Take Pay cut close to retirement for sanity purposes?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Nectarineman
Posts: 41
Joined: Sun Jul 02, 2017 5:20 pm

Take Pay cut close to retirement for sanity purposes?

Post by Nectarineman » Wed Sep 13, 2017 8:45 am

I figure I am about 7-8 years away from retirement. However, I am dreading my job more and more despite the good pay. The travel, the tedium, the direction of the company.

I am in relatively good shape overall, just wondering if anyone has taken a substantial paycut close to retirement to increase their work life happiness close to retirement?

Any regrets? Any advice?

RadAudit
Posts: 2568
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: Take Pay cut close to retirement for sanity purposes?

Post by RadAudit » Wed Sep 13, 2017 9:12 am

Line from a country song (I think) - I've always been crazy but it kept me from going insane.

Works for me. My vote is for sanity.

If you are pretty sure about your financial position, you might want to post your situation in this format for another opinion or two. viewtopic.php?f=1&t=6212

And, if they agree and you decide to go ahead - you can call it cutting back as you cruise in to retirement. Sounds better. But, other than the travel, the tedium and the direction of the company - are you sure that these are the real problems or just symptoms? It's always difficult to tell what the root causes are when you are caught up in stuff like that.

My chief regret is that I stayed with a job I really didn't like because I needed the money and wasn't brave enough to look at other options - or when I did it was too late. Apparently, that's not one of your problems.
"Everything will be all right in the end. If everything is not all right, then it is not the end." - The Best Exotic Marigold Hotel

livesoft
Posts: 55916
Joined: Thu Mar 01, 2007 8:00 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by livesoft » Wed Sep 13, 2017 9:18 am

I went to half-time several years before going to zero-time, so I took a pay cut of 50%. I did not regret it. I'm not sure what kind of advice I can give you except make yourself indispensable to your employer and become financially independent well before you tell them that you are going half-time.
This signature message sponsored by sscritic: Learn to fish.

malabargold
Posts: 399
Joined: Fri Aug 08, 2014 8:16 am

Re: Take Pay cut close to retirement for sanity purposes?

Post by malabargold » Wed Sep 13, 2017 9:47 am

Of course

User avatar
Pajamas
Posts: 2266
Joined: Sun Jun 03, 2012 6:32 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by Pajamas » Wed Sep 13, 2017 9:52 am

Yes, lots of people do it. However, if the company has lay-offs, part-timers, people who work from home, people nearing retirement, and similar may be the first to go, or at least that's what I've observed.

DrGoogle2017
Posts: 195
Joined: Mon Aug 14, 2017 12:31 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by DrGoogle2017 » Wed Sep 13, 2017 9:54 am

Yes, I only worked 4 days instead of 5 days during the last 2 years. I took a lot of sick leave too. Simple reason, my last work place made me sick. Either that or quit cold turkey. I had a small COLA pension so I hung on to my job, otherwise I would have quit sooner.

I also refused to travel. I made up some very good reasons, to me anyway. I made get nick at promotion or raise, I'm in The Who cares camp. I was planning to retire anyway.
Last edited by DrGoogle2017 on Wed Sep 13, 2017 10:40 am, edited 1 time in total.

Jack FFR1846
Posts: 5413
Joined: Tue Dec 31, 2013 7:05 am

Re: Take Pay cut close to retirement for sanity purposes?

Post by Jack FFR1846 » Wed Sep 13, 2017 10:02 am

I've moved from a horrible job environment to a much better environment. The base pay was a cut. Been here now a year and a half and the company profit sharing and bonuses are now vesting and paying off. I'll easily make more this year than I did at the last company.

On the other hand.......I moved one other time from a field job with a horrible boss (every phone call was either that I was the best thing since sliced bread or I was a total failure) to a design job as individual contributor with lead responsibility. I thought the move would significantly reduce stress and was a big pay cut. As it turned out, it was a big pay cut with the most stress I ever had in a job. So I gotta say that sometimes the grass only "looks" greener. You never know until you're in the job.

My last job move was a year and a half ago and I plan to retire in 2 years.
Bogle: Smart Beta is stupid

flyingaway
Posts: 1095
Joined: Fri Jan 17, 2014 10:19 am

Re: Take Pay cut close to retirement for sanity purposes?

Post by flyingaway » Wed Sep 13, 2017 10:10 am

We can do 3 year phased retirement with 50% pay cut. But that is a one way ticket, you have to retire after 3 years. For me, I decided about 10 years ago that I do not want to work in summer months anymore, with an income reduction of 25 - 35%. Now, I am thinking to quit for good in two to four years

bloom2708
Posts: 2534
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Take Pay cut close to retirement for sanity purposes?

Post by bloom2708 » Wed Sep 13, 2017 10:11 am

Are you married or single? Kids or no kids? Kids still in high school/college?

Do you need benefits like healthcare and insurance? Many factors involved that we don't know about.

I moved from a software development role to a finance manager role at the same company. Jumped off one stressful track into a bit more laid back/mellow role. Different pay and bonus tracks, but that is ok. Money is not everything.

Getting out of the work travel business might have the greatest impact. IF that isn't an option in your current role, consider a change.

I changed roles and my wife went to a "stay at home" role. Was it the best thing for our finances? Nope, but life is short and the stress can be too much. We had no debt, no mortgage, good savings. That gave us options. Options you want.

So my summary is do what it takes to lower the stress. Maybe it can be done with minimal pay decline, but keep in mind all the dependent factors.
Last edited by bloom2708 on Wed Sep 13, 2017 10:12 am, edited 1 time in total.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead | | Want to buy something? Watch this first: https://vimeo.com/41152287

KlangFool
Posts: 6456
Joined: Sat Oct 11, 2008 12:35 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by KlangFool » Wed Sep 13, 2017 10:11 am

Pajamas wrote:
Wed Sep 13, 2017 9:52 am
Yes, lots of people do it. However, if the company has lay-offs, part-timers, people who work from home, people nearing retirement, and similar may be the first to go, or at least that's what I've observed.
Pajamas,

And, this may not be a bad thing. One of my peers was counting on this. In fact, he volunteered to be laid off. He received better severance pay than people in a later round of laid off.

KlangFool

rjbraun
Posts: 972
Joined: Sun Sep 09, 2012 8:22 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by rjbraun » Wed Sep 13, 2017 10:19 am

Yes, I took a significant pay cut after separating from my prior job. I thought a prior comment about "grass not always greener" was apt, though fortunately for me it has been a positive step overall. There are always trade-offs, but with the stock market at highs my net worth has gone up nicely as has my quality of life.

If your job is truly dreadful, the toll on one's health should be factored in as well, both emotionally and financially (e.g., greater vulnerability to illness could lead to health ailments). Also, on a per hour basis my current job is not quite so bad even though on an overall comp basis I make far, far less.

User avatar
Watty
Posts: 11134
Joined: Wed Oct 10, 2007 3:55 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by Watty » Wed Sep 13, 2017 11:13 am

Nectarineman wrote:
Wed Sep 13, 2017 8:45 am
I figure I am about 7-8 years away from retirement.
I would assume that taking a large pay cut mean that you would add years to the time until you can retire.

If you were in a toxic situation that might be worth it but from the little you said, other than the travel, your current job does not sound like it is a horrible situation even if it is not fun.

I would be cautious about thinking that the other lower paying job will be a lot better since most jobs where you can "coast" for a few years are not that great or secure.

Have you looked HARD for a more enjoyable job that pays as well, or even better, than your current job?

dcabler
Posts: 237
Joined: Wed Feb 19, 2014 11:30 am

Re: Take Pay cut close to retirement for sanity purposes?

Post by dcabler » Wed Sep 13, 2017 11:36 am

I had a beer with an old friend just yesterday. He's been in management for close to 15 years, but at 68 he sees himself as 2 years away from retirement. Stress was really getting to him with clashes with his new boss. So, he brought up the idea of moving from management back to an individual contributing role and his management bought off on it. Happy as can be in the new/old role and sees it as part of his overall plan towards his final date in 2 years. He didn't say, but I'm pretty sure he took a pay cut to do it. But he seems to be as happy as can be in the new role. YMMV

staythecourse
Posts: 4798
Joined: Mon Jan 03, 2011 9:40 am

Re: Take Pay cut close to retirement for sanity purposes?

Post by staythecourse » Wed Sep 13, 2017 11:54 am

If you are on track or there for retirement why spend an extra minute in a job/work environment you don't like? In my opinion, FI is NOT about retiring early it is the ability to say F.U. to anyone and go do what you want to do. Life is too short to spend another 7-8 years doing something you don't like UNLESS you have to for the money.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

BHUser27
Posts: 572
Joined: Mon Jan 18, 2016 3:07 pm
Location: A Midwestern Town

Re: Take Pay cut close to retirement for sanity purposes?

Post by BHUser27 » Wed Sep 13, 2017 12:04 pm

Nectarineman wrote:
Wed Sep 13, 2017 8:45 am
I figure I am about 7-8 years away from retirement. However, I am dreading my job more and more despite the good pay. The travel, the tedium, the direction of the company.

I am in relatively good shape overall, just wondering if anyone has taken a substantial paycut close to retirement to increase their work life happiness close to retirement?
Interesting. I am 9 yrs away from my plan date to start drawing social security. After 25 yrs at current company I decided to move-on, exactly because of *travel, tedium and shift in company direction*.

I negotiated a 1 yr part-time-permanent position with the CEO/owner. Have been working 2 days per week at 2/5 of my prior salary. Stretching to meet living expenses, but DW & I absolutely could not be happier. So far, no regrets at all!

As word got out that I would be on the market soon (and before I had even updated my resume), friends started alerting me to interesting opportunities in the area. I just finished interviewing for a position that I am very excited about - slower pace, no travel, work I'm passionate about, less pay than before (but way more than my current PT pay). I am expecting an offer next week. I'm giddy.

Obviously, my vote would be "do it"!

User avatar
Earl Lemongrab
Posts: 2447
Joined: Tue Jun 10, 2014 1:14 am

Re: Take Pay cut close to retirement for sanity purposes?

Post by Earl Lemongrab » Wed Sep 13, 2017 2:45 pm

I went to part-time (32 hours) a few years ago, so about a 20% cut. I get every Friday off now. It's good, but I'll be wrapping things up here soon to go full retirement.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

User avatar
prudent
Moderator
Posts: 4656
Joined: Fri May 20, 2011 2:50 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by prudent » Wed Sep 13, 2017 2:57 pm

I would do it if I wasn't depending on the lesser role continuing indefinitely. Where I worked they were pretty good with letting people move to part time in the same role but more picky about people moving down to a lower position + staying full-time + moving down in pay. Their reasoning was "it often didn't work out". Supposedly the person moving down sometimes had trouble adjusting to lesser prestige (although they were good with the lesser responsibilities), had trouble meshing with the "new team", had conflict with the new manager about how to do certain things.

People who kept the same job but switched to part-time stayed on only as long as the full-time people had plenty of work if it was possible for the full-timers to take on the work. There were some who had a pretty specialized role who stayed part-time for years - as long as they wanted, basically.

I think it's more a question of what your company's culture is and how receptive they would be.

Dandy
Posts: 4667
Joined: Sun Apr 25, 2010 7:42 pm

Re: Take Pay cut close to retirement for sanity purposes?

Post by Dandy » Wed Sep 13, 2017 4:35 pm

I didn't take a pay cut but was retired 2 years before I was ready. If you are in decent financial shape I would take the cut for sanity. Just make sure you are not taking a cut and the new job is almost as bad. We only have a limited number of years of health and happiness why waste them if you don't have to.

Most retirees I've met who have decent assets but were reluctant to retire found out they really enjoyed the less stress of retirement. It might be the same for those who choose less $$ and less stress.

Post Reply