Posted by Tim Stobbs on April 7, 2011
For a while now I’ve been rolling around the idea of semi-retirement in my head, but I’ve also had an issue with planning something like that. You see I’m a little unsure on how to pick the minimum to earn each year during those years and then how do you transit then to full retirement. It’s always been a divide I have yet to come up with a good way to bridge since I’m aware that any income I could generate from writing would be erratic at best.
So yesterday while discussing that issue, out of the blue, my lovely wife asks me a question “Would you be willing to go back to school for a bit?” I have no idea what she is talking about, but I reply “Depending on what, yes.” Then she lays out her idea: I could work in her daycare. Pardon!?! Then she reminds me of a interesting fact that if she had a second employee she can take on some extra kids. The profit margin at that point would likely be close enough to cover are entire budget once the house is paid off. Therefore allowing the investments to grow at their full rate, but you could always fall back to the investments if you have a low period of income.
I stare at my wife in nearly shock. In a two minutes she has manage to propose an simple, realistic solution to bridging the divide when I had yet to come up with a plan after rolling the idea around in my head for the last few months. If I haven’t mention it lately, I really do love my wife.
While I’m not sold on the idea entirely yet, it does provide a potential base for me to actually run a full-blown analysis on semi-retirement. This partly rolls out of the fact the way I wife picks her clients. She takes great care to ensure her clients will fit in well with the other kids in care and the parents will work out as well. So the result of that is her income stream is very stable and she has very low turn over of clients.
So you might be wondering, why I would bother looking at semi-retirement when I am already on track to retire at 45? The reason is actually rather simple. I like the idea of transitioning out of work more slowly. I think a full stop on work at 45 could be a little too much at once. So that is why I’ve been rolling the idea around in my head.
If you were semi-retiring, what would you be willing to do to bridge the divide between full work and full retirement?