The Real Cost of a Mini-Retirement: A Year Off Does Not Cost You a Year

You want six or twelve months off. Not retirement — a break, taken now, while you are healthy enough to use it. The planning coverage is sympathetic and vague: the Journal of Accountancy's April 2026 piece on mini-retirements makes a thoughtful case for spreading earning years across a lifespan and offers no savings benchmark or timeline cost at all. Everyone agrees a break sets back your FI date. Almost nobody says by how much.

Here is the number. For a household mid-journey, a twelve-month break delays financial independence by roughly eighteen months — a multiplier of about 1.5 on the time you take. That multiplier is not a constant. It starts near 2.0 when your portfolio is small, falls as the portfolio grows, and passes through exactly 1.0 at a portfolio size you can calculate in one division. Above that point, a year off costs less than a year.

The rest of this is the arithmetic, the break-even formula, and the two costs that make real breaks more expensive than the model.

Why a break costs more than its length

Three things stop when the paycheck does, and only one of them is obvious.

Contributions stop. The money you would have invested is not invested.
The portfolio funds your living costs. Whether you spend down a cash pile you saved first or sell shares, that money leaves the compounding pool.
Everything that money would have earned, forever, is gone too. This is the part people underestimate. A dollar not invested at 35 is not a dollar short at 50; it is roughly two dollars short.

Together those push the cost above 1:1. Less intuitively, a fourth force pushes the other way. Your existing portfolio keeps compounding through the break. If it is large enough, its own growth outruns what you are withdrawing, and the break becomes cheaper than its length.

The two forces meet at a specific portfolio size. Finding it is the useful part.

The model

An illustrative household, entirely fictional:

Input	Value
Annual spending while working	$70,000
FI target (25x spending)	$1,750,000
Invested per year	$45,000
Expected real return	5%
Spending during the break	$50,000/yr

Everything below is in today's dollars — a 5% real return already nets out inflation, so no figure needs re-deflating. The simulation steps monthly at a rate of (1.05)^(1/12) - 1, applies the return before the withdrawal, and carries money as integer cents. During the break, contributions go to zero and the break-year spending comes out of the portfolio.

Start this household at $400,000 invested. Without a break it reaches $1,750,000 in 14.4 years. Take twelve months off and it arrives in 15.9 years: a delay of 17.9 months for 12 months away, or 1.49 months of FI date per month of freedom.

The multiplier falls as the portfolio grows

Same household, same twelve-month break, taken at different points on the curve.

Portfolio when the break starts	Years to FI	With the break	Delay	Cost per month off
$150,000	18.7	20.6	22.2 months	1.85x
$250,000	16.9	18.6	20.3 months	1.69x
$400,000	14.4	15.9	17.9 months	1.49x
$700,000	10.2	11.4	14.5 months	1.21x
$1,000,000	6.8	7.8	12.1 months	1.01x
$1,400,000	2.9	3.7	10.0 months	0.83x

Two things are worth staring at.

The multiplier is remarkably flat in the length of the break. At $400,000, three months off costs 1.48x, twenty-four months off costs 1.51x. Your cost-per-month-off is close to a personal constant, which means you can price a six-month break and a two-year break with the same number. Doubling the break roughly doubles the delay — no cliff, no threshold, no point at which it suddenly becomes reckless.

And the row at $1,000,000 lands on 1.01x. That is not a coincidence.

The break-even: your break spending divided by your real return

Write the portfolio as P, break-year spending as B, annual contributions as C, the real return as r, and the break length as L. In continuous time the portfolio grows at rP + C while you work and at rP - B while you do not. Solve both, then ask when the resulting delay equals L exactly:

\left(P - \frac{B}{r}\right)\left(1 - e^{rL}\right) = 0

The right-hand factor is never zero for a break of any real length, so the only solution is:

P^{*} = \frac{B}{r}

The break-even portfolio is your break-year spending divided by your expected real return. Notice what dropped out of that equation: C and L. How much you save and how long you go are both irrelevant to where the break-even sits. The simulation confirms it — at a $1,000,000 portfolio the multiplier is 1.01x for a six-month break and 1.01x for a two-year break, whether the household invests $25,000 a year or $120,000. (The residual 0.01 is monthly-withdrawal timing; the continuous answer is exactly 1.00.)

The interpretation is simple once you see it. When P equals B over r, the portfolio's own real return exactly pays for your break-year spending. Below that line you are eating capital and paying a premium. Above it you are living off growth, and the untouched compounding on your balance more than repays the contributions you skipped.

For our household, $50,000 divided by 0.05 is $1,000,000 — twenty times break-year spending. At a 4% real return it would be 25x. That multiple should look familiar, and the resemblance is worth naming precisely so it does not mislead you: 25x here comes from a return assumption, not from the 4% withdrawal rate, which is a different quantity answering a different question. They coincide numerically at 4% and diverge everywhere else.

What you actually control

You cannot move your break-even much — r is the market's business. But two inputs move your multiplier a lot, and you control both.

Break-year spending is the dominant lever. At the same $400,000 portfolio:

Spending during the break	Delay from 12 months off	Cost per month
$35,000	15.0 months	1.25x
$50,000	17.9 months	1.49x
$70,000	21.8 months	1.82x
$85,000	24.8 months	2.07x

Spending $85,000 during the break rather than $35,000 nearly doubles the cost per month off, and it raises your break-even from $700,000 to $1.7M. Sensitivity that sharp is why this calculation needs your actual burn rate rather than a guess: a 20% error in break-year spending — $40,000 or $60,000 instead of $50,000 — moves the answer by roughly two months in either direction. Most people can name their salary to the dollar and their annual spending only to the nearest "about."

A high savings rate buys the break back faster. Same portfolio, same break, different contribution levels:

Invested per year	Delay from 12 months off	Cost per month
$25,000	20.6 months	1.71x
$45,000	17.9 months	1.49x
$75,000	16.0 months	1.33x
$120,000	14.7 months	1.22x

This cuts against the usual framing. High earners are often told they have more to lose from a break because they forgo more income. In FI-date terms the opposite holds: a large contribution stream refills the hole faster than a small one, so the same twelve months cost them less time.

Sizing the runway

Two costs sit outside the model and belong in your cash number.

The re-entry gap. A twelve-month break where the job search takes three months is a fifteen-month break. For the $400,000 household that is 22.4 months of delay instead of 17.9 — the search adds another 4.5 months, at 1.51x, the same rate the break itself charges. An unfunded job search is simply more break. Fund it as such.

Sequence risk during the break. Selling into a 30% drawdown to cover groceries converts a paper loss into a permanent one. The usual advice is to pre-fund the break in cash. The usual objection is that cash drags on returns. Both are right; the drag is just negligible. Divert contributions into cash at 0% real until fourteen months of them have accumulated $50,000, then take the break on cash and never touch the portfolio — and the FI date lands within a day of the sell-shares version. The insurance is effectively free.

What it is not is instant. Pre-funding means taking the break fourteen months later than you otherwise would. You are buying certainty with waiting, not with money.

That gives a runway target:

Runway = (break-year spending × months off ÷ 12) + (expected job-search months × monthly spending) + health premiums

Take the break in a calendar year, not across two

MAGI is annual. Quit on 30 June with $90,000 already on your W-2 and you are not a low-income household that year — you are a $90,000 household with an unusual second half. Quit on 31 December and the following year is the cheapest income year of your working life, which matters in two directions at once.

It is an opportunity: a near-zero-income year is the best year you will ever have to realise capital gains or run a Roth conversion cheaply. It is also a trap, because Marketplace subsidies have a floor as well as a ceiling. The premium tax credit requires household income at least 100% and no more than 400% of the federal poverty line. Below the floor, states that expanded Medicaid route you there instead; states that did not leave you in the coverage gap with neither. The 2026 poverty guidelines — $15,960 for one person, $21,640 for two — are the ones that govern 2027 Marketplace eligibility, since a coverage year uses the prior year's guidelines.

The ceiling has also become sharper. The enhanced premium tax credits expired at the end of 2025, restoring the hard 400% FPL cliff, and KFF's May 2026 review found average premium payments up 58% and average deductibles up 37% to $3,786. Extension bills are live in Congress and unresolved, so check the current rules for your coverage year rather than this paragraph. The conversion-versus-subsidy trade in a low-income year is worked through in Roth Conversions vs ACA Subsidies.

Where this breaks

The model assumes you return to the same income. That is the load-bearing assumption, and it is the one most likely to fail in either direction. If the break costs you a promotion track, the real delay exceeds the table. If you come back to a higher salary — or the break is what makes a career change possible — the table overstates the cost, possibly by a lot. Nothing here prices that, because nothing can price it generically.

The model also assumes a smooth real return. Real markets deliver the break-even portfolio's comfort on average and not on schedule; the $1,000,000 household whose break coincides with a bad two years does worse than 1.01x. And it ignores tax on the withdrawals, employer match, and the health-premium line, all of which push the multiplier up.

What would change the conclusion: a sustained real return materially below the assumption raises everyone's break-even (at 3% real it is $1.67M rather than $1M), and a break that measurably damages lifetime earnings dominates every other term in the calculation.

What to do with this

Three numbers, in order.

Your real burn rate, not your budget — the distinction matters more than the categories. It drives both the runway and the multiplier, and it is the input people are most wrong about.
Your break-even, B divided by r. Divide the spending you would actually have during a break by your real return assumption. Compare it to your invested balance. That ratio tells you whether you are buying time at a premium or a discount.
Your multiplier. Below the break-even, 1.2x to 1.9x covers most mid-journey households, and it climbs past 2.5x for a small portfolio paired with a modest savings rate. Then decide whether the months are worth it. That part is not arithmetic.

If your question is the closely related one — when do contributions stop mattering at all — the Coast FIRE calculator gives you the balance that reaches your FI number with no further saving, and The Coast FIRE Catalyst explains why that milestone arrives far earlier than the finish line. The two are different questions: Coast FIRE asks whether you can stop saving, this asks what it costs to stop earning for a while.

The honest summary is that a mini-retirement is expensive and knowable. Eighteen months of delay for twelve months of your life in your thirties or forties is a real price with a real thing on the other side of it. The mistake is not paying it. The mistake is paying it without having looked at the number first.

This article is general information, not financial, tax, or investment advice. The household above is fictional and the projections are arithmetic under stated assumptions, not forecasts. Tax and health-insurance rules change; verify current rules for your coverage year and consider professional advice for your situation.