'Work-retire-work': HSBC's head of wealth says the old retirement model is dead — and 87% who've tried the new one say it changed their life

"HSBC research shows a new work-retire-work model is emerging where people take intentional career pauses to pursue passions, start businesses, take care of children or parents and reinvent themselves," she said.

HSBC's study The Rise of Multi-Retirements indicates a shift toward what it calls a "multi-retirement" model, where an individual takes intentional career breaks, ranging from six to 12 months, in cycles of five to six years. And millennials and Gen Xers are leading the charge (2).

Oden said HSBC's research — surveying "affluent" adults in 12 global markets — found that 37% of respondents planned to take a mini-retirement. Among those who had already taken one, 87% said it had improved their quality of life.

Here is why more people are questioning the traditional model of retirement.

Traditional retirement doesn't add up

The traditional model is based on a number of assumptions: You retire at 65 (give or take a few years), your mortgage is paid off, you receive a regular workplace pension as well as Social Security benefits and your spending drops.

But many American retirees haven't paid off their homes (3) and the cost of living continues to rise, with the U.S. facing the worst inflation in the G7 this year. Healthcare costs are another source of concern.

Workplace pensions have largely disappeared, and for workers who have 401(k)s, the median balance is just $40,000, according to the National Institute on Retirement Security (NIRS).

That means Social Security isn't just a supplement, but represents 52% of retirement income for many. But it was never intended to be a primary source of income. Meanwhile, Social Security's future (and that of Medicare) is uncertain.

No wonder more than a third (36%) of Americans don't feel confident that they'll have enough money to live comfortably in retirement, according to the 2026 Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI) and Greenwald Research (4).

Add it all up, and many retirees may have to dip into their personal savings to supplement their retirement income for 30 years or more. That has people looking for alternatives to full retirement.

Taking mini-retirements as a trend

Mini-retirements are a way to take a break from full-time work and then return to earn more income.

"This trend can be seen across all generations," according to HSBC, particularly for Gen X and millennials, who see 47 as the ideal age for a first break (5).

But Oden stressed a mini-retirement "takes careful planning."

They planned to fund them through personal savings (49%), investment income (41%) and, in some cases, new income streams like part-time work (36%).

Notably, they said they aimed to save a $530,000 nest egg before taking a break..

The report focused on affluent individuals who may already have substantial savings and investment income, not all Americans are in a position to take mini-retirements.

Alternatives to traditional retirement

Regardless of whether you are affluent or not, the new approach is about determining when you want to retire rather than having it determined for you.

After all, it's one thing for Social Security to declare your full retirement age (FRA), but it may not align with your personal savings or lifestyle preferences. Multi-retirement is part of a broader desire to redefine retirement.