Gen Z in the UAE are planning multiple “mini retirement” career breaks to focus on family, professional growth and personal passions, a new study has found.
Gen Z – born between 1997 and 2009 – aspire to take the most pauses in their careers compared to their older counterparts, according to HSBC’s Quality of Life: Affluent Investor Snapshot survey.
It polled 10,797 people aged 21 to 69 across 12 global markets, including 697 from the UAE. All respondents held investable assets ranging from $100,000 to $2 million.
About 41 per cent of affluent investors in the UAE plan on taking a “mini-retirement” break, and 73 per cent of them plan two or more breaks to “realign, reflect and pursue renewed goals”, the survey found.
Among those planning multiple career pauses, UAE respondents are aiming for the most breaks, with an average of 3.2.
They are also the most confident about their financial planning to support themselves, at 81 per cent compared to the global average of 74 per cent.
Most plan to fund their breaks through personal savings, investment returns and rental income.
“It is interesting to see how attitudes towards retirement are evolving in the UAE,” Dinesh Sharma, HSBC's head of international wealth and premier banking for the Middle East, North Africa and Turkey, said.
“The increasing confidence people demonstrate in considering and planning for multi retirements – and their appetite for multiple, intentional career breaks – demonstrates a more dynamic and rewarding vision of what retirement can be.”
Mini-retiring, also know as micro-retiring, is a growing trend in which employees take planned, extended breaks from work, often through sabbaticals or unpaid leave. These can range from weeks to months, or involve resigning from jobs with the intention of returning to the workforce later.
This year, 10 per cent of Americans are planning to take a micro-retirement, with many using savings or side hustles to fund breaks to rest, travel or explore personal and career goals, according to a poll by the platform SideHustles.com.
On average, Americans take four months for a micro-retirement and aim to save around $15,000 beforehand, according to a poll of 1,000 people in the US.
Top reasons for taking a micro-retirement include mental health recovery, travel, gaining life experiences and relief from work stress. Professionals working in areas such as technology, health care, retail, hospitality and finance plan to micro-retire in 2025, the survey found.
In the UAE, key motivations include spending quality time with family, starting a business and living an international lifestyle. However, the main challenges are anxiety about re-entering the job market, family obligations, and concerns over healthcare benefits, the HSBC study revealed.
Around 51 per cent of UAE respondents are planning to take between two and three mini retirements during their lifetime and a further 22 per cent plan more than three with a preferred interval between breaks of approximately six years, the data found.
“The data shows multi retirements are not a generational fad or a more traditional ‘career break’,” said Cora Pettipas, financial planner and retirement specialist at HSBC.
“Multi retirements are a mindset shift, with some individuals increasingly taking time out to focus on living their wealth, not just accumulating it.
“They are creating space for it now – with careful planning to ensure they can fund multiple pauses over the course of their lives. They aren’t viewing it as stopping work or their careers, rather, taking new directions that feel more aligned to their values and needs of their families.”
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What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
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New Zealand: Williamson (c), Blundell, Boult, De Grandhomme, Henry, Latham, Nicholls, Ajaz, Raval, Sodhi, Somerville, Southee, Taylor, Wagner
Umpires: Bruce Oxerford (AUS) and Ian Gould (ENG); TV umpire: Paul Reiffel (AUS); Match referee: David Boon (AUS)
Tickets and schedule: Entry is free for all spectators. Gates open at 9am. Play commences at 10am
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Starring: Bdoor Mohammad, Jasem Alkharraz, Iman Tarik, Sarah Taibah
Director: Majid Al Ansari
Rating: 4/5
MATCH INFO
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
