Taking a break from full-time work before fully FIRE'd

[FinancialWarrior]

Let's say you have a NW of 250k or something and wanted to quit working for 6-12 months just to take a break, or to travel to/temporarily move to a LCOL country for awhile.  Not enough NW to retire forever, but a healthy amount that provides a little flexibility in life.  The SWR would need to be more than 4% to support core living expenses, so this plan cuts into the principal balance somewhat (or a lot, if sequence of returns is poor).  Most people here are more motivated by complete, not partial, FI, since it removes the need to eventually go back to work.  But I don't see many examples of those who have intentionally gone in and out of work on their way to 100% FI.  Is it a bad idea?

[mjb]

I've been considering this lately, inspired by JL Collins' own life experience. That said, my (very, very rough) plan involves having a kid, being a SAHP, and my partner (who is not currently on the FI train, but is as frugal as me) continuing full-time work.

I'm also a freelancer and would likely pick up random gigs here and there, so my perspective is different than someone with a more traditional full time job.

[clairebonk]

I HIGHLY recommend this. I spent my 20s doing things that would be extremely hard later in life. At 39, I am still in a much better financial position than almost all of my friends simply from paying attention to my money & spending.

[retired?]

It probably makes perfect sense to most people here.  Just be careful measuring the ease with which you can re-enter the work force and at the same pay level.

I told one friend that "when speaking to firms about re-entering the work force and at possibly lower pay, they just can't understand that I took time off for its own sake".  His response "that's because most people cannot take time off for its sake". 

It is a foreign idea to most people....unfortunately.

[REAL WORLD EXPAT]

Let's say you have a NW of 250k or something and wanted to quit working for 6-12 months just to take a break, or to travel to/temporarily move to a LCOL country for awhile.  Not enough NW to retire forever, but a healthy amount that provides a little flexibility in life.  The SWR would need to be more than 4% to support core living expenses, so this plan cuts into the principal balance somewhat (or a lot, if sequence of returns is poor).  Most people here are more motivated by complete, not partial, FI, since it removes the need to eventually go back to work.  But I don't see many examples of those who have intentionally gone in and out of work on their way to 100% FI.  Is it a bad idea?

I can see us doing this - we have a couple of elderly dogs that once they pass we'll probably take some time off to travel and decide where we want to live next. Though the thought of full FIRE is nice I really can't see us not doing some kind of paid work, maybe in a different field or a fun job, part-time or contract work maybe.

[FI4good]

Some employers allow a sabbatical, it'd be worth seeing if you could get that ..

I had 5 years out and i ate into my capital. If i had my time over i'd set a financial limit below which i'd have to seriously find work again rather than the vauge idea i needed to do something, at some point, at some time.

Just how much is this year going to cost in time until full FIRE assuming you can get an equivalent job after a year off ?

You've lost a year of compounding and the forever return on it, spent some capital and the return on that and skipped a year or investing. A year off now might cost you 2.5 years of future work maybe, i dont know your numbers.

I had 5 years out , i lived in freedom for those years and it was good. the 42 year old me looks back and thinks 4 more years and i'd have never have had to work again and could have been 10 years retired now. instead i have 10 years ahead of me until i FIRe ( small e ). So definatley dont do what i did. 

Luckily you sound far more sencible than me, i look forwards to hearing how things pan out for you whatever you decide to do. 

[HoundDog]

I like the idea in general, but would it be possible to work at some level during the time off, and avoid touching the principal? Maybe something online, or casual labor here and there.

[MisterTwoForty]

I like the idea.  You could have a seperate gap year fund and when that is funded to your #, proceed to take your time off.  Its a great idea if you are looking to switch careers or are just not that happy in your job.

[bacchi]

I took over a year off in my 20s. It was forced on me by the economy but I embraced it and extended it. I got to do some things that, while I can still do them now, were a lot easier when I was younger (like high-altitude climbing).

Being in a sought after profession, plus an improved economy, helped me get a job when I returned. It wasn't as easy as "send in a resume" but it wasn't particularly difficult either.

Most, if not all, interviewers were impressed and even a bit wistful.

[limeandpepper]

Also see this thread: http://forum.mrmoneymustache.com/post-fire/early-retirement-vs-serial-mini-retirements/

I quit working to travel for the second half of 2014. Hoping to do something similar again maybe this year or next year.

[Khan]

I'm going to do it. Depending on how things shake out, 2020(~33) I'll be heading north of 300k net worth excluding whatever equity is in my house, with a 2 month paid sabbatical, and I'll probably be taking a break to evaluate where I want to go with my life from that point.(No degree or certification, many interests and the changing face of our technological future, single, cheating with a GI bill). Retirement is essentially guaranteed, the trajectory for FI is set, the delay to FI is negligible and/or unknown due to unknown income or location afterwards. In the 250-400k range, the portfolio can survive a couple of years of listlessness with a very small impact. You can assume 4%(or 1/300 a month), so 300k means you can easily account for "1K" of income a month. That's a lot of temporary freedom at a great point.

If I were purely seeking FI, for what purpose, and what's my #? Is it based on a trailer in the middle of nowhere in the lowest CoL, some sort of hobo-vandwelling existence or camping, geo-arbitrage, or is it living in a location I like? Or is it scraping a small/negligible income doing something I love in a high CoL place(Divemaster in Oahu)? Most of you know the answer for yourselves, I don't.

I don't know, I only know that I hate, hate hate hate, hate hate, hate hate, both my current nightshift work, and peoples "vacations", that cost 2 grand for airfare and a hotel, when I know a studio apartment even in Oahu can be had for $1000 a month or less.

Financial Independence, Retire Early

Also, my google fu is failing me, or the blog is gone, but there was a blog from someone who had a motorcycle, and bought like 2 acres in the desert. He used a solar charger for his laptop, and lived in a cardboard box for a year.

(not the post in question, stolen from one of the other topics linked.)
https://livingafi.com/2015/08/04/taking-a-gap-year/

[damyst]

I HIGHLY recommend this. I spent my 20s doing things that would be extremely hard later in life. At 39, I am still in a much better financial position than almost all of my friends simply from paying attention to my money & spending.

Second this. My journey has been very similar.

Just like there is no prize for being the richest person in the cemetery, or the longest lived, there's also no medal for earliest retiree. It's all about figuring out your goals and behaving in ways that advance them. If your goals require that you take time off work at an earlier age, then go for it!

[Btag84]

I HIGHLY recommend this. I spent my 20s doing things that would be extremely hard later in life. At 39, I am still in a much better financial position than almost all of my friends simply from paying attention to my money & spending.

Second this. My journey has been very similar.

Just like there is no prize for being the richest person in the cemetery, or the longest lived, there's also no medal for earliest retiree. It's all about figuring out your goals and behaving in ways that advance them. If your goals require that you take time off work at an earlier age, then go for it!

Love your comment. I always feel like I am racing to retire at an early age to keep up with the mustachians (my Jones's) but there is really no point. Yeah someone might say, wow impressive, and that's the last thought they will probably give you.  Why stress over the 30 seconds of fame. I really like the idea of gradually easing into retirement, like going from FT to PT work. I happen to love my job currently though so that helps a lot. I would gladly do this PT forever I think. One thing I really struggle with along these lines is feeling like I need to move up the ladder to make more money and hit FI even faster. I am one level below manager and feel like I need to be able to check that manager box so that it does not keep me from other opportunities down the road. Do I actually want to manage people? Nope. But I don't want lack of manager experience to hold me back later in life. Along the lines of your comment though, there is no medal for being a manager or getting a manager title within a certain time frame. I just wish I could train myself not to care about this so much, but I bet a lot of people on this forum are Type A overachievers and it feels like if I am not advancing them I am not achieving. I look at older people who are the same level as me and I wonder, why are they not managers yet? But they may have chosen to focus on other things and forgo the responsibility of moving up. Thankfully, I only want to move up to manager, not Director (2 levels up) because they work a ton and the cost vs benefit is not worth it.

[BlueHouse]

Like bacchi, I also embraced some economy-related slowdown and embraced the opportunity.   I traveled for a year in my mid-thirties. For part of that time I volunteered on a project on another continent and that became a "project" on my resume. It filled in a chunk of time so my resume didn't look like it had major gaps, but when asked, I answered by focusing on the work itself (very high level, it sounded like a legitimate project creating a new system for a women's center in a village). If I described it for the thread "describe your job, poorly", it would sound more like "I opened boxes and stacked books". 
I was definitely creative in how I presented it, but I was never untruthful and the more people asked, the closer they got to the truth, and the more it made for an interesting human part that set me apart from others. So I wouldn't necessarily worry about reentry to the job market.

Well worth it and if you can swing it, I highly recommend! 

[mushroom]

My husband and I took almost 2 years off to travel after we got married and then worked 3 more years before becoming FIRE. Totally worth it even though it delayed FIRE. We currently have a kid and are traveling abroad again in Europe, and it is waaaaay easier to travel pre-kids.

I think a year is a decent length of time where it is not too difficult to reenter workforce and if you time it right (starting mid-year) you can also get some great tax breaks by halving your salary two years in a row - lowering your tax rate, potentially becoming eligible for certain tax credits like the Saver's Tax Credit, etc. Plus it will give you a sense of whether retiring early is something that appeals to you - are you bored out of your mind with the break or do you like the freedom?

[Dances With Fire]

I like the idea of having a separate (even if only earmarked) gap year fund. E.g. Save up one year of projected expenses, and then take off until that money runs out.

It sets absolute financial limits on the impact to your stash and even opens the door to taking off more than a year if you stretch your gap bucks :)

^^^ +1 Thanks less4success, my 4 year RE plan just became 3 or less.!!