Has anyone "Pretired"?

[Hannah]

I am wondering if anybody has pretired? ie retired before financial independence.

I am hoping to become a stay at home mom, but my husband is currently a grad student (materials science engineering). If you subtract out childcare, giving and buying a house outright last year, our spending was $22K (including the cost of healthcare premiums from my employer and cost of maintaining a rental).

My husband is currently a grad student with a 20K stipend, and we have 1.25 rentals that together will net (after taxes, insurance, basic maintenance and association dues) 10.5K between the two. We also have a big pile of cash savings (25K), but everything else is tied up in 401Ks, Roths, and HSAs.

We are not yet FI, but I am considering "pretiring" for his last year or two. This would be 12+ months away as we might try for another kid in the meantime.

Has anyone done this? What happened next?

[TerriM]

Do you want to stay home with your child?  Some people would simply consider it a job change.  Pay sucks, but you might get paid back in cute kisses, backrubs, and pats on the back later.   

Be sure to factor in cost of healthcare if you're on the university health plan. 

[Hannah]

I really want to be a stay at home mom, and it would technically be feasible, although a bit tight, and would slow down Financial Independence by a few years.

The healthcare situation depends 100% on ACA, but our maximum increase in expenditure would be an additional 3K per year to get on his healthcare plan (6K premiums, 3K deductible, 4K OOP max). We might cobble together student insurance, ACA and CHIP if it were lower cost, as it is likely to be since we will be just above the poverty line on income.

[TerriM]

I really want to be a stay at home mom, and it would technically be feasible, although a bit tight, and would slow down Financial Independence by a few years.

So, it sounds like you are wondering if it's better to spend five years being home now with them when they're young instead of five years being home after retirement.

Which do you think will be more valuable time for you and your children?  How old will they be when you FI?  Will they still be living with you?

[TerriM]

To answer your question, yes, many mothers stay home with their kids.  I'm not sure that they "pretire" as in never going back, but that they make a mid-life career change to be a mom, and they think the time is well-spent being the primary caretaker for their kids.

And if that's the career change you want to make and you can afford it, you should feel no guilt in doing it, and you will be closer to your children for it. 

There are other moms who get stir crazy and decide to go back to work.  You need to do what works for you and your family.

[historienne]

Slightly different situation, but our plan is for my husband to retire in about 5 years; I'll keep working until we're FI, and perhaps beyond.  My job is quite secure (by the time he retires, I should have tenure).  You couldn't pay me enough money to be a stay-at-home-mom, but if that's what you want to do with your life, and your husband doesn't mind working longer in order to make it happen, then you should go for it!  If I understand you correctly, that's really the trade-off, right?  FI will be delayed, so your husband will be obligated to work longer? 

[Hannah]

It's tough to predict his opening salary (70K is a likely floor, so I will use that), I am hitting a career growth spurt, but that will likely taper off in 2-3 years, and we aren't 100% sure about number of kids, and his anticipated PhD completion is probably 3.5 years away but given a best/worst case scenario this is what I think:

If I continue to work, we become FI in 5-8 years (Current child will be 7-10 years old).
If I quit working after husband graduates we become FI 7-10 years from now
If I quit in one year we become FI in 11-13 years (ten is a stretch)
If I quit work today, we become FI in 12-15 years

Thank you for helping me think through the tradeoffs. Sometimes, you can't see the forest for the trees in your own life. I know my husband seems to be willing to work for 10+ years, but he is also at the start of a career switch, so its tough to guage his real opinion. Not sure what I will decide of course, but thanks for weighing in.

[historienne]

The one thing I'd say is that you might think about how to preserve your flexibility to resume work if necessary.  I don't know your field, but can you take on some occasional contract work?  Or do a continuing ed class once a year or so?  Join a mentoring association?  Whatever makes sense for your line of work.  That way, 1) your husband has more flexibility if he does end up wanting to leave his work sooner, and 2) if he gets laid off or otherwise becomes involuntarily unemployed, you won't be screwed.

[Cassie]

I think being home with your kids the first 5 years is priceless if you can afford it & want to do it.  It seems like your choice meets both of these criteria.  YOu can always work but your kids won't always be little.  When kids are older they don't need/want their parents as much as when they are tiny.  Good luck!

[EscapeVelocity2020]

In our experience, kid #2 pushed us over the edge and my wife quit her job.  We weren't FI by any stretch, and I almost got laid off which was a bit of a nail-biter.  But, as time went on, it actually opened up new opportunities that we were too exhausted to see and too over-comitted to take advantage of and everything turned out great.  But even if it hadn't, I would recommend a parent stay at home if a second child comes along.  You're a bit in a 'grey area' having just the one child and your husband not being out of school, so I don't know what would work out best to be honest.  If you can hang in there a year or two, you might have a better feel for where things settle.  Best of luck! 

[Cassie]

My hubby would periodically get laid-off but we saved $ so not a problem when this happened.  It is so hard to work once you have more then 1 child. Plus a SAHP can save the household a lot.  I also think there is value in waiting until he finished school.  You guys need to discuss all the options to decide what is best.

[Spork]

I pretired in 2006 -- and I even called it that.

It wasn't for kids, but to relocate close to family.  My plan was to take a year off.  I took 3.

I will say ... it was probably the best years of my life.  It made me think my plan of early retirement was the right one.

Things I learned:
* it can take longer than you think to find a job.  For me, I was moving from a high tech area to a low tech area ... looking for a niche tech job.  I saw about 1 posting every 6 months that applied to me.
* I DO NOT regret what I did... but in retrospect it was totally the wrong time as to market timing.  When the 2008 crash happened I really wanted to be in a position to invest -- and I was not.

[TerriM]

I am home with the kids now, looking forward to starting back to work part time next year when my youngest goes to Kindergarten.  I know the kids need you in the teenage years, but I am glad I could be home for them while they were young.  When they're teenagers, they're in school and busy with homework, so while they need you, it's just not the same--they're not sitting on your lap snuggling with you.  And frankly, in my senior year of high school, I was almost never home.  My mother could've moved out and I would've gone on with my life.  Can't say that about a 3 year old.

I think your options are fantastic whatever you decide.  I did work from home with #1 and #2 (#3 plus a move did me in), but I probably would take the time off now rather than later in your situation because these are the most formative years.

[OR]

My wife and I have kind of "pretired", but we have taken a different approach.  We recently had twins, so we dialed our work back to part time for both.  No baby sitters, but we both get 3-4 hours out of the house for work/adult time.  Very lucky for both of us to get so much time with our little ones.  Although a busy pace of life, we stay energized for both sides of life (work/family) with the variety and flexibility.  Trust me there are some tough days, but we know that we are very lucky and just remind ourselves of that. 

We aren't FI, but have a very nice start.  Obviously slowed our FI pace, but still saving.  Even without saving, with reasonable growth, we would be there in 10 years or so.

Also, both our careers are rewarding and fun (most of the time), so our work levels would be very similar even if we were FI.  Hence it is pretirement. 

However, we know that we are very lucky to have this set up.  I have my own business, so I can dial things up or down as needed and my wife is lucky to have a part time option as a teacher.  Not everyone gets to take the road we are on. 

Good luck with your choices, but part time work may be the best of both worlds.  Of course, YMMV.

[Hannah]

Thanks for more stories, I really appreciate those.

My field (business intelligence), has a lot of contract based work, but that's not part time by any stretch of the imagination. It tends towards a 1-6 month contract that ends up getting renewed as the scope of work enlarges.

Starting my own consulting business is a bit of a dream, but it would be particularly difficult to do on a part time basis as I started it up (though once successful, I could probably scale down to part time).

Most likely, if I were to work part time while my husband was in grad school I would bar tend or wait tables which is a job that I always enjoyed and would allow me to work evenings/weekends. I am not 100% sure what I can do to stay up to speed in my field, but there are plenty of open source tools that I could use and write/blog about.

[geek101]

If I continue to work, we become FI in 5-8 years (Current child will be 7-10 years old).
If I quit working after husband graduates we become FI 7-10 years from now
If I quit in one year we become FI in 11-13 years (ten is a stretch)
If I quit work today, we become FI in 12-15 years

You might want to revisit the math here to include your husband's working years to FI. Any year you both work should count as 2 years to capture 'total work years to FI.' His time counts too, no?

If you continue to work, FI in 5-8 years, total work years to FI is 10-16 years.
If you quit after husband graduates (in 3.5 years), FI in 7-10 years, 10.5-13.5 total work years.
If you quit in one year, FI in 11-13 years, total work years is 12-14 work years.
If you quit today, FI in 12-15 years, total work years is 12-15.

It of course depends on what you want to maximize. To me, this suggests your optimal quitting time is after your husband graduates. Obviously if you both continue to work, that's going to cost the least amount of work years and get you to FI the fastest. However, you can see the trade off for you to quit after he graduates is .5 total work years more to FI 2 years later (on the low end of your estimates.) That's 2 real years later for FI date, but only an additional 6 months of working overall.

If you quit in one year vs. after husband graduates, you lose 4 calendar years to FI, and you spend 1.5 more total working years as well. Conversely, quitting after your husband graduates costs you 1.5 total working years, but you FI 4 years earlier!

Just keep in mind that getting to FI as soon as possible might not necessarily be the goal, rather you might want to minimize the amount of time lost working to get to FI, and find the best time for you to quit.