Obama Retirement Fix: No Day at the Beach

(MoneyWatch)  The Obama administration recently pushed through new IRS regulations that make it easier for employees that are paid for unused vacation days to transfer those payouts into their 401(k). At first glance it seems like a nice retirement nudge: encourage employees to save more at no added cost to the employer.
Extreme Stay-Cation But I have my doubts if this is really good policy. As flawless as it seems to encourage better retirement savings habits, the incentive here is to not use your vacation time. Forget the stay-cation; now we're implicitly being told it's financially smart to stay chained to the cubicle.
But it isn't as if we are a slacker nation. According to Mercer's recent global survey of paid holidays and vacation days, U.S. workers average about 25 days a year. That's two weeks less than Brazil and Lithuania (41 days off a year) and Finland, France and Russia (40 days.) And we don't even use all that we get; Expedia reports that 34% of Americans don't take full advantage of their vacation days, foregoing an average of three days a year.

The Need for More Vacation Time If you buy into the new normal retirement fix of working longer -- and if you don't, you better have one gloriously stuffed nest egg -- you should be planning to take more vacation days, not fewer. You can't afford to burnout or get a rep as the office crank no one wants to work with. I am not suggesting that a family of four shell out $30,000 for a nine day tour of Spain or a comparatively "cheap" $15,000 for an eight day Alaskan adventure, but taking a budget friendly break-yes, even a staycation-seems like worthy insurance against career crash-and-burn. I'm also not sold on the notion that in a recession it's bad form to take time off; that it makes you look less committed to your work and thus prime layoff bait. Really? What if that time off gives you a much-needed breather to recharge, so when you get back to work you rock? Call me crazy (feel free in comments below) but maybe taking vacations can increase your long-term job security.

The Downside of All Work and No Play
Besides, time off is just plain good for you. The exhaustive Framingham Heart Study made the case that both men and women who took more vacations lived longer. Another study of middle age men with a high risk for heart disease found vacations reduced mortality risk.
Sure, we need to save more for retirement, but we also need to take a break too.

Photo courtesy of Flickr user mode , CC 2.0.