Author Topic: Semi-Retire on 12 Years Stash?  (Read 7399 times)

easyrider

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Semi-Retire on 12 Years Stash?
« on: July 14, 2013, 11:18:25 AM »
We are rapidly approaching about 12 years of stash, I'd say 3 years out.  I think with some tips from this site we can reduce our expenses and get us there even faster, so maybe we're there in 2 years.  We are in our early 30's with 2 kids.  Once we are at 12 it would be kind of cool to just kick back and put it in neutral.   Get some part-time jobs, enough to cover expenses and just let the stash build up on it's own.  I figure in 15-30 years it should be at 25-30 times our expenses.   Basically let compounding bring us in to true FI while we tread.   Would that be a crazy thing to do?  Anyone else done this?
« Last Edit: July 14, 2013, 11:20:55 AM by easyrider »

footenote

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Re: Semi-Retire on 12 Years Stash?
« Reply #1 on: July 14, 2013, 11:42:49 AM »
I've done a hybrid approach since reaching FI eight years ago. I've worked four very different, full time gigs with substantial amounts of time off between gigs (from six weeks to six months off). Each job was either something I had on my FI "to do" list (work for a non-profit, create a start-up), or was very well compensated, updated my skills and broadened my network. The stache has held up reasonably well (and would have done much better of course without the Great Recession).

Benefits to periodic FT work: the full time gigs that provided traditional medical benefits saved us substantial healthcare insurance costs. (With Affordable Care Act starting Jan 2014, this will be less of a benefit.) Several of the gigs paid quite well, allowing for additional staching and in one case, continuing additional passive income. And I have still had breaks of substantial time off whenever I felt like it.

Drawbacks: full time is still full time. If you have kids, one of your goals may be to spend more time with them, and this may simply not work for you.

End of the day, periodic FT work is just another idea to consider. Perhaps one of you could work or consult FT during the school year, etc. My biggest worries about PT gigs starting in your late 30s / early 40s are whether they would keep your skills current and provide sufficient mental stimulation. YMMV.

Most importantly: Congrats on being just three years out!!

matchewed

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Re: Semi-Retire on 12 Years Stash?
« Reply #2 on: July 14, 2013, 11:43:38 AM »
I've thought of this approach, mostly I plan on doing a modified version of it and when I'm about 100k from FI I'm going to switch to a part-time job with  benefits and ease into FIRE. I think it's doable just start researching options and map it out. Have a solid idea as to how it may work and what could go wrong.

2527

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Re: Semi-Retire on 12 Years Stash?
« Reply #3 on: July 14, 2013, 11:53:00 AM »
I kinda do this now.  We are FI in our late 40s.  We have two kids, age 13 and 10.  My wife doesn't work outside the home.  I work one 40-hour (not 41!, LOL) per week job.  I'm off on weekends, home for dinner every night, and, thanks to a compressed schedule, I have a total of 160 days off per year.  The only downside is my commute is longer than I would like. 

I don't try to save money.  In fact, I take about 2% per year.  My kids will get a substantial inheritance, by the standards of the middle class, barring something unexpected.  In our circumstances, I no longer see the point of reducing the present to expand the future.

rtrnow

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Re: Semi-Retire on 12 Years Stash?
« Reply #4 on: July 14, 2013, 01:32:25 PM »
I'm planning something similar. I plan to leave my full time gig in about a year and pursue something I've always wanted to do. I already have some connections and think part time work to pay the bills will be very doable. I'm also investigating seasonal employment which seems pretty common in the field I'm moving into. Six months on and six months off sounds good to me. I'll have about 15 X yearly expenses plus one year's expenses in cash when I walk.

easyrider

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Re: Semi-Retire on 12 Years Stash?
« Reply #5 on: July 14, 2013, 01:46:39 PM »
footenote,

That's an interesting idea.  I wouldn't be opposed to doing full-time stints but I thought that would be harder to do.  To me it's the same, work half-time year round or full-time half the year.   I would be willing to do either and would be quite happy with that.  I just think I might be a little more relaxed with a part-time job that is always there rather than having to hunt for full-time jobs every so often.  At any rate, I will definitely keep the idea in mind.

Regarding the med insurance, we live in a country where that is taken care of by the government, so luckily not an issue for us.  We don't have any medical issue but if we were in the states I would probably still want a bigger stash for medical related expenses.

Jeff,

It sounds like you've got things well under control.  For us though, we decided we both want to work reduced hours.  Kind of selfish of me but I would rather have us both work half-time than me do full and my wife stay at home.  Again, basically the same concept but just a different approach.  I think your idea is probably better from a career perspective as a long-trail of part time jobs could ultimately limit my ability to get a full time job if I ever needed to.

arebelspy

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Re: Semi-Retire on 12 Years Stash?
« Reply #6 on: July 14, 2013, 03:26:37 PM »
I'd rather work 3 full time years than 10 part time.

YMMV, if you hav e young kids you want to spend time with, parents aging, whatever, you may want to go part time.

I'd rather get it out of the way, then have everything be completely optional.
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happy

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Re: Semi-Retire on 12 Years Stash?
« Reply #7 on: July 14, 2013, 05:47:23 PM »
In contrast to the above, I have been working part-time for 18 years, in order to spend time with my children. I haven't found any difficulty maintaing skills, getting interesting work, although there are clearly some higher level jobs I could not do part-time. Most of these are a lot more work for not much more money so I don't cry too much over that. Since I am a public servant I accrue entitlements like sick leave, that would not follow me if I worked full-time intermittently.  There is an appeal to intermittent work (namely , long breaks!), which I may consider later on.

Since finding the way of the mustache and becoming much more efficient with money, I cut my hours down from 0.7 FTE to 0.5 FTE...because I wanted the improved quality of life now, and I didn't want to fully retire before my kids had got through tertiary education. 
As it turns out,  I am still building the stache and improving home equity. But I've often advocated doing just what you are suggesting... working enough to cover living expenses and letting the stash compound: as my kids become independent I may do just that.

Fundamentally though I guess I'm a "downshifter" rather than "go at it full on and FIRE" type person (too late for me to RE anyway, it will just be earlier, but not early!).




Michelle119

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Re: Semi-Retire on 12 Years Stash?
« Reply #8 on: July 14, 2013, 07:39:00 PM »
DH and I plan to do this when we have kids.  DH will stay full-time and I will work PT and my earnings will entirely go to our 'stashe. Hopefully if all works out I will move to more FT when the kids are older (if necessary) and we can both retire when the kids go to college and we can travel and really enjoy our later years. I really enjoy my job and it is something I can cut back to part time and I plan on doing that even in "retirement."

MrsPete

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Re: Semi-Retire on 12 Years Stash?
« Reply #9 on: July 14, 2013, 09:10:47 PM »
Interesting thoughts, but I think you'll have to spend some time with the calculator to see how the various options would work on in the long run. 

Potential concerns:
- Working part-time often means lower per-hour wages; thus, if you're currently working 40 hours a week and earning $100,000, you can't automatically say you could work 20 hours and earn $50,000. 
- If you're working part-time, will you still be eligible for health insurance and other benefits? 
- How old are your kids?  If they're still young enough to need day care, you might be forced to pay full-time daycare for part-time needs (as a teacher, I used to do this, and it was infuriating -- I had to pay for summer months or "lose my spot").  On the other end of the spectrum, I have two teens right now, and I can assure you that even in frugal families, teens cost more than younger kids.  You need to be sure you're ready for those years. 
- Is your house paid for?  This makes such a difference in how far your money stretches. 

easyrider

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Re: Semi-Retire on 12 Years Stash?
« Reply #10 on: July 14, 2013, 09:29:13 PM »
MrsPete,

Your first point is definitely something that concerns me.  I know my current employer will give some employees the option to do part-time work and I have been there my entire career.  So if I stay I could make it work (my wage wouldn't change, just my hours).  If I lost my job then I am not sure what I would do, probably go back to full-time some more.  Maybe I would look for 6 month full-time contracts as was suggested earlier and take a few months off between them.  I think after a few gigs I would have enough contacts that it wouldn't be too scary thinking where the next job would come from.

The benefits is a good point but my wife does still qualify.

The cost for teenagers is a concern of mine.  That is the problem I have with the frugal lifestyle.  It is okay for me to shop thrift-shops and drive a car that has some rust on it but I always worry about our kids being teased if we push that lifestyle on them.  I think we will just give them some sort of semi-reasonable allowance for clothes/transport/cell and they will have to get a job if they want to turn it up a notch.  I think it will be good for them.

House is paid for in full.  That is the thing, regarding what arebelspy was saying about sticking it out, we are not THAT far away from FI.  We could conceivably get there in a decade.  Somehow we managed to pay off a house and save up a bunch of money in the last 11 years (dual income really helps and so does buying when house prices were much cheaper), with the mortgage gone it is now all going to investments.

Anyways, all good points, from multiple posters and certainly I need to think about this some more.  As I said, it is still a few years out and so much can change in the interim.  I think I will just use that 12 year stash as a way-point as it is easier to stay on a goal when it is in sight than something decades off.  Once I get there, I would probably stay full-time another year or two and build up a bit of a cash reserve.
« Last Edit: July 14, 2013, 09:39:39 PM by easyrider »

travelbug

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Re: Semi-Retire on 12 Years Stash?
« Reply #11 on: July 15, 2013, 12:46:31 AM »
Interesting idea and I like the plan about compounding money. But I would rather get the time out of the way, have a certain amount invested and thenm never have to think about working if I don't want to again.

But that's just my mindset.

How many years would it take for you to become totally FI as opposed to the 3 years for semi FI?


happy

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Re: Semi-Retire on 12 Years Stash?
« Reply #12 on: July 15, 2013, 01:09:00 AM »
Life stage may come into it also. Pretty sure if I was 20 something and pre-kids, I would go at it full tilt and get FI out of the way.  Now 50 something, and almost there, I'd rather have more free time now, and wind down a bit.

Able was I ERE

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Re: Semi-Retire on 12 Years Stash?
« Reply #13 on: July 15, 2013, 05:09:39 AM »
I'm considering something similar, so that I can spend more time with my three young kids.  I'm tentatively planning to request 80% time from work.  This will keep full benefits, and allow me to continue to save money (but not at the same high rate as now).

I'll be interested to hear what you ultimately decide.

easyrider

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Re: Semi-Retire on 12 Years Stash?
« Reply #14 on: July 15, 2013, 10:42:07 PM »
travelbug,

So FI, well that's the thing..  I would not be comfortable completely quitting with less than 35 years of stash, given my current age.  So even if I got to 25 years I would still need to work a little bit.  Anyways, to get to 25 years, I think would take another 10 years (so 13 total) assuming minimal gain on my existing investments (2% above inflation).   If the stock market does 6% over inflation, it would be more like 7 extra years, so 10 total.  And that is just to 25 years of stash.  I would still need to work part-time or maybe quarter-time at that point. 

Mark31

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Re: Semi-Retire on 12 Years Stash?
« Reply #15 on: July 16, 2013, 03:52:33 AM »
Your plan is very similar to mine, although I call it coasting to retirement. I also have young children too though, otherwise I'd just keep working full-time.

It's sure not crazy. Young children are delightful, maximise your time with them.

I've got 3-4 more years FT, then 6-10 part time. My wife's not in paid employment, and she actually wants to work, which would shorten things. This would mean more effort for me, but I guess I should support her hobbies.

Would you actually save no money working part-time?
In Australia, at least, 9.25% of your wage goes into superannuation (not that you can touch this until 60), and with the tax system you'd get a fair bit more than half net pay working half time.
Being on a lower income might mean more middle class welfare* too, if you have that were you live, and wouldn't have any qualms about taking it.

*You might need to google this. This seems to be Australian term.

easyrider

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Re: Semi-Retire on 12 Years Stash?
« Reply #16 on: July 17, 2013, 08:37:04 PM »
I would still save money working part-time.  I would still get my pension which is 3 months living expenses + I'd save another 3 months living expenses out of my take home.  There is a social pension program I pay into as well through work.  My wife would also have pension which is another 2 months expenses every year.   Now that I list it all out, there is actually quite a bit of savings!  That is with only working half-time too.   

Based on that, I think in 12-15 years after I go part-time I could get up to about 30 years of stash.  As opposed to 7-10 years at full-time.