maybe a pay cut is just what I need?

[medved]

I am in my mid to late 50s. I have been working at the same company for a long time. Every year, a board/management committee decides what my pay will be for the next year. (No options; its all cash compensation). Sometimes it is higher than the prior year; sometimes lower; sometimes the same. It is always a high number, just because I am in a very highly paid field. But, still, nobody wants a pay cut. It is just insulting.

Last year, the board committee cut my pay. Just a few days ago, they told me it will be cut again for next year. Nobody should feel sorry for me; even with the pay cuts, I am extremely well compensated. Even so, two pay cuts in a row does not create a warm and fuzzy feeling.

My wife's reaction was "Good thing they cut your pay again; that is probably exactly what you need to make the decision to retire -- they are doing you a favor."

Maybe that is right. I don't really like the work any more, and I have saved enough money so that I could live very well with a one to two percent withdrawal rate. So maybe they are doing me a favor. On the other hand, it would feel better to go out when I am at the top of my game. The Quarterback wants to retire after a Super Bowl win, not a 4-13 season.

How would you think about this situation? Anyone have a similar experience? Thanks for any insights you might have.

 

[finnski1]

I think your wife is right.

 

[MC Rider]

You don't like the work, have plenty of money to retire.
Sounds like a no brainer.

 

[Souschef]

I think your wife is right.

+1
I had sort of the same situation, where I did not get a raise for 2 years. They took my raise money and spread it out to the rest of the group which made considerably less than I did.
I left right after my profit sharing was posted to my 401K.

 

[SecretlyFI]

I have been through a few hits to the gut from the wonderful mega corp world. Pension freezing and abrupt elimination of retiree healthcare being the most significant. After bouncing through several stages of grief about it I settled on grateful. Grateful it will allow me to make a clean break when I ER, with not a bit of guilt. They made their moves, showed there’s no loyalty, the “people-first” memos are pure fiction…which frees me up mentally to make my own decisions without hesitation. So I agree with your wife.

 

[RunningBum]

My push out the door was a little more obvious (I would've had to return to full time and take on some new responsibilities that would've been difficult to pick up working remotely), but this seems good enough sign to me. What happens if you have a 3rd pay cut next year? Same position but you spent another year at a job you no longer care for, with a year less of retirement to enjoy. I don't feel like personal pride is a good enough reason to stay. Most likely once you retire you'll realize that was pretty meaningless, but it's your call. And you'll probably get over the notion that it was insulting.

 

[braumeister]

This one is easy. You're done.

Who benefits most if you stay, you or them?

Two years from now, you will be long forgotten, so what possible difference could there be?

Don't let your ego get in the way. Out the door, now.

 

[ExFlyBoy5]

I am in my mid to late 50s. I have been working at the same company for a long time. Every year, a board/management committee decides what my pay will be for the next year. (No options; its all cash compensation). Sometimes it is higher than the prior year; sometimes lower; sometimes the same. It is always a high number, just because I am in a very highly paid field. But, still, nobody wants a pay cut. It is just insulting.

Last year, the board committee cut my pay. Just a few days ago, they told me it will be cut again for next year. Nobody should feel sorry for me; even with the pay cuts, I am extremely well compensated. Even so, two pay cuts in a row does not create a warm and fuzzy feeling.

My wife's reaction was "Good thing they cut your pay again; that is probably exactly what you need to make the decision to retire -- they are doing you a favor."

Maybe that is right. I don't really like the work any more, and I have saved enough money so that I could live very well with a one to two percent withdrawal rate. So maybe they are doing me a favor. On the other hand, it would feel better to go out when I am at the top of my game. The Quarterback wants to retire after a Super Bowl win, not a 4-13 season.

How would you think about this situation? Anyone have a similar experience? Thanks for any insights you might have.

You typed a lot, but the highlighted portion is the important part.

The finance side is covered, but what will you "retire to"? A lot of people tend to identify themselves by what career that they have/had. I think (personally) that is foolish. If you were to retire tomorrow and you have a party in 3 years, how many of your co-workers would attend? Be honest with yourself. Life is SO very much more than what you j*b is/was...

 

[travelover]

When I was w*rking, I cared about what they thought of my worth and what they said about me. After I left, and I mean ten minutes after, I didn't a crap. It was very freeing.

Why put up with it?

 

[OldShooter]

I agree with the majority here but I am puzzled by a board relationship to a top executive where there is apparently a total absence of communication. Reasons for your pay going up or down should be explained to you even if they aren't interested in actually discussing them with you. Sad. I don't think I'd like to work in that environment.

Have a nice retirement. You won't regret it.

 

[medved]

I agree with the majority here but I am puzzled by a board relationship to a top executive where there is apparently a total absence of communication. Reasons for your pay going up or down should be explained to you even if they aren't interested in actually discussing them with you. Sad. I don't think I'd like to work in that environment.

Have a nice retirement. You won't regret it.

They do give me reasons for their decision. Sometimes the reasons have merit. Other times, the reasons are ridiculous and demonstrate a lack of any serious inquiry or analysis on their part. And of course there is a heavy dose of internal politics.

 

[Aerides]

...
My wife's reaction was "Good thing they cut your pay again; that is probably exactly what you need to make the decision to retire -- they are doing you a favor."
...
How would you think about this situation? Anyone have a similar experience? Thanks for any insights you might have.

Your wife sounds very smart. I recall you've posted several times about the challenge of being ready personally vs. financially.

 

[braumeister]

Other times, the reasons are ridiculous and demonstrate a lack of any serious inquiry or analysis on their part.

So they recognize that it's only the high compensation that keeps you there and they don't have to treat you with any respect? Sounds like a toxic workplace to me.

 

[MRG]

Your wife is right.
I had something similar and a buddy pointed out I should thank the person who convinced me to leave.

 

[cathy63]

Remember when you started this thread over 5.5 years ago? https://www.early-retirement.org/forums/f26/my-introduction-81459.html

...I have worked really hard at my career -- too hard, if I am to be honest -- long hours, a lot of stress, and really no such thing as "time off." I gave up a lot.

For many years, I sort of enjoyed it. Or at least I enjoyed being successful at it -- the pay, status, etc. But these days I am not enjoying it. I'm tired and annoyed. And the profession in changing. So I am starting to plan my escape...

It doesn't sound like things have gotten any better in the intervening time, though maybe there were some ups as well as downs during those years? The pay cuts could be the board's way of giving you a hint that you should leave on your own terms. What if next year they decide your services are no longer needed?

 

[Dtail]

I think your wife is right.

+1
Aren't they always.

 

[Bamaman]

How is the company doing in sales and profitability? If things are pointing up and they're cutting salaries, the writing's on the wall.

And since you're fixed fiscally, it might be a good time to tell'em 'Adios."

My MegaCorp retired everyone over 55 years old in 2008, and it was the best thing to happen to us all. And they paid dearly to send us to the house too.

 

[chris2008]

Listen to the external consultant:
Your wife is right.

 

[njhowie]

I will be the dissenter. If you feel you have more to accomplish and retire after a strong finish then go for it. However, can that happen with your current employer?

 

[corn18]

Engineer your layoff with a nice severance package.

 

[medved]

I will be the dissenter. If you feel you have more to accomplish and retire after a strong finish then go for it. However, can that happen with your current employer?

I have thought about a move -- go someplace else, do great, and leave on a high. But I am not sure I have the motivation to go find the right thing, to learn a new organization, and to make a big contribution. And if I was not going to make a big contribution, I would not want to do it.

I have also thought about moving to a nonprofit, where I would earn a very modest income, but could do something useful.

The question is whether either of those is a "better" use of my time than all the other stuff I want to do. Life is short and uncertain.

 

[OldShooter]

... I have also thought about moving to a nonprofit, where I would earn a very modest income, but could do something useful. ...

Excellent idea, but try a few nonprofits as a volunteer until you find something you can have a passion for. If a paid job materializes, fine, but it comes with constraints and you don't need the money, so why ??

DW's retirement hobby has been nonprofit boards. I have never tried to count but its probably cumulatively been over 20 and board chair at many. (The first thing she does at a new board is to make sure there are term limits. She doesn't like to hang around.) Anyway, from observation, nonprofit boards usually lack management and financial expertise. After becoming known via participation, you will be a slam-dunk board nominee in many organizations.

 

[Jim59]

Engineer your layoff with a nice severance package.

Exactly, or preferably be blunt about it ask if they will pay you off. Let them know you have been reading the signs and they are at odds with your contribution. Tell them it might be best for them to encourage you to retire.

 

[pjigar]

Wife is always right! I actually changed the job to get a pay cut so I can have more time. I haven't even hit 50 yet nor FI. I have FU money so I throttled down. Each of their own. But with 1-2% WR I would quit this very second. Remember Time > Money. That is what I live by.

 

[RetiredHappy]

The question is whether either of those is a "better" use of my time than all the other stuff I want to do. Life is short and uncertain.

Being retired and doing something fun with your time instead of working in a job which you no longer enjoy. Is there a hobby which you would enjoy or can get better with more time on your hands? More travel?