Summary of this article
Micro-retirement for mental or physical recovery from burnout is not the same as end-of-career retirement.
Unplanned frequent breaks risk severe debt, credit score damage, and reliance on loans for essentials due to income gaps.
These breaks delay financial goals like marriage and children, especially for those without high early salaries.
There was a time when people used to plan their retirement by taking steps, such as savings, investments, and managing debts. But Gen Z has come up with a totally new concept of retiring many times during the career, and this concept is called “Micro Retirement Breaks”. In some of these cases, Gen Z considers micro retirement as an offset to work overload, or in other words, to get mental and physical rest after working for a few years.
Often, they consider this decision when they feel sick, and earned leave, along with scheduled holidays, is not considered long enough for a recovery. However, micro retirement breaks can cause serious damage to their financial well-being in various ways.
Risk Of Severe Debt Surge
An unplanned and frequent micro retirement break can cause a quick financial drain. Sooner or later, people practising such frequent breaks may face a financial crunch and have to depend on borrowed money to meet their essential spending needs. Excess debt and lack of income can later spoil the credit score if the repayment doesn’t happen on time.
Difficulty In Achieving Financial Goals
Micro retirements can make it difficult for Gen Z to meet their financial goals on time. Some of the Gen Zs may start their career with a high income, but not everyone is that fortunate. Wedding, child and other financial commitments may get delayed, or they have to be downsized if income flow is disturbed due to micro retirements.
What Should Be Done?
There’s no doubt that mental well-being should be at the top of the priority list for everyone, including Gen Zs. But, when it comes to multiple micro retirement breaks, one should be careful and never consider it impulsively or unplanned. One should first build an adequate corpus to meet all the expenses. There should be a plan to rejoin work life after the micro retirement ends. An income stream during the micro break can be a big help. Before taking a micro-retirement, one should seek advice from an accredited financial advisor to avoid financial distress at a later stage.
The author is an independent financial journalist
