retirement to scale them some more.

Find the Time-Energy-Money

As you consider your ideal day, you also need to think about specific tasks and the time they require.

One of the biggest mistakes I see people make with goal setting is simply: adding, adding, adding more to their plate.

Listen, your plate is already full! Something has to give. These new goals and plans are going to take some time, energy and money to pull off.

Here’s how I go about finding extra time, energy and money to dedicate to my biggest goals: I create the Quit List.

When I plan out my new goals, I give serious consideration to what I can give up to make that happen.

The normal advice is to give up low-value things. Bad habits, time wasters, or things not adding value. And that’s great advice.

But what if you’ve given most of that up? How do you go all in on the things most important to you? The action steps that will actually move the needle to get you closer to your ideal day.

The Quit List has three parts:

  1. Stop: These are things you are going to stop doing. Things that just don’t have much use in your life. It might be budget items or things your wasting money on that don’t actually get you any closer to your ideal day or reflect your values. After you look at your budget, next look at your schedule. What things can you stop doing? Other things that I consider stopping altogether are bad habits or toxic relationships.
  2. Pause: The things I pause are good things. Things that I do value and are important to me. They aren’t leaving forever, just for a while. Maybe for a month or maybe for a few years. You might pause watching TV or video games for a few months while you get a side hustle off the ground. You might pause eating out while you pay off debt. You could pause relationships that are important but a little bit negative and discouraging while you are pushing yourself to make progress on new and scary goals.
  3. Not Now: There are things that you want in your life. They might even be in your Ideal Day-Week-Year. They might be some of your biggest dreams or goals. But instead of doing those things right now, you say “Not now” and wait until the time is better. Maybe you’d love a nice car, home or long vacations, but if you do those sooner than later, it’s going to steal a lot of your financial freedom. I’ve always dreamed of building a custom home. And I’ve said “Not now” for 15 years. Instead, I’ve lived in apartments, a camper, with roommates, and in a modest home we renovated. All those choices helped us become financially independent and have close to a million dollar net worth. Now might seem like the perfect time for that bespoke home. But it’s not. I’m busy working on my business and with my 5 little kids. Maybe in a few more years. Saying “not now” allows you to be patient while you make progress on the steps that need to come first.

You can design a life you love! It just takes some intention to figure out exactly what that would look like and the steps needed to get there. And a mini-retirement could be just the time you need to make these decisions.

Carve out the time, energy and money you need to make progress. A month or a year off might give you the time and energy to make it happen!

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It’s an interesting concept, right?

If I was 35 years old again I’m not sure whether I’d push for complete FI or take a break and recalibrate a bit.

If you want more information on mini-retirements, I have a couple options for you.

First, if you want to get started with some life planning exercises, Jillian has a free 10-day course. It includes the ideas she shared above plus 10 others to help you start dreaming about what you could do with a mini-retirement.

Each lesson has a 5-10 minute video and worksheet to help you create your best year ever.

Sign up HERE if you are interested.

Second, if you’d rather plunge in the deep end, Jillian has created a great course: Mini-Retirements Mastered. It will walk you through all the details to take your first mini-retirement — all the way to transitioning into your ideal FI lifestyle.

She covers best practices for how to negotiate a month off, how to exit a job so you can get an even BETTER job after your mini-retirement, healthcare options and how to organize your finances.

Just one or two of these ideas will pay for itself. But the best outcome is people who go through the course actually pull the trigger and take a mini-retirement!

For the next month get $50 off with code: ESI. Sign up HERE if you’re interested.

Now it’s your turn — what’s your take on mini-retirements? Anyone ever tried one? What was great about it and what would you have done differently?

 


Originally posted at https://esimoney.com/are-several-mini-retirements-better-than-one-full-retirement/

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