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The thought of one day retiring and no longer having to punch a clock, answer required emails, work long hours, and the other responsibilities of employment is a dream that can get you through the hard moments of work. While retirement typically occurs, after completing a career and saving and investing for it, a new trend is emerging among Gen Z career professionals called “micro-retirement.” Micro-retirements involve taking a one to two-week break from work every 12 to 18 months. Gen Z is using micro-retirement to avoid burnout, find greater fulfillment in their work, and enhance their overall well-being. However, it’s not just Gen-Z: according to a survey from Side Hustles, 10% of workers are considering taking a micro-retirement and 75% thought employers should offer micro-retirement policies such as unpaid sabbaticals. However, taking a micro-retirement may have long term impacts on your finances and career advancement. Here’s what you need to know. How ‘Micro-Retirement’ Works The idea is to take frequent and longer breaks from work during your career. These breaks are not your standard PTOthey’re intentional, unpaid time to rest and recharge. Micro-retirements can look like: Quitting a job, and finding a new job when you’re ready to work again. Setting up a plan with your employer that allows you to take unpaid frequent work breaks. Taking breaks from your business if you’re a business owner. Joshua Charles is a Gen Z business owner. His consultancy helps institutional investors, pension funds, and insurance companies invest in projects in Africa. Charles currently takes work breaks every six months for two weeks at a time, and said he heard about micro-retirements from a friend. “I reward myself by traveling to different countries. Whether it’s Europe during the summer or other destinations, and so that’s a way that I incentivize myself to reach certain KPIs,” says Charles. Charles considers his micro-retirement a full-time break. He doesnt work: any crisis or issue has to wait until hes back. He notes the breaks have been helpful for his mental health. Charles says there has been no negative impact on his business or career because he communicates with his clients and team that hell be unavailable for his micro-retirements, and a portion of his income is passive. The Pros and Cons of Micro-Retirements Micro-retirement may sound appealing, but with the cost of living in the U.S. rising, a growing unemployment rate due to mass layoffs, Gen Z’s struggle with debt, and uncertainty, micro-retirement comes with pros and cons. Micro-retirements offer an opportunity to recharge. Gabrielle Siegel, a wealth management advisor at Northwestern Mutual, notes that this is valuable. “It’s taking time to focus on what’s bringing you the most happiness, recharging, mentally avoiding burnout, and realigning with your personal goals. Gen Z is looking at the workplace a bit differently, and happiness is an important factor, she says. However, stepping away from work without pay can impact someones financial future. Taking time away from work can affect your earnings, investments, and funding your retirement, particularly if your company offers a match. Siegel points out having a plan in place is important. “If you’re taking this micro-retirement with no game plan, that can be detrimental to your long-term retirement strategy, she says. “You need planning and realistic goals. If they continuously take time off and don’t realign their financial goals, it can disrupt retirement contributions.” Meanwhile, taking frequent breaks can also impact career growth. Kenyetta Nesbitt-Simmons, a senior partner at HR consultancy firm Simmons HR & Talent Advisory, points out it can be difficult to rejoin the job market. Some Gen Zers are forced to pivot into other career fields due to the competitiveness of the field they left to take a micro-retirement, she says. You could also be seen as a job hopper to some decision-makers within the labor market. She warns that frequent micro-retirements could also be a red flag when youre up for promotion. How to Set Up Your Life and Finances for Micro-Retirement If micro-retirement sounds like a rest and workplace strategy you’d like to pursue, here are a few tips to help you get started. Save enough money to afford not working. Your micro-retirement will be unpaid unless you have a side hustle, so you’ll need enough money to pay your bills during the breaks. Understand your options. Your employer may offer flexibility or the option to take a sabbatical. If not, you may need to decide to quit and find a new job when you’re ready to return to work. Consider your next step. If your employer gives you the time off, make sure you understand the implications for your paycheck and benefits such as your retirement match. If youre leaving your job, whats your plan for reentering the job market? Make sure you have funds for basic expenses if you dont get hired immediately. If your industry is going through a hiring lull, think about what other skills you have in case you need to make a career-pivot. Benjamin Fields is a public school teacher and PhD student at the University of California, Berkeley. He uses his salary and his side hustle selling perfume to afford micro-retirements once a month where he attends events such as festivals or travels internationally. Each micro-retirement is one to two weeks, depending on whether he is traveling. Fields says hes not worried about micro-retirement affecting his job advancement prospects now or in the futurehes confident hell always be able to find work. He says that taking time off and having a mental health break are more important than worrying about making money. Fields accepts that his long-term savings might take a hit and says its worth it. Money is just a tool. If you consider the way estate planning works, as long as I’m saving and investing enough money to retire in the manner I want, then I should be able to spend freely, he said. “All I’m gonna do is just hand it off to my kids, and they’re probably going to squander the money anyway. So I might as well enjoy the money.” Fields plans to continue micro-retirements until he retires permanently.
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If theres one thing that U.S. politicians and activists from across the political spectrum can agree on, its that rents are far too high. Many experts believe that this crisis is fueled by a shortage of housing, caused principally by restrictive regulations. Rents and home prices would fall, the argument goes, if rules such as minimum lot- and house-size requirements and prohibitions against apartment complexes were relaxed. This, in turn, would make it easier to build more housing. As experts on housing policy, were concerned about housing affordability. But our research shows little connection between a shortfall of housing and rental affordability problems. Even a massive infusion of new housing would not shrink housing costs enough to solve the crisis, as rents would likely remain out of reach for many households. However, there are already subsidies in place that ensure that some renters in the U.S. pay no more than 30% of their income on housing costs. The most effective solution, in our view, is to make these subsidies much more widely available. A financial sinkhole Just how expensive are rents in the U.S.? According to the U.S. Department of Housing and Urban Development, a household that spends more than 30% of its income on housing is deemed to be cost-burdened. If it spends more than 50%, its considered severely burdened. In 2023, 54% of all renters spent more than 30% of their pretax income on housing. Thats up from 43% of renters in 1999. And 28% of all renters spent more than half their income on housing in 2023. Renters with low incomes are especially unlikely to afford their housing: 81% of renters making less than $30,000 spent more than 30% of their income on housing, and 60% spent more than 50%. Estimates of the nations housing shortage vary widely, reaching up to 20 million units, depending on the analytic approach and the time period covered. Yet our research, which compares growth in the housing stock from 2000 to the present, finds no evidence of an overall shortage of housing units. Rather, we see a gap between the number of low-income households and the number of affordable housing units available to them; more affluent renters face no such shortage. This is true in the nation as a whole and in nearly all large and small metropolitan areas. Would lower rents help? Certainly. But they wouldnt fix everything. We ran a simulation to test an admittedly unlikely scenario: What if rents dropped 25% across the board? We found it would reduce the number of cost-burdened rentersbut not by as much as you might think. Even with the reduction, nearly one-third of all renters would still spend more than 30% of their income on housing. Moreover, reducing rents would help affluent renters much more than those with lower incomesthe households that face the most severe affordability challenges. The proportion of cost-burdened renters earning more than $75,000 would fall from 16% to 4%, while the share of similarly burdened renters earning less than $15,000 would drop from 89% to just 80%. Even with a rent rollback of 25%, the majority of renters earning less than $30,000 would remain cost-burdened. Vouchers offer more breathing room Meanwhile, theres a proven way of making housing more affordable: rental subsidies. In 2024, the U.S. provided what are known as deep housing subsidies to about 5 million households, meaning that rent payments are capped at 30% of their income. These subsidies take three forms: Housing Choice Vouchers that enable people to rent homes in the private market; public housing; and project-based rental assistance, in which the federal government subsidizes the rents for all or some of the units in properties under private and nonprofit ownership. The number of households participating in these three programs has increased by less than 2% since 2014, and they constitute only 25% of all eligible households. Households earning less than 50% of their areas median family income are eligible for rental assistance. But unlike Social Security, Medicare, or food stamps, rental assistance is not an entitlement available to all who qualify. The number of recipients is limited by the amount of funding appropriated each year by Congress, and this funding has never been sufficient to meet the need. By expanding rental assistance to all eligible low-income households, the government could make huge headway in solving the rental affordability crisis. The most obvious option would be to expand the existing Housing Choice Voucher program, also known as Section 8. The program helps pay the rent up to a specified payment standard determined by each local public housing authority, which can set this standard at between 80% and 120% of the HUD-designated fair market rent. To be eligible for the program, units must also satisfy HUDs physical quality standards. Unfortunately, about 43% of voucher recipients are unable to use it. They are either unable to find an apartment that rents for less than the payment standard, meets the physical quality standard, or has a landlord willing to accept vouchers. Renters are more likely to find housing using vouchers in cities and states where its illegal for landlords to discriminate against voucher holers. Programs that provide housing counseling and landlord outreach and support have also improved outcomes for voucher recipients. However, it might be more effective to forgo the voucher program altogether and simply give eligible households cash to cover their housing costs. The Philadelphia Housing Authority is currently testing out this approach. The idea is that landlords would be less likely to reject applicants receiving government support if the bureaucratic hurdles were eliminated. The downside of this approach is that it would not prevent landlords from renting out deficient units that the voucher program would normally reject. Homeowners get subsidieswhy not renters? Expanding rental assistance to all eligible low-income households would be costly. The Urban Institute, a nonpartisan think tank, estimates it would cost about $118 billion a year. However, Congress has spent similar sums on housing subsidies before. But they involve tax breaks for homeowners, not low-income renters. Congress forgoes billions of dollars annually in tax revenue it would otherwise collect were it not for tax deductions, credits, exclusions and exemptions. These are known as tax expenditures. A tax not collected is equivalent to a subsidy payment. For example, from 1998 through 2017prior to the tax changes enacted by the first Trump administration in 2017the federal government annually sacrificed $187 billion on average, after inflation, in revenue due to mortgage interest deductions, deductions for state and local taxes, and for the exemption of proceeds from the sale of ones home from capital gains taxes. In fiscal year 2025, these tax expenditures totaled $95.4 billion. Moreover, tax expenditures on behalf of homeowners flow mostly to higher-income households. In 2024, for example, more than 70% of all mortgage-interest tax deductions went to homeowners earning at least $200,000. Broadening the availability of rental subsidies would have other benefits. It would save federal, state, and local governments billions of dollars in homeless services. Moreover, automatic provision of rental subsidies would reduce the need for additional subsidies to finance new affordable housing. Universal rental assistance, by guaranteeing sufficient rental income, would allow builders to more easily obtain loans to cover development costs. Of course, sharply raising federal expenditures for low-income rental assistance flies in the face of the Trump administrations priorities. Its budget proposal for the next fiscal year calls for a 44% cut of more than $27 billion in rental assistance and public housing. On the other hand, if the government supported rental assistance in amounts commensurate with the tax benefits given to homeowners, it would go a long way toward resolving the rental housing affordability crisis. This article is part of a series centered on envisioning ways to deal with the housing crisis. Alex Schwartz is a professor of urban policy at the New School. Kirk McClure is a professor of urban planning at the University of Kansas. This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Amid stagnant U.S. book sales, one genre consistently goes viral: romantasy. In this episode of FC Explains, Liz Segran breaks down how Entangled Publishing is writing a new formula for success in the book world.
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