Author Topic: Dual Part Time Income Advice?  (Read 5117 times)

Gumbo1978

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Dual Part Time Income Advice?
« on: April 06, 2015, 06:45:42 AM »
New to the forum and website and would appreciate any advice...

My wife and I are both 36 years old.  My wife is currently in grad school to become a speech pathologist (in addition to a stay-at-home mom).  Expect her to complete the degree 3 years out.  I am currently full time, but would like to transition to a part time gig when my wife starts working again (she would like to work part time as well).  Have found very little (if anything) out there on dual part time incomes but I'm sure this isn't unique.  Would love to hear from anyone who has tried it.

Current financial situation:

My pay - $88k/year

Savings/Investments:
401k - $241k
Wife Rollover IRA (traditional) - $195k
Combined Roth IRA - $190k
DRIP Accounts (Individual Stock - Dividend Reinvestment Plan) - $44k
Brokerage Account - $92k
Company Stock - $80k
Cash Balance Pension - $5k
Defined Benefit Pension - $7300/year starting at 65.
Cash - $37k
Total:  $884k

College Savings for Kids (2 kids - 5 and 3 year old):
529 plans - $36.5k

Debt:
Mortgage - $132k (30 year loan - 3.625% fixed).

Spending:
A very non-mustachian $46k/year.  However I expect this to be reduced by $12k once my kids are out of preschool and my wife is out of school.  I think $36k/year is probably a good indicator of what we will spend at that time.

I'd estimate my wife will earn $35k/year if she does part time (25-30 hours/week).  I don't know that my current job will ever allow me work part time, so I'm looking into transitioning to something else over the next couple of years that would give me some experience in a field I could contract in or work part time.  I'd hope to earn ~ $30-35k per year in my role but would be open to less if I really loved the job.

I've looked at healthcare and it looks like a ACA high deductible plan is in our future.  Any other factors I should look at?  Impact on social security?   Anyone run across a blog, news article, etc. on dual part time incomes for young families?

velocistar237

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Re: Dual Part Time Income Advice?
« Reply #1 on: April 06, 2015, 08:07:20 AM »
When the time comes, your employer might prefer you going part-time rather than quitting altogether. This goes without saying, but you should definitely ask. I hope you're pleasantly surprised.

MMM and Mrs. MMM basically did the part-time two-income thing, where he would do various construction work, and she would do real estate. From your numbers, it looks like you won't need to work at all in maybe two or three years, so you might could just quit and take whatever opportunities come along without worrying much at all about income.

My plan is to ask to go part time, and at the same time, my wife will try to break into the adjunct teaching gig. Speech pathology seems like it could scale well, simply by limiting the number of clients. It's hard to suggest part-time gigs for you without knowing your skill set. Could you tutor or give lessons in something? Do a web search for part time work and share with us a few items that pop out at you, and we can give our opinions. Would you want to do a limited number of hours per week, or would you want to work a few weeks and then take a few weeks off?

TheFixer

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Re: Dual Part Time Income Advice?
« Reply #2 on: April 06, 2015, 08:13:48 AM »
We've been dual part time slackers for 20 years.  Having no kids and keeping consumption low has allowed us to get by on 30-40K/yr while maintaining a house & cars & expensive hobbies.  We kinda backed into MMM lifestyle before there was such a thing, but we skipped over the part about "generate & invest a lot of income early to eliminate the need for employment later". 

You've already got a good amount socked away in the 529 in case kids decide to go to college.
There's money in 401K, IRA, pension & SS that will be available at ~65.

You just need enough savings and income to get by from 40 to 65.  Current cash-like assets are 44+92+80+37=253K.  Pulling from that at 5%/yr gives 12K/yr for many years.  If you switched to 2 PT jobs at a combined 30K/yr tomorrow, and pulled on the 12K/yr as needed, you would have 42K income.

If you keep working for 4 years, saving 40K/yr, you'll be in a very solid position to dramatically downshift income @ 40YO.

You can live a comfortable low-consumption life at 42k.  Do eet!

thd7t

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Re: Dual Part Time Income Advice?
« Reply #3 on: April 06, 2015, 08:36:33 AM »
New to the forum and website and would appreciate any advice...

My wife and I are both 36 years old.  My wife is currently in grad school to become a speech pathologist (in addition to a stay-at-home mom).  Expect her to complete the degree 3 years out.  I am currently full time, but would like to transition to a part time gig when my wife starts working again (she would like to work part time as well).  Have found very little (if anything) out there on dual part time incomes but I'm sure this isn't unique.  Would love to hear from anyone who has tried it.

Current financial situation:

My pay - $88k/year

Savings/Investments:
401k - $241k
Wife Rollover IRA (traditional) - $195k
Combined Roth IRA - $190k
DRIP Accounts (Individual Stock - Dividend Reinvestment Plan) - $44k
Brokerage Account - $92k
Company Stock - $80k
Cash Balance Pension - $5k
Defined Benefit Pension - $7300/year starting at 65.
Cash - $37k
Total:  $884k

College Savings for Kids (2 kids - 5 and 3 year old):
529 plans - $36.5k

Debt:
Mortgage - $132k (30 year loan - 3.625% fixed).

Spending:
A very non-mustachian $46k/year.  However I expect this to be reduced by $12k once my kids are out of preschool and my wife is out of school.  I think $36k/year is probably a good indicator of what we will spend at that time.

I'd estimate my wife will earn $35k/year if she does part time (25-30 hours/week).  I don't know that my current job will ever allow me work part time, so I'm looking into transitioning to something else over the next couple of years that would give me some experience in a field I could contract in or work part time.  I'd hope to earn ~ $30-35k per year in my role but would be open to less if I really loved the job.

I've looked at healthcare and it looks like a ACA high deductible plan is in our future.  Any other factors I should look at?  Impact on social security?   Anyone run across a blog, news article, etc. on dual part time incomes for young families?

Looking at your numbers, you have liquid investments of about $850k (not including cash).  You haven't shared a budget, beyond spending about $46k/year, but you say it will go to $36k/year when your wife is out of school and kids are out of daycare.  Is daycare something important to you?  You're nearly FI if daycare is out of the equation.  If you had one part time income, you'd be fine (even with daycare).  You could shift now.

Gumbo1978

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Re: Dual Part Time Income Advice?
« Reply #4 on: April 06, 2015, 08:57:55 AM »
Thanks for the replies.

velocistar237 - I am a work comp insurance adjuster.  Been doing that for 10 years.  Working on a few certifications that should allow me the freedom to move into risk management, underwriting, loss prevention type roles if I decided to career change.  Problem is I see very little part time work in those occupations (the certifications offer a trip for 2 to Hawaii and a one-time 10% bonus - so there are other rewards if the career move does not pay off).  I'm willing to take a pay cut to get experience in an insurance field that would eventually trade off to part time work or seasonal work.  I'd love to work Nov - April and take May - Oct off for example. 

I know others have talked to my employer about part-time work.  I work for a Fortune 100 company and that has not been an option for others in the past.  I plan to put a part-time job plan in place and present it to my employer to see if they would consider it before leaving.  I have a 2 mile commute, know the systems, like the people, just burned out on my job (and my full time job is 37.5 hours/week).

Fixer - Appreciate the advice.  I have considered sticking it out with my job while my wife works for the first 3 years or so.  Use the savings towards being aggressive with the mortgage or banking it.  I just don't know that I can stick it out for 6 more years. 

thd7t - We spend $515/month on preschool.  It is a necessity while my wife is a full-time student.  My son goes to public school next year which will cut that figure in half.  My daughter will have 2 more years at ~ $250/month.  I would definitely shift to part time now if my career offered it (haven't had any luck as of yet). 

Last Year's Spending (a little rough, but I track with Mint).

Home - $14,355 - Mortgage/Taxes/Home Owner's Fees/Insurance/Home Improvement
Kids - $6044 - Preschool/Camps/Activities
Auto - $5901 - Gas/Insurance/Repairs (had car payment last year which was $3k of this amount).
Food/Dining - $8900
Utilities - $2748
Donations - $2536
Tuition - $2900
Health Fitness - $1300 (includes gym membership & copays on med bills/Rx)
Personal Care - $419
Travel - $327
Entertainment - $350


teacherwithamustache

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Re: Dual Part Time Income Advice?
« Reply #5 on: April 06, 2015, 09:12:20 AM »
Like what the others said you are basically at a spot where you could FIRE now with only her working part time.  You have saved a lot and should be proud of what you have accomplished. 

If I was you I would "volunteer" for any professional organizations inside of your field and go to as many conferences as your boss will allow you to go to.  Tell them it is for professional development.  While at these conferences just start networking.  Your company may not allow you to work part time but other smaller companies will.  You really only need to make 25K a year.  You could do that over 3 months or 10 hours a week however it fits for you.

Put another 250K away over the next 5 years and then FIRE.

Retired To Win

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Re: Dual Part Time Income Advice?
« Reply #6 on: April 06, 2015, 09:35:10 AM »
The only real drawback I can see to the dual part-time job approach is that there's very little chance of getting employer-provided health insurance for the family.

Depending on your job schedules, a big plus will be that you won't have any daycare expenses.  Which could help you shave your "kids" expense line.

Other than that, as long as the rest works for you.  ($8900 for food and dining??!!)

Gumbo1978

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Re: Dual Part Time Income Advice?
« Reply #7 on: April 06, 2015, 09:39:53 AM »
Thanks teacher - One of the certifications I'm working on gives me access to a group to network within and I will plan on doing that.  Good advice.

I have considered taking a year or two off when my wife starts part-time (at least 6 months) to recharge and look at various opportunities.

We are fortunate to be where we are at.  My wife is primarily responsible for that.  She worked for a home builder before the economy headed south and we were able to put back 65% of what we have saved from her time in that job and the compounding since she left.  Compared to our friends we are very mustachian.  Compared to many on this forum, we are big spenders.  :)

RetiredtoWin - Some opportunity for healthcare through my wife's part time job - speech pathology is in demand and some part-time/contract gigs include health with it.  We are looking at ACA if not.  Food/Dining is a big expense for us and definitely a place we could cut back.  We eat out a good bit (no where fancy but with a 2x/week frequency) and my wife goes the organic/whole food route which adds up.  I think if we had more time, we'd cook more.  We both cook and I enjoy it.

velocistar237

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Re: Dual Part Time Income Advice?
« Reply #8 on: April 06, 2015, 09:57:47 AM »
Do you have a FIRE number? If I had what you have, I would stick it out for a year or two and just quit. MMM quit when he had about $600K in late 90s dollars (about $800K today) plus an almost-paid-off house. It sounds like you're already there but are more conservative, maybe too conservative?

Do you see yourself working part-time forever?

If you went part-time, you could probably reduce your food budget pretty easily. No need to eat out when there's time to play chef. If you quit, then you wouldn't need preschool, unless you just don't want to take on that role.

Cassie

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Re: Dual Part Time Income Advice?
« Reply #9 on: April 06, 2015, 10:43:02 AM »
I think each of you working p.t. would be awesome. It would be the best of both worlds. That is what my hubby & I do even though we are 60 & could be fully retired. It would give you time to cook more & enjoy the kids & maybe not have to pay for so much daycare.

Gumbo1978

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Re: Dual Part Time Income Advice?
« Reply #10 on: April 06, 2015, 11:34:21 AM »
velocistar - I could see myself working part time until I was 60-62 (at least on and off).  There are jobs out there that I find interesting but that pay little.  I think it would be interesting to learn a few of them (working in a brewery to learn more about homebrewing, learning to fish while working in a fly shop, working at garden shop to learn about landscaping, etc.).  I could see my wife doing it longer.  She really is enjoying studying speech pathology and since it is also a "helping" career, I think she'll really enjoy it.   She can also take on clients and make her own hours so it is really ideal for part time work.  There are also "traveling speech pathologists" that take contract work and have an apartment/meals furnished in addition to pay.  Would be a great way for free travel for both of us in retirement.

I am definitely more conservative than MMM.  Leaving my current job in 3 years feels like a big risk (even though I don't like the work).  Having my wife hold me accountable for quitting (or having company reduce my schedule in 3 years) to make sure I follow through.   I don't have a FIRE #. 

And I agree we could trim the food budget if I stayed home but I wouldn't want to take on the role of stay-at-home parent.  My kids also really like preschool and seem to get a lot out of it (4 hours/day).  My current work schedule allows me to spend a lot of time with my kids.  Anymore and I think I might pull my hair out.

Cassie - Thanks for your note.  Best of luck with your phased retirement.  Sounds like you and your husband must be doing something you enjoy to keep at it when you are financially sound.  Hoping to find the same.

velocistar237

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Re: Dual Part Time Income Advice?
« Reply #11 on: April 06, 2015, 12:12:08 PM »
velocistar - I could see myself working part time until I was 60-62 (at least on and off).  There are jobs out there that I find interesting but that pay little.  I think it would be interesting to learn a few of them (working in a brewery to learn more about homebrewing, learning to fish while working in a fly shop, working at garden shop to learn about landscaping, etc.).

I am definitely more conservative than MMM.  Leaving my current job in 3 years feels like a big risk (even though I don't like the work).  Having my wife hold me accountable for quitting (or having company reduce my schedule in 3 years) to make sure I follow through.   I don't have a FIRE #. 

I'm considering a similar path, finding low-pay part-time work that I like.

Do a little work to find that FIRE number. You know the typical way -- take your expenses and divide by safe withdrawal rate. With $35K/year expenses and a SWR of 4%, that would be about $875K. With your wife's income and your income from small jobs, it's quite conservative already. You'll probably achieve asset runaway even if you quit now, that is, you'll eventually have multiple millions in today's dollars, just due to continued investment gains and low expenses.

One big mustachian step is to deal with your fears, and there are concrete steps you can take, for example:

Go talk to the people in the Post-FIRE forum about it.
Come up with a hypothetical plan for how you could FIRE with your current finances and try to get comfortable with it.
Imagine the next few years in a job you don't like with a new job as a part-time brewer to see what it would cost you to keep working. Think about the specifics.
Take a leave of absence or extended "staycation" to test out the waters.

Cassie

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Re: Dual Part Time Income Advice?
« Reply #12 on: April 06, 2015, 01:57:30 PM »
We both were not sick of our careers but sick of being tied to a desk, etc. Now we both do p.t. consulting in our field for a high rate of pay. I also teach an online uni class so I can teach it from anywhere. That is new for me, I love it & it pays well.  Some uni's pay terrible so you really need to search for a good paying one.