How can you make a mini-retirement happen? There are 3 P’s to taking a mini-retirement: purpose, plan, and prepare.
You have to decide on the purpose of your mini-retirement, plan how you will afford it financially, and prepare for travel and time off. I’ll discuss these in detail, and provide a case study of my own personal mini-retirement planning to give you a real-world example of how to make it work.
Purpose: Retirement Activities
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The first action step is planning what you’ll be doing during your mini-retirement. Having a purpose behind your time off instead of just using it as an escape from work will make it more memorable and fulfilling. One of my favorite sayings is “retire to something, not from something.”
I’m not saying you need to use your mini-retirement to shift from one type of work to another, just that you should have an idea of what you’ll spend your newfound time wealth on besides “not working.”
Some people plan mini retirements specifically because they want to pursue something they don’t have time to do with a 9-5 workday. Other people plan mini-retirements to see what life could be like without 40 to 60 hours of work and commuting per week.
Another great use of a mini-retirement is to test out your ideal lifestyle and see what it looks like it practice. Rather than waiting until full on retirement to see if the life you’ve been dreaming about works, you can test and tweak much sooner. You may even find that your mini-retirement opens up a whole new life direction or career path.
Here are some ideas for what to do during a mini retirement:
Travel
Have you always wanted to travel but never had the time to dive into cultures or destinations during your short weekends off and 10 days of vacation from your employer? Now is a perfect time to do longer term travel. You can even use this time to see if living in a different place is right for you. Or, you can test out an alternative lifestyle such as RVing or sailing around the world.
Volunteer
If you’ve felt the pull to spend your time serving a cause that matters to you, but never felt like you had enough time to give, a mini-retirement is perfect for volunteering. You can connect with a local organization or go on an international aid trip. There are programs such as world wide opportunities on organic farms (WWOOF) where you exchange your time volunteering to work on a farm in exchange for housing and food.
Learn Something
Another thing you can dedicate your newfound time to is learning a skill, such as diving deeper into a hobby or learning a new language. Perhaps you always wanted to be a writer, but never had the time with your day job. Maybe you could start writing a blog, short stories, or a travel journal. Or you want to work on your photography skills, so in early retirement you spend time getting outside with your camera. If you’d like to learn a language, immersion in the place that speaks that language could be a wonderful way to learn, or you could take classes where you get to practice in person with other students.
Go Back to School
A mini-retirement could be an awesome opportunity to go back to school and get a new degree or certification. Whether you’re building on your past career or going in an entirely new direction, this will benefit you after your mini-retirement is over. Maybe you could attend school abroad to also get a travel experience. Often, you can use a college program to get a working visa in different countries so you can stay longer. This is what Michelle, who is from Australia, did to get a working visa in the United States, travel to 20+ states, and live there for a year. Listen to her story in Episode 6.
Spend Time With Loved Ones
A great benefit of a mini-retirement is that you have more time to spend with the people you love. Maybe during your travels you plan to go visit your far-flung friends and relatives. Or you’ll invite them to come travel with you for a while. Or the whole point of your trip is to spend more time with your spouse and kids, and create lifelong memories with them.
Case Study:
During our mini-retirement, we will be doing a little bit of each of these things. We are traveling domestically in the United States by van, which is a wonderful opportunity to see our friends and family who live far and wide. I’ll be traveling with my partner, so we will be spending a lot of quality time together as well.
I plan to work on my photography skills, a passion I haven’t seriously developed since high school. We also have some ideas of how we want to volunteer our time along the way.
Knowing what you’ll be doing in mini-retirement helps you plan the other logistics including how much money you need to save and what travel preparations you need to make.
Plan: Financial Planning
Next, you need to figure out how you are going to fund your mini-retirement. It’s common to save money to cover your expenses for the period of time you expect to travel. Another option is to develop passive income that can cover your expenses while you travel.
Estimate Your Expenses
First, you have to know how much your expenses are, and estimate what they will be while you travel. You can do this by creating a spending plan and tracking your expenses. I discuss how to create a spending plan in Episode 31.
Keep in mind that you won’t be paying vacation costs for the mini-retirement. Longer term travel allows you to live like a local instead of paying like a tourist, and that can save you tons! You can choose cheaper accommodations and get better rates, and even buy and sell items instead of renting them, to save money.
Lauren and Steven from Trip of a Lifestyle took a 6 month honeymoon to Hawaii that cost less per month than most people spend per week on vacation in Hawaii. They did this by leasing an apartment for 6 months instead of paying for hotels, and buying a car then selling it at the end of their trip instead of paying rental car costs. Listen to their story in Episode 44, where Lauren shares how they completed their trip without spending any of their savings.
Lower your expenses
Look at your recent credit card statements to see what recurring or subscription payments you can cancel while you are traveling. Make sure you have online payment options for everything else. I’d highly recommend automating your finances as this makes everything a lot easier. Check out Episode 35 for a full guide to automating your finances.
Saving for a Mini-Retirement
Say you want to take a one-year mini-retirement, and your expenses are usually $20,000 a year. That means that you’ll have to plan ahead to save this money. If you work for 5 years before your mini retirement, that means saving just $4,000 a year, or $333 a month, or $76 a week. Remember that you’ll also have to save for your long-term retirement in addition to your shorter term mini-retirements.
If you are working fewer years before your retirement, you’ll have to save more aggressively, or take a shorter or less expensive mini-retirement. If you are working more, you could save more money and take a longer mini-retirement.
Do you already have money saved? Great! Figure out how long of a runway this money gives you to live without income. I share how to calculate your money runway in Episode 11. In that episode, I also share tips for financially preparing to quit your job.
Creating Passive Income To Fund Your Travel or Reduce Costs
You can leverage what you already own to create passive income to fund your mini-retirement. Since you’re only taking a short break from work, you might not want to sell everything you own to travel the world forever and you might still want to hang on to your house and your car.
To make money on these while you’re away, you could rent your car to other travelers on Turo and rent out your house or sublet your apartment to a long-term renter, or to short-term renters on AirBnB.
This can help cover the costs of keeping these items, such as mortgage and insurance, while you’re away.
You could also create passive income by having a business that pays each month without a large time investment, such as ebook sales or blog affiliate links. Or, you could create passive income from investments like renting out real estate or getting dividends from stocks.
Earn Money By Selling Stuff
Alternatively, you could use this mini-retirement as an opportunity to minimalize! Instead of throwing stuff in storage to clean up your house for renters, why not sell it and use the funds to afford your time off? Or go even further and sell your house and car before you leave and use the funds to afford your mini-retirement. This will also eliminate unnecessary expenses like insurance and utilities that you wouldn’t be using anyway while you are traveling.
Case Study:
When we decided to take a mini-retirement, we knew it was a great opportunity for us to downsize and become more minimal with our possessions. We don’t own a home, but we both own cars. So we decided we would sell my partner’s car, which still has quite a bit of value, so that we didn’t have an extra insurance payment for something we weren’t using. Then we could use the cash from that sale to fund our travel.
We decided to keep my car, which is 16 years old and worth no more than scrap value, and will probably de-register and store it to save money on the insurance costs. Because it’s not worth much and would cost more to replace it at the end of our trip than to store it during our trip, we figured this was the smartest financial decision.
We also decided to sell many items that we don’t use often or can’t use on our trip. We estimate that we can earn approximately $1,000 by selling things in online marketplaces like OfferUp, Craigslist, and Ebay.
That’s just the icing on the cake of the money we’ve saved for this trip. Originally, we were saving to build a tiny house this year, and once we decided that we wanted to do a van conversion instead, we just used the tiny house savings fund to buy and convert the van. Since the van build will be cheaper than the tiny house, we plan to use the rest of the savings for our living expenses while we travel.
At a monthly budget of approximately $2,300 per month, we have more than 12 months of travel expenses in savings. This does not include our emergency funds. On top of that, we plan to make some money along the way through occasional contract or gig work and passive income from my blogs.
Prepare: Travel Considerations
Now that you know how you’re going to afford your mini-retirement, you need to start planning your travel. Long term travel will look a little different than a vacation, so make sure you plan accordingly. I’ll go through some travel considerations in order of how far before your trip you should plan for each.
Healthcare
Depending on where you are traveling, your normal healthcare may or may not cover you. Be sure to call and ask, and find out what is and isn’t covered. If you need to get additional coverage, look into a travel health insurance plan that will cover you where you plan to go and for the activities and risks you may experience.
Additionally, you should look up what vaccinations or medicines you may need for the regions you are visiting. You’ll usually need to book a few months in advance to get your travel health shots, so be sure to plan ahead. There are some vaccinations that are mandatory to enter certain countries.
Language
Don’t know the language in your travel destination, or just want to brush up? This is totally optional, but many travelers find it useful to learn the basics of the language, such as “please”, “thank you,” and “where is”. If you really want to dive deep and learn the language conversationally, you might want to start preparing a couple of months early. On the other hand, you could use your mini-retirement as an immersive language learning experience.
Figure out how you are going to keep getting your mail even if you are no longer at your home address. Depending on the length of your trip, you can pause, stop or forward your mail. You could ask someone else, like a trusted friend or family member to collect and read it if you’ll be gone for a short time. If you’re gone for longer, you can have it sent to a mail service that will scan and email you your documents, then package and mail the important ones, wherever you happen to be. Switch as much paper mail as possible to be paperless, so you can receive statements and invoices online instead.
Cell Phone and Internet
How will you get in contact with people while you travel? If you’re going to be in a foreign country, you’ll have to get a SIM card that works there. If you’re traveling domestically, you might need a wireless hotspot so you can get consistent wifi, or an unlimited cell data plan.
Currency
Of course, you’ll need money while you travel. One way to save money while you’re traveling is to make sure that you have a bank account with no foreign ATM fees, and a credit card with no fees for foreign transactions. Additionally, you might want to consider getting cash in the currency of the country or countries you are traveling to. This can be done at the airport or once you are in the country.
Itinerary
It’s good to have an idea of what you want to do right when you arrive at your destination. However, your itinerary isn’t as important as you think it is before you leave. Being flexible is really important, because things can and will change. Booking too far ahead will just cause headaches, as Stephanie and Gillian found out when their early retirement slow travel around Europe was interrupted by the Coronavirus. Listen to their story in Episode 18.
Resist the urge to pack your schedule to the gills. We are so used to having every minute of our days filled with activities. So during your mini-retirement, aim to break out of this way of living. Don’t feel bad about just taking time to relax. You can use google map pins to mark areas of interest, but now that you have more time off you don’t need to cram visits to sightseeing locations into 2 or 3 days. Give yourself time to explore and let your travel flow naturally.
Pack
Packing for a long trip sounds more daunting than packing for a vacation. However, it doesn’t have to be. If you’re traveling long term, you’ll still only need a week or two worth of clothes, then you can wash them at a laundromat. You can’t carry a few months of items anyway – it’s likely that there are some items that will be provided at your lodging, and some things that you might have to purchase along the way. So rather than packing for every possible contingency, set some money aside to buy things on the road.
Every traveler I’ve talked to says that a top travel tip is to pack less than you think you need. You will find out that you don’t need as much as you think you do. Even experienced travelers can be susceptible to overpacking, so be sure to use a critical eye on everything you’re thinking of putting in your luggage.
Some things to remember to pack include emergency information like embassy info and copies of your passport, and a travel emergency kit that includes medications, bandages, face masks, hand sanitizer, etc.
You can download my pre- and post-travel checklists in the Episode 17 show notes.
Do a Test Run
Before you leave, do a test run. If you’re traveling in a camper, boondock and stay in a campground to test out all your systems. If you’re doing international travel, maybe go somewhere closer to home before hopping on that plane. This will help you see what you actually need (and actually don’t need), and how you can reduce what you’ve packed or plan better for your trip.
Mentally Prepare
Mentally prepare to be uncomfortable. Going on a mini-retirement is different, and change from the norm might leave you feeling a little nervous or uncomfortable. Remember that flexibility is your friend, and that a mini-retirement doesn’t have to be structured like work, you can allow it to flow more naturally and take things as they come.
Case Study
Our major travel consideration was building out the campervan that we planned to travel in. This takes care of all of the logistics around accommodations and transportation. Then, we planned a loose itinerary around the lower 48 United States, with the goal to visit all of the states and all of the National Parks.
Before we leave, we’ll be doing what’s called a shakedown trip, where we camp somewhere near home and test out all of our systems to make sure we’re ready to go. We’re also planning to pack the bare minimum of supplies and gear and buy what we need along the way. This trip is actually an exercise in minimalism for us, and we have sold a lot of our belongings beforehand to fund our trip and lighten our mental load. Any items we leave behind won’t be used for a year, which means we probably don’t need them at all.
Since we’ll be staying state-side, we don’t need to worry about learning a language or getting a new currency. Our cell phone plans will also work all over the states, so we are planning to stick with what we have, get free wifi from cafes and restaurants, and upgrade to a wireless hotspot if needed. We are still working through logistics around healthcare and mail.
Conclusion
When it comes to taking an extended time off from work, there is quite a bit of planning involved. This is your guide to planning your own mini-retirement and making the most of your mini-retirement.
Get ready for your mini-retirement by deciding on the purpose of your mini-retirement, doing the proper financial planning, and preparing for travel considerations.
Your Turn
What would you do during a mini-retirement? Comment below!
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[…] You have to decide on the purpose of your mini-retirement, plan how you will afford it financially, and prepare for travel and time off. Here’s a case study of my own personal mini-retirement planning to give you a real-world example of how to make it work. I dive deeper into the 3 P’s in this post: A Step By Step Guide To Planning a Mini-Retirement. […]
[…] You have to decide on the purpose of your mini-retirement, plan how you will afford it financially, and prepare for travel and time off. Here’s a case study of my own personal mini-retirement planning to give you a real-world example of how to make it work. I dive deeper into the 3 P’s in this post: A Step By Step Guide To Planning a Mini-Retirement. […]
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