The Permanent Long Weekend

If you have been reading my Twitter feed you already know this, but for everyone else:  my boss said yes to my proposal to drop down to 80% time starting in July.  The paperwork is signed and now making its way through the maze called HR.  The plan is for me to have every Friday off, so I’ll have a permanent long weekend (if the six month trial works out fine).  If things go well my first Friday off will be on July 2, just in time to make a four day weekend. 🙂

I’m full of mixed emotions at the moment about the decision.  On one hand I’m happy and the other I’m a bit shocked.  I asked to reduce my hours, but in some respects I didn’t really think they would let me do it.  After all it’s very unusual to have a guy in their early thirties ask to work part time.  I’m not being sexist here, but it is true.   There are a couple of woman I know who have done this at my company or perhaps a person close to retirement, but not a young guy with kids.

The other feeling I’m wresting with is being prepared to let go of  my dream of retirement at 45.  I haven’t done the math yet, but I’m sure this decision will cost me a fair bit of time on the other end.  I’m happy to have more time now, but I’m a little unsure about how I’ll adjust to working longer.  I’ve been working towards this dream for a long time and to have to potentially let go of it will be hard.

So how much will this cost me?  On the surface you would just take my salary and times it by 20% to get a figure of around $15,000 to $16,000, but the really isn’t correct.  Since I pay no longer pay income tax, CPP or EI on the that income, my reduction in after tax pay should be closer to $8500 a year.  Which if you work it out means I’m buying my time back for almost half of what my salary pays me an hour.  Overall I think I’m getting a steal of a deal on that front.

I’m waiting to get my actual numbers from HR to start modeling the fall out of this decision, but being the numbers geek that I am I did some preliminary modeling.   The most obviously short term effect is it is likely impossible to meet my mortgage reduction goal for this year.  I just can’t make that short fall up, but I will still try to get my mortgage as close to $78,000 as I can.  In the longer term I’ve estimated it will take about an extra 6 months to pay off my mortgage.  So rather than it being done by mid-2012 I’ve been pushed back that to late 2012 or very early 2013.  Overall a modest impact.

Overall I think the choice will be worth it.  I’m so looking forward to my summer now with my board work done until late August.  So perhaps all of this goes to show, you never know what you can do until you ask.  So how about you?  Would you give up 20% of your pay for more time at some point in your career?

16 thoughts on “The Permanent Long Weekend”

  1. Congratulations! You’re obviously very excited. You’re right about the change in tax. I think you are wrong about CPP, though, because the YMPE is around $40k, so everyone earning over $40k pays the same premiums. On the other hand, you may have missed government benefits. When you reduce your income, you start qualifying for more programs like the Child Tax Benefit, working families (in Alberta) and GST rebates. How does your wife feel about you working less? Does it put more pressure on her to earn?

  2. Congrats – I think this is a great move.

    I know what you mean about mixed feelings regarding the not-so-early retirement, but obviously you can’t have everything.

    I might do something similar next year, although it will probably be in the form of an unpaid leave for 4 weeks or so.

    Robert is correct. Your CPP and EI amounts will be unchanged.

    Child tax benefit should increase.

    If your total NET family income is under ~ $78k then you might be able to qualify for the first level of additional RESP grants which will give you an extra $50/year per child on maximum contributions.

    Mike

  3. As you already know from my previous comments, I was eager to give up nearly 50% of my gross pay (which was about 40% of my net pay) to be able to work part-time back in 2001. My mortgage was already paid off since mid-1998 so one biweekly paycheck for the following 3 years (1998-2001) more than covered my monthly expenses.

    I wanted my life back and my company did not want to lose me at an important time (Y2K aftermath and a new report system I would be the expert in) so we struck a part-time, mostly telecommuting arrangement.

    In 2003, the telecommute part of the deal was taken away but the part-time part of it remained, forcing me to increase the long, awful, sickening commute until I could not stand it any more. So I asked to further reduce my weekly number of hours another 20% (from the original hours) to reclaim some of what I lost when the telecommuting was taken away.

    I was still able to save a little, even while working only about 30% of my original hours. But working so few hours wasn’t enough to keep me happy, so I retired in 2008. Would I have been able to retire sooner if I worked full-time longer? Probably. But then again, staying there longer, even part-time, enabled me to reap the benefits of my company’s fast rising stock price when I left in 2008. I would have lost out on a lot of that if I worked full-time a little longer but overall less time from being burnt out sooner.

    I was glad I went part-time for 7 years before leaving altogether.

  4. It is great that you had the courage to do this.
    I work in the OPS and they have something like this where you can have them put aside 1/3 of your pay for 3 years and after 3 years you can take 1 year off paid for by the 1/3 that they were taking away. I plan to do this sometime in the future because I don’t think I can last 34 more years of working without a break – I am 31.

  5. Congrats!
    I guess this makes you a weekend warrior retiree.
    And maybe the reduced income will make you more efficient with your finances,so your ‘dream’ might still happen after all.

  6. Colour me jealous…. I would give up my left you-know-what to have Fridays off.

    But then again, my retire at 45 plans are still on track so far(crosses fingers), which makes it a bit more tolerable to stay in the rat race.

  7. I’m about to start a six month leave of absence on July 2nd, but unfortunately it’s to take care of a terminally ill family member.

    On the one hand, I’m glad that I have saved enough over the years that I don’t have to worry about the financial impact of my leave. On the other hand, I wish I had been less obsessed with work and enjoyed more time with her before she got sick.

    It’s all about balance and recognizing that no matter how detailed and well-thought-out your plans may be, the future is full of surprises (both good and bad).

  8. @ Robert,

    I mentioned your questions to my wife. She is going to answer them directly later today.

    Good points on the annual CPP and EI amounts. Those don’t really change.

    @Hazy,

    It should be interesting to see what happens with our spending with this change. Will it go up or come down further since I have more time to get things done. I’m not sure, but I’ll let everyone know as time goes on.

    @Jon Snow,

    It’s all about choice. You now might just retire earlier than I will.

    @Jo,

    Sorry about your family member. I agree that you can’t predict the future. You can only plan for what you know and deal with the rest as it comes up.

    Tim

  9. Tim,

    My wife and I have discussed the exact same issue. We’re both frugal and our mortgage is paid off and she’s stopped working to stay at home with our two young kids. We’re certain I could drop down to four days a week and we’d be okay financially. The big but though is what if I got laid off? Not likely in my estimation but you never know what the future holds. I’m more comfortable working the five days a week now and building up our financial reserves to a point where we’d reach as Jon Chevreau nicely calls it – our Findependance Day. I guess the fact that I don’t hate my job or feel burned out by it also helps keep me engaged though I certainly do feel the call of a 4-day workweek. Knowing that we’re closing in our financial goals well before we’re 50 makes it easier to accept for now.

    S

  10. Robert:

    To answer your questions
    1) I love the idea of Tim working less, time vs money, I say time,we have two young children and the ability to spend more time with them is great, you never get time back. Also, I have been very fortunate as I don’t work Fridays either and so we will be able to enjoy the time as a family.
    2) I don’t think it has ever occurred to Tim to put any pressure on me to earn any more than I currently do. Part of me having my daycare is that it allows me to be at home with our boys and still be part of the work force and earn some income.

  11. Congrats, Tim – I think this is a great arrangement. I may have missed it, but how are your benefits working at 80%? Do you have to cover the Employer’s premiums on 20%? Or do you have to drop down from full benefits?

  12. @Julie,

    I’m still waiting for HR to confirm exactly what I get, but from someone else who is already on a similar arrangement I learned:

    -They prorate down salary (pension), vacation and Earn Days Off.
    -I keep my full health, dental and even my full 3 family days off a year.

    Other than that I’m just waiting for the details.

    Tim

  13. Just a question?

    Do you still have to do 5 days worth of work in 4 days? This is what would happen if I tried to reduce my work week.

    It actually ends up being a sweet deal for your employer – same work is done, they pay you less.

  14. i retired in my early 40s.

    i think you’re making a great decision. you may not retire quite as fast as you’d hoped, but those long weekends are going to give you a huge quality-of-life boost until you do retire.

    you will most likely be much healthier – from less stress (working + family = stress, no matter how you slice it), more time to exercise, and more time to prepare healthy meals. health = quality of life AND money.

    you will probably have more time to explore your interests, so when you do fully retire you will be better prepared to segue into your new life.

    congratulations!

  15. Congratulation on taking the 1st step…
    My dream is to be able to afford to stop working (ASAP), but my wife doesn’t support it…It’s rather hard to make it happen if only one pulls ahead…Anyway…one asset at a time for the next 10 yrs…wish me luck!

    …and you – Enjoy!

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