First up, I know there are all manner of people for whom this would be a non-starter. People who have grown to hate their job with a passion. People whose FIRE plan involves trekking off grid for months at a time. People who care what the IRP say. I get that and have no problem with it. I’m just putting this out there in case it does speak to anyone else.
Take a typical Mustachian with say a 50% savings rate. If their income is 100 (just to pick a round number), then their expenses are 50 and lets assume that’s their post FIRE budget too. If you’re anything like me you’ve got some slack in that budget to cut in a downturn. Say 20% slack so your bare bones budget is 40.
The big cause of portfolio failure is, of course, a run of bad returns in the first few years. So what happens if, rather than FIRE completely, you stay on just one day a week? If five days earned you 100 then one day earns you 20. You’d planned to sell 50 of investments to cover your income, but as the job is providing 20, those same investments will still provide the rest of your full FIRE budget even if the markets are down 40%. If you can cut your spending by 20% then the one day a week job protects you from a 60% downturn!
I realise not everyone would have the opportunity to stay on one day a week, but for others, particularly if you have specialist knowledge, your employer might bite your hand off if you offered to do this for a transition period. I know mine did when I FIRE’d 19 months ago – to the extent that I was even able to negotiate a pay rise as part of it, plus pay for any overtime I ended up doing. With high school age kids I couldn’t take off round the world anyway so this gives me almost all the benefits of being fully FIREd, but has meant I didn’t need to worry about all the excitement in the market since I left full time work – which has been very nice in the circumstances!
I’ve no idea how much longer I’ll continue, but for the time being working 7 hours a week seems like a pretty sweet lifestyle. It wouldn’t work for me if I really felt that I needed the money, rather than it just being an extra layer of security, but as both my employers and I know I’d be fine if I walked tomorrow it makes for a much better balance of power than most employees have.
If you are at the point when the numbers say you can walk, then you could just pull the plug, but it’s worth considering leaving a toe or two in the water. Who knows, you may even find you enjoy it!