As we get ready for the new year, a new trend in the workplace is starting to take shape: micro-retirement. This comes after the big resignation, the quiet quitting, and the coffee-badging trends. It is trendy to “micro-retire,” which is another trend among young people who are trying to balance work and life.
Business Insider also talked about the micro-retirement trend, which is when an employee takes a break from their job for a few months or even years, similar to a sabbatical. For some, this is also called a mini-retirement.
The trend is known as micro-retirement, and it is revolutionizing the labor market in the US
According to another Unilad article, the word probably came from TikTok. Gen Z and millennials, who are not quite retirement age yet, are the most open to the idea that they will only work for the next thirty to fifty years.
Business Insider recently talked to Jes Osrow of an HR consulting firm about how some people use micro-retirement to start side businesses and how others do it to avoid burnout and follow their “personal passions.”
Micro-retirement experts and people who have done it themselves say that if you want to do it, you should first pay off some debt and save a “sizeable” amount of money. Are you able to support yourself for a long time without getting paid? Career coach Tim Toterhi asked BI about it. In the future, how do you plan to get medical care? Also, what will you do if you have a money emergency?
Most people agree that you need to save enough money for about a year’s worth of expenses in order to micro-retire. Some of the people interviewed also said they planned to work as freelancers while they were on vacation or other time off.
Experts who talked to Business Insider also said that if you want to micro-retire in the new year, you should have a plan for when you might go back to work. Osrow says that setting goals can help you make sure that your vacation has purpose and meaning by giving you measurable signs of success.
What do Americans need to know to plan for retirement in 2025?
While micro-retirement might become popular, there are still many Americans who want to plan for their future retirement. So, there are things you can do to get ready for the next part of your life if you want to retire in 2025.
People who will benefit from retirement savings in the future should know that before they use their savings, they might want to change their investments, look at how much they spend, and, if necessary, put more money into their retirement accounts.
As people get closer to retirement, experts usually tell them to make their portfolios less risky. Even though the S&P 500 has gone up a lot this year, it is still not clear what will happen next year. Some analysts think market prices will go down.
Kevin Khang, a senior international economist at Vanguard, says that people who are not careful could have their savings seriously hurt over time by a bear market at the start of retirement.
Cameron Valadez, a CFP at Planable Wealth, tells his clients to keep a buffer of safe investments so that their nest egg does not get wiped out during a downturn.
Your investments should include enough cash to cover your costs for one to two years and enough laddered government bonds, like Treasurys or Treasury inflation-protected securities (TIPs), to cover your costs for three to five years. If you want to start planning for retirement this year, here are two main things you can do besides micro-retirement:
- Consider phased retirement: Phased retirement allows individuals to plan their retirement activities, manage their expenses, and still earn an income by adjusting to their new post-retirement lifestyle.
- Increase 401(k) contributions: Secure 2.0 allows older workers aged 60, 61, 62, or 63 to contribute more to workplace retirement plans like 401(k)s starting in 2025. This means they can contribute up to $11,250, compared to $7,500 for all other workers age 50 and older. This could be beneficial for those who feel insecure about their savings.