reducing work hours before retirement

[ranchoparque]

Hi I'm 55. Some people at my employer are taking early retirement but they are also making available a voluntary reduction in work hours to 72 hours per 2 week pay period. This is equivalent to 26 extra days off per year.
I've been at my job for 28 years and I also have maxed out at 5 weeks vacation per year.
So, if I took the reduction in work hours I would reduce my pay to 90% of what it is now, but I would then have the equivalent of 10 weeks off per year, not including holidays and sick time.
If I retired now, I would get about 65% percent of my pay.
If I go on working at 90% of my pay for x number of years I can continue to contribute to retirement accounts and not spend down my savings.
So I'm just wondering if anyone has any feedback on this. Would you consider working say 1450 to 1500 hours per year (including holidays and sick days) to be "semi FIRED" or part time?
From my own personal point of view, having all those days off would give me plenty of time to de-stress and have time for hobbies and travel.
I think I might get bored or have trouble adjusting to being 100% retired at this point.
Thanks in advance for any comments anyone cares to leave.

 

[Alan]

From my own personal point of view, having all those days off would give me plenty of time to de-stress and have time for hobbies and travel.
I think I might get bored or have trouble adjusting to being 100% retired at this point.
Thanks in advance for any comments anyone cares to leave.

ER is not the Holy Grail for everyone and it sounds like you answered your own question. If you don't hate work or feel it is damaging your health, and 10 weeks vacation a year sounds great at this present moment, then that looks like a perfect way to dip your toe into the waters and see how you like it.

 

[Rich_by_the_Bay]

I did a 10% reduction about a year ago with voluntary reduction in pay (it's a long story but I returned to full time while preserving those off days due to a change in the institution's time off policy).

I found the extra time off to be very useful, and it enabled us to make longer and more frequent trips to visit the grandkids, etc. The down side is that nobody but you fully understands that you are "off" and the work and calls keep on keeping on. A half day off per pay period is invisible to your colleagues and customers.

But if you have the opportunity to try it and give it back if it doesn't work out, go for it.

 

[kumquat]

Depends on your company. My mega-corp would have given me a deal like that. Their math would have worked like this:

• 72 hours (instead of 80) in the office every 2 weeks
• 5% increase in workload to be done "whenever"
• 10% reduction in pay

Good deal for them. YMMV.

 

[NW-Bound]

OP, you are in the enviable position of being able to ease into ER, since you do not appear to hate your job but just want some extra free time. It is a lot better than most people who have to be very sure before severing the umbilical cord to their workplace.

I have been working part-time now for 6 years. It is not structured like your job, being a mix of consulting and independent work. It really helps our cash flow, gives us extra money for foreign travels, allows me the "courage" to buy stocks when they are low, etc... I do not hate my job (just love it less and less), so it has been OK.

It is an excellent way to ease yourself into ER. You can always accelerate your ER schedule later, if you like. Watch R_i_T.

 

[Katsmeow]

I would love to do this time type of thing and am considering proposing it next year or so (I'm similar age to you). Rich has a good point depending upon what line of work you are in. I'm in a line of work where theoretically I take vacation or time off when sick but in reality I am supposed to bill a certain amount of time during the year so any time taken off, you really have to make up the time. I would like to reduce the amount of time expected for me to bill. I did do this a number of years ago when I had smaller children. The thing is that when there are urgent things going on in the office you still had to work more. It was hard to draw that line. In other lines of work that works better...just depends.

 

[ranchoparque]

I do get stressed out at work but there are many aspects of my job that I like. When I work too many days in a row, I really look forward to having a day off. After a day or two off I'm usually good to get back into the fray. I think what I'm looking for is more a a work/life balance at this point and I'm glad to have the opportunity to reduce my hours a little.

 

[CuppaJoe]

Depends on your company. My mega-corp would have given me a deal like that. Their math would have worked like this:

• 72 hours (instead of 80) in the office every 2 weeks
• 5% increase in workload to be done "whenever"
• 10% reduction in pay

Good deal for them. YMMV.

My mileage varied! After about ten years, my employer decided to close the office at 3:00 p.m. on Fridays, no reduction in pay, and pay increases as usual every January. So workweek went from 40 to 38 hours. Nice employer. I was 5% retired and didn't realize it.

 

[Moemg]

I went from full time to part time before I retired . I then went per diem in the last few years I worked . It was great because I still liked my job and it gave me the flexibility to travel for longer periods of time .It eased me into retirement .

 

[Martha]

I would love to do this time type of thing and am considering proposing it next year or so (I'm similar age to you). Rich has a good point depending upon what line of work you are in. I'm in a line of work where theoretically I take vacation or time off when sick but in reality I am supposed to bill a certain amount of time during the year so any time taken off, you really have to make up the time. I would like to reduce the amount of time expected for me to bill. I did do this a number of years ago when I had smaller children. The thing is that when there are urgent things going on in the office you still had to work more. It was hard to draw that line. In other lines of work that works better...just depends.

Kats, I did it by reducing the number of clients. You still had to bend your schedule to fit the client needs, but there were fewer needs with fewer clients.

Ranchoparque, given how much vacation time you already have, the extra time off adds up to a significant chunk. What is the harm in trying?

 

[ranchoparque]

Ranchoparque, given how much vacation time you already have, the extra time off adds up to a significant chunk. What is the harm in trying?

No harm trying. I am going to think it over for a few months before submitting the request to reduce my hours. I want to consider if I would use the extra time wisely. I guess that's something I can only answer for myself.
I was thinking that having extra time now would be good practice for when I actually take full retirement.

 

[Bestwifeever]

If you can accumulate the hours to be able to take days off, nice.

But if it's just reducing each work day by 48 minutes to make the 72 hrs every two weeks, it sounds less appealing to me.

Are other people already doing this where you work? How is it working out for them? If no one has started on the reduced schedule yet, maybe wait and see how the people who decide to try it like it?

 

[Rambler]

I think if I could take the extra time off when I wanted it (in 2-5 day chunks), I would do it. I'm not so sure about an extra "day" off every two weeks. But that's just me. Right now I have to fly on the weekends alot, so I sometimes tack an extra replacement day or two onto vacations, since I have to keep up with emails and approvals while on vacation (and to a lesser extent on weekends) anyway.

Your comment about thinking about it for a while, I believe, is right on the mark.

R

 

[RunningBum]

No harm trying, but if you're expected to do the same amount of work in 90% of the time, it's probably not so good.

OTOH, if you're putting in OT today, say 44 hrs/week, if you cut to 36 hours and can hold to it, you're reducing hours by 20+% with just a 10% pay cut.

If you're questioning what you would do with the extra 8 hours every 2 weeks, you really need to try it out to see if you're ever going to be ready for ER, because you'll REALLY wonder if you're ready to use the extra 80 hours wisely.

My personal experience, I cut to half time and absolutely love it. If my only option had been to take a 10% pay and hours cut, I'd have done that over staying full time, though I'd probably be gone by now.

 

[Ronstar]

I take off every Friday and usually an additional 3 days a month. Rich is right - a half day per pay period is invisible to colleagues and customers. I get no interruptions on Fridays. I have a few minor work things to handle during the other 3-4 days in a row I take off a month. I handle these minor things by laptop / blackberry and communicate with co-workers/customers to get things done. I'll continue to reduce hours as I improve my delegation and remote communication skills.

Rancho - it sounds like your situation would be ideal for semi-er. It'll give you a chance to develop hobbies and other interests to pursue in retirement. Travel and do a few things around the house. It'll also give you a chance to keep full-time work benefits while easing into retirement. My experience is that you wont get bored if you ease into it

 

[ranchoparque]

I am going to go for it. I'll be one tenth retired. Forum members should encourage me to go to the gym and get some exercise on my extra days off!

 

[growing_older]

You might want to inquire about any effect on your pension if you have one. A friend was on a part time schedule during the month her company decided to cash out the pension plan and was credited only based on part-time pay instead of the full time pay she had worked for the previous 20 years.

 

[Milton]

OP, you are in the enviable position of being able to ease into ER, since you do not appear to hate your job but just want some extra free time. It is a lot better than most people who have to be very sure before severing the umbilical cord to their workplace.

Absolutely correct.

As kumquat suggests, the potential fly in the ointment is that some employers purportedly reduce employees' hours, but do not reduce their workload: so the net effect is that the employees do essentially the same work as before but get less money (and are probably under increased stress).

 

[ranchoparque]

The workload issue doesn't really apply because I would be seeing fewer clients. Also it would not affect pension benefits, vacation/sick time, etc.
The only thing I would be giving up would be 10% of my pay in order to work 10% less.

 

[Katsmeow]

Sounds like a good deal then.

 

[Milton]

I agree. If I could swing the same deal, I would.

 

[growing_older]

If you are lucky you might find this is even a better deal than you think. I know some places that still expect part-time people to work a full-time workload, in which case you are getting a lower salary and taking more work home to do on your non-work hours. On the other hand, I know some places that think it's expected to give extra assignments to full time people, but are careful not to assign work beyond the agreed work hours to part timers. In which case, you might be trading a 50-60 hour uncontrolled workweek for a 36 hour controlled work week and only giving up 10% of pay. Good luck.

 

[freebird5825]

I punched out (resigned) the minute I realized it was possible financially. I went from having all the money I needed to being on a fixed budget, but a lot of things improved for me healthwise and emotionally. No brainer.

It all depends on how toxic your w*rk environment is and how the situational stress is affecting your health and sanity.
Ask your doc for an opinion next time you go for a physical.

 

[NW-Bound]

Ask your doc for an opinion next time you go for a physical.

I didn't ask mine for his opinion. I just told him I retired. He was a bit surprised. I couldn't tell if he was envious. He shouldn't be, because he was young (probably not more than 40), and has not paid his dues.

 

[5yearstogo]

I did something similar to this 2 years ago. I went to 80% time, but the deal I got was not as favorable as yours. My vacation and sick leave is pro-rated as is my additional pension years of service. The pay rate for my pension calculation is the full time rate though. I expected to get no raises, but have been pleasantly surprised the last two years and got average to slightly better than average raises. However, I recently changed to a less visible, but more interesting internal position and I don't expect this to continue.

I have really liked this arrangement. I have two young children (under 10) and my husband works full time (until very recently when I convinced him to pursue a similar arrangement). The reduction in my stress level is significant and my enjoyment of life is greatly enhanced.

If I hadn't been very close to FI, I would most likely not have pursued this arrangement. I have 200 days left to work until I qualify for retiree medical, but may decide to work longer since I have better work/life balance, the pay and pension benefits are quite good and the kids are tied to a school schedule much of the year.

It has worked for me and seems to be working for my husband.

200 days to go (but can't figure out how to change my name!)