Hey, Millennials, Take a Gap Year
Retirement as we know it is dead. No more gold watches awarded for lifelong service at age 65. Today’s young Americans will have to work longer, receive less Social Security and be stressed about whether they’re earning enough to support themselves for their expected longer life spans.
So why not leave work behind for a bit while you’re still young and healthy enough to enjoy the break, and before all the good beaches are submerged?
I’m a semiretired millennial myself and in year two of roaming around Latin America, eating all the fresh seafood I can find, improving my Spanish and napping on picture-perfect beaches. I’ll go back to regular employment one day, but not just yet. This extended vacation from real life has been possible because I had a job that allowed me to save $20,000 over the course of two years and because I picked a region with a relatively cheap cost of living.
enjoy your youth, health and lack of obligations while you can.
Certified financial planner and personal finance expert for The Ascent by the Motley Fool Matt Frankel tried a mini-retirement after finishing grad school in 2009, but it didn’t go quite as smoothly as mine has. He headed to the Florida Keys with $4,000 that was meant to last him several months; it ended up lasting just four weeks. “Key West is an expensive place to live and even more so when you have nothing but free time,” he reflects, advising millennials considering a retirement break to “sit down and formulate a realistic budget first” to avoid having to return to work sooner than expected.
Frankel also advises that millennials looking to semiretire or retire briefly in their 20s or 30s not separate themselves from work completely. “Employers hate to see breaks on résumés,” he says. With so many companies offering remote work options and with online freelance job boards like Upwork, millennials can leave behind full-time jobs for project work or part-time gigs. This allows them to keep their résumés up to date and provides additional cash flow to finance their fun.
But what if a recession hits? What if the markets tank? Many worry about when — or whether — it’s a good time to quit their jobs. I say there’s never really a bad time to chase happiness or take advantage of your health. And besides, the fortunetelling industry is tricky.
“It’s never a good idea to try to predict economic cycles when it comes to life decisions,” says Frankel. “If you’re thinking from a long-term perspective, all of it kind of works out in the end.” So if you take off a couple of years now, plan to add them to the back of your career when you’re older.
Millennials have less net worth and more student debt than earlier generations, according to research by the Brookings Institution. And their long-term earning potential was damaged by entering adulthood in the wake of the Great Recession — potential that could suffer another hit if the country experiences another recession soon. And yes, we may have such high out-of-pocket health care costs — estimated to be more than $250,000 for the average 65-year-old couple retiring today — that we’ll never be able to stop working.
So there’s even more reason to take a mini-retirement now. Not only can you make up lost wages later, but the world will not look the same when millennials reach typical swan-song age.
By 2050, according to a climate change report from Crowther Lab, foggy London could be a thing of the past, replaced by a city that has a warm climate like current-day Barcelona. Coastal cities around the world, including Miami, Rio de Janeiro and Shanghai, could soon be underwater, and experiences like drinking a caipirinha on Copacabana beach or seeing the cherry trees blossom in Osaka could be impossible in 40 years.
Millennials could complain about never being able to retire, or they could simply accept it, acknowledge that they might even be healthier in the long run for working past the traditional retirement age and avoiding the physical and mental slowdowns associated with entering a life of leisure as a senior, and take a little break right now.
So save up enough for a few months of minimum payments and daily expenses in a place with a low cost of living — try Peru, Thailand or Albania — and enjoy your youth, health and lack of obligations while you can.
Even if you never buy a house or have a family, and even if your youthful spirit lasts well into old age, your health is statistically likely to take a few hits. A study out of Oxford found that by 2035, when the average millennial will be 45, still at least two decades from retirement, cancer diagnoses for seniors will be up 179 percent, and two-thirds of seniors will spend their increased life expectancy (3.6 years for men, 2.9 years for women) with four or more diseases. If you’re lucky enough to be healthy now, make the most of it.
Sublease your apartment and store your belongings. Quit your full-time job and book a flight so that you can claim a few months or years of time dedicated not to your boss or your family but to you.
Why are you still sitting there reading this? Your gap year awaits.