What is your free time worth?

[Ronstar]

For those of you already FIRED, think back to the last few months before you retired. Knowing what you know now, would you:

1. Accept a part time job with your employer continuing doing something you like 2 days a week for 48 wks per year - 1 day per week from home and 1 with 30 min commute to an office, at a pay rate starting approx 10% more than your rate when you retired, 401k but no other benefits. And do this under contract for 2-3 years?

Or,

2. Not accept the part time gig because 2 days a week of free time is worth more to you than the $ you would receive under scenario 1?

This is the decision i'm facing, and i'd like opinions from others- especially those that have been retired awhile. Another issue is that I still have 80k of company stock that the company would buy in 2012 if I agree to stay on part time. If I don't agree to the part time contract, I don't know when or to whom I would sell the stock.

 

[RAE]

Well, everyone's situation is different, so we can't really tell you what would be best for you. You say you like your job, so that certainly could help influence the decision. I can tell you, though, that for me, working part-time as a transition into full retirement would not have worked very well, and I'm glad I made the decision to retire completely when I did. I've been retired for nearly 3 years now, from a job with the fed. govt.. I did like most aspects of my job, though not all aspects. I had (and have) many interests and hobbies that I was eager to pursue in retirement. Had I transitioned into retirement by working a couple days per week, I am certain that the work would have changed my whole "mindset", making it difficult to live the way I do now. Sure, the extra money would have been nice, but it is hard to describe just how satisfying it is to have complete freedom to plan your own activities each week, month, year. I love my life the way it is now, and I am certain that working a couple days each week would have negatively impacted that. Let's face it, even if you are only "working" a couple days each week, you are probably thinking about work a lot more than that. Being completely retired, you don't have to think about it at all, and can free your mind to think about anything else that interests you.

This is just my experience..........since you asked!

 

[FIREd]

Assuming I could be assured that the part time job would not turn into a full-time one with part time pay, I would consider option #1. But I would try to negotiate better benefits.

 

[JDARNELL]

So if you went with #1 when could you exercise the stock? If you could negotiate just the 2 yr option (assuming that is what you want to do) with a 10% raise, reducing your weekly work by 40%, and capture that 80K this now makes that hourly rate look pretty good all the time keeping your eye on the door and giving you some nice long weekends to begin easing into ER.

JDARNELL

 

[REWahoo]

I was faced with a related decision when I was retiring. As my departure date approached I was asked to delay for three months. I countered with an offer to stay on for a month for six weeks pay - so in my case my free time was worth 'time and a half'.

That said, I doubt you will find a much help here in making a decision. Only you know what your time is worth to you so you'll have to look within yourself.

 

[Ronstar]

?... Let's face it, even if you are only "working" a couple days each week, you are probably thinking about work a lot more than that. Being completely retired, you don't have to think about it at all, and can free your mind to think about anything else that interests you.

This is just my experience..........since you asked!

Great points! Certainly there is the possibility of thinking of work when I'm not on the clock- I'm thinking of work now and I don't see how I can eliminate work thought distraction much by just going down to 2 days. I'm very far behind now on my hobbies and thought I could satisfy my outside interests in 5 days a week - but maybe I do need 7

 

[truenorth418]

I probably would have continued via option 1. I was relieved to leave my job but I would have preferred to ease my way out in that way assuming I liked the activities presented. But everyone is different and YMMV.

 

[Ronstar]

Assuming I could be assured that the part time job would not turn into a full-time one with part time pay, I would consider option #1. But I would try to negotiate better benefits.

I put together a want ad for my replacement and got résumés from some good prospects, but the boss has not interviewed anyone. He may try to spread my work around to 2 of my colleagues that have more than enough to do with their own clients. This could lead to a part time job with full time responsibility - unless I demand that they hire my replacement and that the situation meets my approval before agreeing to the deal. As far as benefits - I'm on DW's health insurance, so I'm good there, but I'm going to negotiate higher salary to offset the loss of vacation/holiday pay, etc.

 

[Ronstar]

So if you went with #1 when could you exercise the stock? If you could negotiate just the 2 yr option (assuming that is what you want to do) with a 10% raise, reducing your weekly work by 40%, and capture that 80K this now makes that hourly rate look pretty good all the time keeping your eye on the door and giving you some nice long weekends to begin easing into ER.

JDARNELL

The company would buy the stock 12/31/2012. But the boss has a crazy idea to pay me a third now and financing the rest to maximize my attention for 2 more yrs while they make payments on the remainder. I'm ok with this. But a big concern is the bosses initial request for a 5 yr deal - 3 at 2 days a week and 2 yrs at 1 day a week. I agree with you that this makes a good transition to ER, but I have to get the term to 3 yrs or less.

 

[Ronstar]

I was faced with a related decision when I was retiring. As my departure date approached I was asked to delay for three months. I countered with an offer to stay on for a month for six weeks pay - so in my case my free time was worth 'time and a half'.

That said, I doubt you will find a much help here in making a decision. Only you know what your time is worth to you so you'll have to look within yourself.

Funny you should mention "time and and half"- that's the number I started negotiating at and I haven't accepted anything less - yet. But there are other terms that would make less of increase palatable.

 

[Nords]

For those of you already FIRED, think back to the last few months before you retired. Knowing what you know now, would you:
1. Accept a part time job with your employer continuing doing something you like 2 days a week for 48 wks per year - 1 day per week from home and 1 with 30 min commute to an office, at a pay rate starting approx 10% more than your rate when you retired, 401k but no other benefits. And do this under contract for 2-3 years?
Or,
2. Not accept the part time gig because 2 days a week of free time is worth more to you than the $ you would receive under scenario 1?
This is the decision i'm facing, and i'd like opinions from others- especially those that have been retired awhile. Another issue is that I still have 80k of company stock that the company would buy in 2012 if I agree to stay on part time. If I don't agree to the part time contract, I don't know when or to whom I would sell the stock.

This reminds me of the hoary(!) old quote: "We've already established your occupation, ma'am, and now we're just negotiating the fees."

This part-time offer seems like such a good deal now, but the terms won't last on either side of the negotiating surface. Your employer will start making subtle (or not-so-subtle) additional demands like a "special meeting" during your time off, or staying a little later to finish a team project, or expecting you to support the culture with your participation in "mandatory" training/social events. If you're getting a 401(k) then I don't think you can plead that you're "just a contractor", and there's still the whole unsavory hostage factor of the $80K.

You'll change too. Two days per week doesn't seem so bad now from your current 5+ days/week perspective, and heck-- it's just a few years. Easy money! But after a few months your part-time working lifestyle will start interfering with your full-time retiree lifestyle. You'll resent having to show up for the two days you've agreed to, let alone the extra requests. You'll have absolutely no patience for the usual workplace BS or the rush-hour commute that you're tolerating now, let alone for anything "extra" that someone thinks up over the next few years.

I suspect that about eight months into it you'll find yourself having a family conversation along the lines of "WTF am I doing this?!? It's only $80K, and we don't need the money..."

My retirement request was approved one year in advance. For the next 265 days (before my 100-day terminal leave) I found it extraordinarily difficult to haul my assets into the office and focus on my IN box. There were just too many items on my pre-retirement checklist for me to be able to focus on work, and there were just too many retirement projects to get ready for. About the only thing that kept me going was my personal internal [-]lecture[/-] dialogue: I'd managed to behave for nearly two decades and I could keep it going for just a few more months so that I could be proud of my final lap for the rest of my life. Even then it was still close, especially the part about taking the high road and not telling everyone in the chain of command how I really felt about things.

So... to answer your question, my free time is worth way too much to waste it working for money.

But when neighbors & friends want help with a project, if it makes them feel better then I'm happy to accept food or $25/hour.

 

[Ronstar]

I probably would have continued via option 1. I was relieved to leave my job but I would have preferred to ease my way out in that way assuming I liked the activities presented. But everyone is different and YMMV.

It does make sense to "ease" out, as long as it's "easy"

 

[bbbamI]

I would have chosen option 1. At that time DH was still working and I was used to the daily grind. Part time wouldn't be so bad.

Now that we're both retired, our free time is priceless.

 

[Ronstar]

This reminds me of the hoary(!) old quote: "We've already established your occupation, ma'am, and now we're just negotiating the fees."

This part-time offer seems like such a good deal now, but the terms won't last on either side of the negotiating surface. Your employer will start making subtle (or not-so-subtle) additional demands like a "special meeting" during your time off, or staying a little later to finish a team project, or expecting you to support the culture with your participation in "mandatory" training/social events. If you're getting a 401(k) then I don't think you can plead that you're "just a contractor", and there's still the whole unsavory hostage factor of the $80K.

You'll change too. Two days per week doesn't seem so bad now from your current 5+ days/week perspective, and heck-- it's just a few years. Easy money! But after a few months your part-time working lifestyle will start interfering with your full-time retiree lifestyle. You'll resent having to show up for the two days you've agreed to, let alone the extra requests. You'll have absolutely no patience for the usual workplace BS or the rush-hour commute that you're tolerating now, let alone for anything "extra" that someone thinks up over the next few years.

I suspect that about eight months into it you'll find yourself having a family conversation along the lines of "WTF am I doing this?!? It's only $80K, and we don't need the money..."

My retirement request was approved one year in advance. For the next 265 days (before my 100-day terminal leave) I found it extraordinarily difficult to haul my assets into the office and focus on my IN box. There were just too many items on my pre-retirement checklist for me to be able to focus on work, and there were just too many retirement projects to get ready for. About the only thing that kept me going was my personal internal [-]lecture[/-] dialogue: I'd managed to behave for nearly two decades and I could keep it going for just a few more months so that I could be proud of my final lap for the rest of my life. Even then it was still close, especially the part about taking the high road and not telling everyone in the chain of command how I really felt about things.

So... to answer your question, my free time is worth way too much to waste it working for money.

But when neighbors & friends want help with a project, if it makes them feel better then I'm happy to accept food or $25/hour.

Thanks for the great points. I wouldn't mind working a couple days a week - if the responsibility is that of a part time worker. But you're right - there will be those subtle demands. But in reality, I wouldn't be going through all of this if it wasn't for the 80k. Although I don't need it now, and hopefully never will, I would still like to get the $ and walk out the door within the next 6 months.

I can appreciate how your free time is worth too much to waste it working for money - working for neighbors and friends is on your terms, not anyone else's.

 

[Ronstar]

I would have chosen option 1. At that time DH was still working and I was used to the daily grind. Part time wouldn't be so bad.

Now that we're both retired, our free time is priceless.

Same here - DW would be still be working during the first 6-12 months of this, so part time would be ok at the beginning. But I sense that once she retires, our free time will become priceless like you & your DH's.

 

[RunningBum]

It is a nice transition to retirement. It also depends on how safely FIREd you are. If you're not really sure you safely have enough, or if you would like more money to splurge with, I'd go with #1. If you're easily FI, do whatever feels right. I'd probably take #2 because the extra money would be pretty meaningless.

 

[steelyman]

A related question is "What is your dead time worth?".

 

[audreyh1]

When I retired, I felt pretty secure about what I had set aside, and I also had feathered my "short-term funds" i.e. travel budget so I could go do a lot of playing right away.

So the main issue for me in terms of a weekly commitment, was that it would mess up my desired travel schedule. Of course my company asked me to consider staying on part time. But I just didn't see how such regular availability wouldn't totally mess with my personal plans. I didn't want to worry about how to fit my personal schedule around the work commitments, not to mention still always having to "go back to work" on a regular basis.

I think we've had several retirees do the part time thing at first, and it quickly becomes a real drag (once they've really tasted their freedom). And it usually comes down to the scheduling constraints in their personal life.

But, if the nest egg could still using some feathering (analogy doesn't quite work, does it?), then it seems like a reasonable compromise. It then comes down to what you are willing to put off doing until the future.

 

[MichaelB]

Phasing out work should be easier than quitting abruptly for both you and your employer. Not sure why it isn't done more often. Nothing wrong with part time for a year or two as long as you have clear reasons for doing it and aren't doing it because you feel guilty about leaving. Staying part time, especially less than 20 hours, requires a lot of discipline to avoid the type of drift Nords refers to. A "time clock" attitude is a must.

 

[target2019]

The concept is ok. I have a problem with the details, though.

Your time as a consultant employee is worth more, since you've proven your ability. With benefits, you are at least at 125%. Are you giving up any of your benefits? I would counter with 125%.

For the term, I'd counter with limiting this to 3 years maximum. Two years at 2 days per week; one year at 1 day per week.

Your time is definitely worth more than 110%. Would you be an employee or consultant?

 

[pb4uski]

I worked 50% time the last few years that I worked - essentially, hours, pay and most benefits were 50% of what I would have got as a full time employee but health care was 100% (was 0% if you worked less than 50% time). It worked out well for me.

In the job that I had where we serviced demanding clients, the problem ultimately became working 50% of the time but being "on call" 100% of the time. The nature of the work was such that it wasn't practical to say I was "off" on Mondays and Fridays and available only on Tuesday-Thursday. If a client had a pressing issue that I was critical to and wanted to discuss it on a Friday, it wasn't practical to tell them that it would have to wait until the following Tuesday. Since I wanted more down time and didn't to be "on call" all the time and we couldn't figure out a practical way for me to continue to work without being on-call all the time I decided to pull the plug.

If you work as a consultant, you should get at least 150% of your current gross earnings to make up for having to provide your own benefits. My billing rate was 250-350% of my gross earnings, so even 150% would be a good deal for your employer.

 

[Lazarus]

More than anyone would pay me I'm sure.

 

[Ronstar]

....If you're easily FI, do whatever feels right. I'd probably take #2 because the extra money would be pretty meaningless.

I'm safely FI - I've been working for some time just to make extra bucks for toys. But my need for toys is diminishing, making #2 more attractive.

A related question is "What is your dead time worth?".

Good point

..... I didn't want to worry about how to fit my personal schedule around the work commitments, not to mention still always having to "go back to work" on a regular basis.

This is my biggest concern, and I would need a lot of flexibility.

....A "time clock" attitude is a must.

Yes I agree, and my replacement must be in place to handle all day to day issues before I'd agree to this.

....Are you giving up any of your benefits? .....
For the term, I'd counter with limiting this to 3 years maximum. Two years at 2 days per week; one year at 1 day per week..... Would you be an employee or consultant?

I'm going to counter at 1 year max term. I'd be giving up health ins because i have it through DW until ss. My idea of 110% is really about 125% because i figure the extra 10% tacks on after an increase to account for my current vacation and holiday time. I'd technically be an employee because the contracts I work on require subs to have insurance having premiums that would not be cost effective.

...In the job that I had where we serviced demanding clients, the problem ultimately became working 50% of the time but being "on call" 100% of the time......
If you work as a consultant, you should get at least 150% of your current gross earnings to make up for having to provide your own benefits. My billing rate was 250-350% of my gross earnings, so even 150% would be a good deal for your employer.

I work primarily on govt roadway projects where about half of my work is "on demand" . But I can handle this remotely via email, so 4 days a week of 3 hrs remotely plus one day in the office would serve as "on call". The problem with my billing rate to govt agencies is that it is a set pct of my earnings, and any increase exceeding their allowable limit is denied. So I'd have to figure out a workaround.

More than anyone would pay me I'm sure.

Thanks - I'm getting this idea from almost every retiree.

 

[scrabbler1]

Ronstar, the part-time deal you described is a lot like the various part-time deals I had in the last 7 years of working (2001-2008). Wanting very much to reclaim my personal life and do some things I used to do and some things I wanted to do but could not, I was able to lose my awful, lenghty, and often sickening commute which only became worse after my company moved from lower Manhattan to Jersey City, New Jersey in May, 2001.

For 27 months I worked part-time (20 hours per week) and about 2/3 of that from home, going to the office only one day a week. I did lose some of my benefits such as paid sick time (I never got sick anyway), some vacation time, as well as any benefit tied to my compensation such as 401(k) matching funds and company stock allocation. I also had to pay 50% (instead of 25%) of the health insurance premiums. But with low expenses due to having paid off my mortgage in 1998, my reduced pay (only down about 40% because of taxes) was still more than enough to cover them. With my new supply of free time I regained my personal life which made me quite happy, bringing back to life an hold hobby and taking on some volunteer work with the school Scrabble (see my screen name?) program.

But then the company ended its open-ended telecommuting deals in 2003 so I had to fulfillmy work hours at the office. My part-time work hours remained intact although I lost most of the paid company holidays because they did not fall on my scheduled work days.

That lasted until 2007 because even 3 days a week to the office was too much, interfering with trying to schedule my midday activities around the 2 days off from work. The commute even 3 days a week became tiring and often sickening. So I cut it down to 2 days a week and got home an hour earlier on those days (12 weekly hours of work down from 20). It cost me some more money in pay and most of the remaining benefits such as eligibility for the group health insurance, paid days off, 401(k) match, and company stock allocation (not that I was getting much anyway). I went on COBRA for 18 months.

This went okay for a while, as it was easier for me to schedule my midday activities with the extra day off, and getting home at 6 instead of 7 was helpful. Covering my monthly expenses was still no problem but I was not saving very much of my salary any more. (including 401(k) because the match was gone and I needed to save as much as I could in non-retirement accounts).

But this was part of my plan to ER by the end of 2008. After a while even a two-day commute was too much. I had to eliminate it altogether, to zero. The company stock kept rising, so my large number of existing shares grew in value, the only really meaningful benefit I still had. So when it remained at a targeted value at the end of September (its value took only a tiny hit despite the rest of the market crashing that month), I put in my notice and got out.

I do credit my 7 years of part-time work as enabling me to keep working long enough for the company stock to grow while establishing a personal life. Working part-time did not prevent a burnout but it did slow its pace so I could stick around to get to my ER.

 

[youbet]

For those of you already FIRED, think back to the last few months before you retired. Knowing what you know now, would you:

1. Accept a part time job with your employer continuing doing something you like 2 days a week for 48 wks per year - 1 day per week from home and 1 with 30 min commute to an office, at a pay rate starting approx 10% more than your rate when you retired, 401k but no other benefits. And do this under contract for 2-3 years?

Or,

2. Not accept the part time gig because 2 days a week of free time is worth more to you than the $ you would receive under scenario 1?

This is the decision i'm facing, and i'd like opinions from others- especially those that have been retired awhile. Another issue is that I still have 80k of company stock that the company would buy in 2012 if I agree to stay on part time. If I don't agree to the part time contract, I don't know when or to whom I would sell the stock.

It depends on your age and how financially prepared you are for FIRE.

If you're young and your FIRE stash is marginal, by all means stay on part time for a while.

If you're older (I didn't FIRE until 58) and your FIRE stash is very conservative (belt + suspenders + padded budget), don't tie yourself down. In this case, the grains of sand running through the hour glass are much, much more important than a few more bux you'll likely not spend anyway.

BTW, I turned down an opportunity for part time contract work post FIRE and never regretted it for a moment. DW, who FIRE'd at 55 yo, 3 yrs before me, did do some part time work (4 half days/wk). But once I FIRE'd, she resigned. Her compensation was fine, she liked the work (a continuation of her profession) but we were more than ready to head off in new directions. 6.4 yrs into FIRE, it's been great!