If you thought retirement conversations only start at 50, think again. A new concept is gaining traction—micro-retirement. But what does it mean, and why should Kenyans pay attention to the latest buzzword?
In the 9th Pensioner Survey by the Retirement Benefits Authority (RBA), 76 percent of people traditionally spend their entire careers with one employer and eventually retire at around 60 years. Throughout their working years, they take the standard 25-30 days of paid leave as provided in the Employment Act.
But, instead of taking rest, these days are usually spent on family emergencies like taking care of a sick child, leaving little room for personal rest and relaxation.
However, micro-retirement reflects a shift in priorities, especially among younger professionals.
Micro-retirement is a self-initiated concept that allows individuals to take extended breaks from work—lasting months or even years. It’s a reimagined approach to career planning, offering more flexibility and a better balance between work and personal life.
One thing is true, it is crucial to step away from work from time to time for one’s mental and physical health. The stress that accompanies work can become debilitating, and the idea of taking a break seems necessary.
In the West, micro-retirement has been quickly adopted by millennials and Generation Z. In the wake of remote work and flexible schedules, the trend is gaining popularity. But one might wonder whether this trend will pick up in Kenya.
Micro-retirement is not about quitting permanently—it’s about intentionally pausing work to create a sustainable and fulfilling professional journey. For instance, an individual might work for five years, then take a sabbatical to travel, explore new interests, or simply reset before returning to their career. This luxury has long been thought of as a preserve for the wealthy who have diverse streams of income.
Ideally, retirement savings should be sufficient to maintain and sustain a decent standard of living after retirement – old age retirement to be specific.
Yet there are still concerns over financial security since over 56 percent of Kenyans, despite saving religiously in their working years, have insufficient pension benefits to sustain them in retirement - according to the RBA’s Pensioner Survey.
It wouldn’t be surprising if the current workforce had even fewer reserves for retirement if they continuously withdrew their savings for every micro-retirement chapter.
As per the 8th Enwealth Conversation report on the role of technology in savings and investment, peers on social media have a great impact on savings and investing hence, technology will continue to pressure younger people to take up the trend.
This would be a risky misstep that could potentially sabotage their old-age retirement security because, realistically, most Kenyans are highly dependent on a continuously shrinking paycheck and, from time to time, different unstable side hustles.
Perhaps, a more sustainable alternative would be to improve current employee wellness programmes. Let employers give adequate support to reduce or overcome burnout which may necessitate breaks from work. If hybrid working is an option, it might also allow employees who can afford it, to travel while being productive.
Ultimately, the goal is lifelong financial wellness by maintaining a steady income, preserving retirement savings and growing wealth without sacrificing the joy of life.
The writer is the CEO of Enwealth Financial Services.
