Author Topic: Optimizing happiness now vs. Sprinting toward FI  (Read 3198 times)

bo_knows

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Optimizing happiness now vs. Sprinting toward FI
« on: May 23, 2013, 07:34:51 AM »
I've posted my numbers here before for advice/validation and had great responses.  I feel like my opinions on sprinting toward FIRE are changing due to my wife and I's current situation.  The situation is that we have a 14 month old son, and we've majorly twisted our work schedules to keep him at home (financially it's a wash, but it's just something we wanted to do. Love having the little guy around more).  I've managed to shift my work schedule to Mon-Thurs (10+ hr days) to watch my son on Friday, and my wife has managed to drop to 60% FT in order to watch him Tues-Thurs. Monday's are for my inlaws.

Maybe this is just part of having a toddler in general, but we feel like we're in a rut.  I come home right as dinner is being served, see the kid just long enough to see him eat before bed, give him a bath, put him to bed, get both my wife and I showered, and plop down in a tired heap on the couch.  This gives us 1.5-2hrs on a good day to even say hello to each other. If I have any sort of doctor appointment or anything to take care of, I have to wake up 1-2 hrs early for a couple of days and work 12hrs days to make it up.  It's made me think greatly of reducing my hours to spend more time at home.

I'll try to give a condensed financial numbers:

- Age 31
- Income (Me: $103k, Her: $50k(as a part timer))
- Home - Just refi'ed $284k on a $375k home to 3.5% for 30 years.
- Max 401k's, max Roth IRA, contribute to 529, contribute extra to mortgage
- Ample "emergency fund"

According to my rough excel projections, if we continue this path (assuming my wife stays at 60% indefinitely, which wouldn't be the case) we'd essentially completely take care of our post-60 retirement obligations and college obligations in approximately 5-6 years.  After which, we'd probably downshift our employment and coast until our kids were in college, if I could convince my wife we're actually FI. (Note: My wife doesn't even think FI is possible, because she's just naturally frugal and doesn't realize what we're saving). We have on our side a fairly nice pension from my wife's company.

If I were to drop to 80% Full-time employment today, and reduce our 401k contributions accordingly to keep our take-home roughly the same, my spreadsheet tells me that it would be 7-9 years where we hit that "post-60 is taken care of" point, and could cruise to the finish.

If we plan on working to some degree until we're 45-50 anyways, does this sound alright? Any glaring holes in this plan?  If I had to reduce retirement contributions at all, would it make more sense to reduce the 401k or the Roth IRA?  I don't even know if we'd have to work until we were 50, even if we scaled back to 50% FT employment after the "post-60 is taken care of" point, because of our savings rate. 

Too many things swirling around my head, I apologize.


KMMK

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Re: Optimizing happiness now vs. Sprinting toward FI
« Reply #1 on: May 23, 2013, 07:46:51 AM »
I can't comment on your numbers but in my opinion, if you plan to be FI in your 30s or 40s you have a lot of wiggle room with your income and expenses in the present.

Would your company let you switch to 80% or is this just hypothetical? If it's possible, yes, I'd do it immediately. You need more time for your son and yourself now. Even if you end up working until 45 you're doing so much better than the average person.

bo_knows

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Re: Optimizing happiness now vs. Sprinting toward FI
« Reply #2 on: May 23, 2013, 07:49:57 AM »
I can't comment on your numbers but in my opinion, if you plan to be FI in your 30s or 40s you have a lot of wiggle room with your income and expenses in the present.

Would your company let you switch to 80% or is this just hypothetical? If it's possible, yes, I'd do it immediately. You need more time for your son and yourself now. Even if you end up working until 45 you're doing so much better than the average person.

My company totally would, and I've already discussed the possibility of 80-90% with my manager and accompanying team leads. I just haven't been able to bring myself to do it, but as I said, we're feeling pretty burnt out lately.


MorningCoffee

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Re: Optimizing happiness now vs. Sprinting toward FI
« Reply #3 on: May 23, 2013, 08:19:39 AM »
We've done something similar. I took a leave of absence, and now have resigned from my job in order to stay home with my kids until they are both in school. My husband still works full time, but adjusted his hours to go in earlier and be home around 3pm. We now have lots of family time and a lot less stress.

Financially, we'd be ahead if I had gone back to work. We would have been able to retire earlier, but didn't feel it was the right decision for us and our family. We chose to have a better balance now and later, instead of being burnt out now but free later. We decided we needed to revise our goals since having kids changed things.

Seeing my friends and coworkers who are burnt out helped us decide it's not what we wanted. They also tend to spend much more than us since they "need" more conveniences, vacations, toys and luxuries.

tooqk4u22

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Re: Optimizing happiness now vs. Sprinting toward FI
« Reply #4 on: May 23, 2013, 08:47:31 AM »
Do what is right for you and your family, but there is no wrong answer and it will never be psychologically easy to just give up a piece of income.  I would love the option of going 50, 60 80% FT but for my job its not an option.

When we had our 2nd kid, DW wanted to be a SAHM and to do so we needed to make financial adjustments and agreements up front.  BTW she made more than me at the time, but we were able to do it because we basically only lived off one income and we also trimmed back on expenses.  In effect we traded my life for hers so the kids had her around and it was the best decision ever, for us that is.

At $153k combined income you should have plenty of room and if not you then have plenty of room to cut spending - I am sure you can figure it out. 

Ask more questions, keep us posted. 

twinge

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Re: Optimizing happiness now vs. Sprinting toward FI
« Reply #5 on: May 23, 2013, 08:58:02 AM »
Quote
My company totally would, and I've already discussed the possibility of 80-90% with my manager and accompanying team leads. I just haven't been able to bring myself to do it, but as I said, we're feeling pretty burnt out lately.

You're fortunate to have this flexibility--I would vote to use it.  Yes, the toddler years are unusually demanding in terms of parental time--based on my 2 kids I have found the age of about 15 months--3 years to be the most demanding in term of time/energy.  But that's too long a time to be  burnt out when you don't need to be.  And you're laying the groundwork for your wife and your new relationship as parents and you're developing your son's working model of what it means to be a family etc.  If you have the fortunate chance to help you all breathe a little easier during these few brief years, take it.  You can always re-evaluate later.

jrhampt

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Re: Optimizing happiness now vs. Sprinting toward FI
« Reply #6 on: May 23, 2013, 09:57:02 AM »
If I had the option to cut back to 80%, I would seriously consider taking it, and I don't even have a kid.

Random

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Re: Optimizing happiness now vs. Sprinting toward FI
« Reply #7 on: May 23, 2013, 10:18:25 AM »
With a four year old, I can relate to the feeling of that rut and a need to have something give a bit in order to make life at home, enjoyment of a kid, taking care of yourself, etc. work out better.  My wife is working full time, as am I, and we both have travel loads to balance.  My wife also NEEDS that daily run to keep sane.  So I have been working on minimum effective dose of exercise approach to keep me healthy enough and provide space for her.  But I digress.

Have you come across Ferriss's book, 4 hour workweek?  Take it with a grain of salt, especially since it is tageted at single 30 something guy with no family commitments, but there are some good tools and tips for getting more flexibility in a workplace that might be of value.  At least that way, you might be able to get some of your work done at home in off hours as one piece in a optimization puzzle.

Rand