More young people are stepping off the career treadmill—temporarily. Whether they call it a micro-retirement, an adult gap year, or a one-year sabbatical, the goal is the same: a purposeful break from f😼ull-time work without derailing long-term financial goals.

One key to making that happen? Funding it through a brokerage account—and not your 401(k). Here's what you need to know about using a brokerage account to fꦚund your micro-retirement.

Why Use a Brokerage Account?

Unlike a 401(k) or Roth IRA, a 澳洲幸运5官方开奖结果体彩网:brokerage account allows you to withdraw funds at any time without early withdrawal penalties, making it an ideal vehicle for funding a micro-retirement. That’s why♍ , the founder of California-based Aquila Wealth A🦩dvisors, redirected his own retirement contributions into a brokerage account before taking what he calls a “one-year working sabbatical.”

Avoiding these 澳洲幸运5官方开奖结果体彩网:early withdrawal penalties is the major advantage of using a brokerage, according to Maldonado. Most qualified retirement accounts—like traditional IRAs and 401(k)s—have a 10% penalty on all withdrawals before age 59½ on top of any income taxes owed, he adds.

And while Roth IRAs offer more flexibility, Maldonado notes that a Roth IRA is “most effective” when you allow for 澳洲幸运5官方开奖结果体彩网:compounding growth over decades. “Avoid killing the compound🦩ing effect of withdrawing from it early if at all possible,” he 🌱says.

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Plan Early and Invest Strategically

“If you are going all in on the micro-retirement goal, a brokerage account is a smart place to redirect all new retirement savings contributions into,” Maldonado says. He recommends starting as early as possible—ideally five to seven years ahead—and saving more than you think you'll need.

“Add 20% to whatever you tꦇhink you need t🥀o provide a buffer for contingencies,” said Maldonado.

Early on, you can invest for growth. But as your leave date nears, shift your savings into 澳洲幸运5官方开奖结果体彩网:safer assets. “You would most likely want to have your full year of expenses saved up and allocated into stable funds by the time you take a leave of absence,” he says, citing options like a 澳洲幸运5官方开奖结果体彩网:money market fund, T-bills, or 澳洲幸运5官方开奖结果体彩网:high-yield savings accounts.

Mind the Taxes and the Timeline

Before y꧅ou start selling stocks or other assets in your brokerage accoun🤡t, be aware of the tax consequences.

“If you have large capital gains in stock positions, you could be paying 15% to 20% long-term capital gains taxes,” Maldonado n𓆉otes. Consider splitting sales across two tax years—half in December, half in January—to ease the hit.

He also cautions about income taxes on interest from bonds or money market funds. And just as important as tax planning? Exit planning. “The biggest risk is defaulting into an extended micro-retirement unintentionally,” he says. To avoid a prolonged gap, set deadlines for starting your job search or becoming 澳洲幸运5官方开奖结果体彩网:self-employed.

The Bottom Line

A brokerage account offers the flexibility you need to take a career break without touching your 401(k). But that flexibility only works if you’re proactive. To make the most of your micro-retirement, start planning years in advance, invest strategically, understand the tax implications, and above all, stay on track with your return-to-work goals to ensure your finances don't fall under unnecessary strain.

"We tend to underestimate how expensive life is without an income, and we tend to overestimate how much we can save in a year or two—but don’t underestimate the power of focusing on your goals," says Maldonado.