For many of us, the word “retirement” conjures up images of silver-haired seniors playing golf in some sun-soaked city—or, worse, sitting slack-jawed in some gloomy nursing home, staring at the television.
But what if you could take time off from the rat race much earlier, and spend your days traveling or hanging out with your family or doing something else you love?
Enter: the mini-retirement. Introduced by Tim Ferriss in his book, “The 4-Hour Workweek,” the idea is that taking meaningful, months-long breaks from work can help you create the life you want today, rather than waiting until your so-called golden years when age and declining health may keep you from enjoying them to the fullest.
Curious what this looks like in real life? Meet three families who are in the midst of a mini-retirement now. Here’s what they’re doing, how they saved up enough cash—and their plans for rejoining the workforce in the future.
Chris, 35, and Jaime Durheim, 32, an engineer and stay-at-home mom in Madison, Wis.
“My wife Jaime and I were first introduced to the concept of financial independence in 2012 when I stumbled upon a blog dedicated to it. We were excited about the idea of being completely debt-free and not having to do any unfulfilling work in order to support ourselves. So we spent the next four years preparing for that huge goal.
Tracking our spending and cutting way back—we sold our second car and Jaime’s engagement ring and even challenged ourselves not to buy anything new (versus used) in 2017—yielded awesome results: We consistently saved 20 to 40 percent of my salary, which helped us aggressively pay down our mortgage, something we’d already been doing for years, and increase our retirement savings.
But financial independence is a long game, and we started thinking: Why not enjoy the fruits of our labors now? In February 2017, our new goal became to embark on a yearlong retirement, where we’d spend time with our three daughters, work on passion projects and create lasting memories. By July, we’d built up enough equity in our home—so we sold it, downsized to an apartment and earmarked $60,000 for mini-retirement. (We kept some in reserve to put toward another home later.)
Our typical day is simple yet fulfilling. After walking the kids to school, we might spend time working on our blog and side business (a money tracking app) or go on a day date. One of our mini-retirement goals is to figure out what’s next professionally. I’m open to returning to my old job in medical device engineering or pursuing a new dream, like freelance writing or software design. Jaime may pick up part-time work in home design.
For now, we aren’t bringing in any income (even from the blog and app); we’re living entirely off our mini-retirement savings, which should last through August 2018. But we’ve already hit `retirement freedom,’ which means, thanks to compounding returns, we should be able to officially stop working at 65 even if we don’t contribute any more to our retirement accounts.”
Their advice for others: “Track your spending—on paper, a spreadsheet or in an app. You have more power over your finances when you understand the details. Once you know where your money’s going, you can assess whether you're spending in alignment with what's most important to you. If you aren’t, you know what changes to make. "
Jillian, 34, and Adam Johnsrud, 40, a sales rep and social services case manager in Kalispell, Montana
“In November 2015, we embarked on our fifth mini-retirement in 15 years. We have five kids, ranging from 2 to 10 years old, and they’re our biggest motivation. Our retirements used to be much shorter, anywhere from one to six months. But as our family grew—and especially after our oldest son passed away—we were determined to not let life slip by, so we embarked on a much longer one this time.
Taking this time off has enabled Adam and I to focus on our kids, each other, ourselves and our interests. We exercise, read, write, have weekly game nights and family adventures on the weekends.
How do we afford it? While our combined annual income has ranged between $40,000 and $80,000 over the last 15 years, we’ve always made the most of it. For example, even after we adopted our first child and had a baby, we had a roommate for years, saving us $700 a month. We also avoid takeout meals, malls and other ‘pre-made entertainment,’ instead opting for free or cheap outdoor activities. While Adam was in the military for 10 years, our housing bill was covered, and we’ve been drawing his monthly pension for the past five years.
We’ve funneled all our excess cash into investments that have laid the groundwork for successful mini-retirements: In October 2012, we purchased our first rental property; soon after, we bought a second—generating a total of $1,200 per month ever since. We also doubled down on traditional retirement savings early on in our careers, so we don’t feel like taking short-term breaks now will hurt our long-term stability.
We’re not sure what the future holds, but we’ve maintained relationships within our professional networks and have received job offers. I’m confident that when we’re ready to return to work—likely within the year—either of us could find a great job in less than a month.”
Their advice for others: “Work on growing the gap between your income and expenses. Pay off debt, save and invest instead of increasing your lifestyle whenever you can. Sometimes people will initially grow the gap through raises, but end up with a more expensive home or car payment, so it doesn’t do them any good.”
Mark, 34, and Amanda Tew, 36, an accountant and part-time college instructor in St. Joseph, Mich.
“Throughout our marriage, Amanda and I have wanted to live in Central America. We’re both fluent in Spanish and have lived in Latin American countries in the past; we wanted our kids to experience the same. So a few years ago, we started thinking more practically about taking the leap—considering our savings, career ambitions and kids’ school—and decided spring 2017 was our goal. Sure enough, in May 2017, we were headed to Nicaragua.
It took us two years to save $30,000 for a year off. (We have other savings—an emergency fund, $75,000 in traditional retirement accounts and $50,000 for a home down payment—but we’re trying not to touch it.) We got there thanks to frugal habits like not upgrading furniture, driving old cars and living in a two-bedroom apartment with three kids. I also took on extra consulting jobs, and Amanda manages a violin studio and teaches at a local college.
Along the way, we dealt with some unexpected obstacles. In October 2016, I found out I had thyroid cancer. Fortunately, thyroid cancer is generally treatable, especially in young people, but this was a big wake-up call. Faced with even the slightest possibility that you might not even be around for traditional retirement has a way of altering your mindset. Even though medical treatments posed additional costs and logistical complications for our mini-retirement, our resolve to have this family experience strengthened.
Now that we are in Nicaragua, we watch our budget and track expenses closely. Between four kids (we have a new baby) and unexpected events—like splurging on an excellent bilingual private school when they were unable to register in a public bilingual school—we do sometimes go over budget. Fortunately, I am bringing in some cash from virtual CPA work to cover the difference. And I feel confident about my professional future. Before leaving my job, I was able to get some solid experiencing leading a team, which gave me a huge boost of confidence about finding good employment opportunities in the future.”
Their advice for others: “Once you are financially and physically prepared for a mini-retirement—or any big expense for that matter—let go of the fear. We love Jeff Bezos’ regret minimization philosophy: Minimize the number of regrets you’ll have when looking back on your life. Leave the beaten path and live the way you decide.”