Is "Temporary Retirement" the Newest Trend?
The world of work has evolved drastically over the past several years. With the rise of remote work, the gig economy, and technological advancements, the traditional career path—working from your early twenties until you hit retirement in your sixties—may be a thing of the past. A new trend is emerging in its place: "temporary retirement."
What is “temporary retirement”, and why are more people embracing it?
What is Temporary Retirement?
Temporary retirement, also known as a "career break" or "mini-retirement," is when individuals take extended periods off from work—anywhere from a few months to several years—before returning to their careers.1 According to a LinkedIn survey of 23,000 workers in 2022, nearly two-thirds (62%) of employees have taken a career break at some point — and 35% would be interested in one in the future.2
Unlike traditional retirement, in which people stop working permanently, temporary retirement is a more flexible approach. It allows individuals to take multiple breaks throughout their careers without waiting for their golden years to rest, travel, or pursue their passions. Those who return from temporary retirement may choose to return to their same career or try something completely new.
Why Are More People Choosing Temporary Retirement?
There are a few reasons why people might be drawn to temporary retirement, including changing work expectations, burnout, wanting to pursue personal passions, and more.
Historically, work has been viewed as a lifelong obligation, often prioritized above personal interests. People worked hard for decades with the promise of a stable retirement in their senior years. However, this model is becoming less appealing (and less achievable) for younger generations. According to CNBC, only 55% of millennials were eligible to participate in an employer-sponsored retirement plan, compared to 77% of Gen X-ers and 80% of Baby Boomers.3
Because many workplaces no longer offer pension plans or employer-sponsored retirement plans, younger generations are less willing to spend most of their lives working in careers they don’t find fulfilling. Instead, they want to take a step back, recharge, and reassess their priorities with temporary retirement.
Related to that, the pressures of demanding careers, especially in competitive industries, often leave people feeling exhausted and overwhelmed. Taking temporary retirement can help prevent burnout by allowing people to rest and reset, ultimately returning to work with renewed energy and perspective.
Lastly, many people see temporary retirement as an opportunity to pursue passions or dreams that don’t necessarily fit into their working life. Whether it’s traveling the world, writing a book, starting a side project, or dedicating time to family, taking time off work allows individuals to devote themselves fully to their personal goals.
How Do People Fund Their Temporary Retirement?
“How do people fund their temporary retirement?” is the million-dollar question (literally).
Believe it or not, taking years off work doesn’t necessarily require extreme wealth. Many people who take a career break plan and save for it by setting aside funds specifically for this purpose.
Some strategies for funding temporary retirement include:
- Saving in advance
- Working remotely or part-time
- Downsizing expenses
Others may use investment strategies, passive income streams, or even rent out properties to fund their work break. The key is careful planning and a clear understanding of one’s financial situation before embarking on temporary retirement.
The Benefits of Temporary Retirement
There are many potential benefits to taking temporary retirement, including:
- Improved physical health
- Time for reflection
- Quality time with loved ones
- Preventing career burnout
- Time for creative exploration
- Providing a new perspective on work
- Skill development
- Time management
- Cultural enrichment
- Financial awareness and discipline
- Work-life balance
Is Temporary Retirement Right for You?
While the idea of temporary retirement sounds appealing, it’s not a one-size-fits-all solution. It requires careful financial planning and may not be feasible for everyone, particularly in industries where long absences could affect career prospects. Additionally, some may struggle with the uncertainty of re-entering the workforce after a long break. However, for those who prioritize life experiences over continuous career advancement, temporary retirement offers an exciting alternative to the conventional path.
The rise of trends like temporary retirement shows that we are changing how we think about things like work, time, and life. Embarking on temporary retirement is about much more than quitting your job for months or years. It’s about being more intentional with your time, money, and life and focusing on what’s important outside the office.
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