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Old 11-08-2012, 12:28 AM   #21
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Originally Posted by rodi View Post
The shifting to part time does not have to mean the end of accumulating.
....
This part time schedule has worked will for us as parents ....
That worked for us as well. DW quit work after our second child was born and then went back part time once they had both started school. We kept saving when we were down to one income and didn't rachet up the expenses any more than we absolutely had to when we were back to two incomes. I'll retire next year (finally). DW intends to carry on with her part time job, but that's because she want to keep working not because we need the money.
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Old 11-08-2012, 05:27 AM   #22
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Originally Posted by bo_knows View Post
Still well within our "accumulation" phase, my wife and I find ourselves liking the idea of saving aggressively in our 30's, to get to a point where our retirement accounts (with average gains until we're 55+) will grow enough to support us in late retirement, while we switch gears to part time jobs.

After editing that sentence a couple times, I find it hard to understand myself. Here is our current idea:

Age 22-40: Save aggressively, until we meet a retirement account goal.
Age 40-55(or 60): Switch to part time work, just enough to cover bills, don't contribute much to retirement, enjoy life, watch retirement account gain interest.
Age 55(or 60)+: Completely stop working, use the retirement account (that has grown for the past 20 years) for income.

Does anyone on this forum have experience with a similar strategy? I'm curious.
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Certainly doable if you don't mind making the sacrifice in your early years. It's not without risk though. You could lose the nest egg (and your effort) via a portfolio crash, or stumble into poor health such that you cannot enjoy what you've saved.

One way is to w*rk long hours or multiple j*bs early on. The nest egg can grow quickly because the more time you spend w*rking, the less time you have to spend the earnings.
The additional risk you take on with this strategy is something to consider. Your projections should address scenarios where things go jelly side down; if you still reach your goal in those scenarios, great.

For example, I'm about the same age as MidPack, and experienced the 2001 & 2008 crashes right in the middle of what would be your 40-55 "just enough to cover bills" phase. "Just enough" would not have worked for me. So, kept working at MegaCorp and saving like crazy the past 10+ years to become FI. I think you need a back-up plan.
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Old 11-08-2012, 02:59 PM   #23
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Originally Posted by bo_knows View Post
Still well within our "accumulation" phase, my wife and I find ourselves liking the idea of saving aggressively in our 30's, to get to a point where our retirement accounts (with average gains until we're 55+) will grow enough to support us in late retirement, while we switch gears to part time jobs.

After editing that sentence a couple times, I find it hard to understand myself. Here is our current idea:

Age 22-40: Save aggressively, until we meet a retirement account goal.
Age 40-55(or 60): Switch to part time work, just enough to cover bills, don't contribute much to retirement, enjoy life, watch retirement account gain interest.
Age 55(or 60)+: Completely stop working, use the retirement account (that has grown for the past 20 years) for income.

Does anyone on this forum have experience with a similar strategy? I'm curious.
yes, doing this now.

Currently 50 (for a few more weeks lol), saved heavily until this year.

Now have dialed back all savings except what's needed to get the company match.

Planning to change to a "part time" job in about a month, making about 40% or less of what I do today. Wife will continue working FT for another 2 years (her choice).

Ask me in a year how it's going, but I think we'll be fine. We're about $200k short of our "never have to work another day" number...but we don't think we'll need to withdraw any for about 4 years now due to large emergency fund and our incomes...so the growth over the next 3-4 years should get us there even though I only assume about 4% growth. If it doesn't grow, I work 1-2 years longer, no big deal.
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Old 11-08-2012, 03:45 PM   #24
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Originally Posted by Huston55 View Post
The additional risk you take on with this strategy is something to consider. Your projections should address scenarios where things go jelly side down; if you still reach your goal in those scenarios, great.

For example, I'm about the same age as MidPack, and experienced the 2001 & 2008 crashes right in the middle of what would be your 40-55 "just enough to cover bills" phase. "Just enough" would not have worked for me. So, kept working at MegaCorp and saving like crazy the past 10+ years to become FI. I think you need a back-up plan.
This is fair. I wonder if the backup plan should involve essentially increasing the employment and savings whenever a major market correction happens. That seems like the most likely scenario. I guess we'd just have to constantly re-evaluate things based on how the stash is growing.
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Old 11-08-2012, 03:54 PM   #25
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I pretty much did this too. In my mid/late 30s I did well on stock options and bonuses and salary increases and just maintained my standard of living except for a couple of vacation splurges. In my late 40s I was able to cut back to part-time hours at my job, which still gave me a decent salary. I continued to max out my 401K, and dipped into after tax savings as needed. It made for a nice transition into full retirement, plus it worked well with the way my job was phasing out.

If you're talking about going PT in an hourly wage job, I suppose that could work if you did something you like, perhaps in a book store or hobby shop or something that matches your interests, but for the most part I'd rather milk a higher paying job as long as I could and then ER, than take a huge pay cut (considerably less $/hour) for PT hours.
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Old 11-08-2012, 03:59 PM   #26
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If you're talking about going PT in an hourly wage job, I suppose that could work if you did something you like, perhaps in a book store or hobby shop or something that matches your interests, but for the most part I'd rather milk a higher paying job as long as I could and then ER, than take a huge pay cut (considerably less $/hour) for PT hours.
No. I'd rather go PT in my current industry and/or job. There are plenty of people I know doing 30-32hr schedules. I'd be pretty happy if my "downshift" was 20-24hrs, and I think I could swing that at my current company.
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Old 11-08-2012, 06:41 PM   #27
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It's a great plan, because no matter what it gives you really good flexibility.

DH and I at 41/37, nearing the point where our retirement accounts would probably grow enough for us if we stopped contributing. But we're also at the point where we are both making very good salaries at good companies, and with our recent new home purchase, our annual expenses have gone up enough that we need to have one pretty good salary to sustain us. So while either of us could quit and go part-time, we're not at the point where both of us could. A lot of that is because part time jobs for either of us might not pay well.
I guess we're kind of in a "one more year" syndrome situation. Since we have the good jobs, we might as well keep them while we can and make those part-time years that much easier.

But, if I were to get laid off, the severance would allow me time to get my part-time business ideas off the ground and I'd be semi-retired right away!
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Old 11-09-2012, 09:12 AM   #28
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I fully understand the "wind-down" phase, I'm just having a hard time doing it. I'm at a transition point and have to make some decisions. DW is going part-time in February and will work 2 days a week. I have a stressful job but can get a less stressful job making about 60% of what I make now. With those two changes, we take a 100K a year cut in income, but we still have all our expenses covered and can still save 15-20% of our income. I'm just having a hard time transitioning to not saving a large part of our income. Has anyone else been here and done this?
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Old 11-09-2012, 10:51 AM   #29
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I did exactly what OP mentioned, piling up almost $3M in net wealth by 42. I'm really thinking retirement but the money from my biz keeps rolling in, which I used to buy more foreclosed properties which brings in more money on the side. I can stop now and blow $100K on the the Maldives, Bora Bora, Dubai, Japan, Europe, etc for a year; and then what after that?

Saving aggressively is a lifestyle not easily done by most American but you'll be so happy when you have succeeded. I have never ever bought anything that's not on sale!!! I frequently take my 10 yo to grocery and taught him to pick ONLY what's 'B1G1 free' or on sale; if he want something not on sale must wait til next week. I still use a RazrV3 on the ATT $30 1000 anytime minutes cell plan from 2005. I've been considering upgrading to a Samsung S3 cause it's about time, but there's little advantage spending $50 extra every month for having text/internet on the go. I still drive my reliable Sienna; which take me from A to B more comfortably than any BMW and cost of maintenance taxes is a lot cheaper too. I let my Costco and BJ membership expired months ago and then I realized I didn't have to go there every week spending hundred $$$. I haven't been there in three months and saved so much money. Every Christmas I tell everyone I want NOTHING; that 'I'm happy to be alive and healthy to be with them.'
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Old 11-09-2012, 06:40 PM   #30
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Saving aggressively is a lifestyle...
Every Christmas I tell everyone I want NOTHING......

I agree with this 100%. Saving is a lifestyle. Mentally, my problem is transitioning to less work and less savings or no savings. I really need to work 2 years and 10 months more for a nice pension, but I could work those months in a lower stress job with lower pay. It's just hard to make that move. Anyone else been through this?
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Old 11-09-2012, 06:43 PM   #31
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Still in my acccumulation phase also. I am 47, financially independent. I am planning to FIRE this year or next. I will practice medicine part time then, just as you are describing below.

Like you, I plan to stop working completely in my late 50s.

Quote:
Originally Posted by bo_knows View Post
Age 40-55(or 60): Switch to part time work, just enough to cover bills, don't contribute much to retirement, enjoy life, watch retirement account gain interest.
Age 55(or 60)+: Completely stop working, use the retirement account (that has grown for the past 20 years) for income.

Does anyone on this forum have experience with a similar strategy? I'm curious.
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Old 11-09-2012, 09:47 PM   #32
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Sounds like a winning strategy if one can chose later in life or earlier, we all know earlier is better considering compounding. Lets consider 10M or 1k in 1980, invested in an ultraconservative AA, or the same today. I think that illustrates my thinking.
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Old 11-09-2012, 10:36 PM   #33
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I have done exactly what you described. I am 46 y/o and just negotiated a 24 weeks/yr, 4 days/week work scheduled beginning 1/1/13. I probably could have done it a few years ago but was stuck int the "just one more year" rut. Now that I have committed to it, Even though I have not started that schedule yet, I am so much happier in my life just anticipating it. The nice part about continuing part-time to cover living expenses, is it not only allows your nest egg to grow, but also a cushion in case it does not. Although I can afford private school college education for 2 kids (ages 13, 12 now) with my savings, I can subsidize that with "pay as you go" if I continue part time.
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