There’s something perverse about the lives of many Americans.
We work, pinch pennies, and flop into bed each night. Then, when our kids move out and we’re too tired to do all the things we said we would, we retire.
That timeline seemed odd to Chris Durheim. He was working hard and, by most accounts, had made it. He had a great job, a big house, a loving wife, and three adorable daughters.
But he realized that even though he’d done a lot of things right, he was spending the majority of his time in an office rather than with his family. Not wanting to miss this precious time with them, he decided to do something unusual.
At the age of 35, Durheim quit his job and declared he was taking a one-year “mini-retirement.”
What’s a mini-retirement?
Durheim first read about mini-retirements in Tim Ferriss’ groundbreaking book The 4-Hour Workweek a decade ago. And the idea stuck with him.
It’s simple but innovative. Instead of waiting until you’re a senior citizen to reap the rewards of retirement, why not take a break during your working years — when you’re young, healthy, and able?
You never know what’ll happen in the future, so a mini-retirement ensures you’ll enjoy some of what you’ve worked so hard to achieve.
It’s not only about enjoyment, though. Ferriss also sees it as a reset for your career and personal life.
“Though it can be relaxing, the mini-retirement is not an escape from your life but rather a re-examination of it,” he explained in an interview with Transitions Abroad. “A mini-retirement is defined as recurring. … [It] forces the growth-inducing introspection most of us have never had time for.”
Ferriss generally travels abroad during his stints, but how you spend your mini-retirement is up to you. You might see the world, perfect your tennis game, or write a novel.
Durheim’s mini-retirement was about his family. “I’ve always been passionate about being a very present father,” he said. “I want to spend time with them while I can.”
How to manage a mini-retirement financially
A mini-retirement might sound intriguing. But how on earth do people afford it?
Durheim blogs about personal finance in his spare time, so he made sure the money aligned before he quit his job.
In fact, he and his wife had been working toward financial independence (FI) for years leading up to this decision. With FI — which many people used to call early retirement — you aggressively invest a large portion of your income so you eventually can live on just the returns.
When Durheim ran his FI numbers, he realized he’d be able to retire in 13 years — around the time his daughters would be graduating from high school. That didn’t make sense to him.
“Everybody I talked to said kids grow up way too fast,” he said. “You only get these moments once.”
Soon, Durheim ran a different calculation. He called it “retirement freedom” and defined it as the moment “your retirement accounts are big enough for you to retire at 65 even if you stop contributing today.”
When he added his pension to his current investments, Durheim realized he already was “retirement free.” In other words, he didn’t have enough money to retire early, but he had enough to retire at age 65 — even if he never saved another penny.
“It suddenly put me in this position of saying, ‘I don’t have to worry about age 65 or later,’” he said. “I just have to worry about the next 30 years of living expenses. The pressure of saving for retirement eased up … It opened our mind to other options.”
Options like that mini-retirement thing he’d read about a decade earlier.
Durheim and his wife were already planning to downsize to a smaller house as part of their growing commitment to minimalism. The equity from its sale meant they could support themselves for a year — without working.
All those factors seemed to point toward mini-retirement. To finalize his decision, Durheim gave himself “the deathbed test.”
“Am I going to wish I continued to work so I got FI at age 48?” he asked. “Or am I going to be happy I had this time with my kids when they were young? When I put it in those terms, the decision became a whole lot easier.”
Could you take a mini-retirement?
First, you need to take control of your finances. That means paying off debt, contributing to retirement, and saving enough money to live off of during your mini-retirement.
If you’re not debt-free or retirement free, a mini-retirement isn’t out of the question. But you’ll have to include those payments and contributions when you calculate how much you’ll need.
Here are a few initial steps:
- Track your spending for at least two months. Keep in mind that your health insurance costs might go up during your mini-retirement (if your insurance was tied to your job). But your gas, daily Starbucks, and other work-related expenses could decrease.
- Multiply your monthly expenses by the number of months you’d like to retire for. Don’t forget to include debt and retirement payments plus at least one extra month for finding a job.
- Save for your mini-retirement. Cut back, earn extra income, and work hard to reach that number.
Durheim said it’s also essential to consider what you’ll do during your mini-retirement.
“Once you have a picture painted of what you want to get out of that time, it makes it a lot easier to make the [necessary] trade-offs,” he said. “When you’re abstractly dreaming, it’s tough to say no.”
He and his wife, for example, imagined walking their kids to school and then chatting over coffee. Getting involved in their church and spending time with friends. Working on his blog and developing software. Taking their kids to the pool on a weekday or for a hike after school. Nothing fancy, he said, just “being present” in those everyday moments.
“You’ve got to know what you’re going to do with that time,” he said. “Otherwise, you’re going to be stressed with what you’re going to do next, what your identity is going to be.”
How Durheim’s mini-retirement is going
Two months into his new adventure, Durheim said it’s been wonderful — but not always easy.
“We are all tempted to tie value to our incomes,” he explained. “I want to be able to provide for our family and cover our expenses. When your paycheck stops, you have a few of those panic moments where you’re wondering if you did the right thing.”
But his wife reminds him that they prepared for this financially — and more importantly, that everything is reversible.
“I can go back to work; I can find a job if and when I need to,” said Durheim. “A big piece of this is understanding decisions aren’t as permanent as we think.”
Then, they walk their kids to school and sit down with a cup of coffee.
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