Full time to part time.

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twins2012
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Full time to part time.

Post by twins2012 » Tue Jan 24, 2017 4:49 pm

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Last edited by twins2012 on Mon May 15, 2017 9:18 pm, edited 1 time in total.

Wellfleet
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Re: Full time to part time.

Post by Wellfleet » Tue Jan 24, 2017 4:56 pm

Common suggestions include running the Vanguard or Fidelity retirement calculators or calculate what 25x annual expenses will be to get a ballpark figure. Using that number you might need about $1.5 million for you and spouse to live similarly to now.

btenny
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Re: Full time to part time.

Post by btenny » Tue Jan 24, 2017 5:12 pm

This is a complicated emotional issue. The kids are young. He wants to spend time with them. Both of you are young so he wants to do stuff with you and them while he is young. He does not want to wake up old. But I think he needs to keep working to get 20+ high earning years to obtain good SS, Medicare, college funding and retirement benefits. I doubt he is there yet. Yes he will get some benefits working part time but not enough. I also suspect there will be serious conflicts over work schedules when he is off and you have to go to work. This will cause issues between you. I also suspect your savings rate will plummet. I have not done a detail analysis but that are my thoughts.

Good Luck.

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unclescrooge
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Re: Full time to part time.

Post by unclescrooge » Tue Jan 24, 2017 5:33 pm

Do it.

Worst case he can always go back to full time. It's when you are unemployed for a significant portion of time that it may be difficult to re-enter the work force. Part time is a good compromise.

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blueblock
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Re: Full time to part time.

Post by blueblock » Tue Jan 24, 2017 7:52 pm

Sounds good for him. What about you? What do you gain from his plan?

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Jazztonight
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Re: Full time to part time.

Post by Jazztonight » Tue Jan 24, 2017 8:36 pm

I went from 5 days (FT) to 2 days/week (PT) when I was 55, and my kids were grown and both out of college, so it's a different story.

That said, if your spouse has something specific he wants to do with his life, definitely go for it. (I went back to school for another degree.) It's a time vs. money issue.

What I found was that when I wasn't earning as much money, I wasn't paying as much in income taxes, my monthly expenses were less (commuting, etc.), and I was much, much happier.

But I didn't have children to support, my house was paid for, and my wife was making a good living. So, it's different. But I don't regret it.
"What does not destroy me, makes me stronger." Nietzsche

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Pajamas
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Re: Full time to part time.

Post by Pajamas » Tue Jan 24, 2017 8:46 pm

You didn't state why he wants to go part time. It is hard to answer a question like this without knowing the underlying reason.

It may be easier to go part-time at a current job than to take a new job that is part-time. It may also be less risky. The opposites could also be true, but these are things to consider.

Going part time in your thirties with twins is a major financial and life-style decision, even if it is not irreversible.

Financially, you have stated this will push back full retirement and that is almost certainly true. It is going to push back your own retirement as well as his.

You did not say how you feel about any of this.

Judging only from the information in your post, some more introspection on your spouse's part and more input on your part would seem to be appropriate so that you can make a joint decision that has been well-considered so that you both are comfortable with it.

Rodc
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Re: Full time to part time.

Post by Rodc » Tue Jan 24, 2017 8:49 pm

blueblock wrote:Sounds good for him. What about you? What do you gain from his plan?
How about equity with her partner? What is good for the gander is good for the goose and vice versa.

Or maybe she can take a turn at full time?

One thing to consider is either one or both can go back to full time when the kids are in school full time. May have to pay for some after school care but that tends to be much less than daycare.
Last edited by Rodc on Wed Jan 25, 2017 9:11 am, edited 1 time in total.
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sco
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Re: Full time to part time.

Post by sco » Wed Jan 25, 2017 1:04 am

you should both sit down and seriously discuss your expectations (with an open mind)
when those twins hit 5-6 years old (school taking up most of their weekday)
10-12 (friends all of a sudden taking up more of the weekends)
13-16 (don't get me started)
and 16+...

His decision may be a very good one, but you need to look farther in the future. Will he be able to walk back into a similar job after 2 years? What about 5 or 10?

Men leaving work kids is a little more uncommon than women doing the same. Women have enough challenges re-entering..

Just some things to think about,


Kids expenses at 4 are entirely up to your discretion, it becomes harder to control as they get older.. And just wait until they are driving...

Goal33
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Re: Full time to part time.

Post by Goal33 » Wed Jan 25, 2017 1:11 am

Is he just lazy? I can't imagine willingly going from 85k to 43k income if I wasn't closer to financial independence.
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J295
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Re: Full time to part time.

Post by J295 » Wed Jan 25, 2017 7:08 am

OP ... Best of luck. Great of the two of you to consider creative options to balance work and family.

One thing that hasn't been mentioned that you may wish to consider .... whether the part-time work (and the dispositions of your spouse and his employer) is such that it truly can be limited to part-time. I have seen situations where someone switched to part time only to end up with part time pay and full time work (salaried part time positions getting calls, emails, etc. in jobs that just weren't well situated for "part-time").

Now .... I don't want to derail this thread, but want to comment on this ....
Goal33 » Wed Jan 25, 2017 1:11 am

Is he just lazy? I can't imagine willingly going from 85k to 43k income if I wasn't closer to financial independence.
I find this comment inappropriate and unhelpful and suggest you ignore it.

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bottlecap
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Re: Full time to part time.

Post by bottlecap » Wed Jan 25, 2017 7:34 am

Impossible to know because you haven't told us how much you will need in retirement.

If you can estimate that, you can use retirement calculators to estimate if you will be okay.

My wife went part time after we had our kids and probably will remain part time until they are both in school full time. I can say from experience that losing that much income isn't easy and it will, at the very least, put a huge strain on your love of travel.

Good luck,

JT

Dottie57
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Re: Full time to part time.

Post by Dottie57 » Wed Jan 25, 2017 8:23 am

I don't see how you can maintain the same life style while reducing family income by 42k. What are you and spouse willing to give up in order to balance your budget and maintain retirement saving? In your shoes Inwould be creating a budget and running retirement calculators.

eog
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Re: Full time to part time.

Post by eog » Wed Jan 25, 2017 8:35 am

twins2012 wrote: Our twins are 4 and not so expensive yet.
I am curious about this comment. I think 4 year olds(daycare) are very expensive. Who takes care of the kids while you guys are working?

tibbitts
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Re: Full time to part time.

Post by tibbitts » Wed Jan 25, 2017 8:52 am

You have to consider the answers ("lazy") in the context of the group you're asking the question to. Around here half the people making $250k are probably feeling guilty if they're not driving for Uber on the side. Around here it's just assumed that the higher income would be available and a choice, while to most people your new projected income would be something they could only dream of (and probably not until a much older age.)

I think this would be reasonable because you're going from way above average income to merely above average income for your LCOL area. However you do have to consider the possibility for going back to full-time later, which might not be an option (or might be, but at even lower than the prospective part-time salary.) That depends on the occupation and economy and lots of other things - you just don't know. Kid costs can be controlled somewhat - for example, they don't have to drive until they can pay for that.

What you would be getting out of it is presumably some additional sharing of errands, kid-related tasks, work around the house, etc. so that seems like a reasonable trade. There would probably be some additional cost savings due to having more time available.

You've saved an absolutely extraordinary amount already (again, by ordinary non-Boglehead standards) so scaling back now seems okay.

Rodc
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Re: Full time to part time.

Post by Rodc » Wed Jan 25, 2017 9:16 am

Goal33 wrote:Is he just lazy? I can't imagine willingly going from 85k to 43k income if I wasn't closer to financial independence.
Because guys are not allowed the same leeway to want to have family time as women. :oops:
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Watty
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Re: Full time to part time.

Post by Watty » Wed Jan 25, 2017 10:06 am

If you do your own taxes with tax software you can make a dummy copy of your most current tax return and then change the income to see what the impact would be after federal and state taxes.

You would then need to subtract out the extra Social Security and Medicare taxes that he would not be paying.

That would give you a better idea of what the after tax impact would be.

There are some more adjustments to consider too for the benefits he would not be getting. You would likely have to pay more for his health insurance through your job but there could also be these benefits to consider.

1) Vacation pay
2) Sick Pay
3) 401k match
4) Work provided life and disability insurance, be sure to buy these if he was getting them thorough his job.

Working part time may mean that he is more prone to being laid off and depending on his field it may make it less likely that for his to be able to advance and get a promotion.

This will take some work to figure out just how much it will actually cost but once you do that then you can figure out if the trade-off is really worth it. My gut fees is that it is doable if you are willing to cut back on things like travel.

Daycare could be problematic since between your schedules you would still probably need it for part of the week but it can be hard to find good daycare for partial days.

You also need to consider what his work schedule will be. If he would be working four hours a day five days a that might not be all that great if it just means that he goes to work at 10:00 am and gets home at 2:30 PM instead of 5:30 PM. Working two ten hour days is not ideal either since when you factor in the commute and lunch time that might mean 12 hour days so that might mean the kids are already in bed by the time he gets home in the evening.

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Pranav
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Re: Full time to part time.

Post by Pranav » Wed Jan 25, 2017 11:25 am

+1 for Part-Time
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flyingbison
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Re: Full time to part time.

Post by flyingbison » Wed Jan 25, 2017 11:33 am

I would definitely work part-time if I could.

Loik098
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Re: Full time to part time.

Post by Loik098 » Wed Jan 25, 2017 12:00 pm

eog wrote:
twins2012 wrote: Our twins are 4 and not so expensive yet.
I am curious about this comment. I think 4 year olds(daycare) are very expensive. Who takes care of the kids while you guys are working?
+1, and along the same lines, I'm interested to hear about how so much traveling has been/is being done with 4-year-old twins. OP, is there a family member who is heavily involved in your childcare who would be affected by your husband's decision?

visualize
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Re: Full time to part time.

Post by visualize » Wed Jan 25, 2017 12:10 pm

From my perspective, the time spent with the kids while they are young is worth more than the extra $$$ in your 401k.

I am 35 and 2 years ago I dropped from 40+ hours @ 5 days to 27 hours @ 3 days. I demoted myself from a higher project architecture role to a lower engineer role, and in doing so also removed myself from the business rat-race of promotions, putting in extra hours, over-achieving, etc..

I get to watch our 3 young kids while my wife works 1-2 days a week, and my job is less stressful because the expectations for part-time are not the same as for full-time.

It comes down to this question, would you rather:

a) live a potentially* cushier retirement and regret the time lost with the kids for the few years they were young
b) live a potentially* less cushy retirement, but be rich with memories of your children

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greg24
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Re: Full time to part time.

Post by greg24 » Wed Jan 25, 2017 12:10 pm

Retirement-wise, you are probably fine. You have 600k and plan to work another 30 years, giving you no pre-SS retirement to cover. No problems there.

Current lifestyle, you are probably fine. 93k in a LCOL area is very doable, but your desire to travel frequently may be problematic.

Time with your kids while they're little is priceless.

twins2012
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Re: Full time to part time.

Post by twins2012 » Wed Jan 25, 2017 12:19 pm

blueblock wrote:Sounds good for him. What about you? What do you gain from his plan?
He loves to cook so that is a plus for me.
sco wrote:you should both sit down and seriously discuss your expectations (with an open mind)
when those twins hit 5-6 years old (school taking up most of their weekday)
10-12 (friends all of a sudden taking up more of the weekends)
13-16 (don't get me started)
and 16+...

His decision may be a very good one, but you need to look farther in the future. Will he be able to walk back into a similar job after 2 years? What about 5 or 10?

Men leaving work kids is a little more uncommon than women doing the same. Women have enough challenges re-entering..

Just some things to think about,


Kids expenses at 4 are entirely up to your discretion, it becomes harder to control as they get older.. And just wait until they are driving...
People told me kids will get more expensive not less so a little worry there.

bottlecap wrote:Impossible to know because you haven't told us how much you will need in retirement.

If you can estimate that, you can use retirement calculators to estimate if you will be okay.

My wife went part time after we had our kids and probably will remain part time until they are both in school full time. I can say from experience that losing that much income isn't easy and it will, at the very least, put a huge strain on your love of travel.

Good luck,

JT


We will need around 5K a month in retirement.


eog wrote:
twins2012 wrote: Our twins are 4 and not so expensive yet.
I am curious about this comment. I think 4 year olds(daycare) are very expensive. Who takes care of the kids while you guys are working?

We pay nothing for daycare. My sister (has a 3 years old), mom and me take care of the daycare.

Watty wrote:If you do your own taxes with tax software you can make a dummy copy of your most current tax return and then change the income to see what the impact would be after federal and state taxes.

You would then need to subtract out the extra Social Security and Medicare taxes that he would not be paying.

That would give you a better idea of what the after tax impact would be.

There are some more adjustments to consider too for the benefits he would not be getting. You would likely have to pay more for his health insurance through your job but there could also be these benefits to consider.

1) Vacation pay
2) Sick Pay
3) 401k match
4) Work provided life and disability insurance, be sure to buy these if he was getting them thorough his job.

Working part time may mean that he is more prone to being laid off and depending on his field it may make it less likely that for his to be able to advance and get a promotion.

This will take some work to figure out just how much it will actually cost but once you do that then you can figure out if the trade-off is really worth it. My gut fees is that it is doable if you are willing to cut back on things like travel.

Daycare could be problematic since between your schedules you would still probably need it for part of the week but it can be hard to find good daycare for partial days.

You also need to consider what his work schedule will be. If he would be working four hours a day five days a that might not be all that great if it just means that he goes to work at 10:00 am and gets home at 2:30 PM instead of 5:30 PM. Working two ten hour days is not ideal either since when you factor in the commute and lunch time that might mean 12 hour days so that might mean the kids are already in bed by the time he gets home in the evening.

He will work Monday and Tuesday.

rgs92
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Re: Full time to part time.

Post by rgs92 » Wed Jan 25, 2017 12:35 pm

Age 37? That's crazy. If the part time thing ends, he will be looking for a job at 40 and good luck with that. He might end up working at the checkout counter. Just say no to this.

You need to save a LOT these days for retirement and $672K is next to nothing since it sounds like you don't have pensions.
And his social security will be way lower if he does this.

And don't even change jobs at close to 40 years old unless it's dangerous or hazardous or something. Believe me, there is nothing more sickening than interviewing for a job over 40. You feel like you're begging.
He'll end up unemployed in his 40's and always have to answer the question: What do you do all day?

(I'd even say the same if you were the husband and he was the wife doing this.)

Carson
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Re: Full time to part time.

Post by Carson » Wed Jan 25, 2017 1:06 pm

Dottie57 wrote:I don't see how you can maintain the same life style while reducing family income by 42k. What are you and spouse willing to give up in order to balance your budget and maintain retirement saving? In your shoes Inwould be creating a budget and running retirement calculators.
This is solid advice.

We have been in your position. DH works a flex schedule and there was a point when our son was 1.5y he encouraged me to go part time. I did so at my existing place of employment. It wasn't easy, and I think the first two years were me basically working at half pay, but mainly the same job. Eventually I found a new role that was specifically half time and that helped considerably.

However, to get there, I did a lot of number crunching of what our realistic expenses were and what our savings rate needed to be for retirement. We had to give things up; our travel budget went from one trip annually to every 3 or so years. We don't eat out very much, and don't engage in very expensive hobbies. I'm worried that your main method of affording this is just to cut saving for retirement. What does that do to your long-term projections? $5k now is not going to buy you the same 'basket of goods' in the future.

I am lucky in that I am finding career progression even within the part time role. It is easy to fall to the background and not seem as vital a piece to the company. So hopefully you both are motivated to keep up on professional skills in case you need more income.
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tyrion
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Re: Full time to part time.

Post by tyrion » Wed Jan 25, 2017 1:17 pm

twins2012 wrote:Spouse told me a few times that he wants to reduce to part time. He is working full time 40 hours a week and 85K income last year. There is a company that wants to hire him part time 20 hours a week for 43K a year with no benefits. I carry health insurance at my job. I make 50K a year working 3 days 32 hours a week. Our income will go from 135K to 93K. We live in a low cost of living city. Our expenses are almost 5K a month but we do a lot of travel and we love traveling. We have 6-months emergency fund and some savings. Our portfolio is around 600K in retirement and 72K college fund. We will have to cut back on retirement if he goes part time. We plan to retire at full retirement age God willing of course. We are 35 and 37 of age. Our twins are 4 and not so expensive yet. Spouse agrees that he will go back to full time if the kids get too expensive or we need more income. Will we be okay to retire at 67 assuming we will only save 10% moving forward? Thanks.

I've toyed with the idea myself. We are in a somewhat similar situation - incomes are about the same although my wife is a teacher so full time employment during the year but summers and school breaks off. Expenses are about the same. We are a little older (mid 40s), kids are a little older (9 and 11), and we have a bit more retirement savings and college savings. So basically on the same path but 6 years further down the road.

A few things to consider:
How easy is it for your husband to go back to full time? How specialized is his work field? If it's something where it's easy to find a job (nurse, teacher, firefighter, etc) then it gives more flexibility. I would have a hard time finding an equivalent job if mine went away.

Once the kids are in school full time, they will be gone most of the day. What will your husband do then? Does he have hobbies/goals (besides cooking) that will keep him busy? I work an early shift so I can pick up the kids after school every day. This gives me quality time with them while keeping a full time job.

The future is unknown. There are any number of things which could derail your plan of working to full retirement age - change in health to a family member, caring for aging parents, job elimination, etc. Saving now gives you more options for the future.



If I were your husband I would stick it out for now, and revisit after the kids are in grade school. Right now you are in the 'grind it out' years, with young kids and busy work schedules. It should ease up some, depending on how many extracurricular activities your kids plan to do.

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Re: Full time to part time.

Post by Mudpuppy » Thu Jan 26, 2017 3:11 pm

rgs92 wrote:You need to save a LOT these days for retirement and $672K is next to nothing since it sounds like you don't have pensions.
And his social security will be way lower if he does this.
Okay, let's have a little non-Boglehead reality check here. Having over $600k in retirement savings in one's mid-to-late 30s is exceptionally rare for the vast majority of Americans. It is not "next to nothing" at that age. Heck, I'm a bit older than them and I don't have anywhere near that amount yet (particularly since I entered the workforce at 30). Even if they stopped contributing entirely, left the balances untouched, and made an average of 1% return over inflation, they'd have about $1.5 million saved in their retirement accounts in 25 years.

Of course, leaving the current retirement savings untouched is key. As another poster said, the OP and her husband will need to make sure to adjust down their lifestyle spending to match their new, lower income. If they raid the retirement savings to keep their current lifestyle up, they won't be able to afford the switch to part-time.

Rodc
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Re: Full time to part time.

Post by Rodc » Thu Jan 26, 2017 3:51 pm

Mudpuppy wrote:
rgs92 wrote:You need to save a LOT these days for retirement and $672K is next to nothing since it sounds like you don't have pensions.
And his social security will be way lower if he does this.
Okay, let's have a little non-Boglehead reality check here. Having over $600k in retirement savings in one's mid-to-late 30s is exceptionally rare for the vast majority of Americans. It is not "next to nothing" at that age. Heck, I'm a bit older than them and I don't have anywhere near that amount yet (particularly since I entered the workforce at 30). Even if they stopped contributing entirely, left the balances untouched, and made an average of 1% return over inflation, they'd have about $1.5 million saved in their retirement accounts in 25 years.

Of course, leaving the current retirement savings untouched is key. As another poster said, the OP and her husband will need to make sure to adjust down their lifestyle spending to match their new, lower income. If they raid the retirement savings to keep their current lifestyle up, they won't be able to afford the switch to part-time.
I agree that in the non-Boglehead world $600K is a lot of money. But just to be clear, at 1% real that is less than $800K real in 25 years. At a more hopeful 3% that would be more like $1.3M. So maybe $30,000 to $50,000 plus SS annual retirement income. Not shabby, but likely needs to be augmented over time which they can do if they get back to saving later when the kids are in school full time.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

letsgobobby
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Re: Full time to part time.

Post by letsgobobby » Thu Jan 26, 2017 3:56 pm

There are a lot of biases in the responses above. I won't elaborate on what they are.

Here are the facts.

You are married, in your mid 30s, and have 10x your annual expenses saved for retirement; and $72k saved for college.

If you never save another penny for retirement, your assets will double on a real basis every 18 years (assuming a real rate of return of 4%) which means in 36 years, when you are 73, you will 40x your annual expenses saved for retirement. At age 63 you'll have at least 30x.

You have done very well and you have the advantage of being able to keep benefits while working less than part time.

From a financial standpoint, you're in great shape and should go for it.

Those who advise "working another 20 years minimum" remind me of the toad from Tuck Everlasting. Durn thing must have thought he was gonna live forever.
Last edited by letsgobobby on Thu Jan 26, 2017 3:57 pm, edited 1 time in total.

Mudpuppy
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Re: Full time to part time.

Post by Mudpuppy » Thu Jan 26, 2017 3:57 pm

Rodc wrote:
Mudpuppy wrote:
rgs92 wrote:You need to save a LOT these days for retirement and $672K is next to nothing since it sounds like you don't have pensions.
And his social security will be way lower if he does this.
Okay, let's have a little non-Boglehead reality check here. Having over $600k in retirement savings in one's mid-to-late 30s is exceptionally rare for the vast majority of Americans. It is not "next to nothing" at that age. Heck, I'm a bit older than them and I don't have anywhere near that amount yet (particularly since I entered the workforce at 30). Even if they stopped contributing entirely, left the balances untouched, and made an average of 1% return over inflation, they'd have about $1.5 million saved in their retirement accounts in 25 years.

Of course, leaving the current retirement savings untouched is key. As another poster said, the OP and her husband will need to make sure to adjust down their lifestyle spending to match their new, lower income. If they raid the retirement savings to keep their current lifestyle up, they won't be able to afford the switch to part-time.
I agree that in the non-Boglehead world $600K is a lot of money. But just to be clear, at 1% real that is less than $800K real in 25 years. At a more hopeful 3% that would be more like $1.3M. So maybe $30,000 to $50,000 plus SS annual retirement income. Not shabby, but likely needs to be augmented over time which they can do if they get back to saving later when the kids are in school full time.
I was giving my number in future dollars assuming a 3% inflation rate. Basically, plug 4% into the calculation. It's a pretty conservative value to use, so it's my spreadsheet default.

Rodc
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Re: Full time to part time.

Post by Rodc » Thu Jan 26, 2017 4:00 pm

Mudpuppy wrote:
Rodc wrote:
Mudpuppy wrote:
rgs92 wrote:You need to save a LOT these days for retirement and $672K is next to nothing since it sounds like you don't have pensions.
And his social security will be way lower if he does this.
Okay, let's have a little non-Boglehead reality check here. Having over $600k in retirement savings in one's mid-to-late 30s is exceptionally rare for the vast majority of Americans. It is not "next to nothing" at that age. Heck, I'm a bit older than them and I don't have anywhere near that amount yet (particularly since I entered the workforce at 30). Even if they stopped contributing entirely, left the balances untouched, and made an average of 1% return over inflation, they'd have about $1.5 million saved in their retirement accounts in 25 years.

Of course, leaving the current retirement savings untouched is key. As another poster said, the OP and her husband will need to make sure to adjust down their lifestyle spending to match their new, lower income. If they raid the retirement savings to keep their current lifestyle up, they won't be able to afford the switch to part-time.
I agree that in the non-Boglehead world $600K is a lot of money. But just to be clear, at 1% real that is less than $800K real in 25 years. At a more hopeful 3% that would be more like $1.3M. So maybe $30,000 to $50,000 plus SS annual retirement income. Not shabby, but likely needs to be augmented over time which they can do if they get back to saving later when the kids are in school full time.
I was giving my number in future dollars assuming a 3% inflation rate. Basically, plug 4% into the calculation. It's a pretty conservative value to use, so it's my spreadsheet default.
Right, but without additional calculations no one knows what $1.5M in 25 years means. Is it a lot or a little? If one does this in real today dollars it is a lot easier to understand.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

fourkids
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Re: Full time to part time.

Post by fourkids » Thu Jan 26, 2017 4:07 pm

Nope, definitely not. We too have 4yo twins, and make a good income, and I would be a nervous wreck if the breadwinner (me) dropped down to part-time. You both are far too young and the future is just too unknown. He is entering his peak earning years. If anything, I would think he might look into getting a promotion and working harder for a while. Plus you have daycare provided by loving family members. Most families I know would give their right arm for that situation.

To each is own, but to me it sounds far too risky. If you do go this way, I would subscribe to Mr. Money Mustache, and start heavily employing his principles of simple living.

MP173
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Re: Full time to part time.

Post by MP173 » Thu Jan 26, 2017 4:59 pm

Wow big decision. Congradulations on the retirement and college funds. You are in an exceptional situation.

You did not specify the amount of "other savings", nor your situation with housing. Do you have a mortgage? How much/how many years left? Are you paying that down? If I were going to do this (not planning to, but do live on a variable income), fixed costs would be reduced dramatically (early payoff of mortgage and car loans, if any). Minimize fixed costs.

Draw up a plan with current and pro forma budgets....what could possible go wrong with this? What are pros and cons? How marketable are both you and your husband? What is the long and short term outlooks for your careers? What are possible income producing opportunties available?

Ed

letsgobobby
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Re: Full time to part time.

Post by letsgobobby » Thu Jan 26, 2017 6:16 pm

fourkids wrote:Nope, definitely not. We too have 4yo twins, and make a good income, and I would be a nervous wreck if the breadwinner (me) dropped down to part-time. You both are far too young and the future is just too unknown. He is entering his peak earning years. If anything, I would think he might look into getting a promotion and working harder for a while.
They have already saved 10x spending. What's wrong with cutting back their working hours? They still have full benefits. College savings are going well. They live in a low cost of living area. If they never save another penny, even very low returns will leave them well-positioned for retirement. Average returns (4-6% real) will let them retire a decade early.

There is a lot more to life than just piling up dollars. They are mid 30s, not aged, but not exactly fresh out of college. Their kids are growing. They are young and like to travel. Why not do it now? What if there is no tomorrow?

fourkids
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Re: Full time to part time.

Post by fourkids » Fri Jan 27, 2017 11:27 am

letsgobobby wrote:
fourkids wrote:Nope, definitely not. We too have 4yo twins, and make a good income, and I would be a nervous wreck if the breadwinner (me) dropped down to part-time. You both are far too young and the future is just too unknown. He is entering his peak earning years. If anything, I would think he might look into getting a promotion and working harder for a while.
They have already saved 10x spending. What's wrong with cutting back their working hours? They still have full benefits. College savings are going well. They live in a low cost of living area. If they never save another penny, even very low returns will leave them well-positioned for retirement. Average returns (4-6% real) will let them retire a decade early.

There is a lot more to life than just piling up dollars. They are mid 30s, not aged, but not exactly fresh out of college. Their kids are growing. They are young and like to travel. Why not do it now? What if there is no tomorrow?
To each is own, but I feel like they have 40 years ahead of them with many unknowns, so it's risky. What if someone gets sick and they have big medical expenses? What if one parent loses a job or becomes disabled?
Age 35-50 are peak earning years, so I hate to see people not take advantage of this, because it doesn't last forever. In the last 5 years, most of the couples I know- 1 of them has lost their job and hasn't recovered quickly. Many of my friends have lost their job between age 45 and 50. Some of my 50 year old friends/relatives have not been able to find another.

In another year, their twins will be in school full-time and start having activities, so it's not like he'll have additional time with them by going part-time.

I guess it comes down to a risk tolerance level, and the acceptance of cutting out travel or other niceties if an emergency were ever to occur.

letsgobobby
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Re: Full time to part time.

Post by letsgobobby » Fri Jan 27, 2017 3:51 pm

fourkids wrote:
To each is own, but I feel like they have 40 years ahead of them with many unknowns, so it's risky. What if someone gets sick and they have big medical expenses? What if one parent loses a job or becomes disabled?
Age 35-50 are peak earning years, so I hate to see people not take advantage of this, because it doesn't last forever. In the last 5 years, most of the couples I know- 1 of them has lost their job and hasn't recovered quickly. Many of my friends have lost their job between age 45 and 50. Some of my 50 year old friends/relatives have not been able to find another.

In another year, their twins will be in school full-time and start having activities, so it's not like he'll have additional time with them by going part-time.

I guess it comes down to a risk tolerance level, and the acceptance of cutting out travel or other niceties if an emergency were ever to occur.
Firecalc reports a 100% chance of success with 0 failures with the following parameters:

$600,000 portfolio
$60,000 spending
no additional contributions to portfolio
Start withdrawals in 20 years.
Withdrawals for 40 years (or 30, I tried both ways).

If they add even a little to their portfolio; or delay withdrawals to age 60, or 62, or 67, or 70, rather than age 57; and take into account social security; their financial security is even greater.

Life is unpredictable but you only get to live it once. Objectively they can afford this, absolutely.

I assume if they take a financial hit down the road they could just cut way back on traveling and their cost of living would fall back to a sustainable SWR.

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greg24
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Re: Full time to part time.

Post by greg24 » Fri Jan 27, 2017 3:59 pm

fourkids wrote:To each is own, but I feel like they have 40 years ahead of them with many unknowns, so it's risky.
Very true. You could also work your arse off, compile a huge pile of money, then get hit by a bus and die.

The OP has chosen a different path than you, but I don't think it is all that risky.

J295
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Re: Full time to part time.

Post by J295 » Fri Jan 27, 2017 10:09 pm

To the extent there is push back against the part time idea there are quite a few comments about the "risks" of going to part-time and earning less money ..... in contrast there is more limited dialogue about the "risk" of never recovering the time lost working

Of course, parents/spouses need to be responsible, and it seems that the OP family is responsible and this is a lifestyle decision as much as a financial one (the "safest" route is to work and die with your boots on .... disclaimer -- that was not our path and it has worked out quite nicely).

2Birds1Stone
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Location: New York

Re: Full time to part time.

Post by 2Birds1Stone » Sat Jan 28, 2017 8:31 am

Think it's a great plan.

I would not discount retiring earlier than 67.....you are young, your income will likely increase as the years go on.

If you live in a LCOL area you should be able to save a bit more than 10% of income, especially if you use tax deferred space.

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dodecahedron
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Re: Full time to part time.

Post by dodecahedron » Sat Jan 28, 2017 8:59 am

If your husband will spend some of his freed up time doing things that reduce household expenses (e.g., do-it-yourself home repairs and auto maintenance, planning and cooking budget friendly meals to reduce need for convenience foods, comparison shopping on major purchases, using free resources like public libraries and parks for recreation rather than Netflix and gym memberships, etc.), the net budget hit can be less than the drop in his salary, especially once income taxes are taken into account.

ICMoney
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Re: Full time to part time.

Post by ICMoney » Sat Jan 28, 2017 9:32 am

I would suggest you try it if you both agree with it. It sounds like your family is off to a great start with savings, you live in a LCOL area, and have a plan to continue saving. Your husband will be able to pick up your kids every day from school when they start, help keep the household running smoothly and maximize your time together as a family by completing chores while everyone else is out of the house and during the few hours he isn't working, while still remaining connected to a career himself. Not to mention he'll be able to spend additional time nurturing and guiding your precious twins as they grow. The future is unknown of course, but it seems like you are decently well positioned to take this "risk".

Our family (mid-30s, young children here as well) is also taking such a "risk" by having one spouse work 20 hours/week, and we wouldn't change a thing unless our circumstances drastically changed.

Best,
ICM

Nowizard
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Re: Full time to part time.

Post by Nowizard » Sat Jan 28, 2017 10:12 am

Good to be planning for distant future but far too many variables to be accurate with financial planning thirty years or more in the future. Basically, you cannot afford for him to go part time at this point unless you are willing to forego the travel. You lose too much of the "miracle of compounding" if you reduce income now. Without intending to be harsh, if you have a child or children as a college fund suggests, you have to make a choice of whether the children's needs or your wants take priority.

Tim

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