(Image source from: Canva.com)

Feeling overwhelmed at work? Trapped in your office space? Exhausted by the repetitive cycle of a 9-to-5 job? Tired of counting down the days until the weekend? Generation Z has a lively approach to this dilemma - micro-retirement. In contrast to the traditional notion of retirement, which often entails working until the age of 60 (or according to your personal timeline) and then fully stepping away from your career, micro-retirement focuses on intentionally taking brief, planned breaks from your job. These intervals can be as short as several weeks, stretch over months, or even span a full year, entirely at your discretion.

Is micro-retirement a fresh idea? Not particularly. The concept is reminiscent of sabbaticals, which have long been embedded in workplace culture. However, the shift lies in how these breaks are perceived. Unlike sabbaticals, which are infrequently utilized and mostly reserved for significant health issues, micro-retirement is gaining traction among younger workers who value achieving a balance between their professional and personal lives.

This could translate to enjoying three one-month vacations each year or taking a whole year off following two to three years of continuous work. It aims to be more attainable compared to traditional retirement, where one's professional chapter is finally closed. Some individuals choose to embark on journeys during these breaks, while others opt to relax, explore personal passions, or simply recharge. Experts acknowledge that micro-retirement brings numerous advantages—including enhanced mental wellness, heightened productivity, improved work-life balance, and opportunities for personal development. It also acts as a safeguard against burnout. While micro-retirement appears appealing, it’s not feasible for everyone.

Before you approach your HR department with news of your retirement intentions (even if they pertain to micro-retirement), it's essential to ensure certain factors are considered—chiefly, your financial situation. (Unless you have substantial financial support from your family!)

Strategic financial planning is vital to making your micro-retirement dreams a reality. Worrying about finances during your rest period is the last thing you want.

"Stepping away from work—whether for a short time or forever—means you will no longer have a consistent income, making financial preparation crucial. Regular expenses, such as housing, transportation, food, internet, and various other bills will persist. Before embarking on a career break, it is critical to establish a robust financial framework," advises Gaurav Goel, founder and director of Fynocrat Technologies.

It is essential to evaluate the following elements:

Savings and investments: Do you possess sufficient funds to support your lifestyle?

Sources of passive income: This might include fixed deposits, rental income, dividends, or other investment avenues.

Management of expenses: Estimate your anticipated costs and confirm that your financial resources are adequate for the length of your retirement or sabbatical.

"If you plan to take a three-month break, ensure you have funds to cover expenses for six months. Life can be unpredictable," suggests Dipika Singh, a content creator and learning coach. If your finances are not yet in place for your micro-retirement aspirations, here are some suggestions for financial planning:

"Creating a micro-retirement fund that encompasses at least 6 to 12 months' worth of savings in a low-risk, liquid investment is key to ensuring financial stability during your time off. Placing these resources in a high-yield savings account, liquid mutual funds, or fixed deposits offers reliability and quick access when needed," advises CA (Dr) Suresh Surana.

Regardless of the source, it is important to have some ongoing income, whether through freelancing, a hobby project, or rental properties. CA Surana recommends diversifying income streams by pursuing options like rentals, dividends, or freelance work to help offset some expenses.

Experts assert that possessing at least one passive income source can enhance the sustainability of your break, lessening reliance solely on savings. It's also vital to secure health insurance. "When you leave a job, losing your employer-provided insurance can create vulnerabilities, so it’s important to arrange a dependable health insurance policy ahead of time," CA Surana emphasizes.

If you are burdened with debts or credit card balances, it’s wise to settle them prior to your sabbatical to avoid financial difficulties. "For significant loans, such as mortgages or student loans, establishing a clear repayment plan is crucial to minimize stress during your micro-retirement," he adds.

Although some companies may provide micro-retirement options for their teams, particularly infrequently, many remain hesitant about this approach. Therefore, formulating a strategy for returning to work is vital. Taking the opportunity to enhance your skills during your leave will make reintegration into the workforce smoother, as will having additional finances set aside in case the job search takes longer than planned.

Take it from someone who experienced a micro-retirement and shared their journey on Reddit: "The best approach is to plan and save for your expenses (including investments) for 8 to 12 months, enroll in courses for skill development, and outline your goals. During my last short-term break, I focused on a creative project and found it very fulfilling. Additionally, it was beneficial for my health, sleep, and relationships. I also did some freelancing during those periods."

Finally, consider seeking professional financial guidance to enhance your micro-retirement planning.