Musings by the FIRE-side

chile_paul2

DT2001 said:

It is a difficult balance time/income. How transferable are your skills? If you ask to reduce hours and are told you cannot, what do you do as by then you’ll have decided what you want?
My DW and I have been self employed for 25+ years and have made sorted work around what we wanted to do with our 4 children. I only work from home and fairly minimal hours so allows OH more flexibility. We could have been in a FIRE position earlier but have travelled and educated, at times, abroad. I think our children have benefitted considerably and so have we. The key is working out what is important to your family and then finding a way of doing it. With the skills to earn 90+k the opportunities are there although not always the easy option.

If that was the response, I think I'd revert back to my original plan and continue building up my savings to get to that FI point. I don't think I'd throw my toys out of the pram and leave right away (my skills are reasonably transferrable and, despite the impact of Covid, I think I would be able to find another role reasonably quickly - although potentially with a worse commute which would be a real downside and contradictory to what I'm trying to achieve).
I think my employer would certainly start to look at me in a different light once I've asked the question though, which is perhaps the concern and reservation before starting the conversation.

chile_paul2

Dizee123 said:

Another option if you wish to keep the same salary and work 4 days a week is to explore the possibility of working compressed hours.  I work 4 x 9.25 hour days and then have a 3 day weekend.  I've done this for the past 10 years and find that the 3 day shutdown gives my brain some welcome decompression time before Monday comes around again.  I just need to educate my project team members not to schedule important events for Fridays, and it all works quite well.  I also have the ability to flex the non-working day which has allowed me to take relatives to hospital appointments, arrange work on the house and just generally achieve a better work/life balance.  This has allowed me to keep on track for leaving my stressful project management job next year, have the summer off, and then look for a non-stressful part-time job after that until pension kicks in at 60.   Without this I feel that I might have had some form of breakdown in my early 50s due to my increasing inability to handle work stresses as well as I get older which would have derailed my early escape plan.  Just a thought, although I appreciate that not all jobs or employers offer such flexibility.

I think my starting point in my conversation with my employer would be to work 90% hours in 4 days - effectively adding an hour to the 4 days at work, this would mean that I only take a 10% hit to my pay but still get the 50% increase in day's off.
From my perspective, I already work this additional hour a day anyway, so it's no extra commitment for me. I'm sure my employer will feel that, given I already do this extra 'unpaid', they would lose out in that agreement!

chile_paul2

hugheskevi said:

About 8 years ago I calculated what the effect of pursuing promotion would be on my forecast retirement date. I worked out that I could remain at the same level for 11.5 years, or work at the next level up for 10 years. There would have been a significant increase in responsibility, and it just wasn't worth it.

Thanks for such a detailed and thorough response. I think this point is key and is the next step I need to take.
I've already got a model showing how I'm expecting my pot sizes to grow based on current income. I need to now model what that would look like based on:
- Current income reduced by 20% (moving to 4 days a week)
- Current income reduced by 10% (moving to 4 days a week with compressed hours)
- Current income increased for potential promotion
The decision should then be simpler. Does the benefit of X years working at 4 days a week outweigh the cost of having to keep working for Y more years in total.
I'll try to work this through in the next few days and will share the results.

atush

chile_paul2 said:

atush said:

I agree, we really need to know your age.

Apart from that, do maximize your pension as you are a HRTaxpayer.  Use carry forward if you have unused allowances from previous years.  As every 100 you put in is only going to cost you 60.

Then, your spouse.  I realize they are home with the kids, but do you contribute for her?  Ie use her 2880/3600 annual pension allowance?  Do you clam marriage allowance to reduce your tax paid?

Sorry, yes I realised that I'd missed out this crucial information but I haven't been able to update the opening post. I don't think I've posted enough times.
So, to answer your question, I'm 42 and my wife is 39 - so I have plenty of working years ahead of me, should I choose to continue.
On my pension, yes I paid in >£40k last year (using carried forward allowance from the previous year) to minimize tax and it also brought me down to a sufficient level such that we didn't have to pay back child benefit. This year I'm only paying in sufficient contributions to maximise the company contribution (6% / 10%) because I was concerned that I was growing my pension at the expense of my S&S ISA, and it would be the ISA that would be needed to bridge any gap to the period when I can drawdown from my pension.
I also do contribute into my wife's pension, paying in £210 a month, so £2440. I didn't think marriage allowance would make a difference for somebody on my current level of salary? Or are you thinking it would make a difference if I was going to drop to 4 days a week?

You should be thinking about isas, but you wont retire before 55 if you havent saved enough in pensions so boost those first as a HRTaxpayer.  once your pensions are large enough, then look at dialing a bit back but for now you dont have enough in.  Nothing stopping you from doing both, and if you want to get there faster, both of you should be working esp once youngest is in school.  Fire for 2 with only one working isnt as easy as with 2 working

rnj

I am in similar position, 40ish although I have no kids and dont earn as much! I wanted to go part time but felt a bit embarassed to so instead I work condensed hours now and it pretty much feels like part time, so could try that if an option?

FWIW my current plan is to work ~5yrs more and in that time work out what I will do with my free time. I spoke to someone who didnt work in their 40's and now 50 struggled to adjust and return to work. I came to the conclusion I should work now short term (5 years seems very achievable) until I figure out what to do - I don't hate the job but it almost feels like an inconvenience!

MallyGirl

My OH is still not as definite about the idea of early retirement - aiming for 58, now 53 - as he worries that there won't be the contrast of light and dark between holidays and just being home that you get with a holiday from work. I don't share his concerns but I do also have a lot more hobbies than he currently does - as well as a long list of things I would be doing if I had more time. My line manager moved to 4 days a week last year so that precedent has been set. OH had just got agreement, mere weeks before lockdown, to move to working 9 days out of 10 (alternate Fridays off) for no loss of pay due to already working far more hours than contracted. He chose to withdraw the change and still works full time - not sure that would have been my choice!
I don't hate my job but I have many other things I'd rather be doing - that is why I Sal sac 50% into my pension these days.

cfw1994

MallyGirl said:

My OH is still not as definite about the idea of early retirement - aiming for 58, now 53 - as he worries that there won't be the contrast of light and dark between holidays and just being home that you get with a holiday from work. I don't share his concerns but I do also have a lot more hobbies than he currently does - as well as a long list of things I would be doing if I had more time. My line manager moved to 4 days a week last year so that precedent has been set. OH had just got agreement, mere weeks before lockdown, to move to working 9 days out of 10 (alternate Fridays off) for no loss of pay due to already working far more hours than contracted. He chose to withdraw the change and still works full time - not sure that would have been my choice!
I don't hate my job but I have many other things I'd rather be doing - that is why I Sal sac 50% into my pension these days.

I still have occasional doubts about my decision - stepping back next May - but I am darned sure I will do my best to figure out the alternative things I am sure I can do: getting too jaded with the work world I inhabit! 
Yesterday I managed a 46mile bike ride - lovely day for it.   Today: TV/films, cooking.....too wet to bother going out.   I see a retirement, early or otherwise, as being the enabler to make those decisions on a whim: would hate to do (for example) a 4 day week, then have pouring rain on my one day off 
I think/hope the trick is to have hobbies & half-hobbies to expand on.   Wonder what I will say in a years time....
Merry Christmas all!

barnstar2077

cfw1994 said:

MallyGirl said:

My OH is still not as definite about the idea of early retirement - aiming for 58, now 53 - as he worries that there won't be the contrast of light and dark between holidays and just being home that you get with a holiday from work. I don't share his concerns but I do also have a lot more hobbies than he currently does - as well as a long list of things I would be doing if I had more time. My line manager moved to 4 days a week last year so that precedent has been set. OH had just got agreement, mere weeks before lockdown, to move to working 9 days out of 10 (alternate Fridays off) for no loss of pay due to already working far more hours than contracted. He chose to withdraw the change and still works full time - not sure that would have been my choice!
I don't hate my job but I have many other things I'd rather be doing - that is why I Sal sac 50% into my pension these days.

I still have occasional doubts about my decision - stepping back next May - but I am darned sure I will do my best to figure out the alternative things I am sure I can do: getting too jaded with the work world I inhabit! 
Yesterday I managed a 46mile bike ride - lovely day for it.   Today: TV/films, cooking.....too wet to bother going out.   I see a retirement, early or otherwise, as being the enabler to make those decisions on a whim: would hate to do (for example) a 4 day week, then have pouring rain on my one day off 
I think/hope the trick is to have hobbies & half-hobbies to expand on.   Wonder what I will say in a years time....
Merry Christmas all!

This is exactly how I feel and can't wait to be in a position to do what I want to do every day.  If I wake up on a Tuesday and the weather is unusually pleasant for the time of year I want to be able to go for a bike ride, or catch a train and have an amazing day out somewhere.  If I decide to stay in on a whim then I can do some DIY, paint, read etc.  Sounds like heaven to me.

chile_paul2

cfw1994 said:

MallyGirl said:

My OH is still not as definite about the idea of early retirement - aiming for 58, now 53 - as he worries that there won't be the contrast of light and dark between holidays and just being home that you get with a holiday from work. I don't share his concerns but I do also have a lot more hobbies than he currently does - as well as a long list of things I would be doing if I had more time. My line manager moved to 4 days a week last year so that precedent has been set. OH had just got agreement, mere weeks before lockdown, to move to working 9 days out of 10 (alternate Fridays off) for no loss of pay due to already working far more hours than contracted. He chose to withdraw the change and still works full time - not sure that would have been my choice!
I don't hate my job but I have many other things I'd rather be doing - that is why I Sal sac 50% into my pension these days.

I still have occasional doubts about my decision - stepping back next May - but I am darned sure I will do my best to figure out the alternative things I am sure I can do: getting too jaded with the work world I inhabit! 
Yesterday I managed a 46mile bike ride - lovely day for it.   Today: TV/films, cooking.....too wet to bother going out.   I see a retirement, early or otherwise, as being the enabler to make those decisions on a whim: would hate to do (for example) a 4 day week, then have pouring rain on my one day off 
I think/hope the trick is to have hobbies & half-hobbies to expand on.   Wonder what I will say in a years time....
Merry Christmas all!

Whilst a lot of my hobbies are reliant on being outside, I've also got more than enough jobs and projects to complete inside the house that I think I could happily fill an entire year of days off before I ran out of things to do on rainy days!

chile_paul2

chile_paul2 said:

hugheskevi said:

About 8 years ago I calculated what the effect of pursuing promotion would be on my forecast retirement date. I worked out that I could remain at the same level for 11.5 years, or work at the next level up for 10 years. There would have been a significant increase in responsibility, and it just wasn't worth it.

Thanks for such a detailed and thorough response. I think this point is key and is the next step I need to take.
I've already got a model showing how I'm expecting my pot sizes to grow based on current income. I need to now model what that would look like based on:
- Current income reduced by 20% (moving to 4 days a week)
- Current income reduced by 10% (moving to 4 days a week with compressed hours)
- Current income increased for potential promotion
The decision should then be simpler. Does the benefit of X years working at 4 days a week outweigh the cost of having to keep working for Y more years in total.
I'll try to work this through in the next few days and will share the results.

So having run through some high level numbers, I think the long and the short of it is that dropping down to 4 days a week would result in it taking me 1 year longer to a FIRE fund (over and above DB pot) of £500k from 5 years to 6. Staying 5 days a week and taking the promotion would be 1 year quicker, from 5 years to 4.

If I wanted to target a FIRE fund of £1m (maybe for that dream house?), would increase the gap either way to 2 years.......

Of course assumptions about saving rates and % returns on different investment pots will impact the precise results, but when so much is uncertain I'm not sure there is much value in trying to predict this to the week and month.....

Regardless of the calculations the question remains, whether I would be happier working part time for 6 years, or stay full time and power on through for 4/5 years. How best to judge this? It's difficult to assess whether I'll really feel much happier working 4 days a week, however I've got quite a lot of annual leave left over this year (we haven't exactly been able to go anywhere have we!), so my thinking is to 'trial' part time working by taking 1 day's leave a week for 6-8 weeks after Christmas. Whilst it's only a very limited time span hopefully it will help me to assess whether I'm getting value from that extra day and also how I deal with the work pressures - is it manageable or does it just intrude into my day off.